Transcripts For BLOOMBERG Bloomberg Markets Asia 20161209

Atm limits. Extending the qe program 32017. They await the opec talks. Concerns independent producers may not reduce output. A landmark day for south korea as they are set to impeach President Park geunhye. More in a story, just ahead. Lets take a quick look on how the markets are looking. Haidi is standing by. Haidi we are getting a picture here, we have the Southeast Asian markets, taiwan getting on board today. Andness through malaysia singapore just keeping its head above water. Investors the sense are trying to take the time to digest what the ecb trajectory is. We look like we are on the cusp of a taper. Also, critically removing some of these key technicalities so the ecb has greater control over this aspect of the program. We are seeing nice gains from tokyo. Extending that rally 2. 7 . Yen, 114 at the moment. That is lending support to retailers. Weakness coming through from new zealand, down by. 4 . We do have a shift in policy. Driving the kiwi dollar to a high. Ofy have said the level interest may take it back to that target. There could be some tightening. Outside parliament and south korea, there is an impeachment that they may almost certainly go through for park geunhye over this peddling scandal. A. 3 , though the market has gained 3. 5 this week. If we can get this out of the political stability and cleaning of the house, will drive this higher. Take a look at the asiapacific, looking pretty flat at the moment. You can see major gainers, financials doing nicely on the back of that. A huge ramp up when it comes to european banks overnight. Looks nice for financials, they badly need it, particularly european banks. Oil and gas looking strong. We are moving into the meeting of opec and nonopec member meeting. We want details of whether they can get on board. Russia saying they are on board if opec members follow through with their promises, about. 8 for oil and gas and energy. A quick look at how we are setting up in terms of other commodities. Barrel,ow above 51 a. 4 when it comes to new york crude, ahead of that vienna meeting. A little downside when it comes to the commodities rally, losing steam. Copper down by. 2 . And this down by 6 . Also seeing losses ahead of these Inflation Numbers coming through from china. They give you a better indication of the demand levels we are seeing from that economy. And this is where the dollaryen is sitting. These of the exporters. 114 is where we are at for the japanese yen and that is heading out for a rally in tokyo. Rishaad now to first word news. Says opec official record pumped a record amount of crude in november. They had talks on saturday about how the cartel will fully comply with 32. 5 Million Barrels a day from january. They will cap by 300,000 barrels a day of opec delivers. Donald trump named his choice for labor secretary, andrew puzder, ceo of the company that hardees. S jr. And he has been an outspoken critic of the obama administrations later policies and against raising the minimum wage. One of wall streets top cops stepping down ahead of president elect trumps inauguration. Has leaving. There is an expected shift. The Enforcement Division since 2013, overseeing an increasing traffic issue by the agency. The Supreme Court has been told brexit without the approval of parliament would crucify human rights. Wouldminister theresa may overturn hundreds of years of u. K. Law if she used it against process. Rawal but some say brexit is taking far too long. News 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. This is bloomberg. Korean President Park learn herxpected to fate when they review the motion to impeach her. She is accused of bribery, abusing power, she will accept our limits decision. Theaad lets get to National Assembly, give us an idea how it will play out today. I am at the National Assembly here in south korea, an increasing number of protesters are standing out here area this , increasinglyters and i am not sure if you can hear me, they are increasingly rowdy. They are calling for the impeachment of President Park geunhye. This is an area in the southwest of south korea. Protesters are supporting her, as well. This is the second time ever in south korea that lawmakers will vote to impeach a president. The motion put forward accuses her of abuse of power and also violating constitutional duties among other things. Today we are expecting at about 3 00 p. M. Lawmakers in the National Assembly will start voting on this motion. It needs 200 votes to pass. Had 170 one, but still need 2942 go ahead. I know it is noisy, but if you can hear us, what impact does this have on the country . I can still hear you. People are very angry. As the day has been going on, more and more people gathering here to show their opinions and what they think about the issue. The close ties between government and big business. The family one conglomerates here in south korea. They have come under increasing security scrutiny. Lg, andng samsung, others. They talked about the fact that they made donations to foundations which were controlled by a close friend of park geunhye, the president. But they denied political favors in return for that. This has made people in south korea very angry. We see hundreds of thousands of people taking to the street during the weekend, protesting against her. Her Approval Rating has dropped a Single Digits last week. Mobilized a lot of ordinary South Koreans. If the motion does go ahead will beday, she suspended from her duties as president and the Prime Minister will take over. It will go to a Constitutional Court and after 180 days they can decide. 60 days in which to call an independent. Most likely will be a lot shorter. Rishaad nice one. Rather exuberant protesters there. Inflation in china supposed to edge up and feed into higher prices around the world. Our china correspondent joins us now. What is the latest reading and what is expected . Price index is what to focus on, that will come versus an november, rise of 1. 