Message is xi jinping trying to send and how is it being received around the world . We are seeing this risk rally play out across asia markets. Completely unsurprisingly, the intors seeing most gains australia and tokyo are energy, materials, infrastructure related stocks looking to get a from the 78t billion pledge by the chinese president in his roads initiative. We are 30 minutes away from the china. In looking at the theme today, its hard to get away from the higher bys drive, led the cohesive comments from the Oil Ministers of russia and saudi arabia and beijing yesterday, saying that they want to go another nine months when it comes to this supply cut deal that was reached. And began in january. Take a look at this chart. To the supplier that opec cant control. U. S. Inventory numbers drilling reports as well. 20172018, and 2019 Consensus Forecast as well as the number for wti is all leading to 50 a barrel. The question is whether we can put higher put higher. We are seeing risk appetites and lifting, broader commodities as well. We are seeing a nice recovery for the lack of iron ore. Most of these base metals are doing nicely in the day, but we are looking at the longevity of rally. L singapore, taiwan, and malaysia are coming online. We will see nice gains today. Lets go to sophie for a look at how things are tracking. Sophie oil prices are continuing to plot on that path. New york crude at 49 a barrel. Looks like the convergence could be happening. Hedge Fund Managers perhaps being caught unaware. As you noted, we have the likes of iron ore and cover on the rise. That is really giving a boost to commodities players in the region. Asian stocks largely on the up following the gain on wall street that pushed he s p 500 above 2400 for the very first time. We had the nikkei 225 gaining half a percent , going closer to the 20,000 level. Look at the singapore stocks. Sliding a third of a percent. Shares fallingrs for a fifth straight day. When you take a look at resilience, thats the name of the game for the cost be kospi, planning about a quarter of a percent. In korea, mark mobius saying hes confident about moons administration. The domestic situation is looking more certain. Pi are seeing the kos becoming the bestperforming. The msci world index is the yellow. The cost be up 22 . Although Global Stock Markets tend to follow the s p 500, the kospi may be playing that role for the moment. They suggests say, the next upside for the kospi could be 2600. That is uncharted territory for korean stocks. More Fund Managers have been upgrading their korea equities to overweight over weight in recent weeks. Haidi we are awaiting some of the details of reforms at the top of the new president s agenda. Lets get the first word news you with paul allen. Paul National Security master security advisor h. R. Thatter is denying President Trump revealed classified material to the russians. Times says the president jeopardize a critical source of intelligence on the socalled islamic state. Neck master says he was in the disclosures did not happen. To cut the other senior officials were present, including the secretary of state, remember it being the same way. The on the record account said account those of anonymous sources. I was in the room. It didnt happen. Paul bloomberg has been told that attorney general just the his deputy have made eight met eight potential replacements for the fbi director. The white house declined to say whether President Trump will hold personal interviews before leaving for the middle east friday. Toshiba slumped at the open as its dispute with Western Digital turns bitter. Toshiba wants to block their partner from the flash memory sections of their share. Western digital invoked an arbitration clause in the agreement which could postpone a sale. Westernplans to buy Digital Workers from the chip facilities in japan. Venture agreement stipulates that a partner does not lead to seek permission from the other to transfer the odd other for a thirdparty. Western digital did not seek our consent on the sandisk acquisition. We will make an effort to see potential bidders, but the sale is not in violation of agreements. Paul he touched she is rising despite admitting it was among the japanese victims of the global cyber attack. Says email deliveries have been hit and some files cant be opened, although no ransom has been demanded, and it has seen no major impact on operations. Global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. Im paul allen. This is bloomberg. That. Thank you for china has added to its hold of u. S. Treasuries by the most in two years, reversing a selloff, as beijing defended its currency to prevent capital flights. Evening dollars on the story. Stephen engle is on the story. What is the significance . Reporter it shows a couple of things. It shows what we have been seeing all along that the chinese economy has stabilized. It Shows Capital flights are working to stem outcomes in particular. Do they . Added 20 7. 9 billion u. S. Dollars worth of treasuries in march, taking the total to 1. 