Transcripts For BLOOMBERG Bloomberg Daybreak Asia 20171219

Economic houses in place. Theres seeing property is the biggest threat. You may have seen a glimpse of what is to come in 2018 and the treasuries market with that yields surge we saw today. A lot of nervous investors around how much the yield curve has flattened in the face of more positive economic data. I want to bring up this chart really quickly, which shows how much a yield curve has flattened. It is headed toward that in version, usually points to an imminent recession most times. We heard dow fed president fred kaplan say thats usually the ase, how you determine flattening inverted yield curve, and why this time would be any different. That has a lot of investors nervous, are we going to see some sort of tantrum in the bond market . That would be quite shocking to the market. It has been interesting, too, what weve seen overnight, not just the 10year come the 30year. Reform . Signal of tax could we see some type of Economic Growth, or are we going to reach your end and see this extreme positioning with calls of that yield curve to flatten you can that will be a key question for our guests throughout the morning. Betty indeed. Lets quickly pick up how the equity markets reacted. It was really bonds leading equities. Firstp experiencing its loss in three days. The Dow Jones Industrial average losing about 40 points. The nasdaq also lower by. 4 percent. Ivanka lets see how things are yvonne in new zealand lets see how things are faring in new england. Pretty tepid moves in the dollar, despite the bump up in yields that we saw in the sovereigns. Trading in australia just getting under way. As we mentioned, the biggest moves have been in the bond market. Yield on the u. S. 10year, 30 having your, jumping more than seven or eight basis points overnight. To japan, that widening spread between treasuries and jgb will be a big focus today, should signal more yen weakness, but the dollar is not doing a whole lot. We are doing is sitting in those tight ranges, but futures pointing to just a pretty tepid and possibly seeing a little bit of a retreat from japanese stocks here in tokyo this morning. Story, House Republicans passed their test bill, but issues with senate rules mean a revote is required. Lets cross strait to washington and our capitol hill reporter. Tell us what happened. Republicans are just making their victory lap and sort of see this hurdle they have to go through. Is the tax we have bill formerly known as the tax cuts and jobs act. Democrats reached and raised three objections with it, when being the title, so no it has a very long technical sort of title. Second was a provision that would allow taxfavorite educational savings accounts to be used for homeschooling expenses. That got cut as well as a provision that would exempt colleges with fewer than 500 didnts from paying in excess tax on their endowment. The reason this all happened is because these provisions violated what is known as the bird rule. They did not relate enough to federal spending or revenue, and because they are moving this bill through budget reconciliation, everything has to fit very specific parameters. These that not. Democrats raised objections. They are getting pulled out of the bill. Sameouse has a vote on the exact bill as the senate, so they will vote tomorrow morning early. They voted today, it passed by a wide margin. It is expected to pass tomorrow, so we are essentially seeing about a 12hour delay. It will not have a big disruption when it comes to the tax bill making it to President Trumps desk . Laura republicans were hoping President Trump might sign the bill as soon as tomorrow. The president has said over and over again, he wants to do it before christmas, so that with the erratically be before the end of the week. They are still on track to do that. Betty how will this embolden not only President Trump has position into 2018 but republicans as well . They have finally gotten this sought after legislative victory. What can they do with this extra capital . Laura i think there is a big sigh of relief among republicans. They got one thing done and can go and campaign on that, and now they are looking at what they can do next year, figuring out what to do with medicare and medicaid and curb those costs is high on speaker ryans agenda. They are also looking at some sort of infrastructure package. There might be room to do something with democrats, but democrats are not pleased with how this tax process went down and are unlikely to really want to work with republicans. They think republicans are doing enough to endanger their position going into the midterms that they think they are better staking out their own separate space. Thank you so much for the latest on tax reform. Lets stay on this topic, though. Joining us now from mountain view, california, a Research Fellow at the hoover and addition and a stanford professor and former policy director of mitt romneys 2012 campaign. Do republicans have a lot to celebrate . A significantis accomplishment. I think they have been looking for a big legislative accomplishment all year. This particular hes of legislation is significant. It makes some of the biggest changes to the u. S. Tax code since 1986. It is not as much of a tax bill, bill as a tax cut but it is a significant piece of legislation and i think they should be celebrating because this was not a fate accomplish fait accompli. This was not one of those things that was destined to happen. Anybodyf you have told six months ago this would pass by the end of the year, i think there would be a lot of are you kidding me type of phrases passed around, but are we just kicking the can down the road . This is going to increase the deficit by 1. 5 trillion dollars. We will have to pay for this somehow. Theres no question there has to be some kind of reform on the spending side of the ledger. We have always known at least those of us who look at the system know that the u. S. Does have a spending problem, predominantly around the socalled entitlement programs like medicare, like medicaid, the Health Care Program for lowincome americans, and social security. The question now becomes where the action goes there. As you mentioned earlier, the reporter mentioned earlier, speaker ryan is interested in approaching those issues next year, but theres not a huge political appetite, even amongst President Trump, to go after those programs. The question of what the impact of the tax bill will be, we will have to see how much of this deficit application is negated by Economic Growth. I think that has been a source of huge debate here in the united betty states. Betty speaker ryan also saying he has made compromises to get. His tax reform through can we just assume that these sunsets will be extended under a future congress . Track record suggests its not that easy a task. That is correct. I think there is nothing that u. S. Politicians love doing more than cutting taxes. If you really get to the heart of the matter, one of the reasons why this was easier than Obamacare Repeal was earlier in the year is because, quite frankly, tax cuts are things that largely even democrats will want to vote for. This makes the tax cuts essentially temporary, so in 2020 five, they will have to revisit the question of if tax rates stay where they are as cut by the law or if they go up to previous rates. I tend to think these members of congress in a future congress will not be able to resist keeping those rates low unless there is some significant fiscal pressure to do otherwise. Suggestpolls still this is a very unpopular tax overhaul, particularly among the middle class. They are really going to feel it. A lot of the benefits of this tax law are frontloaded. Immediate statutory rate cut to 21 makes the United States more competitive with the rest of the industrialized world. Immediate expensing will move forward a lot of capital expenditures, so we will see some impact on growth in 2018, and that potentially could translate to higher wages. On the individual income tax side, there is some immediate relief, and even the liberal Brookings Institution in the United States concluded