Transcripts For BLOOMBERG Bloomberg Daybreak Asia 20170219

We will look at chinas been on north korea and coal. We breakdown chinas trade data as soon as it comes in. And singapore looking ahead with budget announcement to do later on. From sydney we break down the latest attorneys from the minors in australia. In new york world we will be discussing krafts surprise withdraw from a merger with unilever. And a deal for bank of americas boss. 20 million for Brian Moynihan. Coming daybreak asia from the u. S. And asian headquarters, im betty liu in new york where it is just after 6 p. M. It is just after 7 a. M. In hong kong. A pretty mixed day for markets it seems on this monday. Japan trades will be the one to watch at this hour. And they will be focusing on global trade in the next two hours today. With two former trade negotiators joining us. Betty it is interesting we are talking about all of this at a time when trumps lieutenants call them are out and about in europe and asia trying to appease everyones concerns about what exactly the u. S. s role is going to be in this world. So, well see. Thats, of course, going to be playing into this economic numbers coming out of japan. We will be watching that very closely. Yvonne lets do a quick check on how markets are trading on this first day of the trading with. To new zealand where we start things. The Service Industry growing the fastest pace in 16 months. Those psi figures to give a butle boost to the kiwi, it is giving back gains, given the Dollar Strength we saw a early on. 1. 85 right kiwi at 7 now are lets go to australia and check out things are kicking off in sydney. Still in the tell you range when it comes to the aussie dollar, despite the dollar locking in a second straight weekly advance last week as well. So, continue to watch that one with the aussie dollar stock pretty flat at the open. Japan, as i mentioned, trade, exports are the one to watch. Seen rising for a second month. There was a bit of a risk off session on friday with yen earlier. We did touch 112. 62. 4 so far this. 9 morning put a little bit of a pullback and stocks in tokyo today. This is what we expect in this region this morning. And the u. S. Is closed for president s day, so a holiday for you guys on this monday, but from President Trump this week. Betty we had alltime highs again on friday on wall street. Su keenan here with more, including the big deal that is not such a big deal anymore in the food world. Su a real shocker that you would see a bid of this size made and pulled within two days. The story coming out on sunday through an email. Lets go to the videotape as we show you the headlines. Spokesman saying their intention was to proceed on a friendly basis and they were rebuffed, according to people close to the matter. Capital and Berkshire Hathaway, which together own have a kraft heinz, decided that given unilevers position that they did not want to go forward, this transaction would be impossible. And both companies believed the protracted war of words probably was not in the best interest. The statement says the bid was withdrawn amicably. You look at the charts here. That is a huge shoot up in the stocks we saw on friday for kraft heinz. It actually hit a record, up 11 . And if you look at unilevers a similar jump, up 13 on friday, also closing at a record. A lot of observers are the world, especially since wednesday, kraft has downplayed the need for an acquisition and days later made the offer. They also say the desire for consolidation within the Food Industry. Well likely see more action down the road from one or both of these parties. Betty i not sure that story is over quite yet. How about oil . You are watching that. Su direction question is big. For one reason. This has become a rather boring trade. Lets go to the bloomberg. Because we are now heading for one of the narrowest trading ranges since january 27. A little bit of a surge. Really showing not price but trading range. You can see how narrow it has been as you go to the right which is where we are now. Lets go back into video. Because what we had in the past week was the number of rigs in the u. S. Surging. It was the biggest surge in oil rigs since 2015. Drilling is up as prices have rebounded. A lot of traders and analysts think we are going to continue to seek oil go sideways. Our Bloomberg Survey for the week ahead shows most of the oil staying unchanged, and the bears outnumber the bulls. Yvonne it is not just about opec cuts. They have to watch out for u. S. Shale. The earnings for a. What other Companies Reporting . First up, home depot on tuesday. They cannot just before the bell. This is a company that tends to gap lower if there is a big number expected to report, 1. 133 33. Lets go to barclays. They report on the 23rd. The bank has to follow jpmorgan to keep momentum. And hewlettpackard enterprise are reporting the same day. A lot of focus after the split with hewlettpackard. Back to you. Thank you. Keenan, lets go to the first word news. Heidi south korean president has asked a Constitutional Court to delay her final impeachment hearing by week. Her lawyers asked the court to give them more time to prepare for the closing argument. The court said it would review the request. She was impeached in december after corruption allegations and months of protests. An investigation has widened to include the countrys biggest industrial conglomerate. It was taken back to the wasecutors jay y. Lee taken back to prosecutors for a second day. Lee was arrested on friday on allegations including bribery, embezzlement, and perjury. Angela merkel will host Christine Lagarde on wednesday seeking reassurances the imf will contribute to greeces bailout. The euro area finance chief will review greek compliance with the bailout terms could determine the imfs further involvement. The former greek finance minister says the bailout will only delay the countrys problems. The greek state went bankrupt and the europe decided to pretend that did not happen. And how do you pretend that equity has not happened . Liquiditying it is a problem when it is an insolvency problem. They keep kicking the can the snowball up the hill. At some point the snowball comes back. U. S. Military says an Aircraft Carrier group has begun what it calls routine operations in the South China Sea. The navy did not say how long the carrier uss and accountin accompanying ships which stated. Rex tillerson said that china should be blocked from accessing artificial islands it has built in the disputed waterway. Global news 24 hours a day powered by 2600 journalists and analysts in more than 120 countries, this is bloomberg. Yvonne . Yvonne thank you. China has called for a new international talks on north korea. A day after banning coal imports from its neighbor over p yongyangs program. This was seen as a surprise move but this does strip away a vital source of income in his regime. It really does because north korean exports with china make a buzzing the can amount. In total, more than 50 according to to a professor at the university of north korea. Coalhina to cut all imports would be a substantial reduction in income for north korea. It had been buying coal under exemptions that a lot for trade under livelihood purposes. China is the worlds biggest reducer and consumer of coal. It only has pretty be control over that, and the internal markets itself. As to what they get from north korea, it barely makes up 10 of coal imports to try to get now we are seeing winter demand starting to ease. And chinas looking at reimposing Coal Production caps. So, this news does not really necessarily make a big impact on chinas coal situation but it will have china to look like it is complying and with the u. N. Resolutions and also acting in tandem with the u. S. And other countries on north korea. Betty it has that benefit but what is the bigger tha picture for china . It is going to get countries around the table again for talks with north korea. Other methods have not worked so why not go back to this one . The u. S. Is something more hawkish lp or chinas foreign minister on saturday said he wants to break the negative cycle on the Nuclear Issue pretty says that talks are possible and it is the best opportunity for peace. And china is willing to mediate. China is also trying to smooth out pensions in the region, because it has a wary eye on the puttingt the u. S. I into south korea. This does have an impact on chinas military capabilities as well. So, china has been opposed to it from the store. And on the part of south korea, we see the President Park is being impeached in december and the content is to take over her position are all, will all take a softer line on north korea to her till china would have a partner there into the future on its stance on talks as well. Back to you. Betty thank you so much. On this development in coal imports. Back here in the u. S. , bank of america awarded Brian Moynihan 20 million for his work last year, raising his compensation by 25 . It was a different picture for citigroups