rippling -- spotify revealing plans for new listening options, for radio and podcast. ♪ yvonne: it is a showdown in the podcasting world. also a showdown in washington. we are going to be getting the vote. essentially we heard earlier today that the senate does not have enough votes to pass a continuing resolution. looks like we are closer to a government shutdown. i want to pull up this chart, which raises another issue. it i separates, but related to this continuing resolution vote. issue, which is the debt ceiling. that deadline is coming up. it is a bit of a moving target. expectations are we are going to hit that debt ceiling and need to lift it in march. that is being reflected in treasury markets, where traders t-billsing short-term due in march. yvonne: it's interesting you up, because there is difference between a shutdown anticrisis. we are only talking about -- there is a difference between a shutdown and a crisis. it could be limited depending how long a shutdown lasts. some nerves in the markets today, but some horsetrading going on. we expect some clarity in the next half hour or so. up, because there is betty: let's take a look at how the markets traded. there is really a psychological effect from all that is that -- all the news that weighed markets down. nasdaq pretty much going nowhere. apple shares trading up an inch after hundreds of billions of dollars being invested in the u.s. looks like a lower open for asia. yvonne: looks to be the case. in new zealand, flat for the kiwi. to australia, where sydney is getting underway. tot gdp surprise from china the upside. certainly is going to be a good catalyst here today. 80 four the aussie. policy yields buck -- 80 for the aussie. aussie yields on the uptick. the nikkei breached 24,000 this week. we get some upside perhaps. a strength close to breaking below that 111 handle. first word news with courtney collins. agreed to pay has $1 million to resolve a u.s. justice department investigation into the rigging of currency rates. a source tells bloomberg video includes a deferred prosecution -- the deal includes a deferred prosecution agreement. convction of the a former hsbc banker and charges against another. uber has completed its deal with softbank. the japanese conglomerate is now uber's top shareholder, after the group it leads bought $8 billion of stock in a discount. it includes the correction of extra board seats. softbank wants uber to focus on core markets, such as europe and australia. airbus has pulled back his superjumbo from the brink of collapse with the super order from the emirates. signing in order for 20 of the double attackers, with an option to buy 16 more. airbus says the deal will extend production of the superjumbo until 2029. and scientists believe man-made global warming caused 2017 to be one of the hottest years on record. even without pacific warming known as el niño. nasa and berkeley researchers ranked last year as only second to 2016, while the national and atmospheric administration record have beene second. global and atmospheric administration said it was the third warmest ever. both teams said the five hottest news -- on record have been this decade. 120al news powered by 120 journalists in 2700 countries. this is bloomberg. ♪ yvonne: now we look at the declining u.s. stock. telecom finishing higher, but real estate and auto stocks led the way. su keenan here with the latest. like it would be a resolution hand. this has taken a bit longer, so anxiety is rising. a close at the border, but not by much. a reversal from the bulls road on the the wednesday session. let's take a look at the road oe wednesday session. let's take a look at the market snapshot. bond yields rise to 2.6, which we have not seen any while, which might be tied to the fact that it was important this a verting -- fact that it was reported averting this shutdown would not come as early. a push for clean energy. the fund founder joining the board to push for a cleaner strategy. ge the lowest in six years. a pension nightmare the other day really hit the market heart. investors feeling. -- hit the market hard. investors reeling. buy a defenseg to company in brazil. quite a split in the defense company. while there was optimism in the stock, that has reversed in this latest session. let's talk about the dollar in this chart. when we talk about the undervalued dollar, we see weakness. undervalued dollar, we see weakness. which way is it going to go? we saw the euro exacerbate the weakness in the dollar. the shoot currency now no longer -- now -- now no longer cheap. the dollar has really come down in the last couple days. wn a littleme don bit as well. there will be focus on the in that is coming forward. betty: hsbc paid $100 million to end its rigging probe. su: it is a long-standing probe, and hsbc has been under a five-year deferred prosecution deal. they agreed to pay 500 million in a brooklyn court in this most recent session. it still has to be approved by a judge, but it would bring to an end hsbc's focus in this probe. it would lend the bank's help to the government in helping convict one of its former bankers. it would help fixed traders -- , oneconvict traders former trader already convicted as part of the deal. hsbc, since 2011 when these deals occurred, tightened controls on trading so that this would not happen again. we have not seen muchwe have not in any stocks, including hsbc. guilty, five to similar guilty to similar charges, although they were under anti-fraud. plus million 900 dollars. $100 million not as big of a hit. betty: ending a saga on the probe. the clock is ticking to prevent shutdown.nt does speaker paul ryan have the votes? our bloomberg congress editor joins us from d.c. good to see you. we are down to the wire. will the house be able to pass this short-term funding bill? joe: just a little while ago, the leader of the conservative group in the house threatening to withhold his votes came out to say he had an agreement with house speaker paul ryan to get their vote, the details of which are still being reported. it involves some measure to increase military pay and a couple other sweeteners they had been seeking. that may well clear the way for a close house vote to get this past. it is a very uncertain future in the senate, where democrats have enough votes to perhaps block it. betty: certainly a difficult position for the democrats, too. theythey have to basically decin whether to let the government shutdown or include daca into this bill. it, wouldocrats block that it, would that be a shutdown? joe: that would be the ultimate end, but there is still talking the senate about trying to of short-termpe bill that would keep the government running for a week while they hash out these few details. there is not a lot of appetite for it, but when faced wit the -- when faced with the prospect of