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tv   Bloomberg Markets Asia  Bloomberg  January 13, 2019 9:00pm-12:00am EST

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any moment now we could be getting the latest trade numbers. rishaad: any moment. david: we should be getting the yuan numbers first then the dollar. this comes amidst a massive drop in china. rishaad: the biggest story probably in the markets at one point 1.5% drop back for the dollar against the yuan. in the last four days. across othercated currencies in the space. yvonne: we just got the 2018 exports. up 9.9%. that is what our producers telling me at the moment. at your assets here today, equities edging lower. japan is closed today so we are seeing volumes quite low today. take a look at hang seng. we are down 330 points in the
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city today. further extending it to the rest of the region. after we saw one of the best weeks for asian stocks since november. we are edging when it comes to sentiment, just not a lot as we wait for trade numbers. we also have this vote happening on the 15th as well. also the u.s. government shutdown. we continue to see u.s. futures heading lower so it is weighing on sentiment overall. take a look at the chinese revenue beat. up for tenths of 1%. take a look at your onshore around 674. it'll be interesting to see how this last. some are saying this is a one off. we have stimulus measures coming through. that shows the negative for renminbi. yes, we are continuing to see strength. we mentioned the best weekly gain for renminbi since 13 years ago. it will be interesting to see how this goes. we have breaking news? david: numbers for 2018, let's
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gets dollars with the dollar. trade surplus in its entirety, $350 u.s. in u.s.were up 9.9% dollars. exports up 15% roughly. 15.8%. also at the same time getting the numbers in yuan. there you go. this is averaging out for the year what the yuan was, the conversion into the dollar figure. 12.9% up imports. exports in yuan, up 7.1%. let's flesh it out to get the numbers and see where the trade surplus looks like. certainly imports growing faster than that. it had been anticipated to some extent. looking at the december number 60 how the front waiting data
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has been -- frontloading data has been playing out. that is currently what we have. this is what tom mackenzie is making of it as we get over to beijing. what sort of picture is being painted here? as you are referring to, there are stronger export numbers than had been expected. 2018 exports rising almost 10% year on year in dollars. we had data coming out of south korea which can be something of a bellwether for china's exports and they had seen quite a bit of softening. there was suggestion's china could weaken as well. people were very focused on this, just how much that frontloading was continuing and whether it was starting to weigh. we heard comments expecting to see quite a dramatic slowdown in china's exports, at least in the middle of this year.
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this of course was just a december data we are looking at. in terms of the trade dollars we had expected a number of around for december,s. compared to a little over $44 billion for november. surplus is in focus and that is something trump will be looking at no doubt. haveuan, china's exports benefited somewhat with the yuan weakening last year. the stronger yuan will play out over the next few months. that benefit for chinese exporters apparently being pushed to one side if we get continued yuan strength versus the u.s. dollar. yeah, we will be digging into these numbers as we get a bit more time to ponder them. but certainly we are starting to least see the exports
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holding up relatively strongly. that numberrts, apparently falling year on year. we can also see comments we got minister overhe the weekend talking about from china to continue to open up the markets. --a and mastercard, theit ta their talks stalling, according to reports. that is looking ahead to the trade talks to of course will continue january 30 in january 31 with the vice premier heading to washington to continue those conversations with robert lighthizer. david: tom, thank you. live for us based out of beijing. here bring in haibin zhu, with us in our studios. nice to see you. a lot to talk with you about.
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this chart shows the frontloading affect. it was quite obvious. we still do not have the december numbers yet. talk to us about how bad the payback is going to be when all of this where is off. -- wears off. haibin: if you look at the first cleart is very frontloading as you see exports accelerating. export growth collapsed by about 20 percentage points. this is after tariffs came into effect. although export data still holds up, we see more meaningful feedback going forward. rishaad: total trade with the u.s. in 2018 was actually up 5.7% year on year.
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this will not be record exports to the u.s.. what happened in december we do not know. everyone has been saying people getting orders away before any tariffs kick in. at does it shape up looking 2019? haibin: for now there is a big uncertainty of ongoing a lateral -- bilateral negotiations. taking a more constructive scenario that both sides may reach agreements and the tarif s war could be on hold. certainly we have seen escalation of risks throughout 2018 and that continues on weak market sentiment. the exports sector should be much more cautious in 2019. .hat is one reason why
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6.1 or 6.2. rishaad: we have ppi and cpi figures as well. we're still waiting for the december economic data. 0.9%.me down to one of the weakest numbers. one month earlier, profit growth -- rishaad: that is why ppi is where it is. you get pricing going away, inventory buildups in that will be reflected as well in the december numbers once we get them. haibin: the lower ppi suggesting the weak domestic demand. not only coming from the exports
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side, it also comes from the domestic side. david: aggregate financing should also be out between anytime today and tomorrow. put that together with the overall question. data in the near term is still trending downwards. policy easing will continue. we have seen serious action the last two weeks. more will come. fiscal subsidy for the auto and home have been announced. we also expect more monetary easing. that will continue in the next two or three months. when the policy will hit goals.c data, credit we are still not there yet.
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first quarter we are still facing -- second quarter we see the economy start to stabilize. rishaad: there is so much policy manipulation going on at the moment. allbegin to think perhaps is worse than what was thought. perhaps authorities in beijing are seeing something we are not. even the weekend we talked about further tax cuts. so, there you have it. haibin: we have seen -- rishaad: you have a dual interest rate system. whether that is possible or not, who knows. all these things are being done. two little moves, painting a picture of an economy that is in the doldrums. haibin: it takes time. some take a few months.
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some take longer. what is critical is business sentiment. job security and wage increase. without this, the business sector will not make new investments or new spending. for theill waiting economy's to stabilize. david: we're going to get a graph and a couple seconds. a lot of this is in 12, 18 months from now, how bad does the debt situation get? they are putting a lot of these on hold at the moment to prioritize sure enough growth. -- shoring up growth. haibin: in the last two years, a lot of efforts -- one reason we are puzzled is
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shuttle bank activity continues to decelerate. if you look at the total debt level, it is still trending downwards. so, that is positive news. unless we're talking about the policymakers becoming more desperate and abandoning efforts, then we start to worry again. rishaad: quickly, your thoughts on the yuan, how do they play into this? haibin: more likely to stay stable, given the ongoing negotiation between china and the u.s.. the currency is one of the items on the negotiating table. perspective, we still believe the yen is facing depreciation.
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this is pressure on the yen. rishaad: thank you very much, haibin. quickly look a net -- looking at mission accomplished. or is it? os: president trump tweeted the u.s. military has begun to withdraw from syria, something he says is long overdue. besays what there is will hit by attacks from existing americans. he would devastate turkey economically if president erdogan carries out attacks on kurdish forces. theresa may will warn in a speech that u.k. parliament will kill brexit if your deal is voted down this week as expected. the prime minister will say such a scenario will because traffic. -- will be catastrophic.
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the deadline could be extended or even overturned. the government of greece is unraveling. causing the prime minister to trigger a confidence vote. lawmakers in athens are tentatively holding a confidence vote wednesday. is said to have won approval for a $1 billion loan. is alsopean commission converting alone into shares. a railroad operator owns more than half the airline. the business plan will focus on long walls. -- hauls. global news 24 hours a day on air and on tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm rosalind chin. this is bloomberg. rishaad: still ahead we're going
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to be talking to diane wang, chief executive of dhgate.com, asking about the impacts of the trade war and diversity. david: next we're talking brexit . theresa may thinks a no brexit vote will be a betrayal of democracy. we will ask what that actually could mean. this is bloomberg. ♪
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david: let's get a check of sterling. maybe down tovel, dollar weakness. the highest level since november 22 of last year. theresa may is going into a very critical week with her brexit
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deal facing defeat in parliament that could potentially end the split altogether. talking ine will be the area of britain which deliver the highest number of brexiteers. be effectively a vote against brexit itself. walk us through what we could see and how currency markets would take the defeat. everyone is focused on the vote this week. it is expected to be voted down. you would think this would weigh on sterling a little. i think markets factor that -- factored that in. jeremy corbyn, the labor leader, may raise a no confidence vote. that would also weigh on sterl ing.
