betty: donald trump starting to name his white house team -- reince primus will be is chief of staff. >> continuing industrial-strength leg gains in retail sales and investments. betty: at the global economy could get a health check with scheduled comments from the bank of england this week. and the kiwi's hit as powerful earthquakes strike new zealand.

the main northwest -- cut.-south highway is betty: it's just after 6 p.m. after this sunday. if on: just after 7 p.m. in hong kong. good to see you. we went from this rally to a trump tantrum. could be a mixed start, not a good note to start the week. betty: it was too good to be true in terms of a rally, 48 hours after president-elect trump won the presidency: the election. but now we are getting solid details. reince priebus named chief of staff and stephen bannon who is chairing his campaign will stay on as a strategist and senior counselor. it will be interesting to see who else he appoints and how the markets react to that. yvonne: as this transition

continues, how is it going to let you the uncertainty we see in the markets? deadlymention the earthquake and they are still recovering after it shut down the capital city. the kiwi pairing up the losses, stocks seeing a bit of the list. astralia, the axis 200 had decent week but expect some profit taking. we have some data out today with industrial production and retail and japan, we have gdp out this hour, expected to take up slightly. stos be a good boost for . one market close in asia-pacific, it is a public holiday in india, so no trading there. let's get to our top story in asia. the chinese economy is expected to show continued stabilization.

mackenzie. in tom he has been breaking the data down for us. what are we expect? tom: study as she goes. we are looking at a number of 6.2%. that would be of from what we saw back in september and follows data that shows continued expansion and deflationary prices at the continue to ease. on the retail sales front, we are looking at a number of 10.7% year on year. that would match the number we got for the month of september. fixed assets would be up according to the survey's year on year. a couple of numbers to look for behind the headlines -- auto sales, because a tax incentive may be coming to an end. that could boost auto sales. and property sales, because we seem to be on the verge of ace

policy titans. a word of warning on the retail sales. we saw the alibaba affect on friday, getting $17.8 billion, a record. and we saw the increase for october, but bloomberg intelligence says there is now a disparity that illustrates the gap between how much is being spent versus they wage growth in china. supportedhat has been by policy and looser credit. a lot of that could be coming to an end, so retail sales in the future could start to ease. trump says he will spend a trillion dollars to boost america's infrastructure. is there anything he can learn from china? tom: there's a lot you can learn from china.

china spent $1.2 trillion this year alone and in the last decade, it has spent $11 trillion. china has the something around 20,000 kilometers of high-speed rail and is aiming to get 30,000 of high-speed rails in the next few years. it has built 210 civilian airports will compare that to the infrastructure in the u.s. the last time the u.s. built a major airport was 1985. the flipside is china is spending too much on infrastructure. it has empty enterprise zones and towers that have not been filled up. there was a study that suggests that matches half of the .nfrastructure spending a couple of takeaways for president-elect donald trump from china. if you lessons, if he will take them. from, donald trump

has begun naming his white house team for when he takes office. ashas named reince priebus chief of staff. this might affect the market. to macy that he is bridging the gap between the old guard and the old tea party. in writing spree does, he gets a low-key insider. has headed up the republican party as head of the committee and also help in the get out the vote effort for trump in the final stages, which obviously was a success. stephen bannon was said to be considered for this post and will be named a chief strategist. he was clearly a chief strategist for the republican

campaign and the former chairman of the right ring news right, breitbart news. you get the best of both worlds here, so it is expected that perhaps we will know how this is better received on monday. he is continuing to meet with world leaders like the japanese prime minister on thursday. what we are hearing is that it was at the japanese prime minister's request. could be a good strategy of the two are could be butting heads internally. in the meantime, there is a possible deal between novartis and amnio pharmaceuticals. matterle close to the say they are in talks. this is a big generic drug maker. there has been a lot of consolidation in the generic drug making industry and the drugmaker is seeking to bolster it is missed by a possible link

with them. the drugmaker could be valued by as much as $8 billion. if you look at the chart, the stock has been trending higher as of late. those close to the matter say talks are taking place. we be: what should looking at in terms of the economic reports? look toward a december likely tightening. be looked at will in terms of whether they bolster that thesis. we have economists seeing october sales gains as fuelyment and wage gains spending power. another solid month of sales will support a fed rate hike. are expected to show a rebound in home construction. solar citys and

voting on a proposal to combine the companies in a deal that has been the news as of late. let's get to the first word news. >> the south korean president may be the country's first leader to be questioned in office as an influence peddling scandal makes impeachment a possibility. the investigation includes a presidential aides and executives at leading companies like samsung and you and a. there is growing pressure to quit. banks are struggling to make money from lending. 20%.t probably felt yen is hurting earnings overseas. thanks for this year's worst performers in japan when they rebounded on donald trump us

victory. thousands of pro-china rallied in hong kong, offering support to beijing and announcing demands for the cities independent. by effectively borrowing to separate lawmakers from taking office. beijing's is those who advocate the cities independence are disqualified from elections. global news 24 hours a day powered by our 2600 journalists and analysts in more than 120 countries. this is bloomberg. betty: two people have been killed in a powerful earthquake on new zealand's south island. it severed the countries ray -- main transport route. let's get the latest from paul allen in sydney. how bad is the damage? paul: pretty bad. see agers out of

the worst hit area, but one person died in a ski resort town where you see that picture of the homestead that has collapsed. but that is also where the main transport route hugs the coast and the aerial pictures from their show a scene a fairly impressive devastation. that is going to take some time to clear. there was a business due to ship china tons of crayfish to but that is not going to be going anywhere. impassable, said the airport can no longer be reached. the interisland ferry service which connect the south island to the north has been suspended as well. impactwhat has been the and c of wellington? -- the impact in the city of wellington? paul: there was a lot of damage

