To 20 . The corporate rate is said to be cut 20 . They are trying to clear the skies, they are trying to bring Digital Payments to hong kong. Also, 4000 outlets. Getaad 29 minutes until we this out of china. It is industrial profit news. This is 1094. This is the middle of last year. March of last year. The important question were asking today is is the turnaround the supplyside reforms. We have seen exit capacity been removed on the system. We have also seen inventory overhang being reduced. There has been a rise in metal prices that are driving a stronger profits. The view from Bloomberg Intelligence is that it is mainly the latter. It is causing this demand and the rise in metal prices. That is what we have. Haidi the bigger the interesting this is a particularly Interesting Data point. Ass translates to the same what the earnings are going to be. That is looking a little shaky given that we have seen that reflation story on the factory gate. The have seen it stumble a little bit. This is out in the open when it comes to training in china and hong kong. Selfie, we are seeing a trip at session again. Sophie, we are seeing a trepid session again. Sophie this was not a threeday drop. They are leading gains for that benchmark. The big picture here when it comes to what is happening it has a lot to do with his details of these details. We have the dollar pushing higher. Markets have such low expectations regarding trumps tax agenda. We have the dollars shown signs of life. Perhaps, to have any fighting chance of september starting higher that is the longest stretch since 2007. When it comes to what is happening with the dollaryen, no surprise. This is down 2 10 of a percent there. At 113 at these tax details with 113 is the top over the medium term. Says that if these arteries profits are attitude trumps plan, that might affected as well. We are seeing a softness for japanese stocks. The same goes for the tropics. When it comes to what is happening with japanese markets it has to do with the fact that many stocks are trading over pliy. Trading ex t. Look at what is moving when it 225. To the nikkei toda user mortars is leading the drop today. We do have when it comes to the top performance industrial players, chemical makers, Steel Companies like mission steel as well as pacific metals tracking the gains we are seeing. This is a base metal s elsewhere we are seeing decline board copper as well as aluminum. A mixed bag for commodities today. Rishaad lets talk about fiscal reform on capitol hill with that story and the rest of the first word news. And publict trump and leaders will announce their longawaited tax overhaul plan later on wednesday. Sources say Corporate Tax rate will be cut to 20 on the current 35 with businesses allowed to immediately write off Capital Expenditures for at least five years. Trump will propose a top individual rate of 35 of the to create adecide higher bracket for top earners. North korea has ramped up its war of words with america, issuing a propaganda video showing the destruction of u. S. Military air forces. It shows the shutting down of a b1 bomber and an attack on an air carrier as well as clips of President Trump and a burning flag. They claimed that trump had declared war on north korea, something the white house said was observed. Trump we are totally prepared for the second option, not the preferred option but if we do, it will be devastating. Devastating for north korea. That is called the military option, if we have to take it, we will. Chinas earliest Economic Indicators shows that Growth Continues to moderate in september as they try to curb debt risk and clear the skies. The companys edged down and failed. The outlook was brighter elsewhere as satellite images shows Manufacturing Activity at its strongest in six months. Saudi arabia is lifting his ban on the now drivers. Women will be entitled to a license as of june of next year. The kingdom was the only country in the world to ban women from behind the wheel. The crown prince is seen as pushing the change. It could see pushback. I am paul allen, this is bloomberg. Peggy for that. Janet yellen has signaled full speed ahead on a normal rate hike. Global Economic PolicyKathleen Hays taking a look at what you are calling the yellen manifesto. What does she have to say and the reason behind it . My take on this, listen to her speech, reading it is that janet yellen and her team put a lot of work into this speech. The pdf file has 17 pages of what she said. There is another have a dozen pages of citations. There is nine pages of chart. This is a very strong message coming from the fed chair. Basically she is purging gradual rate hikes. She has done that before. Inflation has been below target for most of the last five years. She analogies there is inflation a ballot is inflation uncertainty. She even said that there is a risk of the economy overheating if the fed moves to gradually. I think here is the line in the speech that really hits home. Lets listen to janet yellen. Janet given that Monetary Policy affects Economic Activity with substantial lag, it would be imprudent to keep Monetary Policy on hold until inflation is back to 2 . Inputted to leave Monetary Policy until inflation gets to 2 . She looks at the strength of the labor market, something that is very important. This is worthy of