Minutes 20 minutes or so has seen lows across safe havens to dollarchina as well. For eighttrack volumeheavy daytoday. Day today. We are on track for 35 billion today. It is a busy day of trade. Trades inxas, 55,000 the first 60 minutes on a front and contract in west texas. Iran is launching what it calls revenge attacks with missile launches onto bases that host u. S. Troops. What to me know so far about irans actions what do we know so far about irans actions . It was a series of attacks on these two bases. The Islamic Revolutionary guard corps claimed responsibility quickly. In the be interesting uns u. S. Response. There has been a lossoflife and how much damage was done . They were on high alert with those facilities, because i ran have thes thought to highest amount of short range missiles in the region and this was thought to be the retaliation to expect. Iran has been saying that they will avenge the death of the general and are calling it a terer operation murder martyr operation. They are planning to attack more targets, but we are still waiting to see details about how much damage was done and the loss of american life. That will be a large part of what determines the u. S. Response. David donald trump they will respond to anything iran does. Do we know what the white house tilt is . We have not heard directly from the white house yet. The press secretary said President Trump was briefed right away. We know congressional leaders have been told about this early on. Esper and the secretary of state were at the white house. Obviously, meetings are going on. We have heard various things in previous days. Saying heard tough talk, that if iran did anything, there would be a response. He used the word disproportionate. In the past if there has not been a lossoflife, President Trump has not responded immediately. The attack on the general used as a strong, but whether he would come back with another strong move or wait and see is really the question. The other question is what else does iran do . Yvonne Jodi Schneider joining us in hong kong. Policyet to our guest, a director at defense priorities in washington dc. Your reaction . Obviously, it is incredibly risome in the possibility and the possibility of escalation remains potent. I hope the white house is restraining itself. This crisis is of their making. The United States walked into this problem and i think it is not too late to back out by refraining from a belligerent response to this particular attack. Predictable attack. It was a terrible choice to leave troops to observe protectable attacks. Predictable attacks. David how would you describe the acts of iran in terms of it being proportionate, perhaps symbolic . Benjamin it may turn out it was largely symbolic. Last i heard, there were 15 missiles fired. , but we of them hit dont know what they hit. If they intentionally fired in a way to do the most damage or missile strikes, it would show they werent going to be knocked around but were not intending to do lots of damage and avoid escalation. I think the United States left iranian leaders in a position where it was almost impossible for them because of domestic , thats, pride, deterrence they had to do something. They werent going to stand for it, but something that would not lead to further u. S. Strikes. Yvonne does iran have the capabilities to stage a confrontation . The economy has been deteriorating already due to u. S. Sanctions. How far can they see this through . Iranians are no match conventionally, but the United States only has a few forces in the region region. 6000 in iraq and more nearby. We have the capability to bomb iran a great deal, but they have 80 Million People about proxies around the region, a lot of nationalism that will make it hard for them so surrender to surrender and would be exceptionally dangerous for the United States. Moreuld be substantially costly than the iraq war. Seen the response from iran and what would you be telling donald trump right now if he might want to deescalate this . Benjamin i dont know if we have seen the extent of the response. I hope so, and i hope they have tried to do something that is of a limited damage so they can get out with their pride and without a major war. ,hat i would tell the president youve made your by killing soleimani and its time to back down. If you say you dont want a war, its time to stop listening to people in your cabinet who seem eager to pull us into war. Start listening to someone, anyone, who might have an idea about how to avoid it. One way to avoid it is to keep your powder dry and start iraq, asng forces from iraqis man we do. Demand we do. David benjamin friedman, policy director at defense priorities. Do you fade risk . It is a tough one. Thing to buy weapon and security firms. What is happening cant agree is people cant agree. It is not that donald trump or iranians wants to be extreme. Thingneither American People nr iranians agree on what needs to happen. Neither can brits. 