Transcripts For BLOOMBERG Bloomberg Markets Asia 20180227

A policy decision out of the bank of korea staying on hold as expected. Surveyed that we stated that the bank of korea would stay on hold at 1. 5 . Who succeedsas to the governor as this was his last decision as the governor of the bank of korea. There has not been a lot of consensus over who replaces him or if he gets reappointed. Take a look at this chart. This is the conundrum they are facing. We had the rate rise in november. Export growth is also coming in a little bit weaker in terms of that last read that we had. Debt is oneath of the conundrums that bank of korea is facing. Banks, aany central fine balancing act. It is largely down to the fed. Take a look at the market reaction. Lets go over to sophie. Sophie you have text talks global stocks are rallying. Stocks in tokyo are rising. Have all of these stocks rising for a fifth straight day. Morgan stanley cannot a report saying that lithium prices will peak this year and have by 2021. An eye on keeping chinese lithium stocks at the bottom of the hour. I went to be keeping an eye on bbke bonds following the decision. The currency is flirting with the 1070 handle following the haley from governor lee. Wear at aeporting to trio of old iphones. Taiwanese apple buyers on the rise following that news. Barrow euro is better, apparently. We will get to the fed in a minute. These two Central Banks are very much connected. Where the bank of korea goes next. Leesprises for governor presumably last meeting. N a governor of the bank of korea has not been reappointed since the 1970s. No suspense surrounds his decision. The be ok was not expected to move bok was not expected to move. Topeka and show a little bit less growth in the second half to peak and show a little bit less growth in the second half. Some transitory factors. Meanwhile, the white line is the key rate under governor lees fiveyear turn. That was a record low in november. Back up to 1. 5 . I think it is also interesting that as the bank of korea made this move, Consumer Confidence fell in korea for the Third Straight month. Beingnds of things are decided here, it is definitely a. Ecline is since november up in confidence coming back down. For the consumer, they seem to be tracking the change in confidence as it occurs. Bank of korea poll finds that the threat of antidumping terrace from the u. S. Onto imports from south korea, one of the big factors hurting, often the potential for faster hikes. The expectations for the economy in six months, the Current Conditions are all down a bit. Reallyk of korea cannot control of protection and trade press from the u. S. I read that one of the analyst was saying that it essentially does not matter who replaces governor lee is they will be dealt the same deck of cards and probably the same responses in terms of how they are forced to act depending on where the fed goes. 314 was not the last times we saw an emerging nation, certainly a lot of countries where the currency is so important to their economic fortunes, like korea. If the fed makes a move that is rapid, right now asian sure there is like to be some gradual rate hike, if it were to speed up, this is the kind of thing that could put them a bit more on the defensive, especially in countries who are viewed as more dependent on foreign capital. Countries like india, philippines, indonesia are seen as some of the most vulnerable. Theyre the ones whose currencies suffer the most right now. Haidi that is right. Have beenegists saying dont worry about the next round of the taper tantrum. Unexpected to hear anything that could create some sort of voluntarily volatility when it comes to asian markets . Thinking he is in u. S. Markets. He is going up before the house of Financial Committee as chair of the federal reserve. We already have the Monetary Policy report from friday. The question of course is can jay powell stay on janet rate as much as economists say they will . I like to throw this in the mix because were looking at the blue line and inflation coming steadily down to 4. 1 . How these curves go in the weeks and months ahead is going to determine how aggressive jay powell has to be. Of the st. Louis fed speaking at the National Association for business economics today says that his is that the fed could go a little too far and raise rates a little too fast. That is the kind of concern that if that starts spreading around the world, i think it is what you reverberate in a lot of markets, including asia. Haidi so interconnected. Thank you very much. Powell ahead to jay turned were talking more about boks decision. That is coming up and a little more than an hours time. Lets get you the first word news. He is sticking to a stimulus plan. He told the European Parliament that economics lack larger than the thought and the bank must continue to provide the accommodation required. We are generally more ,onfident that our inflation that inflation is proceeding towards our objective. We also have to be persistent and patient because the underlying inflation has not shown any convincing assigned of an outward take. U. K. Opposition leader has raised the stakes by confirming a labour party deal with the eu on Customs Union. He announced that over the clear divide with theresa may. He said he is putting people and the economy before ideology. They would seek a final deal that seeks full access to European Markets. With no new impediments to trade and no induction of rights in standards and protections. Regulators in japans are preparing a regulatory overhaul that could lead to a shakeup of trillionns 10 sector. That would allow emerging companies to compete directly with traditional institutions. The new york state comptroller said that new york state did nothing to prevent the Sexual Misconduct of the steve when wynn. A complaint in nevada claims of that the board was aware that at least since 2016 of the allegations against him. Global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. thanks. Still ahead, alibaba follows a big player in chinas delivery market. Details later on in the show. Up next, we will be meeting new zealands financial minister. This is bloomberg. \ haidi this is Bloomberg Markets asia. Apple is set to be readying three new iphones at this year. Sources say they want to attract consumers who lack the multitasking abilities while also appealing to those who want a more affordable top and iphone. Were also told that plan could change. Google has launched its latest android operation. It is designed for emerging markets where most of us have less month memory and slower connection. Says it is a stripped back version and that means the android app can launch 3 faster. Sonys new flagship aims to put some digital cameras to shame. Record video which the Company Claims is an industry first. They face some top opposition. It did not rank in the top five in terms of mobile sales in the 2017. Ter of 4017 kiwi dollar is selling across the board. The largest for any january going back to 2007. Iette imports surged 17 . That resulted in a trade to deficit. Lets bring in new zealands minister of finance. We have seen the kiwi recover. It is back above . 73 now. Traderd is that to manage and finance when you have a currency that strong . Country withtable good credit ratings. We are easy to do business with. I think the currency will always be something that traders will focus on. Consider conditions that are tough. It is very dangerous to speak on exactly what level you want the currency to be. A strong new Zealand Dollar reflects a Strong Economy. Amateur the central bank will continue to keep a focus on making sure that the economy stays in balance. Juliette you did inherit a very Strong Economy when he took over in october. How impacted are you buy this rating and Business Confidence . Is a threat,nk it i think it is quite natural after an election that he will get a. Of uncertainty is a new government a period of uncertainty as a new government comes into play. I believe that confidence in the overall economy will increase. We have very strong Consumer Confidence in sydney. I think is our program rose up, we will see the Business Confidence rise up. Juliette you do have a new governor taking over. When you look at the actual target rates, 1 3 , you have core inflation, how focused are you on the target . It is incredibly important for new zealand and new zealanders to manage inflation. I am just old enough to remember when new zealand had doubledigit inflation, it is not something that hits are people very well. We want to look at the Overall Health of the economy. We are undertaking a review at the moment to see how it can continue to support the productive economy. We will keep the inflation target, but we will also look to aroundce new objectives maximizing employment and making sure that the real economy is bordered by what we do in Monetary Policy. Juliette you have had a model that has worked so well, why tinker with that . There are other aspects of how the new zealand economy operates that we want to be able to support. We want a more productive economy in new zealand and move people away from investment in the productive sector. We want every path in the economic apparatus playing its role. I do think it is important that is playing its role across the board. What we do in terms of fiscal the macroeconomic environment matters as well, but we want Monetary Policy to play its part. Juliette any likelihood we will see a hike . This and commentary that you do, that is what they are saying. Obviously, we will have a new governor. He and i will sign a new policy targets agreement when he becomes the new governor. This also make sure that we are looking into the border productive broader productive economy. He is a very experienced operator and has been at the Business Bank before. He has also played a role and has a great understanding of how the economy operates. Trump held asident joint conference that they may rejoin if it were a much penalty muchbetter deal better deal. The 11 countries that remain have put together a quality deal. Opportunitiest now for our goods and services and exporters in two countries like japan and canada, the also enhancing our existing relationships with singapore and chile. With some of the suspended clauses, if the u. S. Wants to come back into the agreement, obviously they would then need to renegotiate with all of the players to do that. We would of course welcome more countries joining into what is a quality agreement. New zealand has other priorities too. We want to work towards a Free Trade Agreement with the European Union and were looking at with interest at what is happening with the u. K. With brexit. Te your government is promising a life changes including banning sales and houses to foreigners. Do investors have anything to worry about . Know, in effect we want them to invest in our housing stock. Making suredoing is that in terms of existing residual property, we apply the same rules which is that you have to have a right to live in new zealand to buy an existing