2 percent in october. If it comes through as expected, that will crystallize the moves we are seeing into an inflationary cycle. I deflationary cycle stretched to 2011 andback only really started to end in september of this year. That is what we are looking for, oil prices and deal prices feeding into those higher ppi numbers. Consumer prices, those are expected to be kicked off in listed by consumer demand. Bullish. Demand remains in terms of food, we are expecting higher prices for questionable scum of a pork prices to offset that. Those are the predictions for the year on year numbers in a little under 30 minutes. Rishaad what is the impact here . Any impact from higher prices . A pickup in the ppi would be positive. We saw the surprise export numbers yesterday, manufacturing numbers we got our earlier for the month of november. It suggests there raising prices and factories here. Up. Know demand is picked there is an expectation that chinese inflation will continue to rise. An economist at the Commonwealth Bank of australia expects china inflation to pick up to around 6 by the Third Quarter of 2017. That coincides with the generally more inflationary picture that we are seeing, especially if trump launches those fiscal and Infrastructure Spending plans that he said. That will be something of a pain for consumers. They will feel the pinch but it will be good for policymakers alike of the boj. To pull back on liquiditys and into a somewhat tightening phase, but in a moderate and gradual pace. As i say, we are waiting for the cpi and ppi numbers expected that 9 30 beijing time. Thank you for that. Rishaad we have those numbers coming up in just under 20 minutes. And we will have the Greater China economist. Mario draghi confounds the markets. And we asked what he is up to. Not suries did declined, treasuries up after the ecb said it would slow its growth from april. They lets bring in says they say that it probably is a taper. A very good question, the bond market probably thinks it is a taper. The equity market does not see it as that and sees the open end of this. Market that can do place, they seem to like it. It is a very good question. Just because it , does that really make it a duck just ks, does thatac really make it a duck . They have been able to redirect it pretty nicely, but we will see in the next few weeks if it actually pans out. We will come back to the ecb again in a bit. Any reaction to that . The whole story is really the wing the on devalue devaluing the as long as theyuan. Dollar goes up, the yuan depreciates faster. They will try to keep currencies from a depreciating. About the dollar, what is your view on the midterm . If the fed rate hikes in december, what is that due to the dollar . And if it does not, what is that due to the dollar . Is anthe moment, it interesting question. The dollar index is at a high, it keeps bouncing up to the level at the moment. At 105, keeps looking it keeps it dancing off that. And the yen, 115, 114, a very important level. The u. S. Inion is, that dollar has been going up on the expectation that trump will will do what he says he is going to do. We will get fiscal spending and that will push up the u. S. Bond rates. At the moment, i do not think the market is factoring in a higher said. Fed. I thinkes what he does the market will keep pushing up their expectation with further rate hikes. Three, and maybe we start looking at four for next year. It will be positive for the u. S. Dollar. A Bloomberg Survey on yields tells us the by the end of the year you are still looking at a 2. 5 yield. What is the number you are working with . I think 2. 5 percent is about right at the moment. We have not seen anything come out. Dislocation atme the moment to with the u. K. Referendum, pulling out of europe. And we have donald trump but we have not seen the results. Nothing has really happened. He has not gotten into power yet, it is all about expectations of the moment. What will drive the market is when we start seeing the results of brags, when we start seeing trump coming in, what he is going to do, the types of packages he will put through. Fact, to see it go through congress, then i think it will them theill see eyes of thee markets. That is why it is not a hawkish fed. Being cautious, they do not want to overreact to quickly. Maybe things will not pan out as we are thinking. Youre saying the market got ahead of itself, so we need to do a gut check for equities . I think the market got ahead of itself. I am not sure we will see a bond rally. Of we are trading in a range 213 to 214. I do believe the equity market has gone ahead of itself. Trade is helping the equity markets, people believing in it. That is driving markets. They are looking at metals, how they will perform. Supplys obviously been shortages because of what china has done. That is filtered in two other prices. That is all pushing up commodities. The big question is, will that continue . In particular, as the fed starts hiking. We saw last year, the higher u. S. Dollar meant weekend commodities. If people do believe in the trade, it cantion keep going. It is worth watching commodities to see how they are performing. Once the u. S. Dollar goes up and keeps going up. Rishaad roger, great talking to you. Yuanshis comments on fixing, the weakest fixing since october. Chips are down for casino the limitsr beijing cash withdrawals for gamblers in macau. In macau. Rishaad serious damage coming through for these casinos, down 10 . Down, 8 . Had been that is what we got right now. Recovery facing a threat. Has stopped Bank Withdrawals as they fled for capital control. This is a capital outflow story, how china is tightening further. It is affecting the nascent recovery we have seen in the macau casino area. The big ones, las vegas sands, mgm reports, crown, all down by double digits. Wynn resort down. Crown, 13. 7. That is translated to the local market and hong kong, we are just a few minutes away from the opening of trade there. Chinese authorities through macau, are going to cap, starting tomorrow, atm withdrawals to 10,000 down to 5000, that is just 626 u. S. Dollars. There was a report saying one month alone, 18 withdrawals in macau it up upward of 1. 2 5 billion u. S. Dollars. Y are tightening the crude tightening transactions that in hong kong to buy insurance policies in cash amounts. In macau they used various ways to get the money out. They were just getting back on their feet, these casinos. A twoyear slump because of the crackdown on corruption. Gamingt the vip business has been quashed. It could hurt them. Three months in a row, they had seen revenues go up. But that could be put in jeopardy because of this. Breaking chinas latest Inflation Numbers as soon as they cross the bloomberg. And we have all the Market Reactions. Those numbers coming up. This is Bloomberg Markets asia. Beijing, we are waiting for the Inflation Numbers to come through. We are looking at the Consumer Price index. They could represent what is happening at the factory gates, build up down there. And painting a picture for four years, we had that figure in the Collation Air he mode. Interesting how the split inflation will play out. It will be falling again. It is about pork prices. And auto sales have been rising. What does that mean for spending . There are divergent views on it. The number is in line, lets go to beijing. 2. 3 is the number four november, in terms of the Consumer Price index, that is a year on year number, a proper forecast. It is above last month, which came in at 2. 1 . We will look at a breakdown for how those Food Products come into this. There is a Strong Demand domestically for the nonfood items. The food items we are expecting higher prices for veggies and slightly lower prices for pork. We have the actual number for the pbi. As you are saying, the pbi number is what we should pay more attention to. That comes in at 1. 