support for limited gunshots in the wake of the florida school massacre. ♪ ramy: good morning to you and to all watching around the world. markets, close because of the president's day holiday. not much moving except the dixie . it has been moving slightly to the upside. lot of investors have been expecting this to fall farther down. the last time it hit that mark was three years ago. to ask be looking ahead some forex analysts what they expect in terms of that trend looking ahead. the interester rate differentials matter when it comes to the dollar. really thin volumes. liquidity in shortage given u.s. markets are closed. we are seeing some markets come back after the chinese new year holiday. hong kong still and holiday mode. we are seeing new zealand stocks flat, currency as well. big earnings day for australia. we are looking ahead to the hp earnings. bhp.- to the earnings season not too shabby so far. the aussie he much trading water ahead of rba minutes this morning. the aussie 10 year yields at 2.90%. futures in japan .2 moderate losses at the open. back monday of 2% on the nikkei 225. dollar-yen is less strength from the moment-- yen at after the nomination of governor kuroda. a lot ahead of the boj meeting in march, so lots to watch. inflation also coming out on friday. let's get to first word news now. theresa may's brexit team is said to have secret plans to withhold eu payments to force brussels to give the u.k. the trade deal it wants. officials have discussed the idea in case of failure to clinch a free-trade agreement. will set out her post-brexit vision next week and laying out a path for negotiations themselves. singapore has announced a range of tax increases, including a surprise hike and property levies. properties worth more than one million singapore dollars goes from 3% to 4% on tuesday. the government plans to raise the goods and services tax to 9% from 2021-2025. bitcoin rose for a fourth day, breaking back through $11,000. cryptocurrencies have been recovering and on the feeling they will not be regulated out of existence. s&p global ratings says digital currencies will struggle for acceptance in mainstream finance into regulators finalize their positions. global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. . am haslinda amin this is bloomberg. ramy: thank you very much. president trump signaling his support for limited background checks on gun buyers in the wake of the florida school massacre. our team leader has the story from washington. to what degree is this a concession for gun reform advocates? not a big step, but the president seemed to signal without a full endorsement that he supports a measure in the senate that would try to ensure that federal, state agencies report people who have criminal backgrounds to this national database. it would essentially stop them from being able to i a gun. a couple of recent events, including a shooting in south florida, reports emerged that concerns had been raised to either police or state or federal authorities, and sometimes those messages were not passed on. this bill would try to close some of those loopholes. it is legislation endorsed by the nra, so it is something a lot of people agree on, but probably not one of the bigger steps that gun control advocates would be looking for. ramy: when i saw the lines that the nra was applauding this, i was surprised myself. organization against any kind of reform, but looking at the broader picture, we have to ask this again, does this most recent shooting change gun politics in the u.s., especially with the student voices and leaders coming out now? tact is definitely a new having the students come forward. there is a lot of talk about school walkouts planned in the coming days and weeks. it is hard to see this changing the game in the u.s. congress. it is an election year. it is a polarized country. republicans have traditionally opposed all forms of gun control legislation. i don't see that changing in an election year. every time we have one of these events, it makes people wonder whether the calculus will shift. i don't think that will be the case. congress is not in session this year. they are back in their districts much more frequently and taking up this kind of new legislation is unlikely. yvonne: i want to switch gears and turn to russia, where the president has been on an outburst on twitter in the last 72 hours. what do the tweets tell us about how he is feeling since the indictment of these russian officials on friday? >> there was a series of 14 tweets about special counsel robert mueller's indictment on friday. the president claimed vindication in the indictments come as saying it showed no collusion. we know from our reporting that the special counsel has not made a determination about whether there was collusion between the campaign and russian officials are people associated with the russian government, but the president took it as vindication so far that he has not done anything wrong. not hear is almost as interesting, criticism of russian behavior from the white house so far. the president reiterated past claims that russia could have hacked, but that china could have hacked, or a 400 pound teenager with a computer, could have been involved in the cyber meddling, so we have not seen a strong position from the white house on russia so far. yvonne: it seems to be continuing what we have seen and heard from the president with regards to russia. thank you very much. our national security team leader joining us from d.c. don't forget our interactive tv function, tv go. you can watch us live our catch up on the bloomberg functions we talk about. part ofu can become that conversation and send us instant messages for our shows. this is for bloomberg subscribers only. check it out at tv . ahead, hsbc set to report the last earnings under stuart gulliver before the new ceo takes the home. ramy: up next, will a stronger yen push the boj taper further away? joins us sean callow for that and all things forex. this is bloomberg. ♪ ramy: welcome back. there are plenty of big stories this week. we will be covering here. -- them here. one is about investors waiting on this guy, warren buffett and his letter to shareholders on saturday, that comes alongside berkshire hathaway's annual report and those anticipated financial results. hop into the bloomberg terminal. this is 2547. this is warren buffett's right back measure, tracking the berkshire hathaway's a-shares price-to-book ratio. you can see it has inexorably been rising. lower, but falling you can see the sharp bump in the past month or so. athas taken a dip, but still 1.63 or so in terms of that level. that is a basic look at the price-to-book as we look ahead to the annual shareholder meeting and results this week. yvonne: that's right. we are looking ahead to japan's latest inflation figures friday, they struggle to reset the 2% weigh on governor kuroda as he starts his second term. perhaps the problem could be bigger this time around. we see inflation heading in the right direction. we are seeing when it comes to the headline inflation at 1%, expecting it to edge higher to 1.3%, although core inflation, the preferred gauge from the boj , we are expecting that to be , once again.8% showing this is a long-term .attle for the boj this renomination of governor kuroda a reiteration of that on hold untilkeep we reach the 2% target. thequestion is what will yen strength do when it comes to crimping inflation expectations? does it limit how much the boj can do when it comes to when it or reduce ex stimulus. a lot of people have been wondering as we have gotten word of the new appointments at the boj. let's move further into this. gooden's recent strength make boj policy normalization more remote. our next guest it does not expect the authorities to express must concern about that. let's bring in westpac sean callow. let's bring in these expectations about a lack of concern here. have heard a little concerned from the finance minister on friday on the speed of the move, but overall it is not anything that would cause them to get close to considering intervention, which they have not done for many years in a really because the yen is reasonably weak and trade weighted terms. since-yen has come down november 2016, but looking at the yen against the euro and other major trading partners, it is not strong at all, so in terms of the trade position, they should not be that worried, and also in terms of inflation. pressureard is only part of that factor and you have to look at the trade weighted currencies. days,after the past few people have been able to digest the appointment of the two deputies, the two fed governors in japan. and inf people have been focusing on one in particular because the phrase is he is a reflationist. do you think he might have any power to increase monetary easing here? and the follow on, does it need it? think the continuity will be key for