property. New zealand needs and welcomes Foreign Investment and it is how we uphold our standard of living is a small country. We dont expect a sharp correction. There has been some leveling off in house prices already in new zealand as we increase supply and manage some of the demand side. We expect it to be a period of stability in housing market. Juliette that is the new zealand finance minister joining me here in singapore. Haidi thank you so much. This is bloomberg. Haidi this is Bloomberg Markets asia. I am in sydney. Lets take a look at your markers. We get another positive handover from wall street. Sophie, what are you watching . Sophie more green across the string. Screen. On aia. Eeping an ioeye buys. Are currently 16 we are keeping an eye on apple suppliers, very much in the spotlight. This after reports that apple is set to roll out three new smartphones later this year. Securitieshing kci k. G. I. Those are just too specific stocks we are keeping an eye on. We have been seeing other apple suppliers move in tokyo and seoul. Other stocks are climbing on the backs of this news that apple is looking to roll out the new iphones. We had a question as to whether or not this means of the demise of the ipad. Apple news is always capable of creating rumors in the asian markets. Changing the rules to make way for an indefinite role under the chinese president rule under the chinese president. This is bloomberg. Haidi 9 29 a. M. In hong kong. We are counting down the opening of trading in shanghai. There will be joining what is another positive session in asian stocks. With preload volatility overnight. Pretty low volatility overnight. Re looking at jody just janet yellen at 2 . Prettyell would be cognitions that the markets are watching his every move. Here in asia, we have the bank expecting it to keep rates on hold at 15 . 1. 5 . Markets consider what direction his future policy might take, given he may rule beyond 2023, you have a deduced start. Shanghai stocks are losing ground after the best threeday event since 2016. A little bit of a risk move coming through mainland markets so far. Check out what has come going on in hong kong. When it comes to what potential seems a we could look to with the economicasure, thatmation is reporting china will take steps for rural development. Fellow till the has eased following what we have heard. After posting a new business of kong led by china and hong. We do have some real estate stocks on the rise. Almost 2 . Den is up carmakers are continuing to rise after the search we saw on monday. We have tech shares on the radar. A quick look at chinese lithium miners. For them to move after Morgan Stanley that lithium prices will peak this year. A bit of a mixed bag in that space. Taking a quick look at chinese stocks that have key and or emperor and their names king or emperor in their names. We are seeing them under pressure to day up. There is a history of people betting on stocks because of the names. Haidi thank you so much for that. An indefinite presidency means that investors will find their chinese portfolios will be increasingly tied into just one man. These stocksome of market names could also add block change to their names. Implications, is there a consistency in terms of what to expect and Chinese Markets now . Sophie this is more of a longterm change. This means more political uncertainty, and that is always good news for investors. If we look at some of the other constitutional changes that have been proposed, it also means more specialized power. It could been stronger in limitation of whatever policy comes from beijing. I think ultimately, it comes down to this. You have everything tied to one man. Comingas a good policy up from him, this is good news for implementation, but if you have bad policy, then i think markets could be in a bit of trouble. Given that we know he became president in 2013 and we had what happened to markets in 2015, what does that tell us about having an approach and a market volatility or market reform . Ne 2015 was probably the most remarkable year in terms of markets during his term. What we remember is a lot of volatility followed by intervention. Think a lot of lessons that investors have probably correctly drawn from experience is that if Market Forces are moving in the direction that the if theylikes, arent, maybe they will step in and raynauds forces in reighn those forces in. Haidi what has been the back best during his term . consumption has been a big seem with the rising role of the consumer and chinas growing middle class. A lot of the consumption stocks are boost stocks. Who doesnt want a glass after work . That includes some really good truck makers. Drug makers. There are also some companies that are strong in surveillance is Public Security has also been a big seem. Theme. If you look at what has been going on since torre 13 and in particular last year, it looks like consumption is still a big theme and Chinese Markets. Haidi looking at what the next five or 10 years may look like. President s ther presidency is, could it be supported by Strong Economy . Yvonne we are still seeing signs that it remains robust. Smaller businesses report a more optimistic outlook. Financial analysts are increasingly up. The holiday has seen some disruption. Satellite imagery indicates manufacturing has eased. A man fired three years ago as the South African financial minister is making a comeback. Sources tell bloomberg he has support of the new president. The president s to announce a Cabinet Reshuffle on tuesday evening. He is coming back to his former job as home affairs minister. Former general may contest indonesias next president ial election which will be a rerun of the bitter 2013 race. He is popular and has improved access to health care and has fallen short of a promise to boost growth by 7 . Billionaire brothers have had their assets frozen in india to enforce a 540 million award. The site is started in 2008 when the brothers sold. General electric says that recent negative headlines do not tell the whole story. Structuremping its and raising accountability while also over hauling the board. Wasen buffett says he surprised by the surge ge took. Global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Haidi thanks so much for that. We have been getting some of these lines coming through from the treasury secretary. Talking about sanctions on north korea saying the treasury will announce russian the sanctions. If inflation shows up, that would be a concern, but he does not think it will are concerned yet about inflation. Joining me here in sydney. It builds on his comments a few days ago about how you can have wage Growth Without inflation. Eventually, which growth leads to inflation. So far, we have seen very limited kinds of wage growth. That in turn leads to a comment expectations for little increases in inflation of the next couple of years. Those are economist productions. The average person in the u. S. Who does expect to see inflation still rise. A few weeks out from the isloff, purdue much everyone rallying at the moment. Pretty much everything is rallying at the moment. The u. S. Dollar is not exactly soaring at the moment, but as their conviction in this rebound to you . Treasury orof the bond market, they tested the highs and yields. What we found or that there were investors that were looking for treasuries at higher yields, particularly, that was Japanese Insurance Companies at that point. European investors are also a negative environment. U. S. Treasuries look cheap in those currencies andbuyers to come into the market. Haidi a lot of people have been saying it is not about how much they go up but the pace. Is that the case . I think the fed has been very good at telegraphing their message every hikes over the coming years. It is threefor this year. Probably another free the next 34 this year, probably another 3 next year. Markets will see through the next year. You will see some less a volatile markets particularly on the equity side and they should continue to perform well. Hawkishhould he be more given that we have had this andging picture in the u. S. You see that inflation is quite incredible expected . Like the fed has said, rate hikes are not independent. The dow looks pretty good or consistently not negative. To me, that means the fed could actually i dont think they will hike four times this year, but at least two. The problem for u. S. Markets is going to be inflation and that wage data. Strong data get a point this week, do you think that would prompt more volatility . We have not seen it, but that would be another data point point toward higher rates. I think you need a few more. We have not had enough yet to make a consistent story that we are really starting to see inflation. Haidi lots more to talk about. Stay with us. Coming up, the impact of rising treasury yields on asian dollar bonds. Beforeh yield need to go investors to get excited . This is bloomberg. Haidi getting some aligns out from a statement from the bank of korea. Rates are on hold at one play 5 saying that cpr will gradually reach its target for the second half of 2018. Growth overall is expected to be in line with the january it was a little but weaker than we had expected. The bank of korea also saying they will monitor major policies. Trade there could be some trade tensions possibly ignited by terrorists out of the u. S. , but also when it comes to the one h of the young wan. Expecting that press conference from the bank of korea and about a half an hours time from now. The asian bond market gasol record sales last year. Saw record sales last year. From get some details asias credit reporter of bloomberg. What are you looking at . The treasury yields stability actually created a very good and finally last year for the asian dollar bond market to have a blockbuster year last year. Bond slow we saw the down because investors and issuers are waiting on the sidelines for the u. S. Treasury yield to settle at a more stable level. The yield for the 10 year has gone up about 50 basis points so far this year. If a company were to issue a 1 billion bond, the 50 basis point increase would mean an additional five man dollars in Interest Payments every year. That is a big increase. 5 million in Interest Payments every year. That is a big increase. 3 is what investors are looking at. Jpmorgan is said that if the 2. 