5 , the actual number four november. That is below the forecast of 2. 3 . Something of a disappointment there. Is wrong again. They missed the numbers yesterday by a long margin because they outbid during is forecast. 1. 5 for november, year on year. The Producer Price index. Is still, as you both said, feeds and to the picture of growing inflation. A turnaround still from that four years deflationary cycle we had seen. As much as many had seen. There had been thoughts that things like oil prices, metal prices would feed into these higher prices. Also, higher wages in the factory sector, as well. That the higher factory prices would boost corporate earnings and help pay off debts. This in theout wider context of an inflationary cycle. But many economists now expect to see in 2017 the Commonwealth Bank of australia, they predict chinas inflation will hit 6 in the Third Quarter of 2017. That could coincide with inflation in the u. S. If trump stimulates and does those fiscal spending projects he has planned to do. There could be reinflation globally, good news for the ecb, the bank of japan. But not so much for consumers. The pbihad a change of number. Now it says 3. 3 . I am not sure why. Number four the ppi toember is 3. 3 , we need look into that. That is a strong number and far higher than the forecast for the number for the month of november. We need to dig into this and break it down more for you. We will do that in 30 minutes time. The the forecasted ppi number of 2. 3 . Rishaad 1 is indeed a big jump. Harsha haidi lun is standing by. Haidi a little confusion over that ppi number. We are not saying much of a reaction. This is a proxy that reacts to chinese data. Dollar has been rangebound, 75 cents is where it wants to be right now. Taking a look at the chinese yuan. Setting that lower, the most we have seen since september 21. We saw weakness in offshore renminbi. Also, weaker there. Lets take a look at the broader markets, the Chinahong Kong open. It shanghai, weaker again. 2 . Hong kong, up. 6 . We digested the Inflation Numbers coming through from china. Hong kong very much being dragged down by this sector, casino and gaming. This is the story we have been covering all day. The union pay will cut by 50 what Union Pay Card can withdraw in macau. We heard from the ceo of mgm resorts saying that is going to weigh on revenue. Take a look at the selloff we are seeing across Hong Kong Listed gaming companies. We were bracing for this because we have a selloff in Casino Companies in the u. S. Gaming stocks also declining by close to 10 . Sands china down by 9. 7 . Wynn macau almost down 10 . Holdings down by just 7 , even in sydney, Crown Resorts getting a little by contagion. An absolute hammering for those casinos. Cpi year on year from china. And the correction we have, 3. 3 for the year on year, as opposed to the number expected of 2. 3 . At the moment, 1. 5 moved to the outside was month on month, not year on year. So that is what we have currently going on. The ecb sent shock waves through europe and bond markets, more hawkish and dovish than expected expected. They will buy fewer bonds per month. Does that work or not . That is the question of the day. Especially if youre a global bond trader. Cutecb announced it wont its monthly bond purchases to 60 billion euros a month from 80 billion euros. You could call that a tapering, right . That was not expected it, so that hit the market hard. But notwn the road, now. The extended its bond purchases six months past the march 2017 and date. Nine months, now they are to the end of next year. That is more because they said they would be done at the end of the Third Quarter. We would get a sixmonth extension. Means 540 billion euros more purchased than it would have been otherwise. That draghi says he does so they can maneuver the uncertainties. He does not consider a tapering. First of all, they are acting in a pragmatic and flexible way to cope with what may materialize overtime. Second, there is no question about tapering. Tapering has not been discussed today. Did not even discuss tapering. When the ecb started its bond purchase program, they were buying 60 billion euros a month. When they worried about pressures on inflation and deflation, now that worry is behind them. They are still worried about the economy. Tolation will probably rise slowly. But, that is why they may need this change. He said they could even increase the amount of bond purchases if they need to. Rishaad we can see when you especiallye chart, when it comes to european debt. What are traders seeing now . One interpretation is that the move to tapering out shows that the ecb hawks may be getting the upper hand. That bloomberg chart. Line, thee yellow time when the decision was announced, yields went shooting higher. If you look at the purple line, that is italian bonds. That growth 11 . 4 n german bonds yields, up once the volatility calmed down. Germany saysco in the ecbimportant to me, will allow itself to buy more bonds below the deposit rates. He said this is stimulative, but i do not think the bond market sees it that way yet. Rishaad no, not at the moment. They defer that from new york. Customers told that in january all shipments would be stopped. Rishaad the kingdom will stand by its promise to provide 486,000 barrels a day to just over 10 million. Opec agreed to lower production. And nonmembers are asked to do the same. Whether they will reduce output, it just seemed yesterday they were meeting in vienna. What is going on here . Getting themselves it together to agree. Now they are trying to share the load. And others, it is a matter of who comes on board. Harsha what about the level opec has agreed . The market seems comfortable with the progress. Until early to wait 2017 to see if theyre cutting production. Prices are at a level where it is not sucking other supply into the market. The market is quite positive. That,d thank you for looking at that opec meeting. Harsha coming up, more analysis on chinas inflation data and bank of america. Why they see a relatively stable 2017. Rishaad you are back with ginamberg markets asia, rinehart and her Business Partner have been cleared to buy australias company, they spent 1. 3 . Would they were pointing to concerns about national security. Facewagen officials further grilling from the commission about their emissions tests. There is evidence mobile phones were destroyed during the investigation. Suit over the scandal. The automaker is due to return to court to give an update on its repairing of the vehicles. There will be planes, a deal worth 165 billion, but could rise to 400. Lets get back to the latest inflation data from china, higher than estimates. , thank youin studio so much. What did you make of the numbers . Cpi inflation is very much in line with what we have been expecting. Inflation has been coming up, 2. 