0 9 trillion u. S. Dollars. Gain sinceiggest march of 2015. We can bring up the pie chart and see the different foreign holders of u. S. Treasuries. This is 50 of the pie. Its not showing 100 , but you can see about 38 , which is china and japan. Three others make up 50 of the total holdings of u. S. Treasuries. The total is 6. 08 trillion u. S. Let me take you into the bloomberg terminal again. This is showing the combined holdings of china and belgium. Why belgium . Belgiums holdings increased by billion, and belgium, often seen as home to chinas custodial accounts in the european union. Combined us together and the increase was the biggest since 2014. Haidi as you said, it appears these capital controls have been working, but it has been described as being draconian, and perhaps unsustainable if the government wants to continue with opening up reforms. Reporter thats right. You know the volatility we saw with the renminbi and capital outflows, that sparked that the chinese wanted to stabilize that. They have been talking about full compatibility convertibility of the renminbi down the road. The next landmark keeps getting moved further up, but they have stabilize the currency against the u. S. Dollar, at least. Capital outflows have stabilized. Hasan see the fx pile stabilized. For the last three straight months, it has actually increased after selling off by about 1 trillion u. S. From the peak in 2014 of about 4 trillion u. S. It went below 3 trillion, but it has been rising for three straight months to 3. 03 trillion u. S. The record was 4 trillion in 2014. Haidi always asking that question when it comes to china. Stabilityst does the or growth coming at . Innk you so much for that, hong kong. Still ahead, as the summit wraps up in beijing, we asked whether chinas plan will change the face of global trade. Up next, talking Investment Opportunities and the fallout, if any, for asia. This is bloomberg. Haidi this is Bloomberg Markets asia. Im haidi lun in sydney. A recheck of business flash headlines. The largest shareholder in ubs worthshing holdings, about 1. 6 billion. A Singapore Fund will have less than 3 of the bank after the sale which ubs is managing. Stockpiling show that share Berkshire Hathaway spent a First Quarter finetuning investments in airline zantac, pulling back from 21st century fox. Holdings in American Airlines and southwest increased. Warren buffett previously disclosed any boosted bets on apple as he pulled back from ibm. Aoomberg is being told that hong kong billionaire is exploring options for a phone business, including of potential sales. Sources say Hutchison Global Communications is gauging interest from a range of potential buyers. They offer customers access to the fiberoptic network. It could fetch 1 billion u. S. Market. s get back to the asian markets on an oil high tracking record gains in the u. S. Open. I want to bring in the head of multiassets at baring. Great to see you. Im a little speechless when i talk about these markets. It feels like theres a sense of fragility and a sense you could get a correction or the next ratcheting up higher. You say any kind of correction we get at this point is going to be shallow, and investors will be looking for these. Yes, we do. I think about the middle part of last year. We have had economic,ed global and more important me, synchronized Global Corporate profit recovery. That is extremely important, because that is the key driver for equity markets. I think investors have only just recently decided to join into the market. We think there will be a lot more to come. Haidi are they doing that at the expense of ignoring warning signs when it comes to the macro front . In the u. S. , there is a reflation story. Pretty weak retail earnings. The other major data of this positive sentiment is the stabilization of growth in china. We are expecting that to get weaker in the second half as well, particularly with import prices, which feeds into the commodities cycle as well. Do you think investors are ignoring or overestimating that the picture is actually brighter than it is . I think you are right in suggesting that there will be some deceleration of growth in the u. S. And china, the two largest economies in the world. But i think about investors, perturbed about it. Basically we are still looking at growth. This is only a deceleration from the current very strong growth momentum, but that momentum will just decelerate a little bit. I dont think its a major issue, because we are still looking at the Earnings Growth we delivered in the u. S. , in europe very strongly, in japan, china, and the rest of asia. I think this is different from what we had seen in 2014 and 2015, where we actually had in earnings recession. While economies were growing in the world, but at the corporate profits level we had a recession. But that recession ended in midyear last year and trying to into quite a strong phase at the moment. We are into that phase. As long as Interest Rates are it going up too quickly, think that equities should actually not be worried about a slight deceleration of economies in the u. S. Or china. Haidi so you dont expect to see another repeat