50 of people did not vote for brexit at all. Position where a people cannot agree on the right path forward, politics cannot find the right answers. If they cant find the right , security and surveillance firms is the right strategy. Whether iran has responded, i think it is doubtful. Nevertheless, i think it is not as relevant. If its not going to be iran, its something else. David there are different types of geopolitical events. There are times where every week you have something. Then you have Something Like this. Is this different . It is. It is a step up, primarily because it is a geopolitical mistake. But once again, people tend to forget how volatile and explosive brexit could have been. People tend to forget how expensive hong kong can be. So yes, it is a step up. But im just saying similar steps up and down will go on. Reflected inshould equity markets is a big question mark. The longer Central Banks applied liquidity, investors expect Central Banks will fix economic problems and politics will fix geopolitical problems. That is why equity markets remain placid. As soon Central Banks stop supporting the market, thats when volatility will come through. Yvonne we will have more from you coming. Sue japan has posted more news,istic economic indication that tightness in the labor market is not translating into consumption. From arnings slipped year earlier. Governore and the boj have reiterated calls for Japanese Companies to raise pay. Star hasably would bollywood star has joined protesters at a university in new delhi. Local media say the actor stayed at the rally and spoke to students. Comes after at jnu significant anger at Narendra Modis religious citizenship law. Ghosn says theos internal investigation that led never aboutr was finding the truth. He is expected to hold a News Conference, naming people who engineered a two to destroy him coup to destroy him. Has a arrest warrant against his wife. Bushfires inf the australia are being felt halfway around the world. Smoke has been detected in the skies above buenos aires, argentina, 12,000 kilometers away from sydney. The fires have killed 24 people so far and up to one billion animals and are so large they are generating their own weather systems, causing dry weather strikes lightning strikes. Global news, 24 hours a day on air, on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. David still ahead, samsung is out with prelim earnings. On the up next, more market impacts of the conflict in the middle east as tensions rise. This is bloomberg. David relatively good news if you are bullish. U. S. Futures are low on the day. We have recovered half of 1 on u. S. Futures. Live picturesg at of the barrel of the iranian general killed last friday burial of the iranian general killed last friday. Iran has been saying it is not after war in a letter to the Security Council. Did not get a statement from President Trump, so perhaps both sides are having a more measured response. Our guest is still with us. A Global Markets strategist. I know the fed is on hold, but should they give up hope they will raise rates this year . Viktor yes, i think they should give up hope. The only question is how much liquidity they put into the marketplace. They put in a search of 650 billion. That is being reflected in higher on a supply. That is not going into the real economy, it is going into Asset Classes. That is why they performed as well as they did. Is, will Central Banks continue to pump that level of liquidity . The biggest risk for investors is when the Central Banks become complacent. But Central Banks believe the economy is in the right spot. Thats the time to stop worrying. Markets canhat, no improve with neutral Central Banks. Capitallower cost of and a mix of the two. When we dont get them, thats when you get asset price the deratings. Is there a reason for Central Banks to push back on liquidity . Viktor in early september, the s p was looking at negative performance year to year. Curves wereield inverted. Emerging markets were really collapsed. What happened in a time of three months . Not a great deal. Central banks changed policy. If they dont pull back, i guarantee you all of the isms could be down and will be sitting in the same chair discussing how things changed quickly. So from my point of view, there is a recovery and a liquidity optic going on. This should keep us a broadly neutral, neither are they contracting. The question is whether that growth rate is in line with earnings expectations built into the marketplace. , andeling is its not thats why i cant see how they are going to pull back. If anything, they have to add more as they progress. Its almost slightly perverse for markets to expect the Global Economy not to improve. If money continues to go into the markets, do i expect the same trades to be relevant . Viktor thats right. Why would you buy cyclicals and value when not of it israel . Is real . What you do is buy everything that benefits from monetary stimulus. You dont by value or cyclicality. Any world that is just driven by cyclicalitys, value the only works. Is working not to mean revert. So why would you buy strategies that are predicated on mean reversion . Theres no sense. At some point, i do think strategists will change. I do think policies will change, but thats not today. David always great to get your insights. Up not just on our interview but all of the conversations we have this morning. It has been a busy news morning. You can become part of the conversation and send us messages. This is bloomberg. Yvonne taking a look at markets here, things are looking a little slower here given the steep moves we saw following the iran tensions. Seeing a little more green on the screen. David spots earlier were completely red. Get tomeantime, we would some of your business flash headlines. In fact, im being told we are going to your market check. The computer is going berserk. Here we go. Samsung. Yvonne Quarterly Earnings estimates after memory chip prices climbed out of a rut. Fell, but thate was better than expected. Exports are being boosted the easing of trade tensions. Boeing is now recommending Flight Simulator training for the 737 max, reversing its earlier opposition and complicating its return to service. They say they are exploring how to modify similitudes from an older 737 model. United airlines, take a look at markets. The Energy Sector in focus today. At 10 when you look sector groups within asia pacific, i can tell you of the depths of todays session. We are looking at four sectors in the green across the asian