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march 29 deadline, does that get moved? you markets think it will. there was a report saying in distillers -- ministers indicate it will. i think it will be interested move the date because no one wants a no deal brexit. that would certainly weigh on sterling. the key thing is how long does it get moved. to be initially supported the rally would rally on it being moved. if it gets moved with that annoy people who are pro-brexit, and also economic data, the uncertainty with may with what will play out, what form will any exit take place, and that uncertainty, doesn't impact consumer spending, investment. the economic data was still be impacted. even though it will be positive near-term it will be tough to rally hard.
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the uncertainty will weigh on the economic data moving forward. david: the other side, it is misleading. the dollar has been weak as well these last four weeks. more dollar weakness. that has emanated from the dovish fed comments that came out from the fed. going forward the question is now that the markets are pricing in no fed rate hikes this year, then any data that comes out positive would have to start pricing rate hikes into the curve, which leads to dollar strength. the question then becomes has it as much asweakened it could, or does it keep going. i think the market will start pricing in more rate hikes.
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thank you very much. our reporter from singapore. lots more coming up, not least a look at dhgate. this is bloomberg. ♪
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rishaad: we are back and looking at the latest business flash headlines. cathay pacific does it again, selling premium seats at a huge discount. two weeks after admitting a similar ticketing error. seats at a 10th of the normal price. they blame input problems on its website. hackers exposed private detail of almost 10 million passengers. david: hong kong airport's our records last year.
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they handled more than 75 million travelers and more than 430,000 flights. total throughput rose from 2017. uncertainties are cargo movements fall in december. traffic to and from europe and southeast asia sliding the most. rishaad: they are ready to sell covered bonds and is expected to contact investors this week. they tried to issue notes after market volatility torpedoed. the european central bank warned its position weekend -- weakened after the abandonment of the sale. weid: in case you missed it, already got the full year 2018 numbers from the bureau of customs and china. have a look at how they look. $350 billion u.s. was the trade
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surplus. exports were up about 10%. 16% in imports. we still waiting for the december numbers. rishaad: just one headline coming through. we have seen this rapprochement take place between china and russia over the years. indeed, the trade relationship is gaining ground. china's trade with russia in 2018 rose 27% year on year. base, but hugely big trade in 2018 surpassing $100 billion between china and russia. that is the first time that has ever happened. david: yeah. still winning for the december numbers. meantime, market check here. yvonne: today is all quiet but in terms -- up 2%. they are betting on better-than-expected retail sales.
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they cited how e-commerce sales surged 70% year on year during singles' day. 140 is there price right now. that's still implies a 25% upside since friday. lenovo, the highest in a month today, bringing the five-day gained by 12%. auto down another 3%. selling thatenying the holding had been cut in half. still seeing some downside. watching the oil majors in china, all falling. they said they are continuing to see earnings downgrades in 2019. that has not let up yet after two years of consecutive growth some of these majors. three still fairly valued. take a look at the three stocks after correction. things could actually be range bound moving forward for some of these stocks.
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in order of preference they like petrochina as well as sinopiec. this is bloomberg. ♪
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rosalind: here are your first word headlines. china posted its strongest exports and imports on record last year with a trade war temporarily boosting shipments as companies try to avoid being hit by tariffs. they rose to almost $2.5 trillion. oforts late a trade surplus $362 billion. while a has fired a sales director on suspicion of spying. they said the incident brought while way --
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they suspect it may use its equipment to help chinese spies. they say the products are safe. courts in washington says the trump administration asks for options on a military strike against iran. relations between rosalind chin -- between washington and tehran worsened after president trump reimpose sanctions. ghosnfe of carlos attacked what she called the art treatment of her husband in jail, saying she has been -- she said her husband has a limited opportunities to confer with his legal team and has lost appeals behind bars. global news 24 hours a day on air and on tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm rosalind chin. this is bloomberg.
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rishaad: dhgate.com now. it offers access to global supply base. it is estimated the global e-commerce market will hit $7 trillion by 2020 and will account for a quarter of overall trade. joining us is dhgate.com ceo diane wang. tell us what dhgate does in a nutshell. diane: we are the leading company in global trade. today we are also operating our company into the transaction marketplace to serve as a platform to provide more integrated service to act as market and access to finance. rishaad: is that a bit like alipay for a b2b platform? diane: we target more global
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medium-sized retailers. we want to enable them to directly access manufacturers. enabler forecome an accessing global markets, using b2b platforms to do that. rishaad: the b2b platform, is a predominantly chinese or do you have global aspirations? diane: nowadays we see more in the global markets. lake end to use cross-border e-commerce marketplaces so they can do business online. today they can buy and sell globally without it being their home. we have also seen three trends when it comes e-commerce. from consumer market to industrial market. from a close the marketplace to a more open environment. focus, toransaction operating as a platform to a service model. rishaad: give us an example of
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how that works. diane: our intelligent system, we utilize the data and a.i. to optimize to transportation route to more than 200 countries and vice,ns into one ser including if they have different criteria on the transportation. for example, destination, categories, as well as speed, price. shows thestatistics logistics services can reduce 62% compared% to with traditional methods. rishaad: you know where i am going, because you can see the follow-up from it. is it imports and exports? diane: in the past, we focused to enable chinese suppliers to
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go to overseas markets. nowadays the worldwide -- instarted to enable sme's malaysia, indonesia, that they can also leverage the platform to enter into china and the global market. rishaad: obviously the next question is, how is the trade war playing out? do you see any net, net disturbances in the trade flows? diane: i think it is clear that the trade war is a serious concern hanging over 2019. with theasingly business adjusting their strategies to find alternative channels to fight against the challenges. particularly, they see cross-border e-commerce is a better way to find these alternatives. so just like 15 years ago, people were afraid to go out.
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then they moved to online stores for shopping. which forced traditional traders and retailers to do business online. this is the key behind china's e-commerce boom. so, when trade war its china, traders are thinking of new ways to reduce the cost. the answer is this. rishaad: you would say that, naturally. what are you saying with people doing business with u.s. companies inquiring with sme's in china? diane: nowadays we can see more sme's outside china that want to enter into this big market. we have ae right now, local team in the u.s., turkey, malaysia. we are doing cross-border training. we're doing a trade center to enable localized leveraging of our global network to come to china and the overseas market. rishaad: ok, but are you seeing
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any fallback and trade? are you seeing any jumpoff? diane: i think that is really a concern for the business. on the one hand they need to expand to more markets using different channels, no matter off-line or online. or use integrated services to reduce cost. that is the way for them to fight against this. rishaad: diane, let's talk about your company. it is female-run, isn't it? that is unique in china, isn't it? diane: i think for digital technologies, that is a unique opportunity for women to realize their dream, unprecedented opportunity. in china in our platform, 40% of sme's are owned by women. a new report talks about cross-border e-commerce, how to streamline international trade.
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essentially -- a majorthat constitutes source for enterprises, especially for women-led enterprises. that is a unique opportunity. rishaad: will this be a women-led ipo and it which point will you ipo? diane: i think with all the trends, and as the chairman of the women forum, we encourage more women, especially young women, to leverage digital to realize their dreams. rishaad: the point is are you going to come to the market at any point? diane: sooner or later. rishaad: come on, you can tell us. diane: we will leverage capital markets to help us have a global brand. rishaad: when do you think that will happen? diane: we will follow the chips. [laughter] rishaad: thank you.
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thank you so much for joining us today. diane wang from dhgate.com. a lot more is coming up right here. keep it on bloomberg. ♪
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>> we still have more work to do. that is why i made the difficult announcement at the end of last year. we are focused to make sure general motors a strong and really demonstrating even in a cyclical business, we can continue to deliver results. >> we would be hopeful that these trade issues find their way into the rearview mirror as the year goes by. all that uncertainty starts to subside. itn with that uncertainty, is still an enormous market with huge upsides for cadillac. views from of the carmakers as they gather for the north american international auto show in detroit this week.
