Financial system. This is the second hour of daybreak asia, coming to you live. It is just after 8 00 a. M. In hong kong. And it is just after 7 00 p. M. In new york. Australia is just tapping up an interview with the qantas ceo alan joyce. We are really focused in the u. S. On the fed and what they indicate for u. S. Rate hikes and how it might impact Central Banks in asia. I am feeling that confusion in the start of asian trade with that failing soon comments. Doesnt mean does it mean a march fed rate hike on minerals . Do we ever think the fed will be clear . It is a balancing act for them, talking about inflation, too, not a whole lot of people in the fed think it is a problem at this point. As mentioned, odd minerals desperate first lets take a look how the market open is shaping up. Were just you discussing, the Central Banks focus is on r. B. I. , and today bank of korea will be in focus. Its forecast to hold its record of 1. 25 as it waits clarity around a domestic political sandal. There are mixed signals when it comes to economic data. There is inflation on the rise in the community were desperately consumer Consumer Sentiment sliding. Over on the nikkei 225, with a yen over doing around one dollar 13, we are seeing orbiting around 1. 13, we can see bond waiting for their 20 year options, and next week, the boj will be releasing their information around the timing of those purposes does purchases. That impacts of over 2 , and toshiba is back in the red, falling over 4 today. We will be keeping an eye on nissan, as far as going undisturbed from able onward april onward. We have those slow earnings but he was mentioning out of australia. We will get more on that with paul later in the show. In australia, bears are gathering down under as investors are searching for the next big thing. How are stocks shaping up in australia . We have materials leading the drag on the asx today, and just a note that on the shortselling, we have seen average Short Interest at double what we are seeing in hong kong. Check out the story today on the toomberg 10,000 mile journey short australia. We have commodities here as well as banks in the crosshairs here given the broader picture. We have the likes of skynet falling in sydney, over 14 . This is as regulators block the post merger in new zealand. With the there markets. Staying in australia, Crown Resorts has confirmed that their longtime ceo is stepping down. Reportedcomes as they a firsthalf profit of 276 million. The company is saying they have no intention to retreat from china. We know the difficulties they have had there. Lets get more from Terry Williams and the need. In sydney. What has crown set about this . About this . Has been flagged that he was going to leave the company. That johnrise is allen gonda taking on both the executive chairman and the ceo roles at crown. It had been expected that perhaps very. , who runs the resorts business ,n australia barry feldstead who runs the resorts business in australia, would be taking it over. As you mentioned, he is reiterating there is no intention to change this strategy. They will still look to their china market. And give us more on what they said about china . This comments after the arrests of 18 of their senior executives. These, after the arrest of their 18 senior executives. Will get an update on what is happening to the staff detained in china. There are obviously some questions that will be asked about that throughout the morning. What we do know is that it has had a profound impact on what they call the vip, highroller revenues at the australian resorts. It has cut almost half for their and it isperiod, having an effect on oversee revenues and profits. So still a big issue, but we do not have any updates on the staff detained in china. And we have learned that crown has also shelved its hotel listings. What were the reasons given for that . Yeah, this was one of their ideas that they were going to try and simplify the business with. Really, theyken melco,wn a state in which helps alleviate their debt position. They no longer see it necessary to launch this ipo, so they are going to keep these assets they are using the resorts from melco the money reward investors as well. A special dividend today, which has gone down pretty well. 6 , soare up a bit over the result has gone down well so far. Terry williams, thank you. Williams, thank you. We have had a string of bigname guest says the earnings season continues on. We will your firm a ceo, that will happen about 15 minutes. Andrew cole join us at about half past seven in the evening for new york. Now lets get to Courtney Collins for the first news. Joyce hasceo alan told bloomberg at the airport has a 90 headon Oil Consumption for the rest of the year. Firsthalf earnings dropped 7. 