tv Bloomberg Markets Asia Bloomberg March 11, 2019 10:00pm-11:00pm EDT
[indiscernible] byot of that was engendered what we saw in the u.s. retail sales numbers. floating into this net of the woods as well. david: good news already. another piece of good news, progress on these trade talks. they spoke over the phone. yvonne: talking about the warning -- the wording of the documents. they are looking at the next step. that sent risk assets flying here. we are seeing equities and commodities on this trade optimism once again. we did hear overnight that president trump, not exactly setting a real date for a mar-a-lago meeting on any kind of potential deal, so we will see how this plays out. but at least we are hearing that they are on the phone. that is sending the nikkei up.
the china story once again catching that momentum. large caps as well as hang seng up 1%. we are seeing dollar on the back foot just a bit given the trade optimism. asia fx looking a bit up. the south korean won, trade dependent currencies strengthening. ringgit, renminbi, same story. as we zoom out, commodities are catching up a bit. overall, we are seeing bonds out of favor given this risk on session. u.s. futures are looking pretty positive. we hone in on the china story. we had a bit of a cop coming through from them. china dollar basically dropping like a rock. and shenzhen stocks roaring higher here. we did learn they are recovering
all the losses we saw in small caps already. plenty of action in china. really fueling these gains in asia. take a look at volumes and what is driving this right now. the trading on the msci asia-pacific index ballooned to 44 billion shares late in february. that is the record that we saw back in 2009. just to give you some context, since then, volume on the benchmark gauge has topped that previous high. certainly we are seeing tailwinds here in this trade. this of course is centered on trade at the moment. rishaad: we've got also one other story, keeping a close watch on boeing, the 737 max. argentina, just the latest company to suspend 737 max flights.
stephen engle will have more on this. >> we have a statement from boeing saying the 737 max is a safe airplane. the faa saying it has confidence in the continued airworthiness of the airplane. no conclusive evidence linking the two crashes. as you said, more airlines are grounding it. airlines, also aeromexico. we will speak to mark barton in the next 35 minutes. david: more from steve and also coming up, the president and ceo of the stock exchange will be joining us on the show. lots of factors. the philippine central bank saying it is not just up to him to cut rates and he will not bring rates down to fund infrastructure. ramon monzon will be joining us in give or take 30 minutes from now. rishaad: let's get it over to new york and join ramy inocencio
for the first word news. ramy: oil began the week on the rebound as saudi arabia moved to extend supply curves and the continuing nationwide power outage threatens production in venezuela. futures in new york rose after falling last week on u.s. payroll numbers. oil has traded in a tight range after rallying. there are fears of global slowdowns. >> if the economic slowdown ,ndications coming from china from the car sales, telephones, and if we see a slowdown from china, this may impact our demand expectations for this year and maybe beyond. ramy: president trump has presented a budget which seeks one of the largest cuts to domestic spending while boosting defense coffers and adding more than $8 billion for his border
wall. the plan sees rising debt and deficits until the year 2022. observers say it is heading for almost certain rejection in congress. one of africa's longest-serving leaders is bowing to popular pressure and will not seek reelection. algerian president had wanted a fifth term, but mass protest persuaded him to abandon his campaign. the election will be postponed and the government will be replaced. he also promises a new constitution. the 30thh marks anniversary of something many have come to take for granted. tim berners-lee published a paper on how digital objects could be identified and retrieved through browser software. that vision of universal connectivity is what drives much of the world today. berners-lee declined to patent his idea.
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'm ramy inocencio and this is bloomberg. theresa may has won changes to her brexit bill. it raises chances of the deal passing parliament. [indiscernible] for all the details, kathleen hays is with us right now to talk about how significant this agreement is. >> certainly it comes at a very crucial time. theresa may literally jumped on a plane last-minute to fly over to strasburg, france, to sit down with jean-claude juncker and see if they could come to some kind of compromise. particularly on the irish backstop. that has been holding up negotiations for so long now.
she says the new backstop clause is legally binding. sees it as juncker based on assurances and guarantees. one of the most important parts is this idea that the e.u. can't deliberately seek to keep britain in the backstop by failing to negotiate a trade deal in good faith. here's what theresa may said earlier today. >> one of the requests parliament has, that parliament came together and had a majority vote for, was it should be possible to replace the backstop with alternative arrangements. we have secured a clear timetable that enables the backstop to be replaced with alternative arrangements. >> this is exactly what parliament wanted. for his part, jean-claude juncker and theresa may kept reminding people, it is like an insurance policy. you hope you won't have to use it. let's listen to what mr. juncker have to say about that.
