Hoping to get a recovery after drop that we had since december. A s flip the board and have look at your individual benchmarks as well. Reported, a bit of a surprise when it comes to recovery broadbased as you can see across the markets there as well. And flip things along change things, have a look at your currency markets there, the second one is perhaps one of the measures, if you will, have u to be able to say we properly priced in risk remium on the iran story and has it been priced out. You see the second dollar, not retracing all the way back. Quick ng dollar and a check of your commodity markets, we checked and rude is off about 2. 50 per barrel, the highs yesterday, the 10yearyearold, nothing 8. 811 . Ng there, thats your market story for now. Stable. Are lets take it to new york with su keenan. Begin with former National Security advisor john to on says he is willing testify if subpoenaed during President Trumps impeachment trial in the u. S. Senate. Drama in the h it complicates mitch medicine comes plan for swift witnesses. S without democrats say bolton is raising pressure on Senate Republicans testimony. Ditional meanwhile in china, they have on the d their stance u. S. Over the killing of general soleimani. Of force and unilateral action. Maximum restraint and dialogue to insure security in the middle east. Its obvious that the risk of taking actions of the United States violated basic norms of the relations. Al su the u. K. Politics now, the Opposition Labor Party will hold a threemonth contest to find a uccessor to leader Jeremy Corbin with the winner announced on april 4. Six lawmakers have put themselves forward. Polls are saying the brexit pokesman is currently leading the race. The main challenge is likely to spokeswoman siness rebecca long bailey. He latest with nissans former chairman. Nissan says that Carlos Ghosns escape to lebanon will not stop against him for what it calls, quote, the harm misconduct has caused. Ghosn is ready to name the people who he believes is behind and detention. Fox Business Network said it spoke to the former nissan boss weekend and ghosn revealed he has evidence that to es his arrest was a plot take him down. Global news 24 hours a day on air and on quick take by powered by more than 2,700 journalists and analysts countries. Im su keenan, this is bloomberg. Yvonne a standoff between the and iran is continuing to dominate the news after last of general ng soleimani. The pentagon has sent additional east and the middle ark esper insists the u. S. Has ot made a decision of leaving iraq. David derek, nice to see you, you look, so tensions, at a lot of the headlines that have come out globally the last hours, tensions have ased somewhat, have they, though . Derek you know, david, i dont think that they have overall. That the last overnight, the overnight period probably when youre waking up in asia morning was very confusing picture because there was a contradictory sway. One of the things that we saw was a letter that was going out that the rted to say u. S. Was ready to remove its say we respect your sovereign decision, hold on and wait a second. Letter was a draft that shouldnt have been sent. It was poorly worded, et cetera, wasnt meant for consumption, pulling out. Not i understand if people are confused about it. To know. Hat you need there is a three ship amphibious is moving into the percentage gulf. It was in the mediterranean, it persian gulf. E that is a u. S. Move toward. There were hundreds of thousands of iranians out in the streets protesting and marking the end life of general soleimani. And so that is something that know. Eed to the threat on iran is still operative. Retaliate ares to still on operative and President Trumps threat to sanction iraq if it kicks the u. S. Forces out and doesnt reimburse the u. S. The cost of its military actions there is still operative. All of that stuff is still operative. Kind we have heard this of global call for calm now from the likes of south korea was the latest to actually chime in on this debate. Do you see any type of nation a more assertive role in this dispute . I do see a lot of nations basically saying, dont go further. An eye for an eye leaves the whole world blind. Developingthink, the line that you see all across the world from allies like bories all the way to south korea to china, et cetera. So i think you are seeing people of the u. S. And iran both basically saying, folks, leave it here. Whether they will, i mean thats the usly thats question. David and we will update this conversation. Derek, thank you so much, well bring you back on once we do have more developments out of this story. Lets bring in out of sydney, strategist to talk, eleanor, nice to see you, happy new year. The do you think, do markets need this to take profits out of the manic that we had . Eleanor well, certainly it to ed that positive start the trading year and clearly given how stretched valuations q4 runup, its really seen that markets were sort of primed for a little bit pullback. Thats obviously what we have seen and feared. Were cautious towards positioning this as being a more last riskoff er event. Clearly there is a myriad of uncertainty that still remain respect to irans potential retaliation and that could subdue y continue to Risk Appetite until we have more clarity on that situation and i hink, also, given that this sort of heightened geopolitical risk environment is really the to whats been driving markets throughout q4 of last year, you are going to bit hat there is a little more of a tendency toward volatility and markets are going little bit more headline driven, but really were not xpecting this to be a broad move towards sort of risk off, i best in either sides interest to really see this escalation ramp up and when we at irans retaliation, the onus of the probability lies fact that they probably need to do something. Were unsure as to what that its probably t going to be something that, i sort of ignites their credibility but also doesnt insight a huge reaction from the u. S. Side as well. Yvonne you talk about, everyone has been talking about just the its balance sheet, Central Banks across the globe to suppress market volatility. Think that is essentially is enough to offset any kind of risk we see out there these days . Eleanor its certainly going to big driver throughout 2020. Were sort of looking at markets i guess throughout the next year we do see a picture where geopolitical risk can hit markets. Increasing got populism, nationalism, going on across the globe. Buffa buffeted by cyclical hea banks havehe central shown by sort of word and deed that they are more than willing step in and cave to the demands. Liquidity thats really what is driving sentiment at the moment. Of ee for the remainder 2020, were probably looking at year, whatly positive can you say almost after 30 returns in 2019, you have to expect a little it less throughout 2020, but certainly mid Single Digits returns could be on the cards as see the Central Banks continue to stay on the idelines and provide ample liquidity and really fuel investors mentality of the fact just haveentral banks their backs. Until we see, i guess, a shift then rom that mentality, were going to see buyers step correct. Valuations we have