of the taper tantrum . Then expect to see shakiness when the fed actually does get around to trying to unwind the Balance Sheet . I think that will be sometime perhaps in 2018 rather than this year. I think this year we are looking for two rate hikes to come, possibly one again next month in june and another one sometime in september or december. Maybe in 2018 we are looking at some retrenchment of the Balance Sheet in the u. S. I do think there are so many buyers of u. S. Treasuries around the world that it should not be an issue for the u. S. To actually sell more treasury. Haidi that june move is so well priced. I want to bring up a quick chart. Arhaps you are not seeing taper tantrum taking place last time we saw it in rrr currencies, but i want to argue that maybe its taking place in china. This is the one in 10 year bond yields in china. It was a move of over 40 basis weeks. In six or seven we are seeing kind of an irrational bearishness when it comes to the Chinese Markets at the moment. Is this the deleveraging drive, the liquidity situation, is that really the tantrum story playing out this year . I think you make a very good point. I think that is the one tantrum, and it did happen in china as liquidity heightened. I think the authorities are looking into the positioning of a number of funds in china. I think there has been some liquidation of those as well. Anything,if aggravated the situation somewhat. I think it is at a good level where the Chinese Government on rates bond rates dont look very attractive, and we may be reaching that at the moment. Haidi you looked at the longterm, or relatively mediumterm, so what would you be picking up at this point . Among the major Asset Classes, equities is the one we prefer. Looked outsidewe of the bond markets. We looked at High Yield Corporate Bond Fund the private credit, leveraged loans, and so forth. The main Asset Classes remains equities. Within the equities acted asset class, we actually like europe because it is cheap and earnings are rising. You have very good liquidity in europe with the negative Interest Rates and qe continuing. The other market we like is a here. We think asian equity markets look very attractive. We have strong Earnings Growth. Still cheap valuation. It is not a crowded market yet. Europe and asia are the backs best takes for the next six to 12 months. Haidi good to have you. We didnt even get to touch politics. I know you do a great President Trump impersonation. [laughter] head of asiangs asset management. Coming up, china wraps up the them. N road for the message that the chinese president wants to censor the rest of the world and how it is being received. This is bloomberg. Haidi china and the more than 60 countries involved in the Road Initiative have promised to spend trade, investment, and corporate stations that corporations in a joint communique at the end of the summer. The president announced additional funds for a plan he announced is already in full swing. There has been a lot of pr and youtive word, propaganda if will, but how much progress has china made in moving the grand plan forward . Reporter clearly, there is still a gap between the grand slogans and the realities on the ground. They are there will have to be catch up to get more countries involved and private investors involved. They had set a deadline, which is the next summit, which president xi jinping said would likely happen in 2019. Did get with this communique is the countries involved, pledging to support globalization, increase trade and investment in the regions,. Nd to cooperate on innovation smart cities, ecommerce, a range of different sectors. Development banks like the world bank and policy banks, private banks as well, sat down together yesterday to draw up a framework. It was at that event that we spoke to the secretarygeneral of the European Bank for ,econstruction and development who said he would have a role in this, and his bank was going to have a role, and they could help pulling private investors on board. I started by asking about what levels of fund they are likely to commit to the Road Initiative. We have gotten record investments of 9. 4 billion over the past few years, and we are set to achieve more or less the same level going forward, which is huge for us. We have very high mobilization rates in the sector. Between two and three dollars in the private sector. The name of the day was to involve the tech sector. Reporter that is one of the Major Development banks getting involved. We have had different receptions in different countries. And yes thing away from the summit because they are concerned about chinas partnership with pakistan and the disputed kashmir region. Indonesia, getting closer. They have a credit line from china for highs the grail. Then there is the americans setting up a working group to get involved. More answers are needed, but the momentum is there. Haidi a lot of ambition. Thank you for that. Tom mackenzie in beijing. We will take a look at the root the rebound in india. This is bloomberg. 