salamat,i am rishaad this is trending business. ♪ rishaad: we are going to be life in kuala lumpur and sydney. the dollar index falling for the fifth day in a road. he was production of oil at the lowest since october 2014. crude is up 20% in april. icd says this has breached the requirement for dad loan provisions.

also showing the rising stress levels as china's big banks. no more mr. nice guy, china no longer wants to portray the president as a populist hero. they will drop the nickname "xi dada." you can follow me on twitter. underway in 30 minutes time in hong kong. shanghai getting going, as well. no trading in japan today. when it comes to equities, here is heidi. japanese we are seeing -- continuing to take a beating. down.is is how japan is continuing to come under upside pressure. this is how we are looking at in terms of the markets that have just joined the trading day. another down day.

similar losses when it comes to markets in kuala lumpur. quarter gdp numbers missing the contraction of the 10th 7%, worse than expected. of 1%, worse than expected. kiwi markets up. cindy flattening out. ney flattening out. search in crude prices overnight. inventory continues to evolve. upsaw asian currencies alongside that enormous surge in the yen yesterday. the new taiwan dollar reacting to that number. we are going to check on that, trading at 32 point three at the moment. let's take a look at the yuan.

a contraction of 2.2 percent. we were hoping for a contraction of just half a percent. we are seeing some strength after yesterday. let's pull of the australian dollar, looking like this. cpi prices coming out of the bottom of the hour. we are seeing a little bit of upside for the australian dollar. that strong australian dollar has been a concern for the central bank there. this is what the yen is doing. further strength in the morning session. relentless, extraordinary

reaction to the central bank doing nothing but choking the market in such a way. this is what crude is doing at the moment in the early session. 1% -- fournths of tenths of 1%. this despite u.s. production numbers falling, giving a boost to the oil rally, but we are getting some of that back. rishaad: looking at icd. on provision requirement to avoid seeing the drop in quarterly profit. we are taking a closer look at this. what is going on? reporter: the world's biggest the, quarterly profit in first quarter after letting its puffery recovering bad loans phone that mandatory minimum use i mentioned set by the regulator

in china. first quarter profits rising to 74.7 6 billion yuan. it is the fourth straight quarter the bank has failed to 1% profitleast growth. he avoided that quarterly loss by setting aside less money for nonperforming loans but are the mandatory minimum set by the regulator is a 150% of bad loans. 141.2% inhat ratio to order not to post the loss. much like what bank of china did this week, it reported a 1.7% rise in quarterly profits after letting its ratio fall below 150 to 149.1%. bank of communications eked out of profit with a ratio of 151%. china construction bank reports its earnings later today. a ratio ofman said

between 120-130% was both reasonable and possible. regulators are said to be considering lowering the mandatory minimum as banks in china are suffering on the bottom line. rose 14% lastans quarter. margins fell by 19 basis points. the minimum ratio could be reduced to 120% without risk to the financial system. the ratio used to be 100% before the global financial crisis. again, later today, china construction bank out with its results. rishaad: we are going to have a more detailed look at that through the course of the program. kanye.talking to andrew

we are watching chinese oil stocks today good pitcher china falling to the bottom of the barrel. it is posting the first quarterly loss since it first listed. rivals managing to stay afloat. what happened ye? reporter: cheap oil is a boost for the refiners. not have a does strong presence when he comes to the downstream sector. we saw crude prices slump 36% and a gated that january low in january so that is why we saw net income plunge for petro china to $2.1 billion. wayhave to go back to 2000 first started listing. the first quarter, compared to a year ago, we were still seeing about $900 million in profit for

petrochina company compare that to its rivals. cytotec saw a different story. it is the asian oil refining behemoth. they saw profits triple to $1 billion. take a look at sales for the majors. petro china down 19%. cnooc, drop in revenue. probablysay they would see the same story as petro china. . loss in profit nearly all of its profit comes from oil and gas production. remains in the top four among the oil giants along with bp. pitcher china here bearing the brunt of this crash along with conical phillips. when it comes to

income. what does this mean for the second quarter yeah come we have seen a rebound in oil reflected in stocks but analysts say petro china still has a lot to do to raise its competitiveness. they have to cut costs even further and we heard from the president just recently who said that he had to shut down some of the high-cost fields because there was no hope that these prices, that they would make any type of profit. petro china says they expect output to fall for the first time in 17 years, the first time in 19 years for cnooc. rishaad: let's turn to other stories we are watching today. bank out with its numbers. they're first quarter profits have been hit by increase provisions for bad loans. came innd-biggest bank at $636 million, a drop of 14%.

