Mining fees set to surge after china crack down on bitcoin operations. Another day, another on bitcoin, right . We cant stop watching the cryptocurrency markets, but so watching lots of Economic Data. I want to just point out one that we had this morning. Jobless claims spiking tota threemonth high. Guys, take my chart. 5444, these numbers can be quite volatile. N september, those jobless on the backrose of the hurricanes. However, as you can see, relatively low still against the back drop of what weve seen in the last few years, isnt really any that there is a turnaround here in the jobs market. This tight labor market es to get tighter and tighter which means, of course, well continue to hiking rates. Yeah. That we n the fact past now eform what does this mean for companies . Saw walmart with news of raising the minimum wage to 11 per hour. Tight in the you cant t exactly add more jobs but aising wages, that will be ey, although there are a lot of questions, how much will that add to the pressures that with d still battles given that a lot of states have been battling and the minimum wages. That wage pressure is still the mystery here in kets. Abor mar look atickly take a how we traded today. Came roaring back after that brief break yesterday. S p adding on about seven cents of 1 . Dow higher by over 200 a nts and nasdaq up by hundred. Those are going those the tonel help set financials. Could be some muddied fact we given the one time charges when it comes to tax reform. Something to talk about. Lets take a look at asia. D the ks like well en trading week on a strong footing. 1 . Cks up a fifth of 7278. Relatively dollar weakness asia fx against this morning. Trading in australia just getting under way as well. Looking , were ahead to the china trade numbers. Exports and imports coming on this hour. We think it is a diplomatic accomplishment. Ts a way of stopping Vladimir Putin says north korea leader kim jung up has match in the contest to acquire new weapons. Putin made the comments in a russian editors here he called kim an educated and mature politician. The euro strengthened policymakers say they may tweak to align with the strengthening economy. Minutes meeting a widely shared view that communication would need to evolve based on the outlook for growth and inflation. Thats being seeing as a hawkish pill after the extend qe until at least september at a educed pace of 30 billion euros. And bloomberg has been told hat ubers San Francisco headquarters used a Remote Company ool for thwart raids by police and other authorities around the world. Ur sources say the system was as ripley routinely used from early 2015 until late 2016. Remotely change passwords or lock updateta on Company Owned smart laptops and desktops as well as shut devices down. A day. News 24 hours im courtney collins, this is bloomberg. Thank you so much. Were taking a closer look at the u. S. Market close. Rebounded from their first retreat of the new year to set records. To an ares rising alltime high as energy proved to be a big driver. Keenan has been tracking it all. In focus as so well as earnings. Part of what were seeing in earnings is a lot of anies announcing the profit windfall from the overhaul. Hats feeding a lot of the enthusiasm. Look at the close, green again. Bounce back from the reversal yesterday. Important is that the s p 500 is not only setting a new record. 3. 5 year to date and were only 11 days in here in the u. S. Of the ok at some big movers. Big moves indeed. Target putting part of their ax windfall into their employees but the big news is, they are saying, they getting a huge benefit from tax overhaul. Vefrs say they love it. Pitneybowes has attracted buyers and they say someone has been hired options. Te delta, an incredible story, up, up, and away with fares. They announced that their revenue gauge is rising some highest level they have seen in four years. They are raising their profit forecast and again overhaul. So there you see it. Lets go to blackman berg hash tag 5106. Rude was very much in the spotlight as our bonds are right now. Charts crude shooting higher and the fiveyear tips inflation break even. Ere is at least one analyst that argues the oil prices in s providing an explanation or the why the yields have been moving. Something to keep an eye on. Break being n charted here. And while these benchmark indexes, while they break had records, we also on the opposite side bitcoin taking another dive. Very hol his is a time currency, bitcoin was 12 , came off the low. Saw ripple down. Weve got all three of these charted rencies out. They had the most recent rise in january. South going on in korea, thats whats going on. There is concern that they ready to crack down. Social media jumped all over it. South korean officials sort back walk. There is no actual proposal in place but whats mportant is that korea has emerged as a ground zero for the speculative mania. A numbered host to of the most active exchanges. Concerned it could corrupt the youth. Meanwhile, here on wall reet, you have a number of etf vehicles being proposed to the sec. Way, youre looking cryptocurrency mining firm there. The sec looking at 12 s and two etf mutual funds that would supposedly be tied to cryptocurrency. They dont want to tie these things to such an uneven vehicle. Ed it may take a while before starting to review these of gs is the upshot them down. All right. Lots going on in the cryptoworld obviously with regulations, and from south korea as well as china last couple of weeks say thank you. Market. Strong buying by Bond Investors continue to fly. O who is going to win here and emerge triumphant . The latest from hayes. Ergs kathleen bears and bulls in the bond market. Will win . Thats the question. Still insisting that a bear place. Is in maybe a mild one. Nevertheless, heres what he said third day hes reiterated his call. Bloomberg television. 10year treasuries which are now at 2. 5 probably over year will go to 2. 75 or of for a number fundamental reasons. Thats bear market but it doesnt really significantly affect total return in a negative way for Bond Investors. In my es them, opinion, flat for the year 2018. Speaking of Bond Investors, for the second day in a row they stepped up and bought bonds big time at treasury auction. It was 10year yesterday. This certainly may back up he argument that Morgan Stanley is making, another bond guru saying there isnt market. Bonds still offer value. Its not here yet. Look at hash tag 5143. Lets take a look at what 10year yield note has been doing. Lets get rid of that little here. Ight okay. Were above 2. 5 . Heres 2. 6. Is it interesting . There have been other points, 2. 6 was level. The market came back down. Back here in 2014, right . People have their eye on hat in fact, didnt close at 2. 6 but a couple of days it got there. When people talk about 10 ear going to 3 , back in 2013, well, it got there a couple of times so just to this into perspective, one more perspective, china pedaling back on the story that Bloomberg News broke 24 hours ago, they may bond r cut back their purchasing. They are saying that news story may have been based on fake g source or even news. Yeah. Pushing back on that one. Of course, it wasnt just china. Boj this just week. The ecb chiming in and barish case s for bonds on thursday. What do they say . Lets start dove vicious. Ook how far below target inflation is yet the minutes of the last meeting came out and people are talking about ready to are signal that shift. Because they are linking Forward Guidance to better economic growth. Some of the strongest growth, in fact, in a decade so thats one thing. That supports the bears, doesnt it . Then, bill comes out about the economic outlook, hes talking about an overheating risk. What he says, the fact that the rate is below its more than offset by accommodating mob policy, financial conditions and an increasingly expansion their fiscal policy. If the ax cuts and labor market were to tighten must further there would be risk that could rise above objective. Hawkish. Ds on, of course, big focus Consumer Price index. Hash tag 7111. Simply. W you heres your yearoveryear in se cpi, at 1. 7 supposed to s be there again in december. The feds key gauge but, yes, its below. Index at 1. 