about 81 of taxpayers will see relief under this bill, many of them in the middle class, so i do think you will see a lot more shortterm benefit for republicans. The longterm picture is much easier. There are headlines coming across from mitch mcconnell, saying the bill probably will not get any democratic support, and also that the Government Shutdown is not going to happen. So fact that this was partisan, the fact that no democrats supported this bill, how will that affect future legislative bills that come on board . The challenge is that there is an inverse relationship between the level of durability of a bill and how much for little support there is from both parties. In this situation, because it only byorted republicans, it makes it subject to change in the future. If, for example, President Trump gets voted out of office in 2020 and then a democratic congress, its possible we could see dramatic change to the tax law in the other direction. It is the same cycle we are in with health care in the United States were obamacare has been subject to opposition from republicans because it was passed without republican support. This is a dangerous policy making cycle for us to be in, but it is where we are, and unfortunately, we will have to see what happens if a democratic majority takes over a few years from now. Betty thank you so much for joining us on what looks like is going to happen, the tax bill. Lets get now to the first word. Ews jessica china says President Trump is shirking americas traditional leadership role just a day after his First National security address. The commentary sites the decision to abandon the paris Climate Change accord does Climate Change a court and the recognition of jerusalem as israels capital. They said that makes it hard for the u. S. To trust and respect. Saudi arabia is rolling out an expansionary budget as the economy stalls ahead of a critic year critical year for its plan to reduce spending. It also expects the budget deficit to narrow from almost 9 of gdp. Cheap oil has meant to eat of years of austerity, but a return 2030 reform the program. Singapore is the latest to warn about bitcoin. The Monetary Authority says significant risks and will not be protected by existing regulatory safeguards if they lose money. Concerned the dramatic rise might tempt people to dive in. Is high says the risk and investors risk losing their capital. And a korean cryptocurrency dealer has succumbed to hackers. The exchange will close and into following proceedings an incident in april when the exchange urged clients to keep their tokens in a safer reform. About 20 of all Global Cryptocurrency transactions happen in korea. Global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. Thank you. You can get a roundup of the stories you need to get your day going in daybreak. This is bloomberg. We are counting down to asias first major market open this morning and japanese futures are looking slightly higher. For the much i would say unchanged at this point, but certainly not in the red as we saw here in the u. S. Equity markets. This is bloomberg daybreak asia. Yvonne china will wrap up a threeto economic work conference later on today. The first big gettogether since the communist Party Congress in october. Kevin smith, who is short china and sees a slowdown the Property Market is the biggest risk. Thanks so much for joining us. About likely to hear more this blueprint for the economy for 2018 out of china. What should investors be looking for in particular when it comes to the growth target . I think one of the key whoops. I lost my thing. Yvonne we will wait for kevin to get back his it or here. Opefully, he can hear me the beauty of life television. Economicbout the blueprint, we are set to hear from china today. What are you looking for in terms of surprises . Kevin the policy objective china has laid out his three things controlling financial risk, poverty, pollution. The one thing we are concerned about most, that we are looking out for most is really the clampdown on credit. China for the past several years has talked about addressing the credit risks, and we really have not seen a lot of movement in that respect because credit growth has really only accelerated up to 35 trillion of assets and the Banking System offbalancelion in Banking Systems, so we are looking to see if china will really be clamping down on credit growth for real this time. Thats right, and this deleveraging happening in the markets so far, but you take over the broader economy, we have seen slower investing, pbi prices starting to ease as well. Will this affect how much the government prioritizes Debt Reduction next year . Kevin like you mentioned with ppi estimates coming down, weve already seen efforts to deemphasize property growth and emphasize development more in the outer regions with the focus on poverty, and we have already seen the Poverty Development stocks come under some pressure, start torty prices approach 0 yearoveryear growth levels, so maybe this time they really will be clamping down on growth, and i think the biggest risk is that bigger contagion and credit collapse, but we will have to see. Had yuan earlier this year talking about your big chinese currency call, which you had a decline of 70 over the next 12 months. It has not panned out yet. Are you still sticking to this call . Kevin we are still bearish on the currency. China has two conflicting objectives when it comes down to credit growth and supporting the currency at the same time. They want to support the currency, that goes along with the fed tourist rate hikes that have been going on and the tightening of credit by the fed, be if china is also going to raising interest rates, which they have been, recently, that is indicating they want to continue to support the currency, but that is also something that will be likely to trigger credit problems in china, and it will lead to much bigger problems down the road for the currency. You scaling that, though, your position against the currency . Are you scaling back on those shorts, giving you can see the Government Support . The case for been a long time, but it is only making credit problems, we think, more acute, so we are maintaining our position following risk controls, and we still have short exposure to the currency and to china equities. Where do you see yourself making the biggest returns next year . Kevin i really think we are going to see a major credit problem emerged in china this year. We are in a global centralbankinduced everything mobile. It is an asset bubble of historic proportions in terms of global debt to gdp, and its not just china. Those opportunities on the short side in chinarelated places like canada and australia and housing bubbles that have been created there as a result of the extraordinary capital outflows from china over the past decade and also in the u. S. We have shown in a recent paper ,hat on seven different metrics the u. S. Stock market is overvalued relative to fundamental measures measures well into the most overvalued territory it has ever been, so we have short exposure into u. S. Equities, too, and i think this is an historic maniatype of a time for asset bubbles worldwide. Much. thank you so dont forget you can always find indepth analysis on the days big newsmakers on Bloomberg Radio and discussions like you just heard. Tune in to bloomberg daybreak asia from 7 00 a. M. Hong kong time. This is bloomberg. Bloomberg daybreak asia this is bloomberg. Betty this is bloomberg daybreak asia. Yvonne a quick check of the latest business headlines apples long winning run may be coming to an end according to 1 wall st firm that lowered its rating to neutral, saying iphone x sales and other positives are already within the stock price. The analyst said any boost from services will not be enough to lift the stock at this point. Slump ahead of a deadline wednesday as it struggles to settle 3. 