their which is surprising because it was further from the christchurch. there was a masonry broke and some homes and hotels have been evacuated and houses parliament have been open to take some of those evacuees to work. tendquakes in wellington to not up the stomach because there are a series of major faults that run under the city. perhaps it is one of the most geologically frightening places in the country. a lot of nervous people in wellington today. will certainly keep our eye on the aftermath of that earthquake in new zealand. a court is set to rule on the of the bankrupt korean shipper. details coming up next. after four years of shinzo abe's policies, how is the japanese economy faring? we will ring you all the data

next. this is bloomberg. ♪

down toe are counting asia first major market this morning. we start in sydney where trade is already underway. we are very for some of the declines we saw from friday, down 6%. yvonne:."aybreak asia and i'm betty liu. the latest check on the headlines -- the chairman of india plus biggest conglomerate has denied allegations of mismanagement amid a deepening feud. a statement was issued defending his record, saying he'd like new policies in response to more stringent corporate governance rules. a nine page media release was issued, saying units of the company was drifting. options traders are sensing a bargain with asia las

vegas that company. it's at its highest level. from their september high amid a selloff in tech following donald trump us when. their track record may prove them right. profits so are have top wall street estimates. one of 18 crown resorts detained in china has been released. the junior employee a chinese national was released on bail. three australian nationals are among the remaining staff being detained for suspected involvement in gambling crimes. its crackdown on corruption, beijing is focusing on overseas operators with operations in china. time for a look at what we are watching in asia. $.10 releases earnings on thursday and it's likely they will see continued growth with sales jumping as much as 47%

with operating profit up 46% and mobile games expected to be the driving force there. indonesia path central banks that then to stabilize its currency. we will see if policymakers take further steps to boost their economy. has cutral bank interest rates six times this year. the rate at 4.75 cent. the japanese prime ministers due to meet donald trump in new york on thursday. yen volatility may post problems as the next president gives more detail on its betty: asian trade and security policies. china's push to take air out of his poverty bubble looks to be gaining some action. were at a in beijing five-year low.

yvonne: joining us now is the chief economist at capital economics. great to have you on the program. our or so, we did get news of donald trump's cabinet. washingtoninted some main names to lead this transition into his presidency. how does this play into the uncertainty we see in the market right now? are we getting a clear picture for what it means for asia right now? is entirelynk this crucial. trump is a successful businessman but has had very experience in policymaking or government. a lot of it depends on whether he surrounds himself with experience and he seems to have moved some way toward that with his appointment of chief of

staff. interestingly, if you ask for the election, i probably would have said where we would be is down. because of the future talk of mightal symbols, the risk be a bit stronger than we thought rather than weaker. yvonne: there's still a lot of talk about how massive this fiscal stimulus could be. from monetaryift to fiscal stimulus but there is uncertainty when it comes to trade. are we going to see a pivot for trump when it comes to trade policy? guest: the bottom line is no one knows. he was very aggressive during in terms of sealing the u.s. off and making protectionists him a big issue which would have a big impact on

parts of asia, especially china. but we know from his first speech after he won the election his toneas changed somewhat. is it a temporary respite or a permanent one? this is a big risk still hanging over the u.s. economy and parts of asia, but we are just going to have to see how it pans out. there might be some move to protectionism in the u.s. senate would have some impact, but we doubt he will go the full hog and put tariffs of 35% or 45% in countries like china. there needs to be an acknowledgment that there's a don'tsk here, but we think it's going to be a full on global trade war. betty: we were just talking coming up ine data asia, but there's going to be a lot of talk in the u.s. this

weekend capping it off with janet yellen, it will be the first time we have heard from janet yellen after president-elect donald trump. what will you be listening for? any kind of change in tone? guest: that would be crucial. we know before the election that the fed was on track to hike interest rates in december. given the financial market reaction to donald trump's when has not been too severe, i think the fed is on track to hike rates. that's the message i got from stanley fischer is speech, the vice chair at the fed. i think we are expecting janet yellen to say business is on track and providing the incoming data holds up as we expect it will, we ain't interest rates , if rise in december and anything, the likelihood of lookingt-elect trump

through a big fiscal stimulus means there's a greater chance interest-rate swap to come to pace. pendingiven the stimulus to come, something name investors have been coming out in recent days saying that now we know who is going to be in the white house, there is a peak with some of the investments that have worked really well and one of them is tech shares. he was saying those so-called fang stocks -- facebook, apple, and licks and google, those are at the peak and they are about to pop. would you agree with that? i would go deep into that. i think the one thing that is relevant here for technology shares his trump's potential the tax oner

repatriation of profits overseas. a lot of u.s. companies are holding profits overseas and they are mostly held by health care and pharmaceutical or tech companies. in one way, could be a good thing for tech shares if he lowers the tax rate, tech companies could bring their money ba into e u.s. and paid dividends. that is presumably a positive, but in general, the outlook for the stock market has done reasonably well. but we are not convinced it will come down. that's not supported with the huge gains in the stock markets. but we are not expecting big, sharp falls. thank you so much. preferredon on a bidder for its asia operations. all the details, just ahead. this is bloomberg. ♪

yvonne: hanjin shipping is due to report earnings the same day south korean court may select its preferred bidder for the bankrupt container line u.s. operations. bring in our correspondent from singapore. is it likely they will make an announcement later? the court is planning to make an announcement on the first letter. from the two that have submitted their final bid last week, it is between two companies. will go tolk that it hyundai merchant, given that they are the other surviving container line in the korean government has expressed it will support them to come the national carrier, so we will see

what the results come out to be. frome: what might we see the earning releases? expecting ae not good story out of this, given that the industry was already in trouble. widen. expecting it to just as went came were getting into the peak season for shipping companies and they lost a chance of making some money out of it. we will probably see very bad numbers coming out later today. are getting an indication on how big a toll this is taking. guest: yes. fleet has trunk and most of the vehicles have been chartered.