3 was dead on. Higher than expected, at 3. 3 it says a lot about recent increases in commodity prices. We think there is probably more to blame on the constraints compared to the demand aside increase. With of this going up after being negative in ,eflation for nearly five years it does indicate china has dealt with these issues to exit capacity. It shows us their supply constraint in the capacity reduction has been quite successful. That was not necessarily due to the government administrative control. The pricing signal has been sent producing world that for coal and steel, you can make money. There being held by price constraint. The prices are recovering and we are seeing some momentum improvement. What will you watch out for to know this is durable . Inflation is probably here to say. Somewhere around 2 . Not necessarily remaining is elevated as 3 . Will continue to watch for double the commodity tradingmbol, as well as and shipping rates. All of these give you a heads up about demand. Going into 2017, we do think Property Investment in china is going to slow down on the back of all these recent tightening and infrastructure in that will decelerate as well. On the back of that, we probably would not see this pricing remaining this high for this long. Rishaad good news, in some ways. At ang like inflation is healthy flip. The chinese economy is back on its feet. Yes, it is. But it means to more things. Rishaad what do you mean to more things . You are an economist. Example, china is going to import more. The important number yesterday was up significantly. That is hardly nominal. In chinese are now importing more and more raw materials. It means probably china is going to run a smaller trade circle over time. An interesting time when china is being threatened, they may currentlly be the account will probably not show up a big number. It is looking slightly better, Inflation Numbers are on the mend. The message to the currency , trying to pboc maintain this basket approach. In the near term, they will be under pressure to use the capital control to maintain such control. Onng beyond the near term, the growth side, it will need more room. Rishaad what you see for 2017 . How did things pan out . Time for china to balance to consumption again. About investment in property and infrastructure. 2017 will probably go back toward consumption. The demand for marginal new demand from commodities will have to look elsewhere to read it cannot be just in china. , when the u. S. Comes up with more infrastructure, it can offer more help. Harsha do expect this pace to continue . We think growth will be slightly lower than 2016 but still relatively strong for china, at 6. 6 . It will still be about the government target at 6. 5 . Rishaad but will this investment and stimulus continue . Weaving think Property Investment most likely will be celebrate because home sales are starting to decelerate in october. It takes about six months for investment growth to decelerate. Momentum inweaker Property Investment starting in spring next year. In the meantime, policymakers mm think everything looks pretty good and we have a moderate recovery. Our foot have to keep on the accelerator anymore. So lets ease it up a little. By then we may see weakening. Rishaad thank you so much for coming in. Up next, taiwans renewed claims with the south china sea. Harsha taiwan, the trump protocol when he spoke with tsai ingwen. Rishaad the contested territory tinye south china sea, the. Sland of taiping island spiritping in the crew abandoned ship and have to be plunged into the sea. Where with them in a drill, but one that is critical to taiwans claim to the islands. Taiwan is eager to show it is not an aggressor in these disputed waters. Very purpose saying the 100 acre taiping island. The sovereignty of our country is a fact. We want to show the International Community we protect peace, defend free and safe navigation, and value humanitarian values. Taiwan has been trying to frame itself as a peacemaker in the south china sea. But issues of sovereignty are not yet resolved. Is the key,hat fundamental issue. , has held administrative control of taiping for six decades. China claims 80 of the entire south china sea, mark by what line. All the ninedash vietnam in the philippines also say the island chain along to them. The conclusion that these are mere rocks and islands, could further destabilize the region that is already witnessing a more assertive china. Beijing and taipei have as havingthe ruling no legal merit. The wildcard is the threat of a more hawkish u. S. Military under president trump. It could embolden the claims in their securing efforts and embolden the United States and to backjor stakeholders up their policies with military action. , for now, is pushing a softer approach to legitimize their claim. A build a hospital with a solar power plant, and a wharf capable of handling small ships. And the 100 or so inhabitants, raise their own food. Island is a selfsufficient islands that can sustain life on its own. There was a long airstrip. Todays exercises designed to show that taiping island is more than just a rock in the middle of that south china sea. Taiwan says they conserve and protect International Trade routes through this very busy and vital part of the south china sea. Rishaad lets recap the last 60 minutes, macau takes a hammering with the Inflation Numbers out of china. Up 3. 3 after being in deflationary territory. That came to an end a couple months ago. C point cpi, 2. 3 . Coming up, a watershed moment in south korean politics as the president faces impeachment. Well be live in seoul. Almost 10 00 a. M. In singapore, 1 00 in sydney, 9 00 the them on the eastern seaboard of the United States. I am rishaad salamat. Harsha this is Bloomberg Markets asia. Harsha chinas factory gate prices, prompting optimism that inflation will be exported. Rishaad macau casino stocks plunging on reports atm cash with the draws will be cut. Traders await opec talks amid concerns independent producers may not reduce output. Rishaad lawmakers preparing to vote on in teaching park geunhye. Asino stocks having a tighteninge of it, capital controls and restricting atm withdraws. About most markets down 7 . Rishaad what do we know so far . The Parent Companies got hammered by double digits as well. Storys a market moving citing officials and sources that the chinese authorities as of tomorrow in conjunction with the Monetary Authority of macau will be slashing the daily amounts that people can withdraw using their Union Pay Card in to 5000,m 10,000 down 626 dollars. There has been about 10 billion with drawn from a cow atms macau atms. , 600is case, union pay 26, this is not affecting the bread and butter macau player, is it . It is. About 50 of the chinese customers who gamble in macau are using their Union Pay Cards to get