Retreated on friday from the sevenmonth high after data showed that u. S. Hiring fell to the lowest in him a six years in may. The Dow Jones Industrial and nasdaq also fell. We are counting down to the open in australia and japan. Futures in australia looking like this, a slightly higher open. Economists are expecting the rba to keep Interest Rates at 1. 75 . , whereet over to japan the latest gdp numbers come out on wednesday. Futures trading in chicago pointing to a lower open. 6. 72, it is pretty strong against the u. S. Dollar ahead of brexit. Wo markets to tell you about u. S. Treasury secretary jack lew says china is moving in the right direction on the yuan, but needs to improve its Monetary Policy communication. He spoke to bloomberg in beijing where talks are due to start later today. Tom mackenzie is there for us. What exactly did jack lew say . Good morning. The u. S. And chinese side will be meeting in a few hours on the outskirts of beijing. It was a wide ranging interview with jacob lew. We talked about the currency issues, Market Access for u. S. Companies coming into china, the reform agenda as well and communication. We delved into a lot of these issues. Reform agenda was top four jacob lew in his concerns. One of the top issues they will be racing with their chinese counterparts, overcapacity. We know about overcapacity in ,ndustries like steel, imports terrorists have been slapped on those by the u. S. Clue fromto get a their chinese counterparts as to whether or not the reform agenda is still on track. To talk abouted clearer communication, something they need to see more of from the pboc after that surprised appreciation in the renminbi last year. Thesk jacob lew about renminbi and the role played when it comes to chinas Exchange Rate. Take a listen. This is one area where he thinks he has seen positive movement in the last few months and years. Take a listen. Thee need to make sure that commitment to moving in an orderly way to a market determined Exchange Rate will , as there isolicy upanddown pressure, and that it not become a oneway policy in the future. I think compared to where we , we just a few years ago have single progress. Lew really talking about the currency as a positive, saying that if you look at chinas Exchange Rate mechanism over the last decade that there has been some positive movement, and that it is down to the conversations that happen every year in washington or beijing. Look, clearying communication from the likes of the pboc cant be a oneoff. It needs to be a continual policy. Angie we learn that last year, didnt we . How much progress the jacob lew see china making on the agenda . This is what was really interesting. You sometimes think that would have a clear steer on some of the issues that go on in china, but he has inside. It seems like he has as many questions as answers when it comes to chinas reform agenda. He acknowledges that cutting overcapacity in steel and aluminum is a difficult process, but he says it is one that is in chinas benefit as well as the Global Economy and the u. S. Economy, and he talked about the pain that may the chinese may have to go through. He said the overcapacity is distorting global markets, and this is key. The renminbi is the big focus of the discussions. Now it is the question of the reform agenda in china and the question of overcapacity. Angie and whether or not they are going to deal with that. Tom mackenzie live in china. Thank you for that. One of chinas top military leaders has reiterated beijings claim to the South China Sea, while also trying to reassure his audience that china can work with other claimants. Room. Of brass in the what was achieved . Lot, except reassertions of claims by china and other claimants as well, and reassurances trying to reassure. A bitmiral trying to take more of a conciliatory tone. He basically took that conciliatory approach to the rival nations, to the South China Sea, which of course is home to 5 trillion in seaborne trade every year, a critical area that is in dispute. He also traded some barbs with the United States. Here is what he had to say. China advocates a new security outlook featuring inclusive, shared, whenwhen security operation by all. N security operation by all. Heres where he reasserted. China is not out to start trouble, but china will not stand for its sovereign rights to be trampled on. These are the areas that hes talking about, china claims more than 80 of this region. This is not an issue that will go away. This is what the admiral had to say. Our policy that we own the South China Sea remains the same. China has the wisdom and patience to solve any disputes through peaceful negotiations. We also believe that other countries concerned have the same wisdom and patience to walk on the path of peace with china. Any country not directly concerned is not allowed to sabotage our path towards peace. Ofso you get a good sense the admirals position there. Beijing has often use the term as its claims to the South China Sea are indisputable. Other claimants pegged to different. Ok, what is this impending ruling from the hague . We are expecting a ruling from the hague on claims by the philippines chinas claims to an area off the coast of the philippines. A real flashpoint. China has occupied these unoccupied reefs since 2012. This ruling expected in a couple of weeks. Already the admiral says beijing will not recognize what ever that ruling is because they claim the hague does not have jurisdiction. Angie flashpoint there. Thank you for that. You can get more on all the days top stories at our digital destination, bringing together the best of Bloomberg News and new Digital Content allinone address. Why thereoomberg. Com, is mounting speculation over the ahead of indias Rate Decision tomorrow. Why there rebound in oil prices can make you twice think twice about ordering dessert. That is bloomberg. Com asia. Check it out. The stories making headlines around the world. Hasi south koreas Group Initial Public Offering following reports that an executive is being investigated for bribery. For today, andd a new date has yet to be set. The inquiry is a setback for an ipo intended to raise 4. 