Bitcoin is also said to be in a bubble. The price has gone up 20 fold. Betty forget about the equity markets and bond markets, which is going to be focused on bitcoin, right . That is the big distraction for traders right now. Bitcoin futures are for the first time trading on the cboe global index them a big milestone for the financial markets. I dont see a whole lot of movement at this point. Be an appears perhaps to opening price, but i cant confirm that right now. We are watching as these traits start coming in. , brokersthe traders are saying dont expect huge movements. This may be a slow burn coming thewhere we finally for first time, have these derivatives traded on bitcoin. Yvonne it could be a welcome slow burn given the volatility in bitcoin for much of this year. Levoss mentioned, the wink twins banking on this, they are saying it could have 24 growth in the future. Morehat it has become mainstream, it could provide perhaps more stability in cryptocurrency. On the other hand, there is a lot in the other camp saying it could open the door for investors to short bitcoin. Week,orite line from last from mark mobius, bitcoin basically gives tulips a bad name. Betty we know what side of the debate he is on. Meantime, more fundamental, the jobs report gave a lift to the market on friday. The dow hitting another record and the nasdaq also rising, although tech shares were more aimless, a lot of investors still not quite sure what to make of the tax bill and how it could affect the largest tech companies. But othermeandering, sectors, particularly financials, gained quite a bit from the labor report. Moree hoping to get clarity on tax reform when it comes to the amt for the tech companies. For Central Banks as well. The fed, ecb, neil be, indonesia, philippines all meeting. We should be set up for a strong start in asia after futures on wall street were pretty much flat. 5837 for the kiwi. Seeing some weakness after the dollar maintained its tried after the jobs report, the best weekly gain this year for the greenback. Trading in australia just under way, plenty of china data also this week, including money supply, industrial production. Were seeing shares in sydney up about 1 5 of 1 . Currencyeady for the right now, the all the teen year yield at 2. 55. In japan, when it came to the yen, the worst slide since october, it could be a good monday for the equity bulls in tokyo. Could see possible upside, about 160 points according to chicago nikkei futures. A we ared keeping one eye on bitcoin and one eye on first word news. Haslinda consumer and factory inflation in china is moderating, getting policymakers another reason to maintain tough Financial Regulations in the fight to tackle that. Rose 5. 8 percent in november from a year earlier, matching a survey and slowing from 6. 9 in october. Official audit has found some chinese provinces face illegally borrowed money. Counties, as well as a southwestern city, inflated revenue levels to almost 250 million in the Third Quarter. This report included fake ownership of government buildings. The jobsinvestors say report inflation means it is time for the boj to reduce equity prices, that maybe distorting the market. Bank toect the central cut its annual etf target by one third from the current 53 billion. Billion and53 owned; percent of the markets at the end of october. The world bank of new zealand is the latest to agree that the world should be wary of bitcoin. Y say it looks remarkable remarkably like a bubble, and you never know how far a bubble will go before the situation completely changes. Bitcoin has had a wild ride in the last few weeks, with supporters hoping it will become a legitimate alternative to gold or traditional money. It looks remarkably like a bubble forming to me. We have seen them in the past come up over the centuries we have seen bubbles, and this appears to be a classic case. , with a bubble you never know how far it will go before it comes down. A bitcoin believer believes the cryptocurrencies omatic gains this dramatic gains this year are just the start. He says investors are beginning to get the idea that bitcoin is more portable and the visible than gold and the price will continue to climb. The twins are the largest holders of bitcoin. Global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. I am haslinda amin. This is bloomberg. Just looking at the quaint futures right now, it looks like we are getting some initial trade mentioned, and the direction you might expect, this is very early going. Take this with a grain of salt. 16650, it breached the 15,000 level. You heard everyone from the thisevoss twins to others, looks to be headed to the 20,000 level, it could even be this week. Some initial training on Bitcoin Futures youd futures. I dont know, i think we will be on bitcoin watch a while. We are also on tax watch. Yvonne that is right. President trump said to be planning to make a Closing Argument for the republican tax cut in a speech on wednesday. Sources say he will speak in washington as house and senate teams try to agree on a combined plan. They want to have it ready for the president s signature by the end of the year. Weve heard from the likes of the Vice President hoping for a christmas miracle, he said, when it comes to a tax overhaul, but when do we expect to see progress when it comes to the housesenate conference . Ros as you said, President Trump is supposed to be speaking on wednesday, and the first formal meeting of the house and Senate Conferees is also wednesday. We think there is some synergy between those two events, that trump will be speaking to the american people, and likely making the case for another boost in the economy and a boost in jobs. But also speaking to the republican lawmakers and trying to keep them onside as they deal with some pretty significant differences between the two bills. Others have aand sense that the bill in terms of Public Opinion is not popular, and the longer it plays out, the more opponents could become organized and get to lawmakers. I think that explains the urgency we see from trump and the administration and public and lawmakers to push through as quickly as possible with wednesday being kind of the starting gun for the final leg. Different do you think the final bill is going to be from what was proposed in the house and senate . Ros its very interesting. To some extent, it has been inclusionsber of odd in the senate bill, which in no was pushed through so quickly. Were some unintended consequences baked into that bill. I would not say the conferees are tearing up and starting from scratch, but they have quite a lot of ground to cover. There are some significant differences between the two bills, a number of tax bracket, the level taxes are set in each bracket, when the Corporate Tax rates kick in, 2018 for the house, 2019 for the senate. State and local taxes, property tax deductions. A lot of ground to cover. Ofdo think the final look the legislation will probably look more like the senate will than the house bill just because of the raises the majority republicans hold there. Majority razor thin republicans hold there. The number two republican in the today, you will see some ups and downs, he thinks republicans will get a bill in the end, but there is likely to hour,utes minute, hour to some real handwringing over elements of the bill that some lawmakers are having trouble with. Certainly there will be a lot more headlines coming out this week on tax reform. Our dartmouthg in economics professor, former ecb board member. Danny, so good to see you. Argued a long time that the fed is ignoring what you believe is a weaker jobs market than what the numbers indicate. We will get to the jobs report in a moment. Think thefact you jobs market is worse off, are you happy we are seeing, finally, perhaps, the end of the tax reform bill . Danny [laughter] hard to argue this is the end of the tax reform bill. We are going to talking about johnson a bit. About jobs in a bit. I think the u. S. Economy needs significant stimulus and i am for that, but the uncertainty is pretty high. As you correspondent just said, we dont know what is coming, what the details of the tax plan are, and i remember sitting on monetaryyou conduct policy, but it is also the countrys fiscal policy. If that are going to have a meeting this week and the fed are going to have a meeting this week and theyre probably going to put a rate increase in not least because they think there is a tax cut coming but they dont know the details. Betty wait. You really think they are doing a rate increase because they see a big tax cut coming . [sigh] in some sense. It is always balancing one against the other. The reason Monetary Policy has been loosen Interest Rates have been so low is because fiscal policy has been overly