money out because there are agents like vip junket operators, agents who have hundreds of different Union Pay Cards, then they compile all the money they take out. Hundreds, ok . Thats one way they can get money out, then also gamble. Harsha what does this do to macaus economy . Potential ramifications. They are in the midst of a building boom. Palace just opened up, a 4 billion facility. The sans parisian opened up, 3 billion, so there has been this big building boom at the end of a slump. We have had four months in a row of incremental increases of gaming revenue, but look at the stock reaction. This is potentially a big story we need to watch on how deep and how far these restrictions will go. Rishaad thanks. Harsha chinas official inflation gauge of rose to the highest level since 2011, helping to sustain prices around the world. Tom mackenzie has been going to these numbers. How do they look, and take us through the Producer Prices as well . The forecasters need to pack up and go home because theyre getting it wrong on the pmi, export data, and this one. In october, ppi prices were up 1. 2 , so a sharp pickup. Longllows on from this deflationary cycle going back to the end of 2011, so it does suggest the input prices, commodity prices, cold, metal, steel, all feeding into this picture and the Global Demand picture articulated by those export numbers as well. Wagestrength offsetting hikes, factories putting up good prices, good for them in the overall picture. 2. 3 mer prices came up versus 2. 1 last month, some marginally above last months figure. What was interesting was the thanood came in less expected, rising 1. 8 . Some have thought the lower prices would pull those numbers down. Going back to that allimportant ppi number, breaking that down, the mining prices picked up quite considerably, 15 , also Raw Material Prices picking up , yes, the old engine of the chinese economy kicking back into gear. Thats just it. D. C. Impact from these higher prices, and what impact are we expecting overall . Pop down to the supermarket and check the prices on the back of these numbers, but food prices have been up the last few years. In terms of the factory gate prices, this is a positive because profits will be slightly better, easier for them to pay down some debt. It does feed into this picture that our team behind us have been drawing together about a reinflating Global Economy and chinas role in that. We heard that analysts were expecting this pickup of inflation around 6 in 2017. That combining possibly with the fiscal stimulus donald trump might take, Infrastructure Spending steps he might take, to come together and reinflate the economy. That is good news, but policymakers like mario draghi and the ecb, good for the pboc, expected to shift to a cautious tightening phase. They dont want to undermine growth, but this does give them a platform to pull in some liquidity. There are still questions about the role of the corporate debt leverage on the house price bubble as well, and the fact that it does not seem to be the rebalancing everybody has been talking about to the same degree as hoped. Again, the manufacturing picking up some of the weight and doing better than hoped. Pboc expect to move cautiously towards that tightening phase. Are just getting their teeth into these numbers. , plus,sponse to do this casino stocks. Investorsa lot for and asia to digest. We had the flow on effect from the ecb decision. Super mario draghi surprising markets with that lower for longer qe program. We had a good pop from asian equities, but you are seeing weakness, the casino stocks, pulling down the hang seng by. 6 . Lso worth looking at is korea we are seeing it likely that President Park geunhye will face an Impeachment Vote. The kospi has been up 3. 5 this week. Some yen fluctuation, the yen quite significantly weaker at the moment against the dollar, so the nikkei up by. 9 . Index tradingpix at highs of 2016. Australias market getting a good boost on that rally in Energy Prices come up by. 25 , but their casino stocks coming under pressure, and the story of Dollar Strength weighing on emerging markets, jakarta coming online, down. 3 . Shanghai is positive, that inflation data beating expectations. Having a look at currencies, the againstening further the dollar, pushing past that 114 to the dollar handle. Also worth looking at, the offshore and onshore renminbi. , thatfshore down by. 1 Dollar Strength. This is after the pboc weaken sincean fix for the most october. A lot of this on Dollar Strength. We certainly saw buying coming through in the u. S. Dollar on the overnight session. Rishaad thanks. Having a look at the markets. Harsha first word news with sophie kamaruddin. Lets seems to be more at the ecb, mario draghi cut his Bond Buying Program to 64 billion, denying a taper is in place. He had three more months of buying. Mario draghi says cute he is open ended. Options presented were the ones studied by the committees in the preceding months, one four saw the option of continuing with 80 billion euros for six month, and the other one received a very broad consensus. Sophie a russian official says there is the risk of opec defaulting on its output cut commitments after pumping a record amount of crude in november. Moscow will seek assurances about how the cartel will comply with its plan to cut 32. 5 Million Barrels a day as a new level. Russia will only cut if opec delivers. President elect donald trump has named his choice for labor secretary. The ceo of the company that owns burger chains. He was an economic adviser to the tycoon during his campaign and a major republican donor. An outspoken critic of the obama administrations labor policies and said to be against raising the minimum wage. Beenins Supreme Court has told triggering brakes and without the approval of parliament would crucify human rights. Attorney said Prime Minister theresa may would overturn hundreds of years of u. K. Law if she unilaterally against the withdrawal process. Chancellor Angela Merkels deputies said brexit was taking far too long. Named fighter of the year for 1966, 50 years after refusing to do so. 1956 t his peak in 66. The magazine was angered by his refusal to be drafted for the vietnam more, but now says it thinks differently. Muhammad ali was ranked fighter of the year in 1970 2, 1974, andnd 1978 here it 1978. Global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. This is bloomberg. Next, theming up amazon of southeast asia. Talk about Global Expansion plans for the online marketplace. Rishaad south koreas political limbo, we had to seoul, korea for the latest to impeach President Park. Rishaad a quick check of the latest business flash headlines. Global airlines suffering declines. Higher oil prices have been trimming margins. Iata says combined net income will be under 29 billion in 2017. However, airlines have improved efficiencies and costs. We have been