9 30 a. M. In hong kong. We are counting down to the china open. 11 29 in sydney where we are awaiting the data from the meeting, where policy was held unchanged. Im haidi lun. This is Bloomberg Markets asia. Ahead of the rba minutes, take a look at this chart. We have seen a gain when it comes to the aussie dollar overnight, along with commodities currencies getting a boost from the oil story. Russianthe saudi and Oil Ministers seemingly coming together in a cohesive statement yesterday in beijing, saying they are willing to go another bye months to cut supply 1. 8 million 1. 8 Million Barrels a day. We have the vienna meeting of opec next week. This is what we are seeing. If you are asking hedge funds, they are not looking positive when it comes to the aussie dollar. For a sixth consecutive week. If you want to look at fundamentals , the uncertainties over china, Industrial Production slowing, industrial commodities downturn starting with the price downturn in china, so the pmi is falling over a bit as well, and then you look at happening with iron core into a bear market, you can see when the hedge funds are feeling pretty bearish. Lets get to the rba minutes. If we do have them, the reserve bank is keeping cash rate on hold at 1. 5 . Heres what the rba has to say. Maintaining the current stance of Monetary Policy with consistent with achieving flow. Not a great deal of change. March quarter inflation data has increased confidence in the forecast with underlying inflation picking up. That is what we are hearing from the rba. It does see core inflation picking up overtime. Notice that developments in the labor and Housing Market warrant careful monitoring. This is one of their favorite topics, household debt. Haidi to that point, i want to go to this chart that shows the mortgagesncerning spiking and wage growth at an alltime low. What could possibly go wrong . Paul exactly. We havent seen money so cheap in australia for so long. House prices have run away, but really growth wage growth has not been there. That is something to watch out for the coming week as well. We will have job figures and earnings prices. The rba might have more to say in the coming months. Im just seeing if theres anything here leaping off the page that we have missed. The outlook for the Global Economy remains positive, so the rba is upbeat on the macro picture, but all in all a fairly unsurprising set of material here. Retail competition is down from the inflation outlook. We have seen weakness in retailers in consumption demand as being a bit of a global theme. We are seeing that in the u. S. And australia as well. Lets take a look at how the markets are reacting. A nice rally when it comes to australian equities driven by the oil story. Ive got to sophie who also has the open in shanghai and hong kong. Sophie we are seeing that filter into most of the asian sessions as commodity producers get a lift. It looks like the optimism surrounding the belgium road summit is teetering what we have with chinese stocks opening lower. The shanghai snapping a threeday rise. The hang seng is coming to a downbeat town, snapping a six day gain along with a shares, down to 10th of a percent 2 10 of a percent. Meitu is one of five china stocks with changes taking affecting first. Elsewhere, we are looking at kospi, hovering around the 2300 level. Wings, given the won sending the currency to a sixweek high against the dollar as it plans for a fourth. A investors are exhibiting a risk a taste for riskier assets. National Australia Bank says has limited room for further gains. He says the kospi is looking a bit rich. He is in the indian ruby rup ee camp. It has been the best carry trade currency in asia. Building upas been reserves, with the white line track against the rupees ascent. Seen ral bank is we will get more into that story later. Much to the displeasure of indian exporters, of course. We had Stephen Engle in hong kong. Nations anec independent producers may find little room for maneuver when they meet in vienna next week. Oil prices jumping after saudi arabia and russia are extending the production curve into next year. Analysts are asking whether the outcome of next weeks meeting is already priced in. Aramco has promoted eight executives to senior position s as it wants to double capacity and expand operations ahead of the anticipated ipo. Appointments were revealed in an internal memo. Aramco declined to comment, but the website later confirmed the promotion of two Senior Vice President saudi arabia. Plans to sell about 5 of aramco next year. European Union Governments have tightened their brexit negotiating positions as they prepare. Draft documents show a tougher stance on helping companies specific demands on citizens rights, and clarifications on the role of european court. German chancellor merkel and french president macron want a deeper eu, but are also calling reforms. Meanwhile, president macron also signaling his program and domestic policy naming a conservative politican as prime minister. The centerright mayor is charged with driving the economic and social changes the needs. Nt says france the rest of the government will be announced later tuesday. They are