5 billion of debt. Once asias largest commodity in seenit has declined massive losses, concern about debt and claims, it in insulated the value of contracts. Analysts say investment in subsidiarys may be left in the cold. Some debt analysts say the group piggyng its units as banks, leaving investors vulnerable. Theyre under official scrutiny after a debtfueled 40 billion global spending spree. Betty has this ever happened to you . Appears to have misfired a direct message meant for the cofounder of Virtual Reality company oculus. The tesla founder tweeted to his 16. 7 million followers. A message for john carmack saying do you have a set to talk . My cell is. , buts deleted quickly probably not in time for millions to get his phone number. Yvonne we will hear why the yield curve and inflation are causing concern, and that bump up in yields, especially the 10 have in your overnight, certainly one to watch in the morning especially in the 10year overnight, certainly one a watch in the morning. This is bloomberg. 7 30 wednesday in hong kong. Looks pretty sunny, but it is cold. Is 6 30 p. M. Tuesday here in new york. Markets have closed lower. We saw declines not just in equities but also in the bond markets as well. Of breaking that chain of rallies so far based on the optimism around the tax reform package. Yvonne you are watching bloomberg daybreak asia. Lets get to first word news now. Jessica House Republicans celebrated passing their tax bill but not for long. Three members of the senate that visions provisions violate law. Must vote the house again wednesday morning before sending the bill to the senate and ultimately President Trump. The president of the philippines is trying to tax reform bill, fulfilling a promise made on the campaign trail. He said he vetoed some provisions in the bill which will be explained later. Secretary carlos to mingus says the tax still will yield 2. 5 billion in revenues next year. And eu negotiator taking an increasingly tough line on brexit. He told the Guardian Newspaper there would be no special case for the city of london and said brexit means the end of so called passporting arrangements. He also warned the u. K. Have to abide by any new eu rules drawn up in the transition period post brexit. And china has a scaledback version of the worlds biggest Carbon Market, saying it is working on an emissions trading system covering 1700 utilities, fewer than the 6000 proposed a year ago. Officials also failed to name a date for when the system should begin. President xi jinping is trying to balance making Companies Pay with surging demand for electricity. Yvonne thank you. We are counting down to the market open. The action has been mostly in the bond markets following that treasury selloff. We are not seeing a lot of move when it comes to the dollar and the yen. You pointed out, not much move when it comes to the dollar as well as the yen. That is likely to not create any excitement. Anticipating that the snooze fest weve seen in the yen could continue with price swings for the dollaryen following to a threeyear low. That is the line in white on this chart. Back in september 2014, volumes were more depressed than at any other point in two decades. Global volatility has also sent to the lowest since october 2014. That is the line in blue right here. With centralbank banks having killed volatility and fed tightening has done little to help the dollar in twitty 17. Thek this out we has in dollaryen move in tandem with 10year treasury yields. The pair not reacting much, even an octoberumped to high. All the risks on the upside with the anticipated u. S. Tax bill package, but this Current Situation may not last. The kitchen mocha chart shows into 2018,s fitting which could foreshadow uncertainty and that could mean choppy trading. For now, the range is the pair is staying rangebound. Betty how does that set up for Equity Investors in asia . Its called the futures board. We anticipate weakness when it comes to equity markets in asia, a weaker open than anticipated in asia. Here are some stocks we are keeping an eye on as well, flipping the board to show you stocks to watch in japan. Falsified data trouble continuing at Mitsubishi Materials and the nhk report said that borrowers may have falsified fuel efficiency data, and sony on the radar after being cut to neutral. We are keeping an eye on korean thattic stocks on reports a foundry may be created with the chinese firm and samsung may move on reports it is quadrupling supplies to apple in 2014. Now a last look at what is going on in sydney we do have the after creeping lower here hitting its highest close since january 2008. The stocks could snap 18 ofday rise. We have Retail Food Group falling almost a present this morning, extending losses after yesterdays 25 slump. Much forank you so that look at the asian markets. A closing look now at the halt. A record climb for major u. S. Stocks indexes. There is a view among some investors that tax reform is already priced into the market. We have been talking about it enough. Su keenan here with more on the close today and also what to look for in tomorrows open. Many market watchers saying this a look ahead to end of your position in, there is a view the tax cut benefit has already priced in too many stocks, so you had tech turning lower. That also led to a lower market. Lets look at the market snapshot. You did have bonds move lower with stocks. You have oil up ahead of the big inventory data, and gold also was retreating, although we are seeing a move back higher after hours. There is a view we will see oil stocks decline yet again, which i will get to in a bit. Thats go on the bloomberg real go on theets bloomberg are quick. This chart shows there could be much bigger deficits coming if you look at how after the reagan and bush tax cuts, you saw deficits grow. That is kind of make in the cake that this is where we are going. That is another thing to keep in mind. That is kind of big that is kind of baked in the cake. Downgrades are a big story in this latest market close because you had it with apple. You had it with microsoft, both hitting fresh highs yesterday. Lets go on the bloomberg once again. This was a dramatic downgrade in that you have not really had a downgrade on apple since june. They have been quite rare and the latest analyst concern is that the benefits from the 6 are priced in in your getting into the final innings of gains or apple and you are getting into the final innings. While apple was not one of the more active stocks, you did see a move lower as a result of the downgrade. You also saw Riot Blockchain continuing to post gains. Very interesting. We mentioned one short seller moving against ryan block, saying it has tied itself to the bitcoin mania. Tenet healthcare could sell its finance unit to reduce some of its hospital chain debt, and he also had garden restaurants really taking off, Second Quarter of its fiscal 2018 revenue jumped some 14 . Lets go back on the bloomberg one more time. Of all the restaurants out there, many of them under pressure, the fact garden is continuing to increase growth, particularly in the southeastern part of the u. S. , is a big part the hind the growth, not just in restaurants themselves, but in revenue that is projected. Thank you. Two said president s spoke to bloomberg today, and both shared the same risks on the horizon. Why did the bond market fall off again . Kathleen hays is here to connect the dots between bonds and Central Banks. Kathleen where we start, you do not see much of a connection because we will start with the president s of the dallas and minneapolis fed, both speaking on Bloomberg Television earlier tuesday. Roth capital was asked in particular about the flattening yield curve. Lets listen to what he said. I am worried about it, too, and i think we need to watch it. 2. 3 ,year treasury, high 2. 