tv Bloomberg Daybreak Asia Bloomberg March 19, 2019 7:00pm-9:00pm EDT
haidi: very good morning. i am haidi stroud-watts in sydney. australian markets have just opened for trade. shery: i am shery ahn. sophie: i am sophie kamaruddin in hong kong. welcome to "daybreak asia." haidi: our top stories this wednesday, the wait and see moment as markets look to the fed. there is concern the u.s. and china remain far apart on trade. president trump remains optimistic. officials are saying beijing is pushing back at a range of american demands. the e.u. gives may a brexit
referendum. let's get you started with a quick check up on the markets closed. stocks gave up earlier gains. the dow fell .1% after four sessions of gains. that of course because of the negative news flow around that potential trade deal between the u.s. and china, so we have the s&p 500 holding steady, really, not changing much after at one 0oint jumping above that 285 level. the biotech index turned negative, not to mention the semi conductors also took a hit and pared back earlier gains on the news that the chinese and u.s. officials were really debating what to do on those pharmaceutical issues, so that really pressure the markets.
we are seeing pressure on europe's future is at the moment as investors are turning their focus to the decision tomorrow. let's see how we are shaping up for markets in asia. sophie: we are shaping down so far with stocks in sydney off .1%. among the laggards, we have a cement player losing 10%. stocks under pressure. in the daily space, we are seeing this company slide -- airy space, we are seeing this company slide. the company is saying it is looking hard at its business which may lead to more investments. an instant formula maker coming in with a near 10% drop in the first half net income. the space.ed into in wellington, stocks are up .6%, extending losses. this morning, we got fourth-quarter current account
figures from new zealand. we did see the deficits widening quarter.he previous there could be some trepidation given these renewed concerns talks u.s.-china trade along with playing the waiting game with the fed decision looming ahead. haidi: not a done deal when it comes to trade after all, it seems. in hong kong.din we are getting some breaking news on google and the long-running european antitrust battle it has been facing. google is set to give android phone users in europe an alternative, looking to close out a decade of these negotiations. from cap wobbler from google saying for nearly a decade, we have been in these talks about our products. this is the feedback they are getting. alphabet outlining changes to the way it displays ads.
it is really happening before it last e.u.get the antitrust penalty over another advertising service. it has attracted record e.u. fire ants of $7.6 billion u.s., and there has been a lot of es of 7.6y -- fin billion u.s. dollars, and there have been a lot of regulatory fines. they will have a choice of alternative browser and search session to choose from. jessica summers. jessica: new zealand police say the man arrested for the killing was on his way to another target when he was stopped. the two officers involved have been hailed as heroes given the shooter was still armed and homemade bombs were found in his car. the commissioner says he knows
where he was heading but has declined to comment as the accused has been charged. the e.u. is likely to tell theresa may that she must decide by mid-april whether to extend brexit the 2020 or risk leaving without a deal. the other 27 leaders are ready to deliver an ultimatum which would give the prime to seek ahree weeks longer extension. e.u. leaders meet in brussels on thursday. >> what would be the purpose and the outcome of an extension? that thean we ensure end of a possible extension, we are not in the same situation as today? in any case, the european council will need to assess what is in the best interest of the e.u. jessica: the department of transportation is calling for a
wide-ranging review of how the boeing 737 max 8 earned certification from regulators and from the airline itself. the new inquiry is separate to the criminal investigation that the inspector general is conducting in conjunction with the justice department. the range is- grounded. the reserve bank of india says the company must stay on the path of fiscal prudence, including what he calls robust planning of expenditure. he has long pushed for fiscal calm. prime ministered modi's expansionary budget ahead of next month general election. global news, 24 hours a day, on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am jessica summers. this is bloomberg. thank you.
president trump continues to sound optimistic about the trade talks, yet some u.s. officials are said to be concerned china is pushing back at various demands. tom mackenzie watching this. tom. do we know exactly what china is backtracking on? it seems that they are taking a tougher stance now. ishardening -- the line heartening from the chinese perspective. they have made movement on the intellectual property regime, which they have strengthened, and this foreign investment law. mixed reception from the business lobbies. these two areas, from the chinese perspective, are a significant example of them trying to move forward. one thing they wanted in return was a commitment from the u.s. that tariffs would be removed on chinese exports. they have not had that commitment because the u.s. is
discussing whether or not to continue to have the possibility to use terrorists to enforce any toential deal, -- tariffs enforce any potential deal. it seems like the chinese are running out of patience on the question of tariffs and they have been backpedaling on previous commitments to pharmaceutical data and brought broadly, data services as well. this is either a point of can of returnhers say -- or others say this is how two sides negotiate. one added complexity is the question of boeing, because china pledged to purchase about what trillion dollars worth of u.s. goods between now and 2024. a big component of that would have been expensive pricing products like boeing aircraft, which the 737 max 8 would have been part of the package. the chinese side are reconsidering that for safety reasons. we don't know whether they are going to strip out orders
altogether or swap them up, but clearly, if they do change that up or remove them, it will make it more difficult to target. the trillion dollars of purchases -- china is trying to show it can rebalance the surplus it has plu. that is an added complexity in these conversations. haidi: president trump has been sounding fairly optimistic. he has. he said when he was asked about this by reporters that the talks with china were going very well. we reported he is keen to seal a deal to boost his election prospects. he faces pressure from the hardliners within his own negotiating team and from the democrats as well. the likes of chuck schumer saying cannot go wobbly on the chinese.
