Year. They see it as an ideal retail combination. Happy new year to you, elon. Speaking of speculation, we had a wanted for the Market Participants saying that speculation will likely cause a correction this year. One comment he made in his surprises for 2018, he said the u. S. Economy lets pull this up, the u. S. Economy has a better you than 2017 with speculation reaching an extreme. All i can do is look at the chart here, g btv 1241 showing closing for nine months straight, that hasnt happened since 1950, it makes you think where we make history again with something unprecedented . You might sound scary but have to wonder how tax reform will play into it, how much has really been priced in, the big russian is this 2018 going to continue giving the sequel that we saw for bull markets that we saw last year as well, given the fact that the returns were quite incredible, it will be really hard to maintain that for the rest of the year. Indeed, it will be very difficult, just really quickly on the u. S. Market, we did close higher, tech is leading the way, the nasdaq adding on 1. 5 , the dow also adding on over 100 points pleaded to a high open over in asia. The 7000sdaq hitting mark for the rest time ever, that will be a good seat for vortex up in asia but kicking off things in new zealand, were , 7101 for theside kiwi, the dollar really taking the back foot here as they try to kick off 2018, it seems like the greenback continuing to seek that weakness, trading in australia getting underway now, look at the 200 also seeing some ands here, about 13 points yields also picking up after what we saw overnight when it comes to treasuries, the aussie tenure at 2. 73 , japan, keep in mind closed for the new year holiday still, the yen is still trading, it seen some decent gains for the japanese currency, 112, 24 against the dollar. I skate caught up at the first word news with kirilenko. Bounceback from the year over declines on a report that the Founders Fund is holding a large amount of the cryptocurrency. The wall street journal says that that is spread across several of the firms funds. Even one that was washed over in 2017. They started buying the four bitcoin volatile in december and it is not there that help. Gold is starting the new year on the front foot and dancing for a session to put in the log structured and since 2011. There was a 14 rise, even as u. S. Stocks surge the record and the fed hike Interest Rates three times. A 14 day relative strength index with some 3. 4 from 59 on friday and above the level of 70, that could indicate an asset in may for a decline. Gomer has been told that european trading volumes fell as investors avoided doing just before the totals came into force later on wednesday, traders are bracing for one of the most seismic predatory ships in history, affecting everything from research to start. Transaction would have to had been settled after the revised directive comes into effect. Is denying any involvement in the list meant transfer in south korea, that is south of the worlds third biggest oil trader. This was a breach of yuan sanctions, they say the shipment has been sold to a littleknown Hong Kongbased company, Global Commodities consulted was then soldiered on. Local news, 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries, i am kerley lines, this is bloomberg. Questec is a much, but take a closer look at the fresh as for u. S. Stocks on the first trading day of 2018, we also saw treasuries, the dollar we can as well. I want to bring in su keenan who has more on tech leading the charge against today. As you pointed out, it has been a long winning streak of the doubt global stocks, that had their best one since 2009. What you see is fresh records fueled by taxes, we have a quick look at the market snapshot and you will see that the dollar as we mentioned is under weakness here, treasuries are puzzling gold, staying the highest since september and oil was leveling off of it. Rim is going to look at that later in the show, lets look at tech, the gains here, for the significant, there across the board, i am them is because look at netflix, the bangkoks came on strong, a lot of the chip stocks also very strong and they just upgraded so that stock is really setting the tone for a 2018 that may be a gift that keeps on giving for those tech bulls. The case,ems especially with the big move on the m a front. You mentioned before, at t and target made acquisition to gene munster, that influential analyst we have been hearing. Bresky is a widely followed analyst, he is at any time with some predictions, he had it this year and one of them had an awful lot of attention and the target could be an acquisition target and they said they will ofin 2018 for amazon, one two reasons, lets go into the bloomberg at g btv 2413. This store cap, what you see in target is an ideal offline customer partner in that they have stores all over the country mainly in the east coast, a very strong saturation and have a lot , theyandpop customers believe this will be great synergy, what he says is difficult to figure out, it is the timing but he says seeing the valuation of the combination is easy and clearly, the stocks will move higher on that if you look at both stocks, particularly target has a nice little bump out of the report. At t was also in focus as we go into the new year as you know, that is 85 billion of merger with time warner and that is the subject of an antitrust hearing the u. S. Justice department is putting a trial on, it is likely to start in march, there are many analyst at that site they have a shot at winning this one, a lot of people on that as we head into the new year. A lot of focus on that as we head into the new year. It into the tech space geopolitical romans have been happening in the unrest we see in iran. The u. S. Cardboard emergency meetings with the Un Security Council and the Human Rights Council on those increasingly violent protests in iran right now, almost a thousand people have now been arrested in a week of nationwide rallies, you get it began his protest against moreg prices but has gone into an overall demonstration against the government. It takes great bravery for the intervening people to use the power of their voice against the government, especially when the government has a long history of murdering its own people who dare to speak the truth. The top and ministration said it may impose new sanctions on iran as a result, lets get to bloombergs Congress Editor joe joining us now from d. C. , happy new year to you, the president has been tweeting his support of protesters in iran but is the u. S. Really ready to step in when it comes to support . There are some him as to what the u. S. Can do, in terms of moving in there, iran would be a very dangerous enemy for the u. S. Because they have so many places they can put pressure elsewhere in the region. But while theyre talking about keeping all options on set of of sections on the table, nikki haley said the u. S. Was not planning at this point to act unilaterally. There will be much more effective sanctions they could impose if they could work through the u. N. To get more countries involved. There is also the coming month, the president has to decide whether to waive sanctions that was part of the 2015 Iranian Nuclear deal. He has previously declined to certify that they are keeping the terms of the deal but that has not resulted in new sanctions. There are new sanctions that the u. S. Could impose. Obviously that will be the big key, whether he can get that support within the you and. But another crisis could be looming in d. C. , what will be having with the spending bill and the government possibly heading with a possible shutdown, what has to happen from now until then . Between now and then there is some tough negotiations and the same tangle of issues that were there before the holidays, they kick the can down the road so they are still there, the main issue right now is going to be whether or not they can lift the limits on the spending that were imposed under a 2011 budget agreement, this would require action by congress and the agreement from the white house. Now republicans are pushing for increasing the limits on defense spending, democrats want to go with increasing equally the spending, thestic white house has indicated that there will to go along with that. Now, there are bunch of other issues wrapped up in that and the democrats are seeking what they say would