tv Bloomberg Markets Asia Bloomberg March 24, 2019 10:00pm-12:00am EDT
we are looking at thailand and what happened with robert miller. and the session on friday. what is going on with the trading day here? amazing. the chaos that has been developing, we haven't even mentioned brexit. david: if you look up friday in today's session, almost as once it -- one session. point wherethe investors are using this as a reason to take some money off the table. yvonne: especially after the runoff we have seen since we got to the equities. the selloff continues to spill over here into the equity space. the japan, and nikkei 225, seeing a south direction here up more than 3% for the japanese stocks. we will talk about what is going on in the bond market in particular. japanese banks are weighing on the benchmark here today. yet continues to tumble across the globe. you can see the hang seng down close to 470 points here at the moment. earnings front and center.
tencent leading those losses today. attract the benchmark lower. this earnings bananas -- bonanza we saw on friday, a mixed bag of results. not voting well for hong kong. we were on the cusp of a bull market on friday. the clear outperform are here. seeing the dollar stronger here. let's show you what's going on with the bond market. they have flesh this out earlier. a trickle-down effect. france, europe, german manufacturing, once again falling further into contractionary territory. the u.s. data as well. yields 122.44,r a tent basis point pledge on yields on friday. german bonds now in negative territory for the first time since 2016. jgb is further into negative territory.
-.09. the aussie 10 year yield falling back and hitting record lows right now at 1.77. take a look at my terminal chart. we are seeing an inversion here when it comes to the yield curve. this is the three-month 10 year yield curve spread. a lot of central bankers look at a recessionasure of signal. this time is different, perhaps, some say that the global market forces here, when it comes to bond markets, maybe two more distortion here. we are starting to see that inversion in this part, for the first time in some time since, 2008. that was the last time we saw that yield inversion. we will talk more about geopolitics coming up. this mueller investigation, there was no collusion, that report coming up from the two-year investigation. what does it mean? neil ferguson will be joining us from the stanford university stanford fellow.
in the meantime, let's get you on with the first word news, su keenan joining us from new york. su: special counsel robert mueller has delivered his report and has found no evidence of collusion with russia. the report does not fully exonerate president trump of instruction of justice. even though attorney general william barr does not see enough evidence to pursue an instruction charge. the president tweeted in triumph after the report was released and then said later that he has been completely exonerated. >> there was no collusion with russia. there was no extraction, and none whatsoever. total a complete and exoneration. is the turkish lira recovering some of the losses on
friday after there was an investigation into j.p. morgan chase and other banks. regulators said it stuck in the currency's biggest plunge since last year's plash -- crash. they recommended selling the has said jpmorgan note that selling the lira has resulted in market volatility in her the reputation of turkish banks. aree prosecutors in brazil reporting to be seeking to freeze more than three quarters -- seven or the $50 million in illion -- vale -- $750 m in vale funds, after dam collapses. the stability of a third day am has fallen into critical conditions in this parking evacuations. value is under increasing scrutiny and has removed some executives, following the recent fatal disasters. onto boeing. the jet maker is inviting and two hundred
pilots to review updated safety measures for the ground at 737 max jet family. southwest, america, and united airlines will travel to the on wednesday,nt, as boeing tries to deliver a fix that will allow the planes to fly again. southwest is the largest 737 max jet operator. it's technical pilot and training teams review the safety upgrades. 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 su keenan. thsi is bloomberg. a lot happening with regards to what is going on stocks wise. we're on the way down. david: let's have a closer look at this story. joining us now is wes goodman in singapore for us, as well as her global economics editor kathleen hazel out of new york.
wes, libby get started with you. we look at the damage we are seeing in the equity markets. in the we are seeing equity markets a symptom of what is going on? what you -- what you watching? wes: absolutely. the fear trade is 100% fear trades. fear trades in full swing. japanese stocks leading the stock market lower, down about 3%. all of these asian stock markets opened lower out of the block. the s&p 500 futures are being dragged down with them. there's all this talk about the yield curve inversion and recession, that is the word on everybody's lips. it's worth repeating our usual admonition that while an inversion of the yield curve doesn't signal a recession, the lag time is up to 20 months. it's not like it is indicating an eminent recession. for the moment, all of the markets are moving in sync.
bond yields are falling and stocks are falling and investors are seeking safety. -- rishaad:olic kathleen, what is your input on this? kathleen: what strikes me, what is tipped the balance, is europe. we have worried about china's growth for so long. europe's economy, since the middle of last year, we saw signs that it was getting weaker. by the beginning of 2019, the fed says, yeah, we have seen no signs materialize. to german pmi number falling 48, alreadye from below 50. we have a chart of that showing the german pmi and the french pmi and the european pmi and it makes people more worried. it's your largest economy, germany. the ecb does not have much it can do. it has stopped buying bonds and has a negative rate. what can they do to boost the economy? that is the concern.
bund rally, going down in the first time in two or three years. it helped spark this rally in treasuries. likeved from some thing 2.56 on the u.s. treasury 10-year note, down as low as 2.42. the three-month paper at 2.44, yielding more than 10 year paper. the world--traders are more nervous. it's true, you don't necessarily have to get a recession if the yield curve inverts, if it goes deeper again, i don't think this is a foregone conclusion, but you can see why people are worried. david: absolutely. re arecent moves, and the moves we have seen over the last few years or so, so west, we should be worry -- surprised that the yield curve is inverted on a three and a 10. how does this affect the short-term echo we have some big
-- short-term? we have said the options this week. -- auction -- we have some big options this week. wes: we said, this big sale in australia will be a test. yields in australia have fallen to record lows. this will be a test. investor demand and this new low yield regime we had. pitcher ag was drawn, cover ratio of 5.6, which is drawn. demands that investor for debt continues. it seems to be unstoppable. the auctions this week in the u.s. are two's, pies, and sevens. the outlook is strong at those options. -- auctions. rishaad: kathleen, it is concerning, the fed governor of chicago, he is saying the fed is mindful of financial market constraints. the thing is, will they move
bond yields down more? we have 13 other officials talking this week. kathleen: that's quite a lot of it fed speak. you have to put this in context. what helped change the view in the u.s. treasury markets when the federal reserve tickets to rate hikes off of the table for 2019 and said we were in a good place and we will wait and see? people started taking about, if they are not going to take--you hiking rates, the next move will be a cuts. that's the next move will be a cut. -- the next move will be a cuts. when you speak to charlie evans, a great way to kick off the week, you will ask him about the inverted yield curve, how strong of a signal it is to him, what would he to see to get in line with rate cuts in this group on 1c, there are af few numbers out of the u.s.