as far as the timeframe for the use discussions, robert lighthizer will be in beijing from march 25 along with steve mnuchin to continue high-level talks with their chinese counterparts, and then we expect the vice premier to travel to washington to make for them movement in these talks -- further movement in the talks. it is a matter of weeks before we feel this deal. there are significant issues that need to be resolved. haidi: tom mackenzie in beijing, taking a look at the state of play when it comes to the ongoing trade negotiations. let's get the views now from a former fed governor, and a regular guest on bloomberg tv. great to have you again. it feels like the markets, if you take a look at the reaction overnight, have priced in that we will get a good new year's resolution out of trade. are you as that it'd -- as optimistic that it is as
straightforward as that? fuseere is a very long associated with this. it is easy to negotiate a number of soybeans, cars. that can be done relatively straightforwardly. it is these bigger-picture issues on intellectual property in the framework of enforcement, so the laws have changed in china. yes. the question is what will the enforcement be? see thatnly be able to in practice. the administrations are going to want to keep some mechanism they can respond with. that is going to be where the tension is. the chinese are going to say we are changing our practices. the administration will say let's see it in practice. haidi: we know that it has affected sentiment.
the broader economic data, when you take a look at demand and trading volumes in asia -- how do policymakers work their way around what could be a great deal of uncertainty over the next coming few years even? randy: for sure. we saw some of the tumult in the market reflecting that uncertainty. the impact of these trade disputes, at least for now, is much greater on the chinese economy overall than it is on the u.s. economy overall. it affects particular pockets of the u.s. economy there importantly. but trade is smaller to the u.s. that it is overall to china. and the chinese economy is slowing more rapidly than the u.s. economy has been slowing, so there is more pressure. president trump is someone who is a negotiator. and at least at the moment, he feels he is in the stronger position and will continue to press. shery: to your point, the white house chief economic advisor seems to be pretty optimistic
about where the u.s. economy is going. take a listen first. >> we have got a recovery that is accelerating, and that is the sweet spot for the american worker. you know, i think that is really the headline of the report. the state of the economy is strong. it is serving well those who most need it. shery: we know that global markets will -- economic growth if this deal gets delayed and those tariffs remain in place on $350 billion of goods from both sides? isdy: as i said, that important for particular sectors, so that has a very big impact on specific sectors. relative to the roughly $20 trillion economy, it is not that important for overall economic growth, but as we were just disgusting, if there is more uncertainty, that may slow investment, and i think there are a lot of other issues in the
global economy besides the u.s.-china trade dispute that has been raising headwinds for the u.s. this: given all of situation, we have seen central banks turn dovish, whether it is the pboc or the ecb with fresh, new stimulus or tax cuts being announced in china. does this change of tune come in time or are they a little bit late? randy: that is always the question, whether the central bank -- you have a crystal ball that can anticipate everything. thathey undertake actions will have the consequences at the right time? will they get it all right? of course not. they have been trying to anticipate a slowdown. u.s., i called it the pivot to patience. they pivot to talking about patience, keeping trades roughly where they are for quite some time. my guess is that is exactly the same story that we are going to hear when powell speaks later
today. that is a perfect point to leave it. randy sticking around with us for a little while longer yet. we will be taking a look ahead to the fomc meeting. patience is the name of the game. how long can we expect chairman powell to remain patient? shery: and don't forget the messy brexit divorce in limbo. president merkel says she will an orderly split. our exclusive with her is later this hour. this is bloomberg. ♪
policy editor kathleen hays is here with us. is the fed going to take steps they should have taken back in the january meeting? kathleen: if i were a trader sitting here, i would say heck yes. why leave them hanging out there? they included language to signal the fact that jay powell, leading the fed in this nation patients. pause. -- patient this is the meeting they will look at unemployment and take another look at the dots. let's jump into dots on the bloomberg. you can see the rate of forecasted rate hikes for 2019. a lot of people expect at least two or more, but there are some who expect even less. if some of these dots come down and some of these dots -- you can end up with a view of just one rate hike.
we have seen weaker than expected numbers on jobs in february. retail sales, industrial production. suggests itker could be as low as .4, annualized in the fourth quarter. here it is. financial conditions. stock market. we had a big plunge at the end of the year. financial conditions got very tight. we had a big stockmarket rally. the s&p 500 could be heading towards record highs. is this the time for the fed to signal we are not ready for the forecast? we shall see. that is what they are looking at. shery: stick around. we are going to bring and former fed governor randy quarles there, who is still with us. fed governor -- randy kroszner, who is still with us. are policymakers going to stress
patience again? randy: yes. as i said before, they have done this pivot to patience in december and january. that is exactly where they are going to be. the more recent data came in a little bit soccer for the u.s. and soft data around the world. there is no rush to start moving things forward. getting back to the infamous dot plots. that is something that is not coordinated across the different members of the committee. it should not be taken as as much of a symbol as the markets do. it is individuals taking on their own instead of the collective sense of where things are. so i think that is why there is often a disconnect. i think it is likely to come down a bit. i don't think the market should misinterpret the fed as being tough. continue to think the fed will be patient for quite some time. haidi: that really feeds into
the market psychology. take a look at what american money markets are presuming over the next two years. they are seeing rates going lower instead of higher despite what we have seen in the rebound . is this dangerous, the idea that breeding or powell put us into complacency for investors and does that awful leave -- also leaves them with less room to be able to move if and when the conditions do maybe hit? randy: whenever the markets are expecting someone else, whether it is the fiscal authority or monetary authority, to bail them out, it means they won't take on more risk because they will not bear the downside of that risk and lead to trouble. i think it is incumbent upon jay powell and his colleagues to try to explain why they are doing what they are doing, that is not simply reacting to the markets,