be a global deal that will include things like immigration, things like the Insurance Market for obamacare and several other issues that have been really difficult for congress to grapple with and find some agreement on. They may yet kick the can down the road, it is still a little farther in january 19. With immigration tied into all of this, what does that mean for trump and building that wall against mexico . The wall, i think that is becoming a bit of semantics. Democrats are indicating that they will increase spending on border security, that may mean some physical barriers, some portions along the border, dont c2c cting to be a full gulf of mexico to Pacific Ocean along the u. S. Border, it is not practical, not even necessary according to the ministrations own officials. Trump, they can get some portion of it, the president can call it a wall and the democrats can say it is not a wall but they may be able to come to some agreement on something. The last piece of news this afternoon with senator orrin hatch talking about his retirement, making a video that was put out on twitter, immediately you saw lots of significant,most reaction from the former governor there of utah, mitt romney and this is what he said on social media, he said i have joined the people of utah and thank you my friend senator orrin hatch for his more than 40 years of service to our great state and nation but a lot of speculation that this presents an opportunity for mitt romney to try to live for that senate seat. Senate seat. Hat hes wishes residence from massachusetts to utah and chanted it in his twitter handle today. He has been making the rounds with political operatives, he would be an easily favorite candidate, he has big fan and utah, besides being a prominent mormon, he rescued the winter of the mix there in salt lake city, he would be pretty much a shooin should he decide to run and the speculation is that he will indeed the side. Decide. Our bloomberg Congress Editor. Coming up on daybreak asia, we look at the biggest potential risks for investors. Eurasia groups sake china and trumps America First top the lists as risks. Next, up next, we will show you what is in store for u. S. Equities in 2018, this is bloomberg. Yvonne we are counting down to the first market open. Futures are pretty flat at the moment but a lot of geopolitical news recently. Particularly after kim jonguns new years day address Offering Party much an olive branch for soul for talks and now south korea looking ahead to january not as a possible date for those talks. As a way to possibly use the tensions over the Nuclear Program in north korea and of those winter of the games. This is daybreak asia, i am yvonne man. Betty i am betty liu in new york. Pretty good run in 2017, hitting those records across thegain, 2018 board. We are talking up to tony nash. You mentioned north korea as a big risk in 2018, you just heard when you read a headline like that, do you believe it . And it you have to believe it. You become a bit protective about it, north korea has political problems but they have medical pubs two. So well see the basis for negotiations as a solution because of the economic problems in north korea. Place sincen in 2015 but well see them coming out at all. Kim jongun is going to continue these issues around Nuclear Weapons but until he has sustained economic recovery, he just cant come out of it. That risk is still front and center. I was 40 of the manufacturing is that getting done in northeast asia. Kim has a lot of control over that. Through the threats that he has made. The u. S. Economy will do better but speculation is at an extreme, would you agree with that . I dont necessarily see it as an extreme but with a markets are going to define this year, we do think there will probably be a bit of a scare in equity markets are unable or so. Sure, people go to speculate but i think a lot of Retail Investors are just coming back in and a big way into markets so i think a lot of these calls for speculation are going to will become they very loud at the end of q1 or q2 if we see some markets but that stuff will watch out and we will see the end of the year come back really nicely. Quest there is still a big question on the pickup and your that we have seen when it comes to the treasury market as well. Inflation,alex for thisll indicates that factories are just rivaling to keep up the demand out there. That means they are either going to have to hire, invest or just bring up prices altogether, how does that change the inflation picture for 2018 for you . Tony inflation is hard, we put a piece out about inflation, we dont see inflation coming back in a big way. We will see some movement on inflation and we do expect some movement on inflation this year that we dont expect a hard push on inflation, pmis are something that in our view, very good picture of what is happening right now and what has happened in the recent past but we dont see pmis as forwardlooking so we see that as an impact on demand and the supply chain over the past three months and maybe this week and maybe over the next two weeks but well see it as the next court over the next six months. Quest speaking about risk, a lot of people were talking about bitcoin. Youve mentioned in your notes that a lot of people are missing something on bitcoin. Bitcoin is basically i. T. I. T. Always when you think about different days of the internet and my ipos comes to market as it was you free things up, give you more choice, decentralize and so on and so forth. I. T. Will always be about control. The end of the day, i to become something about control so bitcoin will end up being the opposite of what it is but whether it is a bubble or not, we only play those games, we dont have an opinion on that. Bitcoin will become about control, these blockchain currencies will become about control. Quest seeming central bank are going to adopt these blockchain currencies . Sure, we think that emerging market, Central Banks will adopt these as a way to borrow legitimacy from the blockchain, it may not be their main currency, china with a cnh like relationship with a blockchain currency, they are to try that in germany january and his grandmother with a. Venezuela talked about it, you can see other emerging markets look to blockchain currencies as credibility builders were the secondbest by arming have credibility now. They could add stability to the currency but we think we dont think that it is either or , Central Bank Blockchain or cryptocurrency, of course all that stuff can coexist, well see that as an issue. Nash, the ceo of complete intelligence. Much more ahead, the oil bulls charging to the new year. We will look at this tugofwar between opec and u. S. Shale. This is bloomberg. This is daybreak asia, i am yvonne man in hong kong. Now, get to Commodities Oil was a major factor today, we will 80 this year if blackstone invites for private wealth solution. He released his annual list of populism and that tribalism and anarchy would spread around the world. But look where crude is trading right now. You can see just a touch above 60 a barrel, rent at 6667. This has not been consistently seen in 2. 5 years. 80 would be a 2 premium. Ramy inocencio has the story with the bloomberg charts that you need to know. 33looking at this possible percent jump, if we do get to 80 from where we are at 50, this would be compounding what we saw in terms of oils jump for 12 in 2017 and looking at the bullish bets out there, it looks track, btv 1498 as our Cris Bloomberg terminal chart, the blue line is what i will you to look at first. This is a combined hedge fund and you can see that this is actually set a record nearing the one million mark and brent is at a record as well with wti net long, this is the most bullishness we have everything today and this is going up to december and looking ahead, seeing that at least through june, we could continue to see this post is because in june, that is one opec does come back to say doing want to continue the opec curbs . They do say that if they dont have a that well, maybe we was the oil flooding and making prices possibly drop. The blue line is what you take a look at here, this is a line chart of u. S. Weekly crude exports and we can see that they had been rising ever since the Third Quarter of 2017, this is after of course the Hurricane Season of the united states, oil coming online. Right now it is at 1. 