Heidi this is daybreak australia. We are one hour away from asia upon first major market for the start of the trading week. After 6 00s just here in new york. For the next hour, we will look on wallll the action street will play into the trading day. It is another countdown. We were counting down to the jobs report and that was a fantastic report on the economy, but left people puzzled. Looks like we are going to raise Interest Rates now what. Look at what the fed officials are going to say whats coming next. You saw the markets on friday. They were higher but it to a low over the session before climbing back. The s p closing up. 3 in the doubt up 40 point. The dow up 40 points. Expect a lot of uncertainty when the markets open here. Number verypayrolls whateverliminating doubt there was that the fed would be able to go with a hike this week. Taking a look globally, theres a lot of stuff for investors and traders to be focused on this week. The bank of japan as well as the indonesia. L as bank article 50 potentially being triggered this week as well. Take a look at how we are shaping up in new zealand where trading is underway. Had theand dollar, we dollar index falling. Futures in australia setting up like this extending just a little bit, a. 8 gain last week. Ating a quick look commodities where it was a huge week last week. Gold is up about. 5 . Crude flat at the moment but itching toward the 48 a barrel. Futures all steel down at the moment. Lawmakers on both sides of the aisle say they have not seen evidence to support president trumps claim his assessor cap to some. Republicans and democrats say they expect more details to emerge soon. Monday is the deadline set by the Department Justice to provide any documented evidence related to the allegations. Toshibasom tokyo say loss could reach a trillion yen. Comes from a newsgroup that does not say where it found the information. They say they may allow the unit chapter to file for 11. The indian Prime Minister had a resounding victory in the state election allowing him to push ahead his agenda. 216 seataken at least in the 450 Member State Assembly and is leading in more than 90 under theres 90 others. Its put him in the position to campaign for second term in 2019. Turkeys for a more with the netherlands continues to worsen with new accusations on both sides. The turkish president has called for sanctions against the dutch of his assistants was escorted to the german border. The u. K. Brexit is trying to with hold a developed inside the a vote that could trigger leaving the european union. The Prime Minister has indicated she may launch frexit on tuesday if she wins mondays vote. Global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. This is bloomberg. Joining us for a look at what is happening in australia and going ahead into the agenda, lets start with the weekend agenda. It was a Chaotic Campaign and they said some strange things and and that getting some strange things but what was a factor is what shane oliver is describing as shades of dutch disease. The governments did not do that well. With saying when the state is effectively in recession. Its a landslide win the for labor, winning 40 of the 59 sheets. The mere has a big job on his hands. He says that is going to take decades to remove and is edging job creation. You scrap plans to sell a 51 stake in the grid. Mentioned iron ore and we are all trying to work doubt when thats going to come off property come off properly. It is a different set up from where we were two or three years ago. 90 of producers would be able to make a profit. Minors could have made a profit at that level. Deutsche bank says at 40 per ton, just under a third of this sector would be making a loss, but chait but think back to the shakeout and remember alice iron. In 2012 it was trading at three dollars a share and now is at three cents. Betty an interesting comment here from Tesla Ceo Elon musk, a promise to fix southwesterly across electricity problems and 100 days or it is free. You halfous . Expect him to throw in a set of steak knives as well. Of tweetsas a series mikeen elon musk and cannon brookes in australia in which elon musk promised to deliver 100 megawatts of power for southwesterly a in 100 days. This was in response to serious problems. The grid completely fell over after a series of storms. A lot of that got pinned on the states heavy reliance on renewable resources. Theres been a lengthy discussion about what can be done in this idea of pound storage is a popular one, but one wonders if in the sunniest and windiest continent on earth why no one has cracked this not yet. Betty it is a tough nut to crack. The ousted korean leader, park remaining defiant saying the truth about her impeachment will emerge eventually. Her fall has left the country with a daunting but for your task rooting out corruption among political and business figures. South quite a weekend in korea. Shery ahn joins us now. What did she have to say . Shery she is finally broken her silence by having a lawmaker from her party speak on her behalf, saying that she is sorry that if she wasnt able to finish her president ial duties, she would take full responsibility of the consequences. She said she needs time it may take time but