And shrugging off shale, at least for now. Real. Says it will not markets loomberg middle weeast. We have seen signs of stabilization over the middle east. We have seen gains of 2. 9 over the last couple trading sessions in the u. S. Lets get straight to the global market. Go on your bloomberg. Overall, a very positive picture then, in asia, led by the likes of hong kong, and posting 2 as well. 2 as well. S are up in terms of Japanese Companies being driven back online by tech and machinery after the holidays, the Fourth Quarter remains mostly unchanged. We are talking against the backdrop of a u. S. Dollar index that has gone unchanged happy what was going on with the repricing around the world. In the commodities space, we saw it with copper leading gains and ironore leading strong. We are looking over to b rentcrude. They probably had to claim about 300 miles as well. They are confident they are doing everything right. And other forecast are on point about supply. \ great strength there, up 0. 7 . 2. 85 as we paper, speak. We are pulling back because at . Withint, we hit 2. 89 this point, we saw downsides from the comments from governor kuroda of the boj he said cryptocurrencies like bitcoin should not be used as currencies and are used for speculative investing. Lets check in now with the first word headlines from around the world for you and here is c robertson. Reporter donald trump, jr. Is thankful his wife and children were unharmed. The rushed to the hospital after they opened an envelope that t containedy sn unidentified white power. The judge condemned what he called disturbing behavior. You need both of the flight recorders of the planes that crashed on sunday. Everybody was killed when it came down, seven minutes on the flight. Investigators have ruled out terrorism. Previous crash and other safety incidents. The reports on south africa say they are ruling on jacob zuma to resign. This will occur on his National Executive committee and this was preempted by his rule. He was replaced by the instant it wasy ramapo the, expected to be the next president as well. Urging u. S. Shale output was not a huge sister. Thats according to opec sentiments. Themberg has been told that recovery in Oil Prices Since last years reduction is breathing life back into projects that had been put on the back burner. Greg had we do it, 60, 70 and we are very disciplined. I believe we accelerate the culture. And the profound words of english history could come back to haunt them. The dotcom bubble indicates that expandptocurrency could to 19 . The boe strategist says looking at this spectacular rival, the nasdaq as well at the start of the century, bitcoin could plummet to just 900. Global news 24 hours a day, powered by 2700 journalists and analysts in more than 120 countries around the world. Haslinda lets get back to one of our top stories. President trump has unveiled a 4. 4 trillion budget for fiscal 2019, calling for higher spending on the military. In a massive upgrade to the Nations Nuclear capabilities. Are increasing arsenals with virtually every weapon. We are modernizing and grading a a brandnew nuclear force. We are going to be so far ahead of everybody else and nuclear like you have never seen before. The pentagon would see a 74 billion increase. That is part of a program that makes cuts to programs that President Trump sees as not useful. , what are the Key Takeaways from what is a very controversial sign from President Trump . He needs to reduce spending in areas that he deplores and he did, such as you just mentioned, the state department would take a 27 cut in diplomatic activities. The Environmental Protection agency would have a 29 cut. Lashould also s entitlement spending. Those are things we know about the president and his priorities. We are about to see a very large military increase, 11 increasing the pentagons budget. This does not really track with the priority see campaigned on. This budget would stress those priorities. Struck jodi, what me was that the president s Budget Proposal is continually dismissed by congress. How does it appear when congress to liberates over his suggestions . This fory have done President Trump, as well as many past president s. They are called frsf o dead on arrival. Aide mickresidents mulvaney called it a messaging document. It is a republicanled congress. They might be attention to this. This year though, more than even the past, this was probably just human. Ssaging from a the Congress Passed a two week budget plan and inside that they raised the budget caps for domestic spending. These our proposals. Yousef i appreciate your time this morning, jodi schneider, joining us live. Lets talk more about this conversation, bringing in the fx analyst at ubs wealth management. As you look through some of these details, and as we get more i action from around the bond, we see the ride in yields is not because of monetary tightening, but because of fiscal overkill. Let me read you a sentence from this Budget Proposal. It feeds into that, doesnt it . There is a rise in u. S. Bond yields, so they would be related to the fiscal expenditure, rather than having cycle inflation rising. I encourage you to think in terms of the first rowdy effect. You would see the rising form of u. S. Yields. Then it is called the shakeup in the fx market. They have volatility is coming back. They are sad, is if sts you fence more and i beat the system. Because of the increasing pot consumption. The second one hits the car in the seats. Yousef builds elio says bonds are rising and they are passed their peak. We dont know. The economy, though it is clear we are past the top of the bottom market. Solving boss people think it is overpriced. That is him of the definition of a bubble. If you think the market is overpriced, theres still some time to go. Forre hanging in there that. Is thestion is, bubble now over . Take it. Cant as you hear some of those actions, wait until you see u. S. Tenyear going from here to there. They are now saying 3. 