8 billion. India will be looking to strengthen ties with the u. S. Went Prime Minister modi meets president obama this week. Helped open afghanistans egg is biggestic dam hydroelectric dam. They will make a speech on capitol hill and meet Business Leaders. Chinas government may have a bigger problem than slowing growth. A new report suggest the nations jobless rate may be three times the official estimate. Indicatoremployment has tripled to 12. 9 over the past four years. The official Unemployment Rate has hovered near 4 . The official gauge excludes chinas more than 270 million migrant workers. The Worlds Biggest Oil exporter has raised prices on most of his deliveries to asia and the u. S. Saudi aramco increased its official selling price by . 30 . 35 more than the regional benchmark. Saudi arabia has said demand for oil reserves, and crude has rallied 60 over the past four months. The worst is over after two the uae spending cuts, is projecting Economic Growth to accelerate and is planning projects. The chairman of the department of Economic Development told Bloomberg Television that the budget remain strong. , we arewith cuts and the economy will still grow. The growth rate is in the neighborhood of 5 or 6 in the nonoil sector. Haidi you can see that for interview in Bloomberg Markets middle east admit Day Hong Kong time, 8 00 a. M. In dubai. News 24 hours a day on bloomberg, powered by over 2400 journalists and 150 bureaus around the world, this is Bloomberg News. It will take more than the worlds steepest stock market seller to turn china into a place for bargain hunters. After a 40 plunged, valuations still tower over other markets. Is taking a look at the story for us. Is it too early to jump back in . Yvonne it may be. The Government Intervention we have seen from the mainland continues to keep stock prices elevated at a time when we do see profit shrinking in china. If you take a look at the biggest risk on these markets, weve heard about investor psychology. Know where this herd mentality can go. After a 40 plunge, we have failed to see a boost in sentiment. We are still below that 3000 psychological line in the sand, 2938 is where we stand now. A shares are still quite pricey. You compare the the mystic market to the major markets across the globe the domestic market to major markets across the globe, a shares are still three times more expensive. This the ratio is at 59. If you compare that to the u. S. Tech shares at the height of the boom, that is still higher. As you see on the chart, higher than most of the major markets, including switzerland, india, and germany, so plenty to be worried about. Risk of also this corporate default. That is also spreading. The yen trading near that fiveyear low. Much more gloomy outlook right now. Angie not everyone is concerned about the valuations, right . Brokers and analysts still see gains in the shanghai composite. The forecast is for a 13 rally in the next 12 months. What could be the catalyst . They say the downside for some stocks are limited given Government Intervention. Thatis the arm that has 480 billion in that fund to prop the market last summer. They still have about 77 billion of mainland equities out there. Some say the scale could be even bigger given the cash on the state funds are not public redisclosed. Angie thanks. Coming up, after fridays disappointing u. S. Jobs number, our next guest says he sees only one rate hike this year. That is next right here on first up. A quick reminder of how the s pkets closed, retreated from a sevenmonth high after hiring fell to its lowest level in six years in may. Check out the dollar. The greenback dropped the most in six months against the euro. Golden saw its biggest advance as the likelihood of a rate rise in june decreased, and mining shares also reacted positively, the biggest gainer up almost 10 . Lets take a look at the key events driving markets this week. Joining us from sydney is the managing director of cap stream capital. Shakeks like we cant centralbank action, the fed, and the jobs report on friday. A lot of Central Banks making decisions today. Do you think the impact of the jobs report will flow through to asia . I think youre right. Payroll number was disappointing. The jobs number was disappointing. The unappointed rate fell to 4. 