86 , ifurrently at it hits 3 , it would mean such asm investors Pension Funds and Insurance Companies would come in. They could also get a credit spread of about two 2 two 2 two. 5 . Thank you so much for that. Haidi steve is still here with me. Nearing a fouryear high. We have been leaning back from a 3 over the past few sessions or so. What happens at 3 , does it go beyond that wheres that point we see demand coming back in . Most people believe that you are starting to see demand when treasury yields hit that 3 level. There is a question of there are a lot of factors that drop that demand issue. The japanese and europeans have two things going for them. One is they have to strengthen their currency which means you can buy treasuries at a cheaper cost in yen or euro terms and combined with the fact that bonds even in u. S. Dollars are cheaper because rates rose and it does represent a buying opportunity. There will come a point when the dollar strengthens and treasuries will look us cheap to four and investors as they do today. Theres not a lot of consensus as far strategy when it comes to bond markets. Morgan stanley is now saying that they put out a bullish call. I will point do you go if inflation like every other year does not materialize is this a market that now is oversold . That could be true. We are in an environment where we have not seen inflation for the past nine years. There are really limited signs of inflation. To a lot of investors, that means happily bonds are fairly valued at these levels. Whatever happens at the u. S. Treasury market is definitely going to drive global bond markets. The big problem is going to be supplied with the u. S. Running the budget deficits they are running, we will see another billion. 400 that is a lot of supply and the question is who is going to buy the bonds and what we are seeing in treasury options is the bid to cover for the amount of demand decreasing. That will be one thing that causes stress and bond markets over 2008 2018. You are saying that would only happen in china . Think china and russia we are in a geopolitical war. Now, we are in a trade war and a currency role work with china. They have a big economic weapon in their Treasury Holdings and if they want to pollute and sell treasuries, you could see treasury yields move beyond 4 . I view that as an outside risk, but it is definitely a risk for further u. S. Treasury markets. I think the u. S. Is has started the trade war with time already with the tariffs on washing machines and calling the currency manipulated. I think we have already started back. Haidi what is her best call for what an investor does in this environment . For investors, you have to decide what kind of risk you want to take. 2017. Ooks a lot like you still need to keep some money and equity markets. It is also time to take a little bit of risk off the table. Something that will perform in that riskoff environment. Views,thank you for your as always. Catch up on all of our interviews. Join in on the conversation and send us instant messages during our show. This is bloomberg. Showing increasing appetite in alibabas delivery network. Stephen is joining us now with more. We are asking the question. Very hungry. He is trying to fill up his logistics empire to the phil and to End Solutions in the alibaba platforms. He is setting up these new retail platforms where he wants to use the supermarkets as settlement centers and also build out warehouses to get goods to peoples homes. This is the another link in the chain in providing that last mile service. Ofis a Network Across china those motorcycle and scooter food delivery services. What we do know is that alibaba had, as of may last year, a 22 stake in this company. People familiar with the situation, this is not the main public, people familiar telling bloomberg best alibaba has got out the other major investor. Nonstrategicng in vectors ventures. Alibaba is valued at 6. 5 billion u. S. Visit tells you it is not a fragmented market anymore. Baidu has exited. In yet another aria of the chinese economy, you have the both oftech titans are them are going facetoface. Another piece yet of his grand plan to connect online with offline . Yes, he has been trying to i a different portions of his Logistics Network to fulfill this endtoend solution. They had a thirdparty affiliate which last year, they basically brought it within the fold. They bought it. They are also one of the largest investors in best. They have that and they are also building out these warehouses. This motorcycle or scooter network of food delivery companies. This is just another piece of the puzzle for him. Haidi thank you so much for that. It is all coming together for him. Coming up, we will be talking about the bank of koreas Rate Decision and what it means for the new governor. We will also be talking about who could be his successor. That is later in the show. We will be hearing from the eu trade commissioner talking about these challenging environments that we are facing when it comes to global trade. Whether the wto is being undermined and what we can expect as part of a brings deal. This is bloomberg. Haidi it is almost 1 00 p. M. Here in sydney. 9 00 p. M. If you are watching in new york. This is Bloomberg Markets asia. Asiapacific markets extending those gains. Powellsaiting jay first testimony. His choice of language is crucial. Early indicators suggest that china is maintaining momentum after the Lunar New Year. Business confidence is growing. All is well its seems when it comes to the asian equity session. Getting a positive handover from wall street. We did get the bank of korea no change as expected. Waiting on details in this hour when it comes to the press conference. Potentially looking for clues when it comes to a succession plan. Expecting essentially a continuing relation with janet yellen. Some investors are certainly sidelining themselves with a bit of caution going into these two days of congressional testimony. Lets get it over to sophie for how the markets are faring. Sophie asian stocks are moving higher, led by japan and australia. Indonesia joining the fight. Check out what is happening on the mainland. Business markets are digesting what the shape of his future policy may take. In hong kong, shares are climbing as property and telco rise. Jumped 3 after its results. Look at what is happening with chinese bonds. We are seeing yields continuing to retreat. Switching now to take a look at the korean won which slipped below 1070. Bok andthe be ok discussion. Gained 9 over the past year against the dollar. This buy that many experts, more expensive trade is not suffering just yet. We have to bear in mind the Bigger Picture when it comes to the wo. N. It is still weaker against most of its main trading partners. This means that chinas shipments are not becoming as pricey everywhere. I want to highlight the yen. It is holding just below the 107 handle. Several analysts see a move toward one of five. His is japanese exporters she youyo to be are seeing foreign that lowering by japanese investors. Theyre still pondering that question as to what point you need the yield to be at. Aul mario has told you lawmakers that he is sticking to his stimulus plan. He says he is not ready to reduce support for the euro areas despite increasing confidence that inflation will pick up. He told the European Parliament that stock may be larger than thought. We are generally more confident that inflation is proceeding toward our objective. We also have to be persistent and patient. The underlying inflation has not shown any convincing sign of an upward take. Aul u. K. Opposition leader has raised the stakes in brexit by concerning the labour partys support to raise a deal over the Customs Union. Corbyn says he is putting people in the economy before ideology. Labor would seek a final deal that gives access to foreign deals. With no new impediments to train and no reduction in banners and protections. Paul regulars in japan are planning a regulatory overhaul that could lead to a shakeup. The ssa is but examining potential changes in the legal framework. Allow emerging companies such as Tech Startups to compete directly with traditional institutions. The new york state comptroller resorts board of wynn did nothing to stop he allegedly Sexual Misconduct of steve wynn. Says members were complete complacent with his behavior. A complaint to the Nevada State Court claims that the board was aware at least since 2016 of the allegations against him. Global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Haidi thanks for that. Chinas growth momentum is maintaining its good start to 2018. That is also despite distortions caused by the Lunar New Year holiday. It is always a seasonal warning that we get, you take this with a little bit of grain of salt given the different dates that each Chinese New Year every year. Probably a pretty decent grain of salt. Seeingdline readings are pretty upbeat. No indications early indications are that they are holding up ok. It is hard to get a gauge on where the worlds second biggest because theeading Chinese New Year puts a big hole in the economic calendar. Luster, it was january, this year it was february. The Bigger Picture seems to be that the economy is doing ok. Expect aconomists continued gradual set down to that 6. 5 growth level rather than the robust we had last year. This what does this mean for xi in the fact that he is sticking around . Nixon,o quote richard near range, no change in terms of where the economy is headed. We know his narrative. Poverty,ut eradicating pollution, and putting that in the economy. What is it mean for policy . It might lead to an erosion of that narrative. It might lead to alternative viewpoints heard that the longerterm story. We just of no we just dont know. Haidi this is really painting a beautiful picture of the synchronized Global Recovery in export growth and trading intoers and feedback chinese export growth and creating that pickup when it comes to pmis. This is happening despite the strength we have had in the u. N. Are we seeing a decoupling when it comes to currency of the exports . Above. T is all of the the politically sensitive cross is the dollar. China does not just trade with the u. S. The yuan gains have not been significant against the euro. In gains have not been gains have the un not been significant against the euro. The reason exporters are able to write up is because of that. Trongest in christ pick up another expectation of a new model from apple, that improves chinas export story. Right now, it appears that sentiment is ok. If the global story were to slow down, perhaps that would start causing pain. Haidi thank you so much for that. We have china pmi coming out later this week. Still ahead, the latest on brexit as labor raises the bar in the eu. We are speaking to the former trade commissioner Peter Mandelson later. Next, talking about what asian Central Banks should pack for the next hike. This is bloomberg. Haidi this is Bloomberg Markets asia. Im in sydney. The bank of korea has left Interest Rates unchanged. Jay powells first Public Comments are tuesday. Lets start off with the bank of korea. We are expecting the press conference within this hour. Their prelimited in what they can do from here in terms of what you consider household levers and what he considered the kind of weakness when it comes to inflation. How does that play to one of the challenges for whoever the new governor will be . Korea think the bank of will take a very cautious approach to any monetary tightening. Inflation is still contained at least for the time being. There are still quite a few out external risks out there. In terms of how much pressure there is to follow the fed, is that largely out of their control . Would