shutting down the government, they may consider. it may have a ping-pong effect from the house and senate trying to pass a bill. they may work through the weekend trying to get this done. bill that would keep the government running for a week while they hash outtechnict on friday. if they are working on it, there is some leeway. we could be facing a shutdown next week if this all comes to pass. betty: i believe the longest shotgun we have had has been -- utdownutdown we have had has ben the 1990's. could this be a few days,could e we talking a few weeks? joe: probably a few days. a week, maybe more. two weeks -- the one in 2013 went on for 16 days. that would seem to be in the range we are talking about. the impact on the economy would be fairly minor, but it would also be a rather big political impact potentially for both parties heading into congressional elections in november. betty: thank you, bloomberg congress editor. shutdown the possible from a former clinton deputy chief of staff. yvonne: later on this hour, insight on the latest growth numbers out of beijing, with a top-rated forecaster for china's gdp. this is bloomberg. ♪ yvonne: this is "bloomberg daybreak: asia." i'm yvonne man in hong kong. betty: it is a nail-biter in capitol hill. lawmakers working on a spending plan to avoid a partial government shutdown, but the outcome is far from certain. we have heard senate lawmakers saying they do not have enough votes to pass this in the senate. joining us from washington is the ceo of relations at deputyies and former chief of staff to president bill clinton. chanced there is a 65% we will see a government shutdown. what do you say? >> is very fluid, very volatile. unfortunately the republicans have had some difficulty governing. they have not been able to pass an appropriations bill yet. i think this is the fourth extension that they are seeking. on their own.this they have to get something out of the house, and it's probably going to be unacceptable for the senate. it seems like whatever may come out of the senate, the republicans have a very difficult time with their freedom caucus to get it passed on their own. it has to be a bipartisan solution, and they haven't been able to achieve that yet with any major piece of legislation. betty: what do you think will have to happen for the democrats to get on board to pass this in the senate? >> the democrats -- the last go around, there were 18 democrats that helped republicans pass a short-term. what the democrats are looking for, what all of us are looking for is a comprehensive solution and th the appropriations, then what are already bipartisan agreements. there is some dispute that republicans and democrats want to see a daca fix. they want to see the child health insurance program passed. internal it is both political disputes that are happening within the republican party, as well as some challenges that the white house is presenting by not being clear about what it will accept. that all turned around today, with the child health care insurance program. yvonne: it did, karen. there are so much moving parts, hour by hour. being in the position you are in in the clinton white house, ian john kelly's shoes for instance, what would you say to president trump, who does not want a government shutdown? karen: the best advice -- during the clinton administration, we experienced a couple shutdowns. i worked with tucci's of staff -- two chiefs of staff, erskine bowles and john podesta. they did what they needed to get done, and they approached it is a bipartisan manner. these major pieces of legislation like appropriations bills do not get done unless you are talking to both sides of the aisle. the republicans were only able to get a major tax bill accomplished because they did it with reconciliation. if they had to do it with regular order, my bet is they wouldn't have gotten it done. the leadership in the republican party -- and this is not a partisan statement, democrats have done this as well -- you have to approach governing in a bipartisan manner. this is the only waits is going to get done. yvonne: how do democrats approach this gop? are they playing their cards right to the republicans, to the president? karen: what the democrats believe, and if you look at the history over the years when shutdowns happen, the party in control gets blamed for it. bloomberg, so this is a numbers game. republicans have 241 votes in the house, 51 votes in the senate. they should be able to cover with-- able to govern majorityt percentage. the american people are not stupid. they know who is in charge, and they expect the government to be operating. likewill lay the blame, when the democrats were in control, at the feet of the people in control. what democrats are being asked to do is help the republicans out of their own mess. they are rightly saying, we're yougoing to do that unless come to the table and do the people's work. i think that is the right call. yvonne: you have had decades of experience in international government. what do you think global leaders are engaging from this -- are gauging from this congress and what is going on at the moment? karen: in our international privileged tore be working with leaders from europe and latin america. frankly, the level of uncertainty that is apparent in our government right now, both to other governments as well to foreign investors in foreign companies, just does not sitto s well. recent reports not only about how americans feel about this dysfunction, but internationally. the leadership of the u.s. is diminishing. people are not looking at our government as having the study as -- having the steady hand it once had. that is not a partisan statement. during president bush's time in office, george herbert walker bush as well as george w. bush, certainly our allies look at us as having a much stronger influence and a much more steady hand. we were predictable. this disruptive and very states is ae united big unknown to the rest of the world, and not giving anyone comfort. yvonne: one final question before you go. there are democrats who criticized the republicans, if they do shutdown, it's their fault. they control all ofcriticized tf they do shutdown, it's their fault. they control all of washington, how could you not blame the republicans? on the other side, they would say thecriticized the republicaf they do shutdown, democrats areo tie the continuing resolution to daca. whywhy not get this funded, and why focus on these now? protections for dreamers do not expire until march. then tackle immigration? karen: i don't think we would be in this situation had president trump not changed the executive rights afforded to the dreamers. if not had not happened, we we would not be in this situation. the president was presented with a bipartisan consensus as to how to fix this problem. it's not that there