the continuing low yield environment as well. Encourages risk seeking behavior and investors sitting on the sidelines with ample of cash to step in also. More from you , and bring you back to the live with es out of hong kong the chief executive speaking here. Talk about the economy now and deal with ent is to the grim economic challenges of talking about e landlord rents expected to go own as they deal with this retail and Tourism Industry that has been very much weighed down y nearly seven months of protests. You also mention about monitoring what is going on with new lisa mona cases as well, ruling out that it is anything like sars, but something theyre watching out for. Were still ahead here, moving the conversation to theme of 5g, a big this year. Were going to ask if the stock call, were talking china mobile after swamping last year. Lee joins us shortly. This is bloomberg. G. David welcome back to the program, so taiwan, just a reports, trade numbers ater today and the economists see a second recovery. Year. Over 3 from last you look at the chart, the blue line is taiwan and the hope is become a second economy after south korea to just not data but also provide further proof of a udding recovery across the region as the chinese economy stabilizes. Eleanorstill with us is who joins us from sydney. Ou were mentioning about these green shoots and a bit skeptical of the data so far. Why do you think that there is a around this cism right now and what are you questioning when it comes to the kind of trend growth . Eleanor well, i think certainly equity markets, we have pretty much seen that entire growth slowdown priced out. If we do see any continuing weakness in the data, we could see markets really of a drawdown. T i think when you look at the we continue to see that there is these cyclical are going to t buffet growth in the year ahead. We have the ongoing depression sector. Anufacturing we have also got these sort of geopolitical tensions as well on are going to weigh growth. The most recent flareup in the middle east is only an example that. I think more broadly and sort of zooming in maybe on the u. S. We look at the u. S. , i think were particularly expecting that the labor market to lose to continue momentum over the year ahead and thats really going to put, i little bit of a dent in this strong consumer narrative has really been the white knight holding up the u. S. Economy to date. 2019, in 10 of the u. S. Largest states, the labor arket was starting to deteroriate. We have also started to see Unemployment Insurance claims rise. Also seen as well over the last three or so months that startingales growth is to decline. I guess barring novembers jobs data, we are pretty much primed for an ongoing ahead ration in the year there. David if you had, i know diversified is always the way to to pick one asset you would hold against that backdrop, what would that be . Eleanor well, i think, yes, diversification is always key, a portfolio that ncludes equities, u. S. Treasuries, global, gold as and the king at 2020 backdrop where were potentially expecting a transient increase inflation that Central Banks will be able to look past, but a a one off increase in food prices, especially due seeingimpacts that were from the extreme weather events on climate change, that potentially means that particularly d gold is going to be a good safe aven against that sort of scenario. We also still continue to see in this easy policy monitor tray mode that will support gold prices. Had to pick one asset, gold would be the way to go. Yvonne you mention about banks, you have been watching very closely, the moves they could make this year. The aussie has been selling say to the right call, why . Eleanor yes, certainly i think Australian Dollar is on borrowed time at the moment, were expecting them to continue with easing the trajectory throughout the year ahead. If we look at the consumption outlook, it remains under pressure. He Australian Consumer is heavily overleveraged and now choosing to increase savings increase n Discretionary Spending and that is despite house prices being on again. Se we have the private sector in recession and all of this is impact ofconsider the the raging bush fires that we have seen ongoing since last year. That certainly is going to have weight on the Tourism Industry, cafes, restaurants, also construction as well and i think its something that they have to consider. We thought the i. B. A. Would be easing again in february. His is one thing that is going to push their hand further. We are certainly expecting a cut theebruary and further down year as well. In 10 seconds, year . Om the i. B. A. This eleanor sorry . Q. E. eleanor this year, no, into 2021, it becomes a far greater probability. Things with rose lenses, q. E. Will remain part of the conversation with deterioration. So much, great stuff, please take care, of sydney forr there in us as well. E are counting down, not just to the close over in japan and re counting down launch 60 cex set to orbit, t satellites into the falcon 9 rocket just taking off, the pictures that go through here, it certainly has of the year that we have seen spacex launch one orbit, well see how things go here. Link the third star satellite deployment mission which youre look at there. Continue to watch this here. Go, as they say its on your bloomberg terminals as well. Talk about this later, a nice segue. He is in usk story, shanghai talking about tesla, the made in china as well. Well leave these live pictures as we approach the atmosphere and then well make where we ere and see go. To ne elon musk is set attend the ceremony. Solina wang is outside factory in shanghai. Have we seen elon musk . He shown up yet . Solina we are awaiting his arrival. There have been some videos on social media arriving in shanghai. Have yet to see him come to drive,ctory, a 90minute a remote location. We are expecting him to arrive and high level government officials, this is for the pomp model 3smstance of the to actual customers. We have seen the deliveries to december employees on 30. The fact that high government officials are going to be here is significant. Support has been critical to the fast rampup, the smooth process of this building. In fact, its taken just a year from tesla breaking ground to to more than 1,000 cars being assembled there per week. Model 3s are esla going to be exempt from a local urchase tax in china and qualifying for government subsidies. The fact that musk himself is underscores how important this factory is in become teslas plans to a truly global carmaker. Factorybefore that this n shanghai will serve as a template for future global facilities. In will have a factory germany after this. Yvonne talk about the challenges in china, though, we is that the competition heating up and the government subsidies,miting the sales have been slowing down for months. Hat are the prime priorities then for tesla . Olina thats certainly going to be a challenge, major challenge, tesla has announced hey are going to be cutting prices 9 . That on top of the government local es on top of that, urchase Tax Exemption will put tesla in the same price bracket, you have local challengers, you of audi, b. M. W. , Mercedes Benz that are all new electric