you see the bank of korea being forced to move as well this year . Foresee to hikes this hikes this year, most likely to take place during the second and fourth quarters. The most likely timing would be we 24 policy meeting because will have seen a pickup in inflation by then. Also, the new governor will have already settled in. I think the time is right by then to do another hike. This i want to interrupt charge. My question is whether we are over the best of it when it comes to growth and south korea. We saw in the bank of korea statement saying that the january reading was putting much where they expected it to come in at. This chart shows the slowdown when it comes to capital expenditure. That weekend as low as 10 . The investment has been a major driver for growth and south korea. This is give you a warning sign . I think corporations in korea has been really benefiting from the favorable economic outlook. There is solid domestic demand and also the external environment has been very robust because of a pickup in global trade. To pick up an investment in a productive capacity. That is what the chart showed. I think the slowdown is more of a base effect. D inad a week weak perio 2016, and therefore growth was very strong in 2017. I do think investment will remain very robust over the coming quarters. Previous guest said that we are already in a trade disintegration and trade relations between washington and beijing. Do you agree with that and what are the implications as we take a look at some of the terrorists that have been put out there and are potentially yet to come . Tariffs that have been put out there and are potentially yet to come . I do think that global trade production is one of the key risks out there. Especially for south korea, that is a very export oriented economy. I will keep a close eye on the three negotiations of the Free Trade Agreement between the u. S. And south korea. I will have a big impact on the south korean outlook. It is definitely something to keep a close eye on. Haidi appreciate your time. Head of asiapacific economics joining us there. Also looking at some of the headwinds for asia broadly. Watch us live using tv. Also catch up on previous interviews. You can also dive into any of the securities or the bloomberg functions we talk about. Become part of the conversation. This is for bloomberg subscribers only. This is bloomberg. I really dont have any major risk of what keeps me up tonight. Old price might say is one of the things keeping and i on the overall global events. You are likely going to see production going forward. The gold priceat over the last five years, it is going nowhere. You have had all kinds of industries exploding and the gold price has fled. Paintis like watching dry, why would you get excited . How is inflation settling into the system if it is there. We get to inflation levels are over 3 . Haidi some Mining Executives they are giving us a their views from the mining conference in hollywood, florida. We spoke to jacob climb about plans for the companys growth. If history is anything to go by, that is a real risk. We are seeing growth for growth sake is a story. Price used to be 1800. The last time gold prices peaked. Haidi i think youre not the only minor that has been saying that. One of the things of that arises is whether or not shareholders will give you that kind of growth. Are you feeling much pressure from your investors to grow . Think the challenge for the gold industry is that Gold Investors are happy, but we have to win back the trust of generalist investors. Theres a hole a of mining and resource specialist investors at this conference. You dont see some too many generalist investors. We need to demonstrate that we are profiting sustainable companies. That is still a bridge i think we need to cross as an industry. Evolution would certainly say that we are there and we are demonstrating that, but it is still hard to get the attention of the generalist who is still bearing the scars of the last time the gold price rose. Want to see some growth, and i know that you have been more recently shedding assets more than buying them. I still looking at buying things to improve the portfolio . We are. Our assets are undervalued at this point of the cycle. We would say that we would do anything that would improve the quality of our portfolio by that, we mean mine life and cost of production. In 2015, they were, but not anymore. The other thing is where you prepared to make a geological call that there is more in the ground the what you are buying today. Areaisnt it that is on that requires a geological perspective and is some risk. With that rollout any kind of rollout any kind of interest rule out any kind of interest . My knowledge is that it is not for sale anymore. Think they said publicly is that they would be open to selling it at the right price, but there is no active process. Itwe would be happy to buy if they were a credence in shareholders. A credence to our shareholders and what it be situation where the gold price is 1700 us tell you dollars today . Ready think that asset works . Have no idea. Paulson and company is trying to establish Shareholders Councils to rein in the bad behaviors from mining companies, what do you think . I think they highlighted a ander of very important valid points about the industrys behavior. I think it is up to the industry demonstrator and the longterm. There is some risk that we will get back into the growth mode. Know paulson the well and we have some empathy with their that a lot of capital was destroyed during the last cycle. We are getting information that governor lees press conference has started. His a statement to say that the economy is predicting steady growth. A trend of solid growth for south korea. About and accommodated stance being maintained with inflation expected to be between 1 1. 5 . we are getting these lines here as they become available. The eu is under attack again for one of its leading shareholders. Expected losses are quite shocking. Goldilocks says the mounting problem promotes mounting pressure under unwitting shareholders. Noble will report earnings on wednesday. The completed transaction would see it give up. It is part of an ecommerce business but is also operating. Nd, indonesia, in malaysia sellingckers benefit by shares. The Venture Capital community is concerned that the fund is not raining and on potential deals and pushing valuations subsequently too high. Japans 10 trillion Banking Industry may be in for a shakeup. We will get that live report coming out of tokyo up next. This is bloomberg. Mom you called . Oh hi sweetie, i just want to show you something. Xfinity mobile find my phone. [ phone rings ] look at you. This tech stuff is easy. [ whirring sound ] you want a cookie . Its a drone i know. Find your phone easily with the xfinity voice remote. One more way comcast is working to fit into your life, not the other way around. This is Bloomberg Markets asia. Were watching the bank of koreas Governors Press conference going on at the moment. We will be hearing some details from governor lee. His last policy decision saying the current policy remains accommodative. Also talking about todays rates at 1. 5 that was a unanimous decision. Something that is really reinforcing. Governor lee also saying uncertainties were not part of the statement, talking about trade tensions and that being reflecting of korean growth. We continue to monitor this press briefing in seoul. Ophie you have japanese stocks rising for a third session. Closing out the morning session of 1. 4 . Nearing a threeweek high. Ecosecurity saying with a rise in yields having run its course, markets are returning to bullish. Tech and industrial stocks leading gains in tokyo. Onget a sense of other ones, the earnings front you have caltex rising after its results. In hong kong, aia rising nearly 5 after reporting a 28 boost to new Business Value in 2017. In the wake of reports that apple plans to roll out three new smartphones later this year, suppliers are on the rise across the region. A quick check on other movers, i want to highlight the Aluminum Corp of china. A drag on the benchmark. In manila, property jumping on soaring the most since october of 1998. Haidi thank you so much for that. A lot going on at the moment. We are hearing from the head of the imf saying Global Economic growth staying at 39 present 3. 9 . Global economic upswing involving three quarters of the world reinforcing this Global Recovery story which has been dominating markets. Is a reminderity of economic transition and policymakers need to remain vigilant when it comes to volatile capital flows. He is speaking in jakarta at the moment, saying the effects of Monetary Policy normalization is uncertain but the Global Economy has seen brought of swings, broad upswings. Live to jakarta where the imf managing director is speaking at the moment. There she is at a conference taking lazy jakarta. Place in jakarta. You can actually walk that if you are in front of your Bloomberg Live go at the moment if you want to hear from the International Monetary fund manager. Another policymaker or another institutional voice to come out and talk about the implications of capital flows as a result of some market volatility that we had seen. Rapid development is pushing japans plans to a service west plans to consider shaking up the rules. Shaking up the rules is not something you would typically associate with the Banking Sector in japan. Because our ready made quite significant steps to change the way it regulates the financial industry, the most recent of which was steps to introduce regulation for cryptocurrency exchanges. Trying to do a piecemeal solution to the problem at hand. Step back and setback set up a study group to find out how it should be set up going forward. At the moment it is an entitybased system. If you are an Insurance Company you are covered under the Insurance Business act. They are trying to switch to that and look at it more from a bank,on state so be it a it is doing the same kind of business and should be regulated under the same rules. One rule for all. No distinction for banks. No smaller area of entry. What is the background and terms of what has motivated these changes . Thish i think it has been Record Development of financial technologies, smartphonebased services. The lines blur between what is a insurer, whatan is an asset manager. With that in the background, smartphonebased things, robo advisors coming along. Just looking at how the regulation works and how to regulate what is coming about these days. The committee released a support urging them to do these things and look at the Way Financial Services to be regulated going forward. Haidi what kind of implication are you seeing in terms in the Financial Sector on the banks . Gareth thats right. In some ways the banks are required to be licensed to operate banking businesses, making loans, discounting bills. In some ways they have a monopoly on their banking market because it is so hard to get into it. The licensing you need to do that. It