where the economy is. Lets look at btv 776. This shows the white line of the main. Janet yellen said in her speech that beaches continue to move higher. She is seeing signs of that but you see how they track each other. Now it is lightweight is are moved flat. It doesnt like it will move up just yet. As far as what is happening next, this is something i think that is very important in getting the markets on board with her expectations. They will need to and be justified in raising rates on december. Lets look at btv 80 to 90. We are looking at a compilation of a world just rate projection. You can see how the chances of a septembermoved from they moved up and they continue to move up after janet yellen after meeting last week. Remember going into the march meeting . The markets did not believe them. Of fedas a whole bunch speakers speaking about this, getting the markets ready. I am wondering if janet yellen kicked off such a move. She was getting ready to get ready for a rate hike in december. Rishaad i have been looking at feds for 22 years. Never have we seen so many fed speak and put their head about this. We have even more of them coming up. What is expected . The transparency in communications is all about that. We have four more, look at this, three dozen. You can see this from the board of governors. You can skip over to jim bullard. These are the doves. Very clear he is on board. More cautious the but she is watching that love can. Jim bullard probably stays. Eric rosenkranz speaking as the money marketer of new york. I interviewed him in march and he said that we need at least three or maybe for rate hikes this year. Has this had an impact . I want to show the dots. Dot us go really quick. You can see those for dots along the lower lefthand side. That is probably maybe charlie evans. Who house is there. The vast majority are lined up with janet yellen looking for rate hikes. Go over a bit and that is 2018. Three more rate hikes. We spoke to chris lovell was a chief economist, they do a lot of bond business. He says the markets have definitely not priced in what the majority have said officials still seem to be seeing. Lets listen to chris low right now. The market does not have that priced in. Not in futures at the moment. That is talking to our money market guys. It is because hedging is expensive. The yields are still really love. To some extent it does not make sense to hedge this early against what the fed might do next year. A lot between now and december. We shall see. It seems like janet yellen is labor market strong. She may still lead us toward that third rate hike of 2017. Works thank you. Continue ourwill discussion on the Federal Reserve a ie is joining us. Well talk about the impact of the current reported rate hike timeline. Bus, he says it is the biggest bubble of our lifetimes. Why is mike still on a mission to come the king of bitcoin . That interview a little later. This is bloomberg. With Bloomberg Markets. Im shot salon in hong kong. I am haidi than in sydney. A quick check of the latest business flash headlines. Like he is increasingly relied on overseas markets and domestic business continues to slide. China was particularly strong escort. The province there have had estimates that under pressure coming in at . 57, it is way ahead of the median forecast for . 47. They fell 3 in the. Int was upset by a 5 rise america and the pacific. Equifax ceo Richard Smith has stepped down after the theft of 143 million americans private data. Bestsay that it is in the interest of the coverage of have new leadership. He will be paid as an unpaid adviser. Shares have dropped since the hack was announced. Commander oriental has scrapped the sale of mandarin. They will review options of the hotel, including potential be development as a commercial property. A consortium of properties and bidders are in the game to end the sale. Series ofa recordbreaking land and building goes in hong kong. The Trump Administration of the republicans. They say they want to lower the corporate rate to 20 . Lets bring in aia chief investment the trump administf the republicans. Marketer. Been rather disappointed so far. Rishaad what is your view of this . How does it change things . In terms of the physical impacts, fiscal impacts. They were trying to lead that issue and outperform. All of those gains have been paid back. The markets are expected something on the fiscal side. Proactive see some policy come through and we need to see the real economy kick in. This is something that janet yellen will be keeping a close eye on as well. It is focused on Monetary Policy, unemployment, all of the key objectives of the fed. Still very much focused, looking forward on vacation and trying to be preemptive. Odds are increasing in terms of december rate hikes, two or three hikes. It does not increase the need for these hikes if they get the package in place. It could create inflation sooner rather than later. We are hoping any fiscal package will result in more spending in the economy. As we start to see capacity constraints kick in we would expect to see some Inflationary Pressure belt. In anticipation of that, the fed acts independently but in anticipation of that we would start to see inflation target for the inflation levels get closer to the target. Looking through Janet Yellens speech, there are