tight. Opportunity, you loosen fiscal policy a bit, we dont know the details, the devil is in them, it is get you the opportunity, at least for the fed, to continue the path of raising rates. I think it is a mistake, but lets go with this. The reason you want to do that is because at some point the economy turns down and you want to be able to cut rates went bad times emerge. That is part of it. I think we should start to think now about the fed Monetary Policy and fiscal policy moving in tandem. , that makers may not like as they cut taxes, the fed might tighten at the same time and perhaps give them less of a boost in growth they had hoped growth than they had hoped. Yvonne a lot of it comes to trickle down economics as well. A lot of the gop authors of this think it would be good for the labor market, that the money would trickle down to more jobs and higher wages, but is there actually any evidence in this bill that could translate to that . That it could yield modest growth . I dont exactly know what is in the bill for reasons we have said. It is good that firms have higher profits, that is having a positive impact on the stock market, the expectation of profits rising. What we know about wages, and we worry about by wages are so low, wages rise not least because there are fewer people out there looking for jobs, but because of what economists call insider forces. A profits raise, there is greater ability on the parts of firms to raise wages. , there is an ability to pay, it looks like that will happen in the next three years. The question is whether they are willing to pay and it will turn out to end up in peoples pay packets. This point, we have seen little evidence of that sort of change. Ive not seen anything in the bill that would suddenly say, ok, i am doing great, my company is doing well, i have extra money, now is the time to share it more with the workers. That hopefully might happen, but its not obvious it will occur. Maybe it will. But the fact that some have a greater ability to pay potentially can be good for wages, maybe the bill should be thinking about incentives on the part of firms to move some of the profits over to workers. That would be a good thing to do. Yvonne its early would be. Stay with us. We will look at what is happening with brexit negotiations next. Ahead, inflation in china, it eases the pressure for policymakers. The current state at play. Ahead, we a further look at what will be a take week for Central Banks a big week for Central Banks. This is bloomberg. Yvonne this is daybreak asia. Betty quickly, make sure you where Bitcoin Futures are trading right knee right now on the cboe. We are flirting at the 16,000 level. 15,000 940. It has been volatile so far. The key level seems to be the 16,000, so pairing from the losses result earlier. We will continue to watch this. I am betting we will have some big price swings as we get through the first session here on Bitcoin Futures. Yvonne still early hours. We have to go through the Asian Session and see how things happen, and when europe wakes up, too. A little bit more about brexit, the u. K. Is rejecting claims that theresa may told a senior eu official that she considers brexit to be a temporary separation, not a permanent divorce. The president of the European Parliament said he has spoken to theresa may before fridays deal, and says it does not recognize those statements. At the infog a look we got on friday, you have been saying you are waiting from any good news on brexit. Did we get it . Danny well, a little bit. This was a sensible move forward. It lessens the prospect of a , because people at long last are having to get real. Of people whorts live in the u. K. Who are european. You have to sort out rights for them, it looks like Free Movement of people is almost going to be inevitable. The divorce bill looks really high. Brexit people seem not to have thought this through. They have had to realize and accept that the possibility of a hard border in ireland is an impossibility. A move has been made there, but fudge. A grand lots of infighting in the conservative party and coalition government. I think it is a step forward, a step toward common sense and toward soft brexit. But the way i would describe it after listening to the comments on friday, a coalition government, and members of it are fighting with each other like ferrets in a sack. It is pretty hard, when you think that to the uncertainty we were talking about a little while ago, i think markets look at this as a sort of calm, a realization that you are going to have to fudge it. I think that was the sensible thing we saw. Also that the expectation, people talked about, what if the people dont like it, they can vote the government out. We worry for many people is may well see a vote for a new in theent not nottoodistant future. I think this is up in the air, i think hard brexit has been pulled back and people are starting to get mugged by reality. Betty are you saying we cant exactly call this a win for theresa may just yet . You saying they will have to cave to get this through . Danny cannot think it was a great victory, but i think she has had to cave, because most of the we have heard from the brexit supporters have been disastrous. I would characterize it the what the foreign faculty said, that the strategy was to have their cake and eat it. Realized theres is not much take their for the brits. They are in a weak bargaining position. A number of people said we should not be anything as part of the divorce bill, they should pay off. The realization of a document released on friday, were talking about 40 billion 40 billion euros, maybe 50 billion euros. We are paying them by an awful lot. Nigelexit supporters like farage call it a national humiliation. There is a long way to go. But i think it pulls back the craziness from the possibility of hard brexit, leaving without the deal. And basically giving up on the idea that you can have all of these things you want, access to the market, but you dont have the Free Movement of people, capital, goods and so on. Betty whether it is hard brexit, soft brexit, do the brits have to contend with the fact that no matter what, growth in the u. K. Is going to be tepid , it is going to be lukewarm, perhaps even through 2019 . Danny well, yes. We know how about the forecast have been, but the bank of england, imf, the government itself, has been forecasting very low growth with the next 45 years. Less than 1. 5 . I think the reality as well is its not just the uks low growth way, we are the European Union and the euro area growing rapidly. Its pretty hard to say we dont want to be like them when they are the sick man of europe. They are the slowest growing country in the eu. Now it is hard to be associated with those guys who are growing much faster than we are. Think youre starting to see in fromolling some moves away the support for brexit, and in fact we saw last week for the first time, a poll with the labour party with a seven point lead. Things are in flux. I think the slowing of the economy is a really big deal. And real wages are falling. That is going to have a big effect on people spending. I think it is all about the economy, it really is the economy, stupid. We will talk more about wages and the u. S. Danny, you will stay with us on the latest jobs numbers out of the u. S. On friday. You can always find indepth analysis on bloomberg radio. Tune into daybreak asia from 7 00 hong kong time. You can download our radio app or access it via bloomberg. Com. This is bloomberg. Of the top global names in improving are said to againstred lining up a Company Preparing to sell. Announceaid they must before the auction. They could be joined in the auction by other companies. Betty toyota north america says sales across the industry will be in the height 60 millions and the next couple of years, down from this years peak but capped boy and by the republican tax cut. They say this means more money for consumers and potentially automakers. The impressive and sales surge in the u. S. Is coming to an end but toyota says amanda will remain healthy. Coming up next, we will talk more about the jobs report, hiring is solid in the u. S. But wages not so much. What is behind the jobs report . This is bloomberg. It is 7 30 a. M. In hong kong. We are 30 minutes away from asias major market open. Betty and it is 6 30 p. M. In new york. Markets ended quite warmly for the bulls. The s p up half percent after the jobs report. Watchingou are daybreak asia. Talking a little bit about the price of bitcoin, Bitcoin Futures started trading. A little bit of against you , the say turbulence website for the cboe crashing. Maybe they are saying a volume they cannot handle. Might be just a lot of people going to the site. It is quite spotty right now, probably people looking for prices at this point. This is what you need a bloomberg terminal. Youave the prices here for on the futures exchange. 