It is 8 00 a. M. Across the emirates. Is just goneng, it midday. Welcome to Bloomberg Markets middle east. Sinceg the highest levels july 2015. In rising, japanese markets gaining on the back of what happened in the u. S. Overnight. That is what is right. The big news yesterday is that a 121yearold index with questionable ratings made it over round number. Do we care . Take a look at discharge. I prepared for you. It shows the Dow Jones Industrial in white versus the market cap waiting in blue. Weighted00 index is according to caps. The dow jones is a bit different. On a market cap waiting basis, we are not close to 20,000. How much should investors be reading into this . It is psychologically important perhaps, but does it mean anything for the market . Despite 20,000 record in the dow, we are seeing the dollar continuing to fall for a second session, despite the fact that treasury yields continue to rise. Right now they breached the 2. 5 level. Take a look at the chart. We are seeing the positive correlation with u. S. Treasury yields and the dollar, which touched the highest levels november, which has climbed to about 50 . Highyielding Commodity Currencies in asia like the aussie and kiwi dollars are gaining ground. Of course we have the opening of the markets in the middle east in recent middle east very soon. Take us through what we should expect. Here in the middle east we have a mixed picture in terms of trading. We have the dubai stock index down over 1 . Abu dhabi stocks were probably the biggest losers, down 5. 5 . Then if we move onto currencies, you were just mentioning the u. S. Dollar, of a post important importance to those in the region. The dollar not gaining traction, trades come trump back. The dollar losing ground, the japanese yen strengthening. Lets look at what this means for equity markets. We have details on that. It is on the back of that dow, isnt it . Regional stocks higher for a second consecutive session. The Asian Pacific index is holding at levels we have not seen since july 2015 strong movements from japanese equities, led by mitsubishi on the broader topix index, which is also higher for a second consecutive session. Hong kong is seen good Financial News from retailers ahead of the lunar new year. Noting, stocks in thailand up for a fifth consecutive session. A rally in emerging markets getting a good leg up on the back of that dollar weakness, which has given a strong boost to em currencies and markets. Australia and india closed for Public Holiday today. 1 ,ghai index of 1 10 of even with reports that china is in to audit banks to curb the next quarter. 1 , down by 1 10 of 200,000 per ounce. In the contracts in the u. S. , it is gaining ground by 9 10 of 1 . Study,n the 10 year nude 2. 52 . If we have a look at the aussie yield, contraction coming through, 2. 73 . Certainly a strong rally coming through into equities money out of the bond market. We are going to check in on the first word headlines around the world. Haad the pboc ordered chinese banks to control lending afternoon loans surged in january. Theyre banks lent increase mortgage lending or the rates of outstanding mortgages, at least relative to the fourth quarter. The pboc may punish noncompliant lenders by making them pay more for composite measurements. A rentrak for a record low profit, chinas biggest listed oil and gas producer. Onm planning this slump drastically low prices for domestic oil and gas. Prices are set to rise and have promised crosscutting. That is helping shares in the hong kong session. Egyptian ministers saying stocks will not deter investors, telling bloomberg the rate will be low enough to ensure demand while full equities remain strong. Egypt attracting investment to help a recovering economy. The government is committed to a 30 threeyear delay on Capital Gains tax. Postponing another three years according to the Supreme Council for investment. That is the cg team. Yes exactly. We have to take it to the parliament as well. The project is to postpone it for three years. We have all options on how we do it. Profits, reaching a fresh altitude. Filling seen profits climbing to a record. Boeing seen profits climbing to a record on the back of this 737uee jet headed workforce. Boeing says it has three years of dream liner orders. It was named the best performer when it games to be the Dow Jones Industrial. An ever important 20,000. 120 countries covered by 2600 journalists, this is bloomberg. Mexicos president says his country will not be paying for any portable after donald trump pushed ahead with his campaign pledge, signing in order to direct federal funds to the project and curtail immigration to what he calls terror prone countries. We have the details from new york. When donald trump said he would build a wall on the usmexico border, a a lot of people rolled their eyes. Now he has taken the first step toward that reality. While visiting the department of public security, he finding an executive order for the 2000 e project, including 500 including 5000 more Border Agents and immigration and customs officials. A nation without borders is not a nation. Beginning today, the u. S. Gets back control of its borders, gets back orders. In an interview with abc news says the wall would begin in months and that mexico would reimburse the u. S. Mexican president nieto stressed that mexico will not. We have seen stocks moving in the Building Materials sector. Cement makers of it record share prices. Both hit record share prices. Aside from that, mr. Trump signed another executive order to stop the flow of refugees into the country. It focused on countries linked to terror in the middle east and africa, including syria, yemen, libya, somalia, iraq, and iran. If enacted, they would go through extreme vetting, a 30 sixwaiting perio sixd, and months stop for all refugee commission. It would be cut in half from 110,000 now, to 50,000 people each year. Mr. Trump focusing on national security, pushing ahead controversially on his campaign promises. Reinstating the