Trade. They simply Steven Mnuchin said the u. S. Deserves the right to be protectionist. Haidi i am haidi lun. This is daybreak australia. We are moments away from the opening of the first major markets. Etty i am betty liu we are looking at how all the action on wall street will play into the asiapacific trading day, kind of a whimper in how we ended trade on friday. Retail Sales Numbers we are looking at friday morning coming in and missing estimates for the most part, so we will get more data this week that will include numbers on the Housing Market that will lead to more clues whether or not the big consumer demand we have seen in the u. S. Driving the u. S. Markets, whether that is peering out or not. On friday we close down, the dow was down 20 points, the s p lower. The nasdaq composite pretty much unchanged on friday. Sort of a mixed, mixed session. U. S. Is in, and the this relentless phase of being range bound. Againatility, falling heard the 90, 93 lows. Is ifa, the big agenda china dials out retail sales, Income Investment and assessing the production. They are all set to move the markets today. In new zealand, looking pretty 68. 60. Ew Zealand Dollar the u. S. Dollar did fall, but the first gains in a month. Futures in australia pointing modestly high. We did go down 0. 7 on friday. The aussie dollar headed for a. 95th day of gains at . 73 73. 95. We are raising the weekly loss, up a quarter of 1 . Another felt, more saber rattling out of north korea. Wti, this bounce in oil could be losing momentum, but the opec meeting is under two weeks. People are focusing on the production that they will cut, namely in the u. S. And outside when it comes to iron ore prices that are now down. 7 . Lets get the news now with has linda. Laid the china has foundations for a new eastwest trade route, calling it the project of the century. Xi jinping told business figures that the initiative is inspired by the ancient silk road that originally linked china to europe. He repeated his report for globalization, saying it as a piece a road for peace. The belt and Road Initiative is rooted in the ancient silk road. It focuses on asia, europe, and africa. All countries can be part of this initiative. The pursuit is based on extensive consultation, and benefits will be shared by all. Reporter chinas biggest way as an data oil and Gas Producers say nine deals worth 20 billion during the forum. They told bloomberg they have more than 50 joint ventures underway in 90 countries. He told us they are setting their sights on u. S. Energy and looks beyond traditional suppliers to fulfill a growing reliance on energy markets. U. S. Has very rich oil and Gas Resources while china needs to diversify its crude supplies. American crude will certainly be one of our options as the u. S. Government loosens its restrictions on oil exports. It is strategically important for china to increase the natural gas ratio from 6 to 10 or 15 in the next five to 10 years. Haslinda the Uns Security Council discussed north koreas latest Missile Launch, which is seen as a direct challenge to the south korean new leader. The rocket landed in the sea of japan after reaching an unusually high altitude. It was not known if it was capable of hitting the west coast of the u. S. Trump and the other said they would meet kim jongun in the right circumstances. Say Steven Mnuchin said the group understands washingtons position. They had watereddown language from earlier in the year but suggested a more pragmatic tone. Mnuchin declined to shun protectionism, saying the u. S. Will do what is best for itself. We dont want to be protectionist, but we reserve the right to be protectionist in the extent that we believe trade is not free and fair. Approach is to more balanced trade. It is important, protectionism is off the table. There was no disagreement on the fact trade promotes growth, so i am very satisfied. Of course we need to make steps forward. There are different views across the g7 and the g20 for that, but i am confident we can reach common views even on these issues. Haslinda global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. This is bloomberg. Haidi thanks for that. Paul is here with a look for what is happening around australia with trading underway. We have the first opinion polls out following the budget. Did the government do well . Paul not really. Thefirst poll has been preferred of the opposition labor party. The labor party is improved a little bit. The news poll, the other one, not so good for the government, the oppositionay labor party up 53, which is worse for the government. A couple of other interesting factors, was the budget fair . 