helped by the oil price in 2016, but we must be aware of the ability of the well andto work efficiently and manage their business, and we have increased the resilience of the industry. An order for 12 planes with the option of seven more, worth 65 million. The first five planes are being delivered to your next year. Rishaad reinhardt and her chinese Business Partners have been cleared to buy the australian cattle company. Scott morrison says it will remain majority all strain owned. Park geunhye is expected to learn her fate today as lawmakers begin a motion to impeach her. She says she will accept parliaments decision. Give us an idea how things are playing out there at the moment. So far this morning, lots of protesters outside the National Assembly. Me, these people caring these yellow flags are protesting against park geunhye and asking for her into each meant. One person we spoke to said they are angry, frustrated, because they are ordinary korean citizens working hard, but for what when there is corruption and the highest core doors of power . We see an increased Police Presence behind me as they gather ahead of this National Assembly vote this afternoon. 3 00 thatecting at 300 members of the National Assembly will start voting in this impeachment motion against President Park geunhye, accusing her of abuse of power. The 300 lawmakers need to vote in favor of the impeachment in order for it to go ahead. Harsha what is the impact on the country . It is stirring up and frustration, because essentially people are seeing the close example of ties between government and big business. Before, the fact that these citizens are not able to get ahead while corruption is going on at the top level. This week, we have seen the heads of familyrun conglomerates and south korea, coming in, lotte front of lawmakers and grilled on the donations of tens of millions of dollars to foundations controlled by a friend of the president s, and these conglomerates made him nations, but denied they were seeking political favors. Areoes show South Koreans angry that this goes on even though there has been increased scrutiny in recent years. Harsha many thanks for joining us. This politicaln crisis in south korea up next, measuring Market Reaction to todays upcoming Impeachment Vote with advanced capital partners. Rishaad a quick look there at the impeachment threat facing the south korean President Park geunhye, expected to learn her fate today. Harsha lets discuss that with advanced capital partners. Thank you for joining us. Let me ask your reading of what is going on, and this creates a political vacuum, what can stabilize the situation . There are a number of things coming together. All we are looking at is the surface trauma, but the deeper problem is koreas economy has slowed down so much that it is growing slower than the World Economy and korea is losing share in the world. This is a time when any country needs leadership to turn around this economic direction and take it somewhere, but a lot of this drama playing out in front of us is illustrative of a lack of leadership. If they in peach park geunhye, so what is there to replace it . That is a big question. There is no strong leader on the horizon. , if iired park geunhye can put it that way, too the what her father was, the leader that took this country from poverty into wealth and put korea on track for growth for 40 years. They have been living off that benefit ever since, but unfortunately, the world has changed and the Human Resources need to be retooled. Rishaad that is the argument from a lot of pundits out there, the structure of the economy is wrong and it has to reinvent itself and get a different motor of growth, but who will do it . That is your point, isnt it . That restructuring need has been there for 15 years since the imf crisis in 1998, which i was on the ground for and learn more than i expected to learn in the process. Korea is a country that people think is built on the back of but they are a small fraction of the employment and gdp. Rishaad you have this impression that they are allencompassing and the Super Authority almost and control exactly where the economy goes. If the government is the parent of the country. If the government is the parent of the country, and your firstborn children become the ,ome and you nurturing them they are 50 years old already. Stop nurturing. Let them grow up and look after themselves. In the meantime, start thing attention to the next generation and the next and the next, younger, Smaller Companies in the service sector, small and medium businesses, and help the young children, the real children of korea to prepare themselves probably for the jobs of the day, and most important the jobs of the future. Harsha these are the core challenges, unemployment, household debt, but is this distracting issues away from the economy . We launched a one million jobs program. We need another one of these to create 5 million new jobs. It is not that there is a shortage of jobs. There are jobs going unfilled because they cant find the talent for it. Theres a problem with the education system. There is a problem with people coming out 1020 years later and not having anything to do, sitting on the sidelines, rejected, sitting on the side of the road, if you like, and that is a problem in many countries today who need to retool their Human Capital. For korea, Human Capital is essentially the only Natural Resource it has come of crisis is even more profound and acute, and across the world today, we have democracy falling apart because of all these different acts of but, selfinflicted punishment by and large, but korea, which is now a thriving democracy, having been a, how shall i call it, a dictatorship lackingast, is leadership and rudderless, and just when it needs guidance the most, you have this leadership crisis, where it is all well to say we will lend peach our president , throw her out, throw her in jail, but what will you put in place . Rishaad you say the narrative is superficial and it is all about the mess they got themselves into and this is a distraction and they are not dealing with the heart of the matter . That is exactly right. It has been building for at least five years. Harsha many thanks for joining us with your perspective. 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It is 1029 in hong kong and singapore. Casino stocks taking a battering in hong kong, atm withdrawal limits imposed in macau. Seen pay cardholders will their cap cut in half to the 600 26. T of it comes as beijing tightens capital controls and as macau seems signs of recovery after a 26month slump in revenue. Gauge pricesry rose to their highest since 2011. Producer price index jumped 3. 3 percent in november from a year earlier, compared with a 2. 