ceo, who received a 50 pay cut. Laura keller is here with more. Salad days back at bank of america . Laura maybe not so much by 25 is a nice raise. If you think about what the board gave ryan moynihan, this is looking across this peer g roup. If we think about what Brian Moynihan was able to a college any year, this is a really great year. Profit was up the most in more than a decade, when he went back. They had not actually done better than they have since 2006. So that is 10 years of him making the best profit. That is probably something the board wanted to reward him forget betty and on the flipside, what about citigroup, then . Laura right. Cut, forroup, that 6 mike corbett, his profit was down 14 for the year. So you sort of think about how he did this is his versus his peers. Last year he was given quite a substantial raise and a lot of shareholders were upset. And citigroup instill this sort of pay cap on his equity portion so he cannot be paid as much as before. It is sort of a complicated formula that relates to the stocks. But they probably did not want to repeat that again this year. Yvonne and we have seen quite a rally in the financials since trump won the presidency or the election. So, on this prospect of rolling bank radiation is, why is deregulation good for banks and how is bank of america been helped by this . Laura right. All the regulations, banks will complain they are quite onerous, they take a lot of money. You can think about the compliance required under doddfrank or under other things the Federal Reserve has mandated. It has been pretty expensive for banks. They are paying hundreds of thousands of dollars, millions in some cases, to comply with that. So, anything that can be pulled back is really something that can go to the bottom line. And there are certain proposals under trump and some republicans, Jeb Hensarling in the congress, is talking about rolling back some of these things which brings down the expense side. And then in terms of Interest Rates, you asked about bank of america, that bank is really seen as benefiting most, most interestrate sensitive is what we like to call it, because they have adjusted so many loans. On the deposit side, they have a lot of what they call noninterestbearing deposits. Bank of america is going to get more from what lens out. It does not have to pay as much to the depositors. It is uniquely unfitted versus benefited versus some of the other banks. Yvonne still to come on Bloomberg Markets asia, a crucial imf bailout could determine the fate of an economy. We are not talking about greece. Later on, look in mongolias multiMillion Dollar loan and where it will be spent. Betty who knew . The former trade negotiator for japan gives us insight on dealing with the u. S. As we are rate trade data out of tokyo later this hour. This is bloomberg. Betty this is daybreak asia. Yvonne a quick check of the latest business headlines. Chinas National Petroleum has bought a stake in abu dhabis largest oil concession. The National Oil Company says that awarded an 8 stake in the onshore venture. Is the ventures thirds asian company, alongside bp and hotel and total. Rishaad income cameull year in at 46 million. That compares with a loss a year earlier. Lackluster commodities markets continue to weigh on the groups units. Elon musks spacex has launched a Second Rocket in as many months. Carrying 2. 5 tons. Of supplies to the International Space station despite a canceled lost on launch on saturday, sundays launch was is excess. The falcon ix rocket landed without problems after taking the dragon spacecraft out of the atmosphere. Very cool. All right. Well, japans exports are seeing rising for the second straight imports are expected to rise for the first time in about two years. We are going to break that data in just over half an hours time. Expectations as we are going to see a deficit herei in trade. For preview, we are joined from tokyo. The University Professor and former trade negotiator with japans foreign ministry. The numbers for the much in line with what economists estimate, which is about 628 yuan trade deficit, what does that say to you . How is that going to change the game, if it does it all between the u. S. And japan . Been gainingn has a little bit because of this exchange rate, which is favorable for japanese exports. But i think its not really sensible to look at the bilateral trade account between u. S. And japan. I think we have to look at the trade from more multilateral point of view. Betty why is that . Well, i think, you know, if you take two countries trade account, either way, you have a big surplus, the other one a big deficit. But it does not matter because what is important is the, if the trade is fit into the, you know, the International Division of labor. And i think its wrong to look at the bilateral trade in terms of trade account surplus or deficit. Betty but clearly, though, in the United States they are looking at this bilateral trade relationship and they are not happy about it. And theyre threatening, of course, some trade restrictions, not just against a pan but against several countries in asia. Do you think that that Prime Minister abe was able to ease some of those concerns on his trip . Abe has i think, mr. Certainly made sure that the japan is committed to free trade. And also, you know, japan and the United States share the same multilateral trading system in the wto. So, those are the things that kind of baseline to start in negotiations or talks about International Trade between japan and the United States. So, that is quite clear that, you know, those two heads of governments made sure that, you know, where their starting point is. Just interesting, given the prospect of bilateral trade between the u. S. And japan, could japan, how much good japan and up losing out on a deal like this . Is abe going to have to make some major concessions on some of these vectors he have been stubborn and protective about when it comes to autos and agriculture . Twoell, you see, the, when countries engaged in the International Trade talks, the whole package at the end of the day, it should be winwin. And so, far, japan and the United States have successfully negotiated its bilateral trade along with the tpp negotiations. So, what we have reached between japan and United States in the tpp framework, i think that is the best sort of result so far. The United States is certainly very much encouraged to come back to the tpp deal, even for this japan u. S. Bilateral deals yvonne how likely is that, and what a bilateral trade deal be more favorable that it would be tpp minue one without the u. S. . Well, of course, losing the United States is a major setback for tpp. All 12 nations, including the United States. But in in order not to lose the momentum and also we have to, we have to push back the protectionism. I think the tpp 11 countries, so that means United States left behind, perhaps, but at least the tpp 11 should start its tpp deal without changing, you know, the rules that they had agreed upon. Whereas the market result intact. Finally, i just want to get your last take on the president. He has vowed to create a level Playing Field when it comes to the currencies of japan and the u. S. And china. How do you interpret a Statement Like this . Could comments like that lead to a corset currencya war . Well, japan has never been engaged in the currency manipulation, particularly after 2010, 2011. So, it is not a question for japan, anyway. And there would be bilateral talks between the two subheads of the government, namely, mr japan and mr. Pence for the United States. This framework has been agreed upon. So i think this currency issue can be dealt with their successfully by those. Experts. Betty yvonne great to have you with us. Thank you for having me. Yvonne no problem. Coming up, australias plan to return money to investors as it forecast a 50 jump in earnings in the second half. Details next. This is bloomberg. Betty this is daybreak asia. Yvonne lets check on some shares on bluescope here out of sydney. We are seeing it rise some 2 this morning after the astromed steelmaker announced a big jump in firsthalf profit. Lets bring in paul allen, joining us from sydney. How do numbers stack up for Bluescope Steel . Paul stepped up very, very well as illustrated by that move in early trade on the asx. Net profit for the first half, 275 million. Australian dollars, that is up 79 . Underlying profit almost tripled to 360 million australian dollars after, due to a rebound in the price of steel. A few goodies on offer for shareholders. The Share Buyback of up to 150 million and an interim dividend of four cents. Very good set of results for Bluescope Steel. We will have paul malley a little later on. Betty reflected in the shares as we mentioned. Northern star is also out with their firsthalf results. It is a good time to be a gold miner in australia. Paul yeah, it is. If you cast your mind back to when gold was around 1800 an ounce, the aussie dollar was very strong at that time. And now