4 is meaningful. The history of and virgins is such that it has tended to be a pretty reliable forward indicator of recession. Kathleen rob kaplan saying the yield curve is a long way from inverted just yet, but heres the classic concern. See how you get a very flat curve, and next thing you know, recession. Again, not there yet. We have had a bit of a selloff in treasuries, so there is a little less flattening now, but this is why so many fed officials are starting to watch it. Neel kashkari, who has been very dovish, says once again it is not time to hike rates. The fed still short of its inflation target. Should not hike rates until wages start to rise. He said this on monday, explaining his third dissent on rate hikes. Why are so many fed officials saying it is time to raise capital because they are focused on unemployment. Tightnessstory shows produces inflation. They also weighed in on the impact of the tax cuts, and neither a too impressed, right . Kathleen not exactly because of what they have heard in their own districts, but two fed and president s saying i dont think so, but lets show you what Neel Kashkari says. Very few in my district say the tax package will lead to a dramatic change in their behavior. I think there have to have lower taxes, and the behavior has been more about buybacks and dividends than it has been about increasing investment. Kathleen this is a question weve been asking economist after economist, certainly on our program, and some agree it will not make much of difference. Some say sooner or later, there will be so much liquidity there will be low enough rate that it will have an impact. Remains to be seen how big that impact will be, of course. If anything, this sounds more dovish than hawkish. Why did the u. S. Markets selloff . Kathleen ecb hawkish comments, then a bond market selloff in europe. We had three officials talking about a potential change in communication after the first of the year. The president of the bundesbank, always hawkish, thinks wages will start rising and that will boost inflation. Hot Housing Starts may have been because of the hurricane rebuilding. One more story i will say it again we have a great story on bloomberg pointing out that debt sales, bond sales Government Bond sales are going to newly double in 2018 given what has happened with tax cuts, government spending, etc. , and if you are a bond investor or bond trader, think about it, more supply, a Federal Reserve reducing its balance sheet, not investing proceeds as much, so a big buyer is going to be stuffing that from the market. I think that is probably starting to create more caution. Think youllo not impact growth, you can see it will affect bond sales. Even if you do not think it will impact growth. Betty thank you. Up next, cryptocurrencies and fears of a bubble. Our next guest says it is not so bad and thinks amazon will be next to get involved. This is bloomberg. Yvonne this is bloomberg daybreak asia. Betty more Business Leaders are starting to echo earlier warnings and sounding the alarm on bitcoin. 87 Corporate Leaders last week with about nine out of 10 of them labeling the cryptocurrency a dangerous bubble. With us now is a managing partner at full tilt capital. Hes a venture capitalist who has helped incubate cryptocurrency miners. Your lesson to bitcoin itself, although i believe you hold some bitcoin, right . And more on the technology. Anthony more on the infrastructure side. Business is brisk right now . Anthony i think there is a focus on the mania happening in terms of the prices, both from technologists and wall street, and his people out there who say bitcoin is going to save the world and people who say bitcoin is going to zero, and i think both are probably wrong and the truth is somewhere in between. Chart i want to share a with you because we have seen companies that are either vaguely in cryptocurrency or just in cryptocurrency and just there stocks soar. 17,324 hem has jumped since it started trading in september, which is crazy, making people billionaires on paper. Does that, though, undermine your business, your ability to invest because it distorts the market . Anthony i think it actually helps, right . Theres a bunch of Institutional Investors that one exposure to this asset class. Right now, theres not that many options. Most of the newcomers to the Small Companies going public, but the technology is still very young. We still have not had a traditional, proper you have benchmarks like this that dont see any sense, you have strangely valued companies. Anthony you have companies overvalued and undervalued, and everyone talks about a bubble, and i think a bubble is not necessarily a bad thing. It kind of shakes out people who do not deserve to be there and leaves people who have sustainable businesses with real cash flow and build for the longterm, so i think that helps. Isty do you think bitcoin in a bubble . In any rather than being bubble and have some massive crash, i think theres minor crashes along the way. I think we will see minor corrections, and some people will scream its a bubble, but i think it will continue to rise over time. Yvonne can you talk about your business and your investment into some of these bitcoin miners in general . There are statistics out there that one bitcoin transaction is powerme power needed to and average u. S. Home for a week. Is there enough value in cryptocurrencies to justify that kind of Carbon Footprint . Anthony if you look at conception, the Global Consumption is less than. 5 of u. S. Energy consumption. When you start to compare it to some of the other stores of value or currencies people like to put bitcoin in the category of, i think bitcoin at the end of the day is going to create a lot of the same advantages but have a smaller Energy Footprint over a long period of time. China just laying out their Carbon Emissions trading system in their fight against Climate Change. They have scaled back from now, for now, but this seems to be a long effort for the president to curb aleutian. Anthony i think they first started out trying to find whatever Energy Sources they could. As more and more people have come to the market, they have found better to better Energy Sources. Taking tiresy are and putting it through a thermal demanufacturing process, creating an Energy Source on the other end and consuming that energy to my cryptocurrency, so it is drastically less emissions, and i think you will see more and more innovations as they try to figure out how to get Cheaper Energy and create less of that Energy Footprint. Betty you said some thing interesting you think amazon and tesla will jump in. How . Seeony i think you will some of these Top Technology individuals and industries play, so you will start to see a lot of Silicon Valley talent, kind of the sea suite of a lot of these companies. David marcus at vegas at facebook go over on the board of directors. Tesla has conducted a light of the same attributes of an ico. Its done on both a presale model, people look at what elon has done with the hats, right . If you can imagine, rather than sitting people hats, you send people a token, and i think what is interesting is the token can be used as a token or credit on the energy grid. You start to put some of these pieces together betty is this you pitching elon musk and ideas . Idea . Anthony i think he has probably thought of this himself. Amazon as well. It is the same thing, so i think those are two companies betty that sounds very speculative. Anthony it is speculative if people are buying it hoping it , and i thinklue amazon has got the reach across not only a Global Customer base but also a wide enough variety of Consumer Products where it makes sense. You are saying you could generate that energy through burning tires and create the worlds first Energy Crypto mine. How does it work and house in a better alternative to other renewable Energy Sources, you talk about been, water, and. Olar energy anthony the problem is the individuals who own those Power Sources cannot make the wind blow and the sunshine. We own 100 of what they call the feedstock. As long as were putting tires to the process, we are able to control 100 persistent power and on the other hand, we are completely off of the grid, so no Energy Sources going to come atus and try to sell power three cents a killer hour in tomorrow at four cents. This is a fully selfcontained facility. But it is a resource that depletes as well. Anthony theres enough tires in the world that we could burn every signal tire and be burning tires for every single year. People forget that rubber grows on trees. I dont think tires are going anywhere any time soon. Yvonne anthony, great to have you. Our interactive tv function, tv , where you can catch up on past interviews as well as options we talk about, plus, you become part of the conversation by sending us instant messages during our shows. Bloomberg subscribers only. Make sure to check us out. This is bloomberg. Yvonne this is bloomberg daybreak asia. They a quick check of latest headlines fedex is gaining an extended trade after raising its annual profit forecast. A bellwetheras stock, and the news comes amid and anes on tax cuts upgrade on the Economic Forecast this year by fedex, who expects burning of his much is 13. 