5 . This is why officials like charlie evans, who also poke with us in the last couple of days is saying that the feds should wait maybe until the middle of the year before they hike rates. Right now, the bears do seem to be gathering the preponderance of evidence it remains to be seen. All right. Kathleen. Thank you. Kathleen hayes there. Still ahead on daybreak sia, a potential trade war between china and the u. S. It. H later thats later this hour. Well preview bank earnings. J. P. Morgan getting ready to Fourth Quarter results and decade high stock prices. How do they keep that going . This is bloomberg. Coming to you from new york. From hong kong. Kicks off ason for the u. S. Financial friday, with wells fargo nd et to report before the wall street opens. Low volatility plagued the Fourth Quarter but investors are hoping tax reform means future. Er at what to k expect. You were asking where might go this next year . A look at take reform. Terms of tax that could very well continue to help these rally. S p 500 le, the 7 once bout 6 or tax reforge had trigger,pulled the ut for the s p financials, grew by about 11 or so. O with the volatility, lets go to the first in terms ofart, fixed revenues, income in blue, equity here. E in white ow, looking back for the actuallyrter, that 21 . On the order of j. P. Morgan thinks it could on the order of 15 . Another thing to watch is fixed income will quarter, n in the third quarter, yearonyear double digits. Want to e thing we look at. Take a g we always revenue is terms of earnings. D bars here onte the top half of your chart the Revenue Growth for j. P. Morgan. To can see relative wells fargo in the blue it outpacing is 2. 7 . 7. 65 versus it seals like this may continue. Bloomberg , intelligence says revenue rise on the order of for jp morgan but for wells fargo it could fall on of about 1 , jp morgan, h citibank as well as banc of america. Lets take a look at net margins. The efficiency of the banks here. Jp morgan here in white, 2. 37 . Intelligence is expecting that to rise just tick to 2. 39 . Wells fargo, even though in orange, thinking that that could flat moving into the get h quarter when we those results. Ahead, it may not be so much whats happening in the fourth terms of where price are prices headed. Mma or its an whether its in wealth yet to be seen. On now, lets keep might on what we when those numbers drop on friday. I want to bring in our reporter, anking kelly. Tax reform is one topic to be in the calls. Nce what are we expecting. You had that chart showing what it was in quarter. D 3. 2 billion but that chart look a little less nice coming up in the fourth. E went through all of the projections. We collect all these what we notes and came up with as far as consensus, down 18. 5 , which jp morgan n what was talking about, and that equivalent to about 2. 7 billion in revenue on trading. Come it would not be as great. Expected, though, so if i were on that order dont think anyone would be much. G too there are some other banks, goldman, sachs, for example, see much further down, about 30 . O thats a key metric for these banks. Morgan is a big credit talk ssuer, and we about how much debt they have. Expecting out of this . That credit card business is such a huge part of jp morgans business . Exactly. Want to nalysts know about that one credit that backfired. Helped their business it may not be so much in terms of what profit it. Y are getting out of jimmy diamond, of course, is a person who talked a lot about the consumer, people him whether they are analysts or people like you me to understand a little better about how that behaving, and, xhourm ow, too, the man taking on more debt. In november s numbers, e latest hat credit card borrowings have risen to the highest in a long time slight be very to see what immy diamond has to say about some of these ustomers a big pack that kind of debt. And what profits jp morgan able to take on fees that are charged. And, laura, looking to wells fargo as well, weve multiple ut the scandals that they have for the last year and a half or so. Ow is that going to be impacting profit. Ow is it looking for this quarter . Yeah, its not looking good. Wells fargo has really been than a yearmore with these different Consumer Bank scandals. First it was the fake accounts one. Then they had something to charging tos, people for insurance there, and also, too, mortgages. Thats really probably pieces of iggest their community bank, and driven that so long. Ofits for when ive gone through the umbers here, one of the things that i noticed was hat this is likely to be for that Important Community worst division, the since 2011 as far as profit there. Going to be ood, and there is really, you know, a lot of hangups wells can see on fargo. Questions around the iciency ratio. Thats something the bank on struggled to keep target for. Revised down earlierets they had this year and still werent able to make it so its analyst ng that holy spirit be looking for. Laura, lets talk about just really quickly some of topics that were expecting out of the call. Ence are we rm, what watching for with jamie tax reform . Jamie diamond and wells definitely the be ysts will nteresting, what year end affect tax rates will be. Be new the rate would cut 21 but looking at the some ts, they, in based on just hat jp morgan can do in terms of deductions, they could possibly come out with an effective tax rate of so thats something want to really understand. What will it be going forward. E is it now . I dont actually know now. It is right i dont know. Be quite would low. Quite low. Much. Ura, thank you so bloomberg r, banking reporter on bank coming out tomorrow. Go, you can watch us up on past interviews as well as dive any bloomberg functions we talk about. His is for bloomberg subscribers only so check it at tv go. This is bloomberg. This is daybreak asia. Latest ck check on the headlines. Dropoffs is said to have filed ipo. Dentially for a u. S. People familiar with the goldman, sachs and l it will the pope listings. Unlike money losing snap, will have annualized billion more than a dollars. Saudi arabia has short listed york, london and hong kong for the listing. May be on one of the three. Es or all for 2018 and its got sale. Al to help manage the weve been next, talking about earnings season kicking off. Biggest names the Services Tech industry. Tsc and infocis. Berg. Is bloom 7 30 a. M. Iday, friday in hong kong. Away from 0 minutes the first major market open. 6 30 p. M. Thursday here in new york. Where markets closed much higher. Fact, those bulls came much g back today, absent news. A lot of Investor Sentiment is earnings to come next few weeks. Im betty in new york. G daybreak atchin asia. Lets get some news now with courtney collins. Yvonne. S so much, after s p global ratings, vote on the government flagship pension overhaul was delayed. Double b minus, three notches below investmentgrade, with a stable outlook. Social security reform is undermining attempts to shore up he finances of latin americas largest economy, s p now rates bangladesh and dominican republic. Chinas banks will trim issuance of short term debt this year after the government rules. Ed accounting securities says that could possibly reduce lending to estate. Such as real analysts say it means more negotiable certificates of this year l mature than will be issued with the net outstanding amount expected to 261 billion. House of. Passed a tives has bill to reauthorize a key foreign intelligence Collection Program. It comes with an important change, requiring the f. B. I. To to a warrant if it wants americas ontents of communications. The fees Collection Program allows spy agencies to conduct targets nce on foreign abroad. Ecuador has grant citizenship to assange. Ecuador gave him political after he sought refuge in the embassy back in 2012 to void extradition to sweden for investigation of sexrelated claims. But case has been dropped faces arrest for jumping bail in the uk. News, 24 hours a day, 2,700 d by more than and analysts in more than 120 countries. Courtney collins, this is bloomberg. Were coming down to the tokyo and seoul. We saw that on advantages of wall street. Stocks back at records. Bond markets seem more like a cub, i guess. So to t be armageddon, speak. Asia . N they could end the week on a high note following fresh in the u. S. , we also had a surprise, ecb, looking to stir currency markets, the dollar sliding to a september low as trading surge and yen at a sixweek high. Investors will have more on. Ings to focus japan, fast retailing, a surge in profit thanks to csales and data front chinas as well as s a ing bread topping 70 overnight. Heading towards 80 a barrel. 