the aussie dollar has weakened. Gold still around sicking hundred dollars announced itso, Australian Gold producers gold still around 1600 an ounce. First half, net tax up 61 . That is about 18 million u. S. Dollars. And Northern Star also reaffirming 2017 production and announcing an interim dividend of three cents. Betty think you so much. Paul allen in sydney. Up next, find out singapores 2017 budget. We will give a fiscal boost to economy facing a gloaming trade outlook a g 7 30 a. M. Monday in hong kong. A beautiful weekend in the city. Now just 30 minutes away from asias first major market betty it is 6 30 p. M. Sunday in new york. Markets close on friday at record highs. Im betty liu in new york. Yvonne you are watching daybreak asia. Now lets get the first word news. Yvonne. Eah, the white house chief of staff has denied reports that trump had repeated contact with russian intelligence intelligence agents. In the u. S. A report in the New York Times last week as total baloney and containing some trees in his accusations. The mainstream news outlets it that are acting like, you know, washington daily gossip magazines instead of the way it used to be where you would get a few sources on the record. Yeah, you will need some background and maybe, yes, you need some anonymous sources, but to accuse an organization of being in Constant Contact with russian spies is outrageous. President Trumps revised executive order on immigration will be more streamlined than the first one according to the Homeland Security secretary john kelly. Trumps previous attempt to for immigrant screen and cause chaos at u. S. Airports in january. And it was blocked by the federal courts kelly says it is a good assumption the new order will not affect People Holding valid visas or green cards. Renewedcalled for international talks on north Koreas Nuclear program. Beijings Prime Minister made the call after making south korean officials at a security meeting in munich. Warning that pushing pyongyang into a corner will not work. On center, china suspended all coal imports from north korea compliance with u. N. Resolutions over their Nuclear Program. Coal is north koreas largest export. Malaysian Officials Say they are four North Koreans that fled the country. Four other people, including a north korean, have been detained over the poisoning of kim jon nam, who was killed before boarding a flight from kuala lumpur oto macau. They are certain the man killed was kim jon nam. Global news 24 hours a day by 2600 journalists and analysts in more than 100 enclosures 120 countries. This is bloomberg. How thelets look at asian markets are shaping of this monday morning. Now we find that cue on wall street, with record highs on friday. Y. We have u. S. Marks shot on monday for a holiday. Market shot on monday markets shut on monday. We have japanese, thai gdp. Checking on the markets that are open, we have stocks and wellington rising after a twoday drop. This morning we did get new Zealand Services industry numbers growing at the fastest pace in 16 months. Over in sydney, we do have asx falling for a second day with energy and materials, and industrials leading those declines. So, taking a look at the bond space. We do have all the bonds rising by tracking what we saw in u. S. Treasuries. We look at the aussie bond down at 2. 79 . Take a look at the futures board, including im pulling up to we have a yen holding range. The 1. 12, 1. 13 shares expected to open weaker. The kospi looking flat. That update on Bluescope Steel in Northern Star, what about beach energy . So we do have beech energy jumping today following its first half profit. That on the back of rising output and higher crude prices. This is australias biggest onshore oil producer. Divesting its assets and it has been on the m a trail. Early this month, working on a bid for origins. Shares up 39 over the past 12 months. We are seeing the likes of brambles and Worley Parsons following after their earnings, the biggest decline are on the asx today. Over at Worley Parsons, firsthalf profit dropped across the groups businesses, but it has been undergoing a cask a cost cutting exercise. Expected that to be reflected in the second half. Brambles is a shipping pallet provider. They are expecting a petition with American Businesses to continue into the second half and it did withdraw its fiscal year 2019 targets. Betty thank you so much. A look at some of the movers this morning. Japans january trade data is out in 15 minutes. Kicking off this busy week of data and centralbank activity, our Global Economics commentator Kathleen Hays him with more. What is your take on the japan trade covers . Thleen exports, that is the driver of japans economy. The yen has weekend. It has made governor kuroda a little more optimistic. Lets jump into the bloomberg and look at what is expected when we get this all important report. Were looking at the 40 year surplus trend, which was broken in 2011 by this is not me that hit japan and its economy the tsunami that hit japan. Is that surplus move building. Our Bloomberg Intelligence team, if you look at, you dont have the forecast for the actual number, but you can see the last number was 356 billion yen. Their forecast is for rise in their surplus to 543 billion. That would be a strong number. The bloomberg consensus does not see such a strong number. A plus buttill is not such a strong one turned meanwhile, why is it so important . Because not only exports but halfs economy, as i said, of japans gdp growth as pendant on foreign demand. Very important that they can sell overseas. A couple of other highlights. Reserve bank of australia recent leasing their minutes and a couple of days of the last meeting. Philip lowe, the head of the rba testifies. China property prices for peoples bank of china withdraws liquidity trying to tamp down the credit boom. On thursday, the bank of koreas seen keeping policy on hold, closely watched as well. Betty indeed. Outside of donald trump this week, we are watching the fed again. Fomc minutes, putting in context, last week, one of the big events cpi a lot stronger than forecast. And so, now the question is, the fomc minutes a little outdated . Maybe they are but some key points to watch. How cohesive is the discussion when it comes to fed rate hikes . Anything to be coming on board with two or three hikes. What about the impact of Donald Trumps policies . His plans to affect the economy. How much is that affecting what they are forecasting for the year . And finally, the Balance Sheet discussion. Will they start turning it down . What are they saying about that . Dots go on your terminal. Lets remind you of the consensus last year. Six dots in the middle of that triangle. That is a narrow consensus that will be three hikes this year. When they meet next month they could update that. Er speakingetta mest in singapore. The head of the Federal Reserve bank of cleveland. And we will be watching those headlines, watching that speech and bring you all the details. In focus again this week. In parliament and and the bank of england. What is happening . Alwaysn it is interesting. The u. K. Upper house, the house of lords is debating for two days brexit, the trigger, theresa mays draft law she put together. Will they vote yes . On tuesday. They do meanwhile, former Prime Minister tony blair has been urging people in the u. K. To rise up and resist brexit. He is against brexit at any cost , as he calls appear here is what he says on saturday in london. Thee minister abeblair people voted without knowledge of the terms of brexit. As these terms become clear, it is their right to change their mind. Our mission is to persuade them to do so. En tony blair has been part of the remain camp he is also warning that brexit could lead to the breakup of the u. K. Urgeuse it could purge scotland to push ahead for a second vote on independence. Mark carney will be testifying in the Economic Impact of brexit on tuesday, but i think this, for the next couple days, what is going on, this latest melodrama when it comes to tony blair trying to rouse the people of the u. K. , is really making it very interesting, something is always interesting. Yvonne if anyone will listen and could fall on deaf year. Kathleen hays, joining us there from new york could fall on d eaf ears. As the slowing growth and a gloomy trade outlook. Lets head there. As haslinda amin. Good to see you. What kind of boost in the budget give singapores lackluster economy . Yvonee, forget shortterm fixes for the economy. That is what economies are saying that china showing signs, some signs of recovery, there is no immediate pressure for singapore to announce a large stimulus package. Now the budget will instead focus on singapores next phase of growth, growth in the next 10 years. I want to show you this pie chart. It shows the Budget Allocation last year, apart from health and education received quite a chunk. That will probably continue, one, because of an aging because ofand two, the need to upgrade the skills of workers. Expect targeted