>> the backstop is an insurance policy, nothing more, nothing less. the intention is not for it to be used, like every insurance policy. used, it were ever to be it will never be a threat. >> jean-claude juncker also urged parliament to vote yes on this deal, warning that there will be no new negotiations. brexit or chaos is essentially what he says. david: all right. let's talk about what we are hearing from members of parliament. is there any hope that they will accept this version of the deal? >> i think it is interesting to look at some of the things that people havenow some said as parliament gets ready for that vote. jacob rees-mogg, for example, the leader of the pro-brexit tory european research group,
said it is too early to say definitively, but it is a step in the right direction. the democratic union party of northern ireland said it would study the deal. steve baker, a eurosceptic, said parliament should fear entrapment and vote against it. also leader jeremy corbyn urged people to vote it down. the next step in this, the u.k. attorney general will take a look at what they have agreed and come down with some kind of legal assessment. then we will see what parliament has to say. rishaad: nice work. sterling bouncing after these brexit headlines. we get more reactions now. this is sue trinh. ok, one of, one down, just depends on what happens next. tuesday.o the vote we see the alternative move. where does this leave the pound? sue: there is an unusual amount
of uncertainty at the moment. we had a 200 point rally in table, but short-term forecasts are largely meaningless. beyond, at overnight risk reversals, volatility, these tell us that the market is hugely uncertain and doesn't know how to price sterling at the moment. david: one of our headlines today, i just had a look at the bloomberg, cable likes going up the escalator, but chooses to go down a tube. fundamental outperformance of the u.s. economy relative to the rest of the world.
i think the u.s. dollar can win no matter what your view of the world. in a situation where all is right, low volatility is ultimately supportive of the u.s. dollar. rishaad: quickly, is there a light at the end of the tunnel? [laughter] sue: i think that it is too soon to tell. clearly a lot of optimism is baked in the cake, but hope springs internal and the market is desperate. rishaad: but no light at the moment. sue, stick around with us. david: we will talk about the other side of that dollar equation. sue trinh stays with us. we talk about the e.m.'s racing for chinese production. rishaad: plus, manila's malaise. we speak with the philippine stock exchange ceo and look ahead. ♪
let's take a look at your currencies, especially in the e.m. asia space. we are seeing dollar on the back foot on those headlines that we are getting closer to some type of deal. they have been on the phone with lighthizer and mnuchin, talking about the wording of documents and getting to the next step. dollar china is up today. you will see the likes of the indonesia rupiah as well as malaysian ringgit having a good day today. let's take a look at this chart. perhaps we could pour some cold water on this rally. we are tracking when it comes to the emerging markets currency index what it has hit now. the differenceis between what you are seeing in terms of the different moving averages.
last week, we saw the emerging market currency index breakdown word through that cloud. the last time that happened, it forecast the five-month slide in emerging-market currencies, and predicted the beginning of this year's rebound as well. is it a sign of things to come? let's ask sue trinh. i know we don't look much at the technicals, but are you seeing flashing red signs? sue: i think it is pretty consistent with what i'm seeing on the fundamental side. a lot of good news in the price. , but also ae u.s.-china breakthrough. skeptical that we can see any substantive changes. dollar,hat do we watch, or mri markle related to the renminbi? what is the leading indicator for you? sue: it is important to keep an
eye out on the timely activity indicators and what they are telling you is that china is in the midst of a very severe cyclical and structure will slow down. china was already on this path well before tensions with the u.s. came to light. that is a situation that china is going to find it difficult to dig its way out of. there is a disturbing trend of more debt yielding lower growth. rishaad: how severe? sue: very severe. if you look at the pmi, it is well below 50. rishaad: 6% growth is the bottom of that official figure notwithstanding, that is a really decent clip. debateere's a lot of about the truth in that 6%. you have to remember that gdp targets in china and the gdp growth official rate is
ultimately meaningless. if you look at more timely indicators, it tells you the true state of the chinese economy and we are in a lot of trouble. yvonne: i'm just wondering, with all the stimulus that we've heard, i guess you have to look at a medium-term perspective, that growth will eventually recover in china. does that provide some kind of floor, some kind of spillover effect? if you focus on the sheer volume, it does seem that they are pulling on as many levers as possible. if you look at what it means for the creative impulse in china, it is a lot lower than the 2008 downturn. being muchimpulse lower reflects the fact that credit intensity and growth in china is just so much higher. i think the turnaround will be a lot shallower. rishaad: you are watching peso, aren't you? david: we had the central bank
governor, the new one. he's talking about how they want to guide us into a range. he's not going to decide by himself. he's not going to bring rates down just for the sake of it. why do you think we are looking at dollar peso? why do you think the market is not taking more? a global growth it is a, basically, very difficult global environment for small economy such as the philippines. you also have a benign inflation scenario. rishaad: look at that. sue: there is a concern. keeping monetary policy to type. i think you hit the nail on the head, talking about interest rate differentials and yield gaps. with emerging markets, they have
more freedom having the fed waiting. does that mean you get that widening interest rate differential which can add further pressure on these e.m.'s? sue: very much so. remember why the fed is pulling back from its autopilot in terms of tightening. it sees ind of what the global economy and global growth. this is not a favorable environment. david: $7.41 china is your call. rishaad: that is quite a call actually. trinh, capital markets head of asian fx strategy. just in case you missed that interview, tv is your function. it takes you back to some of the interviews. check that out. become part of the conversation.