5 as overseas competitors ruled out more routes and International Airfare sale. Profits fell to 16 650 million from 920 billion from the year before. The ceo described the conditions as challenging. San is announced announcing changes at the top. The chairman will remain as chairman only until april 1. The other chair will become sole ceo and company present. Announced that the current chairman will seek ever renewal at the agm in june. Delaying themp is release of his revamped immigration plan until next week, according to a white house official. He said the new executive order would be announced this week. The original order temporarily banned entry into the united several muslim majority nations. It caused confusion, protests, and was blocked in the court. Chinese banks have pulled record amounts of shortterm debt this month before possible new rules that would make it harder to do know. Lenders have sold 230 billion asset, more than they were allowed in 2013. The vbs will allow all lenders all pboc will allow lenders to global news, 20 four hours a day. I am Courtney Collins, this is bloomberg. Is the Federal Reserve getting closer to a rate hike at its march meeting . They are showing the policy doors open fairly soon. Policy editor Kathleen Hays is here with more, and we had a bit more insight with the top fed official and those comments today, but first your insight on the minutes. Open, but wille the fed walkthrough . Lets look at this important sentence that everyone is talking about and that the market has reacted to. Many princetons express the review that it might be appropriate many expressed the view that of the appropriate to raise the federal funds rate again fairly soon if incoming and late information on the labor market and inflation was in line. Look at this. The rate hike in march is up to 5060 . I will contrast that with what our intelligence teams in new york concluded. They said it will go slowly on the next interstate increase. There is so much going on with fiscal policy, what else can donald trump and his team get through congress . They seen nowhere see no urges for the imminent hike, and they will wait until the next order, so at least june before the next increase. Here is this chart, which will help us visualize how the market view has been changing. This happened last year with everyone going back and four. It flattened out to 100 for three weeks before the december meeting. The turquoise line is what is happening in the last seven months, and particularly in the last couple of months as we head to the march meeting. The odd last your were so low, but now they have spiked out over close to 50 . Around 34 . One in three is what markets are betting. There are only six meetings after the march 15 meeting, so if they do not move it in march that is fine, but in the next six they will have to move every other meeting or Something Like that. There are only a few of those that have press conference as well. We talk about all of these headlines, but continue to hear all of this speak about how march is still on the table, including from jay powell in his speech today. What was your takeaway . I got a bit of willing to wait from jay powell, even though he said it is likely to happen soon. The fed is not behind the curve, he said. Thehe also said he was first you want to see the economy overheating, but it is not right now. Lets look at this bloomberg chart, telling you one of the most simple things you have to know about the fed, dual mandate. They watch inflation. They also watch unemployment. Employment, and inflation is 1. 7 , just little yellow line below the you line at 2 . Yellow also said line in 2 . He also said there is some slack left in the labor market, and the best thing to do is be patient. He will be watching in the next three weeks retail sales, the Inflation Numbers, and as he said, the all important jobs report. If you get some strong numbers, will tell people if there is more serious consideration of the march hike. If you dont, i think our team is right. They might be waiting until june. Particularly when it comes to the way growth for the next jobs report. Still ahead, pulled wagon said decibels wagoned said to be in advanced talks to team up with talk of motors volkswagen said to be in advanced talks to team up with taka motors. This is bloomberg. Some breaking news out of honda and shipping right now. They are falling from 46 right now. This is a record drop according to what we are seeing on the bloomberg, and this is after we learned about hanjins bankruptcy. They declare that a couple of days ago on february 17. We are seeing the shares plunging off a cliff. We hear that shares will be delisted on march 7. That is the line coming through on hanjin shipping, resuming trade and shares falling. Lets bring in that of asia pacific equity and credit. It is really great to see you. It seems like there is not a lot of direction we can go and fairly march is live soon. What does that mean to you . We had, going into the minutes, we will only see two hikes this year, one in june and one in december. The minutes do not really change that you from view from my perspective. They had a lot of conditionality, its and therefores that mean they might sooner. Act they also mention the International Part of it, maybe they want to wait for what happens in france before they do not get caught on the wrong footing. All in all, it did not move the needle. I think the two hikes is more likely scenario, which then also has implications on the currency. We think the u. S. Dollar is already about to peak. And i thought it was very interesting, youre contrary call on the euro at 1. 