5881 hash tag. You can see asian energy stocks, benefit fromart to the value that weve seen. This hasnt been fully accounted valuationsergy stock and Earnings Growth at odds the sector is one of the and est in asia on a pe price to book basis but they are expected to deliver 75 earnings months, ver the next 12 the most in asia, but as you can in the bottom handle, apec energy index, the purple line, thats barely outpacing the index which is expected see eps growth of only about months. R the next 12 sydney, we do have well pull that up to show you how that stock is it could be moving on the company reporting a gas iscovery. You so much. Well keep an eye on that space. Also on this developing story, chipmaker advance microdevices falling in late after saying security vulnerabilities revealed by intel last week also apply to products. For more lets go strip straight Bloomberg Technology ical alistir. Happened here . Ambsah, it turns out that tatement last week was an exaggeration. They said it was near zero risk that the chips were affected by vulnerability. His afternoon after close of traying, one of these variables specta, a patch is on works. Y and in the way, certainlyhe cold comfort for many of those who are affected. Intel is handling the situation so far . Put out intel c. E. O. A long statement this morning. Chip development was always security first, and topsyturvy world of p. R. , thats basically quite a spin, chip experts have been speaking to us for the past eek have been saying that they put speed first over security and that has led to some of these vulnerability as. Think its also quite a big test for the c. E. O. Of intel. Out there making a lot of statements and trying to naturally last underplaying some of the risks here. Amd, also talking about these fixes, the patches, i it didnt smoothly as the ones that intel ran up earlier last week. Icrosoft, there were two ersions that had to be withdrawn because it caused machines using older amd chips to freeze up. Will it take before this is all cleared up . Its an interesting between microsoft, which is the worlds Biggest Software maker and these chip makers. Actually a lot of the front end ork with customers they are make the software and so chips run put out some patches yesterday. Actually they put them out a couple of days, but yesterday had to stop them for amd powered computers because these were seeing the f death. Blue screen o so that really doesnt bode well fixes that arese either. N the pike they are reporting earnings this month as well. See any kind of impact . L there is a lot of debate about that right now and it who is at fault. If you fake the example of a big they spend a lot of money buying those services and you know, their work loads would run intel fully tested all its servers but lets say if they want slower, wouldnt you a 5 discount on what you paid . And i dont know who pays for that. Does microsoft pay for that . Intel . So all of that needs to be there is a risk that somebody might have to pay a lot of money to these companies. To incur the g costs. San you, joining us from francisco. Speaking of costs, the cost client is or big about china officials ordering own facilities to close. Get to more. Weve already been talking about chinese regulators and how they t of these g a lo miners when it comes to discouraging mining. Lot have left china to skirt some of the regulations, but the new rules, how are mining likely to react . Right. There was some big news, instructing bitcoin leave the country and this is already having its first casualties. Biggest e fourth said n Mining Operator its increasing its maintenance from 6 , and other Mining Companies have like they have moving their elsewhere, where regulation is friendlier and there is still cheap energy like canada and singapore. We talk about china being when it comes et to some of these miners. New ignificant is this regulation . Yeah, this is huge for the mining market because china is a huge chunk of it. Concentrated g is there, and thats because, emember that Bitcoin Mining a process by which transactions on the Bitcoin Network are this requires huge of energy, so miners have been taking advantage of energy in china. Now that they are having to it depends on the energy costs, whether they will be as itable as they have been until now. Carmel la, i want to switch gears for moment about this report thats benjamin rom quinnland, saying bitcoin could before 1,800even this year. What is this based on . He es saying that doesnt really see that bitcoin replace cf currencies. He also doesnt understand how valuated. He doesnt see any consensus there. E sees bitcoin valuations can go from as low as zero to as 20,000 or a hundred thousand. Any valuationfind bitcoin valuation, and the he doesnt see that ever happening. We also have me, Research Company saying it will midyear. 000 by so quinnland. Gap, i s quite a big between under 1800 20,000. Sort of the definition of speculation, i would say, at this point. Camilla, thank you so much. Bloomberg margts live blogger cryptocurrency reporter. Much more ahead. Tensions between china and the u. S. He Vice President of the chamber of commerce joining us next. This is bloomberg. Asia. S is daybreak york. M betty liu in new yvonne . President trump says gains from a new deal could be used to ay for a wall at the mexican border. Comes as canadian officials e is a likelihood that trump will follow through on the threat. Head of International Affairs at the u. S. Chamber of commerce. Joining us here in the hong kong studio. You. To see year. New happy new year to you. Nafta, kicking off with the u. S. Chamber of commerce has pledged to fight like hell to save this deal. E you more or less confident that this is going to stick or is President Trump going to scrap this . Were pretty confident that the u. S. Economy, two of 3 tive quarters a lot to be confident about after tax reform getting and, h the u. S. Congress, of course, the deregulation to ur economy, so lets not screw up our economy. We have 14 million jobs tied to nafta. It. Want to reform modernize it, we do not want to withdraw from nafta. Would be terrible for our economy, a great mistake. Weve been clear to the ng sident and his negotiati team. Lets find ways to deal with some of the issues that the wants to address. But lets not throw away nafta. That would hurt our economy. Were making ess in strengthening our economy and have a bullish 2018 year. Get sideways on nafta. What are the implications if see a retreat and President Trump withdrawing from this deal . Free trade, countries are pretty much in free reign to international terrorists. We see some type of trade pensions elevated. Imports see more exports, i should say, being slapped with tariffs . All, in the case of nafta, if we withdraw, if we not sure step and im far but if we were it would hurt our exporters to canada. And manufacturers,ur it would hurt our auto companies. His would be a terrible thing for the u. S. Economy. It would not only hurt business. Workers. Hurt our the most . Ld it hurt everyone loses out. Exico loses out, canada, and the united states. Competitiveness the Energy Sector loses out. O there is a lot riding on getting this right. But economic nationalism or around is on the rise we have to address t in markets like china and lsewhere, where were seeing unfair competition. Where were seeing Market Access limitations, so there are areas that the Trump Administration should be focusing on. From nafta is not where they should be. Could this be a bellwether of ow the Trump Administration policies . Their trade im talking about with china as well. Ou just came back from beijing delegation there. Whats response been so far . Nafta hould not compare Trump Administration is doing with china. 