of 5%.s expected a fall noninterest income fell 12% to do a profit slump. china eastern airlines has been billion dollars to spend on new plans as it adds new routes and retires older aircraft. it is flying widebodied jetliners within agreement for 28 -- $6 billion. nearly $4 billion orders for boeing planes. it is the second-largest carrier in china, flying to dozens of locations outside the asia-pacific. it will boost international capacity by 20% this year. , knee bonest time here has overtaken japan airlines in terms of international passenger numbers. the cap has reduced substantially between the two airlines.

in terms of international passengers. they found her bankruptcy in 2010. it emerged from insolvency one year later. a .2 million passengers on overseas routes compared with 8.1. ana has benefited from new slots at airports. [indiscernible] how facebook has spent a fortune protecting mark zuckerberg. have a look at this one on bloomberg.com/asia. ahead, should investors be concerned? plus we have a surprise factor how can the, japanese central bank better manage market expectations? ♪

the u.n. and white house have condemned airstrikes on aleppo, in the bombing of a hospital that killed 27. more than 60 died overall in the u.n. appeal to russia and the resolve peace talks. the syrian opposition blamed forces led to president assad. the hospital was run by medecins sans frontieres. south korea says north korean missile launches have failed. the rocket was fired from the forern coast in food several seconds before falling to the ground. another unsuccessful launch came later, coming to weeks after a similar failure. pyongyang isays

preparing another test to coincide with the conference. the japanese foreign minister is in china in a bid to improve relations. prime minister shinzo abe met president xi jinping in 2014 and last year. relations have prayed over disputed territory in japan's decision to beef up military forces. they share a $340 billion trade relationship but both sides say ties are difficult. over 2400 journalists around the world, this is bloomberg news. central bankssian have slapped a fine for failing to repatriate more than 1.8 million dollars. the investment company has been over investigations -- internationally, let's bring in kuala lumpur bureau chief. what is the latest? as we saw yesterday,

the central bank put out a statement that said they have sent a letter to ensure compound fines because it is not repatriate $1.8 billion. the reason why they wanted it repatriate it was because -- had used the money. he used the money for different purposes. one mdb has not given enough reasons. of this is this the end saga? reporter: as we know, the parliamentary committee has put out a report that it found $4.2 billion of unverified transactions by 1mdb.

that formerid management was probably to the blamed for the story. he recommended that the police investigate. we have one more investigation into 1mdb in malaysia by police. happening withs the investigations taking place abroad in a variety of jurisdictions? those are also, investigators are stepping up investigations into 1mdb. they are nowhere near the end. in singapore, we saw more people in some of assisting this unverified transactions in companies linked to 1mdb. they are also seeking prosecutors as they try to verify where the funds have been embezzled from 1mdb. let's tell you what we

have coming up after the break, looking at reaction -- extraordinary reaction when it came to the yen after the boj decided to do nothing. ♪

news, the yuanng six. china has raised it by the most since july 2005. raising a by half of 1% to be precise. that is a we have at the moment. the most it has been raised since july 2005. hopes forshing

further stimulus yesterday, sending the yen aboard. upward.d -- quite an extraordinary reaction from a bank which did new anything -- did not do anything. guest: i think that is right. have priced in more, lowering rates further, it can happen and it is not surprising you saw that environment and in the yen rally but the real question is whether the boj has reached the end of their effectiveness with the realization that maybe more qe isn't having the desired results after 20 years of trying. boj may be -- i guess the end of their

tether as well of the same time in losing the end of the tether with the prime minister appeared action he wants to see from him because he seems to have told the heavy lifting. i think that is right. in the income of the boj is going to do more because there's not much choice left. you have to move negative rates, pay people to borrow, i think the problem with the strategy and the reason that i say that we may be at the end of what the central banks can do is that paradoxically you are forcing people to save more as they realize it at have enough money for retirement and that has been the problem not only in japan but the developed world as you reduce rates, you are forcing more saving in less spending. it is a tough road for japan. the boj is going to be moving for more action, more qe, they will pay you to borrow -- the question is whether it is going to be effective in the long run? the markets have their doubts. rishaad: what would you do?