these fed speakers are going to be sending a signal. they will talk up the economy and patience and struck off this move right now in the financial market volatility. we will see. rishaad: thank you to kathleen hays and wes goodman. to chicagotalking fed president charlie evans at quarter to four this afternoon, in hong kong time. still ahead, we're talking brexit. theresa may meets hardline eurosceptics as he tries to save for deal. there are reports that she is going to be forced out. still ahead, we're talking brexit. more on that story, later. rishaad: thailand's delayed election results are in. that is underway, next. this is bloomberg. ♪
♪ david: welcome back. thailand must wait until this afternoon to know who won their election. the results were due sunday evening and will not be released to :00 thailand time. -- at 2:00 thailand time. rishaad: haslinda amin is there. what does it seem? it seems we have an indicative winner at least. what we know so far is a lack of clarity. if there will be a government, it will be a coalition government. that remains to be seen. we have to take a look at the numbers. it is not and back right now. the timeline again, 2:00 p.m. local time. noise, thet all the big picture is we are inching closer to democracy is what the leader says.
nevermind that we are chugging and chugging, but we are getting there. don't worry. there are some big themes we should be looking at with this election. texans --er 1, if thaksin shinawatra's other party had up the band, he would have one. he would've gotten more than the 25% of the military backed party wanted. that's lesson number one. they have been trying to knock out thaksin shinawatra's power since he got the 75% in the 2005 election. -- after that was the coup right after that was the coup. legal framework of blood into credibility this election, that is the idea put forth by the government -- the general. are too concerned that we could in protests after what transpires at 2:00 p.m. today? andrew: what has come out
of this whole thing is the best case of a worst-case. the best case is the military has continued on and the policies will continue. a reasonable number of votes, 25% of the seats in the house. that is not a brand side. -- landslide. meanwhile, we have our first anti-military party in the house, with 18% of the seats. that is the second major thing. the first is that's should watch out would've one -- texans and watch out should've won. the other is this anti-military party. number three, our first military party. the military has always played a role in the elections, now they have their own party. haslinda: your glass is half full. is it enough? valuations are looking pretty reasonable. is it a good to get here? andrew: we are inching.
i'm not concerned about this election, but the next one. i believe the next one will be much for your and fairer than this one. there will be some ability to adjust structures. the most important thing from an economy perspective is we will get a continuation of the existing party's policies, but they will start to have about the political pressure coming from the other parties. in anda: would you jump by thailand? would you buy the tie story now? -- thai story now? andrew: i would buy. one, 1.5 years until pressure starts to mount. haslinda: what would you buy? banks look pretty good. andrew: banks are always a play on the printable situation and the economy. thai banks are reasonably priced. problems, but npl the truth is, they have the ability to get rid of those by selling them to other companies. they are not in a major issue
and they are very cheap. why by thailand when you can buy the rest of southeast asia? thailand expected to grow at 3.9%. the rest of the region, 52 -- 5.2%. i can buy the philippines into a better growth story. indonesia, i better growth story. andrew: let's not get confused between economic growth and coming growth. there are a lot of good company growths. there are 150 good liquid companies in thailand. you don't have that in singapore, indonesia, malaysia. thailand has debts to its markets. there are good quality companies with good brands. i don't think that argument is a strong as it things. -- it appears. i would say does balance. -- it is balance. haslinda: early you talk about a potential election coming up. we could say it's coming as early as one year. that election will
hopefully take us more toward democracy. i wouldn't write that election office terrible. it's just that that will happen at some point. i would like to highlight the other thing that is a major thing that comes out of it. the democrat party is dead. it has taken years to destroy the party. this last coup and the actions of the democrat party to respond to it destroyed it. haslinda: why is that important? andrew: we've always counted on them to be in opposition to touch in china watcher -- thaksin shinawatra, and sometimes, they sated with chaos and the military, and in the end, when they had a chance to replace the meter, they didn't do it. -- replace their leader, they didn't do it. they could've had a good leader like the democrat party, but instead he had to form his own. the result is the democrat party has been decimated. now we have a new opposition party led by this future forward party, and i think that is going to be a major new factor.
every good government needs a good opposition. that's a lesson we have learned. without a good opposition, strong man or woman can come in and destroy things. i'm happy we have a strong opposition. haslinda: anders dots, we thank you for your insight today. thank you forz, your insight today. david: there's a story there to be optimistic. i'm not sure about markets. thank you so much, haslinda amin. you can catch up on all of the interviews you have best year, on the function tv for bloomberg. only watch us live, but scroll back and watch interviews and look at some of the securities and functions we may have brought up here on the show. check it out. this is bloomberg. ♪
over, a deal to buy dubai-based rival kareem as early as this uber'shat is ahead of planned ipo, which could be one of the near stock exchanges a gift ever listings. david: that's get more on this, our age-old deals reporter is here and that asia deals reporter is our studio. what we know about it so far? >> it has been going on for some time. we reported it all along. it seems that it is very close to being around this week. we have some good details into the components and how the deal will be structured. that is ahead of the ipo of uber. it seems to make a lot of sense. they will structure the deal in cash and shale or's. -- shares. they will convert notes into uber shares ahead of the ipo.