vehicles. You have the challenges that the third annual decline of declining vehicle, china. Ehicle sales in electric vehicles comprise 5 of the market, but the sales had dramatically as of government subsidies have been pulled back. That tesla ta shows could do quite well, in fact, the tesla registrations in in china jumped 14 fold to more than 5,000. Priorities are certainly going to be to capture as much as that market as they can. Some of the projections have been pretty wideranging, at the end, only 21,000 could be sold this year of the made in based onel 3s, that is the history of production delays as the la has as well fact that the macroeconomic issues are very difficult. On the high end, some are ptimistic, they could sell 100,000 vehicles or more in china. David great stuff and she is watch there musk n a very windy, as you can see shanghai. From one musk company to another go to live pictures 9. The falcon its the Third Mission since 2019. Some uld be landing at point very soon as well. Reading a couple of things here as well. Will be landing the falcon 9 first stage with the i still love you drone ocean, 45the atlantic minutes after liftoff. Vonne 60 new star link satellites are going to be joining this mega constellation here today. That, of course, live, well bring you those live of ures there, yeah, a lot questions about how many more well see, this could be a busy musk, this is the first of the year. We are continuing to watch this land. In the meantime, lets watch the action when it comes to your markets. Were watching your m. M. R. Function on the terminal. In terms of themes, you are seeing gold miners and a ot of the oil stocks that we saw yesterday that were rising are now kind of retreating. 3. 5 , also down close to 4 . Side, though, some we saw yesterday in south korea, some pretty decent gains and the cosmetics are up close to 6. 5 today. A little bit of a mirror image of what we saw yesterday. Things to uple of note as well, you dont see the tocks here, but a lot of big bank of hong kong, gilly a and upgrade on on sales grading both outlooks. The japanese lunch break, not quite as high as where i would imagine the rocket is already right now. In fact, were leaving you with those shots. Go. Re you well leave you with the story and then look at the spaceship. The live pics up. How high are we now . Kilometers right now, kilometers g 17,000 an hour as well. To watch that e story and well get to the rest of your top stories today. On the other side of this break. This is bloomberg. Welcome back to the program. We are still looking up we are not. My producer just told me we lost the live shot. I am not just cranking my neck, though i did not sleep well last night. The spacex launch should happen any time. In the meantime, keep it here on earth and keep it real. In new york su keenan is there. We will start with the latest in iran. Thousands packed iran and other theian cities to mourn killing of top general Qasem Soleimani by the u. S. Military. Ayatollah khamenei led the service and said the generals death would be avenged. Soleimani was killed in baghdad in the u. S. As it currently has andlans to move out of iraq that the iraqi people still won a u. S. Presence in the country. Elections in the capital new delhi february 8. Rising unemployment and mass protests against prime ministers Narendra Modis agenda. Protests against the prestigious delhi university. They blamed the violence on a group linked to the government. They say it was a clash between rival students. More than 130 bushfires rage across much of southeastern australia with towns and cities suffering record high levels of air pollution. At least 135 separate fires are burning. Animalsn half a blion have been killed. Weather conditions are set to worsen in the coming days. 2 has becomeen the highest grossing animated film ever, amassing more than 1. 3 billion in ticket sales and knocking the original frozen off the top list. Alsoatest star wars movies topping the u. S. Box office over the weekend. Global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. I am su keenan. This is bloomberg. Talk more about chinas largest mobile phone company, hoping to get a 5g boost to revenues in 2020. They offered 5g services from the end of october after plans Capital Spending of 43 billion last year. It came amid pressure to atroduce 5g ahead of previously scheduled introduction in 2020. David investors hung up on shares with china mobile losing 13 , dragging it to the lowest 2008. Since to help us answer that question, edison lee. Do you think things will get better for china mobile . Edison i think it will get better because the market expectation is too bearish on the cap side. Chinese telcos have become more rational in competition. The pressure on mobile pricing is easing. If you look at 5g pricing, it is rational. They try to price it higher than 4g, though they definitely wants people to be spending more when they moved to 5g. Starting from two weeks ago chinese telcos started offering a higher data speed to those who want a 5g phone, but did not sign up for a 5g plan. They are trying to move the traffic from 4g to 5g, which i think is smart. Yvonne your forecast for capex is still below consensus. Why . A couple reasons. The ecosystem of 5g is not mature yet. We know that the 5g standard will not be coming out until march or june this year. The chinese telcos [indiscernible] the buildup will be intensive the second half of this year. You also need to look at the frequency allocation. They are building 5g at the same rate as 4g. Network capacity and density will not go up. China unicom and china telecom, that will dramatically save capex and reduce the number of stations to build. David we look at mobile population, what percentage is now 5g, whether signed up for it or not . Edison it is very low because the telcos only started pushing in march. 2 out be 10ect there may million 5g phones in china. Think this year will be explosive growth. They are offering everyone for a 5g phone higher data plan. Even if you are on a 4g plan, if you have a 5g phone, you instantly get a four times speed. They are offering people who are not signing up for a 5g plan, 5g speed. Is megabits per second almost 10 times faster than the 4g. You will probably get 100 megabits per second, still four times faster. There will be a tangible benefit for consumers to upgrade. The 5g phone prices will continue to fall quickly. We have an average selling price of 4000 renminbi of 5g phone. One would be available to ship today. And they will have a 2000 renminbi 5g phone in two months. By the Third Quarter many models will be set below 2000 renminbi. I think demand for 5g phones will explode. Telcos willh of the capture early adopters . By size willoughby china mobile . Edison by size it will be china mobile, but all three will benefit. The market fear of these chinese telco is whether the capex will be blowing off. I argue the capex will be under control. Even if 5g demand is skyrocketing. As a percentage of the subscribers it is still a relatively small number. We are expecting 7 5g penetration this year, over 100 million users. David you talk about valuations of these three. Irresistible is what you are saying. Regardless of what your assumption is. Edison if you look at price to earnings ratio, they are trading 10 to 11 times per year. Around 5 per year. Even when they are going to the capex cycle they will continue. 