is not a fix on the table. there is, and it is a bipartisan fix. there is no better time to get something done in a bipartisan way than now, and there is already an agreement out there. why not do it? because it should be done. yvonne: we will see how this plays out in the next hour or so. you can get a round of of the stories to get your day going on this edition of "bloomberg daybreak: asia." dayb in your terminal. you can customize your settings so you can get information on the news and industries that you care about. this is bloomberg. ♪ betty: this is "bloomberg daybreak: asia." yvonne: a quick check of the latest business flash headlines. ibm finally broken its 20 two quarter street of declining revenue -- 22 quarter street of declining revenue. sales in the fourth quarter $22.5 billion.to ibm session it took a one time charge of $1.5 billion after a new u.s. tax law that weighed on profits. betty: rebuilding capital after the u.s. tax changes. fourth-quarter adjusted eps beat estimates. it's 2018 profit forecast of six dollars and $.90 to $7.30 per share missed analyst expectations. amex says it will allow it to invest up to $2 million more than it claimed in a -- than it planned in a new initiative. shoottify planning to spotlight -- the mov helps cut ofe ahead of profitability its new york stock exchange listing. up next, a look at wall street's winners and losers as we assess earnings. this is bloomberg. ♪ ahead of retail. under pressure like never before. and it's connected technology that's moving companies forward fast. e-commerce. real time inventory. virtual changing rooms. that's 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: 7:30 a.m. in hong kong, dreary with showers as we cast the end of the trading week. happy friday, by the way. 30 minutes away from asia's first market open. yvonne: 6:30 p.m. thursday in new york. pretty: today. markets also pretty chilly for the bulls. indexeslower, all three in the red. yvonne: you are watching "bloomberg daybreak: asia." word newsto the first with courtney collins. cort? courtney: senate democrats say they have the votes to block a funding bill and force progress on negotiations in the grammati -- negotiations on integration. temporary government funding midnight friday. and the house and senate must midnight friday. and the house and senate must pass a temporary extension to avoid a partial shutdown. speaker ryan: i have confidence this, because members understand, why on earth would we want to have the government shutdown? the sequester on the military starts kicking this, because in in due time. that is not in anyone's interest. courtney: u.s. taxpayers may end up footing the bill for a satellite lost by elon musk's spacex. a rocket crashed into the ocean earlier this month. industry experts don't think spacex or northrop grumman will foot the cost because they have government contracts that minute their liability. -- limit their liability. a winter storm crossing the netherlands and belgium. the storm brought wind gusts of up to 140 kilometers per hour, ripping rooftops off homes, and disrupting air travel and rail transport. airport,dam's terminals were damaged. zimbabwe's new president says he has a plan to revive one of the worst-performings worst-performings economies and end its isolation. he says he will pay compensation washey farmers whose land confiscated, sell bonds to infrastructure, was confiscated, sell bonds to infrastructure, and hold internationally acceptable elections. he was a key figure in the government that oversaw an economy that halved in size since 2000. >> we have committed ourselves to begin addressing and paying our debts. once we go so, i have no doubt in our dialogue with institutions, they will begin to lend their support to this country. courtney: global news 24 hours a day powered by 2700 journalists and analysts in more than 120 countries. i'm courtney collins. this is bloomberg. ♪ yvonne: coming down to the market open in tokyo and seoul. new zealand and australian rket trading 100 -- market treading water. strong gdp data coming out of china. will that be a strong catalyst? >> the chinese economy cruising along. basing acks are mixed start after u.s. stocks traded sideways overnight. we don't have much else perhaps to sway market sentiment. market activity humming along in china. urbanization increasing sparked a rise in base metals. that is not translating smoothly when it comes to minors in sydney's. -- comes to miners in sydney. lithium miners sliding. this after morgan stanley flagged downside risk, forecasting the battery of raw material could fall faster than expected. to snap acks are set three-day decline. seoul seoul -- ew and .utures in tokyo and seoul yvonne: japanese investors have been jumping on the idea that boj will normalize policy at some point. not everyone is buying into this idea. >> not everyone buying the idea of a policy exit. market seems the to be getting ahead of itself, as you can see on the terminal. that has pushed up 10 year yields away from zero. one view that japan's stock market has pricing normalization. thanks stocks suggesting -- depicting twhite opics, banks. nikko will make it less likely that boj action will strengthen the yen. jumpy, despite boj watchers saying we want not see a normalization -- we will not see a normalization this year. in the meantime let's focus on oil. opec increasing its output for crude production in a second month. in the meantime let's bloomberg's power in renewables reporter is tracking all of this action. opec's outlook for the u.s. seems to contradict anbloomber'a report. who is right? >> hi, thanks for having me. that is an interesting question. you would think a massive stockpile draw -- we are talking 4 million barrels completely wiped out -- would be super bullish for the market. on a day like this where you had that opec report, it's just a downhill ride for oil prices. it's not very contradictory. the eia report, while it showed a big stockpile draw, showed last week there was a huge rebound in u.s. oil production. it corroborates this idea that u.s. oil production is headed upwards. the market reaction to that is, let's not get excited. you saw the oil market drop but a few pennies. you will continue to see this muted reaction until there is more certainty over where oil production in the u.s. is headed. betty: this tells you they are perhaps getting uncomfortable with oil prices at this level. the eia is due to release its own report friday. what can we expect that agency to say about oil supplies? >> luckily for you we had an exclusive interview with the head of eia yesterday. they suggested they might be revising upwards hteir projection for u.s. oil. the projections they already have out calls for an increase a day inllion barrels 2018, for u.s. oil liquids production. anything the on that would top 