20, given the Political Risk you have to talking out of france, germany as well as the dutch elections. What are you seeing as upsides for europe . Goes, we as europe should really remember that the big moves, especially on this currency pair, eurodollar, have happened around two weeks when on or takes the qe it off. This has not been driven so much by policy risk. France that is the big elephant in the room. That theieved given french have stipulated the resident cannot trigger a referendum, it is unlikely to get a sufficient majority. Indo not expect too much real negative outcomes. What that means is that everyone looks at inflation in the u. S. And what the feds will do, and many very few people look at what europe is doing. They are looking at Inflation Numbers and they are going through the roof. As early as april, we may overshoot the inflation target, break the 2 . In other words, there is a likelihood that by september, we tonk, the ecb will start talk very seriously about the 2018. Up 2018 if the market moves on that one, we think people overtime will run for cover. We could see a double jeopardy movement on this pair. Lets talk a bit about some names you like. Of the you like some energy names who have not yet participated in this rally. What do you mean by that . Aipacdid some work on the component in particular, and one of the big things for them this year is falling real rate. The banks are bit behind the curve, we are seeing virtually across the region, installation starting to pick up inflation starting to pick up, and we do not expect any central bank to respond to this early on. So this means falling real rates, which you could look at it kind of an easing across the aipac region. When this happened, we find out in this. Moment, Energy Stocks tend to perform white well. So we put those focus on those stocks going up, and the u. S. Peers going fairly well as well. Also the bigger chinese peers have led that, so there is a potential catch up, we think. All right, so there is a bunch of potential compared to the u. S. And European Energy names. You wait out china and india. Tell me about your view on india . India, it went on to noticed that unnoticed but has been a strong comeback story already and monetization, i should say. We were already in doubledigit growth rates in corporate profits, but the main driver bankss going to be the opening a commodity space, and any case that is recovering with the prices and oil. Oldou remember, with the r. B. I. Government, they had what they called the equality review so all the banks had to use for twothree quarters in a row, Balance Sheets to absorb much higher performing loans. We arty knew they would be there already knew they would be there, but now we are coming over one year where this doesnt happen anymore, so we are already seeing some triple digit profit gains from the Earnings Seasons in some of the banks. This will last for a few quarters. Do like the other sectors, including pharma, as well in india . We do like pharma, but that is not an indian story so much. You could argue that is a u. S. Story, where there has been a lot of pricing pressure on the generic space in general, just not for the indian companies. That is because the buyers consolidation in the u. S. , but everyone who could team up on the buyers side has teamed up and we are approaching a moment, probably midyear, were the effects of the most fierce price pressure price out and will probably start doing well again. Pacific equityn and credit. Some sharp and precise recommendations. Up next, a smaller than expected loss and the muchanticipated model three remains right on track. We will break down the numbers, just ahead. This is bloomberg. This is daybreak asia. Shares rose in expanded trade after the electric carmaker posted a narrower andly loss for their reports their muchanticipated model three remains on schedule. Corey, also coming out during that Conference Call, is that the cfo is leaving. Corey has more on this. Tesla reporting fourthquarter results, and it whenlways interesting tessa flails by 2. 2 billion. Continue into the quarter, losing 121 million. Sales also it is worth noting that vehicle sales are down 9 sequentially from the third quarter. The sale of the model s and model acts, but it is all about the michael three model of thelledge allegedly cheaper car. The company is saying it will get a few of the cars out, at least one in july, and volume production in september. The third order is looming very large for this company. They will have to spend two billion to get these cars on the market, and in serms of the massive lo between lost between tesla and solarcity, we saw a massive 1. 