measures and plans like skills developing, leveragesmes to technologies to boost innovation. Also easing regulations for businesses. These are Key Highlights what is from the cfc, called the committee on the future economy. The goal really for singapore to grow 2 every year over the next 10 years. Manufacturing, which has been a key sector, will be maintained at 20 of gdp. Betty what about corporate and income tax. Is singapore expected to review those rates as well . Some of those tax rates have been falling. If you look at this pie chart, down from 30 in the 1990s to 17 . A different story for income tax. The committee on the future economy did recommend every few. It is adjusting a progressive system. The more you get paid, the higher your taxes get the highest paid in singapore currently pay 22 in tax. Among the lowest in the world. In australia, they are taxed 45 . Notthing is its still clear if the government is ready to adopt such a policy. It is a juggling act. Betty they do so much. Haslinda amin in singapore thank you so much. You can turn to your bloomberg for more on this and many other topics. Go to tv live go to get commentary and analysis from bloombergs expert editors. And up next, mongolia gets a little help from the imf. As debt repayments loom. We look at the terms of the bailout. Where the money will be spent. This is bloomberg. Asia. This is daybreak rishaad i betty im betty liu in new york. Indias pti says that vodafones plan to mergers and union it with ids cellular is expected to be announced. The deal would create indias largest carry. It could lead to vodafones splitting off of Indian Business into a separate entity. The all stocks deal would allow vodafones ceo to the consolidate, which has been a drag on earnings. Bloomberg has been told that indian oil is reconsidering 8 billion. Vest the State Government told the countrys top refiner it was no longer keen to defer value added tax on its sale of petroleum added products. The Lego Batman Movie led the u. S. Box office for a second weekend beating new releases, including matt damons the great wall. The family from the animation from warner bros. Rate in more than 34 million in north america. Universal pictures edged above estimates by earning 18 million. Two very different movies. Yvonne absolutely. Meantime, mongolia has reach an agreement with the imf for a three year program that includes million loan package as part of a bigger 5. 5 billion bailout deal to help mongolia with debt repayments. We spoke exclusively with the imf mission chief. Yes, it is going to be a little difficult for a couple of years, our forecast for mongolia is actually very positive. We see growth going to 8 by 2019. And remaining quite high, 5 or 6 after that on account of large mining projects coming. And the output for the second phase beginning after that. With underlying strengthening of confidence in the economy, improved Macro Economic variables. All of this will allow the economy to get much longer. So, you are focusing on three sectors print the fiscal policy, monetary policy, and the Banking System. So, what were suggesting to government is something that many countries have done, which is launching asset quality review. Some problems may be uncovered in that process, and then the banks would come up with a plan to strengthen themselves. And the government would be there to play of facilitating role. At the same time, the bank of mongolia is improving their underlying Bank Supervision and regular asian in order to keep and regulation in order to improve their coverage of the lighting sector going forward. What does the imf think mongolia can do to end this bailout cycle . We do not want mongolia to come and have another program in a few years time. What the government has emphasized to us is that theyre a stable solution to mongolias problems, and mongolia is more than other countries heavily exposed to shocks. So this is a tall order, asking forevergolia be stable is a very difficult challenge for anybody. That is what the government has emphasized that he of the Institutional Reforms. In order to make sure the fiscal policy stay strong. Now what the government has done is they have passed a law that makes it much more independent and commercially focused. They have said they are ending the collectivity at the bank of menta longoria. Mongolia. A whole raft of measures are being introduced to ensure that implemented ine a disciplined way at the cabinet level, at the ministry, the cabinet level, at parliamentary level, so that at the end, we get disciplined and focused fiscal implementation so that the economy can grow and be stable. That is the game here. And im very hopeful that is going to happen with all of this commitments that the government has made that is the aim here. Betty we are expecting the latest trade numbers out of japan at any moment. In a couple of minutes we would bring that to you live in the news breaks. From printable global investors. Somes is the number insight from printable global investors. This is bloomberg. Betty bringing breaking news out of japan. Which has released its trade data from january. Yvonne looks like it was a miss for exports as well as imports. Urine year, rising 1. 3 . T estimate was forhe a 5 increase year on year. This is a drop from the december numbers. In the import numbers was a miss. It actually rose 8. 5 percent and the estimate was for 4 . We saw a rise of more than 3 after we saw the negative picture for exports in december. That leaves that trade balance in a deficit at 1. 086 trillion yen. Looking right now, not a lot of movement in the yen on these misses. Pretty surprising on the exports and imports. And certainly adds a lot more competition between the u. S. And china and the trade relations. And a new dynamic for Prime Minister abe in terms of trying tos to me like the economy in japan. In, get thes bring response now from bob bauer, chief global economiest. He manages 411 billion. Great to get you in tokyo. Want to get your take on these trade numbers. A miss on both fronts. What do you make of it . It is to diethink guess i would not get too excited about any onemonths n umber. Therts were really good in fourth quarter. Friendly, if imports are better than people think, that means somebody is buying frankly, which i think is positive longerterm for japan. I guess i would not make too much out of one months numbers. They are volatile and could easily be revised. Yvonne absolutely. I should say the import figure was better than expected at 8. 5 . Talking about the Global Economy in general because in asia we certainly see this a recovery in exports. China, south korea, singapore. A meaningfull this turnaround when it comes to global trade, or just a blip . No, i think it is a meaningful turnaround. You have to look at what is underlying all of what is going on in the Global Economy. In 2015, if you valued world output in dollars, that was actually the worst global recession since the 1930s. We started coming out of that in february march of last year. Markets began to sniff that out when we had some cyclical issues all around the world start in late fabric, march, april, may. Then in july, august and september, banks financials and industrial began to outperform. So, think that is just showing this is a synchronized global upturn and quite meaningful. And it could go on, i think it is probably still underestimated right now. Yvonne still underestimated. Back in japan now. On that front, then. How much of this improvement we do see in exports, then, is a very reliant on the weaker yen . If it does we can further weaken further, with her be a protectionist response from the u. S. . Bob well, it certainly relies a little bit on the weaker yen. Yen get weaker. They probably could to the 1. 20 range, Something Like that from where it is. And exports are in some respects dependent on that. But japan has always been an export powerhouse. And i think as the World Economy picks up, that is going to be positive for exports from japan. Somewhat regardless of where the yen is in the 1. 10 to 1. 20 range. Betty where do you think the yen should be . Bob that is a good question. It changes so much with purchasing power parity. It probably could be a little weaker from where it is today. But i would not be surprised it is not far off, given the strength in the Global Economy from where i t should be. Betty it is interesting. Pull up that chart. We have a function on the bloomberg wtrf, that shows purchasing power parity. It values the currencies based on the oecd parameters. According to that, the yen is 11 undervalued. Does that sound right . Bob it could be. There is the old mcdonalds, the big mac number, too. If you look at the big mac number, yeah, the big mac index, that shows the dollar is quite a bit overvalued at the moment. So, i mean, if you look at different indices, 10 is not a huge amounts. It could come down. That means from 1. 13 it would go down below 1. 