1.1 million. on the flip side of that, he suggested they might revise downward oil production. betty: same that we heard from opec. this weekend, opec and russia are due to meet for their strategy clearing this oil glut. >> without a doubt the recent oil rally will be on their minds. $70 a barrel, even $65 a barrel, you will have u.s. explorers -- u.s. tapping more oil wells. even u.s. oil drillers are concerned about that. we had an exclusive interview with conoco phillips ceo, a great story on the terminal. he is worried that his fellow pourers will go out and more supplies into the market, and potentially over correct. he said something along the lines to us, you give emp's a bunch of money, and they're going to spend it. that will weigh on any discussions opec has, and any decisions they may make to maintain the cuts they have previously agreed-upon, or to cancel the cuts ahead of schedule. betty: thank you, joining us from san francisco. we will take a more in-depth look at the wheel in the next hour on "bloomberg daybreak: asia." hour.k at oil in the next a conversation with neil beve ridge 7:40 p.m. new york. went right and what went wrong. morgan stanley was the last to add its numbers to the pile, beating the expectations on raising and returning equities. investors boosted share price to add its numbers to the since 20. we have the bloomberg charts you need to know. >> you are saying, finally over. i kind of feel that way. [laughter] it is the same story for morgan stanley. this is my first bloomberg terminal chart. th same storye all week. -- the same story all week. fixed revenue trading fell. the estimated number was supposed to be $1 billion. you can also see it is at its lowest since december 2015. that said, there is hope with tax reform. we see that hope take presence with the share price. it has doubled in value, $25 to $50 here. let me give you a comparison in order to show you how that stands with the other banks we have reported. morgan stanley is here. this you can see is the second worst fall. goldman sachs fell by 60%. j.p. morgan and citigroup somewhere in the middle. bank of america was the shallowest of the falls, -14%. you can see how that goes. is hope going forward this may pull back in the second and third quarter of 2018. follow me to this side of the screen. we're taking a look at this beautiful colorful picture of revenue on the top, and earnings per share on the bottom. you want to look at the fourth quarter. the red bar represents morgan stanley, up by 10.8% in terms of growth year on year. that is good when you compare it to the rest. citibank up 1.4%. goldman sachs up. looking at earnings pergoldman , yellow line represents jp morgan earning per share. citibank in purple is down the share,y $7 looking at the comparisonthat'ss .15. wraps up. to my third bloomberg terminal chart, we are talking about cost cuts. banks were under pressure to try to do that. they did that by eliminating jobs. the last time we saw was june in 2016. this is trying to get to the heart of those cost cuts. looking ahead, they still might have to do that. we reported that brian moynihan over and bank of america still has $1.7 billion to get to his $53 billion target. my last chart here. i will show you where we stand in terms of tax rates for 2018 and beyond. this is the hope for banks. taking a look at j.p. morgan and wells fargo. those have the lowest corporate tax rate. falling fromare 27% -- a hope for banks t increasedo -- for banks fallingm to increase capital growth outlooks, and to forgive and forget the fourth quarter. betty: we've got some breaking lines coming through. the wall street journal reporting the white house is said to be considering john williams for the fed number two job. john williams is the san francisco fed president. pretty interesting. we have not heard him in the mix. mix. we had reports that the white house was considering richard from pimco. he was ruled out earlier. this may be the status quo, having john williams at the head alongside jay powell, taking the head of the fed replacing janet yellen. we will continue to look at this and get you more details as soon as it comes through. coming up, china accelerate's the second engine room. growth is speeding up since 2010. a look at the impact on markets and economies next. this is bloomberg. ♪ a look at the betty: good morning. this is "bloomberg daybreak: asia." yvonne: the rate of economic growth in china sped up last year for the first time since 2010. the expansion of 6.9% exceeding economist estimates. our next guest says you can't take the figures at face value. joining us from singapore is chinese economist at capital economist asia. thanks so much for joining us. these numbers may look rosier than you think, according to the numbers you are crunching. what is missing in this picture? >> the reality is that the real growth rates in china have been implausibly stable over the past four or five years. the statistics bureau saying growth has barely changed during that period. if you look anywhere else, including our own growth estimates, you will see a much more volatile trajectory. there has been a big improvement last year on our figures. we went from 5% closer to 6%, which is a big improvement than the official figures show, which rise.y a 0.2% investors have to look to the official figures and other indicators to see how the economy is performing. q4are seeing a slowdown in despite stability on the official figures. from 6%growth falling in from 6% in q3 to 5.3% in q4. quite a bit of a slowdown expect that to continue into this year given the headwinds to growth. betty: tell me something about too -- i have this chart here. you see this striking disparity between the headline growth numbers coming out of china, and nominal growth, which is a crucial point for leveraging. that is down a bit, but we are still talking double-digit at 11%. do you overlook this as well, or does this eliminate the inflation risk to pick up the pace on leveraging this year? think the nominal figures are much more reliable. i think a lot of the distortions happen when they calculate the deflator, and that is how they massage the real growth rates, which is what they are targeting. certainly there has been a big pickup in inflation in china, particularly producer price inflation. you can see that in the earnings growth, particularly in industrial firms. one of the issues going forward, inot of that increase inflation is commodity prices continuededicated on strong growth in china, which we don't think will be sustained. price inodity prices the slowdown we are predicting unit china, then -- we are predicting in china, then you have that inflationary boost saving. betty: you talk about how the share prices of chinese developers, just the housing boom reflected. how chinesehows you real estate developers and price