25 billion. There is no plan for the press release to borrow more money or so more shares, which would dilute current shareholders. There was big news. The chief Financial Officer is bailing from the company and the old cfo is coming back to fill the job for the time being, but issues continue for this company, with no plans to raise cash announced in the Conference Call today. Cory johnson, bloomberg news, san francisco. Surprises f quite a bit of surprises and that narrower lot. Coming up, more earnings. Mineralsls oz discusses their thirdquarter results. We will talk about how these rising copper prices and what we see is the at the outlook here now that copper is that a 20 month high. England 30 in sunny singapore. Fromone half an hour away trading 8 30 in sunny singapore. Only one half an hour away from trading. Nissan has announced changes of the top. The current coceo president ceo, president , and chairman wally be remaining will only be remaining until march 1. The other coceo will be pertaining complete control. Retaining complete control. A hike fairly soon might be appropriate to avoid the risk of an overheated economy. Discussingofficials the uncertainties of the trump administration, as well as headwind from a rising dollar. The dollar and stocks fell wall treasuries advanced. Sources tell bloomberg that Chinas Central Bank has recently been adding ones from targeted reverse repurchase operations. These moves are said to be in addition to the usual open market operations, which the pboc discloses. Security has been tightening recently liquidity has been theyreng recently, and seeing returns from this cash that was injected before the Lunar New Year holiday. And we are told that this bank is reduced by a similar amount to last years 7 decline, in to loss of jobs. And we will speak to barclays later today on Bloomberg Television as the bank reports earnings. That is during bloomberg deibert europe. Mberg daybreak global news, 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. This is bloomberg. . Yvonne . Courtney, thank you. All of this could change when china comes online. The case, butbe as you said investors are taking a breather when it comes to buying stocks, in particular for near at they are trading mighty month high. Hanjin shipping was plunging by a record 56 today. That is given the concerns around bankruptcy here. It is certainly a shaky start for the market. Take a look at how hanjin is doing. Ony declared bankruptcy february 17, and shares are to be delisted on march 7. Lets also stay in korea and talk about bank of koreas policy decision to get in focus. Andk in with the one won tell us whats going on . They say it will fall to 1200 by year and koreas accounts surplus account for seeing dropping, and the forecast is to hold the policy. Ate at 1. 25 this is despite be rosier picture being painted by exports and inflation. They also the followers from the domestic scheduled to consider as well. We have the korean government promoting measures to help korean spend, such as making public transport much better and beneficial, so the lawn is now is now trading higher. See some dollars losing patience because that 77 level has been elusive so far this year. Take a look at how aussie bonds have been moving. Attracting u. S. Treasuries higher, so the yield has not been falling down by about 2. 81 . This after that record seven months. Eddie . Betty . Sophie, thank you. Lets stay in australia and check in on oz minerals. After theling 1. 1 Company Reported a net profit of 82 million. Joining us now is the company ceo. Andrew, thank you for joining us here on daybreak asia. It lets talk about some of these Global Supply disruptions we have seen over the past month several months. Some of it has been driven by the strike, the mine strike. This do you see these disruptions continuing and buffeting the price of copper . Copper pricing are doing very well at the moment, which is pleasing. It is great for cash flow in the shortterm, but i do have prices like this change and fluctuate a lot. We are very much focused on what you can control in business in the sentiment of commodity pricing, so we need to look at the things we can control. That is absolutely true. Where, pricestrol go, but are you doing anything to capitalize on this moment where you are seeing the significant rally in the commodity . We have got a Growth Strategy in place. We think copper is a great commodity to be in. Some of the fundamentals, longterm, are very good when you look at the supply and demand side. We love copper as a commodity, and we are doing a lot of things to build a pipeline of properties. We are doing earnings with Junior Companies that have good projects, we are fast tracking our studies on projects in western australia, for example, and our next Flagship Development project, we are moving very quickly in the development and study phase. That is a big project, and everything is going well and we are getting all the approval we need. We will be delivering copper out of that project by 2019 in addition to the operations we have now. Im glad you mentioned the carotene project, because you mentions theng project, because you are considering studies. These studies in southern power issues in southern australia affecting issues there. Are they have a turn for you . Are they of concern for you . That is something that is important to everybody, whether or are running a supermarket a hospital. It is something critical to all of us. We had a power outage from a prominent asset. The team was incredibly resilient and the impact of that power outage to the asset with was minimal, so we can deal with those