10. That is certainly within the range of equality or where it should be. Betty you actually think the u. S. Dollar is added peak, that the gains are done. I think right now we are seeing the dollar probably added peak. I mean, if you have good global notth, thats generally dollar positive because when you have good growth around the world, money tends to flow from the United States to other parts of the world where growth is better. And right now, emerging market are doing pretty well as commodities have come back. China is growing faster again. Europe is picking up. That is not dollar positive. I think the u. S. 10 year yield cannot get much higher than they are now versus german yield or yields for the bank of japan. So, i think the dollar is pretty well at its peak or very close to it. Betty youre saying, take a look at the 10 year jgp. 0. 09 . Testing the tolerance for the boj. Do you think the central bank, is is a battle they are losing when it comes to yields for control . As you see reflation trade picks up those yields . Bob i do not know about losing, but i think at some point they will have to raise their targets without question. I think deflation is ending in japan. I do not know how much inflation we could see, but with some positive growth, if we look at real growth in japan and 1. 5 to 2 range which i think is reasonable for the next year, 10 zero does not make any sense. I think the bank of japan will be forced to raise their target at some point this year. Betty i know you say the biggest risk right now is higher Interest Rates. Is that across the board around the world . Bob well, i think what we are seeing is a transition to a period of better growth and mild inflation. Have, say, growth and United States not love growth at 4 to 5 which is quite reasonable, then a two point 5 treasury yields does not make a lot of sense. It seems to me a nominal treasury yield of 3 will see a number with a 3o on it. Betty japans january exports climb, but short of estimates. Trade deficit well past ¥1 trillion. Negative response, kraft scraps its bid. Secondhalf earnings of jumping 50 , planning a buyback. China warns against keeping north korea and a corner after banning coal imports. This is the second hour of bloomberg daybreak asia live from bloombergs u. S. And asian headquarters. Its just after 7 00 p. M. In new york. I am betty liu. As we saw, japanese trade numbers showing exportled growth might be petering out given the worries about trade relations, but also the stronger yen. We were expecting it to rise for a second straight month. Much slower than what economists were expecting. They were expecting more robust growth when it comes to exports. Imports was a positive number, eight. 5 , the first time it hit positive territory in two years. We will see how things are playing out and how japan responds to that. Lets get to the market open with sophie kamaruddin. Anticipating a subdued trading day and asia given that u. S. Markets are shut on monday. So far today, we have the nikkei 225 falling. 4 falling todays trade data we got this morning. Whats moving on the index here, just a quick look. Falling 2 there. Up. 2 pi opening higher, this after falling for two days. Australia, the asx 200 falling. 3 . Willie parsons falling over 11 . First half revenue dropping across businesses. , it expects rising competition in the second half of the year for its is missing the u. S. Some equities we are keeping an eye on today. Ome news around toshiba the conglomerate plans to sell a stake in its chip business to multiple bidders to raise ¥800 billion. It will keep more than a third and retain management control. The rebidding could restart as soon as this week. The nikkei reporting that toshiba plans to pullout of its nikkei to reactor project in texas. 3 percent, notifying toshiba of its intentions to sell its stake in westinghouse. , up 1. 4 ,n on samsung some notes from moodys and fitch. Moody saying it does not expect disruption to samsung operations from these arrests. And fidgets saying the rating would not be affected by these developments. Japanese stocks also reacting negatively. Sophie i want to check on with the yen as well. 112. 95, weaker than the start of the day. About guys were talking with a guest earlier today, we have not seen much reaction given that it is one month worth of trade data. Even january exports came in well below estimates. With exports growing, there is some growth there, some buying of japanese products p at on that in a short while. Thank you so much. Sophie kamaruddin with how markets are reacting. Lets get to those trade figures out of japan. Brian fowler is here with more. Brought takeaways with the numbers . Numbers, it is always strange in january because you have the fact that the Chinese New Year can push the numbers up or down in either direction. Broadly, although the numbers were weaker than thought, we did see mostly what we expected. We expected to see semiconductor shipments, steel, and autoparts boosting exports come a then on the import side, oil hovering above 50 a barrel all year so far. Imports boosted japans energy bills print that was a big factor on the import side. Overall, the numbers having a slightly negative impact on sentiment in the market am a but really not that far from what we expected here it expected. Quite a jump when it came to that import figure. What kind of behavior are we seeing in the micro economy, any expectation of prices changing . At this point, we have not seen that it we saw in the gdp figures for less quarter experts were also a big part of that growth. I think they contributed a little more than half of the increase in gdp last quarter, and so there has been a sense that the export market does remain robust, even though there is some fluctuation from monthtomonth. Looking ahead, we are looking at trade policy, how the bilateral relationship with the u. S. Evolves. We are already seeing japan take some steps on that front. We have the foreign minister and germany late last week, and he met with the eu trade commissioner, and they put out a statement saying the eu and japan are making progress towards a trade deal. Tpp remains alive, even without the u. S. Japan is doing everything it can to keep what is working still working, and i guess the u. S. Reaction is a wait and see. Boj being wait and see then . Where does this leave us with the pursuit of sustained inflation around 2 . Standexpect the boj to pat next month. We did see those fairly strong ,dp figures last quarter, which the last three quarters have been rising, said that the of j does not need to feel panicked about what is going on. There are broad expectations we will see prices turn inflationary this year and a maybe not the 2 target, but certainly close to 1 perhaps. So if anything, people are talking about the possibility of some of the jgb purchases at some point later this year. I think that is what the boj focus will be on. Otherwise, fiscal policy or do we expect to see in this last quarter of the fiscal year all the last spending from the ¥28 trillion package doled out this quarter. Then we were look ahead to next quarter, next year. I would not be surprised if we had another fiscal supplemental budget in next fiscal year at some point. Great to have you. Brian fowler, our japan and korea managing editor live from tokyo. Lets get to first word news with haidi lun. South korean President Park gun hey has asked the Constitutional Court to delay her final impeachment hearing by one week. Her lawyers asked the court to give them time to prepare for the closing argument. They said they would review the request. Park was impeached after corruption allegations and month of protests. The investigation has widened to include the worlds biggest industrial conglomerate. Jay y. Lee was taken back to the Prosecutors Office on sunday for a second day of questioning. He was arrested on friday on allegations of bribery, investment, and perjury. The white house chief of staff at the night reports that Trump Campaign aides had repeated contact with russian intelligence agents. He appeared on the sunday political shows in the u. S. To describe a report in the New York Times last week as total baloney and containing some treasonous accusations. The mainstream news outlets that are acting Like Washington daily gossip magazines instead of the way it used to be, where you would get a few sources on the record. You would need some brett graham, and maybe some anonymous sources, but to a qs and organization of being in Constant Contact with russian spies is outrageous. The u. S. Military says an Aircraft Carrier strike has begun what it calls routine operations in the south try not see. The navy did not say how long the carrier and a company ships and aircrafts will stay there. Rex tillerson said during his confirmation hearings that china should be blocked him accessing artificial islands in the disputed waterway. Global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. This is bloomberg. Thank you so much. Share set to grab the spotlight when austria trading begins after its grabbed a 143 billion bid for unilateral