7 , but even the revisions were bad, revised down 59,000 jobs. About 100,000 jobs, compared to 180,000 in the past, so the challenge for the fed is are we at full employment, and does that translate into wage inflation, so therefore should they raise rates. The markets are telling you that the quality of the jobs are not very good. Unemployment is because people dropped out of the labor force. Almost no chance of a rate hike in june. Very little chance in july. Maybe 25 basis points by the end of the year. Angie does that change the outlook for centralbank action this week . Bi, there arer a lot of Central Banks making decisions this week. I dont think it should affect what is happening in domestic economies, but i dont rbi any rate changes on the or rba. Monthsly they wait 612 ands they cut rates to see what the impact of the rate cuts will be. The bank of new zealand can probably add another 25 basis points. Everything we talked about except for the fed, ever central bank is either printing more money or trend to lower rates. There is something wrong with this picture, right . Central banks are using as much as they can, yet the equity markets over the last 12 months or negative and bond yields have dropped 4050 basis points, somehow it is not working. Angie you have to connect the dots, right . If the fed will not raise rates, the u. S. Dollar will get weaker, which means it will be more expensive for exporters in japan in new zealand as well, which will influence the decision on thursday. Absolutely right. Look at what is happening in japan. They are printing asthma money as they can, and the result simply say that you have a weaker nikkei and a stronger yen. If you cross over to europe and look at what mario draghi is doing, it is the same result, european stocks are down. There, but are not youre right, a stronger currency against the u. S. Dollar makes it harder for Central Banks, if anything, they have to ease more. Otherwise the markets are addicted to liquidity, and any time you get disappointed, youd get a selloff in equity markets. Angie do you think this we could be an Inflection Point for market mood . Im not so sure, because when i look at the markets i think of three different things. Policyst things fiscal and politics, and that is pretty messy. You have elections in the u. S. , australia. You have the u. K. Vote on the 23rd of june, so it is hard to imagine any support from the fiscal side. Monetaryve to the policy side, everybody is printing as much money as they can and easing rates with little to no effect. The last things Economic Data, and Economic Data has been mixed at best, so you would assume Central Banks are a little bit more cautious than they should be, and thats where we are today. Angie all right, if there is one big data set coming up this week that will drive markets, what is it . And how are you bracing yourself for it . I think the data set is huge simply because of Central Bank Actions you talked about, which we expect them to be easier. Next week is more important because you have the fomc, bank of japan, ecb. I think data out of china is important, cpi, pbi, japan is important as well, so Economic Data plays a bigger role, but on top of that, you have to worry about Central Banks. My guess is they will be easier than where they were before, except for the fed, and the fed may not even have a 12 five rate hike this year. A 25 basis point this year. Angie more to come on Bloomberg Television. You are watching first up. Angie welcome back. Youre watching first up. The philippines new finance secretary says the new president will build on economic gains. He has made headlines for his Strong Language and anticrime rhetoric, but his finance chief told bloomberg that his record should really assure investors should reassure investors. He is making tax reforms it should make for a more equitable system. These brackets developed were developed almost 20 years ago, and i guess through the years because of inflation, it has , ande rather an equitable we want to make the taxes to more equitable. The tax brackets, probably the essentials will be much higher than the 500,000 peso cap they have now, so that will involve some reduction in revenue. The Philippine Central Bank is also stepping up efforts to fight Cyber Security and money laundering. Ofhilippine bank was part one of the largest heists in modern history when hackers stole 81 million from the Bangladesh Government account. Lets head over to our Southeast Asia correspondent. What exactly is being done . A couple of things will be under scrutiny, and Digital Currency currently unregulated will be regulated. The philippines is the Third Largest user of bitcoin transactions. 2 million a month. That is because of the volume of funds sent by filipinos working overseas. From that, there will be tighter scrutiny. Financial institutions will have to run regular checks on their customers at all times. The thing is this, the regulations are there already. It is the oversight and fulfillment of those policies which are in question here. On top of that, the central bank is mulling over a proposal to allow land dealing on the black market, and the philippines finally taking action. What is important is implantation. Angie can the Philippine Central Bank push through and implement those changes that are so important . That remains to be seen. It is making the right moves. It will expand its Cyber Security unit, have a separate Surveillance Team to come up with Cyber Security policies, monitor cyber threats, and ensure that institutions can manage their on Cyber Security issues. Live for us in singapore. Coming up, if china is the province ist how a adapting to chinas it is 9 30 in sydney. We are watching the aussie what itolding on to achieved on friday following a week u. S. Nonfarm fuel report. Away from thetes opening of trading there as well as in japan. U are watching first up china is moving in the right direction on the yuan. He spoke exclusively to bloomberg in beijing. He says the pboc action caused an unnecessary nervousness. Reiterated its claim on the South China Sea. Addressing a meeting of defense , they struckgapore a more conciliatory tone. He also