And facebook, and china h and a on a looming cash crunch. The level of debt in china. Yvonne some breaking news right now, south korea inflation in january looking soft, we see a 1 year on year estimate monthtomonth numbers edging lower at 4 10 of 1 , it seems the inflation looking to be getting more soft. Inething we do get to see the Fourth Quarter because we start to see the base effect starting to unwind and the stock currency weakness it is certainly playing into that inflation picture and it is essentially confirms the analysis that that be ok should bok. On hold in the meantime, inflation here looks like it may be picking up pace. That that statement mentioned Economic Growth and Economic Conditions might mean further gradual rate increases and too many that meant Interest Rate hikes coming faster than expected. I want to pull up one of our favorite charts it is wirp, and it shows Interest Rate hikes near almost 100 . Rate hike iner march, and certainly there is a sense where we have heard hawkish comments earlier in the last few months. They could be picking up pace now. Yvonne it is interesting to see the language when it came to inflation and hawkish comments from janet yellen in her last fed meeting. Even, andout breaking the stock ended up in the green. Equity markets higher and treasury yields were high as well to fouryear highs. Ant to bring in romain what happened in the markets . You pointed out the work function and a lot of that is what happened today. Rates in marchn and to the rest of the year and beyond and factoring in the possibility that they could hike even more than that should they meet their Inflation Expectations. We saw a lot of activity coming off of the 10 year treasury yield. Of a high already a lot of it coming because of the treasury is going to increase the size of the option. Sawthe fed came out and we a hawkish tone and their statement. It is the highest we have seen since 2014. An interesting reaction coming out of the market with people trying to figure out what that both supplies will be in the market and what type of monetary sub lies will be monetary supplies be supported. Betty are the overall positive equities . On theink so, we started equity side very well, the dow was up to hundred 50 points and a drop mid day, but by the time we got back it rebounded. We also saw the nasdaq finished higher by nine points and even the s p heat out a modest gain of one point. May not look like much but if at backtoback declines, it is good. Take a look at boeing, it was the best performer today. It is pulling up parts suppliers maybe we can take a look at the videogame makers and we saw positive comments from Electronic Arts on Sales Forecast for the year. That helps take two interactive, activision and blizzard which is up three and a half percent to close out today. We also got good results from nintendo as well, talk about the state of the union address, and he mentioned broadly about policies. You see any reaction in stocks . It had less to do with what he said and more to do with what he didnt say and he didnt offer a lot of details on infrastructure and how he is going to pay for it. That hurt cement makers and industrial companies. We saw the s p gauge that measures Construction Industry drop today, down about 3. 5 . Somee flipside you had financials that did well today also because trump didnt mention anything with regards to serious Bank Regulations j. P. Morgan chase also higher today. We saw other strengthen the financial stocks today. One sector that did worse was the nasdaq biotechs. Of bought up the price the possibility of driving up drug prices, and biotech dropped. Betty digesting the news with amazon and jpmorgan as well. Romain, thank you so much. Lets take a look at how asian markets are set up for this thursday. 7368 for the kiwi dollar, as we start the asian session, australia getting the third of 1 . The for the aussie official numbers were a bit of an offset when it came to manufacturing, and trade coming underway in japan with futures pointing to a bounce back on the nikkei 225. 109. 21 lets get you caught up with first world news. Romain was speaking about boeing, and it has been given 6. 5 billion dollars to continue managing the u. S. Defense system intended to should enemy rockets out of the sky. On contract extends boeings 22023 critics say the system can destroy less than half of targets in the 70 times tested and since 2004, it is three for nine. Has held relations with china as a model for the country after brexit. And the leader offered a bullish vision of the trade future, setting up a panel to review commercial airlines. Lengths. China is expected to be the biggest investor in the u k when we leave the european union, the agreed to a joint review of joint trade investment review, which i think is a good step towards looking to future trade relations can be when we have that freedom outside of membership of the european union. The fbi director told the white house he is against the release of a classified republican memo alleging buyers. I. S. At the bureau it contains negative information and paints a false narrative regarding the election and is currently being reviewed by National Security lawyers. Uas Oil Production has climbed to over 10 billion a day for the first time in four decades. Comes weeks after the International Energy agency says the u. S. Was poised for explosive growth in oil output that would push it past saudi arabia and russia this year. Wti is rising torts 65 in new york. Global news, 24 hours a day, powered by more than 2,700 journalists and analysts in more than 120 countries. I am mark crumpton. This is bloomberg. Lots more coming up on daybreak asia. The outlook for some of chinas biggest conglomerates find out about mounting cash flow problems. Yvonne and an exclusive interview in less than 20 minutes. This is bloomberg. Betty this is daybreak asia and i am betty liu in new york. Yvonne