unilver. Kraft said its request for friendly talks were rebuffed. The Food Industry has a desire to consolidate. This is one of the shortest courtships on record in that there was a message immediately sent that they were not interested. In an email statement sunday, they said their intention was to friendconversations on a the bases. The decision will be offer came from 3g capital and Warren Buffetts Berkshire Hathaway which own about half of kraft heinz. They said there was no possibility for a friend the transaction given the response. They believe the protracted war of wards was not in their best interest. The statement that came out sunday was that the bid was going to be with the drawn. Take a look at the stock price. Kraft heinz on friday saw its stock shoot up 11 , a record. If you look at unilver, same thing, a huge spike on friday, up 13 to another record. Observers finding this with a draw odd and surprising, particular you win kraft heinz said last wednesday that they werent really desirous of an acquisition. They downplayed what was clearly a play being put into action. Indeed if we will see what the stocks do when they open. Stay tuned on that. Lets talk about oil and oils direction. We have seen oil stake close to where it has been, 50 three dollars, recent weeks, but if you go in the bloomberg, we are in a close trading range now on track to be than narrow west of trading range since january 2004. Lets chart this out for you, what we are looking for is that big surge in the middle around the Lehman Brothers bankruptcy. Apart from that, again, this is a chart on trading ranges. You can see how narrow it has been, which is where we are today. Video, we into the see platforms and rigs in the u. S. Have surged in the big time past week did they are at the highest level since 2015. Of optimism that opec is adhering to the cuts. Drilling has been up in the u. S. As prices have rebounded. You look at a Bloomberg Survey we take every week asking traders and analysts what they believe the direction is in the week ahead. Most say probably not going to change much, and that theres outnumber the bulls. We have more arent in some look out for this we could what are you watching . The backside of earnings, a lot of companies coming out. The big ones to watch out for, home depot, a company that typically caps on for caps down. They report on tuesday before the open. Per just hit a record high share on thursday. A lot of momentum behind the stock of late. Analysts expect them to report 21. 73 billion revenue. 23rd, itreports in the must follow j. P. Morgans lead to keep the momentum going to j. P. Morgans fixed income beat. Analysts were looking for barclays to report saying we also have hewlettpackard enterprise reporting the same day. The day before, hewlettpackard. A lot of focus on these two companies to see how they are both doing. Thank you. Still ahead, the imf and mongolia agree on multibilliondollar loan a multi Million Dollar loan to help cover looming debt repayments. We have a report later in the show. Pence meetsident with Angela Merkel p at we will discuss that in more with frank lavin next. This is bloomberg. This is bloomberg daybreak asia. Am yvonne man in hong kong. I am betty liu in new york. Rex tillerson made his diplomatic debut at ag20 gathering in germany as russia press the Trump Administration to keep its promises of improved relations. Our next guest says he sees more continuity then change in u. S. Policy. A former u. S. Aid and diplomat and now runs export now, a company that helps Consumer Brand sell their products into china. With ato start off simple question, who do you listen to do figure out trumps Foreign Policy . Two has it right . I think you are better off just watching him in action than taking any specific remark. First of all, he is coming out of the campaign which has its own share of emotionallyladen rhetoric. Making that transition to government means you will have an adjustment there, but i would look at the action, Rex Tillerson strip and deduced from that. It sends complicated signals. Andhe one hand, tillerson pence coming out much more conciliatory to their counterparts, then you go back on trumps twitter page and it sounds like hes looking for a global trade war. Fairthink you have a point. If we look at the president s Public Comments or his twitter feed, what you are seeing is a president who believes in world community, signaling the market, through his communications, setting the vision and the pace. He is leaving it to the diplomats and the people running the institutions to work out the deal and the daytoday elements of diplomacy. Not just working it out, it seems to blunting the force of that though. Is adont think there contradiction. I dont think he was see general mattis or tillerson saying something that is different or opposed to what the president is saying, but they are trying to take that kind of vision forward. The president made repeated , andnts in the campaign general medicine mike pence reinforce the point when they were in europe last week, so they are being good messengers, if you will, caring out the president s policy, but how you say it on the context will differ. , thats different than how you would say it in a twitter feed. If you look at what mike pence said about russia as he is in europe, he is saying to the effect that the u. S. Will hold russia to account, which is very different in many ways to what you hear from donald trump and some of his aides, who are very strongly and denial that they are in russias corner, but at the same time, dont want to criticize russia either. There are think anchors of policy comes of the president saying there is scope for improving relations with russia, and he believes there is. The facte underscores that russia is currently in violation of its agreements. It is funding or supporting military activity in eastern ukraine. It has ceased crimea, sovereign territory of another nation, so it is not observing its International Obligations and the will hold russia to that, so there if there are fundamental problems in the u. S. Relations with russia, these are the responsibilities of russia to adjust. For asia, a lot of the focus is on the call between President Trump with president xi jinping and the trump honoring once again this one china policy. What do you make of that call . Does this reflect his true position or is he biding time and hoping for something in exchange for that . No, i think that is an honest statement of view. That has been a cornerstone of u. S. Foreignpolicy visavis china for over 40 years since the first communique and the next enemy ministration nixon administration. He is saying we would like to see some cooperation from china as well, and chinas build out in the South China Sea does not contribute to stability or contested territories. Chinas trade policy is widely seen as unfair and some respects, so there are responsibility from the chinese side as well. Are traded tariffs pretty much likely then . \ would china retaliate in some form . How would that impact the companies that you work for the try to sell their products in china . Are dont think tariffs likely, but i do think trade was front and center as a point of friction, if you will, in the bilateral relationship, and i think the president again if we look at his Campaign Rhetoric and what he said subsequently, he sees china as not always playing fair and there are a range of problems in the u. S. China trade relationship, and he will tackle them. He has brought in some china hawks into his administration. I viewed there being some downward pressure central for u. S. Trade friction, i would rate that pretty high in the course of this year. Great to have you. N. Ank lave an guest. Another top we speak to the ceo of ,ustralias egg is steelmaker bluescope, 9 15 a. M. In hong kong. Thats right. Up next, why bank of america ceo Brian Moynihan got a 25 a rise while his peers got cut. This is bloomberg. This is bloomberg daybreak asia. I am yvonne man in hong kong. I am betty liu in new york. Bank of america awarded Brian Moynahan, raising his compensation by 25 . Different picture for citigroup ceo, who received a pay cut. We have more details on the compensation. So what was behind the 25 rise . Gave Brian Moynihan 25 million. We never know why these boards come to the exact number they do, but what we tend to see is what Brian Moynahan has themplished, presiding over banks best year for profit in a decade, 18 billion, 13 more than last year. Has, we can see this bank risen so high in the stock price compared to its peers. If you look back year to date, up 11 . If you go back to when donald trump was elected, up 36 . That is better than the s p 500 by far. Taking a look at his accomplishments, a lot of this comes at as he cleans up the mess since the financial crisis, but what has Brian Moynahan done specifically deserve this compensation . What he has been able to do this year is cutting expenses. That means cutting staff. Bank of america has cut people, itike other big banks, but has done so to save on expenses. It has done a lot with technology as well. This is something that really does help bank of americas efficiency, and these are ratios that over time due get better for the bank and shows what a ceo can accomplish when he is set on keeping costs down, which relates directly to profit. How which you can pair his performance with Michael Corbett of citigroup. He did get a 6 cut. He makes 15. 