that it is not just about providing that support for a particular level in the market. but that is attention. when the markets go down, that is reflective often of lower expectations for economic growth. it may seem like they are reacting to it even though they are reacting to the data rather than the market itself. kathleen: when last you were with us, you predicted exactly what the fed would do. he said they would hike and then pause. now, you are convinced they are not going to signal anything. what would it take to get them to go in either direction at this point? would it take rising inflation? signs of a slowdown? right now, we can see unemployment staying low and wages coming up. what do you think? randy: i think you are exactly right. they are going to look to see if the data is saying something different than roughly where our forecast is. reasonably strong. for inflation to be roughly around their 2% goal, but not
much above and not much below. anything that deviates from that spike in inflation or spike down towards deflation or something that significantly changes the prospects for economic growth, that will get them to move, but it will be a high bar. they are not going to move soon. shery: randy, thank you so much. randy kroszner will stay with us as we have plenty more to come on "daybreak asia." this is bloomberg. ♪
the priceand increase of its top-tier products. shares rose ahead of the results, but the stock is well below its $17 listing price in july. haidi: apple has upgraded its desktop computer for the first time in almost two years. the imac has speedy or processors from intel -- p speedier processors from intel. apple is releasing the blitz of hardware updates ahead of a launch event on monday to unveil its new media and entertainment services. shery: instagram aims to offer instant gratification, launching a new e-commerce feature that allows you to buy what you see. it is testing a new check out future that will let users by directly within the app rather than being redirected to a retailer's website. with advertising growth slowing on facebook, it is seen as a
step toward a new business model, maximizing instagram's monthly users. haidi: the world's top dairy exporters says it is considering in a chinesestake baby food maker, a fundamental change of direction. they posted declines in first-half revenue and earnings and said there are "no sacred in its strategy review. it posted a net loss of 134 million u.s. dollars last year. shery: let's get your start of how asian markets are trading at the moment. we see the asx 200 down for a second consecutive session. same thing for kiwi stocks. we have seen the aussie dollar falling the most against the ..s. dollar we saw china walking back trade pledges according to bloomberg reports. the negative sentiment being
jessica: "daybreak asia this is "daybreak asia." -- this is "daybreak asia." tosident trump continues sound optimistic about the trade talks. some u.s. officials are becoming concerned time is pushing back at american demands. we are told beijing shifted its position because after agreeing, they have not received assurances from the u.s. that export tariffs would be lifted. we are told china is trying to bring in wording to the agreement that complies with chinese laws. former vice president joe biden is said to have decided he is ready to enter the 2020 democratic race. if so, he is seen as being the instant front-runner, having led in early polls for some time now
and because of his link to president obama. many donors have been holding off, awaiting his decision. google will get android phone users in europe a choice of browser and search apps. that is as it tries to close out almost a decade of e.u. antitrust investigations. it will change the way it displays ads for shopping searches to appease smaller rivals that blame google for phone web traffic. the company attracted record than $7es of more billion and a wave of regulation amid fears of the power of big tex. gates joins jeff bezos in the club. mark last celebrated that in the.com boom when bezos -- was justoom when bezos
beginning his climb to the top. global news, 24 hours a day, on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am jessica summers. this is bloomberg. shery: thank you. let's get straight to the australian market check with sophie kamaruddin in hong kong. stocks in sydney as well as wellington falling for a second straight session. this adds markets await the fed decision and consider -- this as the way the fed decision. dollar is holding losses below 71. we are seeing a pickup and aussie bonds, which is pushing the three year yield further below 1.5%, a level not reached since 2016. td securities says a drop for the three-year rate is seen on bets that the rba will cut
rates. i want to highlight the worst performer on the nzx 50, and no company. that would be the biggest drop on record after the company posted a 10% decline in first-half net income due to lower margins and higher overheads. the formula maker said it is taking longer than expected to achieve a regulatory approval for products in china and the u.s. moving to movers in sydney, flipping the board, we have this company tumbling to a four-year cutting its earnings guidance after the company prices for tough conditions to continue in the second half as drier weather impacts sales. we are seeing platinum assets under pressure, falling to the lowest level in a month as the cofounders sold shares. new hope extending declines, falling to a nine week low. at stock was cut to neutral credit suisse to reroute coal
shipments amidst customs delay. iron ore weighing . they can resume operations of facilities that were shot in early february after the disaster. shery. shery: thank you so much for that. an update on the story we have been tracking on boeing. the lion air flight back crash in the java sea had the same issue with the flight control software before they crashed. the flightore managed to ds debate the system thanks to be riding in the cockpit. diagnose the system thanks to the cockpit. it killed all 189 on board. this latest that bloomberg has
learned. this was a previously undisclosed detail on that earlier flight. angela merkel said she will fight to the very end for an orderly brexit after theresa may's strategy had another major roadblock. she spoke exclusively to the bloomberg editor in chief, john mickelthwait, at the global solutions summit. we will very carefully followed events, follow what the british government is going to say with regard to what was stated yesterday. thennot say anything on how situation will present itself on thursday. >> you have to presume she will ask you for an extension. do you have any prejudice on your side? would you like to have a short extension so it does not affect the european elections? or would you like to give them a year to sort out the problem? do,hat i absolutely want to
