The imf has significantly upgraded its growth forecast for the regions biggest economy. Thrilled. Netflix is they smashed subscription estimates. It is a 00 a. M. Across the emirates, this is Bloomberg Markets middle east, i am yousef gamal eldin. U. S. Government shutdown did not last long, but it raises more fundamental issues. Entingt is not doing is d sentiment in asian equities. Assignment to the bloomberg. Equity indices across the board for the most part are higher. And asx 200 of two quarters 1 , also big moves in the nikkei, up. Too big stocks to watch out for, macau, and onwynn the other side, Lg Electronics underperforming after Donald Trumps tariffs. We have a u. S. Dollar that is relatively unchanged. This is still close to its lowest level since january 2015. Dollaryen is one to watch out for. It moved 3 10 of 1 lower after the boj statement. You look at one day volatility, its highest since september. A bit of a correction in the space, there are concerns there is a lot of iron ore supply and it is overdone. Across the board, lets see what is happening with wti, and climbed to 64 per barrel since opec and russia said they will not be any changes anytime soon. Gold higher, a fifth of 1 . U. S. 10 year relatively and the cable trade as well, making sure it is able to defend the 9 10 of 1 it aint the last session. That check in with the first word headlines. The bank of japan has left policy unchanged, as was expected from observers resurveyed. The board voted 81 to maintain strategy, saying expectations should be unchanged. Policymakers are raising their outlook on price raises price rises. Some investors are reading the a finetuning of Monetary Policy could be in the cards. The imf has raised its Global Growth forecast for this year and next, saying a sweeping u. S. Tax cuts are likely to boost investment. Of 3. 9 in 2018 and 2019, they are warning policymakers to be prepared for a new recession. Christine lagarde is saying many threats remain. The scars from the crisis, the low productivity, the aging population, and on and on, and future potential growth, all of that will continue to wait on mediumterm prospects. Debra meanwhile, the imf has boosted expectations for saudi arabia. It is extending 1. 6 this year up from a previous forecast of 0. 5 . The fund reckons growth will then decelerate to 2. 2 to 0. 2 is the kingdoms helped by oil prices. Process in the Israeli Parliament as the u. S. Confirms it will move its embassy to jerusalem before the end of last year. Several people were removed for heckling Vice President pence. Or up with years to recognize a palestinian state and become a sponsor for middle east diplomacy. Global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. I am debra mao. This is bloomberg. Yousef thank you, lets go back to the story in the u. S. Where President Trump had find a bill to end the Government Shutdown. Capping off and nearly three day deadlock and reinstating funds until february. It moves the the dreamers deal is unresolved for at least three weeks. We have the latest on this from jodi schneider. Essentially, it has been delayed until early another round of february. Proverbial can has been kicked down the road again, this is the fourth shortterm extension of government funding since the new u. S. Fiscal year begin. Began. People think there will be a fifth because in three weeks it will be difficult for them to settle the longer term and Bigger Picture spending issues like how much to allocate for domestic programs versus military funding. They have not even gone to that yet. The other question is, how are they going to settle and are they going to settle the immigration question, which led to the shutdown in a just three weeks time . The democrats got a promise from Senate Majority leader that he would address the issue, a did not get a promise on a vote, and they got no such assurances from the house of representatives or the white house. Yousef there was a lot of speculation that as President Donald Trump begins to prepare his arrival to davos, how he would set the tone in his speech to the world. Now with the budget situation out of the way, he has also made another move to really get more attention, hasnt he . Now on tariffs, very controversial. Jodi that is right. Just before he goes to davos, he basically took advantage of a u. S. Trade law called section 201 the basically gives the president why discretion to set tariffs when there is a belief that there is an unfair trade practice going on by a foreign country, and the Trump Administration, both as president and on the campaign trail, has campaigned on this issue. He has not really done much any meaningful sense in terms of instituting trade barriers or tariffs, but now he has. Looks like were talking about tariffs up to 32 on solar equipment, including solar panels, and up to 50 on washing machines from Foreign Countries that the u. S. Deems as engaging in unfair trade practices. What is interesting, much of this is aimed at china, of course on the solar side, it also is affecting some u. S. Allies like south korea, which makes washing machines. T is really interesting it is going to affect largely china, but also others, and he is doing this just before he is going to be on the world stage with these leaders. It is a very interesting timing. He is also doing it in a u. S. Election year, and this is a play to the base. Yousef seems to be keeping people on edge. Thank you for stopping by, jodi schneider. Guest, heg in our joins us out of singapore. As you see the breakthrough or temporary breakthrough in government conversations, how concerned are you about a longerterm damage from these gridlock in governing . The gridlock basically reflects ongoing [indiscernible] andin the white house, obviously the