In hong kong it is just past 8 00 a. M. Probably a week that betty wants to forget. After this article by a former engineer but we are going to dig deeper into the story about the patent fight. In the markets, not a lot of fighting to get to the top in the markets. He saw the dow hit yet another record high. Thenteresting to hear coming back hashtag coming back. Lets get a market check. That puzzlement certainly playing out at the start of trading in asia this friday. They are still set for a fifth weekly gain. With the yen below 113 were of ag pressure, down 7 10 percent. Toshiba on the up almost 4 . A lot of newsline around the conglomerate and it is supposed to begin the process according to reports. We are seeing it snap four days of gains. We got south korea Consumer Confidence rising in february but still below the reading that shows pessimists outnumber optimists. Sydney dragging. Seeing iseme we are the retreat in commodity prices. Particularly movers in sydney. Continuing to fall over the firsthalf net loss. Super retail climbing over 7 this after its firsthalf revenue coming in line with estimates. Salesas early secondhalf growth across its units. On the radar today we have taiwan jobless rates. Singapore industrial output out this friday. Commodity prices are pulling back. How is the aussie dollar holding . We are seeing a slide in iron ore, which is australias top export warner burner. We are seeing the author sticking above . 77 u. S. The dollar aussie traders seem to be moving back and forth between the governors comments and Steve Mnuchins remarks. Hard to see the aussie as fundamentally overvalued what he does say he would like to see it lower than higher. He also weighed in on commodity prices. He says iron ore is not sustainable. Forecasts d. C. The aussie depreciating 3. 7 by the end of the quarter. Year to date the aussie is the bestperforming of the group. Take it look at its performance up over 7 year today. Year to date. The dollar is trading below the 100 day moving average. Thank you so much. Now lets get to the first word news with courtney collins. I aia the estimates. They rose 25 against estimates of 24 while premiums climbed 28 . 28 premium income reached million with net profit and more than 4 billion. Aia is said to be among bidders to a commercial back. U. S. Treasury secretary steven want to decide whether chinas is manipulating its currency. He told bloomberg when no announcement will come before april. President Trump Campaign on naming china a minute on his first day in office. Very mnuchin said he has good conversations with the chinese counterparts. Attorney general Jeff Sessions has reversed the Obama Administration order ending the use of private prisons. In a memo released thursday, nescence saracens the bureau says most inmates and private facilities are what they call, quote, criminal aliens. Has slipped union to bring the bill for its decision to leave, and it could some to 63 billion. The austrian chancellor became the first eu leader to put a cost on the u. K. Brexit bill. 60 billion euro tension obligations to eu officials and pass pledges to budgets and projects. European unionhe have to be better off the nonmembers. Have ing to global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. Im courtney collins. This is bloomberg. Uber is getting sued for allegedly stealing trade circuits trade secrets. We joined now from san francisco. This ff about doing how for best doing that why is alphabet doing this . Theyre competing on mapping, self driving cars. Team is a lot of people left google last year. According to the lawsuit they stole over 14,000 documents and trade secrets. This is a chance for google to prove they are ahead in this race. It has certainly been a tough week for over uber. Tell us the back story for oto a nd uber. Otto started early last year. Earlyof engineers were in member of googles self driving team. Within six months they were sold runningand now they are the Autonomous Driving Team inside uber. Google claims they built their stole 500nology and million of googles technology. We have seen this rivalry between them which is already been heeded. Why is the sector such a hotbed for lawsuits . Formera sued one of its employees as well. Google filed another lawsuit. This is a nascent technology. There are few people in the world who are good at it. A massiventially market which overhaul the entire transportation industry. They are really protective of their ip. Similar to when you saw lawsuits around the start of the smart phone market about a decade ago. Mark, thank you. Boarding beating fourthquarter estimates. Lets get more from our tech reporter joining us live from shanghai. David, they have been widely seen as the google of china. It is not exactly tracked success to its counterparts. Why . It just comes down to one basic thing, advertisements. If you look at the u. S. Market, google and facebook are basically a duality in the online ad market. Faces fierce challenges from titans in china. It has fallen behind alibaba last year in terms of the Online Internet ad revenue for the first time. It is basically needing to grapple with some big competitors in the space. The company turned to the man who previously ran divisions at microsoft. He will be talking later in this earnings call. What are we expecting . , speaking to