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tensions and the slowdown is weighing on the minds of automakers. rishaad: the ford ceo remaining upbeat for auto sales. talking to bloomberg on the sidelines of that show in m otown. >> i want to tell you, i am not happy about ford's performance in that year. that should just be said. i knew it would be a difficult year because of the age of the product. i will just say, we are moving from the oldest product line in the industry to the most refreshed. 75% of the products are all new in the next two years. and that will be really important. now, you put that against what kind of market do we expect. i think the auto business is going to be solid. the economy itself has signals that create uneasiness, but i do
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not think there are any markers that would say we are entering any kind of recession. >> what affects your business? what interest rate -- really drives your business? >> sentiment is a big deal. if people are borrowing for their vehicle they want to believe their jobs are safe. interest rates can matter, because it will change with the cost of the vehicle. but right now i think it is just about, things are firing on all cylinders in our economy, but for political strife over policy and some trade issues. we have had great employment. four million jobs have been created with his current administration. so, i think it is worth stepping back and saying it is in pretty good shape and it can run for a while like that. i'm talking about north america. >> you said you have a major restructuring, like $11 billion. we heard from ford europe that
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there will be big changes there with thousands of people let go. you had restructuring with salary people here in the west u.s. the where are we for ford? >> i want to reiterate we took not too much time to be very thoughtful about how to do this. in north america when we change the silhouette of the vehicles, we were able to protect jobs. never heard of any plant closings coming from ford. if there were any differences because of that, we shifted people around. we still produce -- we are the highest in the industry for producing vehicles in america for america. our blue-collar workers are in good shape right now with the plants we have. as relates to europe, this is not just a new problem. i walked into the company 19 months ago. this is been around for decades. it is not only ford dealing with
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this. we think there is a design in the future that allows us to be there with ford-branded products. but we have to get the industrial system in the right construct for that. i am not going to pull in the punches -- pull any punches. brexit hurt the business model. without that there could have another choices, but we have to deal with that. $11 billion was for restructuring and europe. was the ford motor president speaking with us at the north american international auto show in detroit. some big interviews later on monday on bloomberg television. we have more big guests from that show. the volkswagen ceo, the north american ceo of toyota, and of course bill ford, before chairman will be joining david later today. checking on markets and movers in asia as well.
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we have been focusing on the renminbi today, given that four-day gain. offshore renminbi up about 1.8% in the last four days alone. goldman coming out in raising their forecast for the randy -- the renminbi. now also a pickup in chinese activity. the trade talks could still falter. they say any trade deal that removes the existing tariffs and overall trade uncertainty is still quite a high bar, but they say the risk of further escalation is enough for this rally to have some legs. that uncertainty they are saying is fated, along with -- had faded, along with u.s. stock prices. and 12 the three, six month forecasts. still, relatively speaking, more bullish than what the street is calling. tourism stocks in south korea.
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they are all flying today. we saw a report from several analysts including samsung you shouldsaying take a more wait and see approach when it comes to these stocks. they still say chinese tour groups are going to be leaving because medic recovery in the first quarter. they are raising their price targets as well. one thing to watch out of korea. we're counting down the opening of the session in india right now. let's bring in our reporters sitting by in mumbai. how are things looking? now there are certain macro indicators showing concerns, starting with industrial production for november which was at a 17 month low. its fiscal target
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, largely long to higher expenditure. perhaps populist announcements ahead of elections. these are some aspects that could work against the government when it comes to economic policies. these are some measures that could perhaps hamper how markets are moving. david: we have to leave it there. agam will be rejoining us later when they open in mumbai. coming up, how ireland is handling the brexit blues. we will asking the country's minister of state and department of finance. this is bloomberg. ♪
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rishaad: we are back. theresa may is entering one of the most tumultuous weeks of her turbulent premiership. david: the u.k. parliament prepares to decide the fate of her brexit deal and possibly her tenure as well as prime minister. let's get back to the asian financial forms. that's right. brexit is on the top of many people's minds here along with
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the trade war and slowing chinese economy. brexit given the vote that will happen tomorrow is at the top of our next guest's mind, ireland's minister of state. thank you so much minister for joining us on bloomberg television. how concerned are you that the vote tomorrow will be rejected and the increased prospects of a no deal brexit? >> very few commentators say tomorrow's vote will be successful. that creates additional uncertainty to what is already there. i think it is factored in that tomorrow's vote will not pass. but let's see what the numbers are. as much as anything it is a measured exercise. a possible second vote on prime minister may's deal. stephen: what is more likely, a no deal brexit or a second referendum?
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michael: that's a very difficult question. i failed to believe there will be a no deal brexit. i think there are enough checks and balances within the system and why that looks uncontrolled and it is very uncertain right now. i feel there are enough people there who will enter the base. whether it is the back benches on either side of the aisle. the one thing that is coming across is there seems to be a that says a no deal brexit will not be allowed. i think that is a good thing. stephen: is there a backstop in place to make sure the irish question is addressed regardless? inhael: the backstop is place but the backstop on the kicks in following a lack of trade deal between the european union and the u.k. i find it inconceivable to think that trade deal will not help
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within the european union and the u.k. everyone says they want to trade deal. why would this circumstance arise following trade negotiations? i believe there will be a trade deal. i believe the backstop will not be required. they are having a lot of fuss about nothing. the irish government has made it clear, we will not move from the position that has been agreed with the deal between the european union supported by our colleagues from around the bureau. the backstop is in place and will remain in place and we will not be changing that. stephen: we are running out of time. will there be an extension of the conditions? michael: it is the uncertainty following the vote tomorrow. it is depending on if the vote is won or lost, the size of the loss if it is a loss. it is difficult to gauge how these things will play out. but i am a believer in the body politic. i think in some stage in the
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next several weeks, the body politic, whoever it is, will get a handle on this and it will become more control. stephen: how welcoming are you of a second referendum? michael: i do not believe a hard brexit will occur. i think a second referendum will be very divisive. there was a vote, there was an irish turnout, and they agreed on a deal. we think the best thing to happen in the next couple weeks will be for parliament to agree on that deal. stephen: we just had a guest on in the last hour, and he said what the eu leaders such as yourself need to be very careful if there is going to be a second referendum, how and what you say in the public, not to be further divisive on this issue. do you agree with that? michael: absolutely. i have a friend in the united kingdom.
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we are very close. we're not just neighbors. there are a huge number of irish people who live there. they had immigrated there over the decades and centuries. they are more than neighbors, they are our relations. certainly there's nothing you would want to do to further the discourse between people who are in favor of brexit and people who are in favor of remain. it has been very divisive, it has been unpleasant on a lot of occasions. stephen: you do not want a return of the troubles. michael: the reason the backstop is there is to make sure they will no -- be no hard border in ireland. it was saidently the ireland economy could take a 4% had long-term if there is a cliff edge break, a hard brexit. would you agree? that is quite significant. michael: certainly nobody wants a cliff edge brexit. nobody wants a hard brexit.
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it is very small the people who want it. we are clear, we want to deal that is in place. is agreed that at some stage it will be concluded. benefits nobody. stephen: where do we stand in terms of attracting investment into ireland in the wake of brexit? than 55 companies have moved at least part of their operations from london to dublin. you don't want to be opportunistic, or maybe you do. michael: no, we do not. i have made it very clear that i did not want to be opportunistic. everything i have said to companies in the united kingdom who will have a brexit difficulty has been along the lines of, if you have a problem, we can be part of your solution.
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opportunism is not the way we trade. it is not the way we operate. a we had been very successful in attracting companies. as a result of being fair and reasonable about it. effect of being a neighbor is not how we do business. stephen: thank you so much for your time. back to you guys from the asian financial for. david: of course we will take you back there later on in the show. a lot more conversations and interviews coming up. in the meantime we are still waiting for the december data out of china. we will get you those numbers once we have the. lots more coming up. this is bloomberg. ♪ is bloomberg. ♪
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rishaad: getting straight to the december trade numbers just breaking and it is a big miss. shocking figures. yuan up. 3%.rts down over we were looking for an increase. yvonne: the dollar coming out as well. exports falling 4.4%. the expectation was things would stay positive at least a 2%. imports as well also falling down 7.6%. they were hoping for 4%. rishaad: this is hugely emblematic of what is going on with trade tensions.
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it is payback from the front loading. rishaad: that is exactly what it is. looking overall at the trade billion, we5 actually got $394 billion. yvonne: we are seeing moves and aussie dollar. david: just to show you how it looks visually, we were bringing up this chart earlier. payback is a problem. -4.4%. you have the 2018 average and we have put that against the seven year -- six year average between 2018. the gap is seven percentage points. we are starting to feel the payback as we speak. in terms of market reaction let's have a look at dollar china. dollar offshore here. we had a big drop. we're giving back a lot of that right now.