i think it is a fiscal policy story for much of the world including japan where rather than printing money and buying assets which will help the rich, you have to put more people to work and japan has a low unemployment rate so it is not a big problem there as it is the rest of the world that you have to start investing in infrastructure where it is needed around the world and get more people to work and get more people to spend your japan has its own set of specific problems , a low birth rate, they do not -- aging population, they do not allow immigration so i would say a lot of what is happening in japan is the natural result of demographic changes for time so i think they have a rougher story but they've got to spend money on more productive uses of cash. the year jay didn't do

anything more than they are already doing in the fed -- looking at june -- [indiscernible] the problem that the fed has is, one, domestic growth hasn't been as strong as expected although the job story has held up. the global economy has not held up well, either. inflation is moving back toward the 2% target. it hasn't been there for more than three years. my view is the fed can afford to be on call longer with the rest of the world going more -- the last thing they want is a rally in the u.s. dollar. that is why they will be on hold. i talked to you about a week ago, you said the reserve bank of australia would be doing anything but they australian dollar rate cut their indeed

increased creuset sustain chile since we had inflation numbers. that is right. definitely the probabilities of isearlier set of rate cuts increasing and his rate cuts are moved forward. i still have a view they are going to remain on hold and the reason why -- i think they are in a good position relative to the rest of the world in that they have the ability to cut rates. i think they'll wait for further downturn in the global economy to use that ammunition if they have to. on the other side, the inflation .rint was low the employment data is ok but the story for them is going to be the australian dollar and because it has rallied, they would like to see, you know, they will not say -- they would i do see the australian dollar much weaker, that would give the impetus for them to cut over 2016 but i think they would prefer say that ammunition for longer.

quickly, how much is the australian dollar moved down to -- well -- how much of it is down to the minors coming back to some extent in seeing commodities rally? guest: i have always thought of the australian dollar as a commodity currency, linked to commodities. we have seen a rebound in oil, iron ore has performed to strongly, it is not surprising to me that the australian dollar has performed well. you can also add to that the weakness in the u.s. economy and the fact that the markets have dialed back federal expectations of rate hikes. is not surprising that the australian dollar has rallied to where it is today. we are in a global currency war where asian markets are going to continue providing qe. the australian dollar will not get much stronger. rishaad: thank you very much.

let's get back to the breaking news out of china. the chinese raising the yuan fixing by the most since july 2005. being raised by .56%. ♪

♪ looking at our top stories. end. monthly drop in the -- yen. weaker than expected u.s. growth. loyal slipping from a five-month high. the latest chinese bank to breach requirements of that loan coverage. stress among lenders. let provisions -- below the

of existing0% nonperforming credit. bank of china breached the requirement earlier this week. projections.be ,fter first-quarter earnings nearly $2.5 billion. also ahead of estimates. baidu apr rising by more than 5%. out,ng to data coming australian price index falling in the last quarter. prices on the way up. on the way up 1.2%. reaction to the australian dollar, we're pretty much where we were before. the big story has been the yuan fixing, authorities raising the

value by .56%. this is the biggest move they have made since july 2005. that is going to impact the open in hong kong and shanghai. this is a huge move, fourng the fixing rate by .56 print -- .56%. this is the biggest since 2005. to be watching this developing story but this is what offshore chinese from monday is doing. it has been gaining over the last couple of days particularly in yesterday's session. been high on the back of that extraordinary surge we saw in the japanese yen post-boj. i want to see where the on sure you want has started trading at

that point. certainly onshore r&b has been seeing some strength. a quick check of the australian dollar. pci prices up. -- let's get back to the markets and see how the chatter in hong kong -- we are seeing downsides adding to this sense of doom and gloom. a violent reaction in the markets, really spreading to , nowean, u.s. markets, and again, for a second session in asia, after the bank of japan jolt of the economy by doing nothing. of 1%.e half hong kong feeling a little bit worse. also across southeast asia, emerging markets like malaysia extending losses. holding up the banner in this part of the will, 3/10 of 1%. the australian dollar coming off cominghs after that data

-- come in dash cam you rather -- [indiscernible] huge week for earnings, hugely for financial earnings -- we have been watching the banks -- the two big -- the buildings, if you will, very closely. given the declines -- interesting comes, and these breaches -- regulations when it comes to that loan coverage ratios that we have been covering for you. icbc, the largest bank announcing a 6/10 of 1% rise in profit of course. bad loan buffer that has been -- one in 4/10 of a percent in hong kong session. pitcher china, horrible earnings. gaining yesterday -- 1.2%, one of the few gainers.

agricultural bank of china down as well. are getting the last of the big five banks coming through a little bit later on today but certainly things are not looking good when it comes to the rising debt and the decline in interest. theaad: right, going in at direction, of course, it was an extended session, it was baidu,. course, -- in the immediate future he wants to do more about food delivery, with a call -- we call it on demand. in the longer-term, he is [indiscernible] longer-term , that is where he sees -- [indiscernible] he has put a date on it. 2018.

