We are about 30 minutes out from the open in china and hong kong. Very interesting couple of days to come. We are keenly watching the u. S. Inflation report. Disappoints if cpi to a market that has been awkwardly repricing. Were also passing these comments from jay powell is saying that nothing has changed. Also a reminder, the last trading day for mainland markets before they shut down for the oneweek holiday. The last trading day of the year of the rooster. A modest recovery story playing out a link the lead from wall street. David, it is a busy day in terms of investors passing the data. David there is a lot of data coming through. As you alluded to, there is an Inflation Report that we are stuck between that. We are waiting to exhale or to gasp. Yes, you are getting gains but they are capped. Across the getting likes of gold, the dollar is back below one. 08. 1. 08. That is essentially a picture across the region. Little higher on the regional benchmark. We have malaysia gdp still do out. A decision coming out of thailand. Japan and singapore reporting their Growth Numbers. South korea, as promised we are looking at a split here. We talked session highs a few minutes ago and we are coming down. Here is your intraday chart lots of movers in this market. We are getting a little more upside in this market. Asia, where are we . Route, looking at asiapacific. There is your cascade lower. Im guessing that is 1 10 of the way back up. You had japan close on monday, and heidi, you mentioned the last trading day before the year of the dog. Haidi very exciting. Following that surprise prison sentence, and really surprising walk that we had jay y lee free. Coming under pressure to put it mildly . Yes. we opened down 7 on logiccor. Is latte corp. Your terminal. Everything that matters about a certain asset. In this case it is lotte corp. There is your headline. A lot of stories on the company, but where does this take the Company Moving forward, following that surprise prison sentence on the company here . A lot of volume coming through on the stock here. Average here. Haidi lots more to talk about, david. We will get back to you in a little while. But get first word news from has lent. Missedomic growth estimates in the Fourth Quarter. Oficials show an expansion. 5 of 1 . That was half of the estimates. Down from 2. 2 in the first quarter. President trump has been challenged by republican lawmakers on a potential tariffs on steel and aluminum imports. During a meeting, they said such a move would raise prices and cost u. S. Jobs in related industries such as car manufacturing. Reporters were allowed to walk to watch for nearly an hour. U. S. Forces in syria are said to have killed scores of russian mercenaries. This could be the deadliest clash since the cold war. At least 200 contract soldiers died in alassad failed attack. The Russian Military said it had nothing to do with the attack. The pentagon accepts that. To the fall ofd the president has been jailed for 20 years. Convicted of bribery, conversion, and abuse of power. To us find 23 million. Also paying bribes to win business favors. J. P. Morgan chase has been named a yuan carrying bank in the u. S. Global transactions fell. From a record 2. 79 in august 2015. Take of chinas new york already conducts services in the u. S. And handles payments elsewhere. Global news, 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Haidi thanks for that. Jerome powell has officially taken the reins as the new name takes the race for vice chair. Kathleen is here with the very latest. Had jay powell breaking his silence. Cap lane he took over the reins of power officially. He was talking about gradual rate hikes. The news that grabbed everyones eyes as afternoon in new york, closing, market was Loretta Mester is in the running for the feds vice chair. A woman may get that second most important seat at the fed. We have to remember that there are a lot of other names out there. Loretta is president of the cleveland fed. Before that she was director of research at the philly fed. John williams also a respected fed. His name is still out there. Are, a former fed governor. When asked what kind of fed vice chair loretta would be, heres what he had to say. Want toas tended to move rates more rapidly than on average of the overall soc of the last few years. I think jay wants to get moving also. As he said, he is on track despite this volatility. Might she push things slightly in a more for more rapid tightening . Possibly. There is also the whole of the fomc. Kathleen Loretta Mester did speak today. She was very much in the consensus of gradual rate hikes. Saying when does your watching stability and raising rates turn into a deeper consideration of the fact that market volatility has worsened. It could affect the economy. We will have to wait until his Humphrey Hawkins testimony, which is not far away at all to hear his official statement and get questions from congress. Then we will get a better sense of if he is in the bill dudley and actually there is no one else so far who said they were worried about it. More significance than usual being assigned to this january consumer rice index dollars that is out in a few hours. What are we expecting . Is it likely to move the markets . Kathleen it could. There on heightened inflation watch. This could be a market mover. Rising 1. 9 is seen yearoveryear. 2. 1 ineen rising at december. Versuse is seeing 1. 7 1. 8 . That is the picture you may see. Bond traders and Stock Traders will have a lot to sort out in a quick. Period. It is not the main gauge. Just remind us where those are. People will be reminded of that tomorrow. The fed target is green. And the inflator is white. Up to 1. 77 . Core stuck at 1. 