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extreme coming off the best week in 13 years against the u.s. dollar. here is your function to give you a sense. 1.5% drop. we are down. is shut for coming of age day-to-day. said, an off session in the asia-pacific. let's bring that back down. let me leave you with this chart on the roman be. on your gtv library. it shows you how long this has come. down four weeks. we are reversing a little that. most oversold, depending on your perspective, against the chinese currency going back about 12 months from now.
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india. all set up for thepeaking of the dollar, dollar down by a flexible and patient fed. some say it is almost gone. that begs the question where do we go from here. buy dollar and sell everything else like what we saw back in 2016? let's get the first word news with rosalind chin in hong kong. rosalind: the government of greece is unraveling. a confidence vote has been called. lawmakers in athens are tentatively planning a confidence vote wednesday which could end his four years in power. a sales director arrested in poland on suspicion of spying.
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they said the incident brought huawei into disrepute. several countries suspect this may -- it may be helping chinese spies. they say it's products are safe. say thefrom washington trump administration asked for options on a military strike against iran. the request cause concern at the pentagon and state department, although the assessment was carried out. relations between washington and tehran worsened after president trump's decision to abandon the 2015 nuclear deal and reimpose sanctions. the wife of detained former nissan chairman carlos ghosn has attacked what she called the harsh treatment of her husband in jail, saying he has been repeatedly interrogated no lawyer present. saying her husband has limited opportunity to confer with his legal team and has lost seven kilograms and eight weeks behind bars.
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global news 24 hours a day on air and on tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm rosalind chin. this is bloomberg. haslinda: we just broke the china trade numbers. chinese exports of the most since december 2016. let's get tom mackenzie with more on those numbers in beijing. tom, what does the data tell us? tom: the economists have been warning us that the front loading effects would start to wane. this is more of it really kicking in. the payback, as yvonne and rish described it, for the front loading that happened. supported exports through most of 2018. recapping some of those numbers, year on year exports falling 4.4% for the month of december. the forecasts have been for increase of 2%. compare that to november where
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you saw 5.4%. -4.4%.4% in november to year on year for exports. in terms of imports, a shockingly bad number when you compare it to november. compared to an increase of 3% for the month of november. the trade balance again, a surplus coming in. before your surplus coming in around $350 billion u.s. coming back from the front loading story, many economists say this is just going to become a more bleak trade picture as you go further into 2019. still onlyse we're at 10% with chinese goods exported to the u.s. market. 25% on a smaller slice. and of course there are questions as to whether the trump increase -- would increase if a deal does not come together by march 2. that is why there is so much
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focus on the visit of the vice premier to washington on january 30 and january 31. these data points illustrating how much pain china's economy is facing. economists expect things to get worse from here. many of them. minister the chinese is trying to resolve these trade tensions with the u.s. that will be a priority this year. what exactly did he outlined here that can cushion this blow? again, the commerce minister over the weekend saying the priority for 2019 was tackling these trade tensions, saying he would be working with u.s. states, cities and businesses. they would try to shorten that negative lift so companies and investors from outside china have a clearer idea which businesses and sectors they can invest in. also saying there will be more industries and sectors in which forward -- foreign investors
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will have 100% ownership. visa and mastercard reports, those companies have had those applications for the pboc for some payments effectively rejected or at least put on hold for over 12 months, just illustrates how difficult it is. the fact that these terriers remain in china. that remains a concern for u.s. and european businesses and is likely to be discussed at these talks. rishaad: tom mackenzie in beijing. falling off a cliff come of these trade numbers. probably not a huge surprise. but we did not expect quite this. brett: this is precisely the region -- reason trade talks accelerated. we know this has already happened. not forward-looking by any means. the fact everyone rushed to the table shows a sense of emergency
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to get this out of the way and get back to something more meaningful. both sides are preventing themselves from succeeding at this point. yvonne: if this is data what are you looking out for signs of stabilization? do i first look at credit data, investment? brett: it is hard to look at these numbers. these numbers are based on something we have not seen before which is a quasi-trade war. -- we had a guest saying donald trump knows the next $200 billion of goods is all stuff china makes and tariffs wind up
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burdening the u.s. consumer. brett: the careful what you wish for. you can only hold it out as a stick for so long. the stick hurts you in the end. that is why there has been no acceleration. saying this is a war of words. rishaad: it is showing up in the data. brett: i mean there is obviously a side effect of it, but what i am saying is this is not a philosophy. this is not a philosophic battle the goes on for a long time. i always disagreed this was a three or four year war we cannot get out of. this is someone focus over here and out of here tomorrow and now he already said he was it resolved. let's look at the silver lining. the silver lining is that these two men, xi and trump, formulate a g2 style going forward which i think will be applauded by the global economy. i think he will see a russian
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and chinese fixed income, which is extremely positive for the world and the development of china. the byproduct is it will pull of equities as well. you see every central-bank cycling out of dollars right now. it is all going into r&b. thepeople are talking about yuan getting too strong. this is literally every week a different fear. the simple fact is sentiment runs the market right now and the sentiment is we are close to something and people are not as fearful that this has longer, long-standing effects. it is there, it has happened, but there is a way forward. haslinda: we had a guest to came in to say perhaps china is weaker than people think. you could be wrong. brett: sure. look, china had the worst reforming market last year. i do not think it is hard to find people who are skeptics of it.
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what idea think is you have this groundswell forming where the market has kind of found a bottom. i think the sentiment play says that we have got something positive going forward. and the real reason we like china is because once this trade it,le, they stop fighting china can go back to deleveraging. china can go back to the proper pricing of capital into china. meeting the soe's will not just be the benefactor of cheaper credit going forward. it needs to go into the sme and the privates and that is what drives the next growth of china. so, this being put behind us goes back to the most positive, fundamental play in china, which is prolonged deleveraging that actually has the proper pricing of capital across a wide range of china and allows it to widen the base in foundation for growth. that is a much longer play, but that is the positive.
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haslinda: we have morgan stanley revenue to grow 9% on average 2019, falling below 30 for the first time since 2015. brett: i do not want to take a shot at morgan stanley but look at where everyone's projections were when amazon was at 2200. it is now at 1500. alibaba was at 200 or whatever. i do not think those are that important. what i think is there is a major play into china 2.0 that is highly predicated upon the service sector, around technology and the internet. and that is not going away today. it did not go away the last six months, it will just get stronger and become a much bigger part of the economy. and that is where you buy growth. betters no way to get exposure than the in hundred pound gorillas driving that growth in china. around.: brett sticking
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toing up we're joined discuss china's health care sector. later in the hour we speak to luxembourg's minister of finance about the risks of the global economy. this is bloomberg. ♪ mberg. ♪
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david: a quick update of where we are. bloomberg dollar spot index reversing a lot of the weakness early before that horrible december report from china. this is where we are right now. let's have a look at the aussie and kiwi dollar. apart from the strain coming through, still a little bit here up. everything else across the asia-pacific currency-wise is down again. it did get a little extreme. have a look at that compared to 12 days ago.
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so, yeah, up to you. yvonne: up to us. let's check on sterling. not a lot of movement. sitting around 128 at the moment ahead of this crucial vote with theresa may going into a critical week. her brexit facing defeat in parliament which could potentially end the split altogether. rishaad: a speech later today. she will say her deal would be a vote against brexit itself. jodi schneider is with us now. jodi: theresa may is saying there is more likelihood that the u.k. will not leave the ceo than the brexit deal going down to defeat. she is trying to make a last-minute pitch for that deal to go through. it is widely expected the vote will fail and in the question is what happens at that point. she made her comments after there were talks that some lawmakers are looking at taking
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control of the legislative agenda and basically trying to either overturn the brexit, or trying to delay it, to not have it happen. so there is a lot at stake here and it is unclear what happens after this. yvonne: it basically shows she is no longer running the show. parliament is dictating what goes on. jodi: that is right. if this fails by a great deal, the question is who is in control and what mechanisms to they used to move things forward. aree who still want brexit saying she should go back and renegotiate an agreement with the eu, then bring that new agreement to a vote. but labour is saying let us move forward and perhaps even overturn this agreement. of course living without an lay,ement and play, -- in p the bank of england says that would be potentially devastating to the economy, to home prices in the economy. rishaad: the various options if
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the vote fails, you have the possibility mr. corbyn, leader of the opposition, calls for an election. two, the dump -- the deadline is extended. jodi: that is true. the is the possibility she goes back to the eu. the eu is waiting at this point. they have long said this is the only agreement. take what is on the table, this is it. if it fails they are waiting and watching to see how much of fails by. at that point they may extend the agreement. they may help renegotiate it if it is that close. we will see. at the end of the day, the question is whether she will be in control or someone else will be in control, and who that will be and what path they see to moving forward. rishaad: jodi, thank you very much. what a mess. it makes the u.s. shutdown look i get into my -- look like a pantomime.