16,120 fourng at bitcoin, and continuing to pare back those losses we saw on friday. This is a cryptocurrency that is 3 thousand2000, dollar sometimes it seems in one day. We will continue to watch the spot price on Bitcoin Futures. Lets get to first word news with husband on them. Haslinda amen. Haslinda President Trump is said to be planning the Closing Argument for the republican taxcut in a speech on wednesday. Sources say he will speak in washington as house and senate teams try to iron out differences in the two plans. The president tweeted the bill is moving ever closer. Republican leaders and to have a combined plan agreed and ready for the president signature for the end of the year. The u. S. Ambassador to the u. N. Says israel and palestinians must agree on the status of jerusalem. Nikki haley said she was reiterating official american policy after President Trump do the ambassador to called jerusalem the israeli capital. Macron says he wont immediately revise the French Middle East Peace Initiative despite saying the u. S. Decision to recognize jerusalem is a danger to peace. The french later hosted the israeli Prime Minister in paris, beginning his remarks by condemning all acts of violence against israel. Israeli by minister meets for leaders in brussels on monday. Opec and its allies, including russia, may into production cuts for 2019 is accrued market rebalances by june. Bloomberg was told that russia is eager to end the deal as early as possible. Opec will also Study Strategy at its midyear meeting and the partners agreed last month to cut production until the end of next year. To tackleped evolution pollution has been given a reality check by nature. Plunging temperatures have forced officials to allow resuming burning of coal because of a shortage of natural gas. State media says freezing northern provinces has told to prioritize keeping people warm despite plans to restrict cold morning coal burning over the winter. Global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. I am haslinda amen. This is bloomberg. Yvonne thank you. Were coming down to major market opens in the asiapacific. More, lets get to david ingles. Pretty strong start for us here on monday. David theres always a risk as we move into the end of the year. You get this consolidation, the rotation out because we are near record highs, a positive start, as you mentioned. We look at australia, back over 6000. Isre has been this one really led by Energy Commodities at the moment. When you look at japan, coming get the board of and look at what futures are pricing at for the open . Im doing rough math, were looking at 134 higher 131 higher. . 1 3 of as you can see, some optimism on the s p and dow jones futures. You look sick we will be shaking off the cobwebs of last week. Yvonne and oil has had solid gains late last week, but some weakness right now. What you think that is . David we had a bit of into the weekend. The Kuwaiti Oil Minister recently saying come if we see rebalancing come june, they might end of the oil curbs before the end of the year. That is one line, the other line, baker hughes, up for another two. People are talking about this near record amount of imports, oil imports into china. Therscoring the point of weighting oil minister, if they get a rebalancing soon, they might step back from the curbs and not see them to the end of next year. Yvonne and weve been talking about a busy week. We have china data, japan, the fed. David oh yeah, i forgot about the fed. I think that is wednesday. It is quiet today. But you look ahead, we have inflation out of indonesia, ppi out of japan, machine ordinance out of japan on wednesday, we were talking before the show started, the assumptions there. Yvonne david, thank you. David ingles there. The latest u. S. Jobs numbers show solid hiring, but little corresponding wage growth of no. Our economy reporter joins us from singapore. Fed meeting. Th the how are the policymakers digesting the latest report . You mentioned wage growth, that is something we have been looking for for so long, it feels like a broken record, we done its only times in the past couple of years, we see impressive job growth but disappointing wage gains. The story in this report. But not enough to take the fed off course. Very few economists are looking at this and saying it is something that will change their minds. Everyone is expecting them to hike rates on wednesday. The past couple of reports of had some caveats, given the hurricane effect on the numbers. Is this what we need to read . What is the overall fame . Michelle it is a clean read. We had two months of destruction , it took the disruptions away and were back on a normal pace. Were seeing the same things we have seen before. Ackily, we are seeing widespread job gains, which was not always expected in the reports, its a healthy as sign a healthy sign of the economy growing. One thing i noted was retail and construction, you tend to get nervous about those industries at this time of year, especially retail going through the painful transition from brickandmortar. We saw good numbers out of there. Construction, this is a quiet. Going into the winter months in the u. S. It is growing, as well. Hopefully the wage gains will continue to come in the months ahead. Michelle, that is our new economy reporter. Still with us is Danny Blanchflower. You have long said the fed is a missing the point and that there is still a lot of slack in the labor market your market. About apeople talking chance for the fed turf hike rates four times next year . Danny i wouldnt be for the reasons you said. Its interesting that people dont seem to have any explanation as to why we have seen week wage growth. I do, we will get to it. Like goes back to the 1960s, production and nonsupervisory workers. The reality is for the last six months of last year, wage growth was about 2. 6 . This year, it has slowed almost every month. This month, it is actually 2. 3 , roughly the average for the whole year. Is the economy clearly delivering jobs, clearly tightening, actually the wage growth is going in the wrong direction. Why is that . The answer is people are looking at the wrong things. And Unemployment Rate of 4. 1 in the past what has been associated with weight growth of four. The problem is it is no longer adequate indicator. The thing to look out look at is the employment rate, and that is just above 63 in 2008 and is now 60 and went down this month. Yvonne youre talking about the underemployment rate . Danny no, there is underemployment on top of that. Million new people and jobs today to get us back to the employment rate in 2008, and you are right on top of that, there is the underemployment. The big mistake everybody has made is the u. S. Labor market is at least 8 million jobs away from for employment, and finally, with all of these people who enter jobs with a degree at a high school level, they are pushed down the job here mid if times were good, they would be pushed up. I think it is a complete misunderstanding. Betty calculate that for me. If we are 8 million jobs the way, what are we when we realistically supposed to be raising rates . Danny i would not be. I have said many times, it is a misunderstanding of the labor market. Quite often in the minutes of the fed meeting, you will hear some people saying roughly this. Janet yellen may dispute about made a speech about inflation saying maybe we have misread it. Maybe the natural rate is lower and maybe we are far away from full employment. There is a debate going on in the fed. A mistake is i have studied wages my whole life. They do understand the nature of the wave the labor market. If we were talking about inflation, why are you raising rates when you dont have any inflation either . The answer is, it is coming. Honestly, it is coming, it was ms. Measures. They have been saying that since 2009. It isnt coming. Lots of slack in the economy. It is a really good idea to have a big fiscal stimulus to make up for the slack that exists in the u. S. Economy. Thing i say to everybody, what is your explanation for why wage growth is flat . Oneve one, i havent heard from anybody else other than it is missed measured m ismeasured. I think im the only person who has a story. Maybe you are correct, we continue to see growing calls that we have reached a turning point. Thing, one the question is the yield curve, which continues to flatten. What is your interpretation of that . Is there something more sinister we need to worry about in 2018 . Danny i dont really know how to interpret that. The reality is all along, we started out talking about the fed it saying it would do for rate rises. Rated they would do four