30 a share this year against analyst expectations of 12 40 seven cents. It also said it is on track for record holiday deliveries thanks to rising ecommerce transactions. Analyst expectations of 12. 47. The average forecast on the Bloomberg Service for getting revenue to rise 14 next year. Ip them was are expected to be the biggest drivers, but more massmarket tourists are expected to visit macau. Two new casinos are expected to open and cosine next year. Betty uber now turning to taiwan. Valued at 50 billion and raised more than 5 billion earlier this year. And the worlds most valuable Spirits Company has global ambitions. Listdy announced lands to three units by 2020 as it tries to build its world class image. The company will list ecommerce arm in shenzhen next year followed by its ecommerce unit and a business making less expensive version of its signature liquor. We are currently planning initial Public Offerings in the exchange and that ecommerce business in shenzhen next year. Our online sales have read billions in size and it is still growing rapidly. Going forward, we also plan to list our agriculture company. Our goal is to complete at least three ipos by the end of 2020. We expect to improve our brand image as the world number one distiller the these moves. Ipos. Three coming up in the next hour, we Bank Forecast for 2018 and expand my they are entering the year with a positive outlook. On in the hour, discussing why Asset Management companies are the biggest driver for ai trading. This is bloomberg. Yvonne 8 00 a. M. Here in hong kong, i am yvonne man. Welcome to daybreak asia. Top stories this wednesday, House Republican sweeping tax cuts. The markets dont seem impressed. A decline after the s p fell for the first time in three days. Betty from bloombergs Global Headquarters i am betty liu in new york, where it is just past 7 00 p. M. This evening. Chinese leaders meet behind closed doors. They see debt and property as the biggest threat. The worlds most valuable liquor maker has global ambitions. We speak exclusively to keichow moutai. Yvonne a little too early for baijiu for us. For you guys, could be the right time. A look at what is been happening in the bond market, have not been the moves in stocks we have seen. A retreat on the wall street session after we saw tax reform move one step closer to President Trumps desk. 66, we see the ramp up in yields, the 10 year, the 30 year, up as much as 11 basis points. We did break above this range we had seen. Now, the tenure at 2. 45 . You have to wonder what has been driving this. Is that the likes of tax reform, or this flattening yield curve has been profitable. Betty there are a lot of what ifs, that have investors so nervous. There is not really a good reason we are seeing such a flattening here toward an inversion. The bond markets are going to be surges, orthese disruptions, in the treasury market. We will see as volume spins out if we will get more of those moves. Lets get first word news with jessica summers. President trump shirking americas traditional leadership role, just a day after his First National security risk. They say he is perpetrating a you win, i lose mentality that is harming the u. S. They said it makes hard to trust and respect to the u. S. Saudi arabia is rolling out an expansionary budget if the economy stalls. It has had a critical year to lessen their dependence on oil. They will boost spending and expect the budget to narrow from 9 of gdp. They have had two years of austerity. A return to growth makes it easier to implement the 2030 program. Singapore the latest to warn about bitcoin. The Monetary Authority say investors face considerable risks and will not be protected by safeguards if they lose money. Is driven by speculation and it is concerned the dramatic dive might tempt people to move in. Investors risk losing their capital. The korean cryptocurrency has succumbed to hackers. They will close with bankruptcy proceedings. Ubits assets. F they urged clients to keep their tokens in a safer form. Global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. I am jessica summers, this is bloomberg. Yvonne thank you, lets take a look at how the market open is shaping up. A mixed session when it comes to equities. This morning it has been about the bond market. Sophie kamaruddin has the latest. Sophie the bond selloff is front and center. After jumping to a ninemonth high, we see a rise in the tenyear treasury yield pause after a four day climb. It is still above 2. 4 . Not much in reaction to the yen, tracking closer to the 113 mark. Just about range bound there. A lack of market for disciplines, given the holiday season. Dawsey also under pressure. Shares in australia also flighty, set to snap a two day rise. The kospi for a third day. And the nikkei 225 sliding. A construction stock said to be the worst performer, given the Ongoing Investigation into the rail project in japan. Other stocks we are watching in tokyo, Mitsubishi Materials on the radar. They found a new case of falsified data at a unit. That is after a nhk report of falsified efficiency data. Also, improper inspection practices spanning more than three decades. [indiscernible] flipping the board to check on korean stocks, that may react to reports china is betting toward south korea. Checking out the board for the korean stocks. Tourismrelated stocks are on the reader. This latest bump in the road comes after the pledge to put a bad spat behind them. Betty thank you so much, sophie kamaruddin. Key stocks to watch in asia. Lets focus on the top story. House republicans passing their tax bill. There are issues with senate rules. That means a revote is issued tomorrow. How significant is this revote . Joe it is a glitch, but just a technical glitch. It wont change the substance of the tax bill. After the victory speeches that were given today in the house by paul ryan, the press conference after, it is a little egg on the face. But in the end, it will not change much. The senate will vote on it tonight with the corrected version, which strips out two minor provisions. One having to do with paying for homeschooling supplies, and another, the College Endowment that affected only one college. The substance of the bill will not be changed. But the house will have to come about tomorrow and canceled the votes again. It will be moving through. And then be on its way to Donald Trumps desk sometime in the next week to 10 days. Given how bipartisan this has been, democrats very strongly opposed. Is this over form overhaul different from what we saw with obamacare . Similar politically and as a matter of substance. With both a big issue parties going into the 2018 elections. Obamacare, democrats are viewed it as a big positive. Turned out, people did not like it much, even if they did not know much about it or were not affected by it. This tax cut plan is not popular. There will be challenges with both parties taking a forward. Chance, the democrats do take over the house in november, they can try to for some changes. Although they will not be able to get through the white house because the president would veto them. Yvonne a lot of all eyes on what will happen friday and saturday with this Government Shutdown. Given the momentum on tax reform, could they avoid that . Joe there seems to be incentive for everyone to finish up work and get out of town. Some House Republicans have been raising objections. On theng legislation Insurance Markets that were promised to Susan Collins and others in exchange for their taxable. Still is some negotiations and maneuvering going on behind closed doors. The basic