tv Bloomberg Markets Asia Bloomberg May 6, 2019 10:00pm-11:00pm EDT
>> that decision due in two and a half hours. anything we might have to say about these trade talks? what the extra duties mean for the world economy. of course, we have this to and fro between beijing and washington. a 20% chance the tariffs will kick in on friday. again, we woke up this morning and the headline is they will pursue those tariffs. if he pops his head into some of the sessions. markets right now stabilizing.
csi 300, still on the board here. we are up more than 1%, but nearly making up what we saw yesterday. south korea and japan returning from their holiday. they certainly missed a lot and ,e are seeing about 1% here going to cost a leg lower here. a lot to cap tavon and australia, still seeing pretty steady here higher ahead of that decision. not wes to whether or will see a rate cut. in.aussie dollar is cashing here.re, still pressured mr. lighthizer saying those tariffs will be in place friday,
confirming the tweet we saw from president trump. there is a bit of a coordinated response, so we are seeing u.s. futures weighty here today. csi 300, the rest of the markets looking pretty good. well.ing also up as i mentioned about the yen offshore, we have been looking at this a little more. indication ofer where sentiment will be given the fact in japan, they have not had to rely on the chinese economy, so that could be a better indication of where things come. perhaps that means we could still being some -- still be
seeing some pressure when it comes to equities. given the selloff we saw yesterday, we are seeing the evaluation look a little cheap compared to the u.s. market. earningsompared to the ratio from the emerging markets and we see stocks are the cheapest in nearly six months or so. is this a buying opportunity? be a catchingight situation, but during the session as well yesterday. meantime, first word news, sakina from new york. >> we start with the federal reserve which is stepping up its standardsd lending are continuing to side. says the businesses
would be in debt with the ones taking the loan. mnuchin is refusing the latest attempt to obtain six years of president trump's .ersonal tax returns itsaid the president lacks and therefore, he is not authorized to disclose the tax returns. otherats could now pursue measures including subpoenaing the records. the global slowdown hit exports. fraction from a year
earlier. growth of southeast asia's below theonomy well 7% target. says united nations report nature is in more danger now been at any time in human history. extension looming for at least one million types of animals and plants. the report says the species are being lost at a rate 100 times faster than in the past. human behavior is a major cause. and sea.rs to on land global news 24 hours a day, powered by more than 2700 journalists and analysts and at tictoc on twitter, in more than 120 countries.
>> the united states is concerned it will raise tariffs on certain imports to 25% on friday with the trump administration accusing beijing on acting -- acting on commitments they made. they say the latest round of talks in d.c. this week are still on. is thati can tell you the chinese team is preparing trade talks. mackenzie is watching the story for us. >> out imagine we cannot be too good, given that it just exploded in a lot of people's faces. like?s the approach >> when you get the sense from the press conference, to some
extent the chinese were taken by surprise by this comment and tweet from trump. later on, you have the confirmation that indeed they were planning to increase tariffs to 25%, so there are a today unknowns unknown the chinese response. they did not confirm the dates and there have been reports that indeed they were considering delaying the chinese side over to the u.s. and then of course there's the question of how beijing will respond. in the past, they have said that they will retaliate. we know they have tariffs of $110 billion, so the question is whether they raised the tariffs for look to extend them and
other products. how far to push this. >> we often find that the really media does not bright these stores. what have you seen? >> it is pretty much a blackout and how this story was reported. today, we have had some coverage of this, so if i show you a copy , the state here -- the headline thing the chinese delegation will be traveling to the u.s. to continue these negotiations.
you also have a line in the china daily saying china is urging them to meet halfway. not of the newspapers do make a big play. , there business herald from page, they are talking about the rout and stocks yesterday. they talk about the fact that there is no mention of a threat of tariffs. notn, this front page talking about tariffs. no mention at all, so yes there significant control over how this is being reported in china.