senate and congress. That thisreally is time around is a question of spending, where you put your money come out what you spend your money on, but you eventually get to the point of what you are voting for, if the debt filling will lead to a shutdown. In 2013, there was a shutdown and the government knew how to get around the issue of the debt ceiling. Congressption is that will eventually get together to come up with a solution. Thatlatest event shows there is a clear way to get , the fightissue within congressional members is so stuck they could not actually get to a consensus decision. It actually means the could still be issues Going Forward in terms of spending and the debt ceiling. Yousef i want to get your take is well on what is happening with the u. S. 10 year paper, but lets hear from Larry Summers about what he thinks about the current level of yields. Larry if markets become more alarmed, treasuries are where they go. As many as confident observers that yields are going to rise sharply from here. Yousef do you agree or disagree with Larry Summers that yields are pretty much going to state range bound for the foreseeable future . Yes, the risk of antitrade policy from the Trump Administration is one, the risk of Government Shutdown is the other. Those two factors basically mean that it is elevated and the demand for treasuries are high. Thats exactly what he was alluding to. But that would suppress yield. For me, i think there is a bigger [indiscernible] 2. 65 ,ields have risen the highest since 2013, 2014. That flow is to move away from u. S. Treasuries into other assets as Global Growth improves , as well as the tax reform, it clearly will boost the economy through the fact that it is not revenue neutral. Mean you should expect higher growth and higher inflation. For me, the big thing is out of treasuries and [indiscernible] there could be some inflows into treasuries. My view is highyield from here. With a shutdown out of the way, and we heard from you on yields, what about the geopolitical risks or the possibility of trade tensions . You have the latest moves on tariffs from the donald Trump Administration, flexing muscles arbitrarily, as it were. I want to show you and our clients where some of the solar plans are in the world. Bloomberg, into the 1628. We have laid out on a fabulous map for you. You can zoom in. The key standout, most of these plants are in asia, most of these plants are in china. What is the possibility that we might see a little bit more of a titfortat than we have in the past . 2017, a lot of it was rhetoric. Nizam this has been a campaign tariffs as well, import not just on solar panels, washing machines, but also steel and aluminum. I think that will be the next step. The question then is will there be any reaction from china . Im of the impression there will be, and china could try a few things like imposing higher taxes on u. S. Companies operating out of china, they could even call it labor manipulation. To int is, a good lead it could lead to the start of some Foreign Trade war, and that is not good for emergingmarket currencies. It will not be good for the u. S. Dollar, either. U. S. , andars from the you get titfortat reaction from exporters like china and other parts of asia, will mean the dollar will affect emergingmarket currencies, the dollar will weaken against the yen. Yousef we will see how that plays out. We are still going to talk about other key themes, you are sticking around. Its get you up to speed with some of the middle east equity action, because as the u. S. Stock market posted fresh records and we saw a lot of positive momentum, it hasnt really translated into what is happening in the region, by down 3 10 of 1 , a threeday losing streak. Volumes are 80 of the threemonth average. We saw Property Developers under pressure. Saudi arabia down to fifth of 1 . We saw a bright patch coming. Hrough from qatar of get you up to speed with a quick check of the latest business flash headlines. Big news from netflix, that surge in extended trading after smashing expectations for new signups in the fourth quarter. The streaming service attracted 8. 3 extra million customers about 2 million more than analysts were expecting. In now has 118 Million Viewers around the world. Earnings almost tripled from the previous year. Bacardi has confirmed it is buying petrone patron tequila. It combines two of the Worlds Largest closely hold distillers bacardi rum under the same umbrella as tequila. Group has agreed to put 333 million into a new Sugar Factory and farm. Aficials were betting on revival in for investment when they slowed the pound in egypt. Twitter shares have dipped on reports the chief operating officer is in talks with social finance to become the online lenders new boss. Anthony nota has played a large role in the leading twitters product vision, especially in future ine platforms video streaming. That was your Bloomberg Business flash, lets get back to another big story for markets around the yen, that jumped as the bank of japan kept its policy unchanged, largely as expected by most people surveyed i bloomberg. Or global our global economist Kathleen Hays is in tokyo with what the boj has not been saying quite yet. There has not been much of a shift in the language. Immediatelyrtainly after the decision came out, the headlines crossing the bloomberg, we saw this spike up in the yen, they apparently are focusing on the fact that the slightest change in the wording on Inflation Expectations, but Inflation Expectations are very strong, if they are weaker, there could be something helping them get a tailwind getting them closer to the two percent target. They said Inflation Expectations were unchanged. Ok, at the previous meeting they said unchanged for weakening. Traders