2 Million Barrels per day. Production, i. E. Just market says that by the end of this coming year it could be on the order of 10. 5 Million Barrels per day and eia is all saying that could be 10. 0 2 Million Barrels per day. Can see what has been happening in terms of the backandforth with opec as well as u. S. Shale. Opec is what they want to have done here. Line is where u. S. Shale has been pushing forward and this is the net, not as what opec really wanted to do. Thank you very much ramy inocencio. Up on daybreak asia, could amazon take aim at target this year . Think isee why they the next big deal for the increasingly dominant retailer. Much more ahead on daybreak asia. This is bloomberg. Is 7 30 inw year, it hong kong. The first major market opens here. It is 6 30 p. M. , tuesday here in new york, the first trading day of 2018. Look at the Empire State Building still looking very christmasy. This is delivering a gift for investors. Tech is late in the day today. I am betty liu in new york. You are watching daybreak asia. Lets get some first word news with kaylee line. The Trump Administration says that it may have posed to sanctions on iran as a number of people arrested in the streets near thousand. The white house says it is keeping his options open at the present we do that the people of iran are finally acting against the brutal and corrupt regime. The yuan Ambassador Says the u. S. Has no unilateral plans that she wants an emergency session of the security council. It takes great bravery are there many people to use the power of their voice against the government, especially when the government has a long history of murdering it on people who dare to speak the truth. Alibaba and financial have had abandoned a merger with money gram after they failed to win Regulatory Approval in the u. S. ,hat offered 18 per share valuing any deal at 1. 2 billion. Chinese takeovers of American Companies have pounded one is about National Security. The two companies into debt issued a statement saying they will Work Together for digital payments. Iss internet entrepreneur defined china. He had been giving until the end of last year to go home but said he is staying in america to work on his electric car startup. He says his wife and brother are empowered to handle the affairs of shenzhen that, he said he would work with alisha to resolve this issue. 2017 prototype for hollywood fall to itsing longer lowest in a generation. Admissions have slumped almost 6 to 1. 2 5 billion. The lowest since 1992. In chinaifferent story where local blockbusters road. This reflected the rise of china strength. Global news, 20 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries, i am kerley lines, this is bloomberg. Thank you, youre counting on to the market open in seoul, japan closed but we are still seeing a decent start for 2018, especially for the bulls. The numbers so much the dollar bill. Know, the struggle remains for dollar bulls. That hangover from the new youre right there. Look at this chart, i would to show you the dollar is trading witha september love investors assessing of his global inflation traders go to take hold, we also have u. S. Jobs data on the docket, i had with the december minutes, when you look at the other had, gold trading at a september high after is best front since 2011. So gold fields like it is time to shine and you have bitcoins reason slide also put in the it and bitcoin has Authority Given of the gains for the petersfield affect and after that dollar, they say that it is reaching the limit of this and we had this buildup of throughout 2017. When you look at this chart, you can see that investor positioning has one to a small net long earlier, i met there was a short positioning building a. That has been taken out. There is something of a clean slate that is coming together. Is remaining in the doldrums. Look at the performance against the korean won, it is falling to an october 2014 love which continues to be the bestperforming currency into 2018. Now that is not to be a key test. With his back upon up, the portal show futures in korea, we have fun metals keeping a party going for koreas stocks and futures, they are pointing to more gains in seoul at the open this wednesday. So the Party Continues for asian equities. That is when the dollar is shifting gears. Not so much for the on the flwhy . Shorts are at the highest level since june of 2016. Looking at this chart, we have bears piling in. This goes back to this goes back to the process of the treasury wish some investors have been predicting for a while. That has put ozzy traders in brace mode. More tightening on the horizon. Had ozzy it investors contending with a stronger aussie dollar but we are seeing plenty when it comes to the 200. Have most groups in the red but materials that are really supporting this so far this morning, this nasty today drop. Look at the big movie today, you have maria but there, this trait at a may 2015 high. That is the struggles level since 2011, this as freeport want a permanent extension for its indonesian copper mines, miners getting a boost on the back of the study. Sophie kamaruddin on the markets, something as we are watching is a leading wall street guessing about sales to the massmarket incident. Depending on who you ask, it may deliver more model threes than the previous three months or sales may have soared by a factor of 27, Bloomberg Technology dana hull joining us now from san francisco. Why are these estimates just all over the map here . The model three really just came out in july and we know in the thirdquarter they delivered 222 model three cars, most of two employees. The Fourth Quarter is the first time we are seeing deliveries go to not employees and here in california your deathly beginning to see more of them on the road but in terms of what the number is, it is anybodys guess. So Bloomberg Survey done analysts. Was to doese had not have 17. But we wont really know until the Company Releases figures. What will they be releasing . Most automakers release sales on a monthly basis. Tesla doesnt correlate and they released delivery figures which basically same thing as sales, the cars sold once a on has taken ownership of it. It is the production figures that investors are really interested in, how many model threes did they make in the for cardiff and what of the production ramp look like. It will also be releasing overall sales of the model s and ask and the goal teslas goal was to top 100,000 units for the year. What do we know so far about these model three deliveries . Not rate of the people, just in place of tesla been getting began getting their cars . Yes, particularly in the activities, you look for twitter and you should model three and a lot of pictures for people who got their cars on the 20th and 29th, one man i know who lives in florida came to the fremont factory to pick his car up and drive it to new york, there are a couple people driving the monitors across the country. You are differently same regular people getting their hands on the car. Most of them also on a tesla pass or ask. They are sort of at the top of the blind because of existing tesla customers. Quite a lot to look out for. Thank you. Well talk eluded about tesla in a. Moving onto the tech space in particular, with amazon, the gravel year it has had last year, target rose more than 3. 