expected to be a mixture of centrists, moderate left lingers, and entrepreneurs. Global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. Im Stephen Engle. This is bloomberg. Thank you for that. Unexpectedrupees rebound has seen the currency john more than 5 against the dollar this year. David joins us from singapore. It has benefited from overseas buying stocks and bonds. You also have the r. B. I. Using it as a de facto tightening tool. Exactly. It is one of the few Central Banks that isnt complaining about the strength of its currency. The r. B. I. Hasnt indicated much at all, which indicates they seem tolerant of it going even stronger. Technicals, does it matter . If policy got is going to drive the strength, it is a oneway bet. Certainly what happened is it rallied hard from 68 to 64 against the dollar. It went through a consolidation phase. It is now testing the 64 resistance level. A push through could get down to 63. 60, which is a 53 retracement. It does have a bit more leeway to go. How much more oversold. D be very haidi one of the investment themes are phenomenons we have been talking about is the absence of a fed taper tantrum when it comes to the rrr currencies. Instead we are seeing a pboc taper tantrum tightening. Do you expect much of a reaction from asia, if we get a more hawkish trajectory from the fed . The taper tantrum of the rupee was a currency that felt it the most. I think it can certainly handle raising u. S. Rates a lot more. At the moment, market is anticipating more rate hikes. Could be affected by that as any other asian currency. Haidi a lot of this depends on what happens to the dollar. There is a suggestion that a bit of loss and momentum is coming. This chart suggesting net long positions has been cut to the lowest since august. Why are we seeing this . Is this more tepid than expected . Reporter i think it is more there was aof period were they were popular trades. None of them handout. They have reverted to a negative, basically a short dollar against the yen, when they started rallying dollaryen. They are getting a bit wary at the moment. It is not happening at the time frame they expected it to. Theyre waiting for more information from President Trump and the tax plan before initiating new positions. Haidi we had a nice move in the commodities petrol currencies overnight. Is it going to be the oil story driving through, are you looking at the fundamentals of uncertainties over china, or where iron ore is continuing to go . Reporter i think iron ore is a big commodity currency. Its not the only one, but it is an main one. 660,on ore does push below you have to assume it will weigh on the aussie. We have to wait for Employment Data this week. That should add to fueling to push the lower trade. Haidi thank you for that. Up, where health meets biotech. Of, medicine and why samsung wants to be at the forefront of whats to come. This is bloomberg. Haidi a quick check of the latest business flash headlines. Panasonic planning to reorganize the european and north american sales organizations. Consumer electronics will come under a special department control. Announcedhas also they are planning to start making airconditioners in vietnam. Fire, symantec, and other securities stocks jumped after the cyber attack entered the third day, suggesting Government Spending on technology will follow. Fireeye could benefit the most. Claimisney says hackers to have stolen and unreleased movie and are threatening to put it online unless a ransom is paid. Ceo bob iger spoke ahead of their four seasons presentation to advertisers in the. In new york this is similar to one encountered not less last month by netflix which threatened to release unreleased episodes of the hit series orange is the new black. Its best known for its smart phones and tvs. Samsung is building up business as a manufacturer of complex medicines. It is aiming to become the number one producer of a class of drugs that derive from mammal cells called biologics. Why is samsung venturing into this field, and is this the future when it comes to this . Reporter the company was looking at areas where they could diversify, and the now ceo of Samsung Biologics led a team to look at 50 to 60 growth areas which included biopharmaceuticals. On the strength of their semiconductor expertise, they thought they could succeed in the Contract Manufacturing space where they are making drugs on behalf of Big Pharma Companies globally. Haidi what is it about biologics in terms of it being a class of products that makes them unique . Biologic drugs are grown from cells, which requires a more complex manufacturing process than typical pills, which might be a mixture of chemicals. That makes biologics more effective and capable of being target is towards certain diseases, but it also means the manufacturing is complicated. Many of the new medicines are biologic or cellbased. In 2015, 6 of the worlds 10 best selling drugs were biologics. Building a plan is quite costly, similar to one where a Semiconductor Plant is as well. This new samsung plan being built doesnt have any notes or bolts, and everything