she believes the truth will be clear. Local media are focusing on these words, saying she has not completely accepted the ruling and they are expecting her to put out a strong legal battle. Park geunhye is back at her private home where hundreds of people are gathered in front of her house on sunday. Does were her supporters. It was a very emotional scene and many supporters broke up into tears. Protests seem to have died down. Protesters held a rally and now this survey different purpose as protesters gathered to celebrate her ouster. Deployedlice had to be in order to avoid confrontations such as the one we saw on friday evening. Made,n as the ruling was three supporters died in the confrontation. We still see some Police Taking care of this whole area where we have protesters gathering. Quite a set of challenges for whoever takes over. What would a new president mean for these interregional relations that have been so tense lately . Some are saying this could be a reset formulations, especially with china and north korea and those political tensions we have seen recently. South korea has been dominated for nine years of conservative rule. Liberals seem like theyre going to take power and the leading have askedright now for a softer touch with north korea. Changes at ased plan for unification and has set to reviewovernment the deployment of the missile shield. That would anger the chinese. They have ample minted some retaliatory measures against south korean businesses. The previous Government Back in pastsigned a deal to move the issue of sex slaves. They have said that lacks legitimacy and an apology must be offered by tokyo, all in all though, elections must be held before may 9 and the acting president is expected to announce a date this week. Quite a bit of and certainty ahead. Will have to see how the markets take that into account. Quite a bit of uncertainty ahead. That was a shery ahn in central seoul for us. Plenty going on on Bloomberg Television about today. Later on, we will bring you an exclusive interview with Andrew Spence at 7 10 hong kong time. As we focused on the fed count down to the fomc meeting. Special coverage from 1 p. M. New york time on wednesday. India up as Prime Minister sweeping to victory in the countrys most populous state. You will go with that betty means for his reform agenda. Betty and why technology is not necessarily a good thing for the middle class or for jobs. This is bloomberg. Betty we are counting down to the sydney open less than 45 minutes away and it looks like teachers are leading to a flat opening. I want to tell you about some breaking news happening in Financial Services and the insurance industry. Mark tucker will be retiring as executive and will be succeeded by the new ceo of this comes amid reports that he chairman of hsbc holdings, replacing douglas flint. A lot of moving parts here but confirming mark tucker is going to be retiring as their chief executive. Im betty liu in new york. Heidi you are watching daybreak australia quite a shakeup for some time for that Succession Plan and we will be doing those details. We closeing up by. 6 in australia a massive week ahead. Potentially for politics as well, the question is how does marketsnslate into the and where are you going to be making money . Lets bring you to my next guest hes is a correction is likely but the difficulty is in the timing. He is the head of cash return on investment. Cash its a pleasure to have you in the studio. Theres a lot to digest this week. Does that translate into more volatility . Guest what we have seen in the last 12 months is only big events bring volatility into the market. The market is almost getting used, not really translating into anything of any significance. We may see more in the markets but not anything significant. What is going to move the needle question mark things really have an translated into Market Action this week. Is it going to be looking at what happens throughout the rest of the year . All of these events are in the news. I guess we have to go back to valuation and know that valuation, as you say, markets are 20 on assumptions and thats the starting point for investors. They need company to start to increase their revenues and everything we see our companies are still struggling to come out with big news, increasing revenues and increasing growth the market is rising. Heidi how does it make you feel about china . Theres a lot of concern about what the Balance Sheet actually look like. Early we have been very and understand there were some problems in china. We are talking more than six years ago. A lot of investments were not bringing any earnings. This, we see now those challenges are still there and that china story is going to be relevant for the markets generally for the for siebel future. Betty you mentioned there are certain sectors where you see values. Defensive. Em are idc value in defensive . Guest isnt it funny . Last year at this time, all the value was on the cyclical cycles like industrials and technology. Now, you are seeing the trump rally in the last two months has taken all the value away. Almost like the value is in those sectors. They tend to be a bit more defensive, and yet im a value investor. Betty health care, staples