up over strategy in the middle east. rishaad: it has been a bit of a top struggle for them and the middle east has in it? it, it does look as if it is exactly up uber's alley and it fits into the strategy. manuel: exactly. one of the biggest shareholders is one of the biggest in the region. they have committed big-time to the region. it's always a bit of a give and take there. you've seen a markets. they've ended up pulling, so here in this region, it seems they are going ahead. the pitchdoes polish book ahead of this much-anticipated listing in europe. manuel: definitely. it's one of the biggest deals of the year.
very high profile. one of the biggest ipos in new york. aboutody is super excited how that will play out. rishaad: men well, thank you for a much. let's get to some of the movers in japan. yvonne: we are watching the japanese market in focus today with the biggest laggards here in the region. especially the nikkei 225. down more than 3.2%. japanese yen, we are seeing it catching a bit today. of about .1%. focusing on where yields are, -.09 for the tee up -- for the three year yield. -- 10 year yield. down the percent for the banks. mitsubishi down 3%.
from the boards, we will show you some moving markets today in asia. tencent, down close to 3%. off the lows for the session, but leading the losses on the hang saying here today. -- hang seng here today. the fourthmis for quarter, we are we're talking about how the couple he could enter a new era. prices could still above on the back. sinopec down 2.6%. refining profit taking a nosedive. the icc property and casualty, seeing that stock close to 3% lower. earnings bad, credits now downgrading the stocks. following the earlier downgrade, the reverend but we saw from citic securities not too long ago. plenty more to come. watching not just the bond market, but the spillover effect to the equities. this is bloomberg. ♪ you.
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♪ >> 10:29 a.m. in hong kong, 10:29 p.m. in new york. i have the first word news. let's start with italy. it has joined china's belt and you'reade project, attending the u.s. and western allies in the process. withinarking tension rome. italy is the first g7 nation to join china's initiative, citing deals potentially worth $23 billion. washington and brussels urged caution and the decision has strained relations between the five-star movement in italy and the right-wing coalition. there are reports that china,
meanwhile, is refusing to agree to u.s. demands for an easing on digital trade. has yet to offer significant concessions on calls for an end to discrimination against foreign providers of cloud computing services among other things. an initial offer from china was deemed inadequate when the u.s. asked for more concrete information. the country unexpectedly delaying its election results. we won't get those until monday afternoon. this is the first vote since the 2014 military coup. the vote tally was expected sunday evening, but will not be released until 2:00 p.m. in bangkok. isably, a promilitary party seen in the lead and puts the former general in position to return as prime minister.
of northwestern part australia is bracing for increasingly strong wind and torrential rain, this as cyclone veronica will slowly move toward the coast. this is the day after trevor hit the northern territory. they are approaching the commercially important region, bringing gusts of wind of up to 220 kilometers per hour. it had been expected sunday afternoon that slowed down while out at sea. global news, 24 hours a day and at @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. ♪ getting back to one of our top stories, president trump calling the mueller investigation and illegal takedown that failed, after they found no evidence of collusion with russia, and the attorney general said it is not enough evidence to charge him with obstruction of justice. >> there was no collusion with
russia, there was no ,bstruction, none whatsoever and it was a complete and total exoneration. >> are senior editor is in singapore for us to flesh out the story. derek, can we put this aside? can the president put this aside, and does that get rid of the other legal threats he might face? no, to your questions in order. yes, he can put this one aside, because the biggest question about collusion between the trump campaign and russia has been affirmatively answered, in the answer is a little more nuanced. it is whatever your political beliefs are, there's not enough to charge. the does not mean that president or his team acted like choir boys the entire time but it does mean that you don't have
a legal standard by which you can charge somebody. that's an important distinction. does this and all the rest of the stuff? absolutely, categorically not. there is going to be a fair amount of democratic insistence that the entirety of the mueller report or everything that doesn't compromise some classified intelligence gathering be released and that call has already started but in addition, this doesn't touch any of the stuff in the southern district of new york that involved the trump organization, paying to silence pouring stars or alleged affairs, all that stuff is still very much alive and open. but the big question on russia is pretty much settled. >> where do we go from here? this is it, isn't it? democrats've got exasperated by all this, they want their pound of flesh. what happens next? >> it's really hard when you
want to pound of flesh and you get delivered morsels. i do think that the democrats have a lot of stuff that they are certainlyey going to be heavier oversight, heavier than when the house was controlled by republicans, and there are calls to bring mueller in, maybe the attorney general to see how he got to the conclusion that there was no obstruction of justice, even though mueller said that while he was leaving the question open and that trump wasn't necessarily harmless in that whole discussion. i think there will be calls for additional hearings, but let me rise to a bigger point, which is that 2020 is coming up, the campaign is in full swing and we are seeing candidates on the campaign trail are not getting asked about this. they are talking about health
care, the economy, all sorts of things. but the mueller probe isn't on the top mind of voters right now, so in a sense this will free them up to talk about other ,hings, not the russia probe even as trump blows as much as he can. >> thank you for all of this. you can find all the nuance. let's put oldest into context and head back to the milken japan symposium happening in tokyo. we are joined from their. neil ferguson, the senior fellow at the stanford university institute. thank you for coming on the program, quite timely given all the news we've had. let me get your first reaction, sir, to all the news out of washington. this is a devastating blow for all those people who for the last two years have been going on and on about collusion between the trump campaign in the russian government, they
pinned their hopes on robert mueller, they gave him -- they got significance, they portrayed of deus exnd machina, and the news has broken that he has cleared the president and his campaign of collusion with the russian government. not only that, but there isn't going to be any indictment, any further action on the allegation of obstruction of justice. so on two counts, the opponents have suffered devastating blows over the weekend. that sound you can hear audibly from the united states is liberal journalists and democrats still trying to dig themselves ever deeper into this whole. if i were them i would move on and move on rapidly to other topics. i think he wrote a piece at the beginning of march saying