rishaad: you are back with bloomberg markets as we have a look at the headlines. -- facebook taking down some ads of elizabeth restoring them after reporting by politico. facebook says they removed the ads because they violated logo rules. they have restored them in the interest of debate. david: senator bernie sanders has reiterated his worries about working conditions at amazon. he tweeted that employees rights don't stop at minimum wage and that amazon must respect their right to form a union. in october and amazon said it would raise minimum wages.
street capital management is ramping up its public activist campaign, nominating directors to replace the toshiba board. the fund owning about 5% of toshiba is also the fourth largest shareholder. among the nominees will be king streets cofounder. get a look at the markets. vietnam taking advantage of u.s.-china trade tensions. foreign investors are taking note. chairman spoke to me last week in shanghai. he sees opportunities in vietnam as well as possible regulatory -- within it. >> typing it is a little bit easier for us because we run a fairly sizable fund. vietnam, i think if the government keep on the path they are on, without making drastic policy changes, i think vietnam
will likely be quite high. but it is relatively small. the ticket size is relatively small. affectk is policies can drastically how the markets behave. vietnam is almost what we call a no-brainer. you have cheap labor, young, highly productive, and hard-working. that allcoincidence the factories getting displaced out of southern china because higher wages is thinking them noncompetitive. instead of going back to earlier, it is all going to vietnam. young population and productivity. that trend is going to continue. whether the government now realizes they have a good thing going and they try to make a policy to rein that in or change , thatnamics drastically
is always a risk. but if they let the free market behave the way it is going, -- david: is that what is happening? >> i think they like to look at what china has done and what made china work. they obviously also learned a painful lesson in couple years ago with the inflation, banking issues, and drastic devaluing of the currency. it was also during that time where we saw the potential to go in fairly significantly as a vote of confidence in the country. the government has given us a couple properties we were able to buy from the market and show the rest of the world. when, -- at was good goodwin gaw, joining david last
week. let's take a look at some of your markets. we are seeing quite a lot of trade optimism fueling these markets. we did hear about those trade headlines. the two sides in the u.s. and china are talking about the next step. getting into that lunch break, now around 1.75%, hang seng, taiwan, seeing gains. commodities are looking up as well. this follows the wall street session with the biggest rebounds we've seen in some time. tech stocks fueling that rebound. let's take a look at the asia space. the exception to what we are seeing in the markets today. those earnings coming out. the losses ballooning now that they are competing more intensely against alibaba in food delivery. going to be interesting to see what comes out of this. we have terry speaking at a news
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>> it is 10:29 p.m. here in new york, i am ramy inocencio with your first word headlines. theresa may has one changes to her brexit bill raising the possibility of it passing. after late-night talks in strasburg. they secured assurances on that irish backstop including the measure cannot be permanent. >> one of the requests parliament has, parliament came together and had a majority vote whether it should be possible to replace the backstop with alternative arrangements. clear timetable that enables the backstop as defined currently to be replaced with
alternative arrangements. an insuranceop is policy, nothing more, nothing less. the intention is for it to be like in every insurance policy and if it would ever to be used, it will level this threat. technologies will he a briefing after being hit i patent case lawsuit was claims they submitted an inaccurate royalty report and paid nothing from 2015 onward. foxconn said it did not violate microsoft's rights and is being "i'm directly sued." u.s. retail sales -- sales plunged. the value of overall purchases that isof 1% and compared to a 1.6% drop in december which was the steepest since 20th -- 2009. sales of the control group subset which excludes food
services, card that car dealers rose 1% topping expectations. boeing was the biggest fall are on the s&p 500 after it tries to deal with a crisis of confidence. the faa said the plane remains airworthy but regulators say it will demand flight control enhancements by april. some airlines and regular readers grounded the plane which is boeing's best-selling aircraft generating one third of its profit. 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 am ramy inocencio and this is bloomberg. yvonne: let's take a look at markets in southeast asia are trading, the philippines once the darling for foreign investors have underperformance numbers but southeast asia having a good day on this trade optimism lines that we got earlier. eating close, flirting
with his bull market territory but this rally has been stalled. at 8200 so to put some context, let's have a look at our bloomberg chart. you measure 12 months even if you get some inflows the last two months, if you add outflows the 10 months before he would still be negative. that is peering out, the fed raising rates and you had a horrible year last year, it picked up but we are still looking at a negative basis. let's get a sense of where we go from here, we are joined on the phone by the pse ceo joining us for an exclusive chat from manila. thank you for joining us. we will talk about market sentiment. you guys came out with earnings recently, operating revenue up 30% but i looked at the bottom