actually could open up the markets for banking into new competitors, which could be a negative for banks but at the same time it might allow banks to take other new kinds of businesses. There are pluses and minuses but lets wait and see. It will be a long process to see exactly how this is going to look. Haidi thank you so much, gar eth. Lets get the first word headlines. Billion or brothers melvin angevin this sharing had had their assets frozen in india to enforce the award to it started in 2008 when the brothers sold a lab to daiichi. They require he he admitted selling adulterated drugs and they ruled the brothers had misrepresented critical information. One of the longest flights in the worlds faces the chop unless qantas and american get their way. A secondasking for time to approve a joint venture with antitrust immunity to strengthen ties across the pacific. Rejection could mean the end of the marathon 17 hour sydni to dallas service. The man fired three years ago as South African finance minister is seen making a comeback. Then presentedy jacob zuma in 2015 but sources tell us he has the support of the new president. The president is said to announce a Cabinet Reshuffle tuesday evening. The current finance minister is seen as going back to his former job as an affairs minister. Former general contest indonesias next president ial election which would be a rerun of the bitter 2014 run. Indicatestion party that he will be its candidate when the decision is made in august. He is popular and has improved access to health care and infrastructure, but has fallen short of a promise to boost growth to 7 . Global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. Im paul allen. This is bloomberg. The year being you and is expected to raise the pressure on the u. K. On wednesday with this publication of a draft that ignores some of theresa mays most important demands. The block is set to set out in detail how it expects the u. K. To depart in a years time. Lets bring in the former eu trade commissioner Peter Mandelson. Developments in terms of Jeremy Corbyn backing the Customs Union setting up a showdown with theresa may, is it all as chaotic as it appears . Peter yes it is fairly chaotic. The outcome of the referendum in 2016, although close, was nonetheless clear, voted to leave the year the need. When it the European Union. How it did not vote on was close we should remain to europe and its vast Single Market, where nearly half are exports are sold. We what sort of relation should have with the European Union in other areas. These are all subjects which are hotly contested, not just between the Opposition Labor Party in the government, but also within the government, the cabinet itself. Between people who are soft leavers who want to remain as close as possible to europe, and those on the other hand who just want to be done with the whole thing. Haidi this is a messy divorce. It is acrimonious. Even on friday you heard that the u. K. s brexit stance is quote, fewer illusion. In your view how good a deal could be u. K. Get out of this . Peter on the basis of the governments prison negotiating guidelines and all of its red lines, i think the outcome will be very bad indeed for britain. But i dont think that is inevitable. We could have voted as we did to leave the European Union, but nonetheless to remain within the economic structures of the eu, within the Single Market and the Customs Union. And that in a sense would have appealed to a broad consensus of opinion in britain. Because we were fairly evenly divided between those who wanted to remain and those who wanted to leave. But the government has decided from the outcome not to operate on the basis of that potential consensus. They are operating on the basis of a winner takes all, that having been goaded voted to leave we should leave the entire the economicever damage and whatever the consequences for our trade with europe, for investment from europe, and for jobs in the u. K. And that is why you will see new tensions and difficulties emerging. As i say, not just between the parties, but within the cabinet itself. How too you government have hugely exaggerated the prospects for britain of gaining ambitious and substandard substantive freetrade agreements elsewhere. If you take the u. S. For example, which the government says is their number one priority, but is already fairly open trade in all sectors between the u. K. And the United States. Except for example in agriculture. Britain really want to open its agricultural markets to the very largescale competitive Agricultural Producers in the u. S. . Will we want to take their chlorinated chicken and their homeownerinjected beef . I think not. Hormoneinjected beef . I think not. Rejectedment, very from those us on america. Veryhat likely to protected from america. Britain is already open to a large extent to chinese manufacturers. Can becomenk how we even more open and retain our Manufacturing Base in the u. K. And similarly, we want to land many more of our Services Inside Chinese Markets. Are they really going to reform and open nose up just for britain . I think not. Only will open up in the way that they choose at the speed of their choice. They are not going to change dramatically the existing protection within Chinese Markets simply for britain. We dont have enough to offer in return to persuade them to do that. Think that the prospect for trade agreements elsewhere in the world are greatly exaggerated, as against the trade that we have at the moment, which is as i say, a European Market that takes up to half of good exports delivered into that market. Secure to security the continuity in a trade for the sake of jobs at home. As with a lotpe, of countries we are seeing in this environment, this criticism of investment in the basis of National Security and similar grounds. These draft rules on screening eu,in the eu fdi in the d. C. It as useful or breach . Or overreach . Peter it is national capitals, berlin, london and other Member States in the European Union driving this. Who under domestic pressure from people who are seeing stagnating wages, they are experiencing job insecurity, they have experienced very low growth in europe during the last decade. It is picking up now. And economic prospects are changing. But still people feel a great sense of economic insecurity, and they feel that having been on the receiving end of chinese manufactured lowercost goods for 70 years, now European Assets are being bought up wholesale by chinese investors. They are nervous of this, and that is why there is pressure on different european governments to scrutinize this investment and to filter it rather more carefully. I think we have to be careful about how far down that course we go, because europe has always benefited from international investment, and i think there is Great Potential flowing from chinese investments in the future as well. But i think that particularly in respect from critical infrastructure, sensitive aspects of the economy, you will find this resistance growing in europe, and that is something that chinese investors will have to understand and come to terms with. Us if peter, stay with you will. We will pick up on the conversation. A great deal more to talk about including how potential trade tensions. This is bloomberg. This is Bloomberg Markets asia. Lets pick up on our conversation with the former eu trade commissioner, shifting the focus to china. It has been a very eventful few days when it comes to beijing. Largely expected was a further consolidation of power, now expected to stay on indefinitely. If you are a foreign investor concerned about this lurch away from collective leadership and only concerned about consistency, predictability on policy, as a trade negotiator, is this a net positive . That narrow put in sense, yes it is because you know more about the man in the government you are dealing with. I dont think anyone should be surprised that such a powerful leader, xi jinping, should want to extend the possibility of his term in office. But you talk about consolidation , i think power is only really what xi jinping is about. He is about ambition as well. He has a huge program of change in reform that he wants to take on in china. Not just revitalize the communist party itself, and innkly, put itself more touch with an increase its ability to bring the Chinese People with then in what they are trying to do, but to reengineer the economy and bring about real change in the stateowned sector of chinas economy. All this is going to take a great deal of time. And i would say from an external international perspective, it is good news that such a clear vision, a longterm plan is being set out for china. But of course the test of president xi will not be the length of time he is in office, but the legitimacy of what he does, what he is able to deliver and achieve for his country, and that of course remains to be seen. A decade ago you and head to head with chinese trade negotiators on some of these issues like ip theft and textiles, and arguably some of those remain contentious today. I am curious for your perspective on what changed. What kind of improvements have you seen, and do you think things are moving along in the right direction . Peter well, i did go head to head and i had some very, very difficult wrestling matches with my counterparts in china. Those were in the early years following chinas succession to the wto, where we were saying you made certain commitments, you may clear undertakings, now we are going to keep your feet to the fire in a sense in making sure that you deliver on those. What we always wanted to see as well was continuing reform and opening up of chinas economy. And i think to a significant extent we have seen that, but there is still an absence of a completely level playing field. We are much more open in the west to china then is the case the other way around. And i think that if china really wants to keep three channels open and flowing, than they have got to make further adjustments in order to give western exporters and investors a fair crack of the whip, engage them as serious partners in chinas future growth, and treat International Investors and exporters on the same terms that they would treat domestic ones. So i think there are still areas for improvement, if i could put it like that, but we have seen progress and i suspect we will see further progress yet to come during the course of the next five to 10 years. Is the United States under trump a bigger threat to globalization and global trade in china as . Yes, im a sense, afraid and surprised to hear myself saying. I mean, President Trump so far has shown himself not to be a friend of trade or the international rulesbased trading system. The first thing he did was to walk out of the tpp, the transpacific partnership, which i think was a tremendous setback for the freeing up and liberalization of trade in the asiapacific region. He is threatening to quit nafta, the north agreement north american Free Trade Agreement, in what could only be a completely counterproductive