23 hong kong dollars hurkacz per cash. They do not believe it is sustainable. Yvonne everyone is talking about this, playing the 5g trend. What is the proper play for it . Do you look at the telcos, the handset makers . Where do you find the value . Willn the telcos massively benefit from Revenue Growth as a result of 5g. Bearish, but too if you look at the growth area, smartphone supply chain and infrastructure should benefit. The infrastructure supply chain expectation is too high. That is because i have this below consensus feel on the capex. 5g will benefit in the second half of this the smartphone half of this year. Some have less pricing power. For those that have pricing power, the chips and manufacturers. There is a limited number of suppliers that can manufacture the chips. M,e are the tcs [indiscernible] these companies are almost having a semimonopoly position. You go to other component makers which have more choice such as display or components, pacing, there will be intense Competition Among makers. They will some they will squeeze the suppliers to death, but they cannot squeeze the chipmakers. I am familiar with the western counterpart. I will not name names. [laughter] 200 5g handsets in china this year. Talk about that Company Edison it is different from 5g. They are milks mostly in legacy noakes benefiting from automobiles. Automobiles are getting more automation and electronic into the car. The demand will increase. 5g,ike them not because of but the increase in intensity and costs will increase. Huge localization drive in china for useful components. If youfinal question, think the capex will not be as expect,as most people do i do away with the idea any of these telcos will need to raise money in the next two to three years . Edison there will be consolidation. It is not off the table. Two years ago there was speculation. It makes perfect commercial sense to do it, but politically, it remains to be seen. China. S 4g licensing in they do not have the money to build it. What they are going to do with the spectrum and whether theyre willing to work with the telcos remains to be seen. Yvonne thank you, edison lee. Trains, planes and auto audacity. How carlos ghosn made his great escape. This is bloomberg. Former nissan boss carlos ghosn running the names of people he believe are behind the coup to take him down according to fox network. Nissan said the consequences of ghosns actions are significant and it will continue to take legal action. David lets bring in our Asia Business reported to talk us through. Lets start with what was reported today. He gives us an idea of what he is likely going to say when he spills the beans tomorrow night. That is right, all eyes on ghosn and what he will say tomorrow. Fox reporting they had a over theion with ghosn weekend then he claimed he had documentary evidence that shows tore was a ruse, a plan, oust him and undermine his efforts to merge nissan with renault, and he has given their names. Case fromght this lebanon and try to say the things he wanted to say when he was under house arrest in tokyo. He will be looking to say what his arguments are, some are r obvious targets. Others inside the government may not know yet. I guess nissan counteracting this possible attack from ghosn reiterated today it has taken appropriate legal action against ghosn despite the fact he is in lebanon and reiterating there was incontrovertible evidence of acts of misconduct by ghosn. The stage is set tomorrow. Yvonne tell us more about the business of nissan. How are they going to move on . Angus this is coming at a time bad time for nissan profits. They do not need the distraction ghosn is providing. Does not need ghosn undermining executives clouding the waters between collusion in the government and nissan. This is not what nissan needs at the moment. They do not have a choice, do they . Angus, thank you. Coming to something more nearterm. In terms of what oil movement for the markets means for the currency, we saw at crete past 72. Moderation. 68 a barrel. We will see this continue and whether those two continue to move up and down. Theguest will set us up for trading session in mumbai. Good morning. [indiscernible] there is a breakdown of key support levels. The nifty broke below the marker of 12,000. That does not fit well with regards to movement. However, the nifty indicating a bounceback. You can expect a slight bounceback. However, technical experts we bounce can beany used to sell back into the index. 11,993 is what you have for the nifty at the close. Thanks saw a big selloff. Saw a big selloff. 40 comes from financials. Lower. Big heavyweights concentrated on the downside. Hdsne you are watching bank showing strong growth in loans and deposits. How is the stock expected to do . Devina the last few days we have seen contraction coming into this stock. This is one of the big names were much money has been flowing into it. Shown strong growth in loans and deposits. Deposits are up 25 . The bank continues to gain market share. You can see that in the oneyear pricing of the stock. David great stuff, thank you so much. Talking about appetite food, a plantbased imitation port as it makes a big push into china. David we spoke with the cfo and coo about the companys entry into the worlds biggest port market. At this point we have not announced a specific date, but our mission is global. With 40 of meat being consumed in asia we are very focused on ensuring we can enter major markets like china as soon as possible. The china market very competitive. You have local chinese producers trying to come up with their meat alternatives. Anothereet meat competitor. Where you see yourself positioned in the Chinese Market that is very competitive . What we find in all markets, whether Mainland China or the inner cities of the u. S. Or eaters votepe, meat with their stomachs. They want the best tasting, veablea bull cra products. Let them choose. Eatersconfident meat everywhere, whether in asia or the u. S. , will vote for the best product. When could we see products like impossible dumplings or other dim sum products in china . What is incredible about our technology is that it is platform technology. Impossible pork made from plants products is a great filling in a dumpling or a bao. I wish you could be with us that ces, because you could try it in a variety of cuisines, whether in noodles or a dumpling. Our products can be transformed, cooked differently. In many ways it is 1000 products into one. I think very soon you will see the same thing you saw with impossible burger 2. 