i am very, very interested in having a very good relationship britain, even after they have left the european union. it is in the german a straight -- interest and it is in the interest of the 27 members. i take theresa may very seriously when she says burton stays in europe -- britain stays in europe. it will simply leave the european union. we have common interests thanks to our geopolitical situation. britain has been a country that -- we have close corporation in security, internal security on defense, and internal security, terrorism, and so on. provisions we made position for the citizens to have as clear a situation as possible. that will invariably be the second-best solution, but we are working on it until the very
last hour of the 29th of march. i will fight for an orderly ofxit, an orderly meeting the european union. we have a few days. i must say i am not in a what in to speculate will do on thursday because it depends on what theresa may will tell us, what the situation is. --will adequately the less everyone is speculating, the easier it is. haidi: that was angela merkel speaking exclusively to john micklethwait in berlin. still with us is business professor and a former fed governor, randy kroszner. banker, howcentral difficult is it for the bank of england and all policymakers who are grappling with the potential repercussions of brexit, both on the european side and on the u.k. side, to make any decisions
given that the most likely scenario is another kicking of the can down the road two years after work started on this, mind you? randy: i think the bank of has been crucial and the continued success of the british economy. we focus on all the political chaos, but if you look at how the u.k. economy has done, it has done reasonably well. the unemployment rate is quite low. investment is low. that is true throughout all of europe as well as much of the rest of the world. and the reason -- one of the reasons there's been so little impact in the short run on the u.k. economy has really been because the bank of england provided a lot of support. so they have got a lot of planning that they are doing, thinking about all the different contingencies. they are going to make sure things don't go too far off the rails. there is only so much they can do. haidi: only so much they can do. there is also an increasing sense that was the weakness we
are seeing coming out of europe, particularly germany, perhaps the u.k. may have a little bit more leverage, because it certainly does not feel like on the european side they would want for this to drag out much longer. you look atnk if the eurozone itself, it is not doing as well as the u.k. is, doingat the u.k. is fabulously, but the unemployment rate is low. europe has a reasonably low unemployment rate. the economy is slowing. i don't think it is in either the u.k.'s interest or any of the major countries of europe'a interest.- europe's if one flows, it will have negative knock on consequences for the other. shery: we are getting boj minutes very same. we have seen of course the boj really trying to get to that 2% inflation target. you have done work on inflation targeting. is this feasible let the moment? should they just -- at the
moment? should they have a range instead perhaps? randy: it is really tough. been doing a very bold move of a large amount of easing, buying equities, buying bonds, pretty much anything they can get their hands on, and unfortunately, it has been very difficult to reach that 2% inflation target. debate onere is a whether they should give up on that and be what would seem to be a little more realistic or if they give up on that, does that mean inflation expectation is just going to come down and say they were never really serious about this, we are never going to trust them again? trying towhy he is hold onto that for as long as he can, but the reality does bite at some point. interpret should we taro aso's comments that it is fine if the boj does not ever get to that 2% inflation target quickly?
i remember him saying that japanese people are happy that inflation is not rising that much. see, this is the tension. how do you affect expectations, which is one of the most important things that central banks do? it is one of the things that is least understood. because it is very hard to know how words that are said by a finance minister, a central bank governor, are interpreted or misinterpreted, and how that changes expectations. obviously, there is this difference of opinion between kuroda and the finance minister right now, whether they should be sticking to that. that is probably undermining confidence in achieving that goal. they should really have a very consistent message. that would be much better. haidi: this is the signaling aspect that is quite fascinating, isn't it? you can propose all sorts of structural arguments as to why inflation is generally globally low. if you look at the pboc, there is a good argument for them abandoning their gdp growth target range as well, but if
they were to do that, if the bank of japan perhaps considers a range, would it be devastating for animal spirit that this point -- spirits at this point? randy: the expectations are that the bank of japan is unlikely to actually make its goal, so if it is done -- not just saying we are giving up on it -- that would be devastating. at least are going to in the short run to have this range, we will buy more assets. we will do something also some substance that shows we are committed to fighting low inflation. i think that is the important thing. if they moved to a range in and of itself, that is not the important thing. it is what they do with it and what others like the finance minister and others say about it. we wait forurse, as the fed and boe, we have a plethora of asian central banks coming out with decisions,
starting with the bank of thailand today. we are coming to a period of potential geopolitical uncertainty with a number of elections. at least on the monetary policy front, is the fed staying patient for the rest of this year? randy: i do and that is right, because there has been a lot of concern that the fed would be zooming interest rate up. there is pressure on the emerging market currencies. and that is not the case now. i think this will be there for quite some time, persist. so that does make their job a little bit easier. that said, with a slowing global economy, that does not make their job easy. they are not the only game in town. people say the fed or central bank should take care of all problems. they cannot. they have limited tools. if it is a broader global slowdown, they are not the only
actor that can try to stand against that, and alone, they cannot do that. haidi: we are so used to central banks over the past decade also having all the answers. always appreciate you joining us and sticking around for most of this hour. randy kroszner, thank you so much for that. the former fed governor there. plenty more to come here on "daybreak asia." this is bloomberg. ♪
shery: boeing and the faa are u.s. government investigations after the twin 737 max disasters in the last few months. on top of the ongoing criminal investigation we reported yesterday. ramy inocencio has the story. ramy: the big question is what is the difference between an audit and a criminal investigation? with the department of transportation, this audit is to make sure the standards and