act from americas point of view. And he has shown very weak commitment to the wto itself. And unless we sustain the wto and its rules and disciplines and its ability to enforce resolution of disputes, then we will see the International Trading system deteriorating softly and america, amongst others, would not benefit from that. So in my view, President Trump is very counterproductive. Haidi peter, always a pleasure. Joining us in beijing. Lots of big names coming up including bridgewaters founder who will be speaking to our china correspondent for an exclusive interview from beijing that is live at 4 30 p. M. Hong kong time. 7 30 p. M. Here in sydney. This is bloomberg. Haidi this is Bloomberg Markets asia. Lots more coming up in the next hour. David is around for an update on the big stories. This first and foremost press conference out of the back of korea happening in seoul right now is still ongoing and we are getting more coming through. About the is talking economy, the reason why they did the hike. He is also talking about the fact that maybe at some point if the fed raises rates, he is not worried just yet that it might lead to the other thing we are talking about, jpmorgan Asset Management chief agent strategist talks about his top calls and what he thinks. Look forward to that later. This is bloomberg. It is almost 11 00 in singapore. Were entering the last hour of the morning session in hong kong. Last 30 minutes on the chinese mainland. Welcome to Bloomberg Markets asia. David markets in asia pacific extending the gains as investors await his first testimony. His choice of language is important. Haslinda the yuan weakens. Governor lee says he has no reason to lower growth projections. Really indicators suggest china is maintaining momentum after the Lunar New Year. This, as confidence is growing. Apple has radical expansion plans for the iphone. I would imagine the big phone is bad news for all you fans of skinny jeans. Asian stocks up for eight 10th time in the last 12 days. Bond markets a steady. Several narratives to consider. They said they will continue to support the euro zone economy. Th korean you on yuan all roads lead to 11 00 p. M. Tonight. That is when jay powell steps in front of congress as the fed chair. Haslinda he is the man. Commodities space we are tracking crude oil hovering at 64 a barrel. Increased 8 over the past two weeks. Says they area looking at 80 a barrel sometime this year. Taking a longerterm perspective, can it go beyond 80 in 2020 . Lets go to paul allen now. Paul early did a chinas economy remains robust despite this portion accompanying the long Lunar New Year holiday. Smaller businesses reported an optimistic outlook. Analysts are increasingly upbeat and sentiment is recovering. The holiday has seen disruption. Sales managers saw a slight downturn in satellite imagery indicates manufacturing has eased. Regulators and japan are preparing a regulatory overhaul which could lead for a shakeup in the Banking Sector. The fsa is examining potential changes so that all providers of Financial Services are subject to the same rules. That would allow emerging companies to compete directly with traditional institutions. U. K. Opposition leader Jeremy Corbyn has raised the stakes in party by confirming supports a comprehensive deal with the eu on Customs Union. s announcement opens a clear divide with Prime Minister theresa may he wants the u. K. To be outside any customs deals look inside assign trade agreements with other countries. Corbyn says he is putting the people and economy before ideology. Maintain the senate with no new impediments to trade and no reduction in protections. Paul alibaba is said to have agreed to buy out baidu and other investors, placing its biggest bid so far on local online food services. A deal would give alibaba the largest slice of Online Food Delivery in china and puts it directly against another company backed by tencent. An army of delivery people on motorbikes across the country. Global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. Im paul allen. This is bloomberg. David all right. When you look at the bank korea when of the top stories today, leaving us craving for more. They did leave rates unchanged 1. 5 . They hiked then back in november. They said there is no urgency to follow up on that at the moment. Bond markets signaling their next move will be on the way up, but there is no way of telling when that move will actually happen. That being said, he is not expecting outflows if and when the fed hikes rates and takes roughly at the same level as their policy rates, above were south korea is. Governor lee says maybe not yet. Made it the be ok clear its response will depend on whether it is good or bad for the current economy. Jay powell heads to congress to give his first semiannual report as fed chair. He may find it tricky to rein in economic optimism. The fed already said the economy may be beyond full employment and inflation is showing signs of life. Investors will be watching how paulo embraces his predecessors gradual approach to timing. Lets get the details and insights from our guest, jpmorgan chief asian market strategist. We are seeing calm before paulos powells testimony. Seems likely market is expecting only gradual rate increases. Do you agree . Guest i think the market consensus right now is probably we all know jay powell is an export expert on financial regulation. Jay powell is a very solid financier but his background is not economic. I agree with the consensus that he will very much be following the path set by former chairwoman yellen. At least for the near future that is very much the script. I think the challenge right now is a couple things. One i will be closely watching how he communicates with the market. Again, janet yellen was there is skillful in terms of rate hikes, balancing reduction. When the fed needs to change direction, that will be crucial from a volatility perspective. Haslinda what could cause risks in the market . Are there words that the market is looking out for . Stay dependent has always been the mantra. Going forward the question is what kind of data will the fed chair be looking toward. Other indicators such as the job rate and how which growth could potentially fuel broader inflation. Had a forget we have weakening of the dollar that is creating inflation as well. That has not fully menu manifested itself yet. But that should gradually creeping. David is there a risk he will be hawkish . The timing is interesting. In a few weeks will be getting the fed meeting where well get the updated dots, if you will. Is there a chance that he comes in front of that report essentially and basically sets the scene for a more hawkish fed in 2018 . Tai i think that will be up for the market to decide. You are right. I think the march meeting will be absolutely critical. One, it is his first meeting as the chair. More importantly, we will get a new glimpse of how the other members look at inflation growth, and their projection of policy rates. In the december meeting, the meeting was for three hikes in 2018. Whether that will gradually add towardsfour edge four will be a case key focus. Its an opportunity for him to express himself more. The sensible thing for him to do at this point in time is stick to the script until the point of the next meeting, where he will get a press conference, a bit more of a chance to explain himself, and also member consensus. David at what point do we see asian Central Banks react . We just heard from governor lee maybe not yet. At four rate hikes the you expect more central bankers in the region to tilt more hawkish than they are . Tai it is an interesting stion because this affects is facilitated by the fact the u. S. Dollar is weakening. Asian Central Banks and emerging Central Banks, more flexible policy. In the past when the dollar is wereg, Central Banks forced to raise Interest Rates in tandem with the fed back in the 2000s in 1990s. Now when the dollar is on the downtrend, Central Banks have more flexibility to look after itself. Inflation is not a huge issue in asia yet. Again, that allows asian Central Banks to have more flexibility to set an agenda. Haslinda given the scenario you painted, i imagine markets looking attractive because you look at where they are headed, 1 billion just this weekend alone, 14 billion year to date. How are you doing emerging markets . Tai very constructive in equities and fixed income space. Coming in really functions as a number of things. Global growth is still pretty constructive. Global trade cycle is very much in favor of emerging markets. Both in the macro picture but also corporate earnings. Valuations in asia and emergingmarket equities is fair and reasonable, not expensive. All of these put together puts emerging markets in asia in a positive picture. Of course the weakening of the u. S. Dollar also helps. Haslinda tai, stay with us. He continues to stay with us. Ll ahead, investors they say it could be the best short. , xi jinping looks to extend his rule. Which stocks are tied directly to this. This is bloomberg. This is Bloomberg Markets asia. Jinping anring xi indefinite presidency means investors will find their quote fully owes in china increasingly tied to one man. Our markets reporter is here to look at the implications and what it looks like for equities is the big question. Investors always like certainty and this means political certainty for a very long time. We dont even know how long. At the same time there are also proposed constitutional changes which will centralize power further so that means effective implementation of whatever policies come out of beijing. I think for investors it comes down to this year to this. It comes down to what measures the administration will now come up with. If it is a good policy, it is a good thing. If it is less good, maybe such overly centralized power will be a problem. David i am looking at a whole list of commentary. Any consistent theme come up so far . We did see quite a good response in the equity market yesterday but of course part of that is also the market continuing to recover from the correction earlier. I think the response from the market, at least from an inspector investor perspective, is good now. But there is also some concern especially with regard to International Investors related to a accountability and transparency. Basis, even on a market these have always been concerns that have dogged Chinese Markets. David absolutely. Lets add more to the conversation. Tai is still here. Is it too early to talk about it . He hasnt even begun his second term. Tai Additional Information we have received, really something that is five years away from where we are now. From an investor standpoint i think from an economic standpoint, what we have here is over the next five years we expect xi jinping will look for property leveraging, consumption, improve living in china. From that perspective it is not easy right now to make a longterm judgment. Drawing parallels with countries like japan. Power a long time. Angela merkel likewise. These