thats where you see the values . When i was reading through some of your comments, we have heard this before but i want you to explain it more closely some of the lessons we are learning about whats happening in the japanese bond and equity market and how that might mirror what we are seeing in the u. S. This is your chart we have recreated. Year jgbs at the 10 yield. You see that divergence happening several years ago. Tell me the comparison that you draw here. It is a contrary in chart. The theme for 2007. The journey tends to be quite long and painful. We know that. Immediately after the elections in japan, the market went up in a very aggressive way. Because, it was strong the starting point was more a tractive. Market taken the the contrary and call was everyone wanted to sell bonds and by equities. Equities went nowhere and in the monthsr the following 12 jgb. He the story for 2017 is somehow similar. Policiest is pricing that trump will implement in the states over the next 12 months. The contrary and call says that of economicpe growth you are going to see is not going to be phenomenal. As we know, values in the defensive sector. Thank you so much. I want to tell you about more breaking news coming out on mark tucker. We just heard hes stepping down as a group chief executive from aia. It has been confirmed he will become the chairman of hsbc holdings. There has been long speculated movement at the top and mark tucker is going to become the hsbc chairman. We have much more ahead as we look at that breaking news. Plus trump to temper his criticism of china. We will get more us Steve Schwarzmans comments, next. This is bloomberg. Betty blackstone ceo, Steve Schwarzman, one of Donald Trumps top economic advisers says he expects trump to soften his youth on china. We know Steve Schwarzman has very close ties, said he has some interest here in saying that. Whats he saying . He is saying the donald trump in the white house is evolving from the donald trump we have seen on the campaign trail. Tradeeals with the imbalance as well. Lets take a listen. How things go with the discussions, but it is very measured and not quite as hyperbolic. I dont think theres going to china as aegarding currency manipulator. Ramy now, mr. Trump has the benefit of time on his hands. On beijings side, they have a called outlook on u. S. China ties. Take a look at this chart on the bloomberg terminal. On the criticism of chinese currency manipulation, look how much the country is earning through its foreign currency reserves. The lowest 2011. Callinga case for not china a currency and it later. Heidi up next, trump using a better than expected jobs report indi it is 9 30 here sydney. A sign we could go a little higher, a. 1 gain and a huge event of risk week for investors. The fed might be the least of all of that. Can you imagine that . Betty its just after 6 30 p. M. And you are watching daybreak australia. Lets get to first word news. The ousted south korean president remaining defiant after being read from office. She was home sunday after leaving the president ial office and greeted by hundreds of supporters. She said that she was confident the truth would come out. She faces criminal charges for abusing her powers for personal gain. The automaker claimed the airbag maker withheld information about the faulty insulators. Carmakers are fighting, alleging they knew about the fraud devices. Guilty as part of a 1 billion settlement. Iceland is back. Eight years after the banking crash, they will list almost all remaining positions allowing Pension Funds access to global markets. Iceland spent eight years trying to clean up the collapse that triggered the countrys worst recession in more than six decades. Global news 24 hours a day powered by our 2600 journalists and analysts in more than 120 countries. Heidi lets get a quick update on the markets new zealand, not a lot of action underway. A little bump at the open there,. 1 . Up hasngth in the dollar rally been curtailed the weakness probably around the region, the japanese yen and bank of japan expected to stand pat when it comes to its control policy, but higher Inflation Expectations might result in greater talk about when they start to taper. Watching the pounds watching the pound and the 10 year rebounding but still over. 2 . That was the close on friday, just. 3 after a robust heat on eliminatesport which any residual doubt about what the fed would do this week. Trading getting underway in asia this warning. What are you watching . What is happening in the dollaryen is interesting. Move and iy flat expect a fairly muted start to japanese equity trading. Friday. He big move on not just the fed, it is the boe and Swiss National bank. Desk andom the macro the dutch election. Of traction and that will be interesting going to the polls on wednesday. The move in bonds coming through today, australian bonds selling out to some of that got play ahead of the fed on wednesday. Betty im glad you mention the fed, it is a big week for the dollar. Looking at our favorite function here, everything still in place to see further gains in the dollar. For now, definitely but a strong sense of trepidation. If you jump into the bloomberg and look at this chart, it shows you how the