0. Was david lee, impossible foods cfo and coo. Yvonne we have been talking to the tourism board in hong kong. Bloomberg tv interview about the impact these protests have had in the city, when it comes to visitors in hong kong, it fell 36 from a year ago in the second half of 2019. In december they had 100,000 tourists and visitors per day, but still a slow down, especially during the holiday season. They were talking about a campaign to get more tourists back in the city. Things have relatively speaking, down a bit. David not canceled. Amid speculation it might be the shelved. G event to be rugby events are on. On that note we will hear from them in a couple minutes. Numbers. N tourism coming upve interview on bloomberg television. Yvonne time for our battle of the charts segment. Competing for our votes. Lets kick things off with marcus. Good morning. The blue line shows the price of emerging market equities. Sentimente to bullish over u. S. China trade tensions. It has fully been priced in. Secondly, the recent escalation in u. S. And iran tensions bring further headwinds to asian markets, especially nations dependent on oil. David go for. Go for it. To 70 a barrel due to concerns over as quitting tensions in the middle east. Thisey question is whether oil rally is sustainable. My chart about this Oil Volatility can explain that this rally is going to [indiscernible] if you look at the chart, Oil Volatility rose to the highest level, but still below septembers levels. In the interest of time, since we are coming up to a hard break, the markets are a great chart. Earnings are the next thing everyone is watching out for. This is bloomberg. This is bloomberg. It is almost 11 00 in singapore, 8 30 am in mumbai. I am haslinda amin. Yvonne i am yvonne man. We are entering the last hour of the session in hong kong. U. S. Ordered more troops to the middle east. Oil eases below 70 while gold remains a secure high. Haslinda anger at Narendra Modis government, one of the most iconic sites occupied, the gateway of india. Yvonne hong kongs rumbling unrest continues to hurt the economy. We hear exclusively from the board as visitor numbers tumble. This is Bloomberg Markets asia. Haslinda it is a big day for the Automotive Market in china. Elina wang joins us what do you have for us . I am standing outside tesla. Multibilliondollar factory. A ceremony to launch the first deliveries of teslas made in china model 3 cars to customers. A major feat, but at a challenging time in chinas auto market, predicting the third annual straight decline for china in automobile sales. A difficult time for tesla, but i will have more on what this means for the company. Haslinda thank you. Lets look at the markets. It is likely the u. S. Attack never happens. We have gains in the asia pac index. Erasing the losses earlier. We have the yen falling. Treasury yields inching higher. The index up by 0. 9 . Most of the benchmarks in the region are in positive territory. The hang seng index up by 0. 5 . Developerseye on after seven months of protests that could mean trouble in the office space. Taking a lookage, at the haven plays. 1. 0849. 78. 74. G kong dollar at the currency to be watching. Gains. Crude giving up take a look at the nifty futures. Are hoping for this catch up rebound in mumbai after a brutal session yesterday, closing below 12,000. That was the biggest drop since september. The rupee correlated with the oil mood. Brent below 70. Hopefully we will see steadiness. We are watching yields as well. We did see a pickup after the third option of the r. B. I. s operation twist. We will see how things go for the rest of the bond markets. For first word news we have su keenan in new york. We start in hong kong. Chief executive carrie lam says the economy is set for a grim year. It is expected to worsen with rising dollar rates and some business closures after lunar new year. She wants to work closely with chinas new liaison director to maintain the framework that provides the city with its limited autonomy from beijing. Says he. S. , john bolton is willing to testify if subpoenaed during President Trumps impeachment trial. His statement is a fresh drama and complicates Mitch Mcconnells plan for swift proceedings that do not involve witnesses. Democrats say bolton is raising pressure on Senate Republicans to allow additional testimony. Saysbigger drama, nissan Carlos Ghosns escape to lebanon will not stop legal action against him for what it calls [indiscernible] be ready tod to name the people he believes are behind it. FoxBusiness Network said it spoke to the former nissan boss over the weekend and revealed he has evidence his arrest was a plot to taken down. To the u. K. , politics. The Opposition Labor Party will hold a threemonth contest with the winner to be announced april 4. Six lawmakers put themselves forward. The partys brexit spokesman is currently leading the race. Challenger, rebecca wong bailey. Global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. I am sue keim su keenan. This is bloomberg. Yvonne the standoff between u. S. And iran dominating the news after the u. S. Killing Qasem Soleimani. The pentagon sent Additional Forces to the middle east. Mark esper insists the u. S. Has not made a decision about leaving iraq, despite that countrys lawmakers voting for troops to be expelled. We are joined live from singapore. The Washington Post saying how concerningcials, sanctions, tell us what more we know at this point. That is a really important step. Trump suggested sanctions on iraq worse than iran if they evicted u. S. Troops and did not reimburse the u. S. For the cost, which is billions and billions of dollars. The Washington Post is reporting u. S. Officials are starting to look at how that would mechanically look, starting to drawossible targets. This is a long way away from getting implemented, but it is important to understand with this reporting you could say it is no longer an idle threat. It is in play, a threat that has action behind it and the u. S. Is drying up contingency scenarios. Yvonne what type of sanctions . Against a person, company or government . Derek it is too early to tell. The post did not have too much detail. It seems it is in the early stages of drawing up a potential target list. This could be a bunch of different things. If we are drawing on past experiences where we could look actions, they of range from everything from leadership sanctions down to even the ships and aircrafts that help people do stuff. It ranges across a field of possibilities. But the keyto say, to key context is that they are signaling it is not donald trump running his mouth and you this is an actual threat the u. S. Wants to convey of trying to say that iraq, if it continues down that path, may actually get blacklisted from some amount of u. S. Help. Keep in mind the u. S. Has been a major financial benefactor for iraq, has been the main guarantor of security for iraq on an international level. Threat from the u. S. It does raise the stakes. As iraq continues how it will deal with iraq on one side and the neighbor iran on the other. Raises the stakes, but some questioning whether trump has a coherent iran strategy. U. S. Iraquest thanks tensions will have limited impact on markets. Lets bring in Kieran Calder. Why havent we seen a worse selloff . Kieran i think we did see a bit of a selloff yesterday. Geopolitical events have limited impact on markets. East rget, the middle it is not like it was peakign both peaking before. The markets tend to look over these kinds of things. If we get a prolonged or worse situation, that may have an impact, but we think the market is focused on earnings. Ix is still below 20. East, northe middle korea, waiting for some move from kim, impeachment of trump. Kieran it is right to say