a lot of things that have to do with inflation. One of the things she hinted at is without the stability, not being able to reach that 2 , she hinted that perhaps the fed model when it comes to inflation is flawed or needs to be overhauled. Does that create a wide open door for whoever replaces her to overhaul the Monetary Policy framework . There has been a lot of discussion around this issue. I think markets will be focused on constant continuity and stability. Longer called for the and october meetings. There will be early signs of which way that is going. The market will be very much focused on continuity. I think the real issue in terms of continuity be around thelations and as we know president and his administration is very much focused on trying to ease regulations since the gypsy. Janet yellen has not been shy in coming forward and committing to the types of revelatory environments. This is not really a trump trade anymore. We can talk about looking at health care, that is on life support if you want to part in that terrible pun. Tax has a can more details, still a real battle in congress to look ahead. Is it still a market as danger and by the Monetary Policy environment globally . The market is being driven by earnings. We have seen safe and as a growth between europe, u. S. , north america and asia and japan, including japan which japan has surprised the upside is well. I think earnings are coming through and that has been driving equity markets and keeping rates relatively surprised and in the shortterm we have seen some strength in the dollar as expectations are not tighten toward the year end. We are starting to see that reflect in currency markets across asia. The first half of the year we saw asian currencies relatively strong against the dollar. That is starting to be questioned and in the case of currencies, it is turns rivers. I think investors in this region will be very much focused on that and Central Banks in asia have some room for some policy possibility. We are still seeing rates stay sable if not in some cases start to ease a little bit. Stay with us, we want to get your thoughts on whether we will see an asset reversal from here on and what happened to the u. S. Dollar. But you want to discuss, this is bloomberg. Back here. We will have our conversation with the chief Investment Officer mark. We get industrial profits at the bottom of the hour but it is not the greatest data point. But it does make it question comes out. Product have been going up. Is it down to metal prices and Global Demand on the up or is it down to getting their hands dirty and giving them Structural Reforms in place of excess capacity and infantry overhangs . You can look at this from both angles. There has been a move to clamp down on what is considered to be dirty industry and to improve the environmental outlook. That has had an impact on the supply of certain raw materials. I think by far, what we see this year, china has really surprised on the upside in terms of the economic progress. It has been about a return to old china. Pumped priming, it is relaxation of credit conditions. That has both the domestic economy and it is flowing across asia as well. It was he across the region is a direct result of china being stimulative in terms of of its Monetary Policy. You are our chief Investment Officer. We have certain sectors that have been at the heart of the investments. One has been insurance. How do you guys find it in china . Of thenvest from both domestic perspective and the off shore perspective. I think the Financial Sector is under a little pressure in china because as we have seen statements, how from xi jinping talking about the over by naturalization of the economy where there is too much of the top talent moving into finance as opposed to what i think the insurance sector across the region we would say this, clearly from an investment point of view, it has a little upside in terms of the under protection. The rate at which new wealth is being created because of course, once wealth is created, the next thing individuals do is look to protect that and protect their families longterm in terms of financial wellbeing. We see the insurance sector, the Life Insurance sector in particular still has a lot of time, a lot of attentional for additional growth and the Growth Drivers are very much in place. From the investment point of view, depend on valuations, depend on the outlook of individual companies. It depends on the market they are looking within. In the region we have tended to when we see opportunities for the markets push ahead, they tend to be high me to place. Lets always good to have you on the program. This is all being well. This is what we have coming up later on the program. It is goldman sachs. Theyre warning of a deepening iron ore about. China steps up after to clear the air. This comingt if for winter we will be live in shanghai, prospect for hong kong, flat open in the premarket, just down a fraction. Who knew that phones would start doing everything . Entertaining us, getting us back on track, and finding us dates. Phones really have changed. So why hasnt the way we pay for them . Introducing xfinity mobile. You only pay for data and can easily switch between pay per gig and unlimited. No one else lets you do that. See how much you can save. Choose by the