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brett: leverage is everything and there is zero leverage in may's camp and all the u.k. i cannot say to you what i think will be the outcome, but clearly someone needs to be put in a seat that has some leverage. right now the whole where they're going about the process, you cannot win anything. there has to be a shakeup. i know there are a lot of different political differences between the way the u.s. he theirt -- elects politicians and the witty u.k. does with parliament and whatnot. obviously parliament needs to and control and any tips -- they need to get someone in position to get their head above water. yvonne: what about the eu? are they assessing the situation and perhaps they will save we will revisit this deal struck a few months ago and perhaps throw theresa may a bone? brett: i do not think they can. they have a lot of credibility on the line. they have taken a stance.
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20 or however many countries make up this vote. it is very hard to get consent since -- consensus in a big group. once you have it, you take the ball and you run with it. rishaad: and they do not want to make it easy to leave. brett: they do not want to make the president that you can threaten us and fail on your home turf and we give you an olive branch. you cannot do that. basically there was a stick up. then they had to go and got consensus and they stuck to their guns and that is where they are. i do not see there being a huge lasting affect of the negative effect of what is going on in britain slipping over there. the eu has many other things to worry about, the southern tier being most of it. we have not heard of greece in a long time. it is now back as a headline. you have a lot of different nonperforming banks and loans in the southern tier. i don't know.
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i don't think they give in. haslinda: when you take a look at u.k. stocks they are looking pretty cheap. do you think this comes as all the bad news coming, slashing jobs, retailers sounding a note of caution about the economy? brett: the u.k. is in a very precarious position. as i have said with many markets, i talked about this with japan all the time, when you are not top five in the headlines and you do not control your own destiny, it is not a market that people can really invest in long-term. it is just like japan. when the currency controls your stock market it is hard to get people to buy into the equity market. when the uncertainty the u.k. has is every single day a new headline, i do not think people have the stomach to pick a bottom right now. there are other places to be. haslinda: all right. brett is sticking around.
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for now let's get the first word news. the asianack to financial? stephen engle is joining us. stephen: hey, yes. let's get to our next guest as we continue our extensive coverage of the asian financial forum in hong kong. we have the venture partners managing partner. acrossenture capitalist both sides of the pond, the u.s. and china. how is the trade war, and i am sorry i have to start with that, but how does that affect what and where you invest in china right now? think we have historically been investing 40% in internet e-commerce, 40% in biotech and the rest is in a.i. and i.t. when it comes to investing in china, we do not see a lot of differences. when it comes to investing into
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the u.s. we see a great difference. i think we have seen in the last couple months the investment and biotech a.i. has dropped significantly. same thing for some portfolio companies looking to acquire companies were invest in u.s. stephen: why is that? is that because china is more cautious or there are barriers or what? nisa: regulation. every law firm he talked to has a different interpretation of what should be done. so, right now a lot of companies are saying, should we register or should we not? everybody has a different view. stephen: it has been a place of strategic review of investment. china in particular has been in crosshairs. also of course with the latest huawei arrest and speculation, is that dampening the risk appetite? nisa: i think people are a little more cautious.
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-- willt to see what is there be an explanation for this further along. we often for sure is see there are more entrepreneurs thinking of coming back to china to start companies, which a thing could be a good thing for china overall. stephen: one of the things the united states has complained about industry dispute is china 2025. from the u.s. to perhaps limit that driver technology will do the opposite, spur innovation in china? nisa: i think so. ever since all the regulation the u.s. is coming up with, entrepreneurs in china saying we really have to beat up -- beef --our roman be capable he our capabilities. of course it is very difficult
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now to get it working visa in the u.s. i think you have an annual lottery system. are thinkingfolks they might want to move back to china for good. we will see how that goes. stephen: are you one of those? you are educated at cornell, stanford. visiting lecturer at harvard. are there more opportunities now in china? nisa: i think so. as an investor at really do --ieve in there are so many great minds in the u.s. and china together. stephen: what will the ipo market look like this year? you have to look at the exit strategy. you saw nine portfolio companies go ipo in 18 months. will that continue? nisa: we are very fortunate. we had 13 ipo's in the last two years and 11 mna's.
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i think we have a strong pipeline in our internet companies, i.p. companies, biotech health care companies looking for a change regulation with hong kong exchange. we hope to get some companies out here as well as u.s. the ipo markets, approval process has slowed down the last few months. hopefully that will change as well, but we will see. stephen: are you an optimist or pessimist right now? nisa: i am in the medium-term very optimistic. in the short-term we are very cautious. stephen: all right. nisa, thank you so much for your time on bloomberg television. really appreciate it. i say it every hour. we have more coming up. back to you guys. ♪
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haslinda: it is 11:29 a.m. in hong kong. warning that the parliament will kill brexit if a deal is voted down. the prime minister will say that the scenario would be catastrophic for democracy. some lawmakers are planning to seize control. a new poll suggests half of america blames president trump for the record government shutdown.
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29% say democrats are to blame. declaration for a national emergency for funding for a boardwalk. has begun totary withdraw from syria, something that he says is long overdue. he says there is little left of the islamic state. devastatehat he would turkey economically if their president carries out his threat. arrived.eo has the dispute is harming interests. accusing them of supporting terror groups, something that they denied.
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global news 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i rosalind chin and this is bloomberg. >> we were about 34 minutes back. china just went into its lunch break. .9%.e down about let's get that back down. we will recap the numbers for you. to explain why you are getting a little bit above the dollar. we have updated that with the latest numbers. b is our numbers all the way back to 2011. are the frontloading effects starting to wear off? clearly frontloading there.
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-4.4%. is this the start? that is quite a bad print for the start of december. being found, it is intact. they found that voice recorder from that air jet at 9:10 a.m. jakarta time. the director was rested in poland. saying the incident has brought into disrepute. rishaad: undergoing scrutiny in several countries.
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>> they are all over the world right now, but this has caught them right in the crosshairs. now they are saying that someone has been accused of spying and we will hire the right away. there are still allegations. they are not waiting for any of that to unfold. they are cutting that sales director right away. does it have wider implications? >> absolutely. it is having a moment where they are trying to decide to go the way of the u.s.. create business opportunities for them or are we going to side with china?
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all of these different governments around the world are starting to question whether that is true or not. they are having to grapple with it this year. what do they hold? 2019 is shaping up to be quite a challenging year. big companies are facing slowing command from consumers. you have all sorts of trade war issues. spying, not necessarily a trade war, but economic and political issues between the u.s. and china. >> thank you so much for that.
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good to have you back with us. it seems like there has been an unraveling of chinese tech stocks. value in chinese tech? there is plenty of value. going back, they are the leader of 5g. they are ahead of every other player in the world. there is something to be said about that in a short period of time. it.work that into a chairman driven issue. the idea that tech has come down across the world off of mind blowing levels, i do not miss the early think that will stop
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the growth story. one of the major stumbling blocks of the trade war is that maybe it comes 2030 or 2035. the aspiration to control the supply chain of chip technology will continue to drive growth in that space. i do not think anybody would want to bet against that desire. that will be the driving part to these stocks going higher. china has bought back on that vision. break. at the end of the day, these are headlines. this does not stop a whole country mandate or desire. the lastaybe change number on the headline, but the desire is still to go forward.
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i think if you wanted to look at , look at thening names in china. it has to become more productive . it will certainly come up the ladder. this is a desire from the state government to move forward. they have a problem. they have billions of shares coming out. events thatort-term i do not think clout the future of how we are looking at this space. this could actually help china in some ways.