checks and balances are ticked off in the certification for the airworthiness of the families here. the criminal investigation is to whether there was any wrongdoing. this is increasing the pressure on the faa as well as boeing from two sides. the secretary of transportation did come out with this memo saying that she wants an objective and factual history. she also goes on to say in this memo that safety is the top priority of the department and thosene is saddened by fatalities. this does increase the urgency and pressure. did the faa give boeing to much control over safety? did boeing commit fraud? haidi: you have got information that has come to light in a
themberg exclusive about disaster that was averted a day before the fatal liner crash. the second flight could have ended the same way, but it didn't. what do we know? ramy: this is quite creepy. the second to last line air flight before the one that crashed, it actually have the same problem, and it turned out there was a next her man in the ra man in thext cockpit. he was able to diagnose and fix the problem with the malfunctioning flight control. he pulled the crew to cut power to the motor that was driving the nose down. the reason it was being given down was because there was a malfunctioning sensor for airspeed that made the plane descend. he basically said the plane, all those people on board as well, but the next day, we know that the plane did crash. cutting power is apparently something all pilots do need to
memorize. that person did know. the question is why didn't those other pilots know and why didn't the flight the next day know? , thef things are linked big question is why didn't that crew, if it is linked, no as well -- know as well? shery: coming up next, women make up half the world's population believed only 10% of u.n. member countries. next, we speak to two global leaders committed to closing the gender gap in politics. this is bloomberg. ♪
to the 2% inflation target. the boj's minutes also saying that most members consider it appropriate to continue using persistently. we have not had much change when it comes to policy as they continue to do whatever it takes to get to the 2% inflation target. one member of the bank of japan saying vigilance is required against the economic risks. one of these risks is the u.s.-china trade were given how disappointing the recent trade numbers for japan and trade volumes we have seen as well. quite some time before we reach half of that 2% inflation target. in the days of surrounding international women's day, the united nations put the spotlight on female leadership around the world, and there were some sobering numbers. just 10% of u.n. member states have a female head of state or government while one in five parliamentarians around the world are women. i spoke to two women who want to parity.ose numbers to
i asked why the political empowerment of women has been so challenging. because ofthat it is our history of dissemination, inreotypes, not conducive cultural environments. but we have made progress. even -- i agree with you. only 10% of presidents and prime ministers around the world are female. the numbers are not good. but we have made, you know, progress, and the truth is that when women take part of high-level decision-making, are part of the corridors of power, society becomes a better society. this is not only about essentialism regarding women, but we really do exercise power in a different way, and we really contribute to transforming and improving societies. you agree with perhaps
some mixed feelings when it comes to women leadership now? >> i do have a lot of mixed feelings. ande is 11 of us presidents only three of us have been elected by popular vote. there are 10 prime ministers in the world. so that shows how many women actually get elected directly into positions of power. i would say that one of the reasons also, lack of joint action. we put forward the agenda 2030, we do not do enough on the national or international scene in order to truly implement it. every year, we come to new york in september and we repeat over and over again we need to fulfill the goals of the agenda 2030, but barely anyone reports on what has been done specifically. and looking at why the world needs female leaders, first of all, we make half of the humanity.
it shows the democratic deficit not to have parity, equality, of if greece drive towards the kind of democracy that we want to see, and that is to give equal opportunities to everyone. secondly, when women, when you achieve gender parity, countries do better in the economy. it really affects the development. it has been proven, for instance, if we achieved the gender parity in the european union, the gdp would go up in between 6% and 9%. and in croatia, it would go up by 12%. and i think worldwide, it would go up 31% until the year 2025. and that is a huge difference of the economic aspects life, not just for women, but of their families, of their communities, in their countries. and ultimately, globally.
shery: not only that, but also on the geopolitical level, when it comes to the peace process as well. >> absolutely. we are striving to really get more women involved and participate directly in peace processes as mediators, peacekeepers. the deficit is huge. we only have 3%, for example, of women in our peacekeeping operations around the world. mediators forale conflict resolution. yet the studies made by several organizations show that when women participate in peace processes, they are more likely to last longer and to be more effective in the long run, but this is, you know, with real life experiences and examples. so we need to be in all phases of society to make the difference. that was shery:
the president of croatia. japan and south korea open at the top of the hour. let's preview what to expect. he was sophie kamaruddin. anhie: we are bracing for uninspired start to cash trade in japan and korea. when it comes to stocks to watch encounter, we are watching nissan as the carmaker -- it pulls back production in the united kingdom. watching japan, the credit rating is under review. consumer related stocks move higher after we got numbers for japan in february. thisrea, we are watching company have record high profit. losss like where maker's -- athletic where maker's loss would help -- nvidia stepped to its bullish outlook. haidi. haidi: coming up on the next
haidi: good morning. richard asian markets have just opened for trade. sophie: i'm sophie kamaruddin in hong kong. welcome to "daybreak: asia." . ♪ haidi: our top story this wednesday as markets look to the fed. u.s. and china remain far apart on trade. president trump remains optimistic but some officials are saying that beijing is pushing back.
shery: we have an exclusive interview with chancellor merkel. sophie kamaruddin in hong kong, but are you seeing? sophie: the nikkei 225 index ending declines. the yen is looking study. theing is slow ahead of decision. several members saying it is vital to keep watching the side effects of easing. it will take time to reach the inflation target. up.o have the kospi we did have ppi numbers coming through earlier in the day. we did get minutes from the bank
of korea with one member seeing a downside risk. have stocks do sliding for a second straight day. performers int new zealand after posting a near 10% drop in net income. we did see some movement overnight with conflicting lines about the state of affairs when it comes to the trade talks. overnight losses still trading below. get you to first word news. >> former vice president joe biden has decided he is ready to enter the 2020 democratic race. boosted by his links to president obama.