5 over the next six months. , i think the u. S. Tenyear what i want to view is to slightly stabilize 2. 8 to 2. 9 . I think the market is worried about how the fed will react to the increasing u. S. Earnings. The average earnings in the u. S. Was a precursor for the inflation the u. S. Is undergoing. We do not think that the average earnings is necessary, but is translated into itn inflation because as he, pointed out, how is the economy running with 2 inflation . So, our view is dead. U. S. Inflation is likely to be still at the 2 mark. U. S. Tenyear just stabilized at the range of 2. 8 to 3 in our view. Manus just something to note, you look at the hufhr this is the path with the in the global route last week. There is still a lot more to be shaken out from the bond market, isnt there . Definitely one thing to watch. Would also point out that if you just look at the u. S. Yields, you are missing out on half the story over there. Ecause yesterday you have we started the year about 30 basis points. Germany, the bond yield is up to about 70 to 80. You have to think about the referential of the yield because they do not rise at the same time. Manus what is going to drive the u. S. Dollar, then . At the moment, relatively unchanged, but in light of rising yields and attacking the fed and on the hand, fiscal over health what is going to happen to the greenback . If the market is pointing into the upside risk of the u. S. , i would point to the n and risk with a germa with a german, we would use thiss square, that we only have a dollar. You are getting the u. S. Deficit but the imploding trade balance and that has brought down the dollar. And plus, the fact that the u. S. Is running with a red cross deficit, the eurozone itself. The eurozone is running out of treatment supplies. The u. S. Is running at a 2. 5 deficit. The 5. 5 gap is the highest in history. On that, i would be trading the eurodollar up to 1. 30 at the end of this year. Bracing for a new period in Global Markets. Lang is with us. Why the head of opec is not concerned about u. S. Production derailing efforts to clear the global glut. Font . Lm on the why did tv investors keep their cool . Why and where should investors be allocating . We discuss that next. Yosuef this is Bloomberg Markets middle east. Im yousef gamal eldin. Amazon is cutting back on many jobs, scaling bageled departments, focusing on selling online. They focus on hiring, Cloud Computing and the alexa platform. They have confirmed they will skip the Detroit Auto Show next year, mercedesbenz, joining other automotive makers. For city says the rising complexity of the Auto Industry and the range of new products has prompted this decision. Better sales and the snapchat parent is leaving. In 201 7. Joined last week, snap reported sales that topped estimates, causing shares to surge. The company says they will not be looking for a direct replacement for lucas. Regale is the First Company in the middle east to win a license cryptocurrency. Ethereum will be in the vault. This is the most secure way of investing in cryptocurrency commodities. That was your Bloomberg Business flash. That get back to the story and asia. Jpmorgan, they say their strategists spent all last week in asia. Littleed there was sign of distress amid the market rally. Investors were a little more cautious. Lets get back to tan tech lang. Hes still with us. As you consider that jpmorgan comment, and as you look to the asian markets, where the best trades at the moment, in light of higher volatility, and at some of the other shifts we are seeing . Reporter in general, we are looking for the asian currencies. 4 e to strengthen by 2 against a weaker u. S. Dollar this year. In the u. S. , yields have been rising. It was not as effective this year because fundamentals last year or weaker. Some of the countries were weaker. Competitorore of a then. I really look at the dollar to express my view. It has actually managed against a broad basket of currencies, which asian currencies for path of that basket. To play the positive view on the asian currencies, you have to use the dollar. 4 are looking at a 2 to upside for the rest of this year. Lets talk about the dollar yen. Currencyg yen, japans still in demand, even as the equity story begins to recover. You are looking at here, the bloomberg correlated weighted index with the yen versus nine other currencies. That is at the highest level since december, as you look forward to the scenario of another term by mr. Kuroda. Does your view on the dollaryen trade change . Like on so, it looks several major medias, in japan, kuroda has a very good chance of becoming reappointed. Our view on the dollaryen is th at the sense that it grow to stays in place, he would not necessarily change the status quo. Ycc in place. The but they should not be so easy on Monetary Policy because inflation is rising. Economic growth is the highest in almost a decade. At some point, they should be reversing the extreme accommodative Monetary Policy. There could be a downside risk, but it could hang around 108 to 110, but when they move towards a policy issue, we will be looking at the 105 level. Yousef what about some of the other majors . Are you favoring the cable trade with the boe and the possibility of higher rates there . No, i think the latest bank of england meeting, it is giving investor something to look forward to over the coming months. They could be hiking as soon as may. That is likely to keep the pound on a british tone. Expect the pound to be lifted by our stronger euro. Were looking at the euro at 1. 30 against the dollar this year and the pound to settle at 1. 38. This is in line with the broad dollar weakness. Our best case remains that brexit will be smooth. Be opportunities to buy the pound along the way as we get into the negotiations. 45 should set the close at 1. To 1. 