57 , i mean, china for years has been slowing down liberalization efforts. Not seen progress in china in ways that have really hurt tion, whether its tech industry, medical devices or electric payments. Of their economy have been closed off to u. S. Companies. Not just u. S. Companies. You know, french president macron was just in china talking reciprocity and fairness. What we want out of china is for system adopt a global and s open to trade investment from all over the world, not just from the united states. Think this Trump Administration is doing the right thing by pressing china just ying that were not dialogue. Ave weve got to have concrete, tangible actions. O i really believe that nafta is a different kind of situation than what the administration is china. To do with okay. But just following up on that, you know, we did hear some tough from the president on china trade, and n certainly he and the president are working through those expect that ou President Trump come 2018 is oing to get even tougher on and what might that mean . Well, betty, first of all, happy new year. Do think that the Trump Administration is going to get tough on china. Think its pretty clear they to take a ache a number of actions. The question is the scope and actions. F their administration is representing not just their own ts but the business of unity, a sense frustration with the lack of progress in dealing with the in the relationship between china and the united states. 650 billion economic relationship, but it is still many sectors of the economy china is closed off to u. S. Companies and to frankly foreign investment. Got to address that. He previous administrations ave tried, but they havent succeeded to the extent that we in d like to see success doing business in that market. So i think we were very clear, high level to beijing for a meeting, with the government and we were very candid. Talk is not going to get you anywhere with this ministration. Action is where youve got to be. Certainly action is, you now, going to speak a lot louder, myron. You talk about talking. A lot of u. S. Businesses, your chamber, has alked a lot to the trump how free tion about trade is necessary. That it is, as you just will be , it if we do pull out of nafta. Comments,u think these though, are falling on deaf ears . The chinese are moving at their own pace. Five to seven years ago they reform own their process. Onmyron my comment wasnt chinese, my comment, it was on the white house. But the fictiocus on china and what they will do. Na they pect to to chi dialogue. Have they will take actions, they will force china to react. Agree with everything the administration is going to do with respect to china but we agree that its time for to act in a way thats responsible and be part of the Global Trading system. There is a lot to say thats positive about the u. S. China relationship. Major holes in how they address things like tech theft, how they and sectors arket of their economy how they are propping up soe. Work to do. Me broadly, look, were proponents of free trade and open markets. Been very clear about our views on nafta and even with respect to south heading next ere and meeting with government officials there. Progress with our economic se relationships, as you know, were advocates of ttp. To be oing to continue advocates of an open trading system. It benefits our economy. Its business and it benefits our workers. When we can compete on a level field American Companies do very well, and our companies our hire, as we know, in market, and that creates great opportunities for american workers. All right. Second, ive got some breaking news coming through japan. Missing estimates by quite a yen is ot, 1. 3 trillion how we sit for the month of november. Conomists were expecting about trillion print an much in the an what we saw previous month of october of 2. 2 trillion so that could play to thehere when it comes currency. A look at the market far. Ion, pretty muted so betty . All right. Well continue to watch that. Numbers and hose on the yen and the the impact on the yen and japanese markets. Reform. To talk about tax chamber of commerce has been a huge driving force behind reform overhauled. There you have it, you succeeded. Youre hearing members, your c. E. O. , your business members. Playhis reform is going to out for u. S. Businesses and for the economy. Well, i think its going to real jolt to the economy. Ere already seeing companies workers. Wages for were seeing them look at new ent opportunities here in abroad. Ed states and i think its a real jolt to our economy. Think its going to ensure we have a strong 2018. With tax pleased but there is other work to be done. There is more work to be done on front, to improve our environment on that front. There is more work to be done infrastructure badly force development. There are other issues that have addressed. If i were to say one that issue ould cause trouble in our its y in the year ahead that we dont have the right trade policies in place and very important Trump Administration figure out what they want to do with nafta but lets not nafta. W from that would be a great mistake economy. Would hurt our leave, just real quickly, we have a viewer comment that just came through to me, that was talking about, likely that re china state sponsored capitalism ctually influences the west other way the around. Chinas economy will be doubled u. S. By the of the mid2030s. Do you think china can actually has more leveraged when it comes relations with the u. S. And perhaps they have more, i guess, firepower . Been coming to china for 25 years. There is no question that china rise. The no question that chinas economy is critical to which is why omy, chaz more responsibility today than it had 20 years ago. Has to play byit the rules of the game the Global Trading system. Need to provide reciprocity. They have access to the united states, okay . On the nt from china is states, as isnited in europe. What were asking for is equal and fairness in their market, reciprocity. Allow us to invest in your market. Everyone wins. Winwin as the chinese like to refer to. And right now, were not on so weve track, and figure out with china, how we get on the right track in the relationship. There. L leave it thank you. Chamber of commerce and affairs. Nternational more ahead on daybreak asia. This is bloomberg. This is daybreak asia. A quick check of the latest business flash headlines. Retail overseas revenue exceeded local sales last quarter for the ns st time as clothing chai outside of japan pays off. Owner ng profit for the and g. U. Climbed. Also maintaining its full year uidance including a final dividend of 45 yen. Another bumper year on japanese mergers after topping ranks for the First Time Since 2011. Good time for companies to Fund Acquisitions by selling shares. That played into nomura goldman, ng beating sachs, in large part due to involving buyout firms. Asset management gives us outlook for treasuries as bonds market opening coming up as well. This is bloomberg. 8 00 a. M. Here in hong kong. I am yvonne man. Welcome to daybreak asia. Friday, endings the week on a high after wall street bounced back to record levels. Rateare waiting chinese data. A trade surplus is narrowing. Betty from bloombergs global and global headquarters, i am betty liu. Oil helping drive the Market Sentiment topping 70 for the first time in three years. Fast retailings Global Expansion pays off. Outpacing domestic revenue for the first time. Yvonne it seems like the bond bulls are proving victorious, at least overnight. Selloff ines to the bonds, a lot to do with the options we saw in the u. S. The last 48 hours. Yearso have japan, a 40 auction coming in at 11 45 hong kong time. It will be interesting to see what the demand is like. Betty that will be very important. These yields i know we are watching equity markets but yields are dominating trade in equity markets and Investor Sentiment. Not surprised by the uniqlo story. I like them, i get them on fifth avenue. Lets get the first word news with courtney collins. Up, President Trump expected to extend waivers on sanctions against iran on thursday. The measures were suspended under the 2015 nuclear deal. However, he is said to be preparing new sanctions against tehran for missiles, human rights and other violations. Gently urgingre the u. S. Not to abandon the wider nuclear accord. We think it is a considerable diplomatic