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>> it definitely does. getting worried about the next order economy, transitioning export economy. china does not identify themselves as an export nation. if exports are going down, doesn't that mean something else is there waiting to take the baton to move forward? we know what it looks like. it looks like technology. this is a domestic, demand driven economy. it is so phenomenal. there will be hookups. there is over leverage in certain spaces. look at the u.s. high in theall-time summer of 2018. onsave you have given up
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amazon in 2003, look at what you left on the table. you are hearing the likes of apple and the biggest companies in the world talking about this china slowdown, does that have wider implications? >> anyone would be crazy to tell you that there are not problems. apple sells one product. they have all this other stuff. iso not want to say that it a one trick pony, but consumers are a very hard animal, to think that you can box in and have a virtual monopoly for a long period of time. there are problems. are there problems in the u.s.? yes. the question at the end of the day, investors need to look at the problems versus the upside.
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it is a good bet in the world today. they are problems and sentiment is not great. is it going to be a one-off or will we see more of that as we move forward? >> few will see a lot more of it. there is a change in philosophy about early-stage investing because there have not been many exits. there has been a lot of money put into a space where there has been some success, but a lot of money has been burned. it is kind of a victim of its own success. i think that there will be challenges to start up capital in china. there was a shotgun approach for a while, but it will become much more refined. -- muchonger to
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stronger champions. less angel investment. it is very hard to have that play out with a huge success factor. rishaad: last question. they have a question. yvonne: more about the european woes that we have been seeing. you have greece in this picture now. asking our users, what asset bracket is most likely to reflect the problems? >> the normal answer would be off-the-cuff, the euro, but i do not think that is what happens because there is a recycling of currency. , short dated bank credit is where you see it.
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you will probably see a huge cost of capital increase. a lot of banks under pressure. look toyou could spanish or portuguese banks as somewhere where we would see it show up. i would watch germany. there has been a political transformation going on in front of our eyes that people are not talking about. i think germany is by far the strongest of the bunch. you could see some there as well. rishaad: thank you very much for coming on. chairman and ceo at capital link. spotting the nation's biggest ponzi scheme and protests in major cities. yvonne: he expects a couple hundred platforms to provide the latest sector shakeout. -- we asked whether
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there is more or less money out there. have,is impossible to even in a country as big as china. it is a soft landing. what i like about the regulators, instead of saying 10% survive and 90% dies, it is a protest of guiding the company's, whether we require them to have a portfolio in the bank or a management team. fitrally, those that do not , we try to throw them to other business models. >> what does this mean for the industry as we go from the 5000 toferent platforms down fewer than 300 by the end of this year? will there be less money out there or does that mean more
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lending for you? >> i think there will be more. we were busy building the infrastructure. it will serve everyone. whether it is balance sheet business or no. it will take it in the right direction. everything is going in the right direction. >> what about the new compliance measures? they will always be together. that applies to small companies in general. the idea of one day there will be a license, that is not a reality. if you are doing financing, you have to pay attention to compliance all the time.
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it has been one of the leading companies. how many players you expect to be in the industry? startingough times are to end. around august and september. we feel bad around the end of the year. >> august, i believe. $40 million or so. you guys have been saying maybe next year or maybe in two years. the markets have not treated them very well lately. >> both your questions are linked to each other. i prefer to have a clear presentation when i do an ipo.
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when a question comes up, i would like to say yes, everything is clear. we do not need to go on an ipo anytime soon. pe faded that question. speaking to our own stephen engle in hong kong. still to come, we speak to the minister of finance about the risks facing the global economy. ♪
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>> indian markets are open. standing by to take us through what to expect in today's session. it looks like early gains. market.ve seen the
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lower by arending third of a percent. banks leadingller the banking index down as much as .6%. it remains largely unchanged. we will be keeping an eye on the technology sector, can entering the earnings. rishaad: interesting. what are we looking at? this is perhaps one of the trade.cks in the it is largely on account of the company revising its forecast upwards. 8% growth expectations. now looking at 9% growth for the full financial year.
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in terms of earnings, we did not see that much. not in line. the positive of course is the upper division and the buyback at 17%. thank you. coming up. andaad: risks facing europe the global economy as well. this is uber. ♪ -- this is bloomberg. ♪
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yvonne: the house of commons is prepared for a theresa may's brexit deal. let's get our correspondent who is there for us. let's get to our next guest.
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he is the luxembourg finance minister. always good to talk to you. do you think we are closer to a no deal brexit or a second referendum? >> most people think that we will have a no deal. i do not despair about having a brexit with a deal. the key is that whatever happens , we are going to continue to do business with each other and make sure that british companies and british players can open it -- subsidiaries. and doook into that dramatize what can be -- de-d
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ramtize what can be. politics,go into the negative politics. it is up to the british to decide what they want to do about it. luxembourg has benefited. luxembourg toen access the market. importantg run, it is that business between the island and the continent continues. >> about to tear chinese banks have chosen as the headquarters. how critical is that? >> it is a new infrastructure and investment bank. they will hold their annual meeting in luxembourg this year. i talked about it because we need to have more investment
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flowing from asia to europe and from europe to asia. especially at a time where we had trade tensions. china and europe are the ones pushing for more open trade. it is conducive to that. digital taxation has been a big hot button issue. many members going their own way until there is an eu wide deal. -- you have been a bit of an opponent to what was proposed. where is your position right now? favoring the
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possibility to define a compromise. we need a level playing field. that is what we have been advocating from the beginning. we can live with a temporary level, but european let's face it. this can only be a provisional solution for two reasons. we need to make sure that other countries come on board and taxing revenue cannot be a good solution. there is a lot of work to do in this field. it is working on a general compromise and will come out with the proposals this year. >> with that determine the kind of innovation that you want to the? >> as long as we ensure a level playing field, it would be similar in all countries.
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it is there to stay. if people think that you can get rid of that, they are wrong codes it is good for the consumer, faster and cheaper. > , let's give you a whole half-hour. always good to talk to you. david, back to you. we are headed into the lunch break here in hong kong. closed for coming of age day. u.s. futures down about 20 points. virtually every single stock is down. 157 down. december trade numbers really falling off a cliff there. let's have a look at where we are right now.
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676 on the chinese currency. lots more coming up on bloomberg tv. ♪
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>> u.s. shutdown is now the longest in the modern era, about to enter day 24. if it drags on much further, u.s. equity futures are falling. it is the crucial -- : it is the crucial vote tomorrow. tells. secretary of state saudi arabia that its isolation have gone on for too long and urges all sides to cooperate. oil prices are up.
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it is it :00 a.m. across the emirates. tracy: let's take a look at action in the currency market. currently riding at a six-month high. it seems to have turned into a census position. a lot of that is on the back of optimism. we did have chinese trade data this morning that showed a monthly figure for december with a 4.4% drop in chinese exports. that is the worst performance
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since 2016 and far worse than a lot of analysts expected. goldman is still lifting its , something to 6.7% to watch out for. the trade data and the partial shutdown is weighing heavily on sentiment. there are other factors as well to consider because we had a weekend that was very busy in terms of the liberation between the key energy ministers. they said they would do whatever is needed to stabilize markets. an interesting line on russia. they are not pulling their weight. he says they are not moving as fast as he would like. the four year high. takes hastever it strong sheets. let's get over to other market action.
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let's start with you. what is going on with you this monday morning? juliette: remember that the asia-pacific index was 4% over the time of next week. for the out of action holiday and we are seeing most major markets tracking lower. lower for the first time in about seven sessions area biggest fall since january 2. upsides some positive from a lot of the tourism stocks in south korea. tourist groups heading back there. 34% overue jumped 2018. also watching the aussie dollar weaker for what was seen in that chinese data. the yen is rising today.
