[captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. visit ncicap.org >> asia-pacific stocks joined the relief rally. gold at its lowest level since february. >> oil touch as 16-month high after opec invites independent producers to discuss output curves. >> south korea's political scandal has seen some of its biggest companies holding to parliament for question. >> and japan considers

legalizing casinos. >> this is the second hour of day break asia coming to you from bloomberg's asian headquarters. i am in hong-chin coning, where it is just past 8:00 a.m. and it is past 7:00 p.m. in new york. oking at how the markets closed, and we got a cue from europe shaqiriing off what happened in the italian referendum. they took a lesson from brexit as well as trump and getting on the right side of trades do. >> they rebounded. we are seeing positive sentiment filtering through from wall street from europe as well. let's get straight to the markets here in the asia-pacific. let's head to australia where the asx 200 is up half a percent. ahead of the monetary decision,

they are expected to hold steady at 1.50%. let's go to the nikkei 225, which is just start to go trade. we saw the japanese yen weakening in the last session. the exporters are getting a boost. nikkei up 1%. the yen not doing much after weakening in the last session. let get a check of korea, because it is always just getting under way. we have the korean waun weakening in the last two sessions, right now gaining strength on the dallas. positive sentiment spilling over into asia trading. >> taking a look at what happened here on wall street, it is green as you guys are taking the cue off the s&p 500. off about .6%. let's bring it over to su keenan to talk details. italy wasn't as bad, at least

for the markets? >> no. rlies.the financials italy turned out to be just a blip. take a look at the green on the screen. earlier in the day there was a bit of a deadline, but those losses quickly erased as the market foes used on what is ahead of -- focused on what is ahead of it. a big focus is what is ahead with the trump administration. southwestern, an energy company, it has been moving higher on the energy play. take take a look at amazon. this is a dip in tax, that was up big. a.k. steal up 8.50%. it is up 375% this year. most of that game since the election. it is an infrastructure play. let's talk about what is in the bloomberg. let's take a look at an alignment we are seeing if you look at the charts between the way the americans are trading

and those in europe. at the top you have price correlation and the bottom you have volume. if you look to the right, both are moving higher. what this indicates is european and american investors increasingly trading around the same events and the markets are moving at the same time. perhaps italy was regarded as not the crisis it was played out initially. >> marketers radio pricing that in. let's quickly focus on commodities. oil and copper are riding a bullish wave now? >> absolutely. gold left out of the picture, deadlining again. but copper, right into the chart. a 17-month high today alone. it has been on a wild ride. since the election, copper is one of the main metals in all kind of destruction. et's look at freeport mcmaran.

this is another chart on fire in the recent weeks. if you talk about the copper story in general, it is joined by nickel and some other metals in terms of just being on fire. u.s. growth is also spearing on the metal, as is the stabilization in china. copper is a solid play. oil is up at its highest in a year and a half. a lot has to do with opec headlines. and now the talk of non-opec players being pulled into this agreement. normally traders tend to be skeptical of opec accords. now they are saying let's hold them at their word because oil moving higher. >> very unusual for non-opec to participate. su keenan in new york. thank you vutch.

to our top story here in asia this morning. the heads of some of south korea's biggest companies are facing a grilling in parliament over bribes allegedly paid in the widening political influence scandal. this is unpress denied. we are seeing this tycoons getting grilled in parliament and that being broadcast nationwide in a couple of hours. walk us through what happens today. >> yes. good morning. so in about an hour, nine of the biggest tycoons in korea will be summoned and speak in front of the national assembly to answer questions as to why their respective business groups gave away tens of millions of dollars to a couple by undations controlled someone at the center of a firestorm here in korea, a

political stanley working the country for weeks now balls of her ties to the president, who is facing such unpopularity because of the scandal, she may be facing resignation or impeachment. >> and the biggest fish right now to be grilled is the vice chairman of samsung. what are the allegations around the company? >> right, the allegations center around whether the national pension service, which is overseen by the government, voted in favor of a controversial or contested merger between two samsung units. the allegations being whether government applied favor to vote in favor of the merger. samsung has been denying all that. >> they don't really have a

high regard for them. what are the effects of what could happen here? i could annual suspect this is going to fall, right? >> obviously, it depends on what the people say today. ol in korea have been under scrutiny for deck cadse. ics what you could see today, tpcing on what they say, it could shed light on the cozy nature between business and overnment here in korea. which by extension could result in more criticism. >> thanks. e will be looking ahead in next hour. first reviews. >> thank you. the new zealand finance minister has confirmed he wants to succeed john key as leader. he has held the finance post since october of 2014 and is

the deputy prime minister and says he has the experience required. john key will step down and quick politics all together at the next politics saying he is ot a politician. . the italian prime minister has been asked to put his resignation on hold at least until parliament has approved a new budget. he said he would step down after voters overtwhemmingly rejected his reform. the budget could go before the senate as early as friday. ssia and china have voted -- vetoed a u.n. security council resslation for lepisto. -- their d to a defenses have buckled since russia's intervention in

support of president asaad. they ordered rebel fighters to leave the city or face death. a group has accused its biggest hareholders of eroding confidence. e portrayed himself as one for independent decision making. he accused tata and others of overis hing their roles in his removal in october. global news. 24 hours a day, powered by more than 2,600 journalists and annuals. >> thank you. japan could take a step closer to legalizing casinos on tuesday as parliament considers a controversial bill. we are joined now by isabelle. law markakis have been discussing this lemahieu slache for a few years. what is different now?