5 . I think if this number were a lot stronger, the cpi, people would say it is moving up and they tend to move recently in the core. Irection as a weaker cpi should already be a bit rice into the market. There is no doubt that bonds, stocks, the dollar and everyone will be ready. There are benchmark revisions. It could become located. It could be tough to hit the buy or sell button. We will see how it shakes out through the day. Haidi as you said, high or low. Thank you so much. Next, we will take a look ahead at the u. S. Inflation numbers you later. Private wealth says it will remain recently reasonably nine. Why a volatile market makes for a better trading environment. This is bloomberg. Haidi this is Bloomberg Markets asia. Reporting fourthquarter numbers that beat expectations. They clothe and of 778 million u. S. Dollars. Southeast asias thirdlargest lender reported higher fourthquarter profits here it 16 up, the equivalent of 646 million u. S. Shares jumped an extended trade after the rising popularity of the new Aggregation Service. Research in the. Was 3. 6 billion. They were investing heavily in Driverless Cars and ai. They have filed to begin the i o process the ipo process for its video game services. It was cargo, not passengers that provided the list. That is being driven by demand from online shoppers. The Freight Division reporting a 60 jump in profit. The carrier is spending 850 million to reset its superjumbos and premium passenger. Goober endured eight painful 2017 that spill managed but still managed to grow. Adjusted net revenue increased 61 in the Fourth Quarter year on year. Over lost 4. 5 billion on sales of 7. 5 billion over the four month. H period. Taking a look at what the session will bring to us. Inflation numbers from the u. S. That are very key for investors. Many futures trading up about 1 10 of 1 . Less the for it comes to the s p. Nasdaq, but he much flat at the moment when it comes to that futures session. On best gain for the u. S. The s p since midjanuary, although that is not much of a record, given the turmoil and the selloff that issued from that point onward. We are seeing some bond traders on the u. S. Inflation. With us to discuss the implications of all this is norman chan. This isnt even the feds preferred gauge of inflation, but there is unusual significance being assigned to this inflation rating. Do you think the risk of a downside surprise is really there . What does that mean when it comes to looking out how oversold the bond market is . The bond market is quite oversold already because of the region concern. In the mediumterm, it was the end of year. There was some downsize. Interest rates on the rise for another three terms after last year, three hikes already. The u. S. Bond has a chance to climb to 3. 25 or 3. 5 . In the shortterm, bonds will still suffer. In the past two days, bond yields has been quite high already. There is a chance for them to correct. They might rebound. Longterm, there is room for gain in the bond yield. Haidi norman, how confusing or what itof an adjustment be for the market is inflation were to disappoint. This market has been painfully repricing and adjusting to higher inflationary expectations. I think the inflations probably want be disappointed too much. Inflations could be very fluctuating and the near term. In the mediumterm, they will remain at the nine levels. There will be a more normal level around 1. 5 or 2 . We dont expect inflation to be a runaway inflation that requires aggressive tightening. Wouldortterm figures reflect the shortterm sentiment. Medium to long run we expect them to remain in check. I want to drop a quick chart, looking at the number of short bets against two and tenyear treasury figures. The violent moods we had in february for not enough to dissuade traders. Net positioning into and tenyear features are more bearish. A little bit of easing as it comes to the twoyear, on the shorter and we have seen short bets from hedge funds and others in the speculative market increase the most on record. When you said that you could see rights going as high as 3. 5 when it comes to the 10year, what happens to the equity market when you have yields at that level . At the equitycome market would prove that they can withstand the 3. 5 on deal to. Bond yield here it but the path is going to be very bumpy. Of 3. 25 ,iyear high the market would be it would remain very volatile. It will use every chance to correct. We still expect the stock market to have a decent gain of 10 to 12 this year, the path will be bumpy the cousin of the adjustment of the bond yields. Haidi what about the potential coming through from Lower Energy Prices . What do you see happening to the longer and of the market . Oil pricesthink that going to remain low for long time. Overall the longterm oil price has moved up slightly. We have seen some shortterm correction, so i am not relying on Commodity Prices to help ease inflation. After all, and the international economy, there is still some spare capacities. It to be veryt high. It is interesting in your notes, and what we heard from jay powell, breaking his silence, he is ill seeking three to four hikes for the rest of this year. You said before that this is not genuine tightening because while they are not ultra low. You can see that the new Federal Reserve chairman has already started to con the market saying dont worry too much about it. We are talking about three or four hikes this year. We do not expect to be very aggressive tightening as what we have seen in 1993. To breakhave started it silence and comments about it. I think he is trying to calm down a market. That way it is not too chaotic. Haidi were just digesting the slightly disappointing japan Fourth Quarter dep. His is as good as it gets when it comes to the pace of Economic Growth . Viewoes that inform your as the japanese asset . Japan numbers are disappointing, but longterm uptrend is still intact. Japan has one of the biggest structural problems in recent economic history. Sometimes it might be a little more volatile. Too hope and expect karuda remain boj governor. We need him to stabilize. Japan is in a transitional. Highs