a live investors, what they hope to hear is a firm plan on how ai will make money at baidu. ,f you look at the r d costs they have increased substantially. Basically continuing a trend of increased r d costs. A lot of that going into headcount and technology to fuel this ai research theyre trying to get into. They want to become the cornerstone of ai in china and potentially the world. It is now up to him to do that. Indeed. It is certainly a big job to do going ahead. Senior managers and others have said ai will be key for the company. What might we learn that . Were not sure. The keep telling us that ai is a new electricity and will form the bonds between all technologies. Investors and analysts are very curious as to what the Business Model is. No one has been able to crack ai as a big money spinners terms of anything except for boosting search results and making adds a little more customized. Without that Silver Bullet already invented, people want to know what ai is going to do for baidu. What products will result in . Thank you. Trumpahead, as president has President Trump been overly ambitious . We will discuss what he has delivered. Later on, happy friday. Find out why some japanese workers are getting paid to leave work early today. This is bloomberg. This is daybreak asia. Summoned somerump of americas top Corporate Executives to the white house telling it to start work on restoring manufacturing jobs and u. S. Dominance in trade. At the meeting is the dow chemicals ceo announcing his commitment to the president s vision. Today and ceos here in the last meeting are very encouraged for the probusiness policies of the president and his cabinet. Some have said this is probably the most probusiness Administration Since the Founding Fathers. Since the Founding Fathers . That is quite a statement. Our next guest think the president s ability put to have to put through these policies looks tenuous at best. Executive Vice President and head of you heard from the ceos at the white house, very optimistic saying this is very probusiness. Why are you skeptical . We are skeptical just because so much of what President Trump has outlined in terms of his progrowth agenda has to do with congress. As we all know, congress is a more slowmoving body by design. Once things go through the machinations of the legislative process the usually take longer and are less bold than when they started out. Asthey all get watered down the bills get through congress. Lets imagine a trump was able to get everything he wanted pushed through. In the some of it all, is that progrowth . It depends exactly what youre talking about. There are definitely things that would be progrowth. A bold tax reform package would support growth. Infrastructure with would also be supportive of growth. Hand, other things like his immigration policies and also trade, those might be more of a drag to growth. I think it is a little bit of a mixed picture. Do they cancel each other out . It is 30 plus days into the administration. It is hard to say at this point. But focusing on what he can do through congress and what has to go through congress, which is tax reform, infrastructure, those things look likely to be pushed out towards the end of 2017 to even 2018, given that now congress has pledged label work on obamacare. There are things that are more progrowth, more will likely take longer than some parts of the market expects. , as innocuous an issue on the surface it seems, has been so tough to get through. We witnessed that with obamas last eight years. What the you think could come out of it that actually could pass . That could survive a go into the next four years . Yet, that is a great question. Hase is a Reason Congress not been able to achieve tax reform since 1986. It is very difficult to do. Reformtax cuts, tax actually entails winners and losers. Whenever you have losers, especially on capitol hill, you will hear from their lobbyists and advocates in order to slow things down. Again, it is very early days. Patient on tax reform, especially some parts of the markets got over their skis in terms of expectations. I think paul ryan is certainly committed to having tax reform done, but it will probably take longer and be a little smaller than what folks had anticipated. What do you think could actually go through . What could actually pass . The most easy thing to pass from a tax perspective is tax cuts, because nobody really loses. You might have pushed from deficit hawks but at least among beublicans, there would broad support, especially in terms of Corporate Tax rate. When it becomes more complicated is what speaker ride is trying to do you try to make it neutral, meaning you reduce Corporate Tax rate but you raise revenue for the government. It is a very controversial component of paul ryans plan, which is to basically tax imports and credit exports. That has been the focus of markets for a lot of people on the hill recently. I think while we understand while why paul ryan is so supportive of that, politically it might be difficult because you have the retailers, so they kind of lose in the situation. They already have come out in force on capitol hill. E. And walmart battling it out. Can you have tax reform without a border adjustment tax . You certainly can. Point, with the caveat it is early days, that seems to be the most likely scenario, although things can change, especially if President Trump comes out in support the border adjustment tax. That would definitely change the calculus. At this point you certainly can have tax reform without the border adjustment tax but it will likely be smaller as a result. That means practically that the Corporate Tax rate will likely be less reduced than what has been set out, which is 20 . 