governor kuroda as he starts his second term. it would be surprising to me if there was any change in the official language near-term in terms of the jgb target for the year, and certainly not in terms of the 0% yield curve control, so nothing to change short-term. it will be interesting to see whether the change in the board does have an impact. have an if it does impact, it will be the leadership. overall, there are few hawks their, so more of the same i would expect. do they need more? possibly. i guess is just a case of pushing back the target of when they will hit 2% inflation. i have not been buying has many jgb's, but i think the targets will remain intact. yvonne: we saw the trade data yesterday was robust. do the fundamentals actually justify the strength we have isn in the yen recently, or this all still just a weaker dollar story? is, a squeeze on positions. yes, japanese growth is tracking well in terms of consistency and there should -- they should be traveling with how it is traveling. as far as why did the yen strength and so sharply, there has been a huge breakdown with its correlation and yield spreads. we look at the leverage some positioning in the cme, dollar-yen was one of the few massive position still there. otherwise very heavily short dollar already, so that was probably one whose time was coming and those physicians have been paired back. yvonne: we continue to watch this dollar trade and how it is not catching up with this spike in yields. do these interest rate differentials matter anymore? >> that is the key question, isn't it? it has been a lonely time to be a dollar bowl over the last couple of months. clients are certainly pushing back when we say the dollar will appreciate over this year, in large part due to those interest rate differentials. we think it does come back to support the u.s. dollar in time. we see dollar-yen higher by year end, 115-117 area, but we will need to see outflows resume from japan to see those high yields in the states. they want to buy those treasuries at high yields. recently it has been the case of foreigners selling treasuries, so we need to see that sentiment refers. a terminalquickly, headline that the boj governor kuroda will appear in parliament from 9:40 am japan time. you were just talking about dollar bulls, looking at the dixie at 89. the last time it was there was 2014. there have been some folks, especially in the last few days, when cpi came out a bump in the a lot of folks say the legs will get knocked out looking ahead. what is your forecast? >> we do see the dollar stronger i year in. we have the dollar index up 7% over the year ahead. that is mostly euro, heading 115, maybe dollar-yen 115-117, so we think the dollar does strengthen, obviously very short term. a second.ld on some earnings we need to break when it comes to oil. full-year net income coming in. we are expecting to see a final dividend for the second half cents.in at 5.5 we have been hoping for robust numbers when it comes to the commodity players in australia. we will have to see how things fair, also reaction from the share price. we will check that in a bit. , talkingean callow about the currency side of things, we have been talking about trade tensions. china said it may impose quotas and tariffs on steel and aluminum imports. of theselike some risks are materializing when it comes to the risk of a trade war now. how do you play the currency side of things? are there in yen proxies you could look into here? >> it is difficult. the tensions are increasing. if you look at the latest trade numbers in the u.s., it has been growing, so you can expect this will only increase from the u.s. side, but elsewhere around the world, so i would think that you ,ight be looking at who gets which currencies get impacted pesoost weird the mexican is sensitive, so is the canadian dollar. the chinese yuan would have a lot to lose by that trade war, but the currency is on such a tight leash that it is probably not likely to get much speculative pressure there. would be one to watch that could come undone if there is a real increase in trade tensions. yvonne: given the dollar weakness, asian currencies almost at the mercy of this dollar story right now. are there any asian currencies you would be avoiding at the moment? look, as i say, they have been under pressure a little bit recently, the philippines peso looks like it it is struggling to find its feet. investors will be wary on that when near-term. across the region, you have strong foreign-exchange reserves for all the major currencies. there is firepower there in case they come under pressure, but recently it has been in the other direction with the currency strengthening a concern, particularly in thailand, so it is a mixed picture. the peso is probably the one struggling near term. yvonne: we appreciate your insight. sean callow joining us live from sydney. you can follow this story and other stories on our live blog at mliv . commentary and analysis from bloomberg's expert editors affecting your investments now. up, tax hikes for singapore as the government looks to boost its own coffers. this is bloomberg. ♪ ramy: welcome back. this is "bloomberg markets: asia." i am ramy inocencio in new york. yvonne: singapore has announced a range of tax increases as it seeks to boost savings to pay for a rapidly aging population. ands cross to haslinda amin dive into these budget breakdowns. expected,x hike was but a surprise levy as well? >> yep. singapore is getting ready for the time it will need to spend more on its aging population. currently in the next several years. it depends on when the government needs the money. havewith the hike, it will a low level compared to the rest of asia. taxes on services like online video, music streaming websites, plus higher stamp duties on properties over one million upgapore dollars, that is from 3% to 4% effective from today. the increase will have more of an effect from the ultra-luxurious properties. to asay it is a deterrent property market that was so hot not too long ago. revenuef taxes for more after being too reliant on investment returns from state owned investment companies. where will the funding go to? health care, infrastructure, education, security. maturing population and economy, singapore is trying to strengthen its fiscal footing. over 65 areeople there, as well as under 15. one interesting thing is energy efficiency, which is new to the budget, and there is a carbon tax. >> yep. time for carbon emitters to pay the price, five singaporean dollars a ton will be imposed, rising to $10 to $15 a ton. this will affect oil refineries and powergenerating companies that produce at least 25,000 tons of greenhouse gases he year and account for 80% of singapore's greenhouse gases. it is estimated they will pay the bulk of the levy, 150 million singaporean dollars. is really a way to get power efficiency. as it stands now, singapore nearly gets all its electricity from gas, so it is just a deterrent. ramy: thank you very much. haslinda amin in singapore. more to come. this is bloomberg. ♪ yvonne: 7:30 a.m. tuesday morning in hong kong and we are just waking up after the holiday celebrations, back to work in the city and a 30 minutes away from the first major market open. ramy: 6:30 p.m. on a monday in new york and markets ended last friday nominally in the green, but of course today it is the presidents' day holiday, a celebration of our first president, george washington. i am ramy inocencio in new york. yvonne: i'm yvonne man in hong kong. you are watching "bloomberg daybreak: asia." now first word news. trump haspresident offered his support for a limited strengthening of background checks on gun buyers. since taking office, the main action the president has taken on guns is the block and obama move designed to keep weapons away from mentally disturbed people. president trump has a stressed for gun rights and the national rifle association. bank of england governor mark carney says he is already fighting the u.k.'s net financial crisis. admitting that no -- can eliminate the risk of future crisis. he said the boe is creating a secure defense by planning for a bank failures, providing extra liquidity and ensuring higher capital levels. he says accepting a crisis will happen is the best way to prepare for it. in sweden ares increasingly concerned that the no cache economy is moving too fast. they are carrying out a review of the pace at which the physical money is retreating, and at the likes of digital payments. a report is expected by the middle of the year, but a parliamentary committee has a ready said the demise of cash could make it hard to maintain infrastructure for handling money. the winter olympics has seen the records and at the creation of the world's darkest building, anded by 10 day -- hyundai the markets covered by a new can absorbhich almost 99% of all light hitting at. the building symbolizes purity, the universe and a sense of positive opportunity. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. . am haslinda amin this is bloomberg. ♪ yvonne: we are coming down to the open in tokyo and a soul. now we will get an update. not much direction with the u.s. markets closed, europe also going the opposite direction of what we saw in asia yesterday, so where we now? >> looks like the rally in asia could be coming under pressure, the momentum waning, given no direction from european stocks, falling for the first time in four days. take a look at futures in japan and korea, muted start. stocks lower in health care and consumer staples segment. minutesaiting on rba today, which are not expected to the vault much more than what the officials outlined last week and audubon falling ahead of that, in boones -- bunds. we are checking in on aussie dollar which is holding above 79. and the come on what bank does not expect much reaction to the upcoming rba meeting. checking in on the yen, study after its biggest drop in two weeks, the dollar treading water as the treasury yields by back 3% and sean callow put it to you guys earlier, it is certainly lonely being a dollar bull right now. it looks like they are looking fairly ok with the -- as the oil industry meets in london and we are waiting on the bb outlook for 2018. waiting on the reopening of hong kong market, said to be closely watched. and we could be looking for a move back above the 32,000 level. ramy: a lot to look forward to, but turning our attention to sydney, because earnings season is well underway. it will be a busy week ahead. what is the gauge so far? >> according to credit suisse, it is one of the strongest earnings of seasons in the last 15 years, based on the ratio of earnings upgrades compared to downgrades. more than half of the companies have reported so far, they have delivered earnings and sales of surprises, so we see it is clear that there is underlying strength in aussie profits and we are looking for vhp earnings. we have -- a star also on deck in the mining recording is 7% hike in the first, sorry, seven cent fall in first quarter profits. we are looking earnings results out of sydney. -- jumping after result of rising to an all-time high, but on the other side of the spectrum we have super retail sliding after their earnings, super retail in the spotlight following the acquisition of new zealand's backpack. oil search moving higher after the ceo will be on the show :40.r at 12 ramy: interesting to see it is falling. thank you. let's stay on commodities, be reportingll their first half earnings on tuesday and is expected to respond to activist investor elliott management's latest call for change. the melbourne beer chief joining us for more data bureau chief joining us for more. reporting their biggest first year profit. what is driving this? >> that is right, the biggest number as he said since 2014, what is driving it is the commodity prices for the products that they produce, holding up pretty well. china is the biggest customer, continuing to buy the commodities in great numbers. copper, iron or and oil and gas, bhpping companies like and others. coming out of years of a lowering costs and refocusing their businesses and now they have really become cash generating machines as the environment holds up pretty well for them. so investors like to see that, they like to see companies doing well, but they also like to see in times like that, they like to see some of those profits come back to us. many shareholders: for that for -- calling for that for bhp. we someone come to give close to $10 billion in profits back to the shareholders in 2017, so investors will be looking at profit numbers, but also asking questions of bhp on how much of that will come back our way. ramy: investors will of course be wondering about reunification, right? there is pressure from activist investor elliott management trying to get melbourne and london back together. the question is whether it is good for the bottom line. guest: that is right. you will find with activist investors like elliott that they do not go away once they have their hooks into a company, they hang around and continue to push for change, which they have been agitating for, that is the case at bhp. they want to see the company structure simplified, they think that if that took place up to $22 billion of a value could be released for bhp shareholders. that is, collapsing the entity and having the company based in a single entity in australia. the other thing they have pushed for is the divestment of the u.s. onshore shale assets, for its part bhp and andrew mackenzie, they have been holding off the calls for the reunification. they've analyzed these changes and they think that they would be very costly and that they would disadvantage some shareholders. on one hand, holding firm on the reification, but alternatively on the shell divestment they have -- shale davis monday have accelerated that program and are actively looking to divest from a costly position that they built in the u.s. onshore shale at the early part of the decade. yvonne: thank you. looking into those bhp earnings for us, brett. and andrew mackenzie will be 10:15g us later on today, p.m. tonight hong kong time. quarter past 9:00 a.m. tuesday morning in new york. , showing it is emerging from years of restructuring and scandal. full-year results later on. we will go to our chief north asia correspondent, he is in hong kong. good to see you. cane are the results, stuart gulliver and his tenure on a positive note? >> yes, this is his last day on the job today, he will be replaced tomorrow by john flint, head of retail banking. this is his final set of results. for the betterment of seven years, stuart gulliver has had to deal with downsizing this once larger sprawling bank. they have exited 18 countries and more than 100 different businesses, getting it down to size, more nimble after a string of scandals as you mentioned. they have had to cut 25,000 jobs. and the question is, is that kind of pain over? there are a number of things we will look at, the fourth quarter results, and also the full-year results. not expecting a bad set of results, full-year profit is likely rising, again on the back of higher u.s. interest rate environment, hong kong often times -- it does walk in lockstep with u.s. rates, so with those rising here we could see an increase in net interest income. some of the other things we want to look for are caused performances. keep in mind -- cost performances. keep in mind, they've been shrinking their footprint and we are likely to see full-year you know,crease amid, the rising net interest income. at the same time, fourth quarter, there is a seasonality involved, fourth quarter could break the string of three quarters of succession of revenue increases, adjusted revenue. what way will look at is the jaws, whether they can have the revenue growth outpace the cost growth by at least 1% or 2% at the top and of that, that way it will sway some investors that the bank is now keeping costs under control. yvonne: yes, just how manageable these costs are at the moment. you mentioned that we are looking into provisions as well, what kind of one offs are we talking about here? >> of course, a number of different banks, including european banks and american banks, they have taken charges in relation to these big failures we have had in recent weeks. steinhoff, the big south african retailer, hsbc one of several large european banks that have had exposure to that retailer. carillion, the big builder, the second-biggest in the u.k., we could see exposure to hsbc. and keeping in account the u.s. tax code changes, deutsche bank and others talking about a big because ofte-offs changes in accounting and tax structure in the united states. we could see something there from hsbc, although their exposure in the u.s. market is a little bit less. one thing investors will be looking at is the possible share buyback, lots of speculation that there could be another one. keep in mind, stuart gulliver has given back about, or bought back $4.5 million since august of 2016 and there is speculation that there could be another buyback up to $4 billion, but bloomberg intelligence saying they do not expected buyback in the near term. yvonne: thank you. our chief north asia correspondent, just across the street at hsbc. breaking down the earnings live right here on bloomberg, the finance director ian mckay, that interview will be at 5 p.m. sydney time. the: coming up, renomination of haruhiko kuroda. we will discuss it, next. this is bloomberg. ♪ ramy: this is "bloomberg daybreak: asia." i am ramy inocencio in new york. yvonne: i'm yvonne man in hong kong. the return of haruhiko kuroda suggesting no change soon. yen threatening to throw inflation off course. we just saw lines from the minister speaking in tokyo as well, he says that he hopes the deputy governors and kuroda do