5 in new york on speculation that the retailer is in amazons sides now, one wellknown analyst says target can be considered as the ideal offline partner for amazon. But had to seattle with bloombergs spencer. It is also more about this potential deal here, what could amazon accomplish by buying a bigbox chain like target . This was a prediction from an analyst that target would be pushed by amazon in 2018. What it would gain when you look at the retail market, amazons primary competitor is walmart, walmart has 4000 Stores Across the country and it boasts that 90 of the u. S. Population lives within about 10 minutes of a walmart. Amazon is nowhere near that store presence so by Something Like target would give the physical presence that it needs to compete with walmart for more retail spending. With had a chance to talk jade muster earlier and i want to pray be just a few part of what he does is the strategy for amazon, it is essential it is taking over the world. The future of retail will be accommodation and i would bet that investors would view this theres the take would be that amazon is taking over the world and that is a good thing. Is that a good thing . If youre Amazon Shopper and you are happy with their service, it would be if you are a supplier, it could be a bad thing because they would have too much control over you. But the speculation about them taking over the world, target would be just one of many potential targets for amazon, amazon could buy a bank, it could buy advance auto parts, amazon could buy a pharmacy benefits management company. There is a number of Different Directions that amazon could go in. So the target acquisition is the latest analyst prediction. There has been so many guesses out there. Lululemon could be one, abercrombie fitch, bed bath beyond, which one makes sense for amazon t . You to think of what the gap is for amazon and help quickly they could fill that gap on their own. The best lesley has is there hope would purchase, that was the biggest acquisition in the companys history. For whole13 billion put, they got about 400 some odd stores around the country and a small amount of grocery market share. Amazon had been working on groceries for about 10 years and had little to show for it. He realized that he needed physical stores and people could go in, look at the merchandise, feel the produce, smell the produce before buying it. Amazon realized that was a weakness so they had to buy this be serious about groceries. We have to think about other gaps. If they are pushing into apparel, a potential gap is returned. People like a physical store to return to two return the purchase that theyre not have happy with. Their party with calls to supply that. This is the reporters are with calls. That is one partnership they have now, that is some thing to think about. As you noted, there is a game out right now on who amazon goodbye. Its about anybody out there is guessing what company. Why does this in particular makes us news from gene munster . I think it is sexy. You are looking at a 40 billion acquisition. So think about all the excitement around whole foods with 13 billion. This is three times that size and that would make amazon and target combined would be about half the annual sales of walmart. Thet would really amplify fight of these two giants the fight between amazon and walmart. Thank you so much. That really took over on twitter. Everyone loves talking about amazon, just ahead, a Eurasia Group giving us its list for top Global Investors in 2018. This is bloomberg. We are cap enough of the first major market open. Korea is just about to come online. You can see soul futures barely budging. Although a slight bid there north korea ties with many of our guests being on the spotlight. It is front and center, a key risk in 2018. This is daybreak asia, i am betty lived in new york. Eurasia group is warning that this year could see a japonica crisis on the scale of a financial net of a financial meltdown. This Political Risk consultancy says the biggest uncertainties surround chinas move to fill a vacuum as u. S. Influence waned. Bring in andrew bishop, the deputy of research, he joins us live from washington. Thank you for joining us. Wee been talking about were right for this big, unexpected crisis as you guys have turned it for 2018. What has changed in the last 10 years . One big thing is that if 2017 was the year that raised the question of where is the world headed we really think 2018 will provide the answer and unfortunately, the answer is likely to be quite pessimistic. A lot of the guardrails that kept the world together, kept it stable are now set up to fail and are starting to wobble. If you think of the wto, the iran nuclear deal, nafta, stable u. S. China relationships, all of those things are quite vulnerable to any sort of shock in 2018. So that is what underpins our big risk 2018 is a here. You compare this to 28 2008, there was his expression that the system worked. We are not as confident that country would come together successfully to address the new crisis. Images china possibly and now getting the opportunity under the u. S. And embarking on this America First policy for them to really fill this vacuum in the global stage but already is china in particular . It is a good question. Up until now, china and xi jinping and President Trump heavily tried to delphi tensions, they have played nice throughout 2017, we see 2018 as morbid year for china to growth assertiveness. There is a moment of opportunity for the chinese leader here with china having one of its strongest president s in decades, just at the same time as the u. S. Has one of its weakest president s in decades. China is really the only country that has a Global Economic strategy, both of its economic rivals and competitors look at the world and is very tactical, daytoday basis. China has a 20 year plan and we think it is well on track to achieving it so far. You are talking about u. S. And china, you always talk about trade and trade tensions and they saw trade tensions really crop up in 2017, i wanted to point out a chart here, it shows you how worried many are about trade, g btv 7842, it has really dropped off in recent years and as i mentioned in 2017, this on no shortage of trade tensions sparked in large part by President Trump. Counterparts, how much does trade to point out how much is that going to factor in 2018 . Few things to say here, one is that in 2017, i think markets were quite rattled by the idea that a trade shock can come but it never really happened so 2018 in our view is not the year to say we that bullet but rather, it is the year that will really see some trade tensions between the u. S. And china. The second thing i mentioned is that trade is a big component of the u. S. China economic relationship but investment is also a major component and we think the u. S. Will be tightening other sort of investment scrutiny measures in the first part of this year and that will be a huge part of this. Finally, to your question about what this protectionism 2. 0 is, the idea is that it is protectionism that is back with a vengeance. This is no longer focused on the agriculture automotive sectors but the focus on technology and sectors. We are looking at a nontariff barrier rather than your typical tariff at the border impeachment. We always talk about this race between u. S. And china when it comes to global dominance but is there room for two tigers in the global spear at all . Is anything we could see in 2018 . Is, we have a fairly constructive you over the very long run. That first caveat is of all, you need to be in a climate where the two countries are collaborating. He saw some of this under president barack obama, working with xi jinping toward the we couldgreement and see more of this sector by sector collaboration but overall, the tone right now of the relationship and going into 2018 is not that optimistic and the constructive. Whilecond caveat is that there could be some agreement on major issues, i am thinking of terrorism, cybersecurity, there will continue to be massive tensions as regards to asia specifically. Both countries consider themselves specific powers. There is really only room for one in asia. What does it mean for north korea . We see next messages from kim jongun, it seems like depending on who it is addressed into, whether it is south korea or the u. S. Were President Trump for that matter. Yes i think the 2018 will be a major risk for north korea and the north korean issue. We are likely to see an easement attention ahead of the winter of the big games, pretty much because everyone involved has an interest in clintons down. The chinese and south koreans, the chinese in particular will be putting a lot of pressure on kim jongun to keep tensions to a minimum. That said, we dont think there will be any major diplomatic breakthrough and it is very likely that north korea will actually reach its goals in terms of Power Production capabilities. There is not much the u. S. Can do about this. About one of the topics from 2018 you sent to watch out for which is a cold war. Breakout,e a battle electric vehicles for instance, where do you see this new frontier in this tech cold war. . If you think of the tech sector over the past 30 years or so, it is pretty much all rainbows and unicorns, it was led, somete sector gains, everyone stood to benefit. There are two recent changes that will deepen. The first is that technology is becoming associated with National Security just as it did during the oldschool cold war and the second is that because of this, governments are