27 without25 to the border adjustment tax as an offset. You mentioned a lot of this has to do with congress. I want to get your take on the cohesiveness of the gop party right now. Are you seeing that type of cohesiveness and ideology when it comes to house and Senate Republicans . Can they see i do i would the president . They see eye to eye with the president. There is a focus on what to focus on. Some sort of fiscal stimulus. Obamacare. Where there are disagreements is the how. View, senate one republicans have a different view. Those who have gone on the record. Has beenident trump less clear exactly about what type of plan he would support. I think we anticipate, and you saw some news on this today, i think we anticipate that he will likely get behind something or clarify his position next weeks joint session to congress. Watching that will be very important for americas perspective. Please stay with us, we will have more after the break. Ask you more about trade policy, coming up next. Is daybreak asia. Lets continue our conversation with libby. She joins us from singapore. I want to talk more about trade matters because there has been confusion about Steven Mnuchins comments. Saying he does not have urgency right now to call china a currency manipulator. Trump seems to talk about this not level playing field. Hopefully you can see this chart. It shows the trade deficits that the u. S. Has with many counterparts in the world. It seems like it is more about china that anywhere else compared to the world in white which is blue, which is japan. The yellow is china. Still seeing eight significant trade deficit. What kind of policy would actually shrink that deficit . That is a great question and honestly there is a lot of uncertainty around what President Trumps trade policy will be. You are very right in pointing to china, given that china is the country that the United States has the biggest trade deficit with. On the currency manipulator certainly President Trump has said a lot on the campaign trail. He has been very quiet on that issue since inauguration. I think it was probably out of the realization that china has actually been supporting this currency, which would help the United States, reversing depressing the currency recently. Thatu look at the criteria china would need to fit and able to be labeled a currency manipulator, at least at this point, they just dont. If you look back several years they might, the currently what they are doing does not qualify. I do not think we are surprised necessarily that turnaround because it actually follows backs, but interim follows backs facts. The president has very Broad Authority over trade. Area that congress has seated into a power to the executive branch. If President Trump wants to, he could impose germanic tariffs on china. His head of National Tree council has said things to that affect. Whether he will do that remains to be seen. This could be a case of the currency manipulator designation where there is a payment by the administration. Youibby, i want to ask about what Steve Mnuchin said today. I want to change gears for a moment. A 50 mnuchin talking about or maybe even a 100 year treasury bond. Why not, right . I know you looked at public policy, not so much the Investment Outlook of things. Im curious what you think about this treasury secretary thrown this idea out there. We have lots of very smart folks here focusing on that. I am not what of those people. I do think this type of comment is interesting. It also shows that Steve Mnuchin has not had quite a lot of government experience. Hes new to some of these policy areas. I think there could be some positives to that. Maybe he takes a fresh view in terms of some of the things that treasury could be doing. And of course there are disadvantages in terms of maybe not being able to know how to execute things. It is an interesting idea, i do not think we have a firm posture on that. Related to that, just to take it a little farther, earlier you mentioned your skepticism on how this could get through congress. Given that, are we also overestimating perhaps how much that policy will affect the economy as well . That is certainly what we focus on here. We are big macro investors. Things like growth and inflation, Interest Rate levels, those are the things that drive investment performance. From an Economic Growth perspective this is key. If we do not see tax reform until 2018, infrastructure until 2018, we will likely not see gdp either. 8 30 in singapore. We were half an hour away from trading there. Youre watching daybreak asia. Lets get to the first word news with courtney collins. Candidatedent Emmanuel Macron has moved into the lead to the french president ial campaign. After the latest poll gives him 22. 