their best and he also says japan will soon be out of the deflationary situation. we are also hearing from the finance minister speaking in tokyo, asking the boj to keep working with the government to beat deflation. the same theme. the next guest is a former board member of the bank of japan, a dissenter to the easing program. joining us, takahide kiuchi. thank you for joining us. all has happened in the last 48 hours, does this trio and a new leadership, does this represent the status quo in your eyes or could it change the course of the boj policy? i think that the market expects that there will not be a big change, due to the return of haruhiko kuroda. i think the renomination of kuroda is in line with market expectation and that could -- the uncertainty for the future. news fort is positive the market. yvonne: there is a lot of news on the two new deputies, focus has been on a walk atop a -- wakatabe. has held aer deputy lot of hats, the market division as well. he is seen as a modernist, but it is flexible as well, so how influential of a voice will masayoshi amamiya facesime when kuroda pressure to reduce stimulus? takahide: i think some people expect that he will be green pressure and he could change the butse of the easing side, in general i think that the governors -- is not likely to be -- the decision. they will require the vice governor to always a support what the governor does, so it could be a research and for him. also, it is a case for the wasent vice governor, he well known for a deflation ist. i think that he could be the same. as for masayoshi amamiya , i think he will be influential. and i think that, in my personal the bojfor example, introduced control, then -- started to reduce the pace. i think that is the start of practical normalization policy. anamiya is the person to initiate this. i think that the nomination of him means that the current normalization policy is likely to continue. ramy: we are getting some more lines on the bloomberg terminal. the finance minister saying that he hopes the boj will work toward 2% inflation with the government, clearly these things supporting yen weakness, we also see the yen falling to 106. ahead towardooking the 2% inflation with the government, we have not gotten there. when you think we might and what else is needed to get there? importanti think the point is mr. kuroda has failed to achieve that 2% goal, however the government renominated him, that means the government does not want the boj to achieve 2% inflation goal in the near future. that is a very important message to the three nomination -- the renomination of haruhiko kuroda. sh boj come in the future ould change the status of 2% goal from short-term to long-term. that could also make it possible that the boj could change that policy, that -- is off of the normalization policy. regime, io kuroda's think that the boj may theyually start that -- they should proceed to increase the long-term interest rate, or pace of it. as for prices, no normal prospect that they may go up to 2% . if you exclude energy, it is at 3%, so no chance of achieving 2%. communication with the government, in correlation with the market, that could cause the yen appreciation. i think that will be the biggest obstacle for the normalization of the boj. and -- is not so problematic, canuse japan's economy easily absorb that. however, there will be a big impact on prices. boj's normalization policies, that could cause -- and could increase the inflation rate, maybe below 3%. ramy: it is interesting, as we are talking, the yen is continuing its weakness, confidence from investors. you know, in terms of the longer-term target, what do you think that might be? do you think it is into 2019 here? takahide: i think that the yen is recently the reaction of decline of market risk. expected, thes normalization policy from the boj, it is becoming more difficult because of the depreciation of the yen. but, the boj sticking to the current normalization policy and it may eventually introduce, or implement the normalization, and i think -- [indiscernible] to the operation from last year. last year, it depreciated by 15%, discounting normalization. i think the normalization policy, the market may react very, very -- yvonne: right. takahide: so i think that the yen could approach 100, i think 100 is not important for the economic -- from the economic point of view, but important for growth point of view. so i think yen will approach 100, and the government could intervene, not in the currency market, but intervene on policy. that will be the big concern. yvonne: we only have about 30 seconds left, but the long-term prospects in terms of growth for japan, we are starting to see the boom and bust of the 11 x, that will start to -- the ola olympics, that will be in 2019, is there a limit to how much the boj can normalize policy given the headwinds coming through next year? takahide: i think that that is not important, a big impact to policy. i think the biggest factors, the fiscal impact that the economy -- i think that japan's largest economy is very sensitive to that, the economy is sensitive to that and also the financial market is sensitive to the larger community. so many people think that either favorable conditions, and a favorable financial markets such as yen depreciation, is partly caused by that, but i think that most of this favorable condition is -- by the economy. according to the recession, the second time -- i think that people recognize that the previous favorable conditions were caused by the economy. it is good. -- the interpretation could [indiscernible] yvonne: what more could the boj do? it seems like the policy toolbox is nearly empty and inflation as far away. if they cannot do more to reduce system was, what else could they target? think the boj, mays not that the boj -- it reduce the 2% goal and it may change it to the long-term goal. i think, i believe that the current inflation could be withstent with the -- the japanese economy. i think the boj could be more flexible in the future. the economy is a strong and the boj could start to reduce policy in the future. so i think that the boj's policy could, how do you say, change to more normal with their approach with the policy such as other monetary policies. ramy: in terms of at least one minor tool they could he is, there has been talk about possibly readdressing the consumption tax roll out in 2019, do you see this as a possible avenue to push ahead? i think it depends on the economy. isthe economy is too low, it likely that the government may postpone the tax hike again. case i thinkis that the boj can adopt a normalcy -- normalization policy in the second half of the year. we are not falling into a recession, but because of weakness, the government may postpone the tax hike in october year 2019. i think it is possible the boj may start to increase the short-term interest rate in the second half of year 2019. because i think for the boj, the tax hike is not a big concern. in the believes the -- economy is a split appeared -- is splendid. yvonne: takahide kiuchi, we appreciate your analysis. coming up, the top three trades. where are we when it comes to the asian rebound, we have seen momentum on this tuesday morning with many more of the markets coming back after the new year holiday. stay with us, this is bloomberg. yvonne: 8:00 a.m. in hong kong. i am yvonne man. welcome to "daybreak asia." asia-pacific stocks look set to fly as europe fails to extend afterr gains retreating from a 15 month high. oil rising, hitting above 52 bothers -- $52. bloomberg's global headquarters, i'm ramy inocencio in new york, where it is past .:00 p.m. on a monday hsbc will deliver fourth quarter as well as full-year results. the last under stuart gulliver. dhp is said to report its biggest first-half profit. it is under renewed pressure from an activist investor. this is the second hour of "daybreak asia." welcome. first word news with haslinda amin in singapore. hasinda: singapore announced a range of tax increases including a surprise to copeproperty levies with its rapidly aging population. it is worth more than one million singapore dollars and goes till 4% from tuesday. the government also wants to raise the goods and services tax from 9%. isresa may's brexit team said to have secret plans to withhold billions of pounds in a you payments to give the u.k. the trade deal it wants. we are told senior officials have discussed atf in case a failure to clinch a free-trade agreement happens. may is expected to have a speech for negotiations themselves. bank of england governor mark carney says he is already fighting the u.k.'s next financial crisis. can eliminate the future crisis, he says the boe is creating a more secure defense planning for bank failures, providing extra liquidity, and ensuring higher capital that old -- levels. reports from japan's a launch an corp. is to offer to more than double its stake