3 rise for seen by economists. Consumer prices gained two point 3 , in line with estimates. Koreas equity indices and the won are weaker ahead of a parliamentary vote on impeaching President Park geunhye. Be kospi is unlikely to heavily affected by the outcome. The Small Cap Index could see a relief rally if lawmakers vote to impeach. At 95. Enn has died he was the fifth person to go into space, and the First American to orbit the earth. He spent 24 years representing ohio in the senate. In 1998, he became the oldest person to go into orbit and the only one to fly in the mercury and Space Shuttle programs. He was awarded the president ial medal of freedom in 2012. Global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. This is bloomberg. Harsha i am harsha subramaniam. This is Bloomberg Markets asia. Rishaad i am rishaad salamat. A lot of news to get to today. The main story is this big plunge and casino stocks. Have a look at how some players in hong kong are doing, sans down 9 , galaxy, mgms sign a, also heavily sold off. Wynn macau 10 . Crown resorts in sydney down 6. 3 . All of that playing heavily into the hong kong market, down. 5 . , thehere, looking mixed ecbs surprise decision from mario draghi overnight, a lot of expectation that the qe program as it stood would be extended. Instead, they have essentially tapered it but extended it for longer, so slower for longer. Record highs coming through from all four indices in the u. S. , also Dollar Strength, that means yen weakness. The nikkei up by 1. 1 , both the nikkei and topix trading at levels we have not seen since december last year, also that rally, crude 51 a barrel, helping out energy stocks, the asx 200 up in late trade. Inre has been a switch out new zealand stocks. That Dollar Strength weighing on emerging markets, so malaysia and jakarta down. 25 . The korean index affected by the falling won is significantly against the dollar today, and President Park facing that Impeachment Vote. 3. 5 ospi has been higher this week, mainly due to the fact that the won had been holding at a twoweek high against the dollar, but some retreat today. Crude just under 51 a barrel, and the offshore renminbi flat at the moment, 6. 91, but we did see the pboc weaken the yuan fix the most rishaad . Having a look at reaction so far today. Harsha customers of saudi aramco have been told january Oil Shipments will be cut in line with opecs agreement. They have been informed that the kingdom will stand by promises over 10e output to just Million Barrels a day. Opec agreed to lower production to trim the global glut. Nonmembers are being asked to do the same. Thoseors wonder whether producers will reduce output. Tomorrow, what about it . This is the next step on the long path to coordinated cuts. We have nonopec members coming together, a commitment from , but it is ahers question of who is willing to participate. Opec will try to use its diplomatic power and see if they come on board. Rishaad youre talking to people in the market, how are they feeling about opec reaching the agreed level here . It is a significant achievement that they have agreed. Rishaad thats the point, i always bring this up with you, sure, but what is going on at the margin . Who is selling oil on the side . Compliance has always been an issue for opec. You have the former Saudi Oil Minister saying they have a tendency to cheat, so watch the numbers in february to see january to see whether they cut over have gone about taking action. The news from saudi aramco is positive in that light. Saudi aramco does a lot of the heavy lifting, but early next year is when we will see. Prices are around 51 at the moment, a positive sign for the market. Rishaad thank you for that. Malaysias could loseest bank out to rival lenders. We asked why he thinks other should be following their approach. I think all banks should be. Cimb started early and has done a lot, but the Banking Industry is extremely dynamic, and when the operating environment turns negative, you have to be agile enough to take whatever measures are necessary. Environment ishe such that revenue outlook will be limited, we would want to look at reduction in costs, but that does not necessarily mean a reduction in headcount. 44,002nt has gone from 39,000 in 18 months, and that has been a great achievement. From 44,000 239,000 two 39,000 in 18 months, and that has been a great achievement. In terms of the market, there are indications you are losing out to your rivals. Is there a sense of league tablesat over a short time. I have given up on that. I think in terms of our market shares in all segments, i am very comfortable where they are. Yes, we have 478 years the r 78 years the number one supermarket. What is important is clients over the long term. You view isat do the biggest risk for the Banking Industry . Banking is going to the perfect storm, driven by technology, driven by reregulation, driven by slower macro operating environment, and theie came out with thatem with the analogy is it will still be choppy waters because the structural changes that are coming through, but if you ask me, the biggest challenge is regulation and how regulation keeps changing, and i think the regulators at some point will realize that the pendulum has swung too far the other way and there can be of excessivets regulation, which impacts the performance of the banks and impacts even the sustainability of banks. Chairman at cimb the Asean Business summit. Asian we hear from the marketplace that most listings the challenge amazon. This is bloomberg. Harsha a quick check of the latest business flash headlines. Is the bill for fukushima will be twice as much as originally thought. 180 billion. At more than twice the initial estimate. Jumped and ballooning costs. Rishaad volkswagen officials facing further grilling from the u. S. Federal trade commission over the rig commissionss tests tests. Sions the carmaker is due to return to court next week, giving an update on assessments. Nintendos new console made a surprise debut on the tonight show. They gave the first public demo of the device. March,ue to release in and is hoping it will attract gamers. Want as many consumers as possible in gauging with her intellectual property and having fun doing that. That with notl do only Smart Devices and are dedicated console business, but would do it with our license merchandise initiative, something with fans that was tremendously successful, and also be in other forms of entertainment best exemplified by a relationship with universal studios. Our next guest runs the International Operations of , a mobile online marketplace consumer to consumer where people can buy secondhand goods. And has 19 cities raised over 14 million in funding. I have to confess, i had not heard of you guys. Me thinking you have something wrong with your marketing and branding, but tell me your story. The story is around what challenge we are trying to solve. Have too much stuff at home, too much furniture or clothing and you need to make better use of it, you were