the market is not expecting these things to spill into the real story. We are likely to see a recovery and Earnings Growth in asia this year. Growth is not so bad in the were so we see earnings basically flat. Hat crazy decent cushion yvonne that is the key question, how earnings are going to deliver. They see the projections, doubledigit growth when it comes to Earnings Growth. Is that ambitious . What will we see to reach those expectations . Kieran earnings in asia peaked 18 months ago. It would be unusual if we did not see them bottom in the first half of this year. Means Market Performance was all about multiple expansions is earnings were declining. We discounted recovery earnings, recovery fromte the bottom is going to be supportive as well. U. S. Tch over to the u. S. Earnings were flat. We think growth is not so bad. We think we are going to start to see growth. Off declining. From that perspective things look ok. Youinda yvonne mentioned your strategy. China, still underweight. What is behind that and what will change for you to start accumulating more there . Kieran we had been underway, but looking to add exposure in china. For us the major focus around trade is what kept us away. Against that the pboc has a lot asepower in terms of the month, this will take the trade issue off the back burner and we can focus a bit more on the underlining underlying earnings story. Haslinda what makes sense . Kieran growth. We like Earnings Growth over the long term. Haslinda which sectors . We like a better than h. Than china h. Haslinda how concerned are you about the credit . Kieran the impact would be more on fixed income. We have a preference for the sort of growth area versus the Banking Sector which would be more subjective. Haslinda hang tight. Kieran calder sticking with us. Tensions rise in the middle east. The likelihood of a direct confrontation between the u. S. And iran. Yvonne elon musk comes to town as tesla begins delivering its first cars in china. We will be live at the factory in shanghai. This is bloomberg. This is bloomberg. Yvonne take a look at this chart read we were talking to Kieran Calder about earnings. This has been the overall trend we have seen when it comes to the global earnings picture. Have upgraded the past year. Seems like things are beginning to bomb out which our guests have been talking about. Lets talk more about what to expect. I am wondering, where can i see the most earnings upside in the region this year and what are we watching out for . Is it more about profit growth, earnings, sales or top or bottom line growth . What is key to watch . Kieran we want to watch all of those. Generally have better Growth Prospects around the globe, which should be generally positive for the topline. Many Companies Across asia including japan. We have had 18 months of earnings decline across the region. That has forced managers to tighten their belt. There has been some cutting of cost. We think those will likely come together, as is normal in an earnings cycle, to create a bottom for earnings in asia. Most likely in the first half of this year. An important sector in asia is semiconductors. Two of the three Largest Semiconductor companies in the world are here. It is 9 of asian market cap. We will see tomorrow earnings from samsung for the fourth quarter. The guidance for the fourth quarter. There semiconductor cycle bottomed in asia the First Quarter last year. C guiding for record high revenue. We think the earnings we will start to see from tomorrow will paint a better picture than we have seen over the last 18 months. Pi will be in outperform her in 2020 . Kieran maybe. [laughter] haslinda why are you hesitant if it is about semiconductors . Samsung, it is hard not to like korea, but there are other moving parts and curly including currencies. In koreasemiconductors should do well. We are not calling for outperformance. A lot of the good news factored in, what is the best hedge . , to reinforce your point everything that happened last year in terms of Market Performance is about multiple expansions. We have not yet seen earnings bottom. In terms of a hedge, we want to focus on areas where Earnings Growth will be supported, not only to grow into the valuations , but expand further. Kieran calder, ubp equity research, thank you. Teslachina operations. The first deliveries. We are live in shanghai. This is bloomberg. Yvonne a quick check of the business flash headlines. Xerox secure the largest ever loan in the tech sector as it continues its pursuit of hp. The 20 billion ibm took on in 2018 for its acquisition of redhat. Xerox says the move is intended to remove any doubt about its ability to raise financing. Uber working on a flying car with hyundai, aiming to create air taxis to take the concept of ride sharing to a higher level. Arial taxisectric would take off, land vertically, crew four passengers and that up to 200 miles per hour. Car production in germany has fallen to its lowest in almost 1 4 of a century. Including volkswagen, bmw and daimler have shares of 4. 6 billion, the weakest we have seen since 1996. Decline is due to waning demand in international markets. Haslinda tesla boss elon musk set to attend the ceremony marking the delivery of made in china cars to customers. Selina wang joins us from a tesla factory in shanghai. This is happening against a backdrop of a challenging Auto Industry in china. Selina that is right. On their official weibo account. Pomp and circumstance at the ceremony were elon musk will be this afternoon. This is to mark the first deliveries of teslas maiden china model 3 for chinese customers. We are also expecting high level officials. It is critical because a part of the Chinese Government has been instrumental in the swift and smooth the process of ramping up the factory. Just a year ago this was a muddy plot of land. Now the factories producing more than 1000 cars a week. These tesla cars will be exempt from a 10 local purchase tax that will be approved for government subsidies. Tesla says they will cut the cost. The fact elon musk is here today signifies how important this is as a cornerstone for teslas plans to become a global car making company. Elon musk said the shanghai factory will serve as a template for future expansion. They announced plans to create another plant in germany. Yvonne there are a lot of numbers out there and how many they can turn out. What have you heard so far . Low end, they predict this china factory will only be able to sell 21,000 3s, in china this year. To production issues and delays with supply chain components. 