it the start of the end for hanjin pretty much. betty: much more ahead. how the world's top

yvonne: visit 7:30 a.m. and hong kong. we are just 30 minutes away from the first asian market open. betty: looks like a hazy day there. wherel-clear in new york markets looking to start the week with futures trading in just about half an hour. "onne: you are watching daybreak asia. .et's get to first word news haslinda: we are expecting more signs of expansion when china releases economic indicators. factory output rose, expanding

this year's study increase. they're are expected to hold recent gains as well. richard you out in beijing. a powerful earthquake killed two people and caused widespread damage. the magnitude 7.5 quake struck just north of christchurch followed by hundreds of act shocks -- aftershocks. donald trump has named reince priebus as his chief of staff. he is chairman of the republican national committee and it is expected to bring trump close to the party leadership after a divisive campaign. trump name to from breitbart news as his chief strategist and senior counselor. toppedsney's dr. strange

north american box office for a second weekend. estimated 43an million dollars in the u.s. and canada, helping disney through a record year with worldwide sales topping $6 billion in 2016. the studio has a potential block esther in the wings with a star wars movie expected next month. global news 24 hours a day powered by our 2600 journalists and analysts in more than 120 countries. this is bloomberg. look at how the asian markets are shaping up after the whole we saw on friday. could be a busy start to the week. you have some of these on the back foot. these two markets are trading, new zealand just turning green.

australia is where it is that. when you look at futures, it is interesting because trading above 106. just toldpen up splits above water. i think it is worth noting that when you look at these and smarts, the selling that took place friday took place at the same time you had a surge in volume. when you look at hong kong, watch reaction to the gdp numbers. japan, i mentioned that already, mr. kuroda is scheduled to speak in 90 minutes time. for the first time, it is trading above its 200 day moving average. your: i always like renditions on the touchscreen. theother big story is

pickup and outflows from emerging markets. how bad was that damage? we are looking at currencies. lamy show you how the damage was. group sawasia, this its worst day in 15 months. graphic that shows how much money was pulled out for the week. taiwan, south korea, all the way , still the philippines fairly big. what we are seeing across the ethics space would likely prompt more central bank into action. they could prompt brazil to smooth in these flows across currency markets here. the bond markets, what do

we see early on? guest: the selloff continues. 2.64%. that takes you all the way back to markets this year. in 30 minutes, we get the latest and gdptreasuries numbers are out in the next 15 or 20 minutes. betty: thank you so much. win continues to resonate in markets around the world as a central bankers prepare to address his policies. kathleen hays is here with more on this. the bank of japan governor will make his first comment since the election. what do you think he's going to say? kathleen: there may be some gain but not anywhere near strong.

the yen's week has been a gift to the bank of japan because it has done everything it can do to weaken the yen and nothing seems to work. one analyst says the doj is lucky -- boj is lucky to get this. of course this helps exporters and it holds gdp and growth, maybe boost inflation, so it is all considered very positive. has dropped its forecast for 17 and you can see that. that is a pretty picture if you are the bank of japan. said chief asia economist now it won't happen until the end of his term. it deftly gives the bank of

japan some breathing room to see if yield for control will work out and with this weekend, get the desired outcome. betty: 14 fed speakers this week? speaking? is every day, will have two or three. janet yellen on thursday will be the big one, but i think a lot of people are waiting to see does the market turmoil, the big selloff in emerging markets is something where the fed has to be cautious. let's jump in to the bloomberg now. been a see there has massive flight from emerging markets. you're looking at the ishares emerging markets etf. it tells the story so thoroughly. janet yellen testifies before the joint economic committee.

will she be having to answer the criticisms donald trump has raised in his run to the white house? maybe there interest-rate policy isn't quite right. this is from the atlas research foundation. >> he has always shown great for people who come as he tells it, have always done the right thing in life. they have put away savings, they have been anticipating retirement, and they have found themselves getting next to nothing returns on their account. he doesn't think that's right. guest: she is an advisor to donald trump and was asked about fed independence. she seemed to say fed independence is not in jeopardy. on top of the speakers

and on top of janet yellen, we are also said to hear from mark carney. be driven guest: by any trump election fallout? he is probably another one who likes what the election has done to the british pound. the economy, where policy is heading, and inflation expectations have risen in the u.k.. 4500, you into chart can see the u.k. ten-year break even, look how much that inflation expectations indicator has gone up as the expectation phil sharp week and started back up. the pound is one of the best currency performers after the elections. there is some sympathy between the u.k. populist brexit surprise vote the summer and donald trump

appealing to the masses and getting a surprise response as well. what a change in sentiment. next, how a little-known casino on a tiny u.s. island has become a magnet for high rollers and money launderers. a special report coming up. this is bloomberg. ♪

betty: we are counting you down to asia first market opening. also this gdp number out of japan coming out, we expect things to pick up just a little bit. nikkei futures slightly up. is daybreak asia. vague certainly some numbers coming out to kick off the week in japan. a quick check of the business flash headlines.

indians have returned almost 30 billion dollars in high denomination notes in less than four days after the government cost surprise decision to ban them to fight corruption. the bank of india alone took more than $7 billion in cash deposits. customers handed over the legal notes. atms are being modified to handle the new bills. biggestndia press toducer -- income climbed $65 million, far exceeding estimates. $750ompany plans to raise million and has set up a committee to decide on the type of offering for shares have more than doubled this year. sources say six buyers are through to the next round of bidding on miller's assets. -- the assets are

valued between 5.5 billion and $6 billion. the world's most successful casino ever may be located in a remote american territory run by former protege of donald trump. high rollers are betting on the pacific island of saipan where the staggering numbers have attacked -- have attracted the attention of u.s. officials. the american island of saipan is a remote spec in the pacific with sandy beaches, world war ii relics and the most successful casino in all the asia-pacific, if not the world. from temporary tables tucked at the end of a duty-free strip mall. across the street, hong kong listed imperial pacific is holding a more permanent casino

resort. five hours from most mainland cities, it's a new choice for chinese highrollers perhaps wary of beijing's corruption crackdown. let's where the story gets weaker in macau, it should pop up. that somewhere else in this case is saipan. >> revenue from the makeshift casino with just 17 the ip tables already generates daily $70,000,f about 100 eight times that of the grandest macau casinos. total $13.5s billion in the first half of the year. in this tree veterans question how that's possible. tale on a cautionary the next-door island of tinian that closed after u.s.