line, we are down 12%. give us your take on what guidance is for this specific year. oprah nejra -- operating revenues are up by 30%, income was down by 10%. that is explained by the recession, the sale of one of our properties. without one of -- we would have been 30%. at this year we are looking the much, not much lower. than incomeer figures. because for 2018 we had the one very big [inaudible] that ava big boost toward
listing revenues. [indiscernible] yvonne: we have some breaking news regarding there is a boeing situation at the moment. ethiopian fatal airline crash. we are learning singapore according to the straits times there is reporting that singapore will be grounding 8's.g 737 max announcing a grounding this tuesday morning according to the straits times, now following china and indonesia in being a more cautious note in grounding these flights for now. [indiscernible] as well. of thejoined by the ceo philippine stock exchange. we were talking about earnings.
help us understand what is the pipeline looking for share sales this year? >> ok. unfortunately, the first quarter is not yield a single ipo and to make matters worse, we are having elections in may. everybody stays off the market during elections. orect all the pending ipos capital activities to start happening in the third and fourth quarter. hopefully there will be a big deluge in the third and fourth quarter. we were talking about this equity rally that has sputtered out, we were flirting with bull market territory, why has the rally lost steam and do you expect the index to break into a full market eventually? >> right now markets are at the 700, 800 level. if you look at the forecast for a lot of the investment analysts
in the philippines, they are forecasting year-end average to 2700.erritory of we hope they are correct. as an exchange, we're making sure that we're introducing new profits that would be, keep our market in a very competitive position vis-a-vis the regional markets. start shares, a lot of people are starting to look at being able to hedge their exposure and short shares in your exchange. when can i expect that to be put in place? we are finalizing everything so we submitted all of our trading rules, all of our trading platform has been configured to accept the share -- a short selling sales.
even the brokers have been configured. the [indiscernible] securities borrowing and lending is awaiting the approval of the sec. in march hopefully in the next two months we are pushing to hasten approval. we hope to get short selling the ground by june at the latest. product.with our other i was going to ask you about the nation's bond exchange, will they revive the big to buy? that transaction as they made anknow, offer that didn't -- expired last december 31.
by this friday, they would know if the sellers accepted their offer. pse,nk i can speak for the the offer price, i do not think pse will be accepting their offer. we want to see what the financialof the [indiscernible] are they going to pursue the transaction or not? a bonded to purchase exchange and also the depository for risk management purposes. i don't think we should go into a bidding war with our government institution. seere going to wait and what they will do next. what your add to offers are, a lot of talks
around the region, we were speaking last year with thai stock exchange, they were speaking with the chinese stock exchanges. termat in your medium long-term future for the stock exchange to link your exchange with china or your neighbors, is that something you're thinking of? theothing -- not in medium-term but in the short-term. we are having very serious discussions with the singapore exchange. we are working out the mechanics how to do it. this will open the singapore market to investors and lead to brokers there and vice versa. to iron out all the mechanics and details, we hope to get this launched in the next two months. in the short-term we will have a
partnership. on a long-term basis there is the stock exchange and many other initiatives. ultimately the connection is what they are hoping for. >> sounds encouraging. the next three months will be extremely busy for you. thank you for coming to the program. joining us for an exclusive interview. on new purifying takes meaning as boeing loses the confidence of passengers and investors. we will discuss what is at stake next. this is bloomberg. ♪
country. that suspension will take effect on march 12 at 2:00 p.m. local time. just a couple of hours from now. they will not allow all variants to operate area the grounding thai lion airfect and shandong air. get rish.'s rishaad: let's get the latest on what is happening with this aircraft. stephen engle with me and also mark barton is here. for the airports and regulators. let's talk about where we are with this. has their domestic carriers, silk air which operates five of these max relates, they have two on order,
they do not use a single aisle airplane, that is in addition, errol linkous argentina's also doing a band. and then china out right then as well as indonesia. the singapore ban is interesting because it includes other airlines flying and so it is not just a ban on silk air. this comes after the faa and the u.s. overnight basically rolled 737 global note that the maximally continues to have airworthiness and there is no linking the fight to the lion air crash. from ourget more guest. thanks for joining us.