to around 20%. the nikkei news says a company will spend more than $1 billion to turn the carmaker into an equity affiliate. an official announcement could come later tuesday with mitsubishi and bank of tokyo expected to attend her shares. global news, 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i am haslinda amin. this is bloomberg. opene: the market dril-quip. asian stocks pretty much in the retreat after that bounce back we saw on monday. let's get the latest from sophie kamaruddin. it is a day with little data to distract traders. taking a look at the mood in tokyo, the nikkei and the topix snap a three-day climb. be too muchot today. looking at what's happening with the kospi, a sliding after a four-day even. aussie shares are being led lower by telcos. bear in mind, while the mood may be looking dour, the return of hong kong markets after the lunar new year must provide impetus. we are looking at whether the hang seng can catch up with the two-day rally, whether we can above 30,000 points. let's turn our attention to the yen, which is steady after the biggest drop in two weeks. with that we saw last week handle, that did prompt officials to express concerns around the currency markets, given implications for inflation and monetary policy. you can see on this chart, g #btv 873, it may have been enough pain free and shorts. yen shorts. it shows long positions have built about to levels last seen around brexit. that is the movement green column towards the far end of this chart. we had finance minister -- a finance minister affirming ambition to the boj to work with the government to beat deflation. we are waiting to hear from governor kuroda to address parliament. ramy: sophie kamaruddin the markets -- on the markets. investors have been embracing the apparent stabilization of the bond market over the past couple of weeks. ellerson capital's brick blessed ett gillespie says it could be far from over. llespie hashas -- gi been doing well. tell us the secret of his success. is -- his secret secret is that he looks for the mismatch between fundamentals and where fundamentals are going and where markets are priced. and he uses fairly complex trading strategies, options, and other things, to buy himself the opportunity of profiting when there are significant moves. he was starting to anticipate a significant pickup in bond yields last fall, back in september, and in january, he started to put some of these trades on, and they really paid off in spades with a selloff in the bond market, so one of his funds is up almost 7% since the end of december as a result. ramy: he is definitely sitting pretty when other people saw losses. looking ahead, chris, what are we seeing in terms of the future? chris: well, he thinks we are kind of in the eye of the storm here, so we had, you know, a significant jump up in bond yields. that seems to have kind of stabilized the past several days with the 10 year u.s. treasury yield at around 2.9%. he thinks that later this year yields are going to start rising significantly further. is the key to that outlook an actual pickup in inflation rates, so we kind of saw a little mini inflation scare a couple of weeks ago with u.s. january average hourly earnings, wages, starting to pick up a price bit, and consumer report which came in stronger than anticipated. but u.s. inflation rates, as 's, are stille significantly below target. gillespie think that later this year, we will see a significant pickup in inflation, and then, that will feed through to another round of losses in the bond market. yvonne: what does that mean for the equity story then, chris? if we are expecting it to climb cope?%, can stocks chris: his outlook on equities is really -- it depends on the speed in the move up of bond yields. he points out that inflation was 2004, 2005,hat in 2006, and bond yields were gently rising, but it was gradual enough that the continued economic growth, continued growth in corporate earnings, allowed equities to -- what he says -- to grind out some gains. not necessarily big ones, but they continue to rise. that is one scenario. if the rise and bond yields is from 2.9 now to 3.5% at the end of the year with a step by step approach. he thinks equities can do ok. if we can get within a month or 2.9%eeks, a move up from to 3.5%, then he thinks there could be further, you know, carnage in the stock market, like we saw the end of january or february. yvonne: certainly interesting to get more perspective on the speed and magnitude of how high climb.ld can crist writing us from tokyo. switching gears to politics. president trump signaling his support for limited background checks on gun buyers in the wake of the florida school massacres. may be and alls olive branch an when it comes to this gun reform debate? signaled not even support for a limited background check measure that senator cornyn and senator murphy have supported. he basically has run on his campaign -- his campaign was very much centered on gun rights , and has been opposed to any gun-control measures, including things like enhanced at brown checks. instance -- background checks. for instance, he eased obama era regulations that made it harder for mentally ill people to get guns, so this is obviously a tragic shooting, and he made a lot of comments over the weekend, but he was really signaling the opportunity to have a debate. beingard to see there much of a push for gun-control significant legislation, given republicans controlled both chambers of congress, and they have been opposed to such legislation in the past, even after mass shootings. yvonne: unfortunately, we have been here before. with sandy hook, we did not really hear much either. it does not seem like this parkland massacre will move the needle when it comes to that debate as well. jodi: it's not expected. after sandy hook, there was a big push in the senate for background checks, and they lost by a few votes. that was when democrats controlled the chamber. it's really hard to see. this has been something the nra has really stood against, any kind of significant measures. there is the possibility of florida doing something. states have moved forward. florida has not been a state that has been friendly to gun control legislation, but interestingly, the students themselves who lost their classmates are making a push. they are going to go to andahassee, state capital, they say they will have a march in washington. this is the first time we have seen that happen, the students themselves. we did not see that after columbine and the other students. it was the parents and activists. that may change things a little bit, change the tenor of the conversation. ramy: it seems that way from what we are seeing tonight. thanks, jodi. has been tweeting a lot, a dozen in the past 24 hours. he is linking what is happening in parkland to the fbi in terms of their push to look for possible collusion, and donald trump also tweeting about that. sum up what exactly has been happening for all of us. jodi: a big tweeting weekend for president trump. one of the things he was tweeting was that the indictments of the russians, you know, robert mueller's investigation, actually clears him, shows that he did not have any collusion with the russians, and that there was nothing amiss in his campaign. it does not saying necessarily do that. this is just a step. but he is taking it that way and also blaming the democrats. and not saying much about the russians, actually, interestingly. but this has been another attack on the fbi. the president obviously had fired the fbi chief last year and has taken steps against the is saying that the fbi did not do enough, that they had warnings about the individual in florida, and that they did not do enough to heed those kinds of warnings. so that was among the tweets that the president -- that was among his tweets this weekend. ramy: very interesting that he was blaming a lot of people on american soil, but not people on soil of other countries. jodi schneider, thank you. singapore's the price taxes to shore up resources for an aging population. we are going to the lion city later this hour. up next, asia-pacific markets are set to fly. europe fails to extend earlier gains. investment strategy from ig market is next. this is bloomberg. ♪ betty: this is "daybreak asia." i am ramy inocencio in new york. yvonne: i am yvonne man in hong kong. a quick check of the markets in the region. a pullback when it comes to equities. losing steam after the rebound we saw in asia. fall in the trend of what we saw in europe overnight with u.s. markets of course closed. but we are seeing here when it comes to the nikkei 225, down close to .8%. could be interesting to see how hong kong plays and to all of this. they could be playing a bit of catch-up once markets reopened later on this morning. let's get more from the asian markets analyst joining us from singapore. thanks so much for joining us. we