authorities find it for violations of anti-money-laundering rules. sources tell bloomberg the same u.s. treasury unit is looking into the activities of imperial pacific. the ceo said he is unaware of any investigation imperial pacific is very transparent. i have heard every question you have on your mind. all of my guys and my friend in macau say this is all. it can't be real. but he says they are real bets. we don't want to do anything to break the law. he declined to appear on camera. has corralled some heavy hitters and advisers stretching straight to washing d.c., see andg james will former fbi director, louis freeh and republican party, ed rendell and haley barbour. brown learns the gaming business from the president-elect donald ran trump'se

casinos in atlantic city. head of the local gaming commission says watchdogs are in place. america.s we tracked one thousand percent. >> the local house leader is not convinced. he voted against the bill that eases was hurried into law granting a single four-year gaming monopoly to imperial pacific. >> very grave concern. i fear our people getting the bad side of this whole deal. >> i can guarantee the commissioners at service commission are independent. we do not collude with the licensing. whatld have to ask you type of drugs you are using to come up guest: with that kind of conjecture. officials say saipan badly needs the gaming taxes that includes a replenishment of the islands replenishment funds has run dry. the island is broke.

but even ahead of the retiree association says that from a social perspective, the casino is not worth the wager. >> gambling is just taking money from a and giving it to be. it is not a way to make money. , 10n sale of one to 10 being good, i think it is one. >> a bad deal? >> a bad deal. brexit the first of several planned phases and will deal its hand early next year. break: up next, we will third order gdp numbers out of japan with expectations for a marginal rise as a recovery remains fragile. this is bloomberg. ♪

yvonne: breaking news japan with third quarter figures crossing the bloomberg. guest: gdp for the third quarter

coming in with a surprisingly big jump. consensus estimate of a rise of 0.8 percent. japan gdp has managed to grow all three quarters of this year so far. if you look at private consumption, and it's a big part of gdp and that has increased by 0.1%. business spending is flat against an estimated increase of .2%. up for the third quarter of 2016. residentialding and investment have remained fairly resilient so far. consumption has picked up slightly in the third quarter, but we should look later on when more details come out about what

exactly is driving the growth in the third quarter for japan us economy. slightlyas weakened since the election of donald trump as the next president of the u.s. and that will help the they wouldan, but like to see what has been driving it so far. yvonne: a surprise to the upside. let's look how things are going for japan after the open. those declines in the morning session. could be looking at a pop for the open. let's get some immediate reaction to those numbers with the wisdom tree japan ceo live from tokyo. 2.2% -- where did that come from? there you go. mr. and mrs. watson of the open

their purse strings a little bit. on exports or business investment. consumption expenditure a little better than expected and i think tightness in the labor markets feedpan is beginning to through so there's more money in people's pockets, particularly the younger generation and that gives you domestic demand on a trend. private consumption just up slightly at point 1%. private consumption remains quite weak. i want to get your take on how a could affectncy japan. i know you think be beneficial to corporate japan? how so? guest: corporate japan is in a very good position because a domestic is this investment spending cycle is starting now and trump's focus on infrastructure building is going to do very well for japanese

construction companies and who knows? trump may build a bullet train in the united states which would benefit the japanese. we do see the gdp deflator falling for the first time since 2013. does that mean inflation? guest: effectively, you have these terms of trade effects of low energy prices over the last -- sorry, theweek strong yen until recently. we are still in a zero inflation environment and the key going forward is in the whether the person strings, whether domestic demand led by consumption expenditure is going to lead the way further.

betty: i want to talk about some of the fiscal policies expect it from trump which are going to be quite inflationary and how that might affect japan. important point here. about 14% of japan's profit comes from factories in the united states. get a large cut in corporate taxes, donald trump does take the corporate tax rate down to 15%, that would reduce profit by 2.5 percent to three percentage points. just: right now, there is a lot of nervousness within the japanese government about what a trump presidency means for them. what do you think needs to happen at this initial meeting between the two?

isst: i think the key issue building a relationship. abe andme minister donald trump are very much people persons. i think the chances are very good that prime minister abe and prime minister elect donald trump will get along very well. they have similar national security agendas and they are united as far as the peoples republic of china and couple that with the idea of strong government, that is something both donald trump and prime minister all they support. betty: do you think of a minefield some pressure if donald trump succeeds in putting trillions of dollars in stimulus into the u.s. economy, that that will put pressure on shinzo abe to go after it again? people are misunderstanding what is going

on here in japan. at the beginning of august, the ,abinet ratified a multi-year ¥28 trillion stimulus package. gdp of added5% of fiscal stimulus over the next year. doing fiscal spending, china doing fiscal spending and if donald trump brings america to the four, we have the three biggest economies doing massive spending programs, that is going to be very inflationary. can you actually follow ?rump into fiscal stimulus it can only cover a record amount of stimulus we have seen. quickly. guest: he is not following trump, he is leading trump. he was first to massive fiscal stimulus. who is going to buy the mark

there is a collapse of savings going on and we have your friend from the bank of japan very happy. yvonne: we have to leave it there.