benchmark it benchmark. Oil is up about 2 . We were up almost 4 on brent races. Prices. Material is down. Why would you get into cyclicals anyway . The benchmark is down, about a 1 drop. A lot more news flow coming through in terms of what policymakers are doing. Isdo know indonesia intervening to stabilize its currency. We are headed into the lunch break with little bit more momentum. This is bloomberg. Im su keenan with the latest bloomberg first word headlines. Iran says it is not seeking war after firing a series of rockets at to u. S. Bases. They have thought to downplay their actions while state television says the attacks marked the beginning of an operation to avenge the killing of a Senior Iranian general. President trump has been briefed the Administration Says there are few, if any, casualties. With the economy way down by the shadow banking causing weak investment in a slump and spending. 5 from march, down 6. 8 from a year earlier. The forecast comes as the r. B. I. Chief says price stability is his objective. Deficitas budget stated last year as spending rose more quickly than revenue. Weaker thancture is the forecast but slightly below estimates the finance minister offered last month. Grew atnesian economy the slowest pace since 2016. Global news, 24 hours a day on air, on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. David lets focus in on the Energy Markets right now and see where we are. 2. 2 on west texas. Aaron clark has been helping us watch the story. Where are we right now . Oil give upeing some earlier gains. Are both up about 2 or so right now. Some of the concern is easing. Limited tohas been military installations. The largest concern is the strait of hormuz. Waterway where one third of seaborne crude passes through. They have threatened to shut strait in the past, so the initial spike in Energy Markets was from concerns the conflictould escalate. Risk is thebig of a threat from iranians . It would hurt themselves as well, so how likely is it . It is something they have threatened in the past. , one thing we were reminded of is the vulnerability of Energy Assets in the middle east. There was an attack on a byility that cut production 5. 7 Million Barrels a day. It had a huge impact on supplies and any disruption to shipments could impact shipments for days or weeks. So these assets and chokepoints are very vulnerable. So far, theres been no indication iran is going to go there. So far, is limited to these military installations in iraq. Lets try and help our viewers map out what the next few hours might look like. What are you and your team talking about in terms of the angles to watch . People are watching for the u. S. Response. Iran has made this limited response. We will have to see how much damage there is to these military bases. So far, it seems very limited. Depending on what the u. S. Does and if that targets energy infrastructure, then there is a whole new ballgame. Seems specific to these military sites. If it escalates to Energy Assets or infrastructure, then it is a different scenario. Clark, our asian Energy Editor joining us from tokyo. I want to mark some lines from the Energy Ministers saying they took proportionate selfdefense measures. There are talking about how the moves were symbolic, but they were saying this was selfdefense. Still no word on a statement from the white house. David they are not seeking to reiterate their letter to the u. S. , more details on this to follow. Whats more coming up. Lots more coming up. This is bloomberg. David welcome back. The latest updates on. Evelopments in the middle east to the u. N. Letter saying they were not seeking more and they were taking appropriate selfdefense azures. Notto reiterate they were seeking to escalate war. When you look at how Market Reaction has moved, it certainly in line with the narrative we are seeing. More lines here. Iran concluded measures, not seeking more. Font to look at this at what this means, this is their response. They have concluded measures and are not seeking war. Perhaps the is first direct retaliation. Trump , president yes, that is the figure you are seeing. Half of 1 . You can see a little bit more buying into these markets. Brent, goldt texas futures now coming well off their highs for the day. Elevated, but i would imagine it is pointing to a deescalation. Yvonne you see gold futures are back below 1600. It is certainly more welcoming. Take a look, up to 1. 8 as we speak. Over to our senior you,st and bring in daniel a head of global investment. Is this all about chips . I believe so. The stock price has done well already since last year. We expect that memory chip demand has already recovered and will continue to stay strong. Though chip prices continue to. Ecline, the decline is easing sentimentwise wise, it continues to support check prices. Recovery continues in the first half. David i know it is primarily a chip story, but things like smartphones and Smart Devices . They probably did not do as well as thirdquarter. Remember it did beat expectations that was driven by market business. Third, they probably faced strong competition from iphone fact that while ways concerns seem to be alleviated. Fourth quarter shipment was probably sluggish, but going into 2020, the company is going to have at least two foldable devices. Yvonne and 5g. Correct. Samsung claims they took more than half of 5g phone market share. But having said that, we expect more competition from chinese vendors. Yvonne xioami was one to come up with a phone around the 2500 range. David cheap 5g. To burn your pockets for that one. Lets bring in our guest. Your thoughts on the latest results . In fairly is coming as expected. As you heard, the coming in slightly lower than expected. The chip business seems to b