rises every year for the last six. The samet has taken position i have said, every time i saw the dot plot, i thought about the market would do the same. The market doesnt really believe the story, which is that inflation is coming, it will be great. Moment, it looks like the government is going to do a big fiscal stimulus, which might will boost growth and give the fed some leeway. But if i was the fed, i would be sitting on my hands and thinking seriously about how strongly i had misread the labor market, and i think about all of these people who have had week wage growth. Go, webefore we let you have to ask you about bitcoin. Yvonne i know youve been trying to dr. , we have to bring it up. Trying to dodge it. We have to bring it up. Is this the beginning of Something Big . The winklevoss twins say it will have a 20 fold growth. Where are you on the debate . Danny obviously i wish i had bought some of it a while ago. But thats what ponzi said. He sold real estate that did not exist. You heard this new zealand banker talk about the tulip bubble. Minutes ago,a few i guess the only thing i would say to it, having been a central banker, is for a bubble, to be a bubble, people who are in it would have to be convinced it wasnt one, because otherwise it would not continue. The worry is that these things dont deflate in a nice way. Betty it might go up 20 fold. Walks like a bubble and talks like a bubble, it is probably a bubble. Going to stay out of that one. Betty [laughter] danny its hard enough with the pound and dollar without bitcoin. Betty we will stick with the brexit instead. Danny i would rather that. Yvonne Danny Blanchflower there. Up, how chinas latest Inflation Numbers could give the pboc room to maneuver. We will hear from asian economist. This is bloomberg. Tty this is daybreak asia consumerhinas inflation moderated last month, giving policy makers another reason to play a tough hand in their battle to tame that. Rose five point 8 from a year earlier, while Consumer Prices climbed 1. 7 , slower than forecast. Joining us in hong kong is a chief asian economist. There are further cpi and ppi conversions your to thank you for joining us. Were seeing some easing after a robust year when it comes to prices in china. Where you see this going . Will we stay in the sweet spot is a new normal . Think we seely very tame cpi, and the policy makers dont worry about hiking further. In the ppi, we see this easing. A good sign. Also in the future, i think we will see more convergence between cpi and ppi. For the ppi, i expect they are going to increase a little bit, anduse of the labor cost the supplyside reform is going to cause this one to increase. On the ppi side, i expect they are going to slow down further, because this year, they will have to me shocks from the supplyside reforms. In the future, expect the impacts from the ppi will be slower. I think it definitely is a good thing, as you can see in the report from the moment. Yvonne the minutes from the Bureau Meeting last are, it seems like the president wants to get a better handle of the debt problems in 2018. Some thought that as a signal we could see more tightening from the central bank. Does the latest inflation data, another we see it easing off the pressures, change have you . Change that view . Idle think so, i think they will continue prudent policy and Financial Regulation. Yvonne but not tightening . I think they have tendency to increase because of the Financial Regulation. They need to have additional pressure from the Interest Rate hiking, the policy rate, they can definitely ride the wave, market rates will increase and have a natural tightening. Betty im curious, just from the u. S. Here, youre talking so much about tax reform, we have not talked a lot about how u. S. Tax reform here, in these big tax cuts might affect other countries. Im particularly interested in whether you see these stimulative measure in the u. S. Helping boost perhaps maybe export growth in china. Definitely. I think the tax reform in the u. S. Is relative for many countries. For china, i expect that they have room to increase. I think this one is going to have some positive impact on chinas exports. The Exchange Rate is more relevant for the exports from iina to the u. S. , and also think the president has some , toencies to punish china do more negotiations with china. Yvonne im curious where you see the chinese yen. A was looking in the notes that at some point you see a freely floating chinese currency and 2019. In 2019. Yes, i think at the end of the day they need to float the Exchange Rate. The have indicated their intention recently. Why they arethink going to do that, in a couple of years, i think there are too many reasons. Of thei think because external pressure. Imf already includes the chinese r b, but they are going to review that in a couple of years. That leads to external pressure for china to that. Also, if you look at the financial reforms in china, they are doing the interest stabilization, the capital liver is capital liberalization. 2018, it might be Financial Regulations could bear for themit, it is time to make a move to liberalize the Exchange Rates. Yvonne at what point do you see the turning point . Weve seen china saying theyre going to open up, liberalize the yen, but they always have backed away anytime they see volatility or it starts to weekend. Ken. Ea what is the magic number before we see reforms . I what is most important for china is to make sure their domestic Financial Sector can withstand the shocks from reform change. So the things they are trying to clamp down on shared banking activities, to make Banking Sectors to resist this kind of external shock. Definitely, i think if we see some easing, the significant implementing in china, we see the Banking Sector become stronger than before. Then i think it is time for them to move on the Exchange Rate. Yvonne interesting. Thank you so much. Next, Bitcoin Futures up and running on the cboe. Yet another milestone for the digital currency, but will all the volatility with all the volatility and uncertainty, is it worth the bet . This is bloomberg. Yvonne this is daybreak asia. Bitcoin reaches another milestone, futures trading on the cboe. Bitcoint 15,600 on the futures being traded on the cboe. Lets take a closer look at this with our Global Markets editor adam haigh. We are about an hour into trade at this moment. What have we heard so far . We know the cboe website went down. Adam [laughter] say, just under an hour underway, and this is a fairly momentous occasion, its the first time that professional instances haveny been able to bet on bitcoin tsoever with the currency cryptocurrency unregulated tiered what we have seen in the first hour is the underlying spot price of bitcoin rally off the lows we saw earlier in the evening on sunday night in chicago. We have seen futures get up to 16,000, 16,060 level. Low. You have been as you mentioned, cboe had problems with the website, although they said to us it was nothing to do with the actual trading mechanism, the trades have been unaffected. Its just been largely the way the website displayed. Thats just a function of a lot of people wanting to visit the website, a lot of attention on coin futures in the launch on sunday evening. Weve seen that with the way the exchanges actually allow you to buy and sell bitcoin over the last two weeks. Many have had trading interruptions due to the extraordinarily high levels of demand, and have also seen problems with websites. We have seen that with cboe this morning, but not affecting trading. Betty cboe mentioned it will be a slow build before they Gain Momentum when it comes to the coin futures. What do you make of some of the implications of todays move and what is it mean for the future cryptocurrency . Is in aence, this sense, this is the first step. The futures have launched now, in a week we will have cme, a much larger exchange, it would also have futures trading. Step thatncremental allows wall street and the professional finance community to make a bet either way on bitcoin. It is one small step. Yvonne we have to leave it there. We will check those futures coming up. [inaudible] [inaudible] retail. Under pressure like never before. And its connected technology thats moving companies forward fast. Ecommerce. Real time inventory. Virtual changing rooms. Thats why retailers rely on comcast business to deliver consistent Network Speed across multiple locations. Every corporate office, warehouse and store near or far covered. Leaving every competitor, threat and challenge outmaneuvered. Comcast business outmaneuver. Or a little internet machine . [ phone rings ] it makes you wonder. Shouldnt we get our phones and internet from the same company . Thats why Xfinity Mobile comes with your internet. You get up