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let's get into the conversation. indian markets coming back online. last friday, we saw the daily moving average. below.ve gone below some concern is starting to emerge. a straight day of losses. we are declining further by 7/10. relatively smaller banks. we also had weakness in the 500. some weakness even in the relatively smaller capitalizations. the management will up its forecast on the financial year. it is not looking that great in india. saly, thank you
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so much for that. let's check on the first word headlines from around the world. may at the you can't parliament warning that they will kill brexit if the voter down as expected. such a scenario would be catastrophic for democracy. some lawmakers are planning to seize control of the legislative agenda. the government of greece is unraveling. could triggerote an early election. tentatively planning a confidence vote. president has treated that the u.s. military has begun to
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withdraw from area, something that he says is long overdue. -- he added that he would devastate turkey the turkish if president carried out his threat. all should cooperate. saudi arabia, the uae and egypt cut ties, accusing him of supporting terrorists. riyadh should take steps to in the war in yemen. global news 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. the partial u.s. shutdown
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is the longest in the modern era. it will enter day 24 and with no end in sight. lindsey graham says he floated a proposal to president trump as negotiations over the border wall sunday remain at a standstill. i tried to see if we could open up the government a limited period of time and the president said let's make a deal and then open the government. tracy: warning of a possible cut to the aaa rating should the government shutdown stretch on. >> it is not primarily what we are concerned about. there will be a growth impact. it is not a huge amount of the government that is shut down, but it is meaningful. what we are more concerned about is if the debt ceiling comes
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back. tracy: let's bring in jesse lewis. it is so good to see you this morning. impactto start with the on the treasury market. ironically, i cannot show you treasury positioning because of the shutdown. we do not have that data. primaryrt shows holdings of u.s. treasuries. that is actually the wrong chart. that is my mistake. some indigestion in the market. how do you see these concerns playing out on government debt? this is a lot of theatrical stuff. it is fairly short term.
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cause say, it could indigestion and short-term upset. macroeconomic implications are usually limited. just how people look back and remember this episode. in terms of the treasury market, i do not think it will have any long-term impact on the yields. your view on what it can contribute to the bigger story. the clouds are gathering. i am looking at car sales. 30% in the span of four years. you listen to the people at j.p. morgan who are crunched all kinds of data. the probability of an economic
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contraction is 50%. do you agree with that? >> know. i think there are just as many models that point to the recession being much less than 60%. i think a lot of these do nottical models really have much predictive power. a lot of them are still showing the probability. i would rather look the consensus survey. tracy: on that note, j.p. morgan and of is based on market-based predictors of it. economic data strong. >> i think we can go back to that famous date meant that this stock market has predicted in
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the last five sessions. i think there is information, but i think if you look at a gauge based on the past gdp growth, a model put together by is an excellent track record. isreally confirm and that useful information in itself. i think i would put weight on the hard macro and like mixed data quarterly gdp. we had some numbers out from china. we put this on a chart. line, trade balance surprised quite a few investors. what do you make of an economic slowdown still in the beginning
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across sectors and beyond chinese borders? one thing we have noticed is in the pmi surveys, they have -- weak.co- in november. fell the trend was not so worrying. the trend we are seeing now, there is a weakness in chinese exports. this will make beijing wants to end the war with the u.s.. to enter aot want prolonged trade war. you have a slowdown in the property market. it really needs to rebalance the domestic economy and utilize it.
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this is significant news but it might be good for the trade negotiations. tracy: you are staying with us. still ahead, up. the energy minister says he is convinced opec plus is on yousef: the right track. tomorrow -- on the right track. yousef: theresa may with her warning. andook ahead to the vote all of its implications. this is bloomberg. ♪
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yousef: a live shot of the dubai financial center area. a littlea little bit below the flatlining in what we could act in trade data. the economy is slowing. that is affecting risk appetite across the board. checking on the market action in the middle east and how that
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feared for the last trading session. including a little bit of pressure. trading volumes across the region, we had quite a bit of upside in saudi arabia, lifted by a travel group specifically. was egypt.ghlight reaching the highest levels since november. he named gaining the most, advancing 5.7%. we are up since the december lows. let's get back to one of our top stories. parliament will kill brexit. such a scenario would be catastrophic for democracy. indicating that his party is
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ready to call it no confidence vote within days should that happen. >> do you immediately put down a vote of no-confidence? >> it is going to be soon. do not worry about that yousef: -- do not worry about that. yousef: if the brexit deal is defeated, what would happen next? >> there is a likelihood that there could be a vote of no-confidence in theresa may and new elections. there could be people who want to go back to the eu and renegotiated something. there are reports that there are
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some lawmakers who want to seize the agenda and get an extension so they can come up with a new agreement or at this point, say that brexit is going to be in and did, that they are not going to go ahead with this deal. march 29 is around the corner and the eu is saying at this point that is what is happening. march 29, they need to tracy: leave the eu. tracy:-- they need to leave the eu. tracy: i love that clip of jeremy corbyn. what is the eu saying? they have been saying all along, this is the agreement, take it or leave it. , at thata big defeat point, they might be willing to extend some.
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it does not necessarily benefit them. the point they were making this is irelandt there backstop which will not hide them forever. that was some of the brexit supporters concerns that they would be tied to the eu forever. that will not be the case. they are waiting and watching as well to see what happens. unlikely that they will give a whole lot. waitingpoint, they are to see the size. we have uncertainty in the u.k., but also, the risk of early elections is rising. why and what is happening there that might have implications for stakeholders outside? >> this is all over a naming
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this you. it is causing the government to topple there. the fact that there will be new elections come september. now it looks like they could be much sooner, maybe this week because of this dispute over what you call macedonia. spot in the another eu with some trouble. it looks like it is spreading across the region. thank you very much for those insights. let's get back. still with us from hong kong. key vote, anto this lot of scenarios that are table, fromt together a graphic least likely to most likely and what that could do in terms of upside or downside move.
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i want to get your take on what is most likely. >> i think there has been a lot of bad news. one could almost take a contrarian view and say there could be some pickups later on. i do not think anybody can have any confidence in post-brexit scenarios. models do not give you any guide. i would agree with mick jagger. maybe a little tough in the short-term. we have a convention going on here. one thing that markets do not like is uncertainty and political instability. lame-duck angela merkel and ongoing protest in france as
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well. at what point is that uncertainty start to weigh on growth and the investment landscape? >> in terms of underlying growth and potential, it has been weighing on growth in the background for quite some time and it will continue to do so. the eu has not begun to sort out if structural problems. difficultiesitical everywhere you look. i think you are a has many difficulties. it will soldier on and struggle on. they do not seem to come up with old solutions or economic reforms, so it is a work in progress. i would give it a d grade so far. yousef: the rest of the world is
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getting worse by the day. points to the tightening spread between the u.s. and german government bond. where is the opportunity in europe? >> it is bottom up. it has to be rather than the macro. there will be some areas, some pocket of opportunity. if you look the other performance of europe versus u.s. stock markets, in terms of relative sales growth and relative earnings growth, the other performance in europe so far has been deserved. possibly, no expectations for growth or a slowdown. maybe those are overdone a little bit. basically, europe is slowing closer back.
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surprising everybody with strong growth in 2017. you have to be selective. i would prefer to have a combination of u.s. and emerging markets. tracy: senior asia strategist. that is the most important part of your title. the standoff u.s. secretary mike pompeo tell saudi arabia that the isolation has gone on for too long. we will have the latest. ♪
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tracy: let's get a quick check of the latest business flash headlines. for professionals have been slashed.
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shutdown hit many sectors. middle-management positions dropped by up to 10%. bonuses are also down compared with three to four a few years ago. saudi aramco may tap the market for about $10 billion to help fund the acquisition. the kingdom will decide in the coming weeks about the size of any proposed bond. the move into the bond market for the first time. it has been telling bloomberg pg&e has quit. facing massive penalties and possible bankruptcy in addition to devastating wildfires last year.
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yousef: here is what is coming up next on the program with oil prices around 20%. saudi minister has been weighing in. this is bloomberg. been we♪ ighing in. amazon prime video is now on xfinity x1.
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11:30 it has just gone p.m. we have equity futures ticking lower this morning. it looks like .73% there. if you are searching for good news in equity market, take a listen. pointing to the outperformance as one indicator that we might be ready. let's check on the business flash headlines. >> a new poll suggests half of america blames president trump with a record shutdown. president and
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republicans in congress while 29% blame democrats. more than half are against the declaration of a national emergency to fund the border wall. theresa may warning that they will kill -- europe, prompting the prime minister to call a confidence vote. the latest sign of political instability. tentatively planning a no-confidence vote on wednesday that could end the last four years in power. saying carlos ghosn is being interrogated with no lawyer present.
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her husband has limited opportunity to confer with his legal team and has lost seven kilograms behind bars. company acted before he entered a plea saying the incident has brought them into disrepute. they have rejected all such accusations weighing their products are safe. for therivals international order show in detroit. cutting services downtown just as the city hosted its annual celebration. the show was already reeling from the news that several automakers were's tipping it this year. global news 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more
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than 120 countries. this is bloomberg. here is juliette saly with a check on the markets. juliette: that 4% gain for stocks over the course of last week. is tracking yen higher. a very good week in terms of chinese data. certainly been watching all of that to see whether this slowdown is gaining further traction. you have the index off by 1.4%. you can see every major market is lower today. the hong kong market with its biggest fall since january. the market has been higher for six sessions in a row. not the best dark to the weekend.