that in 1941 they will decide america whether into -- whether america will enter the war. have been trying to do that with the donald trump as to when his presidency ends. what is your best guess? >> i think the best guess is that the president has slightly better than even chance of being reelected in 2020, and not just because of the failure of paint him guilty of collusion or obstruction of justice, there's a whole bunch of other stuff going on that helps him. for example, the federal reserve fundamentally changed its approach to inflation which means an easier monetary policy for the rest of the year and presumably into next year, and the fact that the democratic party seems to lurch to the left under the influence of such firebrands as alexandria garcia
in the i think socialism mainstream media and on the democratic campaign, the worse for whoever is a democratic candidate. i'd say the president's chances of reelection have gone up quite considerably in the last couple months, and not just because of the mueller report. that is not to say it is a slamdunk, there is a huge amount that could go wrong. bear in mind that he has significant difficulties with female voters, with young voters. if you look at the latest numbers out of the key swing states in the midwest, michigan, wisconsin, so forth, you will see that he is not in a particularly strong position. going, ity things are seems to me that the traditional advancement the incumbent enjoys is with him and if the democrats nominate any number of potential candidates it seems likely to me manyhe will win, not that
of them seem strongly positioned to defeat him. you'm just curious, mentioned about population. we are seeing a sizable and if not rising amount of governments among the g20 that are being either government by populists or nondemocratic regimes. we have a chart to show to our viewers. should we be attributing this global growth picture here too bad policies and the fact that the policies that have been triggered by populists are leading global growth to slow down? well, i think it was predictable after the financial crisis, but that's now 10 years ago, that there would be a populist backlash. i remember predicting it in early 2009, and the point i made was that populism comes in two flavors, the left in the right. generally it is right-wing populists who do better after
financial crises, but the right-wing populist failed to deliver and then the pendulum swings to the left. bit in both a europe and north america recently. what's very interesting about what's happened in the democratic party side has been this swing to the left on a variety of issues, universal health care, the green new deal, higher taxes on higher income earners, and so forth. the pendulum is capable of swinging to the left, but i think if populists deliver, and i think president trump from the vantage point of his supporters is delivering on key issues, which is economic growth, creation of jobs, restriction of immigration, and this is crucial , tough negotiations on trade, then it seems to me that the populists have a reasonable chance of continued success.
populists failed to deliver that the pendulum swings to the other side. >> stick around with us. he's at the milken japan symposium in tokyo. coming up on the other side of the break, theresa may facing the endgame as she loses control of brexit. did she ever have it? the latest developments on the way. ♪
♪ >> all right, welcome back. let's talk about brexit. embattled british prime and's or to win may is scrambling her adversaries to her brexit withdrawal plan. key cabinet ministers are denying reports that they are planning to oust her. she has been weakened by continuing uncertainty and her inability to win meaningful concessions from the eu. >> let's go back to the japan symposium in tokyo. thanks for sticking around.
what is going on? does she really ultimately think another attempt of brinksmanship with the house of commons could get to work, when everyone knows she is effectively the emperor with no clothes? it is hard to find words to describe the shambles that british politics has dissented into over the weekend, the prime minister theresa may was begging the various big beasts in the conservative party, including boris johnson, to get her withdrawal agreement over the line in return for which she would resign. it doesn't seem to have worked because boris johnson has more or less got out of the car and written a ferocious denunciation of the prime minister for "the daily telegraph." meanwhile, rumors are swirling
around westminster that there was going to be a coup against theresa may, she was going to be replaced by some other member of the cabinet, perhaps michael gove, that seems to have fizzled out. we are now left in this extraordinary predicament that the european union is essentially dictating terms to the british government about the , theresa any extension may seems likely to attempt one more time to get her withdrawal agreement, trying to threaten the remainders and the brexiteers with no brexit at all. i will predict it would fail again. she doesn't have the votes. the battle -- some of those who oppose brexit said at the time that it would be a much more difficult divorce than the brexiteers are claiming and sure enough it has turned into an
astonishingly difficult divorce. i said at another milken conference back in 2016, i get it, we understand the message, now go and deliver brexit. the sad truth is that theresa may's government, and that includes at least some of the time boris, has abjectly failed to deliver brexit and the most humiliating way, leaving britain into a state of weakness we have not seen since the mid-1970's. it is a truly dispiriting thing to watch, even if i'm watching it from the other side of the world. >> what do you think the headline is going to read on theresa may by friday? well, you know, i keep hoping she will go. she should have resigned after the first defeat from the withdrawal agreement, the first meaningful vote, which was the biggest defeat in the history of the house of commons, and in all previous eras that would have
been it. she would've had to resign, in the 20th century there would have been another election, she would have seen someone else try to form a government, but we are in this completely anomalous situation where the prime minister can be completely crushed in the house of commons and yet survive. she really is the dead woman walking, to echo a phrase used by george osborne. she has to go and in my view she should have gone weeks ago. wer.o.e. therefore -- are therefore an lovely walking toward a second referendum, or do you think the dangerous of a no deal brexit are still looming large? i don't see a majority for a second referendum in the house of commons, or a majority for no deal. the question is if they will not vote for the withdrawal left, i guesst is
it will look something like the norwegian arrangement, in the european economic area. brexit and it think the implications are pretty dire because it will leave a long-lasting division within that party and will antagonize a great many conservative members and voters. i can't see any other way out of this. i think a second referendum would be a disaster because either you would end up with the same result, which would achieve nothing, or you would end up overturning the 2016 result, and i think everyone who voted to leave and 2016 would feel deeply alienated in the trade by the -- and betrayed, and that would be a long-term negative consequence. i'm hoping there won't be another referendum but it seems to me that we are almost inevitably headed for a softer brexit. >> hard to believe it has been