♪ optimism,ason for japan smashes expectations with growth in the third quarter. donald trump starts naming his white house team. new data from china expected to show continuing industrial strength. the kiwi swings after taking an earthquake hit. the main highway remains cut.

ofs is the second hour "bloomberg markets: asia". i am yvonne man in hong kong. it is just past 7:00 p.m. in new york. it sounds like we will get lots of fed speakers. also, likely to get more appointments and a real sense of the team that will surround donald trump. 14 fed speakers this week. we will be very busy. , gdp figures japan a surprise. for once, a gift for the boj. let's look at japan. the growing reasons for optimism in the country where third-quarter gdp smashed expectations. one of the biggest takeaways? both private consumption and

business spending came in stronger than expected. that pushed up the adjusted figure. i have not had time to go through the data set, but it looks like there is some sense of optimism coming throun the economy. exports also played and a factor in this, a contributor to gdp. >> the implications on policy, what might they be? bias thek the easing boj has won not be changed as a result of this reading. however, it will be taken as good news by the central bank. it obviously gives them another reason to pause. the arsenal is relatively

limited, so i am sure that governor kuroda will want to use it when absolutely necessary, and this might give him a reason to pause again. >> it might indeed. thank you so much for the latest on the japanese gdp numbers. trade.ket just started are reacting,they as well as equity futures in the u.s., a slight rebound from friday, futures up a little bit. david has more on the markets. david: thanks. s&p, thents on the nikkei 225, just started trading, up .5%. we opened higher than that, 14,400 65. dollar-yen no reaction, pushing expected.ronger than expressi n

just looking at the data, i have the breakdown in the deflator number, imports down 16%, which speaks to the trunk currency, lower energy prices, so essentially japan is importing inflation a little bit there. the rest of asia is looking like this, a mixed bag. australia down .7%. mining stocks on the way down, one .7%, also a pullback. now, all that being said, i want to set aside developed markets at the moment. the area we want to focus on is this group right here. in 15 months for emerging markets, southeast , all butia close today one stock was actually higher on friday. a massive pullout, dramatic pullout of money from these

markets, equities, bonds, currencies. spike up in credit default swaps as well. that is a group i am watching closely. do have to emphasize that there is a bit more risk on the table. futures on the way up ever so slightly. betty: a little bit of optimism from the bulls. let's get to first word news. economy didina's not seem to dampen spirits for the world's biggest online shopping day. record $17.8a billion. expansion was what alibaba had targeted. it is a barometer of china's transition to a consumer-led economy. it is highly unlikely to grow

at 60% each year because the absolute numbers are becoming so large that that would be very difficult to do. we are at least 30% higher than we were last year, and it looks like somewhere between $17 billion and $18 billion total. morenda: we are expecting expansion when china releases economic indicators for october. economists say factory output grew 6.2%. retail sales in fixed asset investment are expected to hold gains as well. the reports are due out at 10:00 a.m. in beijing. the south korean president may be the country's first leader to be questioned in office as an influence peddling scandal makes impeachment a possibility. investigation includes presidential aides and executives at leading companies. protests have grown since the president apologized, and there

is growing pressure to quit. new zealand's dollar and its key stock index have recovered from early losses after a powerful earthquake killed two people and caused damage. struck juste after midnight, followed by hundreds of aftershocks. businesses are closed in christchurch in wellington. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. >> donald trump us begin naming his white house team for when he takes office in january. just a few hours ago he appointed his chief of staff. so are have as significant, reincetrump appointed priebus, and not to appoint

stephen bannon. being the bannon ultraconservative republican strategists, the head honcho at breitbart news organization. he has been named to being that senior strategist role. i think what you are noticing is that donald trump in choosing his chief of staff and look for someone with widespread political connections to work in tandem with mike pence and the republican congress. keyld trump made several promises on the campaign trail, several of which he moderated tonight in an interview with 60 minutes, but most notably i think what you will see is the trump administration going after bipartisan infrastructure reform, reforming the tax structure, and of course immigration. mean to be negative, but this could either mean moderation and cooperation or this could be setting up for a lot of infighting within the

trunk camp. -- trump camp. spoke with on i election night, some have concerns that reince priebus could not fully get the republicans to get over the republican data apparatus to the campaign during these final days, but winning speaks for all, and i think the senior donald trump sources i have been's reeking with indicated earnedince priebus has donald trump's trust because of the results, and the result is a republican majority in both chambers, and of course donald trump in the white house. >> what does this mean for trump supporters who were voting for the presidential candidate that was saying things like drain the swamp and yet he is taking washington insiders? >> that is a great question. i think that is something that

particularly for the grassroots community, i think steve annan will have help shape messaging on that, because in the final homestretch, many supporters i spoke with all over the country, part of his resounding appeal was that he was someone who would go into washington and shake rings up, and you're taking reince priebus, he has picked ever an insider. doubling down on trying to shake his legislative agenda, but he does receive some criticism from the grassroots community who wanted a total and complete change. my last question, is this the beginning of the trump pivot? we willnow, i think have to wait and see.

i think we will have to see how he chooses to govern. many publicseen remarks, but tonight, his interview and that victory speech, we have seen a donald trump who is looking to his league in a unified political voice. in terms of policy, that remains to be seen. i would be looking for corporate tax reform and infrastructure spending, and so for the markets seem to be receiving his message quite well. >> great to get your perspective on this. thank you, kevin. politics, well. a conventional republican agenda win out against donald trump's campaign promises? we take a look at the indicators next. this is bloomberg. ♪

>> this is "bloomberg markets: asia." yvonne: a quick check of the

latest business flash headlines. japan's banks still struggling to make money from lending. profits probably fell about 20% last quarter. negative interest rates are pressuring loan income at home, and the stronger yen hurting earnings overseas. banks were the worst performers until last week when they rebounded on donald trump's victory. shares of the banks are rising this morning. hanjin returned most of its chartered vessels after a bankruptcy filing. all but three of the remaining 14 ships are stranded or seized over unpaid bills. the court overseeing the receivership is set to name a preferred bidder for hanjin's asia business on monday. throughd six buyers are four assets in eastern and central europe for sab miller.