5 support. Marine le pen leads the race ahead of the first round of voting in april but is expected to be beaten in the final ballot. President trumps pick as u. S. Ambassador to china has emphasized friendship between the countries thing he hopes to play a constructive role in improving relations. The island governor has known the Iowa Governor says his personal relationship with beijing will help rate down barriers. Confirmation has yet to go before the senate. Has faceden executive court in detroit on charges related to the admission emissions scandal. He is charged with conspiracy and other crimes in the scheme to the company is expected to plead guilty on march 10. Five other executives are in germany. Budapest withdrawals from the race of the summer olympics leaving just two cities in the running risen questions about whether the organization is in crisis. Los angeles and paris are competing for sports biggest event after eight cities initially expressed interest. Rio still owes contractors millions. Global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. Im courtney collins. This is bloomberg. Time to see how the asian markets are shaping up so far on this friday morning. Lets check in quick on what is going on. Toshiba climbing over 6 . Potentially see chapter 11 bankruptcy as an option. Keep an i onwill the stock throughout the day. We are seeing red across the board. A theme for today. Declines inther commodities, treasury yields and the dollars. Yield fall benchmark below 2. 4 overnight. That following Steve Mnuchins comments. Following to the lowest since february 9. The fed minutes or not seen as super supportive of a march rate hike. It is shaping up for a good day for aussie bond. They are set to shrink farther. Steve mnuchin is driving the market sentiment, that is pulling the dollar on the defensive. For the most part we are still seeing gains hold, although the aussie is softening somewhat. 77 cents mark. The yen climbed overnight. Yuan gathering strength after mnuchin commented. The dollar is down. Btv6228. There are indicators showing perhaps the rally for the dollar may be over. The dollar as it trades below the 100 day moving average. You can see that in the white line tracking the movement of the dollar. Having to digest not only mnuchins comments but having to interpret and taking stock of european political development. We will have to see whether Dollar Strength can pick up once more. Sophie there with the markets. The dow posting its 10th day of gains, making it the longest streak of record closes since 1987. We want to get more. Another record day for the doubt but it did not feel like it. Because the market was listless. Some strategists, there are many who are all into this rally. They had been pulled in, but the conviction is an inch deep. There is concern the rallies have gone too far too fast. Lets take a look at the big movers, because there were some very big moves. Concern about the state sustainability. An onlinetwo, one is retailer from home goods. They missed their forecasts. Another is a tech company that had big. Lets take a look into the bloomberg and you have at how tech is hitting big. Run in terms of bigger , the1 gains in the market biggest on record. 15 Straight Days of gains. The last time we came close was in 2012. The blue boxes on the top mean it is hot moving higher. Big rallies. Commodities as well. Oil and gold both higher. We pointlead first to the dollar. Oil there is the big focus on supply and demand. What is fascinating here in terms of record is in the weekend february 10 we learned u. S. Crude exports hit a record. The floodgates are opened. Why we export to the world when they pricing has made a difference. It made the u. S. More attractive. A smaller than expected to messick supply gain. Lets take a look at gold. The commodity that glitters. The rally has been reignited since the highest since november. The treasury secretary talked about perhaps the rates will not go up that quickly. That definitely was something gold wanted to hear. We had a Big Hedge Fund manager say he is bullish of the dollar because of the uncertainty surrounding the Trump Administration. You can see the gold rally, which faltered in december, is back in business. Afterhours the Trump Administration moving stocks again with its call on private prisons. When you really see that is a Company Called geo, a Holding Company that manages many prisons. A bit after the bell but if you look at the year today stock it is up from 30 . Took a big run higher right around the election when you had President Trump announcing that he was going to reverse obamas stand on these private prisons. There was some controversy around them. Trump said he wants us prisons back because they tie into my immigration policy. This is where he is putting criminal aliens, undocumented people in the u. S. Being put in these prisons. This is a big part of his plan. Is a shot in the arm for the number of stocks that deal in private prisons. Thank you. During the campaign, donald trump said he would brand china a currency manipulator on his first day. From the white house come his Treasury Team is changing its currency tune. Lets bring in kathleen hays. Seems like this is a softening tone coming from Steve Mnuchin. Figuring thatare there are some steps they can take behind the scenes come in front of the scenes. Certainly Steve Mnuchin is following on something that seems appropriate when he says that he is waiting to see if he will determine if china is a currency manipulator. He is waiting for the treasuries april report. Major trading partners. Tohas to be done pursuant 2015 straight facilitation and trade enforcement act. How do you become labeled as a currency manipulator . It is very specific and very clear. You have to have a large and persistent trade surplus with the u. S. Your current account surplus has to be running above 3 of your gdp, and you have to be conducting onesided currency market intervention. What does this mean for china . Right now they are violating one of those three. Lets jump into the bloomberg. What you are looking at, the turquoise bars are the u. S. China bilateral trade deficit for the u. S. , surplus for china. 