49 saying yes, 39 no. And this was 68 , so the government thinks they are on top. As far as Prime Minister malcolm turnbull, still doing pretty well. Postis the wrapup from the election polls. Betty away from politics, arrow energy missing out. The country is facing shortages domestically, but that could be a blessing in disguise. Arrow was taken away by consortium of petro. They were trying to have scraps, a 20 billion joint venture to ship arrows gas to export markets. Arrow now turns the largest gas of eastern australia. They are starting to expand their project, facing double output and will supply domestic and international markets. The prices domestically have been getting rather strong. Competitors have been dealing with cost overruns from the very capital intensive lng funds, not to mention crossing the reputation crashing the reputation of the price shortages. Every cloud has a silver lining. That is todays moral. Betty and the biggest miner is about to undergo an image change. That includes possibly changing the name . Paul yes, they have a new name after the 2001 merger with billiton, which i believe is a dutch company. To go thep decided whole hog and get rid of the name altogether. There will be a 10 Million Ad Campaign in australia. Not only will they change the name but change their logo that you saw as well and adopt the think big slogan. The chief officer said trust has been lost, but we will reverse that. We need to think make the Community Think different about us. He is talking about the collapse that a lot of people lost their lives. Elliott management would like the profits for australia, listing in london. There is a condition of that 2001 merger with billiton that bhp remains listed in australia, but the Company Denies any link in getting rid of the billiton part of this name and said the rebrand has been in the works for well over a year. Betty we will certainly be watching for those developments on bhp. As you turn on your computer at work today, be alert. An unparalleled global cyber attack that hit more than 150 countries could enter a second phase on monday. This is true. Asia in particular may be in the crosshairs. Ramy inocencio gets us up to speed on this. Several companies suffered in europe already. Some in asia as well. It focuses on the United Kingdom here. The National Health service, well known as the nhs, 48 have been attacked. They have mostly come back online, 90 , but they were turning people away for surgeries that were already scheduled. We can only use pen and paper. Dont come in now until we come back from this. And a nissan powerplant was also affected. Fedex, theed states, Global Logistics carrier, has been affected, but no details. They said in a statement they have been affected and apologize for what is happening. And russia has been affected. The interior Ministry Said 1000 computers have been affected. They do point out it was only about 1 of all computers, so they are trying to downplay. In europe, germanys autobahn has been affected and in spain as well. Asiapacific, according to sky and australia, one business has yet been unnamed, but one has been affected. They point out no Governmental Organization has been affected. China social media is pointing out gas station Payment Systems have been affected. You cannot use credit cards. They sayank of china those are also down. Japan according to the japan times said the National Police agency is working to address this. Taiwan saying they see something has been affected but not going into specifics. Indonesia, hospitals affected. We are seeing it grow, but the thing is this malware was released into the world friday western time during during the working time. In the asiapacific, everyone had gone home, turned off computers, so that is why there is caution saying be careful when you come back to work. Just be careful when you do that, because you could be affected. , it hasckly, ransomware been dubbed wannacry. It is ransomware that locks up your files and locks you out. You have to throw money at them. They are asking for bitcoins, 300. It is interesting this weapon is leaked from the National Security agency a few months ago, one of the trove of tools the nsa itself may have used in the past, now being used by many businesses and individuals around the world. Risk, so who is most at and what can we do about it . Ramy i was wondering who was at risk and if you use apple computers, you are not at risk because it specifically target users, pc users, of microsoft, specifically windows xp, windows eight, and circa 2003. Interestingly windows 10 is not being targeted. If you are a windows pc user, be careful when you turn on your computers here. Microsoft did release a patch back in march. If you saw it and did not download it, microsoft says you need to do that now. The report it as a critical patch. In a blog post that microsoft pointed out the fact that even though there are windows systems that date back 10, 15 years or longer, they are releasing patches for all of those as well. Anyone and everyone can be targeted by this. If your are not a victim, dont open any, but if you are, this is ransomware. You can pay the ransom, and people have been paying it on the order of 10,000, but as the asiapacific continues to wake up, that could possibly have problems. Haidi happy monday. [laughter] haidi thank you for that. Still ahead, exporting to look at the asl match in china. Up next, we will take the temperature of the australian Housing Market. Ofll focused on that ahead home lending numbers due out later this monday morning. And the georgia economist joining us. This is bloomberg. We are counting down to the citi open, and you can see futures slightly higher, up 0. 