to 5 lines of talk and text at no extra cost. So all you pay for is data. Choose by the gig or unlimited. And ask how to get a 200 prepaid card when you buy any new samsung device with Xfinity Mobile. A new kind of network designed to save you money. Click, call or visit today. We are live from bloombergs asia headquarters. Welcome to daybreak asia. U. S. Payrolls boost optimism up a Global Growth and paved way for a rate hike. Bitcoin seeks credibility on wall street. The price could skyrocket. Indeed. I am betty liu in new york just after 7 00 p. M. President trump turning to taxes. He aims to make the argument for a cut of this year. Pressure building on boj to cut equity purchase. They say the program has distorted the market. We have to watch the fed, china data, but all eyes on bitcoin this morning with the coin futures starting trading, one hour in, the buzz leading up to this, not starting off with a banging so far. Website has gone down with people looking for prices are interested in Bitcoin Futures on the cboe. The cme will be launching their futures in a few days. Atare seeing it trade 15,860. That was about 16,000 a few moments ago, but we are in the early hours. It started trading an hour ago. We will see what happens throughout the session with these Bitcoin Futures. Lets get some first word news with haslinda amin. Consumer and factory inflation in china is giving regulators another reason to cut in the fight to tackle debt. It rose to 5. 8 , matching a bloomberg survey, and slowing from 6. 9 in october. Consumer prices climbed 1. 7 . Chinese provinces fake revenue data and broad money illegally. Beijing is trying to tackle local government debt. 10 counties in several provinces inflated revenue levels by almost 250 million in the Third Quarter and included fake ownership of official buildings. President trump is planning the Closing Argument for the republican tax cut in a speech on wednesday. Sources say he will speak in washington as the house and senate try to iron out differences between the two plans. The president tweeted the bill was moving ever closer. Republican leaders aim to have a plan agreed and ready for the president signature before the end of the year. The u. S. Ambassador to the United Nations says israel and the palestinians must decide the status of jerusalem. Wasi haley says she reiterating official american policy after President Trump said the city was israels capital. That sparked criticism among arab and Muslim Leaders and from traditional u. S. Allies. The comments also triggered clashes between Palestinian Youth and israeli soldiers. President macron wont immediately revise frances middle east Peace Initiative despite the decision to recognize jerusalem is a danger to peace. The french Prime Minister hosted Benjamin Netanyahu in paris, beginning his remarks by condemning all acts of violence against israel. Global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. David thank you. Breaking news on samsung heavy. They will beounced replacing their ceo after forecasting a lost for earnings. This is coming off of last week when the Company Announced they were doing a share sale to help cut down debt, but as many analysts had said come at the outlook for samsung heavy remains quite murky. It made not be enough to support the firms long run as orders fall in the troubled global shipbuilding industry. That loss forecast coming from samsung heavy. Some shares seeing upside this morning. Close to 2 at the start of trade, up 1. 8 right now. Watching samsung heavy and the rest of asian markets. Looks like a positive start here so far. The question is will we get that santa claus rally. David hopefully. He is coming to town soon. Lets see what happens. At the cap down in samsung heavy looking to raise the money. 1 ,e is your upside, about not a lot, clouded outlook, operating losses. Have a look at this monday morning. We are getting a rally the across equity markets. You are also getting aussie futures moving up. It is still early. We are looking ahead to the china open later on in reaction to the data from the weekend. To give you a sense of what is moving across the asiapacific flow, im looking for news on a stock of the does not move that much anyway. Just watch that one. It is fairly tilted to the upside. Oil is what we are watching as well. Thee lines, you see it in subtitle of the chart, opec and friends looking to cut short the production cuts. We are getting some lines from china. Imports new records last week. Up by two. Hughes have a look at this graphic right here. Lets get it up, guys. A lot of data in the asiapacific. At some point between now and friday on top of everything you see on the screen we might just be getting the new credit data out of china as well. We are looking ahead to boj and midweek we have the fed coming out with what is likely the most anticipated or telegraphed rate hike in the history of Monetary Policy. Betty it is the worst kept secret. David, thank you. We are looking ahead to the fed and friday. Ankan surveyboj t coming out. The yen forecast is one to watch. Where expecting improvement when it comes to manufacturing and nonmanufacturing outlook, but the dollaryen outlook will be interesting because we tend to see Japanese Companies take a conservative approach when it comes to the yen forecast. 2016 obviously was an exception, but we do see the divergence at the start of 2017 which is why we see such strong earnings this year. Now that we see the yen has y forecasts areanie slowly catching up. It raises the big question, whether we will see an upside surprise and corporate profits in 2018 as we have seen in previous years now that the market and companies are looking more like consensus, perhaps a reality check next year. Is going toe risks be where the yen goes visavis the dollar and how the dollar trades, right, with the tax reform package, how supportive will that be for the greenback and how much is priced in there. Speaking about what might be priced in for the dollar, we are talking about the fed, right. One of the big things to watch this week is the fed meeting. Everyone expecting the key rate to rise, but take a look at this 329 three. You mentioned this earlier about yield spreads. The treasury yield spread between the five, 30, 2, and 10 getting closer to the inversion point. That is represented by the purple dotted line. After anens usually inversion in the yield curve . Well, a recession. We saw that happened back in 2007 right before the recession in 2008. That anotherng is indicator that things are getting pretty bad in the u. S. . We have seenthat e flats incurv because we have seen the shorter in rise quickly given the expectations of rate rises coming to the fore. Thats right. We will talk more about that jobs report, the u. S. Economy adding 228,000 jobs in november, quite a beat when it comes to expectations, but wage growth remains tepid with Hourly Earnings rising only 2. 5 . Twofold this into the risks to watch for in 2018, lets bring in our guest in hong kong. Good to see you. Itid, solid numbers when came to the headline jobs of 200,000 plus, but where is the wage growth . Why are we sing this convergence . Lotou are seeing globally of slack still in the system and that is feeding through to the united states. A lot of the downward push on u. S. Wage growth is coming from offshore, not on sure. The likelihood is wage Growth Continues to be in the range of 2 to 2. 5 for some time. A globalid this is conundrum. We see growing calls for people saying we have reached this inflection point. Camp that we are dealing with structural issues and might see some headline inflation, but wage growth will remain tepid . We are getting quite a lot of movement in Commodity Prices and some movement on rental prices in the united states, the shelter component of cpi am a but otherwise not much movement. In 2018, you are likely to get more of the same. You have to see a rapid acceleration in the u. S. Economy from here to generate the some people are talking about. We are projecting growth of 2. 