are seeing it reopening at the lunar new year holiday, losing a bit of steam. while us through with going to -- walk us through with going to be driving sentiment this week. morning, yvonne. i think what we have for those markets that were open on monday , taking a little bit after what we have seen in new york. for the most part of the week, there is so much to look forward to. and the gyrations in the market, how things pan out, will be interesting. on one hand, we have the bias in the market. certainly from last week, the cpi numbers coming up. we have the fed minutes, and i think that will be the key event to follow. primarily, that will drive things. how things pan out in the market situation will be interesting to see at the end of the week, the market situation. yvonne: you mentioned that your market strategy has not exactly changed since the start of this year. you are watching the volatility as well. we have a chart for our viewers, g #btv 142. we have seen after this market turbulence that investors are actually fleeing from these volatility related funds, whether it is short or long. volatility is quite elevated right now. i think pretty much staying on course, a holding pattern, when it comes to volatility or is it here to stay? yvonne, so, i think in terms of the market situation, it does look like volatility has finally returned. something we have expected this year, but right now, this is really something that emerged in is likely to continue on, my opinion. in terms of the strategy to look at this, in terms of the fundamentals, the expectation of growth is self-sustaining, still something to continue the case for volatility is to pan out. at the market right now should look much more closer towards industries that are changing strategy to capture some of this movement, but at the same time, we see less of this kind of movement, yvonne. i will take it from here. one of your top conviction trade has to do with the u.s. dollar. perhaps no surprise. a lot of people are thinking it's going to fall further. --has fallen below its relative strength is towards oversold. how low, how long, are you going to be going for u.s. shorts? jingyi: in terms of the short overview, it's going to be a longer-term view due to the monetary policy is partitioned. for 2018, the market is seeing hikes price and by the fed. past 2018 to 2020, what we have for the markets fund futures, it only loses to hikes being priced at the moment. we see more hikes that will take away some of those moving into the longer-term, and i think, in that sense, it is going to be weighing upon the dollar. longer-term, there is the expectation for the deficit itself to be addressed by the u.s. dollar. the horizon itself carries both to the end of 2018. rainy. -- ramy. yvonne: the u.s. selling $250 billion of debt in the last three days. what could that signal for yields and how sticky would a 3% yield to 10 year be? jingyi: in terms of the trajectory, i think the market does see a little bit of this tapering, but in terms of this very bearish view for the u.s. treasury -- the market is looking at how for much -- how much for that it will move. i think the market is closely looking at -- i think there is a debate regarding the level we are seeing. we have to make sure it will be a concern for investors, but for now, i think the 3% level that will be -- debt will be a key trigger. jingyi pan joining us from singapore. you can get a roundup in today's edition of daybreak. for bloomberg subscribers, just go to dayb on your terminal. it's also available in your mobile on the bloomberg anywhere app. make sure to check it out. this is bloomberg. ♪ ramy: in the wake of tragedy such as the florida school shooting and the recent earthquake in taiwan, facebook is trying to make it easier for organizations to help people during a crisis. community help launched a year ago and is aimed at helping those in need finding critical resources. joining us now from san francisco is facebook's product lead. thank you so much for joining us. you are head of social good, but you know, in this day and age, there is a lot of social bad, unfortunately come out there. on twitter, on facebook. how would you make sure that facebook is able to push back against the to ensure trustworthiness? >> social good was actually wholed years ago with the goal of helping our community do more good, although they are already doing it. we started to build tools years ago. we continue to do that. we will continue to do that years in the future so we can transform the space whether it is help, crisis the response, or raising money for people care about. ramy: there is good amount of back and forth on this in terms your facebook vice president of ad sales tweeting things. him.d trump retweeting the director of national intelligence saying all of this is wrong. it's a little bit confusing here. can you help to clarify the air in terms of what we are hearing from facebook? asha: so i actually do not work on that area. i work on social impact. specifically, we spend time building tools for people in terms of crises, or people who are looking for blood, for example, if there is a shortage. we work on building towards for the community to help scale the impact they are already making. ramy: got it. just like we have to watch out for fake news flying around, surely facebook has to watch out for businesses that want to be truthful, but businesses that might be also fake out there. what are you doing in terms of ensuring that businesses don't scam people out there as they are trying to look for help? week, wet last announced the ability for businesses to participate on community help to offer goods and services. right now, we have rolled that out to a limited number of partners so we can continue to learn what the right will set it is, so we have folks like lyft and chase an international medical corps that will work with us to ensure we have the help to scale this out to more organizations. yvonne: there are a lot of people out there that question the work you're doing, saying it's just pr. facebook is coming off as insincere in their efforts. how do you sway those who think this is just a marketing campaign? asha: i would go back to the impact of the work. again, this work started years ago. safety check, the first actual instance of it, where there was a team in tokyo that actually built a version zero of the we have been11, so building these products for many years, and i'm excited to be able to continue to do that work. day in and day out, we think about how do we actually built schools to make it easier for our community to achieve the outcomes that they want to? and that's what we think about. you definitely use the traditional indicators, i guess. what do you look for in terms of business metrics, dollars donated, engagement? asha: if different by space. for example, when we think about health and we are trying to solve the world blood shortage, we are measuring, are we making a dent in the blood shortage? crisis response, we look at indicators to show we are helping people to survive and build more resilient communities because of our tools. so we are thinking about how do we transform the space and what are the measurements of that, and that is what we are held accountable to. betty: thank you so much. facebook social, good product lead. asha sharma in san francisco. up next, we look ahead to hsbc's earnings. revenue growth is something we will be looking at as well as a possible new share buyback, which could get investors very excited. we will have added more. this is -- and more. this is bloomberg. ♪ retail. under pressure like never before. and its 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: 8:30 in singapore. a beautiful tuesday morning in the lion city this morning. i have to away from the open of trade there. i am yvonne man in hong kong. ramy: i am ramy inocencio in new york, and you are watching "daybreak asia." breaking lines on the bloomberg about the rba. yvonne: that's right. these minutes coming through. we are not expecting a whole lot of surprise when it comes to the aussie, because we have largely heard from the likes of philip lowe last week already, but talking about the rba, household balance sheet, we are carefully monitoring them right now. it has been generally positive. risetion, they say, to only gradually as the economy strengthens, and also talking about the strong retail competition to persist in the next few years. still the risk that consumption growth could be weaker according to the rba, and rent inflation and cpi could be expected to rise gradually. we will continue to hear this theme. deflation not exactly picking up too materially. given the fact we heard philip lowe last week say if wage growth continues to be at 2%, it will be hard for inflationary pressures to continue to tick higher. meantime, market reaction with sophie kamaruddin, watching some of the aussie movers. the