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tracy: you mentioned corporate news. borrowing, they are now talking about possible ipo. how is that is playing out in asia? juliette: we saw shares jumped the most. it could raise about $5 billion. let's have a look at some of its rivals in the region, specifically in thailand. analysts say it is very much undervalued, rounding by 3%. that they are listed in vietnam and are undervalued. i am also watching the casino players.
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that younow saying should stay in the casinos because a lot of the negative are being priced in. they say it is a top pick. when you look at the map, you can see every major sector under pressure. they are included in the ones that we have been watching. thank you for that roundup. let's get to a story around crude oil. starting to slip away the pessimist. previously bearish hedge funds. theays he is confident market will soon return to balance. >> if we look beyond the noise of weekly data and vibrations in herdliket, speculators
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behavior, i remain convinced that we are on the right track and that the oil market will quickly returned to balance. if we find that more needs to be done, we will do so. yousef: joining us is our energy reported. pull ineen push and terms of demand and supply. >> absolutely. i think the market has a lot more confidence. the comments that we just heard from the oil minister has been echoed in russia as well. they said they are willing to do more before their april meeting to try to put a balance to the market. want to actually see results and they are beginning to see it.
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output fromdecember saudi arabia sell. it was at its highest in november. they said they are on track to in january. there are a lot of people in the market at the moment who think that opec plus can be believed. what they are doing will bring some balance and some progress between china and the u.s. to help the market. on that note, it feels like oil is tracing the move. it is a little bit of a chicken and egg tuition. what is the relationship like between oil and the rest of the market at the moment? they track very closely with equities.
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economics, general, and unhealthiness in the market. of be people want to get out the commodities that are more of so when there is a risk environment, they sell oil. you have seen that would the giant moves in equities. you saw oil tracking with that as well. , it is the time longest government shutdown in pulling down all markets, including oil as well. people want to save their cash before things get that -- get worse. energy reported bringing as the ins and outs. let's continue the energy theme and crossover to my old stomping ground.
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manus cranny is there. good to see you. >> we are here at ground zero for renewables. want to get his opinion. good morning. here.rst ceo you said we are perhaps underestimating a paradigm shift that renewables can deliver. what do you mean by that? >> energy goes into everything that we do. everything. up until now, it has been driven by fossil fuel.
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it goes up and down. timeve now for the first to be able to use the power of the sun and the wind. there is no fuel costs. we are able to generate electricity for 35 years. we are just collecting that over time. costs have come down. in this part of the world, a significant component that we consume. there is no cheaper way to do it. how much have costs come down? >> even today when the sun is shining, we used also .ou'll-based energy
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we are now delivering. we are dispatching. a lot in price. we are doing a product in saudi arabia. look at the difference. six or seven cents that i told you. it also makes. it at such axing low price. as ite what that will do penetrates deeper and deeper. we are able to do stories and deliver all of it. is thekey to the future element. obvious one. is an we always protect the future with the history of the past. there is so much effort into
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moderating frequencies and through other mechanisms. i would not get hung up on everything on the back. you want a solar deal in saudi arabia. what is next? transaction is now in transaction. a huge piece of news. it has now moved into renewables. last week you heard. fuel. lots of capacity. today,big difference even five years ago the cost of renewables was something else. it is so compelling.
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it is the cheapest way. it get -- it takes more money. renewable, they get billions of dollars. your job is to grow the business. >> icn a norm is opportunity. i know about saudi. i want to hear about egypt. >> i suspect they will continue to grow their market. i think there is a lot of opportunity further afield. ,ountries like southeast asia africa is down. when you do those deals, come back and talk with us. bullish on renewables. a staggering stand here. a few dollars in this business.
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thank you for that. speaking to all the key voices. let's get you a preview of what else is coming up on the show. we will talk about mike pompeo and president trump. they believe the diplomatic row has gone on for too long. , next.est this is bloomberg. ♪
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tracy: it is a little after 1:46 p.m. it is a holiday in japan. it is coming of age day. the currency market is open. it is coming of age day. where japanese youngsters officially turn into adult upon reaching the age of 20.
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they are allowed to drink and drive for the first time. let's check on the indian markets in mumbai. good to see this morning. what is going on? likewise and good to see you. no coming of age for the indian markets because we are following the pattern of what the markets are doing. we started off lower and continuing lower. taken a bit of a stick here. they have not been the greatest. that continues to weigh in on the session today. a little bit of weakness there. as set of that, a little bit of weakness in the market. one quik-trip that i want to leave you with. the biggest talking point has been the results.
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a well-known name after the number that has come out is the only one standing out because of a buyback announced it. days,e best of unfortunately, for indian markets. yousef: let's also get a quick check of the latest business flash headlines. >> thank you. struggling but has won approval from brussels for its loan. the european commission is also lending about 40% of the loan into shares. they say the new business plan will focus on -- approve has declined to applications. it was put into the pboc a year ago under a process should have been making a decision within 90 days.
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they declined to comment on the story. investors continue to pull money .rom a bank fun lowering assets to about manages 50 million. growth suffered a loss of about 4% last year, under forming more than 80%. about 4.4 billion u.s. dollars. the deal will create the largest diversified real estate group in asia. is 11 billionalue singapore dollars. bloomberg headline flash. yousef: let's talk about the u.s. secretary of the, mike
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pompeo. she and president trump hope that all parties will cooperate area -- cooperate. president and i both believe that the ongoing this view has dragged on for too long. it harms our mutual interest. mike pompeo trying to reassure allies. joining us now is our editor. welcome back to the show. we got a tweet from mr. pompeo calling for more effort to counter iranian influence. with turkey is overshadowing everything else. run us through where we are at with this standoff. i think mr. pompeo has two
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conflicts on his hand. on the one hand, you have the where theyuation want to withdraw from northern syria. that has raised concerns about taking steps against kurdish forces in syria that the u.s. has said we will withdraw once the turks assure us that they will not act against the kurds. at the same time, you have the and the between qatar uae on the other side. , butimportant to the u.s. at each other's throats. can we focus on the qatar situation? there are two sides to what he is trying to do at the moment. the u.s. has positioned itself as a mediator in the ongoing
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dispute. why hasn't it been more successful on that front? neither of the sides are willing to budge on this. sayingly pointing to 70 we are not going to take orders from our neighbors in order to resolve this issue, but at the same time, they are saying that we are not going to move either. we want them to take the steps that we have asked them to do. they are accusing them of supporting terrorism and they suspect them of being too close to the iranian. they are saying that it is not true and they are not willing to .ake those steps they see it as an attack on their sovereignty. they have tried for some time now. this is not the first time that
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they are unhappy with the situation, but every time that we think that there is some movement, it falls apart. it seems like mike pompeo will have his work cut out for him. thank you so much. still ahead, bloomberg's size and scope. we will tell you what it is, next. this is bloomberg. ♪
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bloombergis time for 's size and scope. today's number is 13.6 million metric tons. here to explain why is our reporter eric lam. i'm assuming it is probably a commodity of some sort. >> we are talking about production of sustainable palm oil.
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the much of 10 figure is a record high for the amount of the readable palm oil being produced at the moment. that theem is producers are only able to fill about half of that as actual sustainable palm oil because nobody wants to buy it. they are basically having problems selling the rest of it. what are they doing about the problem? at the moment, the solution is not the best one. they sold half of it as sustainable oil. the rest is being put back into circulation as used oil. no room totually store it right now. when you factor in the cost for auditing and things like that, it is a bit of a problem for them. tracy: bringing us the
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connection between copper -- commodities markets and the orangutan. i am a friend. i am torn about this palm oil issue. u.n. currently trading close to a six-month high. have the chinese trade data showing the worst performance since 2016. clearly some impact taking place there. lower this morning, a bit of a risk sentiment into markets. pressure.ices under just short of the $60 a barrel handle. we had commentary but that is not helping to support isis at the moment. sentimentcting probably.
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many outcomes, including a no confidence vote. we will break down a lot of the key themes in the coming hours. this is bloomberg. ♪
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