gig or unlimited. Xfinity mobile. A new kind of network designed to save you money. Call, visit or go to xfinitymobile. Com. 929 in hong kong and over in singapore. We have time to get down to the start of the trading day. Just take a look at what is happening in the market auction. , just down a fraction looking at the moment as though we could be seeing a little bit of weakness. One of the Hotel Developments jumping 13 in the hong kong premarket. We will get you up to speed with that. The news has been dominated by Janet Yellens comments. There are breaks in negotiations they continue, hopefully getting Chinese Industrial pop numbers through. Here is heidi. Heidi we are still waiting for these Chinese Industrial pop numbers. It is quite a particular data point if you want to look at it. Crucial when it gives you a bit of an indication of the health of the corporate sector. We talk about his upstream companies in china and industrial profits so closely tied to these reflation stories. We have remembered seeing Producer Prices come down and that is taking a chunk out of earnings. The is in conjunction deleveraging campaign. That is creating a bit of a headache in terms of the debt servicing. And essentially being able to be as profitable as they have been in the first six months. Lets get a look at how markets are out there. We are seeing another down day when he comes to china tracking what was that of a session following Janet Yellens perceived more hawkish than expected comments. Take a look at what is happening on the mainland market. Looking flat here. Still below that 28,000 level. Has this fromlar earlier this month. That is below that 79 u. S. Centennial. We are seeing gains from the dollar getting trimmed somewhat earlier. This was on the back of the tax plan which are due to be further fleshed out later on wednesday. Of course today we had the pboc setting the yuan six slightly weaker as 62 192. You do have the onshore rate comingg a tense of 1 off of that forward so that we saw on tuesday but still around that six spot. As you can see from the equity column, it is a mixed bag. You have the taiex is as well in wellington and singapore. We are seeing weakness. Lets get you to the screen your to show you what is going on with the hotel. It is viable to buy us from its itsts of its assets from parent. Its shares are suspended from today. They are mulling a transaction that may involve the company. The stock was we do have the latest industrial pop numbers out. Rish is looking at a rise. 24 it is in july. Rise of 16. 5 that figure coming through on the bloomberg terminal. It gives us an idea of normal gdp for the chinese economy. Lets get to the first word news headlines. Lets get over to sydney. Wilbur ross has repeated his view that the trip to china went well. Speaking in hong kong after talks with chang and other senior chinese officials he says things are looking good for President Trumps visit to beijing later this year. They are doing what they can to improve trade relations but to between the two leading economies. Traden you look at that deficit, there is one geographic source and that is china and there is one big product source, that is automotive and automotive parts. Essentially, if they can resolve china and resolve automotive, you could in theory resolve the whole trade deficit. The Commerce Department says canada is unfairly subsidizing dutyrded and wants a 220 slept on every cseries plane imported into the united states. The decision is a victory for boeing. Reject this says is and that eliminating this from the u. S. Market. The japanese government has approved a revision to it 30 year plan to decommission a Nuclear Plant the lane by two years. Six point five years after the disaster, the exact location of the melted rods is largely unknown and robots that can withstand high radiation are still being developed. Dispute over sports stars not standing for the u. S. National anthem has reached the business world. At t is offering refunds to directv subscribers who want to cancel their contracts over the issue. The issue has been magnified by tweets from President Trump who says the protest is disgraceful and they should be fired. Encouraged football fans to boycott the nfl. In december from hsbc says the biggest salary increases are found in the alps and the arabian desert. Oftzerland is at an average 193,000, the highest in the world, was twice the global average and 54 more than if they stayed at home. Those relocating to saudi arabia received a 58 percent increase in salary. Day, news, 24 hours a powered by over 20 700 journalists and analysts in 120 countries, i am paul allen, this is bloomberg. China positive president attacked could have a wider effect. Talk us through the impact that this antipollution drive could have on the metals market. That is right, every winter, you see a spike in pollution in china, particularly in the northeast of the country. This is where you have steel mills, cutting plants, aluminum smelters churning out metal. The government is putting in the crackdown on those plants to try and reduce pollution, especially during the winter months. Part of a wider president xi what jinping is try to move towards. A slightly greener economy, at least that is the rhetoric. When it comes to steal, you are seeing the government anticipating