accomplishment, a way of stopping iran from acquiring nuclear weapons, as my colleagues have said. Iran is then compliance according to the International Atomic energy authority. That is very important for us. Russian president Vladimir Putin said north Korean Leader kim jongil and is in the mismatch for nuclear weapons. He made the comments when he and educated and mature politician. He said he has succeeded in developing a Nuclear Warhead capable of hitting any target. Brazilsl ratings cut credit further after a vote on the flagship overhaul was overrated. Minus. Ated double b they are attempting to shore up the financing of the latin economy. S p ranks brazil among bangladesh and the dominican republic. Chipmaker Advanced Micro Devices falling in late trade after vulnerabilities revealed last week also applied to its products. They previously said their chips were largely unaffected because of a difference in the microprocessor architecture. They are fixing Security Problems with the chips. Global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. I am courtney collins. This is bloomberg. Yvonne lets get to your market open, now to south korea as well as tokyo. We are seeing a pause in the bond market selloff, getting a green light for equities. On. Ie it is risk the nikkei 225 resuming gains after stumbling this week. That topix under pressure, sliding 0. 2 , as Consumer Staples and real estate drag on the topix benchmark. A six week high, the dollar struggles amid speculation of the and boj policies. Plus, signs of muted u. S. Inflation. Snapping ahe kospi three day drop. The korean won set for arise in the first six days. A in earnest in japan. Fast retailing beating estimates, amid forecast. Fast retailing on the up this morning. Flipping the board to check other stocks. Nintendo set to bring more games to the set console. The stock is up on the back of that. Shiseido bought an operation from a u. S. Startup. We are watching celltrion in seoul. They are a bio similar drugmaker. Aussie stocks rising for the first day in three. But it is on course for a weekly drop for the asx 200. You have materials leading the rise, while Consumer Staples are under pressure. The aussie dollar sliding. We look to chinese trade data today, some impetus when it comes to sentiment here today. Betty thank you so much, sophie kamaruddin. At theanother gaze chinese economy. Our china correspondent Tom Mackenzie joining us from beijing for more on this. Tom, what are we expecting out of these trade numbers . We are expecting china to round out the year, relatively robust footing when it comes to exports and imports. Exports will have slowed marginally. These are the year on year numbers. The forecast expected to increase 10. 8 from 12. 3 . If you put november to 15, that will still be the strongest pickup they have seen since june of last year. The imports will soft and as well. The imports will soften as well. That would be the weakest increase in imports from china since august of last year. Overall, a relatively sordid picture, even if there is softening around the edges. Around 37 billion. Down marginally from the previous month when it came in a 40 billion. This is something of a Sticking Point between the u. S. And china. President trump has bashed china over, the deficit between the two countries. The deficit the u. S. Has with china. That is something to watch. U. S. Will be encouraged by this slow down when it comes to export numbers. How much longer can we see these doubledigit numbers we saw in november . That was quite a striking number we saw last month. What is the trade picture for the rest of the year . Right, it was a striking number in november across the board in 2017, a strong picture for china trade. Going forward as you suggest, it is expected to be relatively robust. Particularly if the Global Growth scenario plays out. We have seen forecasted increases. If that continues, it does suggest it will be relatively strong external demand. We have seen some of chinas biggest trade partners come in at the highest level since 2010 for december. We also saw the south korean trade picking up quite strongly. Something of a bellwether for china when it comes to trade. The Downside Risks are protectionism. And any tariffs that may be imposed by washington. There are invested there are investigations going on with aluminum and others they may clamp on china. That could prove a drag. We also have the midterm elections and that could add motivation to trump to take a tougher line. We are expecting these numbers out of china in the next few hours. Exports, imports, and the trade surplus. Yvonne we are looking into that. Tom mackenzie joining us live from beijing. China also played a big role in the selloff that led many to hop on the u. S. Ons bear market bandwagon. How much of a factor will it be . Lets get more from Kathleen Hays, she has a look at the week. Some are saying the 30 year bull market and u. S. Treasuries ended. And what about china, how do they factor into this . Kathleen lets take a look at that first. This is one of the stories i find the most interesting, even though it may not have as much impact as it did for 24 hours, the day before yesterday, when Bloomberg News broke a big story. An official says officials were looking at china cutting back on their purchases of u. S. Treasuries. Maybe all of them altogether. That prompted a big global selloff. Came in andn i looked at my bloomberg on thursday morning u. S. Time, i saw a big story saying the Foreign Exchange association in china is saying the story about halting or slowing bond cited a wrongd source. That one gave me a chuckle. A couple departments and china are disagreeing about this. Third day in a row there is a bear market in bonds. Maybe not a severe one. But he thinks it will push yields higher. Lets listen. Are up to 5 nominal gdp. It is possible in the next few quarters. 360, 10 years is possible. 3 is possible, yes. Kathleen lets take a look at a bloomberg chart, g btv 5143. What you see here is the 10year note up 2. 54 . It had been at 2. 6 . Got to 10. 6 . T that is the 2. 6 . It was on a long march backandforth in the bull market. That is one reason why bill gross says 3 is possible. Over at Morgan Stanley they say there is no bear market in bonds. It is in large part driven by the china bond threat. Potential shift in the way they look in inflation targets. A system which would allow inflation to exceed the 2 target and make up for this time it was below. He says the fed talks about it forever and is not going to do it. Particularly end of the week after a strong move we have to watch closely, next week. But i could understand especially this combined with of the 30 year bond option demand was the strongest since 2014. Shows ventures buying. Betty the ecb and new york fed seem to add on to the bear case in bonds. What do they say . Kathleen the minutes basically said the ecb is looking at the Economic Data getting stronger, linking this to a possible shift in Forward Guidance. A low inflation target not as important as growth so much. Bill dudley, president of the new york fed, speaking in new york area, talked about an overheating risk. If you get a tax cut, it saturates fiscal policy come on top of growth already looking above trend to him. If the fed waits to raise rates, it could be quicker. He talked about overheating in inflation, inflation could exceed the 2 target. You do not want the fed to have to raise rates rapidly. He sees the case for three rate hikes in 2018. Lets look at one more chart. The next thing we are watching is the Consumer Price report that comes out friday morning in u. S. Time. This is the cpi year over year, 1. 7 . That is the forecast for december, as well. Far from the 2 target. The main gauge, only at 1. 