outlines look pretty clear. They will fund the government through january 19. They will extend the Childrens Health Insurance Program and a couple other things. They will push it right up to the deadline. Yvonne getting very close. Joe sobczyk, our Bloomberg Congress editor joining us live from d. C. Bad weather ahead, why did the bond market selloff again . Lets get more from kathleen hays, here to connect the dots between bonds and Central Banks. A lot is going on, not just with the fed, but the ecb. Kathleen the ecb, hawkish plans. Housing starts looking good. That is what started a bond market selloff. You would have thought things we heard from two Federal Reserve president s, would slow it down. Did not give it too much relief. Lets look at what they both said on the tax cuts. Not both said ceos were signaling they would use extra money to boost investment and hiring. Lets hear it Neel Kashkari summit up. Very few ceos in my district say the tax package will lead to dramatic change in their behavior. I think they are happy to have lower taxes. Behavior ofat the firms, it has been more about buybacks and dividends, than increasing investment. Kathleen those more optimistic have not added much to the forecast on gdp. Fullnies close to employment, if there is more stimulus, could boost inflation more. Betty what red flags did they raise . Kathleen lets look at rob kaplan. He was asked about the yield curve, which has flattened so much. The selloff reduce did a bit. He was asked if he was concerned, sounds like he is. I am worried about it, too. We need to watch it. Meaningful. 240, is the history of inversions tended to be a reliable forward indicator of recession. 1353. En g btv some pretty steep inversions, if you go back to the 1970s. In version, recession. We are not inverted yet. That is why they say they are not worried about the yield curve. Rob kaplan says there on the fence about hiking rates in december. Interesting to hear him expressing concern. Neel kashkari talking about the fact, you should not raise rates until you see 2 . Wait for wages to rise. It is dangerous for the fed to do this. He has said this many times. Repeating it today when he spoke to Bloomberg Television. Betty i want to turkey the bank i want to turn to the bank of korea in a minute. Did we learn anything new . You look into, their minds a little more. November 30 they raised the 10cord to 1. 5 , g btv 28 tells a picture. Dip, inflation down to 1. 3 , when the decision was made. Gdp picking up of well over 3 . If we look at g btv 2810, you can see where we have come. Will they keep changing the rate . 61 vote the 61 vote. Any more rate hikes should be made with caution, to avoid derailing inflations gradual raised for the target. I think a lot of people thought it would be a while before the bank of korea moves again. An interesting story. So much writing on inflation. Even in an economy driven quite nicely by strong exports. Betty thank you so much, kathleen hays. David degraw on my managers are the biggest drivers. Managementwealth enters 2018 positive. This is bloomberg. Yvonne this is daybreak asia. I am yvonne man in hong kong. Betty i am betty liu in new york. Why our guest says rallies will continue in 2018. Debt crisis is among one of the risks out there. Joining us, Hartmut Issel, the head of equity at ubs wealth management. Good to see you again. Out of those, what could be the biggest risk . Mention the one with the rising rates. That is forced by rising inflation. Korea,isks like north you can speculate. The ones you can from an analytical point of view validated, is emanating from the labor market. Inflation really shoots up. We have seen historically not recessions, but bull markets, typically what they had in common was a short succession, a couple of red hikes rate hikes. Pin down keyme to risks, that is what i would mention first. Fewy we heard quite a people on this program talk about that being the biggest risk. I want to talk about this chart, g btv 7207. It shows you the flattening yield curve, the spread between the twoyear and 10 year. Flatten, leading almost to an inversion. Possibly early next year. Does this signal to you a recession Going Forward . There are different ways you can approach it. We have a recession level our u. S. Teams run. On macroeconomic variables. There is a recession probability for the next 12 months, very close to zero. P early from a fundamental from a purely fundamental picture. I would not be surprised if that happens. On the long end, that is within the control of the fed. The Central Banks will be very cautious to hike too quickly. Forcedof course they are our base cases will probably not be forced to. In inversion,s, it is a low probability. The flattening i think is what we expect. Do you make of the moves we saw overnight, this surge in yields on the long end . Not just in the treasury, but in europe. Are we fracturing and more Economic Growth for tax reform . These, givenmming the extreme position we have seen for more further flat yield curve yield curve flattening . U. S. , it think in the has a lot to do with tax reform. The market is starting to price in the likelihood of it happening. In our view, the Inflation Impact is more a 2019 story than a 2018 story. At the end of this year or early next year, a bit of pricing in. A 12 month target of 2. 5 on the 10 year treasury. We think probably some excitement right now. That will taper out. In europe, not too surprising. I am moving closer and closer to the tapering of the program. Strategy, wend our have a limit on european limit bonds. They have been benefiting from the qe programs. It is a space they should be cautious on. Yvonne does this change the trajectory of the dollar at all . Which has been missing in action from these bull markets, this year. Related to the fed hike and the likelihood of the tax reforms one way or the other coming through, we did expect to or three months of intermediate dollar strength. That may not be over. Attach more in the shortterm. Beyond the, the Economic Growth in europe and the ending of the so much morers are potent than smaller rate hikes in the u. S. , which are miniscule. Sideally, the european probably controls the currency pair for 2018, which means zero strength. Yvonne what does this mean for emerging markets . Tax reform that could change the flows. 123,ve a chart, g btv 8 which measures the chinese impulse index. It is a gauge that lending provides growth. It has hit fivemonth lows in november, which is the most recent data we have got out of china, amidst this intensified clampdown on debt. Has it been a hindrance for this em rally, as we expect china to slow down next year . Harmut emerging market is very much bifurcated. We almost have to take china to a different bracket. It is one of the few that is moderately slow again. It is voluntary, engineered by the government. Is one ofin china, it is positive for evaluation. The rest of em is a different story. While Global Growth probably remains of a high pace and does not accelerate meaningfully, it is not quite true for the rest of the big em. Brazil,t india, russia, to still accelerate a bit. It is also because their base is still a bit lower. Asx japan, for asia, we have upgraded not too long ago equities. Wede from the macro picture, do feel since this year we are breaking out of the 6, 7 year low Earnings Growth trend. If anyone is looking for cheap markets in the world, find them in asia. We arely here, constructive on the biggest part of em, which is asia. Yvonne a bright spot for asian next year, thank you, Hartmut Issel from ubs. For breaking news wherever you are, bloomberg and twitter have launched ticktock, by bloomberg. Coverage live video end top news reports, verified by bloomberg. Jump on twitter and follow tictoc. This is bloomberg. Betty lets get a quick check of the latest business headlines. Mobile in a slump ahead of a key deadline as they struggle to restructure 3. 