in theowners, that index acceleratg over the past several quarters. housing prices, and new home prices continue to rise in several of the major cities. here?re a warning sign if you look at some of the stocks, analysts saying this could be a repeat when investors saw share prices fall dramatically. is there something in house prices we are not looking at, despite yesterday's report? julian: i think prices have gone too far. if you look at sales growth, it has slowed a lot. regulators putting more restrictions on mortgage growth. mortgage stifling significantly. we had a few strong years of sales growth, but that is being by by demand, not underlying stapleton and. -underlying- stable demand. the underlying stapleton and indicators are looking pretty weak. sales we have seen in recent years -- a lot of the assumptions we have seen in share price is that growth will continue, and i am skeptical that it will. betty: thank you so much, china economist joining us on the china gsp numbers. with its new radio and podcast offerings, spotify going head to head with apple and itunes. whether it is ready to scoop the tech giant in talk. this is bloomberg. ♪ yvonne: spotify preparing for its unusual ipo. it is working on its way to lure listeners away from radio and apple into the podcast space. the new initiative is called spotlight. we are joined by lucas shaw in l.a. hearing this news, it made me wonder what took them so long. lucas: they have tried to create other types of music for other years. they have funded original series. they have tried hosting some podcasts and spoken word and other audio, but they have not had a way to present it to their users. a lot of the people that made video series for spotify felt like they were lost. they don't know windows video series went up. this is the newest concerted effort to bring radio and audio, providing news and in audio form. yvonne: really quickly -- apple, itunes, they have such a big first mover advantage, don't they? toas: apple accounts for 50% 60% of all podcast listening. it is the default partner these companies look to for help. however spotify has already outmaneuvered apple for on demand music streaming. and it has a huge audience, more than 70 million of whom pay for it to listen to audio. there is reason to believe they could convince some of those people to listen to podcast and news as well as music. yvonne: lucas, thank you from liveberg news joining us from l.a. we want to recap some of the lines we have just gotten. the white house is considering john williams, the san francisco fed president, for the job of number two two work alongside jay powell. williams respected in the monetary policy world. live from l.a. we want tohe has been seen as ay of janet yellen before. there have been indications in the past year where he has taken controversial positions when it comes to monetary policy. it will be interesting to how he works alongside powell this year. betty: that is right. certainly that has been an ongoing piece of news we have been waiting for, who is going to fill this number two job. we are watching what is going on in washington and the house. they are in recess right now, but getting ready to start to vote. resolution on item number three they will be voting on tonight. we saw president trump on his twitter feed as usual, tweeting out "so important for our country. our military needs it." calling on members of the .reedom caucus to back the bill they seem to be doing so, but the senate needs to come on board. we will talk about this. this is bloomberg. ♪ 8:00 a.m. in hong kong. welcome to "daybreak asia are co- -- "daybreak asia." trump says the house must pass a bill to avoid a government shutdown. and behind the growth spurt. i am betty lou in new york. it is after 7:00 p.m. on this thursday. slashing taxes on goods from drinking water to diamonds. south -- asatching it completes an investment in newburgh. the countdown begins. before the expiration date for the government shutdown. live pictures out of d.c. we are expecting some sort of decision or vote from the house. the house is in recess but we are expecting various bills to start. the stopgap measure, number three on the list. we could be getting something from the house. doesn't mean much if the senate democrats do not get on board. it just means we are going to face a shutdown. friday, midnight is the deadline. or we will see parts of the government closed. johnd headlines about williams being named the number two person at the fed. a lot of news that has broken. let's get to first word news with courtney collins. has completed its deal with softbank. the japanese conglomerate is now uber's top shareholder. the deal includes the creation of extra board seats. they are urging uber to focus on core markets. flagships pulled its superjumbo back from the rink of collapse with a $16 billion order with emirates. it is the first order for the a3 80 in more than two years. scientists believe man-made global warming caused 2017 to be one of the hottest years on record. even without the pacific warming known as el niño. researchers ranked 2017 second only to 2016. both teams say the five hottest years on record have all been this decade. amazon has revealed a short list of locations for its proposed second headquarters. it is not exactly short career 20 cities are in york,tion including new l.a., denver, with toronto the canadian hopeful. the list was whittled down from many more applications. decisionans to make a this year. global news, 24 hours a day. i am courtney collins. this is bloomberg. thank you. let's look at the market open in asia. a little bit in the green. over whetherers congress can really continue to fund the government past friday. let's look at the opening. oulwe are seeing gains in se and tokyo. we are keeping an eye on chips shocks -- chip stocks. the bank of korea, the governor spoke of hard behavior with the currency's rise. the nikkei 225, they are holding a two day drive. the yen edging higher . amid concerns of the u.s. government shutdown. the trust bank says the a downsidecould have below 110 depending on two-year treasury yields in the u.s.. there has been a diminishing correlation between me yen and treasury yields. we have tech and financial leading gains, financial the topics, they have gained almost 5% this month. this represents the market largely pricing in expectations the boj could normalize policy this year. discussing, the watchers are not anticipating this move. let's look at the wider moves in the market. new zealand stocks waning. the kiwi, back around the 73 handle. the currencies among the most expensive in the world. lithium miners in the spotlight. the aussie dollar, that is back. recovering from yesterday's blitz. heading for a sixth week of gains. struggle to maintain that momentum after being burned at the 80 handle. yvonne: thank you so much. watching the australia share markets. the clock is ticking on capitol hill. closely,tching this preventing the government shutdown. the house is going to vote on a short-term spending measure. let's get more with derek wall bank. -- derek in washington. >> as of about 10 minutes ago, they got remarkably better for house republicans. the freedom caucus came out and you firststatement saw on bloomberg, they were going to back the bill. it looks like they may have the votes. this is going to be the third in the voting series. you can expect the vote coming up in the next 15 or 20 minutes. house.s better senate, republicans are short of what they need. they are going to need 60 votes at some point. they have 51 and do not even have a majority of among themselves. in terms of where we are, we are no closer than we were. it certainly does not move the ball forward. even if it does pass, the senate does not have enough votes to pass it, what has to happen? cave.eone has to one of the things we are trying to figure out is what the ask is going to be. what the fallbacks are going to be. to should look for people talk about whether there is momentum for something that is a stopgap kind of measure. lawmakers talk about something in the neighborhood of five days. we are not really quite sure that is going to solve anything. wet would be movement to say are going to try to do something to prevent a shutdown at midnight tomorrow. short --his is the kforce short-term spending bill of the fiscal year. the white house has to be disappointed they keep kicking the can down the road. >> washington loves sequels. we don't really have a great idea how to solve this stuff long-term. there is a lot of division. one of the problems you have come of this spending did eight -- debate has started to encompass a lot of rings that are not the spending bill. eventually, you end up with a road full of cans. you are talking about a children's health insurance bill. you are talking about immigration. a programent ended for young undocumented immigrants brought to the u.s. and said, we will kick that down the road. people are asking a lot of this. they want a lot of their priorities. a lot of lawmakers think they have leverage. they think they have leverage because they do have leverage. republicans have spent the better part of today trying to an oculi their membership and blame democrats. it is really- going to be hard to see how that narrative takes shape. thank you, joining us live from d.c.. that shop gap measure, could happen any minute. economy, 6.9% last year. it was a shot in the arm for the global economy. talk to our china correspondent from beijing. speaking to our guest, saying you can't take these numbers at face value. what are the key headlines? >> that is a valid point. the the takeaway, you got this forecast beating 6.9%. credit expansion has been slowing. the regulators have been tightening the screws. bloomberg economics have pointed it ticked upo, to 264%. ratio betweento a 2015 and 2016. we have seen a continuation of this rebalancing. and then you have nominal growth. that helped the corporate in terms of their profitability. we have a chart that shows the nominal growth picture. versus the white line. it shows this big pickup in nominal growth. lot, but you are right to point out, there is skepticism around the data itself. ofing we have had a couple provinces coming out and admitting they have made up some of their data. 6%s strange level between and 7% growth. that has raised some eyebrows. what about the signs china is getting more bang for its credit buck? >> that is seen as another positive. bloomberg economics saying for every $.30 spent to get a dollar worth of growth in 2016, that is how much you need to spend. $.28 in come down to 2017. it seems there is a more efficient allocation of capital. coalgan as well, saying and steel, you saw profitability improve. that suggests they are becoming a little more nuanced about how capital.cate their the question is whether if the picture starts to sour, the policymakers and state owned enterprises revert to that state growth. one risk, flagged by many economists, is a deterioration of u.s. china trade ties. betty: thank you so much. a deeper dive into those numbers. how much longer can the oil rally last? we are looking ahead to this weekend's opec meeting. strategistchief asia is in the studio. why he has a sense of déjà vu. this is "bloomberg." ♪ "daybreak asia are co- asia."break betty: morgan stanley thinks early performance trends are not reliable predictors or full-year markets. it could look like the year 2000 where things started well but ended badly. joining us now is jonathan gardner. that emerging markets equity strategist. stocks roar these out of the gates. in the developed and developing markets. what are the signals you are seeing where you do see a repeat of history? the parallels are your re-. central banks are tightening. that has begun in the u.s.. theare covering how good china macro has been but inflation is picking up. commodity prices on the rise. that combination, that will eat profits. we have a situation where a valuations are exceptionally high. valuations that are 95th percentile or higher of the long run history. you are describing this, is this just an emerging markets scenario? are we talking about u.s. markets as well? >> there are very few places in the world where we have not targets.our base hang seng, 31,000. we are moving from the central scenario into more of all bullish state of euphoria. an end ofypical of the cycle situation. large return investor inflows. that will not continue. some say if you track these movements in stocks, that is an indicator for economies as a whole. what we found in 2000 after the dotcom crash come all we had was recession. is that going to be the same as well as? -- as well? >> i don't think it was really caused by the stock market declines of 2000, but there are problems starting to appear. if you look at the high-yield part of the credit market, we have recommended going under that. one thing we are interested in is the fact that the semi conductor sector has stopped outperforming. effort to rotate into upstream energy. ongoing,s that are that is a classic end of the cycle phenomena. hasn't a lot changed since 2000? of 3%? rate was north a lot of people like you are really watching as the monetary conditions -- it seems like they peaked last year. they have not really moved too much and that regard. china is the largest part of the index. they are starting to roll back down. if you look at monetary conditions, the way we look at it, a simple relationship of industrial production and ppp inflation, they are not yet into a tightening mode. if we get it running north of 4% and inflation begins to pick up, then you are moving to the kind of tightening china is doing. 