1 . Trade, thatt of begins. I am betty liu. Cold i am haidi lun in a sydney morning. Seeing futures ahead of the citi open, lets get a quick sydney open, lets get a quick open check. We are looking ahead in terms of today, chinese assets, industrial activity as well as investment coming. Hrough today we will determine how the aussie trading session gets the week started. And lets start with this. Our next guest is expecting slowing growth when it comes to home sales. Joining us, the st. George bank senior economist. We had those construction start numbers coming through last week. We have been hearing from the treasurer saying demand is real, other side saying you will see more supply on the market. Is that how it is playing out . We are seeing signs of quite strong demand. It is quite elevated, and the lending data is at higher, elevated labels levels. At the same time, we would anticipate some slowing. We have apra and the australian regulator who has put up submissions last year to restrict investor lending to 10 of the focus on banks, and they also recently put some restrictions on interest only lending as well. All of these factors should, we expect to see some slowing. We have Interest Rates at low levels that it is being a strong support to demand. In some places, i expect tightening. Haidi when the fed starts going a little bit quicker. Yes, that has more of an impact on the longterm rates, so top rates in the fixed term, maybe three or five years of lending, those rates will start to edge up higher. And of course the tightening from apra to what the banks to, an impact. Oes have at the same time, Interest Rates are at a low level. Jumping off of what you are saying about the tightening, standard and how that might affect the homegrown loans of the bank, i want to draw up a chart on those numbers. You can see the orange bars represent the year on year growth, which is near 8 . If you look at quarter on quarter, they certainly have been slowing, and much lower for , slightlyat least lower than the industry average. Since home loans, mortgage lending is a big part, for the west part it is 60 on a such a large part of their portfolio, if standards get tighter, how will that impact the banks who are look, if you tighten lending standards, it will have some impact on lending. , i mean, what is supporting home growth lending it is saying Interest Rates are quite low. There is still demand, yes. We do anticipate some slowing, and house prices being where they are, in sydney and melbourne, we expect some slowing to occur. Betty the question is, how much does it slow before it deteriorates their loan portfolios . How can they stand before it really becomes a material effect for them . Part of theirbig loan book. It will have some impact obviously. I think in terms of the whole , you need to look at it the other way. If raising standards are there for a reason, that means to keep them, the whole financial system, down in the longterm. It shows that you do have more stable Economic Growth later on. Haveovernment has said we high Household Debt levels, the haidi the residual shocks. Janu it scares me a little bit. Haidi you can see this divergent path back to wage growth and the path it is taking. Does it worry you . And thisis worrying, is something that slow wage growth has been the issue we have faced for over a while. We used to have Spare Capacity in the labor market. We just want to see stronger growth. Stronger growth to bring down the unemployment rate. Then that would increase the prospects. Stronger wage growth. So we are in this catch22 where we want to get stronger growth, we might do things like stronger consumer spending, slow wage growth. Chart, definitely this you do have to worry a little. I think there are some other things where it makes us a little bit more relaxed about it , these rates are very low. The rba has put out a study about this. It has to be those who have the capacity to pay the higher income holding the most debt. It is the most reassuring thing. Haidi thank you so much. Janu chau. We would like to bring to your attention our interactive tv function. You can watch us live but catch previous interviews and go into the securities or bloomberg functions we talk about. This is for bloomberg subscribers only, but check it out. Haidi i am haidi lun in sydney. Mark you are watching daybreak australia. A quick check on how the commodities are trading, relevant as we are looking ahead to the australian trade. Gold is up slightly 0. 