48. That is where the opportunity lies. Yousef there are traders and analysts that argue be are trading in the eye of a global storm. To thatsubscribe similar view . Do you see similar things . It depends on where the storm is brewing because the storm and equity markets has not spill over to the credit. I would say we are watching out for the real Economic Impact from monetary conditions. We are looking at three but 5 were looking at 3. 5 to 4 . Given imaging not see a sharp yields, this is something we want, but not the best case. Tan, thankeck leng you for your time this morning. We are just getting warmed up on this program. Shrugging off shale. The president says u. S. Shale will not derail efforts to deal with the global glut. Is he right . This is bloomberg. Yousef you are watching Bloomberg Markets middle east. Im yousef gamal eldin in dubai. A lot of the earnings are still trickling in. We saw amixed picture. The dubai index was down 0. 5 . Overall, volumes were relatively low. We sell gains on the s p and the gcc, 70 of the moving average. Air arabia was the standout on that stop, the most traded in dubai. And abu dhabi and a saudi arabia, both positive pictures. In saudi specifically, a move up 1. 3 . Petrol chemical shares moving off the positive energy from the rebound in the Global Markets as well. This is a little bit of a catch up for saudi stop. Qatar, down 0. 6 . There are a couple of buddies that really stood out and i will show you what has been happening. 84 dropped 5. 4 to riuadads a share after missing the analyst estimates. The other part of the original conversation really focuses on oil because we have had more comments about what is going on with the energy conflict. Brent and wti is trading higher. Brent, 62. 99. The commentary from the president now, from the united arab emirates, and from mr. Barkindo, generally consents that what opec is doing is sufficient and there is no reason to worry about the shale surge in the u. S. This demand can observe the supply that is coming online. Also, quick note from the bloomberg column. Painful as last week was, the speculative money in oil remains firmly positioned for further gains. That is simultaneously a backstop against panics like last week. Interesting what is happening with the cftt positioning. We will talk about the tugofwar between Rising Oil Prices and Central Banks tightening liquidity. Where does that leave the gulf . This is bloomberg. In dubai it is 8 30 and 11 30 in new york. Where are we with u. S. Equity futures . S p 500 futures called a little bit lower. Those were initially a little bit higher, so we see the downside there as well. The focus will be on what donald trump is doing with his spending plan and the outcome for rates and inflation. Those are some of the key themes, lets check in on the headlines from around the world with rosalind chin. Rosalind President Trump unveiled a 4. 4 trillion budget for 2019, calling for higher spending on the military and massive upgrades to the capabilities of the nation. This would be a 74 billion increase to the budget, which would cut programs. President trump sees these programs as wasteful, such as the Environmental Protection agency and the state department. Donald trump, jr. Is thankful his wife and children were unharmed, and they were rushed to the hospital because of a package containing unidentified white powder. April a married test indicated the substance was not dangerous. A preliminary test indicated the substance was not dangerous. Have foundervices both recorders from the plane that crashed on sunday outside of moscow. Everybody on board was killed when it came down seven minutes into the flight. The plane was in one piece when it crashed and investigators have ruled out terrorism. Theantonov has won at least at least oneas crash on his record. They want president zuma to resign. This comes after the National Committee net following a series of scandals during his nine year rule. However, he is refusing to go before the second term of this year. Surging u. S. S hale output will not be a huge disorder of assets to clear the got glut. That is according to the president , who says the market should be balanced this year. Meanwhile, the Global Engineering giant has told bloomberg that the recovery in oil prices is breathing life back into projects that were previously pushed to the back burner. 60 to 70, very disciplined with opec and the associated countries. I believe this will reexamine rate the projects. Coin might haveit history come back to haunt them. Lle cryptocurrency could fa 90 in an environment of unsustainable extending supplies. Similar teche rise with amazon, this point t bitcoino jus could fall to just 900. Global news 24 hours a day, powered by 2700 journalists and analysts in more than 120 countries around the world. S bloomberg. Linda it is looking better than it was this point last year. We have a solid rally coming in across asian markets, led by what you can see in china and hong kong. The csi 300 having its best oneday gain sicne august, 2016 and the hong kong hang seng is having its best oneday gain since october of last year. Hes the consolidated moves coming through from singapore with good Earnings Results coming through and new zealand looking quite good and up by 0. 8 . Chinese shares listed in hong kong are rallying today, the hshares index out for the first time in 10 days. Japan also came back as well, trying to play catchup, though we did see the rally and topix wane a bit. Brent crude is at 62, and 59. 90. Urrently at but there has been general upside coming through from these markets. That is the look at some of the stocks we are watching in the region today. We heard from sunny optical in hong kong, forecasting a 120 profit. Full year the share price has been up substantially. Looks like itr will close at a record low. A continues to issue the profit warning at the end of last week. And of course, capitaland, coming through with a drop in fourthquarter numbers today, but we spoke to the ceo earlier and he says the underl