quickly, easily, and in an agile way. But there is a light being shown in thee on power state, so i am happy everyone is working together on a solution. That is what we want to. To see. I do not want to focus on what has gone wrong, i want to see the solution for the sake. In turn, state. In turn, we have been working on a power strategy for what the future looks like. We have some robust plan in place, so we are confident we will have those results. And what are your options in terms of funding . Who could possibly contribute to the cost demo cost . A good question. We have a strong Balance Sheet with no debt on it, and at the end of the year we close with over 650 million cash in the bank. We can build it straight from cash flow as if we which. Wish. This means we can get very good rates if we chose to put debt into the project. A lot of options, so we should maintain option hourly. Optionality. We are in a privileged position to have that. Getting back to the copper price, i know you said a lot of this is beyond control, but the call of the week seems to be for a city calling for 4000 a time in terms of ton copper. Are you as bullish on the price . Look, it is a really good question. I cannot begin to predict what the price of copper is going to be into the future. What we are focused on is the fundamentals. The Investment Decisions we are making require assumptions to be made that spanned decades, so we are very focused on fundamentals. What supplies are in the market, what is the demand . I am not demented optimist am optimistic, because even though the existing affix around the world are getting more challenging at that surround the world are getting more challenging. Fundamentals tell you longterm price will be robust. We make sure our operating assets at carrapateena are at the lowest possible cost they can be. That is what you do to protect yourself from super cycles or troughs in the market. Troughs are great, but focused on the cost focus on the cost. Can you tell us some more progress you are making in this project yet a win will you be able to get production online . Project . When will you be able to get production online . Coppernicolegood resource coppernickel on the surface does resource on the surface. This timeline has us finishing that study toward the end of the year. We will be able to come out and say whether we commit to another study, or not. Now, thetimistic right project looks good. It is good grade, shallow, they district. D it is a there are multiple resource target that we know of. Thank you so much. We appreciate your time joining live from minerals adelaide. What thisind out means for the market, next. This is bloomberg. Seoul, coming up on the trading day there. I am told it is 30 degrees fahrenheit right now. Pretty called pretty cold. Not too bad. We are strong. The bankjumping is jumping and exports are getting stronger, even though this is away at consumer confidence. Editoromberg global Kathleen Hays is here with us now. There are so many parts of the world where you have politics mixing in with economics and Monetary Policy because korea has a lot to juggle right now. If they can keep the sevenday percent, at 1. 25 record low. Consumer prices have jumped pretty sharply, up 2 over the year at january. That is the highest level since 2009, and Consumer Sentiment slumped dramatically. There is a lot of scandal around the president and samsung, so i think people are just going to sit back and watch. Lets paint a picture of where they are and where they are not going. Record low, you can see how it has been going down steadily since 2011. Inflation used to be a lot higher, but it sunk down in 2012, 2013. It was staying so low that north tocourt south korea had 2. 5 2 about a year ago. That has been climbing rapidly, and that is one reason people are thinking they will play this decision carefully. They raise rates, households will say the cost of my debt costs more, so i might have to default on the debt. They do not want that. Meanwhile, they have changed requirements on banks as far as what as they can lend. We will have a decision coming up. We are thinking it will be in the next hour, it is from the press conference as well. That will come to our viewers as you know as we get that. Thanks, kathleen. Turn to your bloomberg for the coverage of that corian Rate Decision k orean Rate Decision. Make sure to check that one out. For the first time, science regulators are putting on a to beat back risk from the financial system. They are malcolm, why is this unified front so significant . It is one number that tells us why it is so significant. 