1 . No improvement on crude futures below the 50 merrill. Haidi it is a 30 a. M. In sydney. A. M. In sydney. We have a fairly dark view of the Sydney Harbour bridge, but there is a lower close in the friday session. Betty i am betty liu in new york where it is 6 30 p. M. You are watching daybreak australia. Both go to first word news. Haslinda Security Experts say the week is unprecedented the weekends unprecedented cyber attack will continue to claim victims. The malware used in the technique was stolen from the National Security agency. It affected the british National Health service, russias military ministry of the interior, logistics giant fedex. This is something we have not seen before. The global reach is unprecedented. The latest counties over 200,000 victims in at least 150 countries. Haslinda chinas premier said they will continue with crude money policy, and they will maintain stability and financial markets. State media told Christine Lagarde they are continuing to manage slowing exchange rates. They say china will strike a balance between volatility, deleveraging and Economic Growth. A chinese aviation official said beijing is negotiating with u. S. And france for more air rights to meet growing demand for mainland airlines or direct flights. They are contacting existing rights which china says has been depleted. The talks with france are a part of chinas plans to boost air road in the one world, one in trade initiative. Angela merkels christian democrats got a decisive victory in germanys most populous state, handing them a heavy defeat in the national elections. Voteb you took 34 of the in westphalia, and the other party got 31 , the worst showing since world war ii. Global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. This is bloomberg. It is a big week ahead for earnings. We have cisco, alibaba among companies reporting. Su keenan with a look ahead. Also more economic numbers to keep our eye on. Su lets start with the tech numbers out. It will be bigger when you talk about online retailers or etailers, then alibaba and tencent. They did better than a 30 year to date. Can they take it higher . Investors are interested to see competition from jd impacting them. Especially since they went public. The back end of the week, the 18th. And tencent is up about the same amount as alibaba. They have done very well on the current environment. They will be out the 17th, a day before alibaba, and this is the focus on tech where it is right now. These technical analysts, lets go to the bloomberg 8527. You have apple on target for 800 billion market value. They say there is a giant market value tech. When you look at the five, it creates something to look at, the combined capitalization of the most valued companies, apple , google, alphabet, microsoft. They are 3 trillion. That is according to data compiled by bloomberg more than the total value of stocks in a single equity market except for the five largest, china, japan, the u. K. There is concern, what if that valuation is overdone . Betty interesting to see how much of it is in tech companies. We will have more economic numbers. How is housing . Su big focus, because weak rebound or start to the economy, is it real, an outlier . We will find out the numbers. Home construction has been nearing a decade high. Rise,duction will also underscoring of these. They will provide signs the economy is rebounding from a First Quarter slowdown. He could also be a way to focus on president trump. He will meet turkeys president erdogan. Groups in syria likely to be the first topic. Then we have him for his First International trip, saudi arabia, tel aviv, rome, the nato summit, and the g7. He will really get immersed in something many were concerned he did not have a skill set in, international diplomacy. Haidi last week retail was a big theme with the consumption strength in the u. S. , and that is one of the earnings means you are following. Su a lot of earnings numbers hitting the tape. A couple other themes like low volatility, those have become crowded trade. Everyone concerned with the exit, it may not end well. Goneility index, this has exponential. Lets talk about earnings. Cisco, theyafone, are reporting at the outside. Avis fell 19 post earnings. That will be a focus for weakness in the rentacar companies. Hurts always a big hertz always a big focus. Can snap rebound from their fall . And if we go into the bloomberg, 8544, these stocks, retail stocks, the number of closures have exploded. It is up to 97 , and you are seeing that reflected in the brickandmortar Companies Falling victim to the online again. That is the trends of that industry in terms of earnings and stocks performance in the weeks ahead. Haidi thank you so much for that. Lets get to what we should be watching in asia. Adam is here with us. We have stocks from oil and the new south korean president celebration. Are we seeing more volatility in asia . The u. S. Stock is normal. Adam we have seen strength in the dendollar. Yen dollar. We did see a move in the u. S. Bond market, so we expect to see more of that follow through with australia. They are also saying they are trying to assess the severity of the missile test from north korea. Is it a misunderstanding or disagreement about this new kind of missile, certainly weighing on that. Equity investors are looking for a reason to celebrate, say we have pushed on pretty well. It is more of a risk than a downside kind of trade, a couple of excuses to take money off the table. And the big slowdown with chinese data, the production, retail sales, that will be the big focus later on today. Betty it is getting tough for dollar bulls after they made their money beating rallies. What are the key Technical Levels to watch . Adam let me bring up this chart on the bloomberg. It is pretty clear that 115 dollaryen is the number. We hit the resistance. 