dollar bulls are positioning at the moment. Theres the sense the market is underpricing. The fed expectation of three moves this year, the language is going to be key coming out of yellens press conference. The way the market changes its dynamic and catches up to the dot plot or doesnt, they could will see the diversion between where the fed is an bond market is in terms of rate hikes going through the rest of the year. Theres also the treasury secretary in germany and the language around what he said not just in terms of the china aspect, but any mention around the u. S. Currency will be closely scrutinized. Looks like a 19 chance by fed funds futures for a red hike to share. How far that has gone up. Thank you so much. Stay on this with Abigail Doolittle joining me at how the u. S. Markets are pricing this in. Abigail it has been a bit unusual for the major averages here. The s p 500 down for the first time in seven weeks. On a bullish stretch ahead of the fed. Some technical analysts say we will see a pullback now. This, right now we see lots of red. Katie stockton says she had been bullish up until then but she expects a bit of a pullback. We will see stocks pullback. Groupo had Simon Property down on the week as well. Overall, a bearish week for stocks. Those were in the energy sector. Abigail we had oil down for the second week in a row. Thats the worst week for oil since the election. Maybe it suggests a bit of a reversal. Also before that opec supply. Reversal, butof a it will be interesting to see what is next. The pink line is the 50 day moving average. Dayyellow line is the 200 moving average. Oil hitting down on the 200 day moving average. Will the buyers that been and support . It will be interesting to see what happens in the week ahead. When analysts says he does expect the average to support oil trading higher. For the second week in a row, we have had gas trading higher. As betty and kathleen can attest to, it is freezing. [laughter] that was one bullish spot in the energy complex, natural gas. The past two the first rate rise of the year has become even surer thanks to the jobs report. But brexit is looking a little more rocky. The payrollwith numbers. They were universally strong. Strong enough for the Federal Reserve to go through with an Interest Rate hike when it concludes its meeting. They seem to be firmly going down that path. The consensus was a gain of 200,000 workers, yet the employment rate fell, and that was a plus. It looks like unseasonably warm weather boosted goods hiring in goods producing hiring jobs. 6684 you can see it is the biggest gain on construction day mining. Plus for the overall number. Thewill hear a lot more probability at 100 . The question is if it is a two day meeting where the fed unemployment, gdp, inflation, and the number of rate hikes that should be coincident with those kinds of numbers. In 2017 couldes move up to four. Members likevish janet yellen may not be willing to go that far. It is a broad measure and is turning down. Higher than the previous month, but still kind of flat. Fed wage growth tracker has trend that band is suddenly going down. The labor market is tired. Slowly is going to be a big question for the fed when they get that. Plot together and release it. Heidi the risk could be outside as theresa may and her team are trying to revert a revolt in her own party. Whats the latest . Kathleen it seems the last few weeks are slipping out of theresa mays grasp. The upper house of our moment, the house of lords voted for an amendment that would give them some control over the negotiation if theresa may cannot strike a deal with the eu. Now the house of commons has to vote on this amendment. She is also hoping that she can trigger the march 31 brexit, that is the deadline she set for herself. In the u. K. , herb rates it chief spoke on u. K. Television. He said its a small amendment, a simple deal, just dont tie theresa mays hands. Would benson said it perfectly ok not to get a deal with the eu. And the dutch election is this week. At the egg deal. Is that something that would slow parliament down and give theresa may time to think about it . The eu celebrates the founding treaty on march 25. You mentioned some big things to watch. More central meetings, but that in perspective for us. Kathleen you have the bank of england, china has big numbers coming out. The National Peoples congress is wrapping up a change in the gdp target wednesday is a big day. Retail sales in the u. S. And consumer prices, china wrapping up the allimportant meeting from people all over the country and then the dutch election. On friday,eting trump, free trade, protectionism do you remember when the g20 draft suggested they were dropping antiprotectionism from their language . We will see what happens there. Says hes notin going to pound china over the currency, that will be something to watch. A positive development perhaps for the market. Betty thank you so much. , were going to look at what the big when means for the indian political landscape. Betty good morning. Im betty liu in new york. Heidi and im haidi lun in sydney. Youre watching daybreak australia. Check on the latest headlines a jpmorgan executive is going to be excluded from the tanking industry after