really ining a keener interest leading a technology. So what we see happening in 2018 and beyond the special between the u. S. And supercomputing, Artificial Intelligence to answer the question, we think this could be quite destabilizing and the cracks here for Ron Washington accessjing is adware get to the next generation technologies will obviously have massive geopolitical leverage at least in the short run. So you have to figure about this like the space race in the cold war or the Manhattan Project during the second cold war for that matter. We do see this fight for check. Who benefits from this . We have winners and losers that we can say play out for 2018 . Absolutely. On of the big winners is going to be thirdparty countries and regions. I am thinking of europe and africa in particular because they stand to benefit from this competition between the u. S. And china. Fromu take a step back Breaker Technology and focus more on daytoday, technological infrastructure, whether it is fiber optics or even cell phones and 5g communication, both the u. S. And china have an interest in gaining market share again in europe and africa and latin america. Bringing down prices without bringing down quality. So there is a healthy competitive effect here that could benefit thirdparty countries quite a bit. Andrew bishop there, the Deputy Director of the research for eurasian joining us from d. C. Obviously with those risks of 2018. Dont forget interactive tv function call, you can watch us live and we will catch up on some of the past interviews and dive into the any of the securities of the bloomberg functions that we talk about throughout the morning. This is where bloomberg subscribers only but be sure to check it out. Tv. This is bloomberg. A quick check of the latest business flash headlines, google is being accused of moving more than 19 billion to bermuda in 2016, saving almost 4 billion in taxes. Regulatory really toward filing shows that has a double irish in a duck sandwich to shut it International Profit the senate about shipping revenues from one irish subsidiary to a Dutch Company is no staff and then onto a bermuda mailbox on by another island registered company. Alibaba jumping about since june on a report that this mobile browser was used by more than india and indonesia than google chrome. The wall street journal says uc browser has more than 430 million users worldwide and a 51 of the indian mobile market as compared with crown, they lick from an edited by 41 . Much more ahead in the next hour of daybreak asia, theyre giving us the 2018 outlook for sovereign credit across the asiapacific, we will talk m a with jeremy choi from china. It all started with a cardboard is this a phone . Or a little internet machine . 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. See how much you can save. Choose by the gig or unlimited. Xfinity mobile. A new kind of network designed to save you money. Call, visit, or go to xfinitymobile. Com. Yvonne it is 8 00 a. M. Here in hong kong. I am yvonne man. Welcome to daybreak asia. Wednesday, tech back sparking a rally on wall street. Signs of similar gains across the asiapacific. Bitcoin shows off its new years hangover. Bloombergs global headquarters, i am betty liu, here in new york. It is just after 7 00 p. M. This tuesday evening. Moneygram, a 1 billion deal. It runs out of credit with u. S. Regulators. Hollywood bombs in 2017. Fans of staying at home. But it is a very different story in china. Yvonne looks like the starting 20 story of 2018, hollywood box office. And Tech Companies in general. We see tech back with a bang for 2018. We have a chart to show how things have performed. G btv 6742. On the enda backflip of 2017, given how much we have seen these speculations. Certainly we are seeing tech well ahead for the year. It looks like this could continue in the short term. Betty that momentum trade continuing. More of a correction in the market makes you wonder what is likely going to lead of the doubt. Speaking of the movies, it is too cold here. I could not get myself out the door to go to the movies. I am one of those that stayed in with netflix. The markets were rallying quite well. Certainly a happy new year for the s p bulls. Year forappy new equity bulls, indeed. Gaining. Adding 0. 2 , new zealand back online, the nzx 50 gaining 0. 3 . The dollar trading at a september low. Poweringhe ringgit ahead, creeping closer to the four handle, 0. 7 . At korean won trading high 1062. The aussie stocks, led higher by miners. Tinto trading at the highest freeportce 2011, after wanted an extension for their copper mine. In the commodities space, a mixed bag. We saw copper lose ground. Gold still hovering, partying on. Trading at 13. 20. Afterlly could be at risk the longest winning streak since 2011. Starting the year with a bang, courtesy of the dollar weakness. s are flashing. The bottom panel you can see the 14 day index for gold topping 74. Gold bugs, beware. Samsung heavy, after cutting the asber of executives by 30 part of its ongoing restructuring efforts to stop fighting. About 0. 8 . They are forecasting an operating loss this year. Posting a two day rise in seoul. Betty thank you so much, Sophie Kamaruddin, looking at early movers. Lets get the first word news. Bitcoin bounced back from new reports thes, founder is holding a large part of the currency. Including one that launched mid2017. The founder started buying before it bottomed out in december. It is not clear if it sold yet. Gold is starting the new year on a good foot, advancing for an eighth session, the longest stretch of gains since 2011. That builds on last years 14 rise. Up,ions 14 day index was above the level of 70, that means an asset could be set for decline. European trading volumes fell as investors avoided doing deals. Form one ofbriefing the most seismic regulatory shifts in history, affecting research. Any transaction completed tuesday would have to be settled after the revised directive comes into effect. And denying involvement in the transfer of fuel to north korea after the south said they originally owned cargo, in a breach of yuan sanctions. They say it had been sold to a littleknown hong kong company, which then sold it on. Global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Yvonne President Trump and his capitol hill opponents enter the new year spoiling for a fight. Unresolved immigration, spending plans, that will shape bipartisan talks on how to avoid a looming government shutdown. Jodie snyder is here with the latest. The white house budget, legislative directors, they are meeting wednesday. What can we expect . They do need to settle this. January 19. They need to do a longerterm effects. Ine leaders, democrats particular, want to add things like immigration, what do you do about the undocumented children ca, which the president has said congress should settle. They are dealing with a spending, broader policy issues will be later. The president is set to meet at camp david with some leaders this weekend in maryland. Apparently they are not going to discuss their broader policy goals until the republican retreat later in january. Yvonne we ended the christmas break with the miracle, as they were calling it. Of there is still a lot unfinished business. What unresolved issues do you expect to surface in 2018 between President Trump in congress . Jodi they have immigration. There is the issue of the debt ceiling. They will have to raise the debt ceiling before march. Now the treasury is operating under extraordinary measures. No one thinks they are going to put the debt ceiling at risk. Although in the past when this has come up, sometimes people have tried to tie things to that. And it is an Election Year. Historically, Neither Party wants to do big things in the Election Year because they have to focus on campaigning and dont want to bring up cant contentious issues that could complicate their campaign. Betty we talked about north korea in the new years address. Seemingly to extend this all of branch to their neighbor downs ranch tod this olive b their neighbors, down south. Jodi President Trump has not said if the u. S. Will participate. He only said, lets see. Kim rocket call man, and seemed to disregard the talks. Is no expectation the u. S. Is going to participate. However, it does put pressure on, if north korea and south korea are talking to each other. It is a development he cant ignore. We will be watching that. Itsfinancial dropping