in line with his previous comments. that is when he things that cars can hit the roads. rishaad: what sort of dangerous is he foreseeing? what does baidu face? dangerous ass opportunities, of course. middle ofthe investment cycles. there is more spending to come. there is more pain coming because going into robotic cars is going to cost a lot of money. there is a lot of work to come in a lot of money to come. rishaad: i think you are talking to karen chan and he made this comment about localized market is coming off initial stages of explosive growth -- that is one thing, here, so. the comparisons are challenging. that's get back to where the company makes its money, and that is search. guest: mobile is up 9%.

that is really the danger point. -- like everyone, everything -- smartphones print that is an area where baidu does not dominate the market. some of its key competitors are really coming up. thank you, david. going to take you -- keep you in the world of technology. amazon beating estimates. thanks to new delivery options and cloud services. jump in earnings may ease investor concerns. bezos pouring money into online streaming services. surging after posting a

better than anticipated forecast. it indicates that the company's slot on may not be as bad. linkedin sending shares plummeting earlier this year after saying that growth would be slower than anticipated because it miscalculated some strategic measures. speculators are trading more than $260 billion in chinese commodities over one day last week. .hey are pulled back regulators are coming in at the moment, stepping up control of the market. the value of futures trading across china the three biggest commodity changes have shrunk more than 40% we are talking about that time last week when investors just -- $261 billion worth of everything from steel bars to bigs. now we are seeing aggregate

volume for shanghai reinforcement futures down in ofn ore, jen joe cotton, all them coming down -- remember, last week, we are talking about cotton, 41 million bales were traded -- do you know what that means? that means that you can make 9 million pairs of jeans continence ahat regulators have come down and are now clamping down the speculation they have raised margins for a trading also transaction fees and we are now hearing from sources telling us that the securities regulator is said to have prepared to limit this price fluctuations with a new measures are goldman sachs has already expressed some concern about this and speculative trading in iron ore and how that could impact the markets so we are now seeing that with a training cooling down, prices are also coming shanghaiake a look at

steel reinforcement rebar. has come down 8% since that peak leslie picker that was april 21 one for four days the prices plunged about 20% and they are now coming down slowly as a trading also starts to cool. so what are these new measures? people are at it skeptical about these new measures saying that the authorities have just just released -- a slew of new measures without really considering the long-term impacts that these measures could have on the marketplace. rishaad: thanks a lot for that, sherry, right. china has decided to i suppose turned down xi jinping as a populist hero. xinhua news agency told to drop the nickname of xi dada. what is the story behind this nickname? i guess they are trying to --

[inaudible] nickname that an we have seen since the early his administration. he took power in 2012 and december 2012, the first public da,tioned of this name xi da october terrific tim and that invokes his ancestral home province, so the dialect there -- it could be literally xi big big or something more akin to big daddy xi --it has been essential that to this attempted to portray him as a populist hero, promoted by state media per there has also been spontaneous adoptions of it by some smith's and poets who have spread it around. it has really become quite a phenomenon. rishaad: what are chinese media

outlets being told to do yet ? guest: we have seen several state media outlets, you ,entioned xinhua news agency the main source of government is, they have been told to stop using the term. this is not mean it is a block. it doesn't mean some admission of wrongdoing. simply just let's turn it down, let's quiet it down. the suggestion that there is a re-think going on. rishaad: is there any significance in the timing? guest: we do not know what catalyst there may have been. the people we spoke to that received then did not get any explanation which is not typically how it's done. we do know that there has been a growing sense of unease over what many have seen as an

attempt to build another cult of personality along the lines of what was coming back in the mao zedong era. perhaps they are showing sensitivity that he doesn't want to re-create those things, having lived through the cultural revolution. we do not know, we just know that this does seem to suggest that they want to just sort of diana back a bit. you a welet's show have coming up, signs of stress as far as china's banks go. another lender admitted ♪ bad loan buffers.

these are the stories making headlines. john boehner says he would not

back donald trump and would not vote for ted cruz pity described him as quote lucifer in the he and he also said trump are texting buddies. ted cruz says his comments show why he in carly fiorina are a .etter outsider choice he was officials say military personnel have been disciplined over the bombing of the civilian hospital in an afghan city but none will face criminal charges. 42 people were killed in october during a strike on the clinic run by medecins sans frontieres. a crew mistook the building for a taliban command post. india has asked the u.k. to deport a dj. new delhi made the request after revoking his passport.