about 1000 days since that first referendum. senior fellow at stanford university hoover institute and senior fellow at harvard university. let's have a look at the latest business flash headlines. sign up next -- sinopec shares are down, the largest drop since 2014. other state owned companies are trying to churn out more domestic oil and gas. sinopec is seeing more than $20 billion for this year, missing estimates of fourth quarter, tumbling almost 90% from a year back. >> rio tinto may consider a housing increase on oil supplies, as the value becomes clearer. they are optimistic about the u.s.-china trade talks and worried about reduced demand from beijing. >> all right, let's take a look
at your markets. we stabilize just a little bit but we are still seeing the lows asia, session for msci japan is still the laggard into the lunch break and we are still down 3.2% in tokyo. hang seng with 450 points, lots of earnings to digest. atge-cap china down, we are 2150 on the benchmark. let's have a look at the boards, japan is falling the most since december 25, you may remember the christmas day selloff. oracle corp. japan was the biggest mover in asia, down 11%, the most since 2011. third-quarter earnings, low sales over profit growth. shares were down 8% for the full year of aozora bank, and china
resources gas is the outperform are here in asia. we are seeing the likes of citigroup, bank of china upgrading the stock on high-volume growth, and overall the company is staying financially sound. a second day on earnings, cicc upgrading the stock despite the fact that earnings were a mess. tencent also in focus today. we mentioned how analysts were applauding tencent on more growth in new businesses, but india now dampening the sentiment. bloomberg. ♪ ♪
♪ all right. something light on a day like today. we are seeing damage across the markets. battle of the charts. going to pick their best charts against one another, and viewers can access those charts and a couple moments. other people are calling it's the battle of singapore. i don't know who those other people are. [laughter] anyway, let's start these up. michelle? >> all right, guys, will i still
have said chair jerome powell in , something of a reversal from last year where we saw lingering consonants from the fed, and this is having an impact across the world but look at asean. i have charted a few countries against the u.s. and purple, showing not just that low inflation picture but also what sort of base these economies are coming off of after having to chase the fed higher innovate can use these rates to move more dovish, the whole pattern that the fed has set out for the 2019 decision and also some cuts in the works. thailand is still below its target ban on inflation, and we have a couple others. , but ita i didn't chart is very close to malaysia's
pattern in seeing a higher interest rate. this dovish trend, they have another data point to hang their hat on. >> joanna, what you have? >> ok, so i have small-cap stocks in the u.s. versus large-cap ones. small caps did really well to start the year but in the past year or so they have been underperforming by quite a significant amount and on friday they really tumbled on heavy volume, and that is considered a sign of risk appetite and it is also a look at the domestic picture as opposed to a global picture so a lot of people see this as a sign of another downturn. that is definitely a space to watch. >> ok. afraid it'sm decision time. if you are sports fan, here's
magic johnson, michael jackson, michael jordan, there's also michael johnson, and let's place michelle on the board as well. >> what did you have, yvonne? >> michelle. [laughter] remember, bloomberg users can interact with the charts on the function gtv go. can view any reason charts featured on bloomberg tv. save those charts for future reference. this is bloomberg. ♪ want more from your entertainment experience?
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♪ it's almost 10:00 here in bangkok, 8:40 a.m. in mumbai, i'm haslinda amin. >> time rishaad salamat. we are entering the last hour of the morning session in hong kong. this is a look at our top stories. so-called risk of monday. asian stocks gapping down for the new trading week, taking off for the most since late december. robert mueller finds no collusion but doesn't clear the president of obstruction of justice. trump says it is a complete exoneration. >> decision delayed. thailand must find out who won the election and who will stay
in power. bloomber this is "bloomberg markets." ♪ >> the first election since they came to power, and however you look at it, we are inching toward democracy. some say it was an unprecedented democracy in terms of what took place, preliminary results are expected later. invalidated votes, some say the question is why so high, in 66% voter turnout. we expected the number was 80%, much lower than what was expected. again, unprecedented. given that remains,
preliminary results will be coming up later today. looking at the markets. >> let's have a look at the number, the markets just giving up and running in bangkok. generally speaking that is probably less about the election and more about the general sentiment in the region. looking at what's going on currency wise, we have the dollar depreciating 6/10 of 1%, let's kick it up with a look at what we can expect out of india with 44 minutes to go before the trading day gets underway. appreciating,llar 10 year yields with the bond rally. another negative start to the nifty. this is a market that suggests indian equities put on something
cap $220 billion per market after being the worst performer at the start of the year. let's kick things out to the first word news. with rosalind chin >. >> china is refusing to agree to u.s. commands of easing curbs on digital trade. beijing has yet to offer significant concessions but will end discrimination against cloud computing services. was deemedoffer inadequate and was withdrawn when the u.s. asked for more concrete information. special counsel robert mueller has delivered his report and found no evidence of collusion with russia and the 2016 election, however the report does not exonerate president trump of obstruction of justice, even though attorney general william barr doesn't see enough to charge. the president tweeted in triumph after the report was released, saying he has been completely
working. it's being recognized in all kinds of ways. it's part of the fact that we've got slow down. pound now desperately -- powell now desperately trying to backtrack on what caused this inversion. haslinda: the bond markets suggesting a recession is coming? >> slowdown is here right now. with the policies we've got, recession is coming. even though we have powell making very accommodative noises there is no real sign, of any policy change. they may be september before qt andold back on qe -- no rate cuts until then. it may not be enough. there's a real danger we end up having created conditions that create a recession whether it manifests by then or takes longer to come through.
i think the fed have created this recession by policies that don't make sense. haslinda: what does that mean for the markets here? you take a look at the bond markets. an accident waiting to happen in this kind of environment. i think what we are going to see is that the real problem we have is you look at thai exports, the data that came out last week, and regional exports. everywhere, it is signs of struggle. we've seen huge stimulus in china for 18 months. we've seen the fed backtracking on the wrong policy they had for so long, yet none of that is doing enough. wherever we have the strong dollar, that is suggesting that there is sufficient -- massive global headwinds. unless we get a weaker and much more liquid dollar, i don't see how we hold recession. -- avoid recession.