they agreed to divest assets with the takeover of sab miller. the assets are invited at between 5.5 in dollars and $6 billion. guest says the outlook for the market may not be that gloomy after donald trump's win. from singapore. little bit more optimistic post-presidential election right now, but we see tantrum, someump are calling it, especially in emerging markets asia. the given how rampant search for yield has been this summer, how much further could we see declines here now? >> thank you. thank you for having me here. i think the important issue is

that markets are currently pricing in quite alive. -- quite a lot. everyone is expecting a huge stimulus package from donald trump. cause rising yields an interest rates. i think this is what the market is currently pricing in. to show you chart how emerging markets are looking right now, because we obviously see the white here, where you see the carry trade index. that has fallen substantially when it comes to emerging markets fx. on the other side, the yield premium closer on this diversion straight. what is a floor that puts an end to the selloff? >> i think we from deutsche bank expect more clarity on the program of donald trump. it is deftly too early to make andprofound projections

forecasts here, but i think the yield spread we are seeing currently between emerging markets and u.s. treasury, causedng, and this has some flows out of emerging markets into treasuries, therefore it might be not the end now, but we have seen most of this kind of flow into treasuries until we are seeing more clarity from the u.s. some say this has led to substantial portfolio partstioning, change and of developed markets, but shifting from a monetary policy focus to fiscal policy. how does that change your outlook now? yes, so we are having our quarterly meeting this week. clearly this has a major impact on how we see 2017. what we are going to clearly discuss is if this is already a

game changer. are preferring fixed income over equity markets, but as you rightly said , this is a shift from monetary to fiscal stimulus. most likely also be positive for the equity markets, although we know there has been stretched evaluations in the u.s. equity markets, so we have to verify and also discuss at length if this is already a game changer, and we are going to do this this week, most likely we are shifting the little bit away from fixed income, and then a little bit more positive for the equity markets as well. >> what is going to be significant about this week? sorry, i did not get the question. week, soid maybe this

do you feel like you will have enough information where you can start making the switch is? no, it is our regular quarterly meeting, which we have to discuss the markets. it just happened to be the week election.trump we wanted to wait for this result before we meet together and then discuss our outlook for 2017. >> i want to go inside the bloomberg terminal for a minute. we have a chart just getting back on the u.s. markets, a chart that shows an interesting situation, which is that the dow and the nasdaq are diverging the most since 2001, which is quite fascinating. investorssounds as if are signaling a bubble in tech ares and it is time to selloff. what do you make when you see a signal like this? what you make of that? area,iously in some

especially the tech sector as you said, there has been some stretch of valuations before, to compare the dow with the nasdaq is maybe not the right kind of comparison because the dow is just a 30-stock index. onhave been positive technology before and remain positive on technology because we think there will be a major change in the technology space, but this is not a signal where it would cause us to be too much concerned, because as i said, the two indices are quite different. all right, thank you so much. yvonne: some breaking news out

of japan. economy minister making comments after that surprise gdp result, 2.2% for the third quarter. the economy may head to two gradual recovery, and win this recovery will continue even though some weakness has been seen. slow down risks still remain, but he says he needs to watch downside risks in particular when it comes to emerging asia. some soft spots when it comes to the modest japan exports could have been the potential driver on the economy and what led to this unexpected strong growth for the quarter. coming up, earthquakes hit new , signs ofisland

damage limited. a live update next. this is bloomberg. ♪

this is "daybreak asia". >> two people have been killed in an earthquake in new zealand. let's get the latest from paul allen in sydney. how bad is this damage from the earthquake? 7.5 is a big quake. it was centered in a town nearby. this is a couple hours drive north of christ church, which have the severe quakes five years ago. this time, christchurch largely unaffected. , onead two people killed in a historic resort near a historic town, and one in a ski

resort. one runs alongy the coast there and is prone to landslides. that has been caught off by the rail that runs along the same coast. affected insinesses that area as well, a lot of fishing happens there. will not beyfish getting out of there today. ferry servicend that joins the two islands has also been suspended. >> it seems like this quake was followed by very strong aftershocks. what has been the impact in the capital city of wellington? the impact in wellington has been more than christchurch. that has a lot to do with where the fault lines lie, but a lot of fallen mason area. some houses and hotels

evacuated. the reserve bank is closed today. a lot of office workers have to stay home while those high-rise buildings get checked. there are still about 5000 properties around the wellington region without power, but there is more to come. wellington is famous for its wind, and that is expected to get up today with gus up to 140 kilometers an hour as a storm approaches. up to 140sts kilometers an hour as a storm approaches. watching out for tsunami warnings too -- warnings too. kong denouncing demands for independence. they came a day after china intervened by barring to elected separatist lawmakers from taking office.

that those who advocate the city's independence are disqualified from election. china's planned east-west trade route has moved a step closer. , they will ship products to africa and the middle east. it links maritime routes with new roads through southwest pakistan. the pakistani army is guarding the port. at aan pumping more oil faster rate even as opec cal ls on members to limit production. to 250,000 barrels a day in october, four times the volume in 2013. opec meets at the end of the month to discuss the cap, with several members boosting production or seeking exemptions. >> up next, donald trump surprise of election win has

triggered the biggest emerging market stocks a lot. we will assess the outlook for frontier markets. this is bloomberg. ♪

>> is 8:30 in singapore, just a half hour away from singh -- from trading. it looks again could be a good start to the week. >> it seems a bit threatening there with the weather. you are watching daybreak asia. let's get to the first bird news -- first word news. >> the top stories this hour -- japan's economy expanded more than expected in the fourth quarter. gdp grew an annualized 2.2%. private consumption grew just 1/10 of 1%.

dropped .1%ator from a year earlier, its first hold since 2013. we are expecting more signs of expansion when china's releases its economic indicators for october. fixed asset and investment are expected to hold. that will be out at 10 a.m. in beijing. the dollar and its key index have -- aussie dollar and its kinect have bounced back after an earthquake hit after midnight local time. many businesses are closed in christchurch and in the capital, wellington. donald trump has named reince priebus as his chief of staff when he takes office in january.

he is the chief -- he is the chairman of the republican national committee, and is expected to bring truck closer to party leadership after a divided campaign here -- campaign. donald trump named stephen bannon as his chief strategist. this is bloomberg. time to see how the asian markets are shaping up this morning. just and are very quickly about what is happening in new zealand. we have come off the lows and are now treating high. one part of the market is feeling the quake. that bounced 7%. it is much better than what we saw on friday. it hasn't settled just yet. we are still seeing declines over in dignity.