are different political systems but there are parallels on how to interpret the longevity of a leader in a country. Just backtrack to trump and brexit, what you have are huge events. Market interpretation of these events can very overtime. I would be more cautious to overinterpret what that means for the chinese or global markets. Haslinda if we look back to how markets have done under xi jinping its like we have bouts of volatility and some intervention. The International Investors might be concerned about that intervention. What is your response to them . How do we look at Market Forces in china. Tai i think Market Forces will gradually be introduced but as we saw from the currency the past two years, liberalization, than outflow and declining preserves. Case where we expect to see Market Forces, it will be gradually introduced overtime with even correctional reversal. I would not be surprised to see over the next five years the same. More importantly we focus on structural changes in the chinese economy. Consumers rising, technology rising. That to me is more important for investors. David politics aside, there are new wantsinaspecific in how these decisions are made. Nuance in how these decisions are made. But does the lack of checks and the risks on the longerterm plans when it comes to china, does that add a layer of risk on the chinese consumption story . Tai sure. The truth is it is not unique to china. It is possible in many, countries whether the u. S. Or other parts of asia. In this particular constitutional change, in the long run it raises questions on checks and balances. In terms of Economic Policy you have to consider the fact we legitimacy of the government is dependent on economic growth, low unemployment. From that perspective it offers a degree of comfort for investors. Mark we have justina we have had pretty good performance in chinese stocks recently. Are there still good picks left in those markets . David dont tell me tech. I am sick and tired of talking about tech. Justina would about mom tie . Tai technology is a good place to be. Technology but sectors making use of technology, health care, education, what chinese consumers need and want continues to grow. It changes rapidly over the past five years from quantity to quality. That offers a lot of opportunities. The banks are starting to see profitability gradually improving. Offers opportunity to investors around the world. David earnings season is coming up. Overall what is your Growth Expectation . Tai for asia as a whole the consensus is around 10 to 12 . I think that is reasonable considering the level of exports right now. We expect a sustained but steady level of eps growth. Next year, a very strong recovery. David thank you. Great discussion. Tai and justina. Well talk more about smarts later on. Samsung has a new galaxy line, apple may be following suit with a cheaper and bigger iphone. This is bloomberg. Welcome back. Apple is reportedly planning three new smart foreigns smart phones for relief later this year. When we are told has a big screen to attract multitaskers. Production caps are already underway. Our tech reporter has the scoop. Apple is shaking up its smartphone strategy for this fall releasing three new models including a new giant phone with a 6. 5 inches screen, making it one of the largest mainstream smart phones on the market. An update to the iphone x. And a new lowcost model to replace the iphone 8 which will use an lcd screen. The bigger model and the update to the iphone x will continue to use the more expensive sharper oled screens that came out with the iphone x last year. Is in responsey to some consumers in asia not appealing to the iphone x and the higher price point which made features like the screen, edge to edge technology, and facial technician recognition not attainable for people not want to spend 1000. The news comes as send some as samsung unveiled a new phone as well. That they have faster processors and upgrades to the camera. Samsung is holding its fire to the phone. Apple will go head to head with it with its new giant larger iphone. They expect this new iphone to really upgrade the iphone cycle and create a super cycle of sorts. Upgrades by the likes of apple and samsung spurring demand in the Semi Conductor industry. Global is forecast to grow nearly 30 in the next 12 months. Lets talk more on this. We are looking at a super cycle, good news for the chip industry. Guest yes. Today we are seeing asian Semiconductor Players on the rise on the back of reports of apple looking to roll out three new smartphone models this year. Apple opening up their wallets, that is a plus for asias tech exporters. Several players in the space are planning to grow capacity as well as to keep up with orders. Sent my conductors in taiwan plans to increase to 239 million this year. Aside from chipmakers we are seeing other apple suppliers gain ground. Display makers rising in japan. We also have 3d sensors on the rise. Sinceg the most ground february 2015 rising over 4. 5 . We are keeping a close eye on this. Machine so japans tool makers also likely to benefit from it. Sophie we have fierce competition in smartphone markets that could add to foreign demand. Making smartphone parts. We havent seen this moderation. To 48 to 65 growth we saw in november. With overseas orders jumping when it comes to smartphones, china made up about half of japans orders, that could provide a booth. Getese brands are trying to more market share and could overtake apple and samsung as leading buyers of machine tools. Last quarter gave Samsung Apple trying to hang onto market share with this tablet move potentially. A less expensive model of its flagship iphone x. Haslinda quite a mouthful. Taking a look at the Chinese Markets as they head into the break, it is a mixed picture today. They are all in the red. China down by almost 1 . Officialind the chinese pmi index is erdogan stay in thursday. They may show growth momentum sloth this is bloomberg. We are keeping an eye on noble. In hong kong, we are entering the last half hour of trade. Standard in focus during the lunch break. Focusndard chartered in during the lunch break. I am david ingles in hong kong. AmHaslinda Amin i am i Haslinda Amin in singapore. Lets get a check of first word news with paul allen in sydney. Mario draghi has told eu lawmakers he is sticking to his stimulus plan and is not ready to reduce support for the euro area despite confidence inflation will pick up. He told the parliament that slack may be larger than thought and the bank must continue to provide accommodation required amid uncertainty. Man fired three years ago as financericas minister is seen as making a comeback after he was sacked in 2015 month but he has the support of the new president. The president is to announce a Cabinet Reshuffle tuesday evening with the current finance minister seen as going back to his former job has home affairs minister. A general may contest indonesias next president ial election, which will be a reone of the 2014 race. A rerun of the 2014 race. He is popular and has improved access to health care and if a structure, but has fallen short of his goal of growth. India toozen in enforce an award. 2008 when the brother sold a company to da iichi. A tribunal ruled the brothers had misrepresented critical information. Global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. I am paul allen. This is bloomberg. Thank you. Some of the worlds top commodity producers have gathered in hollywood, florida. We asked the ceos about the risks facing the sector. Have any major risks that keeps me up at night. Gold price is one of the things keeping and i on, over all geopolitical events, like oil price. We are not finding the big Capital Projects that will drive growth for the industry. You are likely to see flat or declining production going forward. The gold price over the last five years has gone nowhere amount youve had cryptocurrency, cannabis exploding, and the gold prices flat. It is like watching paint dry. Why would you get excited . Investors are trying to understand the feds view on Interest Rates. How is inflation settling into the system, if it is there . Levels over 3 , gold does great there. Rallied on the possibility supply curbs can continue. We have the story in the lion city. Tell us more about this bull run. It is interesting because if throughrbs continue september, that will mean less demand for iron ore, but what actually happens is because these curbs are to reduce pollution, the mills want to use , 62 content and 65 content has been going up. Benchmark has gone to the tenmonth high, supplies are not growing as quickly as they were, and demand in china is resilient as the country builds out the central and west of the country. We are looking at pictures of how polluted some cities in china and why they are also stepping into curb the output. Not everyone is bullish. 80 is as far as iron ore can go. Tell us why they are not bullish. Iron ore has done well because of demand for highgrade because of pollution concerns, but there is no real shortage. Australia and brazil for the main exporters and still have plenty of supplies and are exporting it, shipping to china, new records get broke each month. In the world of plenty supply come you only need some waffling in demand from china, which imports about two thirds, and you have a problem with the price. Citigroup sang the price could be higher through the end of saying the price could be higher through the end of this month. In the Second Quarter of the year, the price coming down to 60 and fading. At the end of the day there is plenty of supply. There is no shortage of iron ore. David lets switch to politics and look at india. This is shaping up as the next political background as india prepares for elections in 2019. Is our economy and policy reporter joining us live to talk about the story. Why is india planning to revise date on key indicators at this time . , Prime Minister modi is seeking reelection in 2019, and this revision is aimed at the voter. Prime minister modi claimed 7 million jobs were created in one year. Bothis being questioned by lyrical opponents and economists and comes on the back of several infants, so people are asking how so many jobs have been created. One economist has told us the data has been revised to politically massage it appeared in a country like ours where the government is probably the dominant data collector and , thisinator of data easily become propaganda, and that is very useful heading into an election. It is surprising that economists were still scratching their heads and settling down to the recent changes made in 2015, but again they have to brace for changes coming up soon. Is what the question can india due to make its a data more reliable . Is it needs answer to spend more on data collection. Right now it spins a meager portion of its budget. The cso and the National Sample survey organization which collects data, there are a lot of parttimers who collect data for them. There are barely full timers because of the financial