5 main dollars, so over there, there was a lot of turmoil. Toigroup is not as linked Interest Rate rises. They are more linked to emerging markets come us of that hurt the bank this year. Unfortunately for Michael Corbat , he presided over a year when the bank made 14 less and profit. Thank you so much for joining us there. Take a look at markets before we go to break, a mixed bag. Especially Japanese Equities down. 5 . We did get a miss when it comes to those export figures. Imports were quite a beat, 8. 5 up your do this is what it looks like out of new zealand, still slightly positive, up. 5 . Sydney shares, pressure , the everjapan resilient aussie dollar. We did see Dollar Strength capping two weeks of Dollar Strength we have seen of late. 5 , quite a bit of yen strength. This is bloomberg. Yvonne 8 30 in singapore. They are clicking to hear from the finance minister later on today to deliver the 2017 budget for singapore to deliver a modest push when it comes to the fiscal budget in an economy facing a pretty gloomy trade outlook. I am yvonne man in hong kong. Betty im betty liu in new york. You are watching daybreak asia. Haidi lun. Haidi japans january trade data has disappointed with exports growing by just 1. 3 from a year earlier, against forecasts of 5 . Month, surged last leaving a trade deficit. It weakened slightly after the data released. Malaysian Officials Say they are seeking those who fled the country the day kim jonguns half brother was murdered. Boarding aed before flight to macau. South Koreas Unification Ministry said on sunday it is certain the man killed was the brother. An operation to take the western half of mosul. The campaign was announced on state television. They took control of it eastern mosul. The west remains under i. S. Control. The u. N. Has voiced concerns for hundreds of thousands of civilians trapped in iraqs secondlargest city. Angela merkel will host Christine Lagarde, seeking that reassertion ministereek finance yes varoufakis says it will only delay the problems. They will pretend that did not happen and how do you thing did not happen, but extending liquidity to it. You keep kicking the can down the road, or as i like to say, the snowball up the hill. At some point, the snowball comes into an avalanche. Than 2600e journalists and analysts and 100 20 countries. Im haidi lun. This is bloomberg. Yvonne, betty. Yvonne time to see how the asian markets are shaping up this monday morning. Here is sophie. Asian markets looking for a third of a percent weaker this morning and the nikkei 225 in focus given japans traded at came in below estimates this morning. The japanese session now lower for a third day. Take a look at some of the decliners. We have the likes of mitsui came in mining mower. We have pacific metals up over 5 . It manufactures stainless steal, nickel, metal powder. Of course, japanese yen strength also weighing on the nikkei. Over on the kospi, we are seeing it reverse its gains. Samsung has over 5. 6 points, but we are seeing the rival falling today. The only bright spot with the australia and asx 200, down almost. 4 following some of the earnings updates we got this morning from the likes of parsons. Let us turn to the m a space. Talk to us about the impact on that. Sophie well, elsewhere in the space, we are looking at softbank. Its ambitions for m a certainly gearing up towards optimism. 2. 4 . Up this after reports of a future potential tieups between sprint and tmobile. Softbank is said to be giving up control of sprint if that eases the way for a merger. On a call last week, we had softbanks ceo saying softbank was open to any options for a deal. He was rebuffed back in 2014 when he met with u. S. Regulators to discuss lying tmobile, but investors are intoxicatin anticy will be more comfortable with in the industry. Elsewhere, we are taking a look at what is going on a toshiba, 2 over two point over today. It will be reopening its bidding talks are a chicken it this weekend we have the likes of brambles up today. It does expect further competition in its American Business to continue in the second half of the year. Yvonne thank you so much, kamaruddin, on the markets. International talks on north korea to a day after banning coal imports. More from our asian government editor, dan. What is the difference with this one . This one does not have the loopholes that the last ones did. There has been call bands in the past, coal bans in the and what china did over the weekend was it said basically that we are no longer going to take any coal regardless of what the reason is, so that is a huge blow to north korean exports. Daniel 1 billion a year. It is about half of what north korea exports, so that is a big pay cut in Foreign Exchange earnings for north korea. Time whens comes at a china is facing International Pressure to iranian north korea. To reign in north korea. Daniel they always have pressure to deal with this but they see two things going on. One thing is that it is a Missile Defense system that will go in south korea and this is a system that could potentially be used to counter chinas own military capabilities, so the u. S. Says it is to block north korean missiles, but it is sitting on chinas doorstep. They could potentially look to china and take out their missiles as well, so china is concerned about that. The second thing was last weeks murder of kim jongnam, kim jonguns halfbrother. If kim jongun were to ever leave, he would have someone from the kim dynasty to claim legitimacy. Yvonne what is the likelihood of renewed discussions now . Daniel there is many obstacles to renew discussions. The u. S. Position has been that we cannot talk a must north korea sees Nuclear Disarmament as the final goal. Now, with donald in the office, who knows. Tough, soft, and he said we could sit down and have burger. Trump is a guy they might see is someone who just might want to make that deal. So only time will tell on that. Thank you. Our asian government editor. Let us talk about some more possible deals. Enter in early talks for a slice of noble. They want to move forward with the purchase of syngenta by the end of june. That is bring and the report of following this story for us. Looking to strengthen its grip on Global Commodities trading, so the companies we are talking about, the entities we are talking about, are already pretty big in china, but they are looking to increase beyond the borders and really reach into areas that can set global commodity prices, so example,oking at, for noble Global Energy trading business, and that is very important. It is already one of the biggest oil businesses. The deal was noble would be the fourth time a Government Owned Company bought into international commodities. So now, it is ed. Erest get theming for june to approval for syngenta. These areas are china trying to and areasts clout that can allow it to get clout over the prices of these commodities as well. Policiessaying chinas thatially in areas influence Global Commodities prices. Sinochemts to merge and create one single entity that can oversee all of these commodities issues. Syngenta already a leader in its field. Sign up cap sinochem already big and chemchina as well and noble, again, a big player in the field, so always coming together under one entity would surely be a pretty powerful force, so that is what china is trying to do as well as so china can soe move towards a more service and consumer oriented economy as well. All of these moving in tandem together to fulfill chinas aim. Of m a activity happening from china, not just the heinz unilever deal. Betty up next, find out if 117 budget is going to give a fiscal boost to an economy facing a gloomy trade outlook. This is bloomberg. This is daybreak asia, im betty liu in new york. Yvonne im yvonne man in hong kong. Please check our latest business flash headlines. Indian oil has plans to invest a billion dollars in the country after a provincial government threatened to withdraw a tax rate. It was a longer keen to defer valueadded tax on the sale of its petroleum products. Softbank shares opened higher. Reuters reporting it is willing to give up control of sprint to cement a potential merger with tmobile. Last week, Softbank Sander told softbanks founder said he is also open to the investment unit. They may reopen the door to a deal. Batman movie led the u. S. Box office to the second weekend in a row, beating new releases including the great wall. It raked in more than 34 Million Dollars in north america. Universal pictures, the great wall took third place. 