most powerful person arguably in the world. is really going to be taken by the markets, administration centered on that. what was interesting, i was watching sunday night, the tweets coming out and they were that the press is treating me reallyy, unemployment low. by the way, trade talks are off. it was quite an interesting
insight into a range of subjects. >> on this wondering now, is there more upside if we do get some type of trade deal? >> what i think is interesting, most market participants are looking at what is happening, saying 25% tariffs are going on. i think most people are thinking hopefully there will be something on thursday, maybe trump will do a last-minute u-turn. i think the 25% tariffs, one of the things we talked about is the idea that the optimal point is a 50% tariff on all chinese exports. at the moment, a blanket tariffs is only around 5%. ae u.s. is still moving from point which is relatively optimal in the trade talks. we thought the u.s. was arguably giving away too much, which is why the chinese were keen on
getting hold of the deals. i don't think they are quite prepared for what is coming up. >> was it prisoners die limit? >> the question is, whether you would choose a $10 chocolate for five dollars or you would take a three dollar chocolate for free. the argument is 78.4% will actually take the free chocolate. i have done the experiment for thousands of people. the thing is, when you look at the trade relations between china and the u.s., what you find is it is roughly around 79%. >> what it means, china is effectively giving away goods for free because you are pretty much using them and you do not really care. there is no real utility value. i have done this with people as well. saygive people $100 and you
if you both can agree, then you both can keep the money, but if you can't, you don't get the money. most people say we should be 50-50, but remember the other guy does not have any money at all. you make an show is offer of $30 to the other person and able take it. working your way back, you get that. >> i locked the -- like the chocolate butter. >> a lot more to talk about. we will try to assess what to do with you. it is not as extreme as most people were expecting. possibilitye real of a change in interest rates.
of asiath us, head training. stretch theyn how saw. isi think what is happening the things we thought were going to happen anyway. of accelerated that and really focused on some of that. you thought the dollar would strengthen and they would fall back a little bit. what has happened is it has really accelerated. the outside is really limited for the time being. it is september 13, that will play out for the first time in a few years.
>> when you look at the u.s. economy, it is how the fed was so fixated. there are questions being asked about dollar liquidity. tighten.continues to the assumption was the fed would cut rates and what you should be buying is emerging markets. the dollar has not weekend, it has actually gotten stronger. situation have the with inflation. is in the way it seems. >> a policy response would be unnecessary. one of the levers they have in terms of a response.
you are not going to get liquidity as they would in the first quarter. emerging markets are not trapped and i think you would see it over the next four months, a slow bleed coming out of it. we saw a lot in one day, people unwinding. we think that is going to continue for the next few months. >> the fed has been closing the taps a little bit. what becomes popular? provided $1.6 trillion. to zero. fall close what we continue to like is this is an environment where there is
upside in equities. maybe a bit more in emerging markets, so really this is an environment that will carry and bonds continue to be very attractive. do?hat do you >> the upside in high-yield is limited from a capital perspective. the year -- the yield is still there, so still be up, but what we are seeing also is in the volatility market, any uptick is actually being sold because they are desperate for the yield because they realize this is what is happening. new world economy is short economynow -- the world is sort dollars now.
recognition. >> let's stay on the earnings seed -- earnings seen. the company said it has found evidence and the impact on earnings should be less than 2% for each year. or buffett said he remains confident. nextrange of upgrades month as the company continues while simultaneously competing against them. such aslearned upgrades reminders and messages that make it more independent from the iphone. >> take a look at what is going -- what is going on.
>> a lot of earnings and the trade deadlines as well. we are seeing some big moves on property insurance. is certainly helping investors and the forecast was not as bad as the market has steered. feared. we talk about electric power , analysts seeing stocks down 8%. included a projected devlin -- dividend increase. we will see how that plays out. when it comes to hong kong and china, some of the big experts fell. , appleecline yesterday suppliers falling another 3% and dropping from 10% yesterday, so
at comcast, we didn't build the nation's largest gig-speed network just to make businesses run faster. we built it to help them go beyond. because beyond risk... welcome to the neighborhood, guys. there is reward. ♪ ♪ beyond work and life... who else could he be? there is the moment. beyond technology... there is human ingenuity. ♪ ♪ every day, comcast business is helping businesses go beyond the expected, to do the extraordinary. take your business beyond.
29 p.m. in hong kong. i am sticking with the first word headlines. accusing beijing of backpedaling on, made during negotiations. trade talks will continue with a chinese delegation still set to visit washington on thursday and friday. trade representative robert lighthizer told us that significant issues remain whethered, including tariffs will remain in place. really do not have a lot
of experience in negotiating with the chinese. my experiences with china -- there is a lot of talk, sometimes they will backtrack and sometimes not. you have to be patient and persistent. stick with it. su: to iran now. signaling that they might scale back on their commitments under the nuclear deal. this is in response to growing pressure from the u.s. they do not plan on abandoning the accord like president trump but might make reductions to some of its obligations. have beent eu leaders informed and the president will make the announcement on wednesday. will be read tumbles as the top electoral body nullified election in istanbul.