2008, a spectacularly bad year. i want to get your take on japan. they are eight certain. it seems like a lot of it has been the bond market. what is going to be the effect? do boj has going to have to some sort of unlimited fix, that is going to lead to, or they are not going to do so? >> i think they are a more extreme example. the cyclical sectors have heavy weighting in the hardware sector. we think the yen will strengthen against the dollar. that has already begun. it may also taper the purchase program. you are expecting that is going to happen. >> yes, we do. central banks are looking at economies in good shape right now. with wage inflation and commodity price inflation, they have to tighten. the cycle reasserts itself. sending alarm bells i guess. thank you. joining us from morgan stanley. the chief asia strategist. you can watch us live and also catch up on past interviews. bloombergr subscribers only. this is bloomberg. ♪ a quick check at the latest business flash highlights. sales in the fourth quarter increased 3.6%. ibm says it took a one time the new tax law. american express will suspend its repurchase program to rebuild capital. adjustments beat estimates. forecast of missed expectations. they say the tax code will allow it to invest $200 million, more than planned in growth initiatives. morgan stanley fourth quarter profits beat estimates. these climbed to a record. offset a drop in fixed income revenue. they are securing bitcoin futures. hpsc is said to have paid $100 million to solve an issue regarding rigging currency. the investigation has already led to the conviction of one former banker and charges against another. coming up next, india looks to tax cuts to hurt -- help businesses hurt by the chaotic rollout. this is bloomberg. ♪ retail. under pressure like never before. and it's connected technology that's moving companies forward fast. e-commerce. real time inventory. virtual changing rooms. that's 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. 8:30 in singapore. betty: i am betty liu. you are watching "daybreak asia." courtney: president trump has urged the house to pass a temporary government funding bill. conservatives in the house freedom caucus say they will support the measure. must pass a temporary extension. why oners understand earth we would want to have a government shutdown hurt the military. that is not in any one's interest. courtney: a powerful winter storm has killed at least six people. wind gusts, destructing road, rail, and air transport. --dreds of people were flights were canceled. yays hee's new president since has a plan to revive one of the performing at economies. he will hold internationally acceptable elections. he was a key figure in a government that oversaw an economy half its size since 2000. >> we have committed ourselves to address pain our debts. courtney: and the new zealand prime minister says she is expecting a baby in june. she says she and her partner are expand their team will from two to three. stay-at-homeill be dad" first man of fishing -- dad and quote first man of fishing. i am courtney collins. betty: you are looking at live it sure is where the house is beginning voting on the stop gap funding measure. is going to take about five minutes or so for this voting to take place. by all accounts, within the last hour, couple hours, has been looking better for republicans. of the from some preliminary stories, articles, it looks like this bill is going to pass the house. the senate looking like a tough first log. what is really going to have to happen, someone is going to have to cave in by tomorrow. yvonne: we got guidance that the senate is going to hold a test vote that could kill the stopgap measure. we will get to this later. the house bill under way. in the meantime, let's get a check of markets. sophie: we are keeping a close eye on the u.s. 10 year yield, above 2.6%. watching me dollar-yen -- the dollar-yen. jumps u.s. 10 year yield above 2.6%. there could be further downside. moving towards the 2014 high. for now, the support is seen at a low. with the dollar on the defensive, that is hoping to push currencies higher. the offshore yuan, trading at a 2015 hi. below --n won hovering the ringgit up. the best-performing currency in asian. stoodtwo central banks pat, we have malaysia up to that next week. stocks looking mixed across the region. the nikkei halting a two-day drop. asx 200, being dragged a lower by real estate. pressure,ners, under after morgan stanley came out with a report, falling almost 9%. report that a chemical company, climbing in tokyo. thank you so much. a new headline out to read the house does indeed have the votes to pass the stopgap funding bill. remaining was about 50 seconds in that five minute time when they were voting. votingse republicans yea. them, excuse me, one has voted yes for this. it looks like the house has votes to pass this. yvonne: the freedom caucus, they were able to win some concessions. it is likely that the measure is going to be blocked in the senate. there are stopgap measures they could pass. the finalwill get tally in a moment. the indian government sent markets as itgh unexpectedly cut taxes on goods and services. kathleen hays here with more. breaking news as well in the last hour about john williams of the san francisco fed may be being the number two at the fed. a lot of there are names mentioned. john williams of course is on the list. assucceeded johnette yellen resident of the san francisco fed in 2011. he became director of research at the san francisco fed in 2002. what is most important about john williams, the fact that jay powell is the first fed chair in three decades not to have a phd in economics. john does. he is a respected theorist and monetary economics. he is on board with rate hikes. somebody talking about changing the inflation target to something broader. will that be dovish? we don't know. signal for the bears. anything that has to do with the fed, very important to the markets. we are getting the final headline the u.s. has in past the stopgap measure. they are going to send it to the senate. corrallingnell, democrats over to pass this. let's get to india. what is the latest? kathleen: they are slashing taxes. forill always be remembered demonetization, the impact of hidden cash. they are trying to make everything more efficient. finance ministers decided to make some changes. revising rates. i want to give you an example of the kinds of things, so you understand. diamonds will be down to a quarter percent. better make it easier to buy them. 5%, a tax being imposed. you a sense of the kinds of things they are dealing with. consideringalso taxing items like gasoline. this may reduce government revenues. at a time when people are worried about the deficit and hoping the government can ring it down. by more are being hit