say he isdia reports living in a $17 million home. this is bloomberg news. icbc following bank of china, preaching bad loan provision requirements to avoid posting a drop in profits. give us an idea of what is going on. reporter: the regulator has put out 150% minimum on the ratio that banks have to set aside for bad loans. been underty has some much pressure that the banks have net interest margins. but also because of the bad loans. icbc had a 14% rise in the first

quarter. without lowering the mandatory -- bank of141.2% china did the same thing. both in order to smooth out their earnings and get into positive territory. .cbc quarterly profits up 0.6% this is the fourth consecutive quarter that icbc has failed to reach even 1% earnings growth. is -- and i'mhing going to sound like a cynic -- the question over chinese bank balance sheets, who knew? offt: the issue is what is the balance sheet. a lot of the analysts do not want to a dress this because politically, it is dangerous and difficult to quantify.

the two examples i have show the equity swap, that could bloom significantly. rishaad: they do not like this? guest: the banks have a profit motive. i respect a lot of people who work at the bank of china. they are the lifeblood of the system. they are the last recourse if the government is put cash in the economy. reporter: so how that is the problem? guest: my friends in china tell me it is more like 30 trillion yuan. that it is only 3 trillion at this point. the whole point was to wipe off the bones. they did not wipe off the phones so they ended up adding more stuff on the balance sheet. that is only 10% of potential liability. they are scrambling to keep up. reporter: outstanding 1.6%.forming loans, just i mean, that seems pretty low. guest: the imf came out with a

report saying 650 billion is the official number including special mention loans but they put at 1.3 trillion. that does not even include other stuff because the banks have something called investment product that has grown from 6 trillion to 11 trillion and recently -- that stuff that nobody really knows is in there because the reason they are doing it is -- rishaad: when is a bad loan a bad? guest: that is the point. also, these in destin products -- i mean, they do not have to say who they are lending to. you just have to say it is an investment. -- a lot ofquestion fun managers ask me that. couple ways of looking at appeared one of the ways is the credit to gdp gap, the growth in debt compared to overall transpired people are now saying it is at an alarming level. reporter: official said it is manageable? guest: of course they will.

china is different. essentially, what you are going to have is china according to some imf reports is looking at near thailand-type debt levels. some point, right now the corporate's cannot even pay a portion, the interest. rishaad: so what is a telling you about the overall economy? a bank should be reflecting what is going on on the ground. guest: they are. essentially, the government has been using fools of capital, the insurance companies, the stock market, the last big pool of savings is the banks. that is what they are now starting to tap. they are going to reduce the reserve rate requirement. keep squeezingto that but at some point, they are going to run out of cash in the economy will grind to a slow -- reporter: so reducing debt

mandatory minimum, does that create more financial risk? guest: of course, but that is only that but the iceberg. the amount of implicit debt in the system is huge, and it will gradually float through various channels onto bank balance sheets because it is the only place left where there is cash. rishaad: are all banks the same? guest: the state banks have been more cautious in terms of growing their wealth management products and also their investments. some of the joint stock banks have been quite aggressive or china merchants was up 26% -- that is partly a function of them aggressively taking yield because their net interest margin -- goodad: are only is pretty

guest:guest: -- they cannot maintain it. the corporate -- i think the overall figure i saw for corporate on assets was -2% said basically the people who are borrowing are not returning. also, then you have the property bubble which at some point is going to deflate. cannot pay thee interest, how can the banks make money? reporter: i am -- [indiscernible] [laughter] up, months after suffering a social media -- looking at all of this, coming up next. ♪

rishaad: lego has been making waves after making a mistake when they shunned by chinese

artist last year. lego admitting this mistake. reporter: let's backtrack a little bit. iwei year, ai we participated in a display. rishaad: they said it was political --? provided bricks for him for previous exhibitions. there has been a huge response on social media to that. galleries and individuals flooding them with bricks for the projects. lego says the request was , saying it wasn an internal mistake. this has brought up the story and loads of press coverage in more comments on social media

for ai weiwei -- he was very active on social media. twitterng comments on etweeting comments on twitter. once again, lots of people voicing -- rishaad: are they going to allow bulk now ? reporter: they are not going to ask what they are used for from the customers. on facebook, there has been also comments about the story. once again, lots of controversy around this. ai weiwei is reported to have welcomed the statement from lego , saying he recognized it too late. rishaad: coming up, we have baidu head of estimates,

expecting the rest of the year to continue the way it began to look at their earnings with our next guest. ♪

announcer: from our studios in new york city, this is "charlie rose." charlie: we begin this evening with our continuing coverage of election 2016. hillary clinton won four out of five primaries on tuesday. donald trump triumphed in all five republican primaries. bob woodward, associate editor of "the washington post." in new york, michael barbaro. what was it you saw there? what is the quality of trump's foreign-policy vision? >> what was important about this speech is what was not there. he did not talk about the wall