Global Economy and global trade deals there is a link for investors. That is donald trump. Kathleen hays is here. Bond markets around the world seems to be sending a signal. Are they on the right track . This is a bet we have seen for a while. A a lot of ebbs and flows. A a lot of bond markets are buying the story that donald trump will stimulate the global economies. Tax cuts and spending hikes is what we are looking at. I want to look at the bloomberg chart to show how these yields are rising from germany to japan to the u. S. The white line is the japanese 30 year. The blue line is the german 30 year bond, above 1 . Today,e bit lower yielding higher price. Is that people are still wondering and watching every hotline on donald trump. Yields said further biggest monthly jump since october 2010. They are trying to pull back on some of the leverage in the chinese economy. You dont want consumers to lend as much. At the same time, they have to provide liquidity for the new lunar new year. Goldman sachs saying yesterday they think chinas move is toward a heightening bias, which has had another hit on the chinese bond market. Host you mentioned headlines. We have japan releasing its december data for cp tomorrowi. The tradesupport also . Kathleen i dont think so. You will understand why when you look at discharge at the start, japanese inflation yearoveryear. This is still taking this into account. This chart is a downward trend in inflation, no matter how much the bank of japan said around. Not much relief tomorrow. Up 1. 4 . Ine is not the right signal. Driving theon is japanese inflation to a standstill, if not at least stagnation. Host theresa may meeting donald trump. What do we expect out of that . Kathleen theresa may hopes for a trade deal. She needs some exports going as she leaves the european union. Like, she wants to put her nation first. We will be looking for a uku. S. Trade deal that improves trade between the countries, that brings prosperity that will ensure we can bring jobs to this country as well. I can ensure the gentleman u we will put u. K. Values first. Host it seems that the trump team will be helping her. She will be the first foreign leader to meet donald trump at the white house friday. Today she is talking to republican lawmakers in philadelphia about bringing the two nations together ahead. A a lot of handholding rebuilding ties. Host thanks for the lead on donald trump and theresa may, among other stories. We look at the global market. Issuance fell short of expectations last year. Will 2017 be any different . S P Global Ratings joins us next. First, chinas crackdown on new loans as it curves excess leverage. Curbs excess leverage. This is bloomberg. Back to Bloomberg Markets middle east. Live on Bloomberg Television and radio. Lets get you a quick check of the latest business headlines. One of chinas units has outbid for a plotevelopers of Government Land in and old airport area. Hna won with a bit of 709 million u. S. Dollars. Profit of the worlds biggest casino operator missed activists missed estimates. . 62hquarter profit fell per share, as revenue rose 7 to over 3 billion. They say the casinos missed because lucky gamblers kept winning, causing up to 20 million and lost profits. After hoursslipped after warming sales of profit for the current period may miss estimates. Revenue could be low as 5. 5 billion, missing the analyst average projection of 5. 9 billion. Qualcomm on the page to defend its most profitable unit from regulatory and legal challenges around the world. Settop 20,000 for the first time. Asian markets continuing the rally. Our next guest is puzzled why equities outside the u. S. Are gaining. Lets bring in the asian head of Financial Markets research at bank. Did you wake up this morning going, wow, 20,000, we saw this coming. It was just a matter of when . We had to get to the forecast eventually. I have been teasing my daily note readers for ages. What does it mean . Nothing really. It is a psychologically round number, but it is not particularly significant. Isse it strange that it strange that the dollar is losing ground . We are seeing the dollar reversing on this divergence with yields. Michael to be honest, not a lot of sense at the moment. Treasuries going up, equities going up and the dollar going down does not make a lot of sense. Not to me anyway. The good news about the dollar going down is that any theory, it should help ease pressure on emerging market economies. Do you see that as a benefit . Michael no, not really. We have two scenarios. Is serious about being protectionist in trade against everyone else, we will get either a strong dollar, which will be painful for a lot of countries around the world. Or it will be done through a weak dollar to make sure that the u. S. Is more competitive. That will still be bad for a lot of countries around the world. I dont understand how we go past 20,000 on the dell, and everyone puts on their caps. The americans should, but everyone else shouldnt be. Host i dont have the dow base ball cap. I guess this is all down to animal spirits. The looming trend for asian is trumpet and trump and trade. How is the tpp going to play out in emerging equities . Michael in the long run, it will be hugely negative. The u. S. Is at the forefront of the Global Economy and Financial Markets. As i just alluded to, if we see the u. S. Take a protectionist stance, which was completely normal since world war ii and hasnt been since. If we do, it will disrupt everything we thing as normal in terms of Clinical Training everything we think of as normal in terms of global trading. Many companies are in the green today when trump is talking about the law with mexico. A very different reality. That thought. We are coming back to you with your thoughts on emerging markets, which ones are at most effort from a trump most at threat in a trump presidency. This is bloomberg. Host welcome back. You are watching bloomberg. Lets continue our discussion with michael every. I have to float this idea with you. We