5 . Another way where the bears and bulls can still have a lot to debate. We will see what happens. It is early 2018. This could be the year, we shall see. Betty in the next segment we will be talking about this. Still ahead, looking to the latest trade data out of china due in a few hours. Well discuss what to expect with our guest. Also, inflation data happening in the u. S. Our guest joins us with his outlook for the economy. This is bloomberg. Yvonne this is daybreak asia. I am yvonne man in hong kong. Betty i am betty liu in new york. Consumer inflation in the u. S. Data due friday could influence the feds rate hike fan. It could eventually lift inflation. Ashley perrott is the head of pan asia fixed income ubs. Also, Kathleen Hays is also with us. Ashley, first off, before we get to talking about inflation and whether it is going to rear its ugly head this year, what about all this talk of this week are we, are we not at the end of our three decade bond bull run . Is this the beginning of the bear market . Or is it nothing at this point . Ashley i think it is probably the latter, much ado about nothing. It is a nice talking point at the end of the 30 year bull market. But i am not sure it is helpful to think about it in that way. 10 year Government Bond yields have gone nowhere in the last 10 years. We are only at 2. 5 . Or bearbull market market . Im not sure it is important. For the time being, bonds a been pretty stable within a relatively tight trading range. I do not think much will change that environment. Betty it seemed like even the person who raised that issue this week, bill gross, talking about the beginning of a bear market, seemed to walk back the alarmist language he had ignited a few days ago. Actually come i want you to hear what he said today on bloomberg. Your treasuries are now it to. 55 , probably over the year will go to 2. 75 or 2. 8 , for a couple fundamental reasons. Is a bear market, but it does not affect total return for Bond Investors. It leaves it flat for the year for 2018. Betty actually, sounds like you would agree with him . Ashley i think it is right. 2. 8 ,f they get to 2. 75 , that is where the forward rates would be over that period. You would not see significant returns in that environment. You compare that to bear markets in 1994, 1998, that is not a bear market. Environment we are in now, you cannot describe is a bear market. Maybe like a teddy bear. [laughter] betty i am going to use that. As you were talking, i was looking at another bloomberg chart. I want the time it out. Some people have not been watching the bond market for a long time, they dont realize how ridiculously low the yield has gotten during this financial crisis. I took the same chart i have 10n looking at all week, year note yields. I pulled it back to the late 1980s. Back then it was a 9 . Dont you wish you could buy 9 10 year notes now . [laughter] being focused on price, they got it so low they had a hard time getting inflation, getting it back up. Where is fair value now . We still have big balance sheets, there is talk about tightening. Where should the 10year note be valued . When it comes to valuation you have to come back to real rates. If you think over the last 10, 20 years, real fed funds rate probably averaged around 2 . The forecast this time, the 0 to 1 . Ld peak at premiumdd extra term for a 10 year bond yields, maybe you are talking 1. 5 to 2 above inflation. I am not sure the real fed funds rate comparison to where we were 20 years ago is particularly valid now, given the inflation dynamics and growth dynamics in the world and the leverage. The mutual rate is lower. Markets are rarely there. It is probably not too far away from where we are. If you think the 10year note yield has traded between this 2. 5 level for the past four years, it would imply we are too far away from equilibrium, but the market is pretty comfortable with. It is not just about what we are seeing in the u. S. , possibly hearing a theme of policy convergence coming through 2018. The minutes saying they are open to tweaking the policy guidance soon to reflect the growth we are seeing in europe. I want to bring up a quote in the minutes that talked more about this. If they converge closer toward the dimensions of Monetary Policy stance of Forward Guidance could be revisited early in the coming year. Is 2018 going to be more of a europe story for the bond market than what the fed does . Ashley potentially. You seeing it from all Central Banks. The are raising what general policy is. They started tapering purchases further. All Central Banks are working toward an exit of extreme policy. Yes, it could be more of a story in europe. Does two orfed three hikes this year is largely immaterial. The european story and potentially the bank of japan story. It is whether they quicken their exit from the control mechanisms that will also be an important story. I almost dont know which country to ask you about. When you think about 2018, i think about china, and all the things we talked about this week, particularly how they are managing the fixing rate. Ot of people are wondering where do you see china going with their Exchange Rate . Some people think they are taking steps to weaken the currency, to help the economy. How do you factor that into this whole myth of bonds and where to put your money . It is always hard to predict how developed Country Traders reacted china. We know china can be a big player, depending what it does. Ashley youre absolutely right. I think it is easy to predict what developed market traders will react to china, typically they overreact. Because it is a market they are not familiar with. We can probably guarantee that will happen again in 2018. Almost like it did this week with the talk and statement around the list on buying. Their reserves have gone from 4 trillion to 3 trillion. Naturally they are buying treasuries. It was not particularly new news. They wantrency side flexibility. They have talked about it a couple years. The market needs to listen to them. They want flexibility. Appreciation and depreciation will be a function. Goes through just like every other currency in the world. The market will have to get used to that. Be 1 or 2 from where we are now is hardly material compared to what other currencies due in other parts of the world. Much more volatile than what the renminbi is. Yvonne they have not moved close to those levels. Ray to have you here, ashley atrott, from fixed income ubs asset management. Part of the picture is what we see in oil prices. Brent crude has briefly topped 70 a barrel in london for the first time in three years. Joining us now is the energy reporter. It seems like the stars are aligning. You have the opec deal, u. S. Stockpiles shrinking for an eighth week. What are the biggest factors . The fundamental picture is vastly improved. Longestion it is the run of declines in a decade. The continuation of the opec cuts and the market is balancing. Demand is better than what was expected. We have the uae minister talking about 1. 5 Million Barrels a day in 2017. All of these factors are coming to play and pushing up the price of oil, both of brent and wti. It looks like they are outpacing what many had expected. A lot of positive momentum in the market. It is the fundamentals or technical situation, it might be overboard at the moment. Betty where does it go from here if it is overbought . If this is the top, what is the next level for oil . Ben a lot of lows in the market at the moment. There is a positive momentum in the market, it is still there. We are seeing wti slightly easing today. Brent last night hit 70 and came toward 69. Not a huge correction, maybe a temporary correction. We may see sideways trading as it moves back. Certainly as the market moves closer toward the end of the year, it is a situation that goes into a rebalance phase. Is affordable. Yvonne ben, great to watch what is going on in oil markets. China,t we are seeing in we have markets checking to see how things are faring in the asiapacific. We are seeing when it comes to equities that rebound on wall street. Certainly helping the sentiment. We are seeing green across the board with the nikkei 225 premuch flat right now. We have seen the strength in the yen continuing at 111. 17. The kospi leading the pack, up 0. 33 . In excess of 0. 