a very credibility central banker to make sure that japan commerce around the world remains reasonable lee reasonably low. And a government so that they onld have more confidence investing in the economy and companies. Haidi certainly saying we need him longer rather than a change in strategy. Norman chan joining us in hong kong. You can catch up on all of our interviews by using our interactive function on tv. Can become part of the conversation by sending us instant messages during our shows as well. This is for bloomberg subscribers only. Check it out at tv. This is bloomberg. Last trading day of the year of the rooster in china. What are you watching them at dave . Im watching whether or not we do close above 30,000. We did see some short positions filled when we did not quite right through the barrier. A lot of headlines coming through out of the chinese mainland. Have a look at some of the names we are following. By no means is it an exhaustive list, just some changes. The lower third, you can see at the bottom of your screen. Falling on a profit drop. A little weakness coming through in c and h and c and why. When thetalk about markets open on the chinese mainland. Haidi also coming up, lottes lost leaders. 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. Haidi it is 9 29 a. M. We are counting down to the open of trading in china. Shanghai. Shine the asiapacific stocks trading up by about a 10th of 1 . Story. Nd of modest we have a market that is finding its feet after the reagan recent bout of volatility. Volatility level still reasonably elevated. Much in focus is that u. S. Inflation rate. It is much more unusual to have a focus on that reading. We are seeing a faster than expected rise in treasury deal. Let us take a look at how things are faring when it comes to the hong kong and shanghai opening. This is the last trading day before we get into that weeklong Chinese New Year holiday. You are not expecting too much in terms of volume. Byg kong stock tradings up 1 10 of a percent. The yuan setting is fixing today. Tracking those declines that we saw in the u. S. Dollar. The dollar paring those losses. It really is about love when it comes to the yen. Let us get more on the color of what we are seeing and the hong kong and mainland markets. David we are getting some gains. Well be ending the session with gains, though i would caution , we are readyment started seeing some of the short positions buildup across a lot of the blue chips here in hong kong. That is maria. We opened above . 30 and 30,000. South korea is leading the gainers today. It is fairly mixed. Not a lot of conviction. Once we do get more clarity on that inflation, do we get that lining up when it comes out of the u. S. . We have gdp numbers coming out of malaysia. A decision coming out of thailand as well. Some things to watch across markets in Southeast Asia. Market 3713 at the one. We will get you a bit more to tell in some of the big names we are following. Shanghai, we should have it there. Here we go. Given a few seconds. Their ego. We go. E i am a bit curious to see what we are as technicals are concerned. We blew past 1500. That is quite a gap still before we even start to talk about retesting the systems. Following the collapse we saw on friday. Just to watch out for those stocks and how they are trading. That is what happens to your stock when investors get their first chance to react to that. Lots more to discuss with the chinese market. Last trading day of the year of the rooster. It is the rooster, right . Haidi yes. Lets of people wearing that it will be a dog year for stocks. Market jitters appear to have used for now. The focus on this incoming inflation rate out of the u. S. , clearly there is some volatility or fears of volatility still ahead in ahead. Theas amusing, this is not feds preferred gauge for inflation. It is not a data point we would of much significance to. Indeed. A lot of people in the market are really focused on inflation simply because the bond market has been so turbulent recently. It is deciding whether yields are at the right level or long level. Where is the inflation target and where is it Going Forward . The bond market will be looking very closely. Everybody else needs to pay attention. They do not usually miss by more about 0. 1. Worry tooneed to much. There is evidence that things are starting to pick up in america. We have seen some wage pressures going on. There are Stores Coming through from the states that material costs are starting to rise as well. When people think about refurbishing their homes are doing renovation, those costs are going to be significantly higher in 2018 and they were last year. Atple are worried that come some point this year, the inflation data will start to look ugly. Maybe not today. Im looking at your valentines day missive to the yen. The news that we have seen and the yen and the u. S. Darla dollar, which of these currencies is the story about . Yen started the movements yesterday. It was quite significant. It has been about that for a long time. We are beginning to look at levels that we have not seen since late 2016. It is quite a long time to go. One of the things about dollaryen is that a lot of momentum starts to build and it could go direction leave for quite a long way. Downtrends tends to be more severe than the uptrends. One of our was a very heavily traded strike option. There are some people who see considerable downsides for dollaryen. It is not likely to happen for a few days. One of four is a number to keep in mind. 4 is a number to keep in mind. Given a day where we have this come down when it comes to volatility, it gives us some breathing space to focus on the ecocalendar. Japan and singapore, those numbers on the disappointing side. Yes. Definitely. Japan especially will be a bit concerned. The gdp numbers were not good across the board. It must be a worry. You wonder why the Prime Minister is taking his