aussie dollar as well. sophie: earnings season very much under way. according to a credit squeeze a stronger earnings season than we have seen in the last 15 years. that's not translating when it come -- transmitting when it comes to the moves in tokyo. in termsbiggest drag of points. the minor is expected to deliver its biggest first-half profit in three years. that's not helping the share price today. when you take a look at the bright spot, tech shares leading the adventures, up .9%. ltm.igher by let's pull up the board to check in on shares. we have it on track to close at a record high. the company develops electronic design, automotive software. ins after reporting a drop income and projecting constraints in operating market growth. the competition is getting focused. consumer strategy -- a share,king ahead to it seems there is not so much to guide market sentiment. how is the mood really shaping up? sophie: when you take a look at the mood in the equities and bonds space, you have declined across the board. when you take a look at what is moving the dow in tokyo, you have the likes of the factory automation player meeting the drop on the nikkei 225. keep in mind although we are light on the data docket, we are waiting for machine orders from japan for january right there. you take a look, take a look at the currency space and what is happening with the yen. we have it on the back foot, continuing to drop after its biggest slide in two weeks. take a look at the commodities complex. oil continuing to gain ground. trading at the highest level in two weeks during a key week for crude. industry giants meeting in london. we are waiting bps energy outlook. ramy: taking a cue from europe and starting to wade into a sea of red. haslinda amin. already -- there is concern that the no cache economy is moving too fast. the riksbank carrying out a digitalmid the rise of and mobile payments. the report is expected by the middle of the year, but a committee has already said cash could make it hard to maintain the infrastructure for handling money. president trump has offered his support for unlimited strengthening of background checks on gun buyers. since taking office 13 months ago, the main action the president has taken on guns is to block an obama administration rule designed to keep weapons away from mentally disturbed people. president trump has repeatedly stressed support for gun rights and the national rifle association. reports from japan say mitsubishi corp. is to launch a 20%.r offer to around the nikkei news says the company will spend more than $1 billion to turn the carmaker into an equity affiliate. an official announcement could come as soon as leader tuesday with mitsubishi on the bank of tender shares.to jamie dimon has extended his reign as the best-paid ceo on wall street, taking the title for a second straight year. was $29.5 million, if i .4% rise that was the smallest among the top five banks. morgan stanley came second at , took his total compensation to 27 million dollars. global news, 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i am haslinda amin. this is bloomberg. emerging from years of researching and scandal. results later on today. let's get to our chief correspondent, at stephen engle, in hong kong. what can we make of his legacy? is the end of an era, probably, an ignominious era, if you want to call it that. stuart gulliver, this is likely his last day on the job. john flint will take over. he will take over as of tomorrow. gulliver has spent the better part of his seven-year term really shrinking the footprint about 100xiting businesses, exiting 18 countries , cutting 25,000 jobs. a number of different allegations that the bank, through its massive tentacles of business, were involved in allegedly money and helping clients evade taxes. probably thera is best way to put it. that could likely come to an end as the bank is shrinking its footprint and getting a little bit more nimble as they report their fourth-quarter and full-year results at midday here in hong kong today. so what are we going to be looking out for? the cost structure is one thing. the cost performance -- this is a company that has been shrinking cost, but we are likely to see in the fourth quarter a bit of an uptick in cost. what a lot of analysts tell me they are looking at is what the and called the jaws -- growth whether revenue sufficiently surpasses that of cost growth at the upper end of 1% to 2%. we are respecting for the full year an increase in single digits of growth. the markets, we are expecting a 2% decline quarter-over-quarter in revenue. for the full year and profit, we are expecting slight rise on the back of the higher u.s. interest rate environment and the higher net income -- net interest income. also, we are looking at potential provisions. hsbc as well as a number of european and u.s. banks, exposed theteinhoff scandal -- failure of steinhoff as well as carillion, the u.k. builder. one thing investors around the world will be looking at is whether the buyback program will continue, if there will be a new buyback program. stuart gulliver has bought back 5.5 billion dollars worth of your shares. there is some speculation that be another buyback upwards of $4 billion. not expecting a buyback in the near term. ramy: i want to go back there for a second. what kind of write-downs or one off that we talking about here? stephen: there could be because steinhoff,posure to the south african retailer. we are seeing hsbc, one of several european banks as well as u.s. banks, with credit losses or potential credit losses to the steinhoff, south african retailer. also, carillion, which collapsed with more than $2.2 billion with of debt, so any kind of information we can get to the exposure, provisions of potential right often that. keep in mind the u.s. tax code. hsbc not as exposed to the u.s. market. the u.s. tax code makes it harder to deduct past losses from future tax bills. deutsche bank, among others, forecasting another full-year result, negative result, due to those write-downs on expected lack of write-downs on the tax code in the u.s.. but we could get some guidance of course later on today on the number of those plans. ramy: that's right. i'll chief north asia correspondent, stephen engle. thank you very much. 's will be breaking hsbc earnings life on bloomberg. we will hear from ian mckay. that interview will be at 3:00 p.m. in sydney. stay tuned. next, we look at china's plans to restrict investment in property and how that could affect the real estate market. this is bloomberg. ♪ yvonne: this is "daybreak asia." i am yvonne man in hong kong. ramy: and i am ramy inocencio in new york. singapore has announced a range of tax increases as it seeks to boost savings to pay for a rapidly aging population. let's bring in our correspondent, haslinda amin. there were a few surprises out of this budget. haslinda: that's right. surprised to read has substantial reserves to draw from, but that not a long-term solution for the country, hence the slew of tatts is announced in the budget. gst won't get to 9% from 7%. important to note that gst in the height, singapore will be among the lowest in asia. the taxes to be implemented, a tax on online, video, music streaming, the likes of netflix, plus a carbon tax of five dollars a ton to raise between $10 and $13 a ton. industrialect large facilities, companies that produce at least 20,000 tons of greenhouse gases per year. of, they account for most singapore's greenhouse gases, so like i said, a slew of taxes, on income for revenue from state-owned investment companies the likes of gse, the likes of -- key spending priorities for the country in the coming year will be on health care infrastructure , which will rise to 3% of gdp over the next decade. yvonne: that was a surprise that we were not expecting. what are the details here. what if i could that have on the property market there? haslinda: you know what? you are right. few saw that coming. higher stamp duty on residential properties over one million from 3% to 4%,dollars, up effective from today. the increase will pretty much affect on to luxurious properties. some say it is more a deterrent for property markets that are just recovering from a slump to prevented from getting too hot. they say the effect of increasing revenues is actually quite minimal, as we have reported. singapore developers have been bidding for land aggressively in recent months. while there is no cause for concern about beads he brings there is no harm in being cautious, hence i think, this is why we are seeing this tax. haslinda amin, chief says asia correspondent, joining us from singapore to break down that budget. speaking of properties, we are talking about china. china's outbound investment of property could fall for percent this year according to a new report from punishment and from strictering approval procedures. we are joined by a partner at the law firm paul hastings, that focuses on the real estate sector. 