2 . The trade data from china could be the key focus here to look ahead to that later on this morning. Coming up, fast retailings expansion starts to pay off as International Sales beat local revenue for the first time. A look at the numbers. This is bloomberg. Retail. Under pressure like never before. And its connected technology thats moving companies forward fast. Ecommerce. Real time inventory. Virtual changing rooms. Thats why retailers rely on comcast business to deliver consistent Network Speed across multiple locations. Every corporate office, warehouse and store near or far covered. Leaving every competitor, threat and challenge outmaneuvered. Comcast business outmaneuver. Yvonne 8 30 in singapore. A dark picture there as they wrap up the trading week. I am yvonne man in hong kong. Betty looking quite dark. I am betty liu in new york. You are watching daybreak asia. Chinas bank will shrink issuance of shortterm debt this year after the government tightened accounting rules. Security says that could possibly reduce lending to sectors such as real estate. Moreng analysts say certificates the net outstanding amount expected to fall 261 billion. Bloomberg has been told that ubers San Francisco headquarters has a remote log of tool from Company Computers the system known as ripley was routinely used from early 2015 until late 2016. It could remotely change passwords or lockup data on companyowned smartphones, laptops and desktops, as well as shut the devices down. Granted citizenship to julian assange, who had been living up as embassy in london for more than five years. Ecuador gave him political asylum after he thought refuge in 2012 to avoid extradition to sweden for investigation of sex related claims. Still faces arrest for jumping bail in the u. K. China is seeing signs of success in a fight in beijing. Concentrations of the most plunged 33 rticles in the Fourth Quarter from the year earlier. In the capital itself, levels tumbled 54 . Government policies have forced to millions of homes and businesses to switch from coal to cleaner burning natural gas. Global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. I am courtney collins. This is bloomberg. See how the to asian markets are shaping up. Lets get the latest with sophie kamaruddin. Sophie the bond space, mostly tracking treasuries lower. The dollar bears have been awake. Asian currencies have room to rally. When it comes to the yuan, the asx will illustrate whether the pboc will allow Market Forces to come into play. At offshore yuan trading 6. 49. Rising for the first day in four. Small caps continuing to advance in seoul. Revised tax rules coming into force at the end of the month. That may boost confidence in the korean market. In sydney, miners leading the rise. This after a report that rio tinto and bhps iron ore shipment rose in the third quarter. With oil for the with a Fourth Quarter gain. Beach energy climbing to a high in sydney. Japanese stocks under pressure. The yen trading at a six week high. The nikkei 225 marginally higher, while the u. S. Topix rising 0. 2 . What is moving on the nikkei, we have family mart falling 7 . The biggest drop since april 2014 after its guidance missed estimates. Auto stocks looking mixed. Fast retailing rising to a december 2015 high after delivering a beat. Betty lets take a closer look at how the fast retailing shares are doing, reaching that high at the tokyo open. Reported overseas revenue exceeding sales for the first time. Editor has been tracking this. Sales are up, margins are up. Sounds like they are doing quite a few things right, including overseas. That is right. It has been a long Time Strategy for folks overseas and it is getting traction. Another important point or their margins. Their margins are up, that has been a trend as well for them. The entire last year and the year before that, their margins were eroding as they invested in this expansion. They were opening a lot of new stores are not left a question mark. They are increasing sales, but what about the margin . How much money will they actually make . Will they be profitable on this expansion overseas . This quarter gives it an affirmative yes. A lot of that goes back to execution. This is a company run by japans richest man and he has built it from a very Small Company to a very large one by execution. By taking a fairly simple, straightforward strategy, and executing it. This come back shows the company and can execute on their plan. Yvonne it certainly was a great result. Target their four your unchanged. Are they pessimistic about the rest of the year . Or just being conservative . Dave i think they are being conservative. You do see the yen strengthening a little bit. They have some balance in terms of their exposure on forex. But they are relying more on overseas profit now. Roughonally, they have a summer. They sold a lot of stuff in the winter, their heat tech underwear, ultralight down. Those are big products for them. Sales aremer, their less and their margins go down. It is very competitive to sell shorts and tshirts. They have a lot more competitors in that space than they do in thermal clothing. It is tough for them to make money in the second half of the year. They made almost their entire operating profit for the year in the first half. It was a booming First Quarter, a record for the First Quarter. Time, they are keeping their powder dry. If the next quarter comes in and the same way, you would expect them to upgrade them. For now, it is only their First Quarter. They are on an august fiscal year. They are being conservative and not raising it. Yvonne betty is a fan of the tshirts. But it is always the jackets for me. Those are good this time of year. Thank you, joining us live from tokyo. Sticking with the earnings seen, posting quarterly profits that exceeded expectations. From analytics and cloud services. Joining us is william wong. Will, thank you for joining us. Has made strides in shifting to emerging tech offerings. How is the progress so far . Will good morning. It was the solid quarter. If you think about the cloud services, data analytics, and cybersecurity. 40 to 50 year on year growth on the back of a 30 gain the last quarter. There are definitely making a lot of strides. It is the First Quarter of a book to 50 million contract. They are making a lot of upfront. Theyre coming from behind and terms of global peers. The center is probably at 55 . This quarter they are at 25 in terms of emerging technologies. Making a lot of progress in growing the business quickly. But still a lot of catch up to do. Ibm is a leader in the space globally. Of pressurettle bit when it came to Financial Services, which is the biggest industry exposure. What happened and what is the outlook now . Question. Interesting 30 of our overall revenue. We talked about Financial Services in general seeing some weakness. Especially on the banking side. On the insurance side, some improvement over the next couple quarters. You areanking side and seeing this is based in north america, a lot of companies they work with on the banking side that are mapping out their Digital Strategy. A lot of that is being done in house. There is no timeline they when another Bank Customers will be able to utilize their partnership, their skill set. It is something that is shortterm, not longterm. It is more specific to tata. Ther business within Financial Services sector is doing relatively well. This is probably more of a shortterm temporary hold in terms of spending and Financial Services. These companies map out there Digital Strategy going forward. It is still to be seen, still relatively early. But theyattish, expected to pick up soon, hopefully. Betty hopefully. Fosys, and about in the new ceo on his first earnings call. Appointed when we saw the old ceo pushed out. What are investor questions going to be . Will the big question for him, he has to lay out what his strategic overview of the company is. Before they said they wanted infosys to get to 20 billion of revenue in 2020. They felt quite a bit short of that. Withwill probably end up 14 billion or 15 billion in 2020. Theyre looking to him to lay out a strategy and how they expect to grow their businesses from the emerging tech side. Thet of the focus will be employee base. There was a lot of turmoil on management. He will be speaking to investors as well as his own team across the globe. Investors will want to hear a clear, concise strategy on the top line as well as the margins. Margin deterioration as well as those in the industry. How i can impact the growth part as well as the margin side, especially as we see costs on the Human Resources site increase as they bring more people on board in geographies like the u. S. Where you see political pushback for that to happen. We saw pretty strong growth in Continental Europe out of tata. What can we expect infosys to say about their european operations . Will it is definitely a growth area. Continental in europe. There is still a lot of opportunity there. 