2 . Even with tax reform . Yes. A lot of those tax changes will not impact growth that much. They will impact the bottom line in some of the corporates, but not much impact on growth. When the fed meets this week with 2018 under Jerome Powell that they will have to factor in cuts . Kinds of tax what you think we still continue to see threefor rate hikes in 2018 . I think we will get two. We get one this week and one in q2 next year, and one in q4. Whether you get a third and fourth depends on inflation. If youre looking for a flat outlook for inflation, then youre looking at a third and fourth. With ourdo you agree earlier guest who said there is a lot more slack in the labor market than what the numbers are telling us, what the data is telling us on the surface . The turned over data is very strong. That is one thing. Aboutack to the point global output gap, the difference between potential growth and actual growth. That is still quite wide and pushing down global prices and one of the reasons why you its inflation continues to be quite week. It is one of the reasons white european inflation continues to be quite week. Indeed. I want to pull up that chart we should before your segment, 3293, which is the yield curve continues to flatten, whether youre looking at the 210 or the 530. How disturbed are you live this. How do you explain the flattening yield curve . Are we headed into a recession . Im not sure disturbed is the word i would use. There are two things going on simultaneously. First of all you have a decline in the term premium, which are the yields on the long end of the curve that represent expected Interest Rate hikes. That has declined a lot since the inauguration of donald trump. A flattening out of growth that has not accelerated to the extent that people expected and the inflation has not accelerated to the extent that people expect, and as a result you see that flattening out and the shortterm rates have gone up, so it is quite natural which are seeing in the u. S. Yield curve and not indicating an impending recession. Are, will leave that they but stay with us. We will talk about some other Central Bank Decisions coming up this week in a few moments. Also, big changes for some of asias companies. What investors should keep an eye on in utilities. Is the boj about to harpoon its 150 billion etf whale . We will look at the cuts and lost are expecting to see on equity purchased in just a moment. This is bloomberg. This is Bloomberg Markets asia. I am betty liu in new york. Kong. M yvonne man in hong investors in japan say it is time for the boj to cut down on equity purchases as a double its etf buying in july last year over worries of another market downturn, but now that is being blamed for distorting the market. Lets get more from our tokyo stocks reporter. Good to see you. How have things changed since the boj went on a buying spree last year . We are at, what, to decade highs on japanese stocks right now. That is true. Things have changed a lot, at least fundamentally, and the economic environment has continued to improve, which was somewhat unexpected after the brexit result, and uncertaintors were what kind of impact it will have on financial markets, liquidity, and whatnot, and the boj has increased its purchase targets ¥6 trillion, double the previous aount, but now that after year has passed and the economy has continued to improve and you have record highs in u. S. Equities and Japanese Equities now trading at the highest in 25 years. Some people are saying do you continue buying, which is 50 billion in equities. Some people are saying they will reduce next year. What impact could that have on the market . We call it a tokyo whale, but can the nikkei 225 and topix maintain levels without the boj stepping in . Right. One of the key investors are arguing that there could be a potential cut by a third are saying this because the economy is positive, because the environment is positive, you can cut this without having a huge negative impact. If there were to be a huge negative impact, it probably would not happen am a but because of the environment we are in with strong equities, strong Economic Data and whatnot, even if the boj scales back a little bit, you still have ¥4 trillion worth of buying to keep equities rising on and on and on, and if there were to be negative impact, if something unexpected come up, you can always have these investors ubs is saying the boj can always come back and say, ok, we are going to buy again and whatnot, so there wont be huge negative impact. So it wont be disruptive. On are tokyo stocks reporter the etf program from the boj, program. Ve etf Mark Mcfarland the chief asian economist is thing with us. Mark, do you agree it is time to wrap it up with the etf program . Or later the boj has to wrap it up. Is aast thing you want central bank owning half the equity market. It is not a good signal on capitalist principles in japan, but the boj policy generally if look at the quantitative and qualitative elements of its stimulus package, that is unlikely to change much and is still quite bullish. They can pull back and still be a stimulative central bank, right . Absolutely. It is probably the most stimulative bank in the world at the moment and that is unlikely to change anytime soon. Of japan andout the boj some commentary from governor kuroda and some of on its Website Research material, they are telling you the boj policy will not change much for the next 12 months. One more point on the etf before we move on, this is likely not going to be disruptive to the markets. As theyelieve the boj are looking at ways to scale this back are not going to make any missteps and they will be able to do this without disrupting the market . You look at the roadmap set by the Federal Reserve across the pacific, the telegraphing of policy has been relatively successful so far and has not led to a spike in longterm Interest Rates and a selloff in the equity market of any great substance, so there is a roadmap from the fed that the boj can follow and it should not undermine the market too much. We have heard some hints in the last couple of weeks from governor kuroda himself, a speech in zurich saying there is a risk to anchoring that 10 year jgb yield to 0 . Juncker curve control could be watered down in 2018. How likely do you think that is. Could we see a japanstyle normalization before inflation hits 2 . I dont think so. It is interesting if you look at analysis,enario an they are looking for the longer end of the you curve to move up about. 1 , so they are looking to make some adjustments, but generally speaking there is not that much in the pipeline until you see cpi moving towards 2 . Governor kuroda statements and also his counterparts have suggested that 2 has to be held. Asia in general, indonesia, philippines also meeting this week, both going in Different Directions when it comes to tightening. The philippines perhaps could be on the more hawkish side, but when it comes to asia in general , which central bank has been the Biggest Surprise and the biggest letdown . Perspective,icy the rba has been interesting. Lookinghs ago, you are at the rba thinking about raising Interest Rates at the end of this year or beginning of next year. That is now completely off the table. The oneto must likely to raise Interest Rates in the next four months are probably the bank of korea, which did recently, and the bank of middle asia, which has inflation running above its target range. Aside from that there are not too many signals. You cant quite call it policy convergence. Convergence, but also a lack of the need to raise Interest Rates. Indonesia,comes to that is the one we are watching for thursday. Back to back cuts augustseptember, and a brief pause now. Is it just a pause or they will continue to ease . You need to see the impact of higher Commodity Prices on indonesia. We have seen Oil Prices Move up quite a bit and the overall outlook improvement for the region, so the need to cut Interest Rates is probably not there anymore and will probably stay on hold for quite some time now. We had the president speaking in jakarta at our event last week, and its always about the third year anniversary, not the first year, when it comes to wedding and we now see Growth Prospects a little bit better. Mark, great to have you here in hong kong. You can get a roundup of the stories you need to know in todays edition of daybreak for bloomberg subscribers. To tv on your terminal and you only get the news on industries and assets you care about. This is for bloomberg subscribers only. Check it out at tv. This is bloomberg. David some of the top global names for aewing lining up bia sabeco. Emerged forr has awe after an allshare bid. That has increased an allcash bid from china energy reserves. That values the bed at 80 since australian a share. Build a plant in morocco an employee 2500 workers. It is part of a larger project between china and morocco to create a largescale Industrial Hub in tangier. 