haslinda: sit and wait?a -- wait? >> we were buying treasuries a year ago when nobody else was. at 2.5, it is standard fare value. we are only taking marginal profits there. we have been taking profits on equities in the last week or two, because it felt like everything was getting too dovish. the pricing got to divert from under -- got too diverged from underlying fundamentals. haslinda: right. gambles,eem like, paul cofounder and managing partner. still to come, lots more. of thailand's military
>> president trump is calling the mueller investigation an illegal takedown that failed after the special counsel found no evidence of collusion with russia, and the attorney general said there is not enough evidence to charge him with obstruction of justice. president trump: there was no collusion with russia. there was no obstruction, none whatsoever. total was a complete and exoneration. our senior editor is in
singapore. what are the legal threat -- what other legal threat does the president face? he is not out of the woods yet, you told us earlier. yeah, no, i don't think that he is out of the woods. i think that this investigation -- done,one is doen, and now we are into different things. the mueller probe is basically set. the mueller probe finds no collusion or certainly not enough to charge somebody with. then you get to obstruction of justice. they say, look, there's not enough. there's a little bit of a hedge there. the end result is that there is not enough to charge. now it comes down to a couple things. one is, democrats are demanding right now to see the entirety of the mueller report. they are wanting to see as much
as humanly possible as fast as possible, and they raised the possibility that the attorney general, mr. barr, that mueller himself could be called in for hearings or to elaborate further. that's happened in previous probes. so, all of that is there. then you go beyond that and you're talking about some probes that are ongoing in new york in the southern district, some things that involve the trump organization and various other places, where those probes were out of the scope of mueller past investigation -- mueller's investigation. all of those things are very much ongoing. rishaad: is there a timeline? what do we know as to what happens next? where do we go from here, derek? derek: i think where we go from here is the president is going to spend the next little bit of time hitting people over the head with this as much as humanly possible. if you think that the president
was in an ebullient mood, just you wait. he has a rally in the swing state of michigan, which he won by a couple tens of thousands of votes last time and it is critical to his reelection bid. he is going to stand in grand rapids, a very republican place, in michigan, and he is going to go off. it's -- it is the easiest prediction i have ever made. if i could bet anyone, i would take their money. he will hit people over the head with this as much as humanly possible. meantime, democrats are going to try to see what was in the actual report. right now, all he has is a four-page summary by president trump's attorney general on what the conclusions top lines are. i'm pretty sure this report is a lot bigger, but right now we are relying on one person's interpretation. i think democrats will try to get the whole thing and figure out how close to the charging
line did things come, and if it wasn't a criminal on some parts, but was certainly scandalous or wrong or improper, i think democrats will proceed along that as well. >> what does this say about obstruction? obstruction, it's a little bit muddled, realistically. robert mueller said there wasn't enough to charge with obstruction, but at the same time, president trump wasn't held harmless. interesting's an point. it suggests that there was something there, but not nearly enough to move forward with. that is probably an unsatisfying place for a lot of democrats for this to stop but it is also a very defensible place. keep in mind, other places where
president trump is being hit with obstruction or similar sorts of "let me try and stop this bad news here," when you are talking about possible campaign-finance violations about a payment to stormy daniels, that stuff is not really covered. that is out of the scope. -- it'sis going to be going to be like getting a piece of cake that is soggy and wet for democrats. they got something but it wasn't nearly what they were hoping for. you can kind of feel the disappointment, even as far away as we are here. >> thank you very much. our senior editor. coming up, rio tinto says it is not worried about a slowdown in china. we will have more from our exclusive interview with the chief executive. that's on the way. this is bloomberg. ♪
♪ >> welcome back. you are watching "bloomberg markets: asia." i'm haslinda allman in bangkok, a day after the elections. >> and in hong kong, i'm rishaad salamat. here's a look at the latest business flash headlines. uber picking up extra rides in the middle east. the consideration is $3.1 billion, a deal that could be announced monday. it is one of the most valuable tech startups in the middle east with over one million drivers in 15 countries. that includes the japanese commerce leader record 10. standard isness leaning to debt ridden jet airways looking to sell a stake in the company.
the group will give the airline emergency funding of more than $200 million. attemptsrt comes amid by the narendra modi government to keep jets in the air ahead of next month's general election. the world's biggest refiner raised spending to the highest since 2014, joining other chinese state-owned companies trying to churn out more domestic oil and gas to ease the country's reliance on imports. capex and more than $20 billion this year. it missed estimates before results tumbled almost 90% from a year ago. ♪ says he iso's ceo monitoring global growth closely and is not worried about the level of demand from china. he spoke to bloomberg at the china development forum in beijing. the situationhing
in a very close manner. the key one is china, and remember, after 25 years, we are saying copper, iron ore, diamonds, and we are buying $1.3 billion. we are doing pretty good. is china slowing down? know, [inaudible] are we concerned by the slowdown? the answer is no. >> and in terms of demand from china, do you expect it to be in line with 2018? what do you think? >> if you look at my older books, there are no concerns whatsoever. i do not control the environment making sure we have the
right quantity. the right relationship with customers making sure costs are controlled, making sure we generate cash. last year was a very good example of it with $13.5 million. >> is that your views that the stimulus measures china is enacting will benefit companies like yours? >> absolutely. any infrastructure investment in copper,ans additional additional aluminum. absolutely we will benefit. >> in terms of the trade war, there was a sense they are getting close to a deal, and now we are hearing that tariffs will be listed on chinese exports. does that raise your concern?
you say you are the optimist in the room. >> i am the optimist in the room. lots of wealth has been created globally. one of the key drivers was trade. in canada and the u.s. and china and australia, sometimes people do not think it is fair. they put the issues on the table and common sense will prevail at sooner it comes out, the better for everyone. ceo speaking to tom mackenzie in beijing. >> let's have a look at what's going on with some of these movers, taking a look at japan for the stocks we are watching as we come back from lunch break in about five minutes. a couple companies have been making waves on the nikkei 225. the situation is that we have
currently amongst the stoxx orix corp ads down about .8%. there's only one stock moving to the upside, mitsubishi. this is a company which saw 17% fall on friday. that is when it said it will halt biogen on alzheimer's treatment. traded, we areot expecting a fall, as we had it downgraded to sell. another alzheimer's drug is perhaps in the offering as well. looking at his aura, the dividend forecast for the full year, significantly lower than estimates. surprisingly, 1%, a company which is a shareholder in kareem. sealed aaid to have $3.1 billion deal to buy it.