-- in sydney. especially gold-mining socks -- stocks. gold prices were trading well over $100 from current levels at the peak. we are trading about $100 below that. a mix across the region. these are markets that are open at the moment. when you look at what is happening in the bond market, that is containing at the market. the losses, we're looking at yields in australia. apr and march, this is a one-year look. it is very complex, burke right in the middle, you have u.s. 10 year treasuries. we are to levels of this time last year. 2.18% is the yield. following the elections in the u.s., these got to about january 11 or 10th.

what about emerging markets? what about week last week. leasing early last -- what a bad week last week. what are you seeing? >> the pullout was just absolutely vicious across emerging markets. taiwan is one we're watching, south korea. monday through friday, netapp was -- net outflows. have a look at some of the currencies we're watching. slightly better. -- dust has not settled in settled. -- bring it is gaining ringgit is gaining. this is one to watch very closely.

it's sort osnowballs en you get declines in the currency market. very important space to watch. let's stay on emerging markets. our next guest says big sovereign wealth funds are looking at frontier markets for the first time. joining us now is the founder of , which investments specializes in frontier markets. what a timely moment to be visiting. the sovereign wealth funds are looking at frontier markets, perhaps until last tuesday? >> i think they might be looking at them even more. we have seen selloffs in the emerging market. it is important to know that the frontier markets become more attractive as emerging market become us attractive area why? where you find returns? today, you have valuations across the board at unprecedented levels in it is

hard to find value in the states. it is hard to find value in europe. it is hard to find value in the emerging markets. where you go? you go to the them are -- the front he markets -- the frontier markets. other than elon musk, you have to look at frontier markets. >> it doesn't make sense to me, because it people are fleeing out of emerging markets, it is because they are avoiding risk. why would they go from an em, which has a longer track record come and go to frontier markets? >> frontier markets tend to be relatively liquid. they tend to not even have a stock exchange. among other things, that means you cannot trade like you can and emerging markets. you have a little bit of a longer-term stable outlook. you do not have capital flows

play around the same way as you do in emerging markets. i think that is why it is tough for some investors to get into the frontier. if you're looking for a liquid instrument, it is tough to find. you look at these institutions like sovereign wealth funds, these days, they're recognizing you have to look at ivan equity and illiquid or at least temporarily locked up opportunities to access the upside in these markets. that is what we do. i think more investors are going to recognize that you have to trade off a bit of illiquidity to get the upside. , we're i'm curious about talking about donald trump and some of his policies. he did say on the campaign trail that he wanted to make america independent from opec. that has quite a lot of people in the middle east worried about what that means. you would be worried about the gulf states, you'd say that is a region you don't want to be in?

>> it is a just a looking at a donald trump administration coming in and what that means for the world. i think there are still a lot of question marks. i have a bit of a contrarian view on this, as least as far as concern frontier markets. i think people are saying this policy the trump administration is looking at will be tough for frontier investors. be a bitt is going to easier for us. the reason i say that is when you look at a lot of these markets, the most important thing is how to underwrite the geopolitical risks. especially if you look at say the markets in africa or in frontier asia, these are market that have intrinsic growth factors. these markets are growing no matter what. consumption is growing, manufacturing is increasing. if you're looking to underwrite the opportunity, you have to actually say what the geopolitical dynamics are. you have to underwrite the

geopolitical risks. biggest factors affecting geopolitical risks in think we'res, i going to have more certainty under the trump administration than we had under the obama administration. i have lived abroad for 11 years. we have been investing in these markets for a long time. it has been tough these past eight years to know what the obama in this nation -- obama administration's policies are, and what they're going to do in these places. there was a lot of bouncing around on important issues. sometimes we got second middle try to figure out what actually a country like ethiopia -- what actually is the administration's approach to ethiopia? how to the underwrite that when we look at risks in the region? factors. important it is tough to get clarity under the current administration.

if you get may be a bit easier under trump. >> how you manage currency exposure? most of these currencies in the frontier markets are paid to the dollar. given the dollar's strength, some of these banks could be at anytime willing to float their currencies? issue. is a tough there is no easy answer, because among other things, these currencies are generally not -- you usually cannot do much except walk out that exposure. you can't go hedge them. there isn't an easy way out. when we actually look at the deals themselves, we underwrite on the basis of some currency fluctuation, particularly the rising dollar. when you are dealing with the level of growth that these markets have, and the level of upside on the investments themselves, you can take a pretty good bit of currency risk

and still find that your net return at the end of the day is very healthy. we think it is a risk worth taking. >> you talked a bit about the gulf nations, that there is some geopolitical risk there. we are focused primarily into markets -- mongolia and sri lanka. we think both of those marketplaces are very interesting. i think mongolia has been known for its resource growth. we like all the businesses around the resource sector. we think there is a very good upside to be had now in the coming years. sri lanka also has some opportunity in manufacturing and other sectors. i think dynamics in the global economy will play well for both of those markets. >> appreciate your perspective on frontier markets. executive chairman and founder of schulze global investments. actually -- the dollar yen

rose past $107 to hit $107.36 right now. that is the highest we have seen for dollar-yen vince july -- since june. this is after we saw that very is 2.2% forp, this the third quarter, driven by exports. that was the big driver. compensating for weak spending as well from companies. we are seeing the dollar when at $107.36 this morning. >> that is going to be a boon for some exporters. how will trade dealers in asia be affected under a trump administration? much more ahead. real estate to one of the ceos -- we will talk to one of the biggest ceos. this is bloomberg. ♪

>> t thihour. options traderare sensing a rgain intencent. biggest internet company in asia is near its highest level since july of next year. there was a selloff in tech following donald trump to win. $.10 track record may prove them right -- tencent's recommend for them right. the junior employee of chinese national was released last week on bail. three australian nationals are among the remaining staff being detained for suspected involvement in gambling crimes. after a crackdown on corruption,

beijing is focusing on overseas casino operators that have operations in china. >> china says it is concerned about eu trade protectionism. it helps the block will certainly follow tt overrules. rules.low wto begin anssion investigatn in february into three categories of chinese steel product. now,me breaking news right a magnitude that does a six earthquake -- struck.quake has this is following up on the earthquake that was reported earlier in the earlier hours. another 6.8 magnitude earthquake, 38 kilometers southwest of chicora comedies -- kaikoura, new zealand.