200,000ntly employs people in 30 sites around the world. This is bloomberg. Yvonne it is 8 30 in singapore. We are half an hour open from the open of treating. I am yvonne man in hong kong. Japanese investors say positive stock is a sign for the boj two reduce purchases that are distorting the market. They expect the central bank to cut their annual target by a third from the current 53 billion. Billion on had 150 japanese etf as of thursday and 4 of the market at the end of october. The reserve bank of new zealand is the latest to agree investors should be wary of bitcoin. Graham spencer said it looks remarkably like one, and history shows it is never clear how far a bubble will go before situations change. Bitcoin has had a wild ride particularly in the last two weeks. They are hoping it will be on alternative to gold or traditional money. An alternative to gold or traditional money. It looks like a bubble. We have seen them in the past. We have seen bubbles. It appears to be a classic case. But with that, you never know how far it will go before it turns around. Bitcoin believer Cameron Winkle right thinks the winklerod thinks the cryptocurrency is just edit start, and it could rise to the price. Investigators investors are beginning to accept it is better than gold, and therefore the price will continue to climb. We got off winklevoss and his twin are among the largest holders of bitcoin. Is not optimistic about a peaceful resolution to the north Korea Nuclear standoff. Even as the regime touted talks at the u. N. Beijing to the outlook for the peninsula is pessimistic and wants all sides to end what it called a vicious cycle of confrontation. A team visited pyongyang over the weekend and said they will agree at all communicate at all levels. Global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. Amin. Aslinda this is bloomberg. Yvonne thank you. We want to talk about bitcoin, given what we have seen here today. We have other asset classes, equities and asia heaping pretty slow. They are mixed right now. Flat on the regional benchmark. The latest with david ingles. David we have got back all of the gains given that all of the gains. You can see we are all in yields pushing higher, and the emerging tenure in japan just to give you a sense, lets look at the chart. Higher, started out there we go. Now we are pushing towards a low for the session. Your scatterplot should give you a sense of the movers. Bgfand also of course and of course the japanese contractor is 5 lower. , thatres, nhk reporting the company is under thestigation under the contracts in japan. You have a few mentioned. The Railway Project that is open to tokyo in 2027, and osakatokyo in 2025. Shares are pushing lower. 20 45. Shares are pushing lower. We are looking at the aussie dollar. 75. 12 is your level. You look at forward, roughly in line with the spot price 75 roughly speaking. Here is your city economics index for australia. They do not detract one another. It is disappointing what we are seeing across australia, perhaps a prelude to weakness in the australian currency. The other thing i want to mention, a lot coming through on the week. We are talking about inflation in china in a few moments. To give you a sense of what to watch here. You have the export price index, one rating into the end of this year. We also have a slight adjustment lower. It is not declining by any means in terms of ppi. That is something to watch as we hope china continues to export more inflation to the world. Not quite just yet. We dont have the update just yet for the export price index, g btv 3032. Keep that in your pocket as you look at the data ahead. Yvonne thank you so much, david ingles, taking a quick look at the markets. Consumer factory inflation in china is moderated giving policymakers another reason to maintain a tough Financial Regulation in their fight to tackle debt. Prices rose 5. 8 from a year earlier. Asiais bloombergs chief reporter. What were your Key Takeaways . Nda good morning, betty it adds to that, china had the wind blown out to tackle the economy. The wind is economy is stable. We have numbers that take pressure off the banks. To review that, they are trying to push through to deleveraging. Is overalle backdrop total debt is due to 300 by 2022. That has been doubled by the 2008 level. There is a sense of urgency. They have urged the government to tackle this head on. There was a report saying they were aware of risk, like the narrative we have had recently. By all accounts chinas officials seem to be seriously tackling the debt situation. That is an ongoing theme into 2018. Betty what about the narrative for the pboc, the central bank . Does it change anything . Enda this would have been the big contradiction, strong inflation versus, how will you start deleveraging and derisking . But the feeling is it looks like there was moderation in the client space, so that takes pressure off Central Banks to tighten. If they are going to tighten, how they can do that through macro credential majors or do so through other measures. They have a look at their disposal. Even though core inflation is at a threeyear high in china, in the wider picture, there is no need for the pboc to act in a hurry. Yvonne what does this mean for the global reflation story . In china we might see the output gap is widening, Commodity Prices cooling down. We have a repeak in inflation . Enda when they pulled out of that long streak of negative people yards there was a feeling china was exporting inflation to the world. When you look at moderating the way it is, it is a picture china will not be adding to much to the global inflation. One of the big hopes for a policymakers around the world is inflation will finally start accelerating. That will bring down debt and have nominal growth. One of the pieces in the jigsaw, china is not necessarily going to be for this. Yvonne it could be a welcome sign for the bond market. A little bit of stability. Enda curran, thank you. Lets turn to the Power Generation across asia, because Bloomberg Intelligence says Many Companies are set for big changes to their Business Models in the coming years. Lets bring in the author of that report, the utility analyst joseph. Thank you for joining us. What should we look out for when it comes to Energy Utilities in 2018 . Joseph colon two big things happening, one is acceleration. You do have retail competition accelerating in places like plan , singapore, and also china. That means endusers will have a choice on who to buy the part from. The bad news is it creates competition. These companies are used to a very stable longterm cash flow, high visibility, and all of a sudden you dont know if you will be losing 20 of your market share, so that create a lot of pressure on these companies. The second thing we are seeing is with [indiscernible] as you may guess, you try to be the lower cost producer, try to produce less at a lower cost, so there is a flight towards one it isbe called coal, cheap. In china they are using a lot of people looking at some of the cheaper forms of generation like hydro, etc. These are the two kind of major things you will see in the export market. Yvonne further competition, reforms as well, which will have more improvement . Are there tougher times ahead . Joseph i think it is going to be a lot tougher Going Forward for the companies. In japan, since they liberalized for her 5016, over Million People have already changed their electricity provider 4 million or 5 Million People have already changed. Lostkyo electric power has 3 million customers. That is going to continue to accelerate in japan. In china it is a lot earlier in terms of where we are at in terms of reform. Other Companies May be losing their market shares Going Forward. I am curious about what companies are doing to defend their market position, exactly. Is a greatt question. Different countries are doing different things. In japan, they are trying to offer a global solution. If you use my power, and also, i can provide gas to you. I will provide other Services Like internet of things related things like Home Security and so on and so forth. So they are trying to bundle solutions, but it is tough because the new kid in town, the new arrivals are going to try to offer solutions to consumers. What you are seeing in the u. K. And australia, in places in the united states, you will see more in japan and Going Forward, you will see it in china as well. Betty why does Energy Market reform, why does that affect the fuel mix . Joseph that is a great question which people dont look at. It is the other side of the coin. In the past, you did not care about cost of production because if your show costs go up, it helps the pace anyway like in hong kong were japan. All of a sudden you have to care about your production costs, so you are looking at what you will do with your portfolio. In japan for example, the companies are trying very hard to restart Nuclear Power plants. This is a very aggressive target on the part of the government that wants 20 of power for Nuclear Power because nuclear is cheaper versus gas for example, but it is not easy because what we cannot really forecast is a. Ocial of people you know, the average consumer that says, hold on, we had fukushima, we are concerned about nuclear, so they may not necessarily get the grassroots support to restart the power