♪ >> it is almost 10:30 a.m. in bangkok. we are in the middle of the trading day. we are awaiting the preliminary numbers from yesterday's elections. that will happen at about 2:00 p.m. local time. there are only two possibilities when it comes to this coalition, of pro-democracy or pro-monarchy coalition. let's get the first word headlines with rosalind chin in hong kong. governor says there is plenty of room to open the financial markets to the rest of the world. foreign financial service firms
should be treated the same in domestic companies. he also told the chinese development forum that the pboc will focus on providing more this year to help investors manage. minister has held talks of leading conservative eurosceptics as she fights to save her brexit deal. she met boris johnson and david to see if there's an agreement that has already been defeated twice in parliament. the meeting came amid reports that senior figures are plotting to remove her and in star a hard-line brexit backer as p.m.. regulatorsinvited and about 200 pilots to review updated safety measures to the 737 max family. southwest, american, and united will travel to the production in washington state as boeing tries to deliver a fix that will allow the planes to fly again. southwest is the largest 737 max operator, and its technical
pilot in training teams will review the safety upgrade. for roddick is leaking as it hits northwest australia and a sharp turn away from these states, iron ore heartlands, without getting any deeper. it is expected to head across the peninsula. for erotica has been expected, but slowed down at sea. global news, 24 hours a day and at @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. >> this is the situation following what's happening regionally. butlf a percent move down, that does not necessarily mean we will end up negative. -- with regards to indian stocks, $220 billion
being added to the market cap. the dollar index is broadly unchanged at the moment, but it is seeing a bit of appreciation against its indian counterpart. we also have the 10 year yield with this patent of rising bond prices, with the yield falling for basis points. the nikkei 225 just coming on, 3.2% down. the hang seng also has a nasty fall taking place. fallback,1.8% is the a jakarta composite index down. the let's show you the highlights in bangkok. we have the stock exchange of thailand moving to the downside by .3%. of course a lot of that is down to what's happening as we have a sense of stasis in the thai capital, where we can now venture off to. >> that's right.
ofiland awaiting the results its first election since the 2014 coup, and unofficial results shown the ruling monetary government in the lead. critics isbiggest cutting -- is casting doubt on the credibility. he spoke to us in an exclusive interview. >> people should start questioning the credibility of this election. example, the turnover ratio. in the case of bangkok's voting --trict, the number [indiscernible]
basically the credibility of the election commission. youo all things considered, are saying it wasn't a free and fair election? >> no, by far. there are too many irregularities compared to past elections. >> you said repeatedly you reject the military and you want the military to be dissipated over the years. how much influence can you have, given that 250 members of the upper house of parliament will be appointed by the military? >> if the election is not resolved, it is difficult to say who will be forming the government. i think the military tribune will come back at this point in
time. we will say what will be the final result of the election. but we are very comfortable being in the conversation. believe we are in a very good decision to allow some other parties to be the government, given the election that was not very decisive. returnselection thailand to democracy, but it seems that divisions within the country still remain despite the election. >> exactly. i fully agree with you. you could see the democrats at the party has been gaining a lot of force, and
there are different points of view among the thai people. that will lead to the instability of the next couple years. interview withe future forward. let's get some insight on the impact on the markets. we continue this conversation with paul. when you take a look at how ,lections have been followed are we expecting the same to happen? >> i don't think so. i think the key is the backdrop. the global backdrop, we had really disappointing export numbers. there is never going to be that kind of a positive outcome. the danger if we got a bad election result could have been some really local downside. but if we managed to track what the rest of the regional markets are doing -- >> markets are already trading
the msci aged index down by 11%. where does it go from here? >> i think a lot of it is because the policies have changed to fairly close range. we haven't seen these kinds of growth numbers. one big thing that could come out of this, we are going to get the outcome we were always going to get, which is a pro pp administration. the good thing is it now has a mandate from the country, and that enables it to form a stronger coalition, and where that potentially has a positive economic impact is a lot of the infrastructure plans that have been talked about for so long will get put into action. that is where the postal come. >> what would you buy in thailand and what is there risk,? it is the strongest currency in asia. >> absolutely.
it is still running above balance. the bank of thailand is monitoring it very carefully. when pboc weakened the and ibi, if contracted, think we will still see the bank of thailand keeping a tight hold. i don't see any major news there. in terms of local market, the one good news story is infrastructure. you have to play the other aspects of structure, a whole bunch of listings from time to time that haven't been attractive. the one thing you have to look out for is although we are expecting reasonably benign news following the election, it will still keep all those underlying tensions bubbling away therefore sixd months we should start to see those flareup and we have
already seen the rhetoric -- they had two possible ways of arguing against the outcome, one that the system is unfair and that the actual election was the fact that they got the largest vote share chips away the argument about the system to some extent and i think that is why we are seeing them focusing on how the election was conducted. the short-term instability but that is relatively minor. we expect maybe some regional outperformance over the next few months but be careful because these problems could always flareup at any moment. >> where does this leave thai democracy? is this a step in your view toward getting back to a full democratic system? >> i wouldn't say it's quite
like that because we've never had a full democratic system here. thailand is a country in transition. thailand is essentially a vestigial country -- they only abolished universal -- it still exists largely to this day which is why we have had all these different regional powerhouses over the years and this was the first one to consolidate them into some kind of a national base. but it is a long way from democracy. years interesting -- for suddenly,ver since ever since part of the democrat party have tried to progress thailand toward democracy i think it needs a new approach and it is interesting to see someone step into that void and
get the kind of support he is getting. the most positive thing for the long-term future is that so many people have supported what he is trying to do. going to see this but what i have is a chart showing that after last year until june there was money coming into thailand but ever since about july we've lost about $2.5 investment worth of pulled out from thai equities. will this election be enough to redress that and engender a bit of confidence in the system, or do you think we will have more of the same for the time being? >> i think -- one problem is there's this large this hundred ending of what goes on in
politics. about aorts talk military government which it is that every military government is a military government, every prime minister has been in the military and that is why we have never had democracy. i think that misapprehension is going to get fed by the results. we usually see all the posters and banners that you see before the election, various stripes wearing their military uniforms and this time everybody were all wearing businesses in ties. i think that is a real step toward democracy, people are making that change. there is a positive investment, whether it is direct or equity markets.