13 million. Ok, well, the is in trading week has barely begun. We have disappointing news on exports and we are waiting for Kathleen Hays here with more. Everyone says exports and we are it is just one month numbers, but how worried should we be . Theres a couple thing to do think about. The trade surplus, i just a trade surplus for japan, month of january came in down from 356 million yen. Exports only rose 1. 3 . They were forecast to rise 5 , so what happened to japans exports . They know that china exports were up 3. 1 and they have been up 12. 4 the month before. Lunar you year was going on. Exports down 6 . Exports to western europe down 5 . Imports had their first increase since 2014, so this is a trend that is not exactly what japan is looking for. According to capital economics, tradeont think japans surplus will go up to its previous eyes anytime soon, betty. One reason, they say the weaker yen, because of the way foreign currency evaluations, and, it is going to boost imports first, for japan, andts maybe more important, over the course of the year, they are seeing a renewed slowdown in the economies of japans biggest trading partners, so that is a bit ominous. We are going to wait for more of the analyses to come in, but there is more down, i did say. Betty we have got lots of fed speakers this week including the cleveland said president in singapore. Daniel less than kathleen must than one hour from now, we will be watching for the headlines. A fairly cleveland set hawkish precedent. We have the big report last week where she is asked about it by the audience. Let us look at a bloomberg chart with three inflation measures. Now, the main inflation measure is the white one. That is excuse me the pc. That is the feds the pce. It came in at 2. 2 on a monthly basis, 0. 6 . The online, its own inflation estimate, a trimmed mean estimate. That is 2. 5 , so clearly, this is on the radar screen. We will hear what she has to say about that. How hawkish is she talking about a march rate hike . Of course, some people think they may be outdated because he got the big economic reports that were stronger than forecast so that put them a little bit more on the backseat, so we will get speech is from seven fed speakers. You cannot turn the tv off, Bloomberg Television, for a moment. [laughter] in parliament and the bank of england, we hear from turning blair tony blair, indirect challenge to theresa may. To theresa challenge may. The u. K. Toing resist, particularly to resist brexit at any cost. That is one of the things he is worried about. Here is what he said on saturday in london. Tony blair the people voted without knowledge of the terms of brexit. As these terms become clear, it is their right to change their mind. Our mission is to persuade them to do so. Well, brexit as policymakers recently saying ist doris shut door shut. Maybe he could have influence on the house of lords debating for two days. Voting on theresa mays draft law for the how to trigger the brexit. Maybe they could have an impact on not that would make a difference. Mark carney, head of the bank of england, is testifying to the Treasury Committee of parliament on tuesday. Kathleen he has got a lot to say about the economy of course after three months of very weak retail sales in the u. K. It looks like those brexit impacts, a much weaker pound, higher in import prices, so brexit is front and center in the spotlight again this week. Yvonne little signs things could be materializing. Kathleen hays. You can catch loretto mester speaking in singapore as part of the central banking series in less than one hour from now. Bloomberg users can watch that. Go live we continued to her on Bloomberg Markets asia on wednesday morning is a time, tuesday evening, in the u. S. Singapore, the lion city unveils the budget this afternoon as it battles slowing growth in a gloomy trade outlook. Let us be joined by has haslinda amin. By has haslinda amin. Qualcomm mom modest budget is what we are expecting, yvonne. No large to mila because china is showing some signs of recovery, so there is no need to pop up the economy. The focus will be on the longerterm growth. We are talking the next 10 years, space of growth, i want to show you this pie chart that shows the Budget Allocations last year. Health and education received quite a chunk and it will not be the same this time and that is to do with singapores aging population and the need to upgrade the workers, so expect targeted measures like plans for development, help for smes to boost innovation and also, the easing of regulations for businesses, these are key areas highlighted recently by the committee on the future economy. Singaporealistically, can grow 3 yearly in the longerterm, but only if some of the strategies are implemented. Yvonne, betty. How about the corporate and income taxes, is singapore expected to review those rates . You know what, corporate taxes have already fallen. Back in the 1990s, it was 30 . Now it is 17. It is already quite competitive. On aan see how rates are downward spiral. A different story for income tax. It is another story altogether. It has been suggested we need a progressive system, i. E. , the more money you make, the higher the tax you pay. The highest rate in singapore about 22 in tax versus 45 in australia. That rate is among the lowest in the world, but it is unclear right now if the government is ready to adopt such a policy purity bond, betty, as you know, i would probably go for a lower income. I dont there is any chance of that happening. I think a lot of us would want to go for that. Haslinda amin in singapore. Mongolia getting help from the imf and debt repayments boom. Where that money will be spent. This is bloomberg. This is daybreak asia. On betty liu in new york. Yvonne im yvonne man in hong kong. Time for a quick look on what is coming up. What are you watching . Kicking things off with the ceo paul steel omalley joining us. Isking at what the company doing. Also having a look at the prospects of iron ore. What they are predicting as well. Moving on, having a look at what is going on the commodities base in a whole. He will be getting us his thoughts on what is going on out there and asking about the socalled breakfast trade, which he had on that time he came on to Bloomberg Television and see how that has all worked out for him as lobster last but not least, looking at north korean relations with the rest of the world. An hour, we have someone on. He is going to give his reaction to statements coming out of china saying the americans have got their policy all wrong when it comes to the north. Betty. , thankall right, rish you so much. A lot happening in the coming hours. Mongolia has reached an agreement with the imf for a three year program that includes a loan package, part of a bigger 5. 5 billion dollar bailout deal to help mongolia with its upcoming debt payment. Yes, it is going to be a little difficult for a couple of years, but our forecast or mongolia are very positive. We have seen growth going to 8 i20 19 and remaining quite high by 2019 and remaining quite high. The second phase beginning after that. Underlying strengthening of confidence in the economy, improved macroeconomic variables. All of this will allow the economy to get much stronger. You are focusing on the fiscal policy, monetary policy, and the Banking System . So what we are suggesting to government is something many countries have done, which is launching an asset quality review. Up with awould come plan to strengthen themselves and the government would be there to play in facilitating role. At the same time, the bank of montreal you is improving their underlying Bank Supervision and regulation in order to keep on top of these problems and improve their coverage of the center going forward. What does the imf believe they can do to improve this boom bust cycle . What the government has emphasized to us is they are interested in a stable solution to mongolias problems. Mongolia is heavily exposed to shops, so this is a tall order, asking that the growth be stable forever is a difficult challenge for everybody. That is why the government has emphasized many of these Institutional Reforms to make staythe fiscal policies to strong. What the government has done now is passed a law that makes it much more independent and commercially focused and ending the the deficit itself is under strong control and a whole draft of measures are being introduced to ensure the budget is implemented in a disciplined way level,evels, Cabinet Parliament level, so at the end, we get disciplined and focused fiscal implementations of the economy can grow and be stable. That is the aim and im hopeful that will happen with all these commitments the government has made to its people. That is it from us. Plenty more still to come. Markets asia, up next. Rishaad japans trade deficit blowing out to above ¥1 trillion as january exports fall short. Onchina calls for new talks the Nuclear Program after blocking coal exports. Rishaad bluescope jumping on higher forecasts, a Share Buyback. We will speak live to ceo paul omalley. Fiscaldest