cuts of some 30 to Steel Production in some areas it necessary. This will reduce predation, same for aluminum, you have construction activity, potentially curtailed in all the major cities in northern china. It is a whole suite of measures. Quite a lot of this has been very well flag. It is very well anticipated. Clear what thely effect is going to be. That is what Morgan Stanley is flagging. They are saying these are unprecedented measures in the markets. To wait to see how they pan out. On the prices you see a lot of impact because people investors are anticipating what the effects of these controls may be. This year we have had aluminum which is a fiveyear high. That is because there is closures of plant already. Plus the anticipation of these winter curbs which are frankly pretty significant. The same with steel. And then iron ore is obviously a raw material for steelmaking. The idea is that it is going to be significantly less as far as steel produced. It hit the lowest since july yesterday. That was Martin Richard for us. This region imports one in three dollars of the u. S. Exports given the terminals along the gulf of mexico, 20,000 kilometers away. The week american benchmark is said to be the part that slows it. We are now going to singapore, it is comparatively cheap. What else is driving all of this interest from asian oil to u. S. Crude . As usual in the oil market, it is several different moving parts that are all coming together at once. The biggest change in this is the u. S. Shale boom. The u. S. Is producing so much light, sweet crude right now, the refining system was never prepared to handle it. We havehe same time asian producers such as indonesia, malaysia, they have had declining production over the last couple of decades. They need more light sweet crude. The u. S. Government reversed a 40yearold ban on exporting crude oil. This shift allowing of u. S. Crude to flow from the gulf coast from houston to Corpus Christi over here to refineries in china, japan and korea. In aipac ofy seeing conference this week in singapore, a lot of interest from asian buyers to get that u. S. Crude over here. U. S. Exports could rise as much as three or 4 Million Barrels per day am basically nothing. The flows from this out of the will continue. What will happen to this spread in wti . Sevenly, about as much as dollars, 6 50 6. 50 that is narrow. Is blowout from about two dollars and . 50 to seven dollars. Now as more exports leave the u. S. , metal prices should go up there. It should never back down into the four dollars and 4. 50 range even over the longterm that sprint has gotten wider. Aty saw the forward curve two dollars or three dollars. They are stricken more and more u. S. Exports so they need a wider range to incentivize. Rishaad we will talk to the men who is reinventing himself as the head of bitcoin. What he says cryptocurrencies is the biggest bubble of our lifetime. This is bloomberg. We are back with Bloomberg Markets. I am a shot in hong kong. I am haidi lun in sydney. Bitcoin has plunged after china said it would been Exchange Trading before recovering. It has been quite a roller coaster ride. Ramy inocencio has the bloomberg charts that says all you need to know about the ups and downs of the worlds biggest cryptocurrency. For my first bloomberg terminal chart i want you to know how closely bitcoins run and currents slide resemble the internet bubble and implosion of 2000. Lead a lot of people happy. Look at g btv 9483. This is the price of bitcoin from 2013 to now. Line is the nasdaq from 1996 to 2000. You can see the parallel parabolic growth. Both grew over 300 in the same amount of time. Not only that, their declines are also similar. Bloomberg intelligence is forecasting that bitcoin has probably hit its peak. To my second bloomberg terminal chart. That is g btv 8843. Bloomberg intelligence says bullying should be a primary beneficiary as bitcoin falls and if we stay in our weak dollar environment. Here, bitcoin is in yellow. We should see the reason paul, gold here is in blue. Be the rises, that could last for a gold rally. This is at the lowest sustained level since 1991. For my last chart we have to talk about bitcoin and of course the chinese yuan. They said it would stop initial coin offerings as well as freeze bitcoin Exchange Trading. This is btv 42 02. We are starting to see the trappings of an inverse relationship between the hard currency and the cryptocurrency. One of those new china measures were announced. Bitcoin felt about 10 by the offshore yuan rose nearly 1 . This red area down here shows rising inverse correlation echoing what some analysts are saying that bitcoin can actually coexist. U. N. Xist with the theer way coexist with yuan. Rishaad we are talking about bitcoin, it is volatile. The question we are asking is whether other cryptocurrencies are really that different. Mike says there are similarities. Mike in a lot of ways, this is a market like any other market. Of the the psychology indonesianeed and their, the dollar yen, treasuries, they are exaggerated because of that liquidity and because there isnt a good way too short. They die andl, make the comment that china bans the exchanges, the trendline breaks, they fall a lot harder than they would have in other markets. There is a short days to cover. You dont until you reach a new