and we have been to the dentist and we found out there's nothing that needs doing tomorrow, so i think that will allow foreign investors to start to trickle -- i don't think it will be a think weurnout but i will see a trickle and that could be positive, especially when we hopefully get the infrastructure. >> let's not forget the legal framework put in place to ensure that the military stays in power. let's have a look at what's coming through from general motors, share price down about sayingth the company's it is cautious of entering the u.s. market currently because of the trade war, that is their isition and another question whether they have been able to build their cars there in the first place.
♪ as rishaad described, the value of markets are looking pretty soggy in asia. let's get right to our guest in mumbai to take us through the day's actions. what are some of the concerns about global growth? >> not unexpected. we are beginning to show some signs of weakness in the indian markets, considering the drop around 1% following a half percent drop last friday. we are seeing an extension of losses after a tremendous rally over the previous one or two auto weeks.
the nifty has given up crucial levels and we could come through on the back of banks, which are also down by as much as 1%. as far as the dollar is concerned, we are seeing a little bit of strength. fallingmarkets are also , so there certainly has been weakness all around. >> thank you. british prime minister theresa may has met leading conservative euro skeptics as she fights to save her brexit deal with reports of being a cabinet figure in planning to remove her and in-store -- and restore a hardliner. our senior international editor is tracking this. to say theresa may is under increasing pressure is probably putting it mildly. >> that's rate. this is another political fight, again fighting for her political life. there is talk among her cabinet
that they want a deadline by which she is going to resign, and that may actually help her, they think, get the brexit deal through. she will try yet again to get it through the house of commons by large percentages. weekend,t meeting this which came after british newspapers say she's under increasing pressure to resign, she says she will give it one more try to get this through and we will see what happens but it is unlikely she will be remaining much longer, especially if this happens in her own cabinet and even in her own party she doesn't necessarily have the votes to get a deal through. >> indeed. it seems like there is open conflict taking place between the cabinet and the party itself. there's not a majority in the house for a no deal brexit, there's not a majority in the house for the third deal, there
is no majority for the people to call for a second referendum. what would likely happen question mark someone takes over -- would that work? >> that's the issue, right? what arelse comes in, they going to do differently? these are the options that are before them. they has been talk that should come up with some kind of plan if they are going to remove her on how they proceed before they do that. philip hammond said that this weekend, it is up to the critics of those who want to see theresa may leave to come up with some other way they will move forward on brexit in the meantime and there is no majority for that. >> what is the latest with brexit and the timing? given moree been time, obviously, to get something through, and if
theresa may does remain that will probably be another vote. there could've used some other kind of machinations trying to move it forward and they have obviously not ruled out a second referendum even though there is not support for that. the problem is there is there's not clear majority support for anything at this point except leaving without a deal, and everyone has taken that off the table. what happens next is the real question, and how soon. >> thanks for that. the prudential ceo says merger talks have opened up a wealth of andnership opportunities benefiting from instability as a result. he spoke at the development forum in beijing. portfolioicated the and that had a strategic value
to us as well because energy is very successful in europe and european clients are familiar with it. it was done about two weeks ago so it cost us about 26 million pounds but i think we would have probably got to that decision with or without brexit but brexit clearly defined the timing. shift in ourolicy world wasn't brexit, it was them saying you are responsible for your own. we have had tremendous the band -- tremendous demand because the consumers are looking at how to fund their own retirement. we are on the lower risk and of the product offerings and that is where they are more comfortable. >> can you give us an update on your splitting up of the u.k. business? >> it is progressing really well. of regulatory work
we do, he got 170 years of contracts to review to make sure they are as they should be, and it is in very good shape. i would say we are slightly ahead of schedule and there are a couple elements coming up that are out of our control. there's a court case on de-risking that we have to accept the timing and the decision of the court on. there are a few other steps but it is progressing nicely. -- if those reports conversations are stopped what does that mean for your expansion plan here in china? are you looking for partnerships? >> we haven't commented on any m&a specifically but what is interesting with announcing a d merger is a variety of firms have approached us who probably wouldn't have looked at us before. people tend to look closely at
you when you are doing things seen as different. much broader set of firms we can do more with then just competing insurance companies. there's lots of innovative firms that would like to work with the company and our relationships and reputations. we have lots of options that are new but we are not looking necessarily at changing the overall structure of the group. wells, prudential ceo, speaking to tom mackenzie in beijing. what's more to come on the show. this is bloomberg. ♪
the range rover has been rare legalarking a victory for foreign companies fighting for intellectual property disputes with chinese firms. has ordered them to immediately stop making and 7, sayinghe land wind x it copies five unique features. they must be compensated although it did not name of some. daimler is looking at a potential partnership in asia to help cut costs for many car brands. daimler is in talks with a chinese joint venture. last month they were working at cross cutting measures for public markets. while way -- huawei is urging institutions around the world to cut ties with the company. "the financial times" courts a
board member as saying their collaboration with research bodies will increase. he also said more than 80% of considered aent is gift or funding money with no strings attached. ♪ say -- we are awaiting the election commission to come out with a preliminary election results later today, at 2:00 untilhere are delays 10:00 a.m. this morning and 2:00 p.m. this afternoon, the first election since they came to power. the results have been pretty surprising, those numbers are neck and neck and some say that's the reason for the delay. 2:00 p.m. is the time to be watching. >> absolutely, thank you.
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