look. Or a service to sell it harsha you have 14 million listings already, and you are a marketplace model. Explain how you make money. We are focused on growing the user base and making sure transactions are happening. In the future, we will think about ways to monetize services. Rishaad could you follow the ebay model . Way,at would be one easy but there are many other ways, ability to posts, sell faster. The legacy of our business is more traditionally newspapers. The good old days of selling a car, you go to the newspaper and. Ublish something we are the new wave of classifieds looking at mobile and allowing a new category of things to be sold. Harsha what would be the highest selling category. Which category . Fashion is one of the largest ones. Rishaad i saw peoples trousers on there. You dont want to buy somebody elses trousers. Piece of clothing can be someone elses new treasure. Just clothing, but handbags, shoes, and also things like catch its gadgets. A phone becomes obsolete fast and you want to get rid of it, and someone else wants to the cup the old phone. Are these primarily happening on the phone . Is that the bulk of where transactions take place . We did not have a website and tell a year ago. Everything takes place on the phone. We started off with just mobile, whyhat the not understand when everything is on the phone. They put it all together. Rishaad it is remarkable, the phone only. I have only been on the website. In this onlines marketplace, lots of players in asia. Who do you see as your biggest competitors, and how to differentiate yourself . Difference, you talk about ecommerce, big category with lots of players, but most of them are focused on getting brands to sell more stuff. Rishaad they have a lot of consumer to consumer. And an on mobile individual selling personally. Has gap in the market allowed us to grow in seven countries and 19 cities. Harsha take us through your capital requirements. You have raised about 14 million already. Is there a need for more capital . What is the plan there . Main dollars,r 40 and the use is going into the technology to help you discover things you want and enable you to sell faster. Burning through this money. What is the burn rate at the moment . We dont disclose the burn rate, but we have a long lead for the next few years. Harsha there has been the buyout of other players in the space . Online classified players start going into highvalue like cars and property. People probably pay some amount to advertise those products. Harsha you did something in malaysia as well. Talenting for technology and acquired a team that will provide us talent. Rishaad we are next. His china an option for you . We Just Launched in australia earlier this week. China, we will have a hard look at it. It is a very different dynamic. Harsha at what point are you going to start making revenue . The markets where we are we arelike singapore, almost the goto place. Put on products for you to sell faster. At the click of a button, you can boost your post. Rishaad when do you get revenues . By early next year, as we also tothis product be clear, the acquisition also provides us revenues. ,ishaad i have a question alibaba, a lot of pressure there , chinese issues having to deal with counterfeiting. How you deal with it . It is a challenge across all players. One of the biggest tools is technology. We look at over 50 different signals to determine whether a transaction is at risk, and we use that to block transactions. Hitha what is the next big from your stable . Right now, we are focusing that we have access to markets that we have ventured into, hong kong, philippines, australia. You on theeat having program. Please come on again if you have more revenues and you are in other geographic locations. Right, the International Vice president for carousell. Harsha china set for a record year of auto sales, but tax breaks are about to expire. Is the winning streak over . That is coming up next. This is bloomberg. Harsha this is Bloomberg Markets asia. Rishaad china putting cars on the road, a retail record year. Surpassing last years total already. Sophie kamaruddin has the details. What is driving this . Buyers taking advantage of a tax break introduced in october. This year, car sales are up 16 thanks to the cut on the v of small cars to 5 . Luxury car buyers getting ahead of that additional 10 tax. Retail sales of 21. 1 million. This is according to official numbers by the chinese Passenger Car association. Harsha what does it mean for chinese carmakers . Sophie given that lackluster , 1990 was the last time the car market slept. Slumped. In terms of deliveries, positive year for local and foreign carmakers in china. Sales grew 20 in november, which has helped to clear inventory at dealerships, part of the reason the tax break was introduced. For the first 11 months, foreign over oneve sold million units. Ford saying it is set for a record year in china. Rishaad it is mindboggling how big this market is and how big it can get at the end of the day. Will 2017 be another record . There is some policy uncertainty that could throw a spanner in the works. There is no clear information from beijing whether the tax break will extend the on this year. Sayingresight shanghai expected drop in that tax rebate will not be continued. If that is the case, carmakers have to boost incentives to make sure appetite is there among buyers. Next, we were up update the big stories of the day so far. It seems like a lot of big stories of the day, but we start with ecb because mario draghi cutback asset purchase programs, but is extending the timeline, and the markets are reacting positively in europe, the United States, and asia. How does this set up investors for 2017 . Cocio onlk to the whether this recent pickup on Global Growth will continue. Stockstinuing our casino climb, plunging, going the other way in hong kong today. Plunging on concern that china will limit the amount of money than mainland gamblers can withdraw from their atm and macau by 50 . Those stories and more next hour. Well, before we go, lets look at those casino stocks, on absolute beating, and absolute kicking today. Actually recovering slightly, arent they . Media report saying one bank in macau has capped a team with the atm with the draws. Announcer from our studios in new york city, this is charlie rose. Charlie Michael Lewis is here. His books have sold more than 9 million copies. Three have been adapted into successful feature films. His new book is called the undoing project a friendship that changed our minds. It tells the story of two israeli psychologists, Daniel Kahneman and amos tversky. And some of their groundbreaking work uncovering the human mind. New york times says the book combines intellectual rigor with complex portraiture. He has written one hell of a love story and a tragic one at that. I am pleased to have Michael Lewis back at this table