level of support and rebuild your base. How do you know when to buy and sell . Thing . You trade this there are multiple ways. It is like a ballet of the chart and the ballet of the prices. I saw a lot of people that i need the prices. A part of it is event driven. Also, access to information. One of the things ive tried to keep trying to do is put myself at the center of the ecosystem. It is still a relatively small world, you know what is happening. When the alliance got announced, you knew it was going to be announced. When it does, it goes way up. I would call that an event driven trade. The broad trading of it is macro. It can see euphorias and sold at 5000, 4980. Three weeks later, trying to buy in the low 3000. You are a trading junkie and it is a lot of fun. It increases your tax bill. For some people, that is a different strategy. You are trading what . Declines . Ive taken the approach to participate in all sides of the ecosystem. I have mining to create new coins. That has been an interesting business. It has been a money loser for us. But ical currency terms spent been coined to buy bitcoin lies. If i spend dollars, i would have been making money. Owning better off just bitcoins. In either, you are much better off owning either then and hes her mind. In ether, you are much better off owning either rather than the either mine. They are not that wellcapitalized. You dont live that much money on the exchanges. We traded lots of them. Emini here in new york cameron tylers exchanges is one of our go to places. That got regulated, you feel a little better about it. Happens, ieally bad know those guys, you can go down there and give them a shot. Tothat was mike speaking bloombergs erik schatzker. Coming up, Going Digital in hong kong. Details, just ahead, this is bloomberg. This is Bloomberg Markets asia. The richest men and asias forcesest person joining in hong kong. This will allow you to make and store payments and 4000 retail how that. Stephen engle is with me. What do we know about this . Just ahead of the interview, i got word that he was meeting jack in this building. He owns it. Of course, that is what they were hashing out. I am assuming. This deal is being discussed at that meeting last month. Sure enough this is what they announced. They are teaming up with sharing who has a retail presence. He is teaming up with li kashing. Last year, he granted licenses to operators to these versions of mobile wallace. Fruit from that granting of a license. Staying with this, jack ma has been moving to the logistic side of things. He has more control. Retail, they are having this new retail concepts. Alibaba has always been about providing a platform for others to do business. Now they are doing to logistics themselves and the distribution and delivery. As jack ma and i talked about in hong kong, as they get a gear they have to go asset heavy, not asset light. Todays alibaba sites, you should not leave the heavy monitoring to the others. You have to do it. You have to invest. Alibaba is investing heavily in logistics but it is also a lost making. Million. 300 and 1 revenue also tripled, they have about a dozen other partners as well, including an equity stake in best logistics which went they have a lot of 20 equity stakes that. What will alibaba do . They will fold it into Alibaba Group and at another alibaba board member. They will invest another 15 billion u. S. Dollars to build out the Logistics Network over the next few years. What we are hearing is jack ma is setting up a gaming unit as well. Do we know anything specific russiac . That is an interesting one. Gaming phenomenon if you will, jack ma and alibaba want to build out their Digital Entertainment position which has been lost making for years. They are continually buying content for this division. As has been an interesting when we have been hearing. This is a report from this ine news media platform reporting that alibaba Digital Media set up a Gaming Business unit split into between an Online Platform and Interactive Entertainment positions. This is just a report right now. Competitiondirect with tencent. That has that gaming area locked up in china. That is somethings competition. Thank you so much for that. Coming up in the next hour of Bloomberg Markets, asia, how geopolitical factors are weighing on particular currencies. We will talk about that with. Urasian groups a lot more to come over the next hour, this is bloomberg. So we need tablets installed. With the menu app ready to roll. In 12 weeks. Yeah. The world of fast food is being changed by faster networks. Data, applications, customer experience. Which is why comcast business delivers Consistent Network Performance and speed across all your locations. Fast connections everywhere. Thats how you outmaneuver. Announcer from our studios in new york city, this is charlie rose. Charlie Hillary Clinton is here. She was the democratic partys nominee for president in the 2016 election. She previously served as first lady, senator from new york, and secretary of state. Secretary clinton received more votes than any other u. S. President ial candidate in history, besides president obama. But despite winning the popular wrote, she lost the election to political newcomer donald trump. Secretary clinton reflects on the 2016 campaign in her new it is called what happene