5 billion of debt. Investors agree to waive certain rights over a Revolving Credit Facility until the 20th. It is not clear they will extend. Nobles decline has seen massive losses, concerns about that, and claims it inflated the value of its contract. Yvonne hna group facing a new warning. They say they may be left in the cold. They say the group is using its unit as a piggyback piggyback piggybank. Worlds Largest Liquor company has big plans for the Financial Services sector. Kweichow moutais german pours out his idea in an exclusive interview. Chairman pours out his idea in an exclusive interview. This is bloomberg. Yvonne 8 30 in singapore, almost time for trading in the lion city. I am yvonne man in hong kong. Betty i am betty lou in new york. Lets get first word news. House republicans celebrated passing a tax bill, but not for long. Three members of the senate found provisions that violate the rules. They will have to be stripped out he a can finally be written into law. That means the house must vote again on wednesday morning before sending the bill to the senate and then to President Trump. Philippine president Rodrigo Duterte signed a reform bill, for selling a promise made on the campaign bill trail. It will lower taxes and raise a levy on some items. Said it willtary yield 2. 5 billion in revenues next year. Barnierotiator michel taking a tough line on brexit, as theresa may attempt to heal divisions in her cabinet. He told the paper they would be no special case for the city of london, and brexit means the end of socalled passporting arrangements. The u. K. Would have to abide by any new e. U. Rules drawn up for brexit. China issued a scaledback version of the Carbon Market, working on an emissions system. It is fewer than proposed a year ago. They failed to name a date for when the system will begin. Makedent xi trying to Companies Pay for the surging demand and electricity. Nomura lower just reading the neutral, saying iphones and other positives any boost from Services Wont be announced further. Repatriation of apples overseas cash may be priced in already. Global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. I am jessica summers. This is bloomberg. Yvonne time to see how the asian markets are shaping up. Lets get the latest with sophie kamaruddin. Not a lot of conviction out there. Sophie we did have the session starting out with early losses. More of a mixed picture as the markets await the u. S. Tax redo. That did little to help the dollar. 10 year treasuries are pausing there ascent. Falling with the aussie dollar, down slightly. The korean won, softer. The kospi dragged down by consumer stocks. The rise in Health Care Materials shares helping keep the kospi little shake little changed. Handle. At the 113 the nikkei 225 losing 1 10 of 1 . The topics, little changed. Dropping over 4 this morning, falling on a report of fuel efficiency data falsification. Tuesday, the Top Executive will give up part of their salary. Japaneseeing contracted stocks remaining under pressure. They say it is falling a fifth session. Beer makers also sliding, the likes of asahi and kirin. Another trading at the highest level in over two years. And tokyo marine at a oneyear high. Lets look at japan, display, the stock jumped the most since december 8. Kyoto reporting they are in talks with Chinese Companies on planned capital injection. Betty thank you so much, sophie kamaruddin. Another day, another rise for commodities. The bloomberg commodity index, up for the ninth straight session, the longest rally since july. Remy inocencio at the wall with what we need to know about commodities, driven by data and sentiment in the u. S. In china and china. Ramy i want to talk to you first about oil, g btv 6395. We are going to take a look at what is happening with the white line. We areude inventories, expecting this to fall a fifth week in a row. That would be at its lowest point in 2015. As that has risen, we expect oil prices to rise. That is what we have seen for wti crude and brent. This is rising in anticipation of those numbers coming out, when the Energy Department in the u. S. Reports weekly numbers. Lets go into some metals, g btv 4099. Taking a look at copper. The price of copper is the purple line youre seeing. Ever since the fourth quarter, we see that take a rebound off the lows the past several years. It is being held by what is happening in the real estate sector. No surprise, but we can see this exacerbated over the last year, with housing shorts in the u. S. At a high we reported early this day. Starts,as tiny housing both arising in tandem, pulling up copper. Bloomberg intelligence saying the copper rally is going will have more room to run. They say there will be at deficit in 2019, and that might continue through the year 2022. Keep an eye on where the copper line is going. Also, g btv 3683. Have to talk about iron ore. 62 is the white line. We can see that taking a leg up. Thanks to large part president xis push to make china cleaner and greener. They want higher grade iron ore. That is pushing up the price of steel. There is a midterm bull case and midterm bear case. The bull case, profits are encouraging steel mills to push a production. But as rising steel prices continue, that could slow demand for iron ore. When it comes to iron ore, we do have to say thank you to xi jinping for pushing that higher. Those are the three bloomberg charts you need to know on commodities. For the entire arc of things today, it is pretty green. At its highest in two weeks, the bloomberg commodities index. Yvonne lets continue with that theme. Out auntry said scaleddown vision, aimed at limiting pollution. Our head of China Research joins us live from beijing. There is news of this Carbon Emissions trading system china is building. Explain how it will all work. A basically it will be continuation of things they have been piloting since 2013. They had seven pilots going on in major cities and provinces around the country. Over the course of the next year, the National Governments plans is do have these merge into one National Government one scheme. It will cover all the emissions from chinas power sector, which will be significant. The amount they currently him it is more than the amount of Carbon Emissions from india. Yvonne it is incredible. Interesting, the details. It will cover 1700 utilities. Still far short from what we heard last year. Including 6000 Companies Across a branch of industries. They are proceeding with this very cautiously. Why . Sophie there are a lot of issues in terms of creating data accurately. They originally were hoping to include aviation, construction materials, iron and steel, petrochemicals and other industries. Collecte, to accurately historical emissions data for all companies in these sectors across the country, and to be able to negotiate with provincial governments and enterprises to establish carbon caps for all of these industries, has taken the Central Government longer than they anticipated. Therefore, they have decided to start first with the sector that has the lowest cost of abatement. Therefore, it may be the best sector start with. It is similar to the process that happened in the e. U. When the European Market set up there emissions scheme. What was universally covered was the power sector. It is one of the sectors with better Data Collection and a clear path toward a beating emissions, than perhaps the other sectors we are discussing. It is part of the reason the government has reduced the scope for a more Rapid National rollout of the process, to also simplify the process and be able to capture emissions in the most efficient manner possible. Betty how will this help rein in pollution in china . Sophie i would say the biggest impact will be on chinas overall coal demand. Wethe last couple years, have come to realize how big the impact china has on global commodities. Coal prices have increased over the past few months, due to the fact that although china has been implement in strict Environmental Policies affecting the supply side, it is not necessarily implemented the same of enforcemente that impacts the demand side for china. The Carbon Market may be one of the mechanisms china is utilizing, along with many in the power sector. It should help to reduce chinas longterm consumption of coal. We will have to see, in the next year or so, as the Central Government comes out