30 penetrated in terms of offshore. Germany at 60 . They think there is still a lot of opportunity there. Overall, Continental Europe will benefit from some of the cost reductions that will happen if they use offshore Companies Like tata and infosys. They continue develop resources there. William, thank you so Bloomberg Intelligence software and tech analyst. E talk about tata and infosys china set to release december trade numbers later today. Our next guest sees a stronger Global Growth in 2018 playing out well for chinese exports this year. Ding shuang explains why in a moment. This is bloomberg. Tty this is daybreak asia i am betty liu in new york. Yvonne and i am yvonne man in hong kong. We are awaiting chinas trade data. They have forecasted a slight slowdown in december with exports growing at about 11 . Joining us is Standard Chartered s chief economist ding shuang. He is also a former pboc economist. Thank you for joining us, happy new year. We saw the november numbers. They were quite striking. At least in the picture of Global Growth. It looks like we are ending 2017 on a strong note, 29 . How long can china keep trading these doubledigit numbers when it comes to exports . Ding shuang it supports the view that the external environment is still high quality. Andntly including the pmi, also the new export order from china, suggested solid growth of chinas Foreign Trade has been maintained. In december we forecasted export growth of 9 and import growth of 14 . That puts annual export growth to 8 and import growth to about 17 . That is a major improvement, comparatively to 2016. The Foreign Trade surplus could narrow. It dropped by about 20 . In 2018 we expect not only solid growth from europe and u. S. , but africa, middle east and latin america. Generally favorable environment would encourage the Chinese Government to purchase deleveraging. Are still expecting 6. 5 percent growth in 2018 for china. We see a lot of economist in the last couple weeks upgrade their forecast because of the external conditions. Slowdown in the Housing Market has not materialized just yet. What would cause you to join the bandwagon and change or forecast . Ding shuang it depends what the government assigns to do. Decides to do. Very likely we will take advantage of this external adjustment, toan make growth more sustainable, more innovationdriven, and environmentally friendly. I think they will improve the quality of growth. As we look at the three critical battles from the conference, two of them containing financial those would bring downward pressure on the gdp growth. Policies would be less accommodative. We expect higher Interest Rates and tighter regulations. The central bank may raise the rate. Interesting, and your notes you had a contrarian call that inflation in china could come back in a big way, picking up at 2. 7 by year end. How would we get there . Inflationary pressures are still fairly benign in china. Expectuang the data we [indiscernible] normalization, already the cause of the major pickup of inflation. High ppi that, a inflation is likely to pass through to the Consumer Price as well. And consumer inflation remains. If we look at the recent oil price, it is interesting. It is at 70 a barrel. It has a close relationship with food products. Even though we are expecting tempering of export growth in china, it is still certainly at these highs. I am curious, linking that to recent news we have heard over china possibly selling treasuries. Of course they have come out and said it is fake news. Nonetheless, a lot of speculation about it. Does it make sense china might be looking at their dollardenominated debt . The u. S. Treasury market remains the busiest market. It is very difficult to shift very quickly to diversified diversify the u. S. Treasury. Think china may not have a lot of additional foreignexchange to the u. S. Treasuries. That liquidity is underlying. Betty given the theme of foreignexchange, we know the u. S. Has passed tax reform, some are expecting that with a more robust u. S. Outlook we will see a reversal in the dollar. I am curious how you think the chinese authorities are preparing for that with the possibility of more volatility on the chinese currency . Our shuang that is also expectation, more volatility. Interestingly, the pboc it. As reported this was a factor we think that is a step toward making the Foreign Exchange rates more marketdriven. To flatten the market. And with the Exchange Rate more stable and inflow more balanced, this opens the window for further tax reform. Make the Exchange Rate more flexible, a lightly flow for the next two to three years. Betty thank you so much, Standard Chartereds chief china economist ahead of the trade data in china. You can get a roundup of that story and more to get your day going in todays edition of daybreak. Bloomberg subscribers can go to dayb on their terminal. You can customize your settings so you only get news on industries and assets you care about. This is bloomberg. Some interesting comments coming from facebook ceo mark zuckerberg, saying he is responding to customer isticism, noting the feed now going to feature more posts from friends and family. And the algorithm will the comments fromlic brandon media outlets. That will shake some of these media groups who have been paying to get that content straight to your feed. Yvonne it is interesting, they are going back oldschool, the way we remember facebook when they first launched it, when we first had our accounts. We were College Students in that network. We are heading back to the old frame. There is concern in this transition people will spend less time on the site. That could have impact on the business overall. Betty absolutely. Engagement is the holy grail of metrics for these networks. Engagement is likely to decline, the time spent on the site, likely to decline. It is a direct reaction to the heat facebook has gotten over the past 12 months, especially with fake news dominating peoples feed. Yvonne he made that his resolution for 2018, to fix facebook. 12 days into the year he has already made changes. In the meantime, a quick check of the headlines. Tencent sold 5 billion of bonds. Andu. S. Selling offering the first time they have issued debt since 2015. 10510 year and 15 basis points respectively above u. S. Treasurys. The sale in comparison to alibaba, who raised 7 billion in a november issuance. Saudi arabia has shortlisted new york, london and hong kong for the International Part of the aramco listing. One, ad be on combination or all three of them. Appointed to have lenders including goldman sachs, citigroup, j. P. Morgan and coterietanley a whole to manage the sale. Yvonne a fight against smog in beijing. Greenpeace says dangerous particles plunged 33 in the Fourth Quarter of the year earlier. In the capital, levels tumbled by 4 . Government policies have forced billions of homes and businesses to change from coal to cleaner burning natural gas. We did hear headlines this morning from officials in beijing, telling students to stay indoors. Also be the bad side, not as pretty as some suggest. Is it worth it . Wet happened with the shift, ran short on natural gas and it forced the government to hold factories, and in some cases, go back to burning coal. Betty it is running counter to what beijing officials are hoping for and aiming for, burning more natural gas, less coal. As you mentioned with that shortage, it is turning things around. Surprisingly quite quickly with this morning. The heavy air pollution in beijing, warning students to stay indoors between january 13 and 15. That is it from daybreak asia. Our market coverage continues with haidi lun next. A lot to cover. This is bloomberg. Is 12 00 p. M. Here in sydney and 9 00 a. M. In hong kong. This is Bloomberg Markets asia. Haidi asian stocks struggled to rebound despite gains from oil. Energy and retail are weighing down. Treasuries advance led by the long end of the curve. U. S. Bank earnings season muddied by tax changes and expectations of a trading slump. And clea