moneygram merger plans after regular after regulatory hurdles. Yvonne healthy outlook, christian de guzman talks about sovereign risks. This is bloomberg. Bloomberg. Yvonne this is daybreak asia. I am yvonne man in hong kong. In newi am betty liu york. Global expansion likely to continue this year, according to moodys. They expect global gdp growth to remain above 3 . Joins us nowguzman from singapore. Christian, overall, you expect , especiallygns asia, to maintain a stable outlook . Christian that is right. Currently we have almost all of s in asia with a stable outlook. The exception are 3 a negative outlook on sri lanka. And a positive outlook on vietnam and indonesia. We do currently have a stable outlook. We have beenrse, talking about this the last two hours. Risk out there could jeopardize that outlook. I want to tackle one in particular we have been talking ad nauseam about. The pulling back of the stimulus by the central bank, and the possibility we might see inflation overshooting the target. Do you see that as a big risk at all, to be sovereign . Risk. Ian it is indeed a it is more manifest in those externally reliant. Those who are more susceptible to Interest Rate shocks, given their connection to Global Capital flows. Those less susceptible are those more reliant on domestics for financing. Those are on the lower end of the ratings scale, typically. Those are going to be more susceptible to Interest Rate shocks, if indeed global inflation would be higher than what we currently expect. Currently we are only looking at a slow, gradual mobilization of the Global Policy rates. Yvonne how sustainable is this reflation theme . We are talking about tax reform passing in the u. S. , europe, asia firing on all cylinders when it comes to the economy. Which country do you see getting the most fiscal strength . Christian one of the key themes we have looked into, apart from the global theme you mentioned, very strong and synchronized Global Growth is, reform is going to be quite patchy. There is an argument that countries can take this opportunity against the backdrop to pursuegrowth reform. What we are more likely to see is less of a strong trend toward strong fiscal reform. I think there are a couple countries where we could see a very strong momentum toward that, those fiscal reforms. Not really in asia. One thing we also want to see is over the medium to longterm, where fiscal is formed, is likely to have an impact on the main trajectory. Yvonne taking a look at reforms in particular in asia, it remains the focus for 2018, given beijings efforts to deleverage. How serious do you think beijing is on this front . We have seen this pickup in yields, when it comes to the sovereign bond market, as well. What would cause you to put china on the credit watch, negative . A1s shows, moodys had that rating. What would change that view . Rating alreadya1 incorporates risks with regards to the leverage, which has already been incorporated in our downgrade last year. The way we see this rebalancing youre talking about in china, there is a tradeoff between stabilization and some of the risk related to the highest leverage. At this point, we do think the chinese authorities do have the wherewithal to balance these two needs, to keep a rise in a systemic leverage maintain, while also maintaining stable growth. Yvonne also on that front with that a1 rating is japan. There is a lot going on when it comes to the fiscal discipline side of things, seems to be lacking after the elections. All this talk of fiscal policy, if you look at japan. There is also the prospect of a hike in the consumption sales tax. Does that change your view, from a credit perspective . From the credit perspective from japan, we recently affirmed japan a1 rating as the same as china. What you want to see, what you would look at in japan is the longterm trends. We look at the fiscal deficits, i think much is lost in terms of how the market perceives system discipline. We have seen a fairly good tax record of reduction since the beginning of the decade. The abe government has done well in terms of meeting certain fiscal targets. One target likely to be missed is the primary balance target, by 2020. The market is focused on this. The consumption tax hike in 2019, while it was a key pillar of the recently concluded elections, it is not a slamdunk. Probably not a chance, it could be delayed look delayed yet again. Betty you are watching risks around the world. These last few days watching protests in the streets of iran, started off as protests against economic oppression, moving on to political repression. Do you look at that and say, that poses somewhat of a risk manyin asia, as well, as governments try to push through fiscal reforms . This actually falls into one of the key things we covered in our recently published global sovereign outlook. We covered a couple themes which economicthe very sound and Financial Fundamentals and strong growth, the mixed prospects for reform. The relatively high but stable debt. The last thing we had covered risks. S team of with iran, that adds to this risky backdrop for sovereign risk in the region. Certainly what happens in iran could have further implications in terms of what we are seeing already in the gcc. Betty before we go, i want to pull up a chart, g btv 2452, which shows you the world growth forecast. The world gdp forecast, which continues to show above 3 . I know you have your own forecast. We have been talking so much about risk and warning people, i hope people dont get scared away going into the new year. Is there a chance we might actually see an upside, that we might succeed with some of these forecasts . I think there is upside risk, which is in line with the chart you have just shown. One thing we are considering countries in most the g20 are growing above potential. If we do see some more Labor Productivity trends, wage Growth Trends will come in stronger, certainly we could see there would be upside risk not just to the g20 and oecd, but to Global Growth as a whole. Betty thank you so much, christian de guzman, Vice President of moodys investor services, looking at sovereign risk in the new year. Populism, tribalism, anarchy spreading across the world. Blackstoneording to the forecasted that would propel oil to 80. This is bloomberg. Yvonne this is daybreak asia. I am yvonne man in hong kong. Betty and i am betty liu in new york. Ken griffins 15 billion hedge fund may expand. We are told said adel has been in talks to higher people from the Algorithmic Trading division. He announced he would close his firm after failed credit. Yvonne blackstone group, speculation will get ahead of itself in 2018, leading to a correction of the s p. The benchmark, will end the year above 3000 as profits rise and Economic Growth approaches 4 . They also see oil jumping above 80 as populism, tribalism and anarchy spread across the world. Betty alibaba jumping the most since june, on a report its mobile browser was used by more people in asia and indonesia last year than google chrome. They have 51 of the indian mobile market, compared with chromes 30 . Uc browser led chromic in indonesia during the same period. Yvonne amazon the shakeup of the retail landscape continuing in 2018. They said amazons move up for target, following the 14 billion acquisition of whole foods. They said that they are an ideal offline partner, and he adds the timing might be difficult. The value is easy to see. The future of retail will be a combination. I would bet that investors view takeaway, amazon is taking over the world, and that is a good thing. Something else rallying with oil, oil hitting 80 this right, listingis his year of surprises. He says populism, tribalism, anarchy would spread across the world, lifting oil prices. Wti crude is pushing 50 a barrel. The level that 2. 5 year highs. 80 would be a 30 premium to today. Remy inocencio has the story. Here is the bloomberg chart we need to know in oil. Ramy i will throw in one extra bloomberg terminal chart. This is a look at an index, wti crude. Right now it is 60. 42. We are talking about the 80 mark. The last time we saw that was 7 of 2014, november closing at 80. 