he is also expected to capture significant support from major donors. many have been holding off while awaiting his decision. choice.ill give a this after they closed out almost a decade of trust investigations. to appeasethe way rivals. findsave attracted record of more than $7 billion and a wave of regulation amidst fear of the power of tax. the man arrested for the killing of 50 people was on his way to another target when he was stopped. the officers involved have been hailed as heroes. homemade bombs were found in the car. to comment further as the accused has already been
charged. muste eu -- theresa may decide by mid april to extend brexit 2020 or risk leaving without a deal. leaders are ready to deliver an ultimatum that would give her three weeks to onide whether to gamble forcing the build through parliament were seeking a longer extension. they meet in brussels on thursday. extensioncome of an -- at the end of a possible extension, we are not back in the same situation. in any case, they will need to assess what is in the best interest of the eu. >> 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. haidi: let's get back to our top stories. some u.s. officials are said to be concerned that china is pushing back. let's bring in our senior editor. goodmarket has passed a headline. there is pessimism building given the complexity of the talks. >> yes, there absolutely is. question is over intellectual property. the issue is that china is said to be pushing back on intellectual property terms that they had agreed to already. some related to pharmaceuticals. there is concern that china wants to do a trade deal that complies with laws that are
already on the books. it is a complication. the question is, how big of a complication it will be. asked how theas trade talks are going. he said it is going well. to be sure, there are sticking points that will be hard to put through. this is certainly one of them. could this complicate ongoing talks? absolutely. this is a really big one. they are concerned about the trade deficit. airplanes are really expensive. if you buy a bunch of them, you can trim the deficit down pretty quickly. one of the big questions will be here. what i am really watching for, if you are looking at going specifically, you should look at
what china replaces it with. otherey replace it with or is this something that you pull the plane out and try to make it up with agricultural subsidies? -- if you areu.s. billing, this is a question of whether or not there will be planes or not. i think there is a really material question as to whether theot china would replace max with another boeing aircraft. shery: thank you so much for that. the federal reserve is expected to double down by cutting its rate hike forecast in half. kathleen hays is here with what we can expect. the fed is more in-line with the
markets now. >> it does seem like that. oftainly in the first part the year, yet they are seeing cutting the consensus forecast for where the economy is going in terms of rate hikes this year. remember jay powell surprised people when he turned dovish in january after hiking rates in december. it is consensus. what happened since then? gdp trackers are pointing to 0.4% growth in the first quarter, way down from what we saw last year. what is going on? here are some of the things the fed is looking at. retail sales, all weaker than expected lately.
rate is just about neutral. it could probably get ready to stop. not just in china but in europe. we just heard about that and brexit. still unresolved. jump into the bloomberg and look at financial conditions. look at the far right hand of the screen. stocks startedy falling. they have rallied again. financial conditions have eased again. they have to look at sending a strong signal in the face of a market that is rallying. should the fed shift to instead ofe fed hike two? kathleen: let's jump into bloomberg really quickly.
we talked about this earlier, but it is an important chart. officials. lot of all you need is some of these people shifting down to get that lower view. said noer fed governor matter what they do, this is a decision made by a lot of different people. here is what randy said. >> i think it is likely to come down a bit. i do not think market should misinterpret that. i think they should continue to think that the fed will be patient for some time. that is where he will be called on to answer a lot of these questions. will: the bank of thailand be releasing information hours from now. what does it mean for policymakers there? kathleen: the weakness was such a big driver for the bank of
thailand in january. now, with the potentially weaker dollar, it strengthens. they have their first general election coming on march 24. the first since there was a military coup. they do not want to get into the middle of just yet. we can look at some of the numbers. that is their key rate. in can see the rate hike january. the problem for the bank of thailand, they have barely been able to keep inflation as high as it is supposed to go. gdp has been holding pretty steady, but they had to hike rates. you could call this a sweet spot. the leadership sees now and what they might say.
haidi: we are getting breaking news as the prime minister responded to the incendiary remarks. explanation after president erdogan cited the turkish victory and threatened australians in new zealand, following the massacre that killed 50 people, saying it was targeting the people. seen president erdogan streaming video as part of -- and his political campaign to galvanize his conservative basis. threatening to return anyone who came to turkey with anti-islam .entiment back in coffins saying if they do not deal with the perpetrator of that
the hong kong dollar has been under pressure. this has become the second best performer across asia right now. very much on trade optimism. where will it be as we continue to see a trade deal getting deleted? is no doubt that it has been performing quite well. there are lots of factors. definitely, trade optimism is one of the big factors. it is keeping you on supported. there is no denying the fact that growth will be slowing down a bit more. it actually means that the pressure in the second half will be for the yuan to weaken against the dollar. shery: we have seen currencies
get a boost, as we saw this pre-fed weakness in the dollar. of indian rupee lost a lot ground in the last session after in incredible surge. where are we headed given that they have been signaling that they are not happy with the strength in the rupee? >> i would actually fade the movement. i do think what has transpired in the last few weeks -- that actually means the rupee can actually strengthened. if you look at the last trade number, it was more than expected. it will be providing some tailwind. next one ton the two months, we will see the rupee strengthening. the rupee will also be a
factor when it comes to all the political uncertainty culminating in the election results that are due in may. i want to throw up this chart. still trading at elevated strong levels. double what they deem as adequate. .ou can argue is it a concern or a headwind, with that we are expecting the policy coming through this weekend? that is a good question. is creatingdoubt it something. it continues to be quite large. off tomorrowming to 6% or 7% levels, but that is
still large enough. the one thing to note over there , it actually contributes the most over there. thes insensitive to exchange rate movement. we are seeing some recovery. any weakness will be faded. the emergence of resilience this year has been based on these three factors. the presumption that we will get something for the u.s. china trade war. we are getting a bit of reading space. finally, this expectation that the dollar will begin. do expect that to continue to mature? indeed. we are expecting a more dovish
turn. we are expecting for 2019 to come off the basis points. we are expecting the fed to be dovish. both of these factors are intertwined. on the trade deal, we are still optimistic. .ven though there are concerns the talks are still happening. that we willstic get something on the table by the end of the day. could we see the bank of indonesia lowering rates? >> that is one of the non-consensus calls that we have. even though the market continues to focus on stability, that is -- west of the market
definitely think there are good chances that they might cut rates this week, especially if the fed is dovish. if you look at how they have been behaving, it has been fairly resilient. they were better than expected. on board of these factors, there is a good chance. shery: thank you so much for your time. get a roundup of the stories that you need to know to get your day going in this edition of daybreak. you can customize your settings so that you only get the news on industries and assets you care about. this is bloomberg. ♪
offer is of -- already oversubscribed. far exceeding available shares. it made itself a rival to uber with aggressive price cutting. they may need to pay a premium when it starts trading next week. haidi: apple has updated for the first time in almost two years. video processors and new graphics engines. there are new screenings on offer with a larger version costing $1800. it is ahead of the launch event to unveil new media. instagram aims to offer more, launching a new e-commerce feature that lets you buy what you see, testing a new feature that would allow users to draw
-- to buy directly in the app. growth slowingg on facebook, it is seen as a step towards a new business model, maximizing the 130 million monthly users. some lines coming through on samsung from the shareholder meeting, taking place at the moment. they are seeing a physical you do to slowdown in the market. we are talking about uncertainty in the business environment. they are pledging to remain friendly. they willaying that have flexibility in investing in response to the situation. a difficult year because of the slowdown in the smartphone market. haidi: we will stay with the theme. beating estimates. topng higher prices for its products. let's look at those numbers.