31. 5 billion in the latest month. That is where they are stepping over the latest line. Thathite line shows you when it has been above 3 where you see the yellow line, but it is back below. That is where china was violating. Now it is back in line. It is interesting the imf has stuck up for china. They say their currency is in line with fundamentals. Is trying to strengthen its currency. It is not having the effect of weakening the currency it had years ago. Maybe that is another thing the Treasury Department will take into account as they make this very important determination in april. Donald is also stepping up to push to get u. S. Ceos create jobs. His is going to work . He hits them with a bat one day then pass them on the back to next. He said today his priority is to bring back manufacturing jobs to and he wants and expects the ceos to help it. Help him. , my administrations policies tax reform, trade policies will return significant manufacturing jobs to our country. Everything is going to be based on bringing our jobs back. The good jobs, the real jobs. Sometimes the simplest chart still the most powerful story of all. Lets look at why this is a tough road to hold. , manufacturing employment has been steadily falling falling for nearly 40 years. Output is rising. Manufacturing has become leaner and meaner. There might have been some unfair trade, and you did. More than in previous decades, maybe now. But technology, manufacturing worker biggest enemy. The ceos saidngs back to donald trump in these meetings is look, there are jobs that had lot of American Workers do not have the skills to meet as technology invades even the factory floor. It gets more complicated. It sounded to me like a had a very productive meeting. It does sound like that. Thank you. Reserve bank of australia governor is now more than two hours into his testimony to lawmakers. Paul allen is following all of this. Talk to us about some of the highlights so far from the testimony . He started off talking about it appearsth and how to be on a former footing, particularly in china and the u. S. He said there is no longer a next dictation globally on stimulus. That goes for us here in australia as well. On monday we had philip lowe talking about the employment picture gives them cause to hit the pause button on easing. He said Household Debt is becoming a concern. There is a worry the cash rate toe was cut further below stimulate the housing market, increase Household Debt. Be nor hint there might more cuts. He also said he does not see inflation falling any further. Weak inflation led to two cuts in 2016. That we aretheme is probably in a pause when it comes to any further easing of the cash rate. Paul, we are seeing the aussie dollar fall and little this morning as well during his testimony. Philip lowe saying he still wants a lower currency. Thats right. The Australian Dollar is something that has been missing in action when it comes to the reserve bank of australia. It was one of the first questions he took from lawmakers during his testimony about the level of the Australian Dollar. Here is what he had to say. I find it hard to say that it is fundamentally overvalued, but i would like it to be lower. I see the depreciation we had today is having a noticeable effect on the economy. It is helping the tourism sector, it is helping the education sector, and even some parts of manufacturing feeling better. Been a long morning but he is in the final stretch. That testimony will probably wrap up in under an hour. Thank you. Were going to leave that there. Bloomberg subscribers can continue watching what is going on there with the testimony at live. You will also find events you might have missed earlier. Certainly a big lifesaver here for us at bloomberg. Coming up next, no fundamental change. Talks that chinas moves to stem outflows is affecting the business. This is bloomberg. Malaysiang news out of involving the death of kim jonguns have brothers death. Agent that led to his death. This is from a preliminary report. A little more from the toxicology test results on the death, which has been quite making headlines. We will continue to watch that. Out of that preliminary report, a chemical involved a vxnerve agent. The company said the value of was 25 last year, led by hong kong and china. Us businessceo told drivers had not changed despite chinas attempt to stem capital outflow. The fundamental underlying drivers of our business do not change. Savings rates, protection penetration cover, urbanization. These factors are strong. What we said this morning was we have had a strong start to 2017 as well. We saw 2016 being