>> watching that one very closely. thank you. donald trump has pledged to be tough on china when he enters the white house. are denounced beijing as a currency manipulator. let's discuss that -- he may even denounce beijing as a currency manipulator. one thing that the moke is that the markets have been focused on is the regulation of the financial sector. given how we have seen the trump transition, do you think when it comes to repealing the -- repealing laws like dodd-frank, they could be repealed completely? has think whatever but he been watching carefully is to get a sense of how well donald trump governs as president. a lot of the early signals is that he will govern as a republican, which i think comes as a relief to many people because you sort of know what that looks like. i'm not saying it will be a conventional republican administration.

>> will it be moderate? >> i wouldn't say that either. certainly, the fact he has appointed rights previous as his chief of staff, -- appointed re ince priebus as his chief of staff, that suggests he is going to work with the republican party to pursue an agenda that could be more republican focused. that was a big question coming out of the election. i think you need to gather this in terms of what can he do as president, and what requires an act of congress? those are two very different pathways. dodd-frankepealing is something that would require him to go down a legislative cap. -- a legislative path. that is not some he can do. >> what kind of revisions would you expect in his first 100 days? >> i think that we are expecting that there will be rolled back

of a number of executive orders that president obama issued, particularly in the last sheet of years of his presidency. those were not so much of the financial sector as they were in the environmental area, the energy area. donald trump has indicated he does intend to roll back some of the climate change initiatives that president obama had sponsored. the keystone pipeline, i think, is back up for consideration. i think you will see more activity in the environmental and energy sectors. dodd-frank is a statutory and regulatory set up, not just something that happens by virtue of executive order. >> if you were to take it a step further into deregulation, our banks ready for this? are they ready for the leash to be loosened, given that what we have seen with wells fargo? it is just a few years into this

recovery. maybe there are some banks that are too big not to fail. >> the banks have spent a huge capital andney, human capital, putting themselves in a position to comply with these regulations. i'm certain they would appreciate some easing around some of the capital requirements, but i think they have adjusted, and the question is what sort of relief would they're actually be, and how quickly with that work its way into the markets? i'm curious to know your reaction to what one of our best just said a few months ago. he believes we are going to have much clearer policy coming up from donald trump. that is going to be better than what we have seen from the last eight years and is that coming you agree with? it is hard to predict those types of things.

the fact that you have a president, a senate, and a congress all within the same party do suggest that there is the possibility of more consistency and clarity around direction. on whof this will depend the people are that are actually put into the cabinet positions and the other approximate a 4000 positions that will need to be filled by president trump. i think there were certainly the possibility that there will be more consistency just from having a republican outlook on a number of issues, whether it is trade or tax or any number of important questions. >> you mentioned that even the keystone pipeline mike he coming back -- might be coming back. if you were betting, what are the odds that things like that will come back? >> if i were betting, i think i would put some that something like that, which are matters of

presidential decision. certainly, candidate trump indicated that he very much disagreed with the decision that had been made on the keystone pipeline, is very committed to expanding the energy sector in the united states. on that issue and a number of other issues that we will -- that are addressed by executive order, that would be one of the first priorities of a new white house would have is which of those orders are going to be reversed. >> thank you so much for joining us. up next, it is a big day for shipping. decides its fate. this is bloomberg. ♪

>> this is daybreak asia. i'm in new york and -- new york. >> is look at was coming up next few hours. what are you watching? dailies continues in asia. chinese domestic activity is out at 10:00 a.m. we could see industrial output inching up. also, watch out for investment numbers to see how much that is still propping up growth. .lso, more reaction

exports was given as one reason for that positive number. how long will that last? we do have where that the tpp appears to be dead in the water. and money are bigger questions. the most successful casino of all time is on a tiny western pacific island there is -- and is run by a protege by president-elect donald trump aaron -- trump. >> pandian shipping -- hanjin shipping is facing a court decision on its u.s. how likely is it we're going to get something from the court later on? >> the court has said they will select today.

we don't know whether they will be announcing it. it will be sunday today. the merchantsween and a carrier. the productions is that people hanjin has a better chance because the korean government has repeatedly said that they want to grow to become the national carrier and be responsible for the country's exports. >> what might we see from earnings later? expecting a whole lot from the earnings. they wanted to court filings just after we had the peak season. we are not expecting a whole positive number. as a matter fact, it might be more negative because they messed up on the biggest up season for any shipping company during the year. we're getting some indication of how big a toll this is

taking, right? reduced to ahas 10th of what it was before, because they have been returning all of the target vessels back to the owners. some of the vessels have also been sold as part of the financial -- the financing that they got. it does not look too good for hanjin right now. they will probably say it is the start of the end for hanjin. >> thank you so much. certainly a dire story, but one that continues. that is it for us. plenty more still to come. the asian trade gets underway. >> markets seem to be mixed right now, but trouble be in effect.

i am rishaad salamat. i am haidi lun. this is "bloomberg markets: asia." ♪ reasons for optimism, japan's smashing expectations. >> data from china expected to show continuing industrial-strength, gain in retail sales, i