157 trillion yuan. U. S. Is about 11 trillion dollars. What will tend to happen is it will all pile into stocks while it is looking for a home. The fed will try to push that down in the money will escape elsewhere and go into other asset classes. Think of it as a balloon. The regulators have tried to press on one part of the balloon as another part in place. Fashiong in a concerted , maybe well see a effort to keep that lid on that growth. And this is all to break that mindset of implicit guarantees. The government will not come to the rescue of investors, even if they do see losses. That mindset has led to a huge swelling of the Asset Management and Wealth Management product. Banks are on many sides of this, and they are owned by the government in many cases. With the expection that something should go wrong, the government would step in and protects us. The bank, they are happy to keep something in the money and want to send it elsewhere. It is a moral hazard that needs to be crossed. Could we see some regulatory consolidations . There has been talk about that for many years. While there is talk about that of theme around because proposed draft measures, there is also a skeptical elements that we have heard this before, lets wait and see. The proof needs to be in the pudding. Needs to be here for this to kick in and be squashed is for some failures. Will the government really allow some of these Asset Management companies, these trusts, to go bust is that is where they are headed . That is to be seen. Whether this is a sign of coronation on this front or perhaps of what has been speculated by others that there may be some sort of super is tooor evolving, it early to say. They certainly talk about it and this cooperation is fueling the work. Malcolm scott on the chinese regulators and their regulation. Lets say in china. Serviceial media tse there is beating twitter. It looks like the Fourth Quarter was a good one for weibo . The numbers do look that way. A Fourth Quarter rent revenue coming in at 227 billion, and that beat the companies own estimates. Share, . 34. There is an increase of users by 33 year on year. We are seeing growth of about ,0 for several quarters now while rivals are seeing their stagnate. Looking ahead for the First Quarter net revenues forecast. Hat 185 million it has included increase more than 280 in the last year or so. In the last year, it started tearing away look at that takes the. Big stop. Ed it is described as a chinese twitter, but it has live streaming, sports forecasts, and more as well. Is a remarkable rise as well after the ipo three years ago. The future looks to be bright for weibo after they took over their rival, twitter, in terms of market value. They are doing well. Reason that wider marker twitters market cap fell below eibos because of their fourthquarter earnings. We can show you the difference between the market values of the company. His weibos market cap the blue line is weibos market cap. Twitter we see the two companies. Weibo has a larger user base, which has yet to be fully hugeaged, and builds a chunk of weibo revenue, 80 9. 1 in the third quarter, and expected to be a big part of the Fourth Quarter as well. Its monthly active users are stagnating and it is blocked in china. Back to you. Outoming up next, vw looks for a road into indias fastgrowing auto market. This is bloomberg. This is daybreak asia, i am betty lou in new york. Takingswagen may be another stab at india after a failed entire with suzuki. This unlikely partner is not a dominant player in the countrys passenger vehicle market. We are tracking the story now. This alliance would put volkswagen with tata motors. How advanced are the talks right now . Hopefully, the second time lucky for volkswagen. Years, volkswagen and tata motors have been exploring several options. Tata motors has been looking for , anders such as in persia it looks like now that bulls wagon may be helping it push todd will help got into market. They will be developing cars were emergingmarkets. The genevanounced at auto show in march. There is no guarantee an agreement will emerge. Some of the market are saying it is still unclear the partnership will take what form the partnership will take. It is no surprise that Company Factories are a large size of the indian empire. There is a Great Potential for growth. This could be a game changer for tata . You know what, it will probably give tata motors a boost, but it is unlikely to be a game changer. The increasing competition in the indian car market everybody is in it from fiat, and others. The thing is tata motors has sing a lot of money in its home market. They have been relying on the jaguar mostly. Lets bring in the shares. There is a large number of revisions over the past month. 75 of analysts we spoke to have revised down the est imates, not looking good at all. This handpicked santos or was ousted, and it is weighing on all units and not doing any good for them successor was ousted, and it is weighing on alt. I units all tata units and not doing well for them. Yvonne is still watching for the rate announcement coming up from the bank of korea the central bank. They are not expecting too much out of the central bank in south korea, but the markets are taking a breather. Perhaps they are still digesting what those fed notes really meant, but we are also seeing a Dollar Strength trickling through, but the yen is Still Holding to quite a bit of strength with the nikkei down about 40. 4 . This is bloomberg. It is i am here in hong kong. This is Bloomberg Markets asia. The bank of Koreas Holding rates, they are revealed. That is going to be revealed or soon. Despite theking off deity being optimistic. From stocks soaring,
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