being find a bribery investigation. They work for the lender in asia and the fed said they hired inerns and other employees china. Jpmorgan describes the conduct as unacceptable and says hiring practices have been improved. The comments caused shoppers to boycott the biggest supermarket chain. He made the comments during a panel of hearings in london on friday and said the remarks were meant to be funny. Warner bros. King kong revival has taken the top spot at the weekend talks office. The film was coproduced by Legendary Entertainment and is part of a slate of monster movies following the godzilla reboot. It mark it knocked logan from the number one spot. Betty how many times are we going to bring king kong back . The indian Prime Minister won a resounding victory in a state election that will let him push and put some a prime position for a second term in 2019. Strongs like hes in a to campaign for a second term. He has become the most influential man in 30 years. Hes in a strong position and he has gained support on the promise to bring back growth. He has ruled out measures like demonetization as a way of rooting out corruption. I want to show you this high chart. Theyve won the majority in the most populous state. He has been very aggressive pushing forward. Want development. Setssement for that so far the tone for politics for the next 24 months. Despite the win, isnt it true he has a challenging road ahead . He does. Tofaces strong opposition reforms in the upper house of element. Difficult tobe push through and perhaps out of reach for him. What he is likely to do is push for structural Economic Reforms and will likely push to revive lending and policy aimed at including india pass formal economy into more formal channels. All of these will be welcomed by the market and investors. Heidi one feature on the bloomberg we would like to bring to your attention is our interactive tv function. Find it at tv. Interviews previous you might have missed and to deep dive into the securities and functions we have talked about. Up next, how the worlds biggest iron ore miners are aiming to withstandecting to expected price plunges. This is bloomberg. Heidi im haidi lun in city in sydney. Betty im betty liu. You are watching daybreak australia. Western australia has a new government after a landslide election agree for the labour party. Want to bring in the managing editor. Why was the previous government tossed out here . Good morning. Saturday possible elections i landslide victory for the labour the liberal end to National Coalition will. Roller coaster during the mining boom states , butve done extremely well opponents claim he mismanaged the mining and and when the gravy train came to an ad, record that lost its Credit Rating and opponents a he mismanaged the mining boom. A new football stadium that many argued the city did not need. Heidi is this not a common feature that plays out across sectors . The key is you have to were led away and have enough cash during the boom to make sure finances are in a healthy state when the boom comes to an end. Commodity rich nation and is probably a touchdown for how best to handle booms. It distributes cash back into the budget when the price drops. Opponents argue he may have done the same. The good news for the mining chancees is theres no of a proposal by the Junior Coalition partner. The leaders of the national have proposed increasing the rate to get the budget back into a better state, but with labor at the helm, theres no chance of that happening. Heidi what is the outlook for w a now . Guest looking pretty grim. Its already at the highest jobless rate in australia. Set to rise through to about state product, the growth rate is not looking healthy. Labors mark mcgowan says hes not going to underestimate the enormity of the challenge for the new government and said it could be decades to get that deficit back under control. Heidi already managing expectations there. Breaking down the weekend election result in western australia. Daybreakt for australia, but yvonne and betty are up for the next couple of hours. We are still fixated on these developments in seoul. Betty i dont think we can hear yvonne. We seem to have some technical difficulties. We have been looking at these developments in seoul and we will be continuing to track these as they occur. Will be recapping the events on friday when we had the Impeachment Vote for President Park geunhye. We will take a look at how the monday session reacted and we will be taking a look at the huge risk Event Calendar this week. The bank of japan, bank of england, all meeting on thursday. Betty and we have a big interview later today down under. Ministerillion foreign is going to be joining Bloomberg Television ahead of her trip throughout southeast asia, visiting singapore, malaysia and the philippines. Much more needed of course as they are pushing this transpaci signs of stability, china says the economy has improved this year with little danger of a hard landing. Leaving to take up the reins and hsbc. Theresa may faces a revolt ahead of a vote that could see the start of brexit. Fall,de after the President Park remains defiant, saying the truth will come out
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