that,just heard from shareholders are concerned about the cyclical downturn when it comes to smartphone demand globally. what were the major drivers that we ended up getting this surprise as a result? >> the numbers are quite impressive. knows thatin general smartphone shipments slowed down significantly. the thing is, the company continues to increase average selling price for three straight quarters. they rose 17%. not only that, but the strategy is another way for them to test the market to have higher selling prices. company,s well for the
how they whether through this downtrend. at the same time, the major surprise comes from internet value. heavily rely on advertising. this is well known. this quarter, they are able to boost additional value. be the startthis of sustained profitability? believe the new earning strategy is a good move. it is an intelligent way for them to separate off-line distribution and online distribution. ground -- the lower brand. testing the higher end market. haidi: we always appreciate your
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>> this is "daybreak: asia." president trump continues to sound optimistic about trade talks yet plenty u.s. officials are becoming concerned that china is pushing back on american demands. beijing has shifted its position because after policies, they have not received assurances from the u.s. that export tariffs would be lifted. china is trying to bring in wording to the agreement. the reserve bank of india says the country must stay on the path of fiscal prudence including robust planning of expenditure. , butpushed further calm
surprised investors by cutting rates and leaving the way open for more. expansionary budget ahead of next month's general election. bezosates has joined jeff in the billionaires club. crossed thehas billion-dollar threshold according to the billionaires index. was just beginning his climb to the top. $145 is worth more than billion, bringing an almost $22 billion this year alone. an indication of how much strain employees came under as the --pany turned out cars more than 22,006 days. two thirds of the industry came
from repetitive stress issues. haskhstan's leader for life announced his resignation as president. decadeser nearly three as ruler of the largest energy producer. latest leader in the region. onlyid -- he has been it's president since 1991. his move came as a surprise. 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 jessica summers. this is bloomberg. shery: the eu is likely to tell theresa may that she must decide risk going onr without a deal.
let's move on to david. prime minister may is going to ask for a delay. what would play well for sterling? anything that reduces a probability be positive. the longer the delay the better. it may result in them not even leaving. delay, do theyt believe that the plan can get done? can it get across the line? the alternative is a no deal brexit. they believe she can get it across the line because it would uncertain -- reduced the uncertainty. what about the risk of a
potential leadership change? >> this is definitely a possibility, without question. there is a lot of pressure on her already to resign. confidencethat no vote. there has been a lot of pressure from her ministers to resign the matter what happens. the question is, who takes over for her? would they be more for stocks? we will see how it impacts the sterling. our reporter david there. still a lot of uncertainty. time to see how asian markets are shaping up so far this morning. sophie: uncertainty ahead.
treasuries are steady and yen is under pressure. seeing the aussie dollar and kiwi dollar declining overnight. in the equity space, tv stocks are off. itsbiggest laggard after disappointing results. looking to extend the kinds that we saw on monday. the kospi is up .6%. the company is seeing a difficult year ahead due to the slowing smartphone market. have korear side, we gaining ground. securities raising the price target by 16%. taking into account the
forecast. being reasonable as they gain traction in the u.s. and china. i want to highlight a stock. a four-year low after cutting its earning guidance. seeing sony and nintendo sliding. this after a new game streaming .ervice it largely still runs on sony station four. shery: google getting into gaming. are the losses justified right now? what does this mean for the gaming industry? we did not know how much it will cost on a month to month basis.
it is a subscription model. they have been incubating for quite a long time and it is becoming increasing part of their current revenues. of course, you have xbox live. it will be quite competitive. is more long-term question will more -- with a shift away more? the spectacles of having to release every new console vc years. it will no longer be with us. it will drastically alter the business model. haidi: is this the nail in the coffin for console gaming going forward? >> every time, we would ask
them, when will you start selling games for more? in a rare loss of temper, he dismissed it as heresy. it makes sense. selling software for your own .alled soul -- console it is the end of an era that kind of business. this spaceng into will only accelerate things. it is not enough to simply offer that service. you need to produce content, which takes years. they do have some work cut out for it. this is not the first attempt. why would it work this time? into thousand three, a company was offering the same service. they struggled for about 12 years.