are seeing the korean yuan gaining highest levels since seven weeks in the dollar. We had an analyst saying that the korean yuan could be attempted to depreciate their currency just before gaining just to appreciate their currencybefore talking with donald trump. I can understand that doing that now to avoid depreciating it going forward. It will be tough for businesses to deal with this on a daytoday business. Tothe nearterm slot is depreciate to compensate for a potential terrorists area. Tariff barrier. I dont think any asian exporter is in a strong position to the u. S. They are the buyer. The countrythe country with thes the one that has ammunition when it comes to these talks. Host you are a huge yuan bear as well. We are seeing Profit Growth and industrial firms in china rising at the slowest pace in a year. That is as prices surge. Michael demand in china at the up. Nt is picking it is being driven by borrowing from the government using various forms of tactics. Of course that will work if you throw more credit into the season. Unfortunately, it is not being borrowed. Everything is reversed and moreso. Enjoy it while it lasts. It wont last. Host we can debate the reality of china economys for a long time. If you assume that china has to keepomestic levers the economy going at a reasonable rate, it seems like all the risks are on the external side. Things like the Federal Reserve raising rates. Michael the ones that you just flecked are huge external risks. Trump is another one too. That plays into the domestic issue. If we see a negative external environment, china will want to stimulate the domestic economy even more. We are on outright bubble territory in many areas. They will have to blow that bubble even bigger to compensate for a negative external environment. That is very worrying. The downside is obvious. Got we cant let you talking about china without Digging Deeper into the bubbles. Which ones do you see as potentially the most worrisome for 2017 . Michael the credit picture overall. The housing budget housing bubble is enormous. The government will not allow a housing crash one way or another. You cant keep growing credit fast the nominal gdp. Something at some point goes wrong. Michael every with a dissection of the markets and what to expect in the larger asian economy. This is bloomberg. These are the first word headlines from around the world. China described as an anchor of stability with a consistent reform towards freetrade. China has been billing itself as a champion of globalism as donald trump scraps the Transpacific Partnership and says he will renegotiate nafta. Since july. Ing the up, but not enough to make up for sales of mobile games. Oldest Stocks Exchange was 51 times oversubscribed for his initial public offering. Singapore exchange and george soros among the sellers of shares. India has drafted ipo shares attempted to top 1. 1 billion, the biggest in six years for india. We have news each day every day, 2600 journalists working in 120 countries. We have the tip of the world covered. Thanks so much rish. Egypts finance minister says the stand on stocks will be low enough to ensure demand for equities remains strong. Riadyh, walk us through what the minister might be trying to achieve in talking down that duty. They need to stand because they need to reduce the deficit. At the same time, they need Foreign Investors to come in. We had 7. 5 highest since 2001. To talk to scare away national investors, who are trying hard to track. It has risen since the devaluation last year. Host tell us a bit about the bond sale from egypt. What was the reaction from investors . Ministeri said, the told us they are quite happy. I believe he calls it the sweet spot. It is true that the coupon they are handing out is the highest in quite a while, but it is worth staying in worth stating that a year ago, the yield on a previous bond was 8. 5 . Higher now. From their perspective, they may not be doing too badly. What we have heard from analysts and investors is that it was quite generously priced. They wanted to make sure that it will attract investors. The minister also said this is the first of many. People keep coming to the market. Host it has only been a couple months since egypt floated its currency. Give us the impact and its effect on the economy so far. Riad it depends who you ask. For the common egyptian, it has been difficult, because inflation has shot up. 25 now. Keith they managed if they manage to keep that under control, probably the base effect after a year or so should start working its way through the economy. , the stockr hand market shows that Foreign Investors seem to be coming back into the market. Egypt as a Tourist Destination hit byism is so badly terrorism. Now it has been quiet more recently. The russians have indicated they may come back. Egypt is cheap. That might help. Host executive editor for the middle east and africa. Thank you so much. In this talk about oil part of the world. Chinas biggest listed oil and gas producer says net income in 2015 fell as much as 80 . This could Central China on a record low petro china on a record low profit. Taking a hit on oil and gas prices . China is going to see profits tumble this year. 20 year onstl year. They have this refining sector which will get a boost in oil holes. They also spun off pipelines and got a chunk of cash at the end of the year, which helped them to stabilize. They have a big drop in oil, but you get a bit of a buffer. Even at an 80 drop, some analysts have said that is better than what they even expected. Host we know that fellow state owned energy giant will probably benefit from more refining. It is one of the biggest fuel makers. How will the list of chinas big 3 do . Hand, they are completely exposed to oil prices. As oil falls, they will have to go with it. Half of the analysts we have heard from this moment expected them to be posting those. Posting a loss. They are cutting costs, but they are still exposed to prices. They had a list they wrote down in can