100,000lysts predict this year or more. To talk more about that macroenvironment, chinas auto market is an unprecedented slump. Predictions pointing to the 12th street annual decline. Particularhicles in have 5 of total vehicle sales. However, those numbers have been scaling back dramatically as china has been holding back on the government subsidies. Despite this challenging backdrop, numbers show tesla will have Strong Demand at the get go. Tesla registration jumped 14 fold in november to 5000. In addition to the macro, a lot but alsocompetition, global Car Manufacturers like bmw, mercedesbenz, trying to get a bigger chunk of the car market. Bullish ones like Morgan Stanley saying this ramp up in shanghai could bring 10las stock to 500, a times upside from where we see it currently. Time now for the stock of the hour. A coat maker because it is so cold in the studio. [laughter] icc initiating coverage with an outperformed call. The brand has become iconic in china. It rivals canada. Three hongget of kong dollars. The chinese also have a preference for buying chinese. Good for the company. This is bloomberg. Haslinda live pictures, in the middle of the trading day. Pretty much in line with the rest of the region, here is an update in singapore. The mes says they are a Diverse Group of applicants, seven applications were for Digital Full Bank licenses, 14 for wholesale permits. Says it did not disclose all of the names, but it is reported that jack ma and financial are among them. Thats get the first word headlines with su keenan in new york. Su we start with hong kong, the tourism board is preparing a Rebranding Campaign to lure visitors back to the city. Ongoing mass protests continue to take over the streets. Interview with bloomberg tv, the tourism board says it is a new challenge to the economy. We are in Uncharted Waters in hong kong. The last half year has seen a drop in tourist arrivals by about 36 . This is on top of last years opened the macau bridge and highspeed rail. A lot of people came to try out the bridge and rail. Su thousands of people packed tehran to mourn the killing of Qasem Soleimani by the u. S. Military. Service and led the said the death would be avenged. The u. S. President has no plans andull troops out of iraq, the iraqis still want a u. S. Presence in the country. Assembly elections in the capital new delhi in india on february 8 amid slowing growth and mass protests against prime hinduer modi and his nationalist agenda. Lawmakers blame violence on a group linked to the government while police say it was a clash between rivals. Has becomeozen 2 the highest grossing animated film of all time. Than 1. 3 billion in ticket sales and knocking the original frozen out of the top spot. It continues a stellar run for disney with the latest star wars topping the box office over the weekend. Global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. Yvonne we will take a look at the markets here. When it comes to risk off, we are back to a more red sentiment. Nikkei,p 1. 3 on the not nearly gaining the loss we saw yesterday, but we are saying and are in australia watching india markets. We had a brutal one yesterday, down 1. 9 on the nifty. We could be back about the 12,000 mark level. The rupee still seeing some strength at 71. 72. Oil has shown some stabilization , the geopolitical risk priced in. The india tenure yield down three basis points after the third option from the r. B. I. In operation twist. Haslinda speaking of oil, brent crude down by 1. 2 . Leveltreating from the 70 after the attack. After the attack by the u. S. We saw oil surge 5 , not the case right now, down 1 . Mideastescalating tensions, buyers and asia are entangled could disrupt key suppliers. Are we seeing any evidence of tension in the market . Yes. Sounds, we are not saying real evidence of any supply disruption in the markets now. Buyers, a lot of them have reduced supplies from iran after the u. S. Sanctions. Right now it looks like business as usual through the persian gulf to asia at the moment. We are not seeing ships canceled that are carrying oil. Maybe there is more to come. Paint us a picture if we see oil supplies in iraq disrupted, what would happen then . Is a different story. A lot of asian buyers are major buyers of iraqi oil supplies. That asianariety refiners like a lot. Sanctions. And trump beq like he warned, it will a major trouble for refiners. They would have to find supply from elsewhere, and it will be a headache for them. Yvonne thank you out of singapore with the oil report and the latest in the middle east. Lets get to our next guest, maintaining a conflict between the u. S. And iran is unlikely. Sorana parvulescu, partner, control risks Group Holdings joins us from dubai. Hank you for joining us it seems like a situation in the middle east is widening, and the focus is on iraq after we heard from the parliamentary vote that u. S. Troops should leave iraq. How should the u. S. Respond to those demands . Parliamentary decision is a nonbinding decision at this point, it is more of a political statement that reflects the killing of general soleimani that has triggered antiu. S. Sentiment in the region. We have taken it as more of a anitical statement than actual decision. There are more steps to be taken by the government to request that, and our expectation is this will be talked over and is still unlikely. Be pulledcould iraq into a conflict . Sorana between iran and the u. S. . For the time being, iraqs sitting grace is that iran and the u. S. It has been in their interest to maintain stability workedaq, and have together to push back the islamic state. For the time being, that remains unlikely. The iraqis have rallied against the u. S. Compounds because of domestic political tensions in iraq recently. We do not see a realistic scenario unless we see a major conflict in the region, which remains unlikely in our opinion. Haslinda we know iran has vowed retaliation. Do you see a more emboldened iraan . Attack yes, this recent was part of the titfortat series of attacks over the past six to nine months. In some ways it was expected. We did not know when, but we knew something was going to happen. We do expect some form of theliation partly because National Government can save sce because of soleimani position in iraq. But iran can choose when and how it retaliates, and it will likely calibrate the retaliation in a way that keeps the two sides away from a potential direct conflict. Yvonne can the 2015 nuclear deal be salvaged . Depends ont probably a result of the u. S. President ial elections. If it has any chances. For the time being, we see no and game, which is why we see this titfortat escalations will continue until the u. S. President ial election. Ifns game is to wait to see President Trump leaves the white house, then maybe it could get a partner which it could negotiate further. But it is looking more tenuous, and there is little in the form of offramp possibilities, no obvious tradeoff that will ease or deescalate the situation especially with u. S. Elections looming. Notinda the u. S. Has decided whether to withdraw troops from iraq. If it does, can iran view it as a win . Sorana yes, i think Public Opinion, the Public Opinion court, this has been seen as a bit of an iran win. Tried to pass resolutions to have the u. S. Military leave the country, and it has never votes. D enough in that respect, it is a win toeady, and it is starting retrain a soft power exercised retry the u. S. As the occupiers of iraq. We think it is unlikely that the u. S. Troops will withdraw anytime soon. This is more of a political relegation. An yvonne we had a Washington Post report that trump was considering sanctions against iraq in light of this. Do you think this is the right approach, or could it end up backfiring . Yes it will definitely backfire, and a u. S. Is in a top because it sees itself as balancing between the influence of iran and iraq, and any steps it takes against iraq will lessen their position of influence. It is hard to see how sanctions bar any targeting of designated persons would get any result. Haslinda President Trump has said iran will never have a Nuclear Weapon. Do you agree . Sorana we can all hope that, right . Iaea reports, we are not close to iran close to developing a Nuclear Weapon yet, despite the threats and actions to step away from their commitments under the nuclear deal. The question is how close iran can get to being able to it if it once it. If it wants it. And that break it time is within thets that are safe, but increasing has been announcing it will give up some of its commitments is because it want something to dial down on. Nce negotiations restart they want to go back to the nuclear deal and say we go back to the original commitments, but you will have to ease off the sanctions to what the deal says. Yvonne thank you so much for your time, sorana parvulescu, partner, control risks Group Holdings. Some moves we are seeing here, dollar china dropping 0. 