let's get some insight into whether the airlines are overreacting or legitimately doing the right thing. by airlines is justified. , doing this aircraft need to get out of the bottom of what makes these planes fall from the sky. stoppedthe 1980's, we five crashes over three years and this is definitely the right step to find a solution. the airline is going to hurt consumers, asia and southeast asia and some of the european operators will have an impact on the revenues. unless the aircraft is stabilized, this is the best course of action.
not rule onid grounding the aircraft. do not want to link the lion air crash with the crash in ethiopia. including in the boeing statement that came out overnight. perhaps didch they not give the proper training to pilots. are you concerned by how this was implemented in the new generation of an old airframe but basically a grand -- brand-new aircraft? regulators need to be more proactive. andent through an faa phase the mcas is a new
technology and the ability of your light controlled system is definitely alarming to the point a nosedownn induce position. we need to put the two together. no matter how chilly this is in terms of similarities, i would still feel like we should not speculate, let's get the data and see what happens. >> we are hearing chinese officials through the media are asking boeing, pleading with going to issue a ban. we know the faa did -- a grounding. the faa did not ground them, they only grounded an entire model of an aircraft in the last
40 years twice. that was the dreamliner that had no fatalities in 2013 but also 1979 in the american airlines crash in chicago with the dc-10 where 270 plus lives are lost. did the faa do the right thing grounding whena there has been threaded 46 lives lost in these two crashes? >> the faa [inaudible] local regularo leaders to enforce that how they interpret that to be. in my honest feeling, the faa will not come with [inaudible] unless they believe something has happened. and whatot expected should follow suit is the regulators in malaysia and singapore and indonesia, india,
australia that would take more harsh aggressive steps with a complete and total grounding of the fleet until we figure out what is wrong and as we change that, mcas with the alternative part, if that is the alternative solution then so be it. we have the similarities of the tragedies, you have another aspect that they took place in developing or emerging markets and developing nations where standards may be a bit more lacks. ax.l is that important or germane? the last crash they had was in beirut and lebanon in 2010. the airlines has been [indiscernible] for the last eight years.
fires and thetery aft galley fire, there has not been anything significant in terms of a major disaster. i know they have some good talent and they are a repair station. even with lion air, they are certified and approved by boeing. i don't see a maintenance quality here. i see, think more of a challenge aircraftilizing u.s. technology. every time you introduce a new aircraft it always reacts differently to what realities are. a lot has to be done now to stabilize than aircraft, to pinpoint the problems which are affecting it, normal, slight performance. we can have safe flights out there.
thank you for joining us. some breaking news coming out of foxconn. >> it is a facebook post talking about they have microsoft here, oft they did not violate any those rights that microsoft has said. they do not manufacture the product in the lawsuits titled -- that was stated. at 11:30 a.m. local time we will hear from them, you heard him defend himself against these claims that they did not pay for royalties from 2015 to 2018. plenty more coming up. this is bloomberg. ♪
debts and you can see in the charts it has plunged the time since the beginning of this year. i overlaid that with the shanghai composite index to make the term are interesting. those two charts lines are negatively correlated and it is not hard to imagine that when the sentiment as high people pay lower for debt default insurance. the point i want to make is when investors are saying the composite is in a bubble china'sy, jpmorgan says cds rally is also overdone. the reason is because the rally is given more by the financial, monetary policy loosening up really by the fundamentals. formationore new debt in the financial system then there is a bubble down the road. that was good.
>> we are talking about with hong kong as being ground zero for one of the areas hard-hit by the trade war. this chart is showing if we are going to have a way out for hong kong that potentially it could come from retail. we can see here on top is the visitors from china, mainland china hit a record, over 5.5 million in january. and the bottom, you see as the same time we had a rebound in january for retail sales back to 7.1%, the highest since last august. basically flat. before then, we saw that trade conflict right. this is given that we had the budget, some belt-tightening there. if we are going to have a way out for hong kong, it is retail that will be interesting the hong kong economy. >> this chart tells me to stay way from lv, samsonite, encouraging signs. rishaad: both very similar in a
emily: this is bloomberg technology. coming up in the next hour, shifting into reverse as rebuffed -- abruptly, elon musk keeps many of tesla stores open raising prices on electric cars to pay for cost. china and indonesia have after antheir fleets, ethiopian airline crash killing all 157 people on b