10. More than three years ago. Looking at the bullishness we closed 2017 with, we might get there. Take a look at g btv 1498. Unprecedented optimism is what we are talking about. Net longs for wti crude in white, as well as brent crude, is nearing one million. This is its highest ever since we have been tracking this. Because of what has been happening this past quarter, because of opec. Those curbs pushing ahead, pulling back in terms of supply. Saying of june we could continue to see bullishness. But by the halfyear mark, there may be some wondering what will happen afterwards. That is when opec comes together and says, what will we do when the current opec curbs to do expire . If they do not do well, oil could flood the world again, and oil prices could come down. To g btv 2423. Boil,pec coming off the the blue line is u. S. Weekly crude exports rising higher over the past three to four months. Now up by 1. 2 Million Barrels a day. Looking ahead, this could go higher. Ihs expected to go to 10. 5 Million Barrels every day. 02 million, 10. Barrels a day. G btv 8881, this is what opec tried to do in response to the cut, this is what the u. S. Did. Opec not getting what it wants, and shale production getting higher and higher. Yvonne ramy, thank you. Disappointing scripps, fatigue, disappointing sales, makes 2017 obama for hollywood. This is bloomberg. This is bloomberg. Yvonne 8 30 in singapore, a sunny start to our 2018 week. We are half an hour away from the opening of trading in the lion city. I am yvonne man in hong kong. Betty i am betty liu in new york. Lets get to the first word news. The Trump Administration says it may impose new sanctions on iran as a number of people arrested in three protests. The white house says they are keeping their options open after President Trump said it they are against a brutal and corrupt regime. Nikki haley wants emergency session of the security council. Great bravery for the iranian people to use the power of their voice against their government, especially when their government has a long history of murdering its own people who dare to speak the truth. An internet entrepreneur is defined china, refusing to turn to return to the u. S. To help a company he created pay off debt. He said he is staying in america to work on his electric car start up. He said his wife and brother are in the power to take care of the shenzhenlisted company. Says Driverless Cars are set for lift off, first in the u. S. After the next couple years. Fueled by the race to dominate by tech producers, it will top 20 million in sales by 2040. 2017 proves tougher, hollywood. Moviegoing falling to the lowest level in a generation. It slumped to 1. 2 5 billion, the lowest since 1992. It is a different story in china, where sales were at a record, as local blockbusters world. It reflects the rise of chinas strength. Global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Thank you. Time to see how the asian markets are shaping up this morning. Lets get the latest with Sophie Kamaruddin. Sophie asian stocks are setting gains at record highs, even with japan offline. There has been dollar weakness going into 2018. We are seeing weakness in the kiwi dollar. After testing the high of 1065. The yen trading near a 2. 5 year high. We wont see the effects until japan comes back online thursday. I want to highlight what is going on with of the aussie dollar. It is at a 10 week high, and the aussie 10year note. Extending gains. Going back to what is happening with the korean won, the recent gains for the currency are showing the dollar selling against the won maybe overdone, with the index for the pair near a fiveyear low. Citigroup is saying you should ignore that, as the korean won has a strength room to strengthen. , which isn the kospi rising for a fourth straight day, most Industry Groups losing ground. Materials and i. T. Helping to support gains for the index so far this wednesday. Steel miners leading the materials space. Pushing theothers sector higher. Betty Sophie Kamaruddin with an early look at the markets. 2017 proving to be a tough year, especially for hollywood. Moviegoing falling to the lowest level in a generation. Admissions in north america slumping to 1. 2 5 billion, the lowest since 1992. Joining us from l. A. , our reporter. What is the cause of this . Bad movies or people being lazy . What is it . It puts perspective what is has been going on. We were ported over the summer, one of the Lowest Box Office draw in a decade. Sequels not doing very well, disappointing. Not we have been suspecting as many people were going to the movies is because of netflix and amazon and other streaming services. Put is what these numbers in stark relief. In a generation, attendance has not been as low. , and an estimate for now maybe we will get confirmed numbers later in the month. But a gives us a good idea of what the industry is struggling against. Betty is it expected to continue into 2018 . Anousha it is hard to predict. Some analysts are predicting the box office, by dollar amounts, should grow. There are more marvel films, that should boost. There are attendance by cinema chains to improve attendance by doing tests on pricing, making it cheaper to go at some times, creating Subscription Services. But there is nothing to suggest the trend of people staying at home to watch a Subscription Services will go away. A very different story from what we are seeing in china. What exactly is china doing right at the moment . Anousha it is still a growing market, while the u. S. Is mature and much of the u. S. West is mature. It is a relatively new experience for china. Star wars is opening there this weekend, the latest movie. The first star wars, which came out here in 1977 had not been shown publicly in china since 2015. It gives you a perspective how new this market is to moviegoing and movie fandom. Cinemas still adding 20 every year. It is very much in growth day with expansion. It is really spreading through china, this greater activity toward going to the movies and growing local production. Local films like wolf warrior 2, really a rival to hollywood offerings. Yvonne it has been quite remarkable. Thank you, our Bloomberg Media reporter joining us from l. A. Why our next guest sees more m a deals. When it comes to china and this race with the u. S. Tech. This is bloomberg. Yvonne this is daybreak asia. Betty i am betty liu here in new york at new york. To winancial failed Regulatory Approval in the u. S. And had to offer 18 a share. Moneygrams shares plummeted in extended trade. Our reporter joining us now. What happened and how big of a blow is this to ant financial . Significantretty blow to ant financials international expansion, especially in the u. S. We observed there would be synergies between moneygram and ant financials asia business. They were confident, all the way up until the last moment. See the company sees no way the Trump Administration has approve this deal, ant agreed to pay 30 million as t of the moneygram termination agreement with moneygram. Betty they both thought it would go through. Will this change Investment Strategies for Chinese Companies in the u. S. . It is a signal for all Chinese Companies, going forward. Of trumps as a test approach toward Chinese Companies. There was a chipmaker a Chinese Estate Company wanted to own earlier. They will see this as a signal. Yvonne in terms of International Tragedy strategies, what are they for ant financial . Lulu they have to be more focused on asia, going forward. Not a good. , it is time for them to make International Expansions on that front. Even if they do, it would have to be via cooperation. Yvonne lets get more on the m a outlook from china. From the head of m a on china renaissance. Also worked on the merger of gogovan. Thank you for joining us. It seems this is a growing fame when we see to the u. S. , the regulatory backdrop getting tougher and tougher for chinese Tech Companies. Is it the start of a trend, and while this will this shift . Thank you for having me. It is a timely topic right now. Over the last year, a lot of if capitald us, control would affect Technology Companies going abroad. It has less of an impact on the geta side because they offshore capital, they are strategic in terms of what they look for. That is not an issue. But over time, in issue is what we mentioned. Especiallyuntries, for transactions that target a sensitive industry, they are more and more concerned on limitation on what chinas companies can do. From our conversation with our the Larger Companies understand the situation and are evolving in terms of their approach. I agree with some of the things we discussed just now. They are doing more strategic alliance. Even though there is the