30% to 40% drop in outbound investment this year. is that realistic or too pessimistic for this year? >> it may be somewhat realistic, but what people are missing here i think is kind of the overall trend, which is still towards outbound investment, but towards more regulation of that outbound investment. china, like any other economy, as it continues to evolve, they started from a level where anything outside of china was never regulated, never looked at by the government, and over the past 10 years or so, there has been an increasing trend of regulations so the chinese government knows what chinese citizens and chinese investors are doing, whether it is directly out of china or chinese investors which may control hong kong, singapore, or new york. my you does that change advise your client when it comes to outbound investment this year? does it change the behaviors here? are clients more in a holding hotter? david: that is exactly the right question. the new regulation is notice 11. there is some good and there is some bad. under the old regulatory scheme, before a chinese investor could sign one of these large deals, it had to go to the government for approval. having to go to the government for approval in the middle of a negotiation process led to what a lot of people talk about as largeina premium, a chinese investor having to pay more to keep the western seller involved in the deal. the chinese government has gotten rid of that, so that's a great thing, but what they have now done is they have put in place a regulatory approval before the deal is closed. we changed one approval for another approval. on balance, i think that large, sophisticated investors, chinese investors, are working through the process right now, but i don't think that this is going to prevent them from doing it. it's just a question of figuring out exactly how this works. like everything else, when you're talking about institutional investors, it's complicated, but it's not going to stop these investors from investing. yvonne: it's not just restrictions from home, they are facing it from both funds. is he getting more difficult to navigate through these regulatory hurdles after we saw this? the biggest high-profile case we have seen, actually, the deal actually fell apart. david: this has nothing to do politics, but world where things like the committee on foreign investment in the united states, where governments are becoming much more vigilant about looking at cross-border transactions to see whether there is a national security element, and certainly, we have seen that apply towards chinese investment going outbound, so it's complicated. it's more complicated. it does not mean that deals are not getting done, it just means that if you are doing the deal, you need to be prepared and do your work early rather than late. what youm brought that up. it is not necessarily impossible, but extremely difficult. that implies some gold on -- some deals are ongoing. what are you directing your clientsm to where they -- clients to where they can have access to overseas areas? david: it is no surprise that people involved in real estate that one of the hottest areas in real estate right now is something called logistics. warehouses, call it what you will. the chinese regulatory scheme actually does not deal with logistics as real estate. simpler approval and review process for outbound logisticss into the sector. you are going to continue to see investment. ramy: let's say a lot of the money is staying in country. where are some possibilities, some opportunities in china? could it be one belt, one road you are telling people to go to? david: one belt, one road, of course, is the top line thing that everyone is focusing on, but if you're talking about real estate in china, the government has a new, interesting proposal, where they are now encouraging investors to invest in for release residential. it used to be for sale residential. from a structural standpoint, it was profitable for investors the way it was set up, but we are seeing both domestic investors and foreign investors focus now on this release segment. -- for-release segment. yvonne: china is all about these trophy assets, so to speak. is this going to be a game changer in the real estate sector? sophie: it's an interesting -- david: is an interesting question because what you are seeing is that, culturally, chinese people desire to own their own homes. that's right. over time, we have seen in the last 10 to 15 years that china and chinese people are becoming more international, kind of more like the rest of the world. in the rest of the world, people like to own their own homes, too, but a lot of them rent. i think there is a significant market segment to be serviced in the for-rent category. if you are asking if i think it will replace it, no. concerns thatwere capital controls had some unintended consequences of dampening inbound investment. has that changed that mentality? david: that is a significant headwind is that when you restrict outbound investment, investment stays inside the country. in inflate assets. or asset prices, rather. people have stop talking about the conversion rate. people were very concerned that 6.1%. at 6.8%, people were thinking -- yvonne: seven! david: that the chinese government had to defend the currency. i am just not sure that is a significant concern anymore. ramy: david, looking ahead, do you think that that is maybe a case for no more restrictions to come in the future? david: while that is part of a for a less restricted scheme, if you look at what has now happened, it is not just focused on the currency. it's focused on control. the chinese government wants to know where chinese people are investing their money. ramy: we will leave it there. thank you, david blumenfeld, paul hastings partner, for your thoughts. don't forget, our interactive tv function, tv . catchn watch us live and up on past interviews as well as dive into any of the securities or bloomberg functions we talk about. plus, the comfort part of the conversation yourself by sending us instant messages during our shows. as is for bloomberg of drivers only. check it out at tv . this is bloomberg. ♪ yvonne: this is "daybreak asia." i am yvonne man in hong kong. ramy: i am ramy inocencio in new york. o'snvestor says ray dolley big short will cost them dearly. his bridgewater associates has a massive $22 billion bet against europe's biggest companies. that includes italian banks. there is tremendous value in european lenders which will benefit greatly when the ecb starts normalizing policy. >> i think he is going to lose on this and the reason is that we are one of the largest investors in the italian npl. 50% market share. we see tremendous value in some of these asset classes. yvonne: british retail billionaire philip denies he is planning to sell his fashion empire. -- it was in talks with china. the company agreed to buy another company. they bought a controlling stake in the shoemaker. ramy: daimler is trying to play down the newspaper report that says its own engine questions the legality of software used to control its diesel powered plants. the build haveby been released to "harm dialer and it's nearly 300,000 employees." .aimler says it is cooperating yvonne: that is almost it from us on "daybreak asia." haidi, you are watching the singapore budget, and the reaction to all of this. .aidi: really dissecting we had husband a talking about the ramifications. it's the budget that counter the demographics problem of an aging population, how to pay for some of these costs that are associated with an aging population. we will be speaking to the singapore minister for trade and industry, going through the details of that budget, and also talking about the singapore economy, which is a bit of a canary in the gold mine, when it comes to global trade. it is such an exposed economy when it comes to global trade flow. we are going to talk about the synchronized global trade story and whether tensions come into play in his outlook. joining us will be the ubs wealth management regional cio also. he says it is under very specific circumstances that we see the impact of rising bond yields really causing another tantrum in stock markets. he says it's not a reason to get out of the market. he is still overweight global equities and the largest portion of that is u.s. equities. php reporting also. glencore as well. martina and -- mark keenan joining us in particular to talk about positioning and oil. ramy: thank you very much. that is it from "daybreak asia." our markets coverage continues with haidi lun, next. stand by for "bloomberg markets." this is bloomberg. ♪ ♪ ,aidi: it's 9:00 in hong kong and 12:00 in sydney. this is "bloomberg markets: asia." ♪ asia-pacific markets are on the slide. preparing to deliver the last result. nobles adrift on a sea of troubles.