Janet Yellens last meeting in charge, we continue paving the way for a fed hike in march. Catherine hayes is in new york with more on this. This is a more hawkish fed or not . It is leaning in that direction. It shows a lot more concerned with inflation, but to underscore, they are on the path. Ahead of the policy pen, this is how you do it when you get the statements. Lets start with a key sentence. Economic conditions will of all gradual warn further increases, but guess what, they added the word further. If you are going to have more this year, you better start in march. They said that not only does the gdp look solid, they applied the and adjective to spending, it is another tweak to watch. The important tweaks are in inflation language. In the january meeting they said they expect inflation to move up this year. In december, they seem to show more confidence. They noted measures of market compensation, wages, salaries, etc. Moved up in months. Wage gains is going to go in the next chart, the yellow line is the feds 2 target. The white line is that pce core which is down 1. 5, and the overall deflator is at nearly 1. 8. Not as weak as they were, but not at 2 . And theesting note he wrote up after the decision that is a look that much more confident a year ago. He pointed out that the fed in fact said the risk to the economy remained roughly balanced. They may take out roughly and they might Show Confidence in the outlook, but even so, you look at futures. Projections,trate you can see this is a slamdunk, a done deal. The chances of a hike are up to 95. 9 . I suspect it wont be long before we get to 100 . Betty not very long at all from that, what should be what should we be watching . The combination of wages and benefits, moving from 2. 5 to 2. 6, so a little progress there. Government jobs report came in stronger than the forecast suggesting that payrolls should look pretty good. Wherems of fiscal policy, all thinking about what Infrastructure Spending tax cuts nothing touches on this. It is interesting that former fed chair alan greenspan, 18 years at the hell was on Bloomberg Television earlier and is concerned about the deficit and what it will do for the economy. Lets listen. We are dealing with a fiscally unstable and outlook, the breakout is going to be upside, the question is when . We have been through it almost a decade now of stagnation, and we are working our way. This is a delicate task, they want to see inflation rise, they want to see it at 2 , but talks are more concerned with where the fed is heading and if they wait too long inflation will catch some fire. That means they have to hike rates more aggressively and with more quickly, and that is the kind of thing that will unsettle the economy. But wait a minute, we have been below that 2 target and can afford to let it up to 2 and move higher before we actually take that next step. But we shall see, marches a couple of months away, and jay powell, we will be hearing his confirmation in early february. Im sure he will be speaking as well. Maybe we will get a sense of what the new fed chair sees. Betty kathleen, thank you. News, eithering has reports earlier but there ebay is replacing paypal as their primary payment processor. Even though they had disagreements, they will be moving to abn and become their primary payment processor after paypal has reported forecasts short of wall street estimates. Signe i guess it is a that these two companies are distancing themselves after the split in 2015, but ebay says the shift will result in lower losses and costs for merchants. Also greater options for buyers as well, so something to watch here on ebay. At the moment, will continue the conversation with an exclusive interview with out brought, will get views on the timing of the next rate hike and Janet Yellens successor. That is coming later on. You can get your day going on your addition of daybreak, to the mobile app, and customize your settings. Facebook sees a first, but some of the news is not good, we are going to break down the latest results next. This is bloomberg. Yvonne this is daybreak asia. From facebook recovering the after our slump caused by disappointing fourthquarter results. Shares are actually up now by 1 , but daily active users came slightly below forecast. Sarah joining us from san , and Mark Zuckerberg warned that those results were going to be worse than previously because they changed some things around to make them use in different for users. Facebook is saying they are trying to emphasize time well nt and minipill meaningful interaction. It already has an impact on interaction. Decline,unts for a 5 and the declines in north america are the first thing being seen, so that is concerning to investors. It stock dropped but recovered after facebook said this is a temporary bump that engagement in north america you have so many users and are so penetrated and evolved. Is anybody wondering if this is the beginning of a downtrend . Analysts are worried about that, but to be fair the company is still growing in markets worldwide, but the u. S. Is the biggest Advertising Market and once there could be daily active user decline in europe as their privacy laws going to affect. People are going to be watching whether engagement is in fact going to continue to be a problem and whether that can be due to facebooks changes to the newsfeed or whether that is something more fundamental that people want to be on facebook. Beyond facebooks control, i think another question is over quality or quantity, what winds out here and could it have an impact on advertising revenue for facebook . Theye company says that dont expect changes to impact advertising revenue but they are taking steps to make sure that apps on facebook are good for users. Ads onthat they banned and they geties criticized for their impact on society. Yvonne can they build on new businesses . What about other business lines like instagram . When are we going to see that reflected in terms of revenue . That it ishe things interesting is that stories, the posts on instagram and on the other apps that they have to are shared for 24 hours and thatpear they expect stories are going to overtake feet posts as the most common form of socials sharing down the line. That is significant and they have been able to make ads in Instagram Stories come and that meaningful part of their revenue. Well see that increase and hopefully facebook will get people to use that more on the facebook app. Results, facebook mentioned it is temporary, what implications do they have to if any on its competitors like snap . Facebook is growing so much faster than competitors like twitter, and when it comes to snap, what i mentioned about stories. Stories is a product thats not invented, and this is a case where facebook is eating snaps storiesnd are bringing where snapped doesnt have the resources to penetrate yet, so it is concerning for them. Yvonne sarah, thank you for breaking that down for us. Lets do a quick check of the latest newsflash. Largest banks took advantage of the last quarter boasting higher profits even as lending income fell. To 2. 1me climbed billion and achieved profit goals with a quarter to spare. Percentted a nine profit jump provisions for loans and treasury income fell, and that income dropped to 259 million, well below the expected 357 million. Their want to boost the Balance Sheet by raising provisions from delinquent borrowers. Icic little change. Nintendo posted profits next to robust shipment in the holiday season. It is the strongest sign yet that the consul can be a longterm success. At 1. 5 billion and japans biggest messaging service reported a surprise loss in the Fourth Quarter. Betty 37 billion dollars in the red, 21 million profit despite that sales beating predictions at 421 million. Shares jump in the Earnings Report that they are expanding into Financial Services, including cryptocurrency trading. Yvonne well have more earnings analysis coming out next and how microsoft Cloud Computing business is giving it a boost. More on that on daybreak asia. This is bloomberg. We use our phones and computers the same way these days. So why do we pay to have a phone connected when were already paying for internet . Shouldnt it all just be one thing . Thats why Xfinity Mobile comes with your internet. You can get 5 lines of talk and text included at no extra cost. So all you pay for is data. Choose by the gig or unlimited. And now, get a 200 prepaid card when you buy an iphone. Its a new kind of network designed to save you money. Call, visit, or go to xfnitymobile. Com. A chilly hong kong and we are minutes away for the first major market open. Betty and it is 6 30 p. M. In new york with markets rebounding from losses after the hawkish tilt of the fed, i am betty lou in new york. Innne and i am yvonne man hong kong, and a look at first world news. Fed met for the first time, keeping rates unchanged but setting the stage under jay powell. Expect conditions will of all in a manner, adding the word further to the previous statement. The fed said that the near to risk appeared to be roughly balanced. President xi is asking for china to propel longterm growth, the country needs to make better use of Global Markets and resources and to improve the economy to enhance international competitiveness. In october party that invest technology should be embedded to the economy to improve governance. Chinas great fire sell is ready to go. Billions him to sell of dollars in assets and the first have to pay down debt and avoid a cash crunch. Would come in the Second Quarter, h and a has already admitted a shortfall of almost two and a half billion dollars in the first three months. Day in india where Prime Minister faces a difficult balancing act. He must way fiscal prudence of handing out cash to placate voters in next years election. The government wants to keep Global Investors onside, and he will be sticking to the goal of narrowing one of the biggest budget deficits and asia. Global news, 24 hours a day, powered by more than 2,700 journalists and analysts in more than 120 countries. This is bloomberg. February has arrived and the new trading month for all of us, and what could drive market futures. We are seeing a bit of a pullback in the last couple of days and markets are doing a bit of a balancing, and they really just met, but are we heading towards a decline . It seems like we have been waiting for a correction and we have seen warnings for Morgan Stanley that we have technical valuation metrics flashing. Investors might be reluctant to lowt, and that growth multiples, keeping buying interest peaked. Is thel market, that twoyear, and stocks in hong kong maintaining their gains over this course of time. Goldman remaining strategically bullish recognizing that a correction is looming given the extent of the rally. Despite petering out a touch in january we had stocks in the region up almost 6 . While it looks like a mixed start to february, there could be fresh rallies and a repeat performance of pmi data. We didnt quite get that from south korea with cpi coming in slower than forecast, we have indonesia and thailand up, and to kick off, we also have korean trade data and we are waiting in the us federal budget. We are waiting for approvals due in about an hour, and check out aussie shares, we have stocks fixing gains for the first date in sydney. He hath utilities leading the charge there, and real estate stocks climbing half a percent. Coming in this morning, following a midsize of the boom in sydney had peaked as regulators crackdown on lending. Pimco says there is a cold currency war underway, tell us about that story. Nature thaty is what the Trump Administration is doing with the dollar, sending an implicit but clear signal to markets that a weaker dollar is indeed the goal. Even with Steve Mnuchin walking back his c