news of this morning, there is a lot more. [indiscernible] think it will start a trend that people wont do things in the u. S. A lot of Technology Companies are becoming increasingly global. In terms of their approach, it may be less direct. Have seen certainly these chinese Tech Companies try to establish this International Presence from going to markets like the u. S. Do you see the possibility of m a going in the opposite direction, where Chinese Companies become the target . Jeremy we think it is a possibility. The history of chinas internet, we think the trend has been [indiscernible] they are very strong in their capital, very sufficient. [indiscernible] there are still a lot of opportunities for Chinese Companies to go abroad. Yvonne the u. S. Is not as attractive, are there countries that might benefit from this . Last year wethe have seen southeast countries like indonesia be a very popular place for investment. To them grab singapore, indonesia, and we also see alibaba acquiring. There has already been a lot of focus investing in that part of the world. Overall, i would not say the u. S. Is becoming a less attractive place. But the kind of deals happening there will be in the minority. On the partnership side, tencent has invested in tesla, snap and so on. Those types of deals will still probably happen. Betty more partnerships than actual buying of companies. Of the m act most will become some traded in a tech area in asia . Jeremy we think there are two areas that have been very active. One is tech, obviously. And the other is ecommerce and retail. We havey in the u. S. The amazon deal this year. But chinese ecommerce penetration is a few years ahead of the u. S. We have seen online and offline deals happening 2014 with alibaba investing a lot of this Offline Retail assets. That continues toward this year and we expected to continue in 2018. That will be the active part. Ai and technology, it has been the focus of a lot of companies in china. Many need highTech Companies to drive their business and expand users. We think that will continue to be a big part of companys investment. Betty it has been quite a slow down here in m a activity in the u. S. A lot of people contribute that to uncertainty over a policy. We did not know where taxes would go. We finally seem to know that. Do you expect to will outpace the u. S. In terms of m a activity . Or might the u. S. Catch up . What is your view on this this year . Jeremy overall we think china continues to be very active. Things politicalwise have been very stable. The growth has been strong. Companies are looking at the growth side. 2018,g at next year, besides technology and retail, we see investment activities. Another part we expect to see activity is entertainment. In china, the number of Internet Users has grown to a peak. All the companies are competing for users time. All the way from movies, long videos, shot videos, music, literature and so on. All these companies are fighting for limited use of time. We expect to see more consolidation happen as the User Experience improves. Yvonne what does it mean for the market . They are proposing to change shares, how could that be attracting more chinese firms to list in hong kong . Or is the u. S. Still more attractive on a valuation perspective . Of hongall the talk kong ipo reform has been positive in terms of m a dialogue. Over the last year we have seen a lot of companies being more proactive in hong kong. They view it as more certain and valuation has been getting healthier and healthier as the Hong Kong Market goes up. Asset reforms keep happening. We hope more and more companies see hong kong as a listing value. Concerned about investment. It becomes more attractive, the Hong Kong Market. Yvonne a busy market for us. Jeremy choy, thank you. You can get a roundup of stories to get your day going. Bloomberg subscribers go to dayb on your terminal. It is also available on the mobile anywhere app. Get news on industries and assets you care about. This is bloomberg. This is bloomberg. Yvonne this is daybreak asia. I am yvonne man in hong kong. Betty i am betty liu in new york. The e. U. Revised transparency rules that come into effect wednesday. One of the most significant changes the business and financial world has seen. Here is a look at what these rules mean. Ii, the markets and it isial directives two, a second a push of regulating the markets, rewriting the rules for how information is shared come up prices are set, even how brokers pay each other. It starts very soon. In 2007 harmonized rules for stock trading. Then, the financial crisis hit and more was needed. They extend the harmonization beyond equities to commodities, bonds, derivatives and beyond. In brokertill traded to brokerdeals. Gil he would force much to open and regulate the platform. With automated trading making it hard, and many crashes blamed on this, algorithms must be registered. And there would be Circuit Breakers to shut them down. It is not just machines under scrutiny. Research provided by trading commissions would have to be paid for separately or not at all. What happens in europe does not stay there. Regulators will extend to any institution trading european securities, no matter where they are. It will not be cheap. It will cost firms over 800 million, if the systems are to be compliant. The clock is ticking toward mifid iis january deadline. Yvonne lets see just how far these expanded regulations are reaching. Lets get to bloombergs asian finance reporter. The big question is how markets will prepare for this. What might we see here in asia . It is fairly interesting what could happen here. Throughout the asiapacific it will be more the commercial impacts from the new european regulations. Anyone who manages a Global Portfolio will have to get their research and trading costs unbundled from their brokers. Even here in australia, capital has had that difficult discussion with brokers in australia. Look, you have to unbundled these Research Costs or we wont deal with you. As a result of that, they see their costs falling 30 to 50 from last year. It is having a significant effect. Yvonne could be a potential loser on this front. Find this more beneficial, and who will lose out . Matthew there is no doubt it , that aree buy side looking like winners out of these regulations. They will have more money in their pocket, and more money for their client. We could seer end, smaller managers pretty happy, getting more corporate access, rather than a big Investment Bank like ubs coming in. Managersller asset will get more access to the companies themselves because it ubs will have to charge their clients for that access. Hand, analysts are moving from the sell side to the buy side because of this. Going to private investment houses because they can do better research. Interesting, Commonwealth Bank of australia has picked up the hail mary. Economist, cbas Asset Management arm. He will be starting next week. It is interesting we see someone from the buy side coming to the sell side. Betty thank you so much. Have breaking news from trumps twitter page, responding to kim jongun, saying he has his hand on the Nuclear Button. President trump also tweeting out on his own page a few minutes ago, north Korean Leader kim jong on just stated the Nuclear Button is on his desk at all times. Depletedone from his and food starved regime please aform him that i too have Nuclear Button, but it is a much bigger and more powerful one than his, and my button works. Oh boy, yvonne. Just when we thought there were , we see that tensions ratchet up again on twitter. Of words and war of buttons between north korea and the u. S. This is very contrasting from what we heard from kim jongun during his address, offering h, willing toanc talk in the lead up to the winter olympics. If theis all means, and u. S. Will be joining in on those talks as well. Betty so far we are not seeing a huge reaction in either the korean won or kospi. We have been here before. Maybe it takes it a little to the edge. That is it from daybreak asia. Our market coverage continues. This is bloomberg. This is bloomberg. Tech going into 2018 with the enthusiasm displayed last year. Bitcoin is shrugging off a hangover and trading at 15,000. The Founders Fund is a big investor. Financial dropping its plans for money grab. Running out of credit. I am in sydney. Travel and populism. The risks facing the Global Economy in 2018. This is Bloomberg Markets asia