strong and our start to 2017 also very strong. China did start the year with some curves when it cames to transactions to stem capital outflows, which did include purchases when it comes to Life Insurance policies as well as investment policies. We have seen this surge from chinese visitors coming into hong kong and buying insurance policies. I want to throw up a chart for our viewers. It is up to 19 billion hong kong dollars already. Sinceou seen a trend these curves have been put in place before and after . Do we ceded did we see it speed up or slow down . At hong kongook business we have had success across channels and all customer segments. To peoplebusiness here, it is very successful. Chinese in hong kong is successful. Rateve seen a 30 growth in hong kong business since 2010. This is just a continuation. We have seen visitors come in in 2016 business slowed and , buyinge People Insurance was less than 1 of those who came in. A few hundred thousand actually bought insurance. Fundamentally our business is very strong and it has been very strong since 2010. This is not a new phenomenon. But you said more than half of your premiums were from chinese visitors. Is that not true anymore . It continues. It continues but not to take from hongthis thing kong nationals. Across the business, if you look at aia, compound annual growth rate has been 28 . This is a strong group, a great portfolio of businesses in the marketplace in asia which is unparalleled and unprecedented in terms of its potential. There is talk in beijing that they could be easing restrictions when it comes to Foreign Ownership for foreign life insurers, which will be very beneficial to aia. You already have the advantage being the whollyowned operation in china. If these restrictions were to lift, how would you expand in china . On rumorsot speculate at this point. There has not been a solid what you have to keep your eyes out. We look positively and constructively. If you look at the China Business itself, it has grown eight times in value of new business since 2010. Six times in operating profits and earnings since 2010. We have tremendous business there. If you look at china penetration , it has doubled since 2000. It will double again by 2020. President s the aia speaking earlier. A little more on those breaking headlines that just came out from malaysia, police say the chemical used on kim jongun agent. D a vxnerve that is a chemical only used in chemical warfare. This is only used for that. It was developed in the 1950s. It is odorless and tasteless and very stable. It travels easily. He was attacked at the airport in malaysia. Those are some of the details we have right now but it looks like the death of kim jongun came nerve agent. Coming up, japan tries to soothe its overworked population, but not everyone is excited by the idea. We are live in tokyo next. This is bloomberg. This is daybreak asia who doesnt want to leave early on a friday . Me. [laughter] many employees now can do just that. It is a plan to get the chronically overworked population out of the office send outm. And of the office by 3 00 pm and spend their money. Tell us more about premium friday. Why is it called premium . Like you explain it is a campaign driven by the government to have people work in the less at least once a month. Goyou get to theoretically home at 3 00 on a friday once a month. It is called premium and a sense to give it a good feeling, to make it feel a connector good day, especially on a friday. Day,el like an extra good especially on a friday. What kind of Economic Impact is expected out of this . Analysts have thrown around a is figures but overall it not expected to have a huge Economic Impact just yet because one of the reasons is we did not see that Many Companies involved in this yet. Surveyedf the people said their employer is up for this plan. We do not really have a lot of people actually taking the day off and going out to spend the money at 3 00. So the public response has been what . A lot did not know about it. We have tried reporting on the street to ask people what they feel about it. If you people said they have not heard about it. Company whoes at a is actually doing the campaign did not know about it. Not a lot of people are into it. Maybe if the government does more advertising and tells people to go home early, then maybe we can actually see some action around it. But we are not feeling revived yet. The vibe yet. Lets see if this premium day works. Ac, ain the u. S. , cp conservative conference, is going on at this moment and will throughout the weekend. Vice president mike pence has taken the stage. Aning that trump won toric victory and he has is already delivering for the american people. You can tell by the tone of the , continuing to rally to the faithful. They are already the big believers. Trump wasnt even invited last year. Now look at them. Talked sing also trump will take on the globalist elite with their nationalist agenda. This is bloomberg. Its not 00 a. M. In hong kong, midday in sydney. Im haidi lun. This is bloombergs market Asia Bloomberg markets asia. Asiapacific stocks, ending the week on a cautious tone. A winner. Reports of chapter 11 protection for its nuclear arm. Its a performance best described as subdued. Taking his time, steve m
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