deficits. just to show you what bonds have done. inflation has been moving up. security saying, if there are problems with the deficit, they could push it up. be a step, there may to allow foreign investors to invest more in india's banks. that remains to be seen. yvonne: thank you. , why the opec russia deal may face an unusual problem -- up next, why the opec russia deal may face an unusual problem. ♪ "daybreak asia." oily: china's crude production may be set to extend its slide. our asia editor joins us. when does this trend of more gas and less oil start? seeing is the slow of the oil cycle. these started sliding companies started cutting back on their spending. we started seeing this collapse in oil in china. they are the biggest producer in asia. the world's largest importer. what the chinese come he started doing, they started cutting back on spending in fields they thought had no hope of making a profit. saw production start to fall. time, china was going through this process of trying to switch away from coal. the government encouraged producers to focus more on gas. last year, they started switching over from coal to natural gas. theyed that demand, shifted a lot of money over toward that few will. -- fuel. what are we expecting, now that we are seeing it in the $70 a barrel range? exactly. it is the sort of thing you would expect. you see oil coming back up. they have older fields. you thought nothing would really happen. again, their production is harder to get back up online. they are still focusing on natural gas. a lot of that is still being focused toward the natural gas market. not a lot of optimism. bmi research says they will see a 4% slide. producer, theyst are probably the most bullish. they see a 2.2% increase. what you mights see. gas, we are expecting an increase. probably another 8%. yvonne: thank you. joining us live from singapore. gas consumption is expected to rise 15% in the next year. let's bring in the senior oil and gas producer. they are switching to gas. is this more of a sideshow? >> oil is all about demand. what is going to be critical is global demand growth. china still the leader for global demand. last year, we saw oil demand increased by about 500,000 barrels a day. we think growth will moderate. slightly weaker gdp. we are expecting growth around 3.5%-4%. it will be a critical factor. we were talking about how sustainable these levels are. we have heard him opec -- heard from opec. sayingical phillips ceo they are scared rivals will start drilling again. forhere a case to be made opec not to exit this deal? deal in december this year, the countries have a the deal iniew vienna. if prices got ahead of it really will start to raise questions about whether or not opec should step in. the u.s. production will come back online. aramco is listing at the end of the year. from the saudi perspective, there is no real reason to cut. yvonne: could there be a lag on -- the >> we are thinking production could increase by 300,000-400,000 a day. levels,t up to the 80 that really would comfortably exceed demand and start to put downward pressure on prices. the more shale is going to come back, rebounding the market. yvonne: while we are talking about more production, coming you weremarket, talking with our early reporter about this. saying there is going to be a significant draw out of cushing. how do you reconcile these? >> if you look at what is driving crude prices, it is two things. inventory draws we are seeing. the market is very clearly undersupplied. we think there was about one million barrels undersupplied. in the backward and forward contracts. infantry draws we are still seeing in the market. higher prices will attract capital back into north american shale. what you will see is supply starting to increase that will supply anding global demand back into balance. we think it is likely we are going to see inventory draws. higher prices will ultimately bring the market back into balance again. yvonne: thank you. coming up next, reforming uber. the changes the company will need to make after completing its deal with softbank. ♪ is "daybreak asia." uber has completed its deal with softbank conglomerate is now the top shareholder. let's get to bloomberg news's tech reporter joining us live from tokyo. tell us about the changes expected in tokyo now that the deal is done. >> good morning. it will come in the form -- probably the biggest impact will come in the form of an expanded board. softbank will have two of those seats. influencing decision-making going forward. another big difference is the deal eliminates this two tier voting structure. in a way, it is kind of the end of an era under the former ceo and founder, travis kalanick. if you have time, you should we read theou should businessweek cover story about how chaotic things have been under his rule. towill also put an end internal strife that has handicapped the company, ending the lawsuit by benchmark capital, one of their biggest lender's. betty: that is a fascinating read. tell us what uber is going to do with this money. exactlyis not cash-strapped but there is plenty of ways they can use the money. they have been on an amazing tear. everybody knows they are dominant in the u.s., but they can be found in many places. going into the self driving car market. $1.25 billion will not be wasted, that is for sure. yvonne: thank you. just a recap, what we have seen house passing.s. the stopgap government funding measure. it wasn't a huge surprise. the freedom caucus did lend their support this bill. republicans were able to pass this bill without much democratic support. betty: they passed it to 30-197. -- 230-197. it does kick the can over to the leaderfor house majority mitch mcconnell to corral his a dozenans and about senate democrats to cross the line to push the bill through. the senate may in fact hold a test vote on the floor tonight. if they do, that could kill the stopgap bill. it looks like they may hold a test vote on the floor tonight. 24 hours untilut we find out whether the government is going to shut down on friday at midnight. even if it does, we are not likely to see this happen for more than perhaps a few weeks is the guidance we are getting. yvonne: the republicans need at least a dozen democratic votes to get this vote through the senate. going to have more on "bloomberg markets." at least 10 of 18 democrats we have seen so far have said they will vote or a temporary funding in december. they have announced their opposition. ♪ >> is 12:00. this is bloomberg markets: asia. ♪ haidi: the house passes a bill to keep the u.s. government for shutting down. getting behind china's gdp growth, morgan stanley sees the growth for efficiency. opec raises the forecast for u.s. crude output ahead of the meeting to consider its own terms.

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