the ruling is a victory for president erdogan who received -- refused concede that his candidate had lost in the city where he built his political career. the lira fell more than 3% after the decision. reaching its lowest level in seven months. former goldman sachs banker has been granted bail in the u.s. and placed under house arrest. this ahead of his trial over the scandal. shirt, hein the blue arrives on monday morning and appeared in front of the court the same day. he pleaded not guilty that he broke anti-bribery laws. 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 su. this is bloomberg. a busy next few days. event. talk about it in southeast asia is front and center. you have the philippines also coming out on thursday. strengthening the case on the philippine front. inflation,el of almost telling you. >> and you have the rba guy got pretty interesting. the chances of cutting rates are now the highest in years. the markets have not really pricing more than a 6% chance of a move. now they are saying that it is about a 45% chance of easing and it will be pretty interesting here. paul allen is joining us.
the decision could go either way. paul: it could. it is a live decision. we have pushed up about. i am standing here, telling you about it. khat lit the fire was the wea first-quarter numbers. that is one half of the mandate. housing market has also been weakening, weighing on consumer confidence as well. retail numbershe coming out. the retail and trade numbers we had not do much. havee other hand, we really strong employment numbers in australia. the jobs market is looking very healthy. are sitting -- they on a dilemma. it looks like it is split down
the middle. the rba will do not -- nothing again. how does not factor into the decision here for the paul: itate --estimate? paul: the reserve bank of australia likes to keep itself separate. thinkould lead you to they would not do anything. they have in the past. cycle,the last easing they cut the rate on the budget day. hand, we heard from the ceo on monday. he said a rate cut from the rba
today will do very little to move the needle on inflation, growth or anything the central bank is worried about. government to the reform taxes or to cut the red tape, to do something. you could make an argument for the rba to sit back and see what the result of the election is, see who wins and what the policy is going forward. rishaad: paul allen there for us in sydney. now we go to southeast asian banks. policymakers with growing economic threats from the u.s. china trade war. get here -- this is what is going on in australia. the data is not that bad.
this is the surprise index for the u.s. and australia. we have been positively surprised. maybe it will be premature or maybe it is worth waiting until june. >> the biggest thing going on across the region is inflation. we have known about what has been going on in japan for the last 30 years. deflation inor japan. growth has already happened. disinflation or deflation is in some developing markets has not been explored enough by economists and markets people as well. past, it has always been concerns about inflation that we have heard about in emerging markets. if you have a prolonged period
of disinflation not really reacting to anything central bankers are doing -- rishaad: they are set up to deal with deflation. the whole game has changed. >> correct. i am not allowed to be rude. does seem that they are fighting inflation demons. if you look at korea, they are fighting inflation demons writing are not -- there are not any. cut.e case for does it become not so much to spur inflation but to bring down real rates and to make sure they do not go above a certain limit? >> there is that. there needs to be an incentive to take on that risk. that is really what they need to be aiming for. the reasons for that
disinflation are not well understood and a lot of those economies as well. there is something going on. if the reading -- for men be weekends much -- yvonne: it does not change the narrative much. question put a lot of marks on that trade now? >> my view is yes. i think the market that is most -- if you lookhe at the move of what happened yesterday, it was a complete replay of what happened in 2018. everything earning and renminbi muscle down. thehink that is probably best way to position here. yvonne: how much lower could the aussie go? >> have been holding this big level of 17 cents per what seems
like eternity. we could get down to 67 -- what seems.70 for like eternity. we could get down to $.67. we call this process the ta iwanification of australia. being a high equity yield to low interest rate market. buy you can do is you can capital guaranteed products over three years with 200 30% participation on the australian equity market. you can do the same thing with the banks. i do not know why people are buying equities outright when they could be doing this with full capital guarantee, especially if you are a dollar investor. if it sounds too good
to be true, it probably is. >> what is the promised yield? your basically exchanging the yield. the banks are already cutting dividends. past, to buy the australian yield plays, used to pay a lot of that in currency. now you get paid to hedge the currency. the market.weaken a lot are still paying 6% dividend yields. even after the cut, they are still looking pretty good. there is more where that come from. oneaad: if you had to pick location, where would it be and
what would he be? >> i would pick australian high-heeled. i think they had the best. if the currency breaks from a u.s. dollar perspective, they will look pretty cheap. against them is anything earning men be. i think it is more a currency play. .t does not really matter someba will be cutting at point. rishaad: thank you very much. up between the u.s. china dispute. discuss about that asset, next. ♪
rishaad: you are back with bloomberg markets. a joint venture in china. they are hiring five managing directors taking majority control last year. eric has been recruited from the merchant bank. talks with three more mds. >> the latest on the bidding war. anadarko is back. leaving chevron with four days. they had raised the cash portion of their offer. they also pledged to pay the breakup fee on anadarko's
behalf. it lined up a deal to sell the gas field as part of the transaction. rishaad: forecasters after halting work, deliveries should now be to the middle to low end. is indicating last month that they would be in the middle of that range. there was a dam collapse in a separate mine in january. >> stay in the commodities space. the u.s. china trades that is putting others in a precarious position, especially copper, looking especially vulnerable. james poole is with us out of singapore. been, metals have resilient.