with more specifics about exactly when the National Market will launch, how the different regional markets will combine, and what will be the carbon cap they are putting on the power sector. If they set the carbon cap at a level low enough in strict enough to enforce the power sector to incentivize the power sector to reduce coal demand, that should have an overall impact on chinas environmental performance. Sophiethank you so much, lu in beijing. Kweichow moutai is the worlds Largest Liquor company, with the market cap of 120 billion. They have ambitions of growing more. German yuan renguo spoke exclusively to bloomberg. Said he wants to bolster sales and expand and Financial Services. Over 2018, we will produce 107,000 tons of liquor. The sales will equal this years. We are aiming to improve and expand our financial business next year. We are already running and 8 insurance company. We are now headhunting Top Executives. Businesses for all to reach a combined 100 billion yuan. In the past you said they had the capability to have more listed companies. Where do you see the Spinoff Companies coming from . We are planning initial Public Offerings in the shochu unit. And our ecommerce unit in shenzhen next year. Our online sales have reached billions in size and it is growing rapidly. We also plan to list our agricultural company. Our goal is to complete at least three ipos by the end of 2020. We will improve our brand image as the number one distiller. The share price of moutai, they said had grown too fast, without reason. Do you feel it is at a reasonable price . The stock price is a reflection of the underlying value. Is it overpriced . You have to ask investors and consumers. Moutai is investing in the future. The stock market is risky and you have to always be cautious. That is really all i can say. Yvonne that was Kweichow Moutai s chairman, yuan renguo. One of japans biggest brokerages preparing for regulatory overhaul in europe next year, by trading their Artificial Intelligence. This is bloomberg. Betty this is daybreak asia. I am betty liu in new york. Yvonne i am yvonne man in hong kong. Using Artificial Intelligence to trade. January,s effect in forcing brokerages to charge investors separately for trading, as well as research. Lets look closer with the david degraw, executive director and algorithmic directorate daiwa. Thank you for joining us. It is designed to help the investor. How do you expect Artificial Intelligence to do that . We are implementing our algorithmic platform in a way which uses the recent affects events in Artificial Intelligence and machine learning, using networks to better model the distribution of the volume patterns in the market. As well as the trend in price formation that happens during make oururs, to algorithms trade more efficiently and have less impact on the market. We expect this will be beneficial to investors, who will have Greater Transparency and better control over their investments, and the implementation of investments. s differentiating factor with your ai, you focus on the trading volume. How is that a better strategy than deutsche bank, who focuses on the price . Of stocke movement prices, there is a degree of randomness, which is difficult to model mathematically. Our networks have a proven to be superior that recognizing patterns. Known, through our independent research, the volume patterns in the market tend to cluster, and have an innate structure that can be understood and exploded by nortel networks. Networks. There is research we have leveraged, and there are patterns in volume that can be recognized and modeled accurately. Betty what is the biggest risk in using this . David we are very careful to implement the signal we get from network into the overall algorithms trading profile. Checksre prebuilt risk that we used to make sure it behaves within reason. More generally, in terms of the risks whether you choose to use eight Ai Technologies or not, there is a possibility of an opportunity risk. If youre not leveraging the newest technologies and scientific advancements, you risk falling behind. Betty the risk being left behind, if you are not doing what others are. I dont mean to interrupt you, but i am curious of the biggest risk, may be the loss in jobs of traders inhouse . Well, i do not think this trend is anything new. The Movement Toward automation in trading, and removing human bias, has been in place over at least 10 years. There is always a drive toward better execution and Greater Transparency for our clients. If we are not on the cutting edge, we do risk falling behind. The trend isobs, nothing new. Utilizing new Technology Creates new opportunities. And it creates a different skill set we are looking for. I think there is a lot of interest currently in Neural Network technology. There are many graduate students and programs popping up in universities across the world. There will be a lot of talent coming into the market. We want to use that and make sure we are delivering a good execution offering to our clients. Yvonne it certainly is a sign of the times. What is the market sentiment, and liquidity, if anything . If everyone is using Ai Technology to execute trades, how does it change trading behaviors . David that is an interesting question. It is difficult to say what will happen. I think currently there are already many hedge funds and High Frequency trading firms and brokerages using one or another type of predictive technology. Whether you can classify it as ai or not, may be remains to be seen. But we think better technologies will improve efficiency in the market. That should lower trading costs, and it should be better for the end investor. If anything, we think it should lower volatility. Certainly, our models we have worked on have been able to improve on lowering the variability in performance. Which means it is predicting the volatility more accurately than we have in the past. Thank you, david degraw, head of Algorithmic Trading at daiwa securities. Do not forget about our function, tv. Watch us live, dive into securities and functions we talk about. Become part of the conversation by sending us instant messages during our shows. This is for subscribers only. This is bloomberg. Yvonne this is daybreak asia. I am yvonne man in hong kong. Betty i am betty liu in new york. Macau is on its way to see casino profits return to a high. Before chinas crackdown on luxury and access, gaming revenue to rise 14 next year. Gamblers expected to be the biggest driver. But tourists are expected to visit macau. Two new casinos said to open next year. Conquerorinas uber didi, to focus as a taxi hailing program. They will work with existing drivers. They are valued at 50 billion. Uber halted taiwan operations in february, after opposition from the government and local drivers. Betty subaru executives will return part of their compensation after failing inspections. They will give up their salaries. The transport ministry outlining the causes of misconduct. Subbarao recalled almost 400,000 vehicles in japan last month, after admitting issues that domestic plants. Time for a quick look what is coming up in the next hours. We have our guest from jpmorgan. Take a look at what is going on with the bond market. Could be concerned about the flattening of the yield curve. One of the big moves on markets taking place, something to be looking out for. And what about these tax overhaul plans and the slight glitch, what does it mean to the American Economy . Bitcoin, again in focus. Aboutlea talking to us and whatis going, should be going on with this currency. 1,000,000 since it was conceived. There you have it. Betty only 1,000,000 . That is it for daybreak asia. Market coverage continues. This is bloomberg. Rishaad as you were. House republicans passing sweeping tax cuts. The senate rules means a new vote is required. The markets dont seem impressed. Asiapacific pretty flat. S p fell for the first time in three days. Oil continues to edge higher, driven by a larger than anticipated drop in u. S. Stockpiles. Salamat. Haidi im haidi lun. Well the Business World is increasingly united saying it is dangerous. This is Bloomberg Markets asia