crunch. The cfo retired in january and we dont have a replacement, so what the government needs to do that is moree data reliable and pop in more resources and have better quality data. Indy has to take india has to take data seriously. Haslinda speaking of elections, other countries heading into elections. , the race would be a rerun of the bitter 2014 race won by joko widodo. It is deja vu. The question is whether he has boosted am and yes and ammunition to win this time around. Anit could be a rerun, but interesting and different campaign. In 2014, jakarta window do was the outside candidate and help to carry him over the line. The other candidate was trading on his image of the strongman general. Time around, joko widodo has to campaign on his record and is the establishment. Why he has done things while he has done things with infrastructure and health care, he has struggled to get growth over 7 . Shrewd campaigner. In 2014, im sure you remember the theatrics of him coming into the stadium on a horse. He is very good on the campaign trail. Haslinda what would be the key issue . Would religion play a part . We have seen how politics played a part in jakarta. He is the candidate who became the governor of jakarta in a campaign aggressively fought on race. We saw aggressive rallies by hardline excitement islamic groups. Can expect that race and religion will play a part. Pushn also expect he will in on his china stance. Haslinda if you were to look into the crystal ball, does it joko widodo. . Himou and i interviewed firsthand and saw what he has been doing with infrastructure, health care, education, made doing business easier. He probably does have some negatives, including economic nationalism, however, jakarta with dodo is good on the is good joko widodo on the campaign trail. He is still seen as a man of the people. That is probably something he will campaign heavily on. Haslinda what will be the biggest risks . If economic nationalism comes to the fore. We have seen signs of that. It is an easy thing to campaign on during an election. The economy may not be growing a strong as dakota with dodo is joko widodo would like. That is probably their biggest concern. Next fivehe wants the years to push through the reforms he has put in place. One of the risks are that everything he has put in place would be revised if he comes into power. On some occasions, the party parliament,d him in and we have seen signs of pragmatism on policy. The differences between the election campaigns become more acute, and he will be playing up his difference to joko widodo. Himparliament has supported from time to time and some of his Economic Policy could be expected to continue. For the thank you insight. Interesting times for the region as a whole. Not just indonesia, but many more here. Lets take a look as we head into the trading day in india. They will be joining the rest of asia. We have seen gains in asia. India looking like this. Futures pointing to a higher open, up. 3 . Banks remain in focus at this time given the prices we are seeing. This is bloomberg. David a very good morning to all our viewers joining us. Seconds away from the open of cash markets in both exchanges. 6477, looking to push towards the higher end of this tenmonth 66 on maybe just under dollarrupee. Looks like we will get a pop at the open on the nifty index. Here we go with the oath. Lets get it over to sophie. Sophie you are on the money. Rising ground, up. 25 , for a Third Straight session. The rupee firmer, sticking below 65 handle after jumping above that line. India bond yields higher for a second day as we count down to the gdp report this week. When it comes to a stock to watch, Punjab National bank. Checking that stock after the bank said the amount of fraudulent transactions could be 204 million on top of the current estimate of 1. 8 billion, plus the stock was cut to neutral. David the bad news doesnt stop for the bank. 7 down. Looking at another part of the market down, china bucking the trend. Doing the opposite. What is behind that . Sophie asian stocks gaining ground for a third day with most sectors seeing green. China stocks sliding, shanghai shares sliding after their best threeday advance since march 2016 as markets consider what direction xi jinpings alice he take beyond 2023. Beyond 2023. L take tech and smallcap stocks extending gains on monday as ,awmakers delay ipo reforms which potentially tighten supply of equities on that benchmark. Hong kong hshares under pressure, down. 8 , Chinese Developers feeling pressure, but hung saying treading water but the hang seng treading water. Spotlight after it reported a 28 jump in new business for 2017. Haslinda looking at the sectors , a lithium miners in a whole today. What happened there . Sophie feeling the pinch after Morgan Stanley came out with a report saying that lithium prices, the raw material used in renewable batteries, they say the price of this raw material will peak at 14,000 this year before falling by half in 2020 2021. Sie lithium aussie lithium miners taking it on the chin. Lets pull up the board. , but otherwiseer this theme around lithium and the scramble to secure lithium supplies for players that rely on that production is a bit of an event today. Haslinda we will leave it there. The operator of Southeast Asias biggest Gaming Platform has had a rough start has a public company. Shares have plunged 20 since listing in october. Our asia reporter joins us right now. We are seeing a disconnect with analysts upbeat and investors taking the other side, wine . Why . Analysts are still bullish. , largely have concerns related to profitability. Areevery dollar they spending or earning, the losses for sea has widened for the last three years. Concerned the profitability is not coming at a faster pace. , but theh is there pace of growth has declined, so that is keeping investors at bay. Investors are looking at the whatrun, looking at Southeast Asia can be in terms of the digital economy. Companies aree talking about is 50 billion. It is a fact this is the only lithium plate for Southeast Asia. It is getting some competition, but analysts are talking about the long run and looking at what the company will be doing in terms of shopping and its payment systems, and hopefully the profitability would come in due time. They are still picking their growth on the increase in the number of active users and increase in Revenue Growth. David in a lot of ways the sideny does hope the sell is wrong. Certainly there has to be a plan out there to bring it back to profit, so what can the company due to allay some of these concerns in the market . It has to do with profitability. , abably better communication less convoluted plan of how profits will be coming in would be good to start. At thes are looking company to increase its penetration in under spent also make itsd platform and that is the strategy others have played and benefited from it. Then faster Revenue Growth would help a lot. Ipo,rms of growth, before the yearly growth with 70 to 80 . Year, about 59 . So if Revenue Growth increases, which can be the case given a lot of indonesian users are about to come online 2021. That would increase the gross merchandise by you of total goods that the company would be delivering. It would probably lead it to a less convoluted path in terms of profitability. David hopefully it does come if it does, the sky is the limit, but i could imagine rockbottom when it comes to sea shares. Bloomberg a subscriber, you can catch up on all those interviews you may have missed with our interactive tv function, tv. That is the function to join the conversation and send us instant messages during our shows. We will try to get those comments and questions to our guest. Check it out. Tv. This is bloomberg. David this is bloomberg daybreak asia. Aslinda i am Haslinda Amin the latest business flash headlines, noble group under attack from one of its leading shareholders. Expectsks investments losses will erode what little cash the company has left and says the mounting problems pile further pressure on unwilling shareholders to accept the restructuring deal. Noble reports earnings on wednesday. David ebay is said to be close a japaneseor ecommerce site. It is lying assets from a jv assets from aing jv partner played at roughly 700 million. Japan is the biggest market qoo10. Haslinda the new york state comptroller says the board of wynn resorts did nothing to stop alleged Sexual Misconduct. It said members were complicit in his behavior, permitting him to wield his power unchecked. A complaint in nevada state ofrt say the board was aware at least 2016 of the allegations against the wind steve wynn. David approaching the lunch break in hong kong. We have been talking about earnings. Aia out yesterday, and we saw the reaction in the markets. Standard chartered over the next ,ew minutes, 12 15 local time that bank reports earnings in hong kong. After the closing bell, we are expecting numbers out of anta sports and some of the biggest Property Developers in the city. A consistent theme, pretty mixed, only new World Development nudging higher. Ahead, lots ofng big names coming up on bloomberg tv, including bridgewaters founder ray dalio speaking to cut Tom Mackenzie to Tom Mackenzie for an exclusive interview from beijing at 4 30 in hong kong. Newly sworn in fed chairman Jerome Powell will present the semiannual Monetary Policy report on tuesday and face questions about Financial Stability concerns and what the market is really watching out for. David survey, right. Im not sure if i will stay up for that. That is about 11 00 p. M. Will that world look completely different . It will be interesting. We were speaking earlier with j. P. Morgan assets. The meeting in march will be important because of the revised forecasts on growth and the economy, so Jerome Powell has to strike that careful balance between striking a hawkish tone, which a lot of people thinks he should come but not giving aware where the fed takes rates. The march meeting should be a better time to do that. Haslinda we are seeing calm after the route and the markets are comfortable where we are right now. The indications from the fed is that it will not raise rates rapidly this year. We will wait and see. Bloomberg markets middle east is next. This is bloomberg. Mom, dad, can we talk . Sure. Whats up, son . I cant be your it guy anymore. What . You guys have xfinity. You can do this. Whats a good wifi password, mom . You still have to visit us. I will. No. Make that the password you stillohave toovisit us. Thats a good one. Seems a bit long, but okay. Set a memorable wifi password with xfinity my account. One more way comcast is working to fit into your life, not the other way around. Yousef asiapacific markets extend global gains as investors await Jerome Powells first testimony, his language critical. Mario draghi sticking with stimulus, telling European Parliament that uncertainty remains and he is not ready to reduce support. , the shakeup continues kingdom replaces top military commanders and opens the door for women to enlist