is welded to fit together. Haidi fascinating. A huge amount of infrastructure required to set up this unit of the company. Thank you so much for that. Our Health Report talking about Samsung Biologics. Coming up. The belgian road promising to expand trade and investment. We take a hard look at the likely road to success. This is bloomberg. Haidi this is Bloomberg Markets asia. Im haidi lun in sydney. Have issueds allies a joint communique promising to expand trade and investments. We take a look at this hugely ambitious plan. We have china partner christopher 10 joining us. We talked about this massive power,e in power soft being played out in the pr side of things. How optimistic are you that what is being promised will be delivered . I think this is clearly the Strategic Direction of china and quite a few countries in the region, that they need to go into this direction. Solution,a quick fix but it is going to be a longterm direction they want to take. I think it would be slow in a way, but its moving forward. Haidi what are some of your concerns . As a dealmaker who has worked in china, and has seen the development of Infrastructure Development in the country over the last 10 to 15 years, a lot of mistakes have been made in terms of the deployment of capital. Are you concerned this might happen again on a regional level . Yes there are a lot of risks and , particularly in the emerging market. I think key concerns would be the risks and returns that are subject to uncertainties. Especially to the private capital firms, it is very difficult for them to identify all the risks and potential exposures they will take if they take up the projects. They need to do their Due Diligence and have talks on discussing projects. Haidi a lot of questions we have been grappling with is where the financing is going to come from. Have seen chinas asked efforts to export Homegrown Technology for rail. It is unsuccessful because of financing and the incentives outside of china. What do you think the financing side is going to look like . When we talk about the takesing, it usually decades to be profitable. When we do a typical production, it is projection, it is easily 25 or 30 years. For financing banks, it is to provide financing with enough protections. Structure,the tpp which is the allocation of risks customize between the public sectors and the private sector, which means the Market Participants could be subject to a less certain situation, and the financials may be easier. Theently there are funds government backed up that could betteriding more financing to help projects become financially viable. Haidi the key things to come out of that is the longtime when Infrastructure Projects and the participation, and what it will look like in terms of tpp and private sector participation. You mentioned that you imagine a lot of this will be kick started soes. F volleys we know the problem the president has had in reforming does. Risk of overcapacity and inefficiency that has plagued that sector. To a certain extent, yes. Ink rarely talk about think for some countries in some locations and projects, it could be better. For certain Market Participants, for example some of the large construction conglomerate, when they look at the risks and return looking at the operation of the infrastructure, they are looking at the construction getrtunity, and they returns in early stages when they get epc. For different Market Participants when they take up projects, they would have different returns and risks. I just want to ask you, one of your key projects in terms of your experiences working on a domestic rail project in china, what were the takeaways . If you look at it as a case study on a micro level on what this 78 billion infrastructure rollout will be, what was the takeaway . Projects, itailway to look at key future demands and returns. The key for the railway is to look ship make sure you have the right estimates of the future rest revenue. It is equally important to do similar Railway Projects in other countries, you have to do Due Diligence to make sure you have reasonable estimates, and more important me, when you are subject to a high level of uncertainty, theres always a need to build in the margins of couldto make sure you take up future potential uncertainties. Haidi a massive amount of Due Diligence to come in the months and years to come. I appreciate your inside. Coming up for the next hour of Bloomberg Markets asia, the outlook when it comes to oil prices. This after russia and saudi arabia lifted the market backing another nine months of output cuts. This is bloomberg. Announcer from our studios in new york city, this is charlie rose. Charlie we begin with the fallout surrounding President Trumps firing of james comey earlier this week. Trump began his morning with a series of tweets warning comey of leaking anything negative about him and threatened to cancel future white house briefings. President trump has broadened his search for f. B. I. Director and considering an interim director. Joining me from the white house is Jonathan Karl of abc news, here in new york, ed rollins,