sony thought the streaming past. it is here, it is just not mainstream. there are lots of reasons that have been brought forth. some of it is lack of content, some of it, the structure was not there. you could argue that for google, there is not only the infrastructure and ability to price, there is pressure the company to find new revenue streams. if they are serious, this might be the time where streaming becomes mainstream. haidi: we always appreciate your time. there in tokyo. the german chancellor angela merkel has signaled that she is unwilling to cave in u.s. pressure on banning huawei. she says she will not single out
individual vendors. >> we do not want to simply exclude one company or one provider. we have some requests and certain demands. this down into lay a law and we will then talk to our partners because they had their ideas as well. there are two things that i think we should not do. discussing conservative issues publicly and simply excluding one participant because they come from one specific country. i think we should not be naive about this. in china, they have very different laws. there should be a european
let's get straight to singapore. a bit of a game changer overnight coming through for paypal with that tie up. with me is the ceo for paypal. this is quite a game changer. >> it is absolutely a game changer. instagram has been on our platform. it is really about, how do you get merchants to the places where people spend most of their time. you and i spent time on facebook and instagram and we never want to leave those kinds of interactions. it enables virgins to show their wares, whether tags or stickers. you can click on it and you can actually check out. the velocity of trade will increase essentially. >> any suggested numbers for
what kind of revenue this could bring you? >> we project the revenues. the solutionhaving for merchants across the world and what we used to call the paypal shortcut. pair of shoes and it is like walking to up -- walking to a story. he picked it up and you walk out. in the same way, you can go to a website and see a pair of shoes. they have a paypal button there. with one click of the button, you can check out. merchants whenr they want to attract customers. >> what is the likelihood of it being set up globally? be sequencing it out. it depends on instagram, whether we roll it out globally. >> instagram is moving towards facebook. did they have any plans for
cryptocurrency? >> i think the currency has multiple aspects to it. the security associated with it. paypal already provides that level of security. card, have a slowing paypal will cover you for that. paypal willcard, cover you for that. we already cover all sorts of security transactions. the wanted to ask about global push being heated by the likes being aided by the likes of mastercard. aided the likes of mastercard. institutions across the world -- we have partnered in brazil. all kinds of institutions in the u.s. and banks of japan. it is -- the real competition
out there is cash. we have a beautiful tailwind in the digitization of cash. what the government and institution wants to do. in order to accelerate that, partnerships is the way that we need to go. other platform providers, particularly and asia. and others, how are you trying to compete with them? >> cash is the biggest competition. one thing -- the question that we should ask ourselves is who is a global player who has 300 million consumers globally? consumers and merchants? our real value is making sure that if you partner with us as a merchant or a consumer, you had access to 200 countries and 267 users-- 206 to 7 million
-- 267 million users globally. >> any similar investment plans for the asia-pacific? >> we do not project or share our intentions. thank you for trying. the asia-pacific market is in its infancy and it is growing. what we're doing right now in japan, for the first time ever we are allowing one touch bank in japan. merchants and consumers can click on a button with one click instead of 10 and 15. they can use their bank account to pay for anything online. that is a massive change for the market. the opportunity to disrupt is very significant. >> finally, you have plans for one billion users, about four
times where they stand at the moment. is that likely to come outside the u.s. and eu? the rest of them are outside world. we have 267 million users. a substantial amount of them are in the u.s., but most of them are outside the u.s. as well. that is where bc see the most growth coming from, which is in asia -- that is where we see the most growth coming from, which is in asia. shery: thank you. juliette saly in singapore. if you missed part of that interview, the tv function is tv on bloomberg. you can we watch past interviews and dive into any of the securities or bloomberg functions that we talk about. become part of the conversation.
projection from 15521560 share. transport rates and higher delivery expenses. shery: the top dairy exporters as it is considering options in a chinese baby food maker. pledges of fundamental change in direction. posting declines in first-half revenue and earnings saying it wants to sell assets and cut after posting a net loss last year. main owners bought more shares and said they may buy even more. the most in three works -- three weeks. the market value does not reflect what they called its vast potential. shery: a tourism group says
business is good. exclusively to him and said he does not see allowing casinos on the island does spent a boom in growth. -- expect a boom in growth. it increases a lot in general in china. year, we also signed an .greement with thomas koop a lot of these segments seem to overlap each other. year thomas cook
expansion. -- your thomas cook expansion. europe, if youto stay in resorts in european countries, we have a lot of resorts in different positioning. i think in china, we can introduce different brands, different positions and results. to different customers because we have enough customers in china. cannot have only one kind of resort to these customers. >> you also opened atlantis. money toquite a bit of build it. builtof these big resorts them in anticipation of casinos
i do not think they will open. that was the tourism group ceo speaking exclusively to us. very much in focus after i.ofit beat estimate in xiaom also, expectations that they were sustained their profit growth. fall sinceeen stock they listed last year. chinese airlines may move that china is looking to exclude 737 max 8 jets from airports. chinese carriers make up about 20% of 737 max 8 deliveries worldwide through january. checking on the hong kong
dollar. even after they stepped up the intervention to protect the currency. about $1 billion has been spent this month and the government was very much ready to spend more to defend the hong kong dollar. shery: thank you so much. that is it from "daybreak: asia." our markets coverage continues as we look ahead to the trade in hong kong. fori: please stand by bloomberg markets. hong kong is almost upon us. this is bloomberg. ♪
♪ welcome to "bloomberg markets: china open." >> we are counting down to the open of trade. asait and see moments markets look to the fed. there are concerns the u.s. and china are far apart on trade. >> trump optimistic am a but some say beijing is pushing back. shrugs off fears of a slowdown with earnings that beat estimates. we will run through the numbers. ♪