3 times this year, and the technical analysts that we have been. Peaking to our pretty sure any advance to the level basically comes off dollaryen again. Fridays from charles on and the inflation report, that certainly is the risk, isnt it, inflation is just not as strong as some might hope. It is tricky for the dollar that plays out where expectations are for the u. S. Economy and inflation expectations. Tomorrow is the housing start number. That we getfirst underground the key levels. Around the key levels. Betty we are watching for those numbers pretty closely. Adam haigh. A look ahead at asia. Now xi jinping lays out his vision of trade. We hear from the oil and gas minister about the opportunity. This is bloomberg. Betty good morning, i am betty liu in new york. Haidi i am haidi lun in sydney. You are watching daybreak australia. The business flash headlines, bhp billiton is going back to plain old bhp. They are about to launch a 10 million advertising campaign, changing its logo. They want to change the way the Community Thinks about it. Change has been in the works and has nothing to do with the accidental recent hold for reform. Mitsubishiges to the u. S. Financial, which will consolidate accounts into its commercial operation. That would see a record in the bank of tokyo. Moveenders hoping to efficiency. The changes will affect about 2600 corporate customers abroad boring of borrowing. Haidi the investment arm of the Sovereign Wealth Fund of abu dhabi is going to invest as much as 15 billion in the seoulbased vision fund. They say it is a significant return, and they will make their investment over the next five years. Softbank will wrap up in the next two to three weeks. 95 billion of commitment so far. Betty china laid the framework for its new eastwest trading route known as the belton road. The ministry described as the plan of the century. Tom, take us through the details of this grand plan. That is right. President xi really letting out his plan for a chinese globalization of investment and infrastructures that will link china and asia to the middle east, europe, and africa. He announced new funding for s initiative around 78 78 billion u. S. He also wanted countries involved with this to sign on to his vision of how this is going to unfold. Amongst leaders we had president s of russia, vladimir putin, the turkish president erdogan, the Prime Minister from pakistan. Heraldedsigned on and this. We did not get members of the g7 other than italy. There are concerns in europe and the u. S. About the transparency about this and the project, how it will be implemented. But it was a big stage for president xi jinping, really building on the image he is carving out himself as a champion of globalization against president trumps election. This, the headin of chinas largest oil and gas producer, cnp see, China National petroleum corporation. That is a key issue as the energy security. And i asked him about russian pipelines digging gas from russia to china, why there were delays about it, and also prospects with u. S. Energy, oil and gas, into china. Chinas reliance on imported oil is over 60 , which means that almost 300 million tons of crude oil are imported every year. The u. S. Has very rich oil and Gas Resources while china needs to diversify in imported crude supplies. American crude will certainly be one of our options as the u. S. Government is losing its restrictions on oil export. It is strategically important for china to expand the national gas ratio in his primary energy mix from the current 6 to 10 or 15 in the next five to 10 years. Tom would you consider investing in u. S. Energy . We are interested in investing in u. S. Lng projects now that america has lifted export restrictions on lng. Opportunities in building natural gas plants and customization facilities were investing in lng projects, we will consider them. The russian pipelines that seems to have faced a number of delays in terms of coming online, the pipeline that will bring russian gas to china, those delays, what were the reasons for those delays, and when do you expect that pipeline to come online . The cooperation between china and russia is strategic. We are planning to complete [please stand by] both sides are speeding up the pipeline. The exportation of gas fields and the processing facilities. Tom so it is rare to get these insights from the head of one of chinas major state owned companies and the largest oil and gas producer in the country. Potentiald about investments in u. S. Lng, and the terminals they lined up in the u. S. As well as those development regarding russian gas being piped in to china. This is all about china trying to diversify its energy mix. It was fascinating. We are learning more about how it is programming. Betty we discussed quite a bit of this last week, but the main tensions around this project, outline that for us. We did touch on those, and it was interesting they kerley clearly came to the surface yesterday. The meeting continues today. We will see how it pans out. There was this note or paper put out by the chinese as part of this