plant. So all of those decisions, you want nuclear but you cant have nuclear, wont do it in japan, what are you going to do . Betty we will leave it there, joseph from Bloomberg Intelligence. Back at it again, looking at Bitcoin Futures, started trading today. Apporters hoping it will be new credibility to the cryptocurrency. This is bloomberg. Yvonne this is daybreak asia. I am yvonne man. Live. I am betty the house and senate teams are working through the weekend to bring their tax reform plan together into one bill. President trump is preparing his Closing Argument on wednesday. The Economic Council director gary kelly joined Bloomberg Markets ahead of the market weekend negotiations. Here is what we know. We know we have passed two bills, one in the house, one in the senate. They had a 20 Corporate Tax rate in them. Conference, and that conference now, they are supposed to conference the differences between the two bills. That is what we know. It sounds like we are at 20 . . What are you getting it sounds like it is negotiable now. We are in the process now where we have taken two bills one by the house, one by the senate, they have both written their independent bills, and we are trying to bring them together into one bill that will be voted on by the house and senate. The committees need to agree on what that final bill will look like and what is in there. They are supposed to take their differences and merge them together and agree. That is the process that is going on. A lot of it will happen this weekend. Hopefully when we get back on monday, we are working all weekend i know that. We will have a final tax bill here, and we will know where we are going to be. There are some moving points in the air, and we have got to get to agreement between both chambers and deliver both to both chambers. There is a lot of progress in may. You still have not answered the question. Is 20 a redline . The president talked about in, both bills have 20 them. That is where we are. That is what is in the conference committee. Jonathan it is a conference conversation that might expand, including tax deduction. It is said to be on the table. Does the white house support that, gary . What is on the table is the house is concerned about their salt members, and there are 70 stalls sold state members. No one wants tax increases. They are trying to say, maybe we should expand the 10,000 deduction, not to just include real estate taxes but also income taxes. The white house is fine with that is that were they go, we are fine to support that. Jonathan what they say that is welcome to accommodate . Where they are working this out among themselves, they will come up with a bill to get support in the house and senate. We have told you that the whole time. The white house is involved, we are actively involved, but ultimately the house bill the tax bill is written by the house and senate. I will ask you about bitcoin. Is the white house watching what is happening with bitcoin, and what are you thinking . Is this is an you are worried about . Of course we are watching it. We dont think it is a serious risk, but we are watching. Jonathan something you want to act on, the irs, is this something that needs to be regulated . They have that approved some futures contracts, so we will see what effect that has. It will allow people to short it. There has never been a transparent market in bitcoin. We will see what goes on. It is an evolving market. We have watch this happen before, and markets have evolved. Yvonne that was gary cohn speaking to Jonathan Ferro about tax reform and the white house looking at bitcoin. Speaking of which, when futures have been treating trading on the cboe for a few hours. Our reporter joining us live from tokyo. Take a look at the movement so far. Who is trading today . Sure. Er what was on first hour of trading was above 9 million on the cboe above the contracts. And to put that in perspective, for the same time, 300 million traded globally on Bitcoin Exchanges, bitcoin spot against the dollar. The future is a drop in the ocean. We are seeing consistent buying and selling inactivity every single minute in activity every single minute. I think what that shows that is there is demand for this, but you are still on the fused the first day of the contract, you see very little activity. Brokers will kind of test the systems, make sure the trading is working, the settlement is working. Out of the gate we received one, two contracts being bought consistently every hour. The notion is not huge, but it is not a bad start. For who is doing this, a new towards is geared more retail people. It is smaller, 15,000 right now versus cme which goes live in a week. That is five times bigger than the cboe contract. Is gearedred cboe towards retail. They will support it from day one. It is a guess, but retail traders are the ones buying and selling here early on so far. Your point, just watching Bitcoin Futures on the terminal, volume is steadily increasing by the minute. It is not anything huge to write home about, but the volume is increasing. Institutional traders, what are they saying about Bitcoin Futures . There is a lot of controversy on the final settlement pricing. Why is that making people uneasy . Know, we saw it with libor and the fx rigging scandals a few years back. Whenever you have an option that determines the final settlement prices, that price could be easily and it related. With the cboe futures, the way they settle is they look at a Bitcoin Exchange called gemini. Once onwant just that day. Gemini does not have huge volumes right now. If i have a position in futures and want to affect the final settlement price of futures, i could go into the Gemini Exchange and move the prices up or down in my favor. That would impact the future settlement price. For anal settlement price futures contract is how fundamentally it is valued. If you dont have the transparency or confidence in how that final price is determined, you will not be, you will not have a good time. You cannot work with these futures, so i think we will have to see how one type works out, how that price is determined on the first month of expiring, and if that goes down well, we will see more confident from investors. But for now, the cboe, there are questions about the final price. Yeah. Betty so it is going to be open communication. Our Bloomberg Technology reported on Bitcoin Futures, a new day today in bitcoin history. You can get a roundup of that story and more to get your day going in todays edition of daybreak. Subscribers can go to dayb on your terminal. It is also available in the anywhere app. You can customize settings so you only get news on industries you care about. This is bloomberg. Betty lets get a quick check on the business flash headlines. Spotify and tencent Forest Alliance forged an alliance. The Music Division will take a minority position in spotify, and the streaming service gets tencent entertainment. Music sales job jumped 20 in china last year followed by a rise in streaming. They offered to details. No details. Yvonne apple close to buying shazam entertainment. It is already a part of syria. Be announced later monday which would value the londonbased shazam at 400 million. That may cover the blow to shazam investors. The company was valued at 1 billion when it last closed in 2015. Betty coming down. Air new zealand has leased new aircraft to help its timetables during the maintenance after engines on the dreamliner fleet. They are being chartered for European Company high fly and should begin flying next week between auckland, sydney, and perth. 4. 5 thousand have been affected. Yvonne that is almost it for daybreak asia. Time for a look at what is coming up next. We have all the daybreak ladies back. What are you watching . Haidi we will hopefully end on a high note when it comes to china data coming out. We will be previewing that and taking a closer look through the Inflation Numbers that came out the last couple of days showing tepid inflation up. Citigroup, the chief china economist, he sees a slowdown in measures with gdp to 6. 5 going into next year but also flagging some of the risks when it comes to the property bubble and how policymakers want a freeze as a part from a full on first. Burst. And also the management had of fx yield on real yield. Love to unpack going into the new week. Lots to unpack. Over and Bitcoin Futures 16,000. Market coverage continues. This is bloomberg. Boosting u. S. Payrolls optimism about Global Growth and paving the way for a rate hike this week. China inflation giving policymakers another reason to play a tough hand as they fight with the debt. Bitcoin seeking credibility on wall street. The rbnz says it is a bubble. To Bloomberg Markets asia in sydney
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