3 . We are not sure what is adding to the strength to the chinese currency, but it is the dollar weakness we have been talking about. Likely to go lower ahead of the holidays. It is unlikely to fall below that threshold without any significant improvement in the growth data we have seen. With the trade deal being signed as early as next week, that is largely priced in. We will see what contributes to these moves. Still to come, india braces for more protests. Details just ahead. This is bloomberg. Yvonne india markets have just opened, it looks like it will be a good session in mumbai. What to expect from todays session. Good morning. We recoup 50 of yesterdays losses. It is an opening for the majority of indices, back above the market 12,000. , niftychological mark has opened higher, a gain of 1 . Nifty bank has bounced back, up about 500 points, and a nifty 500 has gained about 1 . Some relief in the vix, surged from december 30. That cooled off in the morning session, down 8. 5 . The indian rupee which has been depreciating is at 71. Hdscs we are tracking, came out with its quarterly, strong growth in loans and deposits. The december quarter was up by 20 . The stocks reacted positively. They have been posting growth of 40 in the last five quarters, but some relief in the opening session. Back to you. Thank you. Protesters are ramping up demonstrations against the Indian Government after a brutal attack on students of the countrys second highest ranked university escalated tensions. Mumbaibring in our bureau chief. We saw widespread protests, what is expected today . The protests are still continuing across various cities. The bulk or happening in the capital near new delhi where not just students the people of all walks of life have gathered at Public Places and are demonstrating against the high handedness of the ruling government. Even in the Financial Hub we have seen protesters that started as a small protest outside the gateway of india, and that has ballooned. We have heard that police have moved these protesters from the iconic tourist spot to a larger ground where they will be allowed to continue protests, just not in front of the gateway of india. Hotel,tside the palace which is also a location for local tourists. Haslinda how long will it play out for the government and is any response expected . Saying thers are government has been highhanded in handling protests. Falloutests are a wider of new citizenship laws that modis government announced a month ago. Says aister for security large part of the violence has been orchestrated by people who want anarchy in the country. Protesters said they will not back down even an inch on the citizenship law. It does not seem there will be any backing down by the government. Protesters say they will continue to protest and holding demonstrations in new delhi. Most populist the state the protests will continue. Safe. Da thank you, stay still to come, can hong kong stand the falling tourism numbers . We will hear from the tourism chairman. This is bloomberg. Dr. Y. K. Pang spoke to our chief correspondent. At theave not looked exact number in terms of gdp impact, but it is significant. Employsism industry people directly, so people in the Hotel Industry and Airline Industry and hospitality industry, and across retail and transportation. A lot of peoples jobs and lives are impacted, and in these areas. Re suffering losses what we are doing is trying to turn things around. There are a number of initiatives. On one hand, the government and tourism board is providing subsidies and fee cuts to help tide them over. We are also making promotional forrts that are geared bringing visitors into hong kong on the shortterm. Asia wherearkets in people will still come. ,e are working on a campaign and on the website we are putting in a tremendous number of special views never seen before in hong kong, and they are marketed toward the philippines, indonesia, thailand, korea. We are getting a lot of traction. Is that going to be enough . Tickets criticism that subsidies are too small and not enough, there needs to be a bigger rebranding of hong kong. This Current Campaign is a Technical Campaign to bring in shortterm visitors to tie that trade over. To anhings calm down extent, we are planning and working on a major relaunch and rebranding of hong kong to remind people what hong kong is about, and what the future of tourism will look like. The launch date will be subject to how things pan out in the next few months. Can you give me a clue . This is a significant challenge for hong kong, lets not sell something that it is not. We have had six months of violent protests, the pictures on the news of tear gas and rubber bullets, batons beating people. This is a serious Public Relations disaster for hong kong. How do you rebrand . Dr. Pang a rebranding will not beat to say hong kong is safe again. When it is safe, people will realize the protests have died down in hong kong is safe again. Coming totions of hong kong, a city that never sleeps, the most exciting confluence of the east end west with the experiences, the sounds, sights and smells are something you cannot find anywhere else in the world. Haslinda dr. Y. K. Pang, tourism board chairman, hong kong speaking to our correspondent stephen engles. At landlords in hong kong are looking at another prolonged antigovernment protest that has taken a toll on retailer protest, it is not looking pretty. Yvonne taking a look at this chart, you can see where the commercial properties side. Prices are at levels that we have not seen since 2013, and there are questions about what the landlords will do. Rent, itok in terms of is the most expensive in the world. This point the landlords have to do something to keep retailers in stores. Haslinda if you look at this graph, landlords standing their ground. Office space could be at a two year downturn. That is it for Bloomberg Markets asia. Taylor im taylor riggs in san francisco, in for emily chang, and this is bloomberg technology. Coming up, as iran mourns its fallen military general, it down revenge against the u. S. Cyberattacks may be on the menu. Plus, it is buy time. Pivotal Research Raises alphabet to a buy largely on the new ceo