initiative, but they wanted to get as many people to sign off on this regarding financing with the Infrastructure Projects. They have 18 National Leaders to sign on, 18 countries hearing what they did not get with the backing of the European Union or germany. We heard from germanys Economic Affairs minister saying what they wanted was language in that document about international investment. They did not get that. They were holding out, and the chinese have refused to take on board the requests. We heard Christine Lagarde making a point saying the projects need to be environmentally friendly, that Environmental Concerns need to be factored in. We have seen problems around the Infrastructure Projects like in myanmar where there were projects, because of concerns of the environment. And then we did not hear from the National Security council. He said transparent, fair playing was needed, fair Playing Field for the u. S. To want to get involved and u. S. Companies to get involved. There is optimism among countries but also caution from european nations and the u. S. Haidi are you hearing much in terms of the response from Southeast Asian nations about this initiative from beijing . Nations arest asian clearly crucial to this. There is an element of caution for some of them around this idea china is expanding its sphere of influence. Malaysia has done a big intake were taken a lot of the investments to china allocated to the belt and Road Initiative. One country that needs infrastructure is indonesia, and we spoke to the head of their correlation board. Pointd indonesia made the of pointing this out, seeing the mistakes of other countries around the belton Road Initiative, and they are going to get involved. There is a key infrastructure project, he talked about linking jakarta to java. They talked about a deal of 5 billion u. S. Dollars to get it under way. Cautionhinting at a approach that they are looking for more details in china on how this financing is going to work and how this transparency and implementation, because that is key. Implementation on the maritime and overland route. Haidi implementation, how effectively they will be deployed, accountability, all of these things. Tom mackenzie at the belt and road for them. A splash in china. We will look at this plan. This is bloomberg. Haidi im haidi lun in sydney. Betty i am betty liu in new york. You are watching daybreak australia. Australian rules Football Club is betting china will be the first received nation to a doctor the sporting code. They are hosting a match in shanghai. Jason scott is looking into the push. What is the thinking behind this game in china . Reporter this has been a long time in the making. It is about a fouryear project from adelaide. They are a small working class that australian rules, and was started four years ago. They started thinking outside the box and leaning towards china for a way to pick up their revenue. It started about three or four years ago when business in hong kong and shanghai were forming players. They built up theres, make businessns with the community, including the founder of this major Real Estate Company in shanghai. He bought adelaide, liked it, they hosted the game in shanghai late yesterday. Played yesterday. Haidi we know that things happen and take off in china when beijing puts people behind it, so where does the Chinese Government stay on this initiative. Reporter they are being very supportive. The Chinese Government will look promoteas a way to chinese businesses getting its foot held in australia. It is important in hosting the games, which is a military plane desperation grounds, specially designed to the purpose, yesterday. And during his visit to australia in march, the premier attended a game of australian rules football with australias Prime Minister, malcolm turnbull. He was draped with a Port Adelaide football scarf at that game. There is no high together approval from the Chinese Government. Haidi also, amazing pictures of him trying to do a pass. Thank you so much for that. That is it for daybreak australia. Up. Ry and betty are coming we will look at what is coming up in the next couple of hours. We will continue to talk about the lack of direction when it comes to markets as earnings season continues. Betty we have one guest with j. P. Morgan, head of asset allocations. Interestingly enough, we have volatility that is such a low point right now, the lowest was 1993. Markets and records, it has got to seem disconcerting here. It is the quiet before the storm. That is what has got people nervous, things are to calm in the market. There has got to be something on the horizon. We will talk to him about what that possibly could be, and could history repeat itself . And the silk road associates, the ceo, he will join us for more on the big belt and road projects. Haidi yeah, that is right. The initiative. This is bloomberg. China lays the foundation for a new trade route, the project of the century. Finance ministers take a chromatic view of trade. Mnuchin says the u. S. Reserves the right to put itself first. Koreas latest Missile Launch is seen a
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