took that as a positive, but the boj also said that the Downside Risk prices exceeds the upside risks and there is upside momentum for the price target but it is not yet sufficiently firm. Clearly no big change here for the boj. Furthermore, every Economist Says right now they are trying to avoid saying anything that could possibly boost the yen, no intent to do anything like that. I think a bit of a premature response, but if you are a currency trader, i guess you have to why or so first and examine what is being said later. Yousef where does that leave us with the press conference . That could possibly maybe generates a market moving news, or is that unlikely given the boj is trying maybe to be boring when the market expects it to be exciting . Kathleen that is such a good point. Yes, i think that is what they are trying to do. They want to be firm and confident. Governor kuroda saying we are making progress, moving in the right direction, but they dont want anyone to think there is any move yet to remove stimulus. Htrope he hasig to walk. He is going to question after question from reporters, and one will certainly be a cut in bond purchases a couple of weeks ago, doj watchers say it was purely technical, but some are still thinking, could it be the beginning of the boj living on the normalization path . Theyare on it even if havent raised their inflation target. Rays tothats why some that point. Is it a logical thing for them to do now . The boj employment of governor kuroda, he will be asked about that. Governors come in to play, terms are up in midmarch. Its expected as a package, an announcement that governor kuroda will stay or go, the deputy governors probably in the month of february. One more thing to note, the newest and youngest board member, in his mid30s, he dissented again. He wants more stimulus from the boj, but it is important, the question of the mix of appointments that the Prime Minister will be making. Think people figure there will be a reflation is in the mix to accept this thinking, but the hope is that he will be helping governor kuroda and not making his job harder. Yousef thank you for that update, Kathleen Hays live out of tokyo. Thats show you something i caught my attention this morning and some other traders, as well, in terms of how the rally has been not just for dollaryen, but others. Dive into the bloomberg with me. The and has rallied the yen has rallied. I want to get some more perspective. Nizam is still with us. What you saw from the boj so far and what you expect to hear from the presser, put it in context for us. Nizam kathleen covered it nicely, really. Im the one hand, there was only a subtle change in Inflation Expectation in that the boj said Inflation Expectation is still low, but looking more stable. Other than that, there has not been a change. The question of whether the press conference could lead to a , at least unless doctorate , for me ih position think the question really is whether the boj is on a tightening or bias right now. The boj has been buying less gdbs, they announced that couple of years ago. The point is this data has been released daily, and on it daily basis, it has jumped radically from last year. At the buyinging of gdbs from last year, you are looking at a nice swing. 2017 was far lower than 2016. The point is, the gdbs purchasing is a trend that started a long time ago and the market is only now becoming desensitized to it. Therefore, it is about time for governor kuroda to signal any hawkishness because the market is clearly desensitized to less dovish views. Yousef im looking at a report, thesay that despite signs boj is unlikely to achieve its price stability target. They are saying the operations for the boj are going to get more complicated in 2018. Where does dollaryen go from there . Lets get some bold calls from you. Nizam i think, you know, there is no angle whatsoever to argue that you get to 2 inflation from japan anytime soon. Last year, japans growth in the first half of last year was Even Stronger than in u. S. Than the u. S. And Construction Activity in japan is picking up because of the 2020 olympics. Ours there is some activity going on. I would not say they are longterm or sustainable. I would say there is a risk of inflation going lower from here, it is reduced. I dont think its the right time for the boj two found significantly hawkish. Also, the dollar has weakened, the yen has appreciated. Yousef the dollar has really we can. We will have to leave it there. Thank you again for coming on the program. Lets remind you as well briefly that you can stay tuned to bloomberg all week for a covered of the World Economic forum in davos. The interviews today include the include ceos. Tops 100netflix billion market cap as its shares soar in afterhours trading. Stranger things have happened, literally. More on that next. This is bloomberg. Netflix shattered all expectations to the upside, and extended trading also sort, up the country. Rd for they signed up 8. 3 3 million subscribers in the fourth it far beats the most optimistic forecast i analysts by analysts by about 2 million. Part of it is thanks to its fantasy series called stranger things. Say it hasalysts also inspired competitors. Netflix now has 117. 6 million customers, the biggest year for the company in terms of subscriber success. Merging,r rivals are firing staff, fretting about the future, that netflix has continued to show staggering growth, not just in the u. S. But in europe and latin america. 3. 2 9 billion, while earnings almost tripled from a year earlier. Its a success has inspired some competitors, facebook, apple and amazon, ferguson amazon, for instance. Int disney has also invested Online Services to acquire competitors and match this powerhouse that netfli