the news this week will not help. hand, what will be driving corporate metals is the growth in the chinese economy. if you do get an exclamation in the trade war, you are going to probably have more stimulus in the chinese market. it will be boosting demand for metals. morereens has been hit seriously by the trump tweaks and by the possibility of an increase on tariffs on friday. rishaad: this is what we want to get to. markets agricultural been the same recipient -- the main recipients of the selloff? >> the issues with grains markets are that you have the outbreak of african swine fever
in china and other parts of asia, reducing the demand for deed, which is an important area of consumption for green. you have south american crops and weather delays. of global glut grains. that has meant that -- there is one index that bloomberg has the sub green index. indication of how much oversupply there is. much.d: thank you very joining us there from singapore. let's move things along and have a look at some of those markets. yvonne: we have been watching when it comes to the minors here. ners here. there are concerns in the market
. they had a setback and could not resume operations in brazil. we are seeing iron ore rise. minors --the chinese miners. we are watching one big merger potential deal in asia. take a look at that. it is surging on record after announcing talks with a norway company. the stock is up 13.6%. telenor.tly owned by close to 9.5%. some key movers here given that we are seeing a mixed picture with the likes of korea and japan under a bit of pressure. divina is standing by in mumbai.
actually closed below. that will be crucial, considering that we could see a bounceback, looking at the rest of asia. a biglity is becoming concern now. up to levelsng it of 26. that indicates tension within the equity market. you have selling pressure building up. wasonly index that did well 19. again, the markets will be more earnings driven. people watch out or how the heavyweights performed. it pressured the markets yesterday. yvonne: we have marco there.
tell us more. we know how consumption stocks have been doing. beenhave not really hitting the mark in terms of performance. they have done plenty better. they had a one-time tax adjustment. a pocketss, this is that had been under pressure. they could face further pressure. great things are expected from the company. profit cut of 69%. thank you very much. now, coming up, it is that time of the day. our reporters going head-to-head, competing for our votes. it is battle of the charts, on
>> our viewers and clients can access their charts in a minute. things off in singapore. andrew. my plan today is to bamboozle you with technicals. what you can see with my chart is the oil price. on either side of that, you can see this. at the moment, you have wti breaching the lower band. that is a sign that we can expect some gains. the last time it actually breached was pretty much coincided with a sharp rally that we saw from the september and april. note, look att to
between the two bands. indication that any moves that we likely see will be more dramatic. these technicals are happening against a backdrop of rising tensions in the middle east. while the saudi's may be able to pump more to make up way, the key point is that it is reducing global capacity. if we get more geopolitical, there is less of a cushion. you are suggesting that we are going to see more upside for oil, given what has happened in the past. all right. sam, go for it. aboutm not here to talk boring bands. about theto talk
battle for global supremacy that is the u.s. china trade war. president trump may be investors heart palpitations every time he goes near twitter, but impact of the trade war is the connection between china and taiwan. the correlation between the top -- taiwan dollar and u.s. has fallen to its lowest since december. taiwan's economy is closely linked to china's. 40% of taiwan's experts have gone to china. of companies with facilities in china shifting production back to taiwan at the request of u.s. customers who want to avoid any tariffs. warident that the trade will end up being a net positive for timeline and benefit them. that is the core message that
this chart says that investors agree with them. -- the clearink winner is sam elliott. inortunately, sam, you are second place with the t-rex today. the other one had more predictive qualities. i am going so with the chart. the beard contest -- we are almost out of time. the beard or the chart? yvonne: i am going to go with them. ♪ -- sam. ♪
emily: this is "bloomberg technology." coming up, trade tit-for-tat. among the worst performances after a tweet seemed to escalate the trade standoff between the u.s. and china. after several high-profile debuts, the highest ipo in years is this week. uber's public offering. putting the app back in apple.