>> right. we do actually expect this bill to pass in the lower half of parliament this afternoon, and it could pass in the upper house later this week bring it into affect. i think what is different is japan has become a major tourist attractions. it now welcomes millions of chinese tourists every year, and the government is looking for ways to attract new tourists and keeping people coming back. there have been objections from the public. a lot of people are concerned about things like gambling addiction. there is also the fact that a person, they on are concerned about the harmful side effects of gambling in jab. >> when i think of gambling in japan, i think of those

pachinko parlors. how long will we have to wait to see something come for fruition? >> to take your second question first, looking at how long to fruition, even if it passes this week, there needs to be another bill passed in parliament which would set more specific regulations, such things like whether japanese citizens can go to the casinos. we have seen in other countries in south korea, they have casinos where the citizens of that country aren't allowed to go. i think they would see it more as a competition to their business, but some companies that are involved in supplying pachinko with machinery have been in favor of this bill passing. you look at cash man shares. they have gone up. the big gaming companies such as m.g.m. resorts and las vegas

sands, they are los angeles huge investors in japan and could make a lot of money if this actually comes to fruition. >> a lot of potential players there wasn'ting to ante -- waiting to ante up. >> the resources rally after five years of pain. is relief in sight for commodity bulls. latest market outlook coming up. >> and are margin crossroads coming up for the future?

>> you are watching day break asia. i am in new york. >> and i am in hong kong. investors have quickly digested the italian referendum defeat with stocks advancing and the euro bouncing off a 20-month low. why are markets shaking it off

quickly? we have an asia pacific trategist at b.n.p. pair dparabas. is it worth staying you should buy in the dip and just way for it to rebound? someone we are clearly of that opinion. if you go back to the turmoil we have seen, and subsequently president trump's election in the united states. these are all factors discounted by the market quickly. having said this. some of who these events do have an impact longer term. a trump presidency in the united states could mean fiscal xpansion, and dollar improvement which could be a factor. >> and coming to the conclusion

that we are going to see steepening yield. which of the companies benefit from that here in asia, what sectors? >> in general, steepening yields are good for equity markets because they are precursors to stronger growth and possibly recover inflation, which money countries in this region on have been waiting for. the beneficiaries before the banks in hong kong, singapore, some of them korean as well. in our latest reshuffling of the asian model portfolio, we have greated the financial sectors to neutral, while we were underweight for quite sometime before. we are overweight in financials now. >> when it comes to emerging markets in your notes you say they are at a cross road. i call it a policy dimon drum. you are seeing expectation of higher rates in the u.s., which

will mean fund outflows, and weaken their currencies, and they are tempted to raise rates with the u.s., but that would cap growth. where do they go from here? >> there are pressures here. i think europe's growth recovery is good for market companies. at the same time as you rightly point out. that will tempt investors to put money in developed markets and pull money out of developmenting markets. this round is likely to be more related to companies like the euro and the j.g.p. these emerging market economies have repaired their current accounts over the last three or four years remarkably. emerging ink that phenomenon market flows choking is likely to be more limited than we have seen historically.

>> i want to talk about the election of donald trump, you touched on it a little bit. what is the biggest opaque issue, and i know there are many. but what is the biggest opaque issue you hope will be cleared up in the first few months of his administration that will impact you as well as asia? >> a trump administration obviously brings in its wake quite a few questions. think the relatively simplers issues to deal with are domestic fiscal possible. higher infrastructure spending and taxes, that may be more to do than the more indetermine nature trade policies that mr. trump has talked about. right now the market is not really factors trade policies on the part of the united states. but that tret or that concern could always be there -- but

that threat or that concern could always be there. we think it could serve to keep risk premium elevated across emerging markets. >> i want to hop into my bloomberg and show you this great chart that we have here. this is about markets relative value. i want to ask what do you think is overvalued and undervalued? we can see the hang seng is in green. that means it is underpriced according to analysts. on the flip side, s&p 500 is down in the red, implying that is overpriced. do you agree with this? what are your thoughts? >> by and large i would tend to agree. we do think the hang seng, and is bly more so the hsci clearly undervalued at this time. we think chinese growth is stabilizing, which is serving to stabilize growth across the opportunity. china is always that 800-pound

gorilla in the regionee. if you compare price to book multiples to r.o.e., asian markets would clearly appear undervalued in comparison to other developed markets right now. this may not play out because we are seeing reallegation of assets into so-called safe haven destinations. ou may see the continuation of the developing markets, but in the long-term we remain positive on the emerging marketses. >> thank you no booing being -- for you for being with us. >> thank you. >> a quick check of headlines. morgan stanley's tighter things look to go generate more revenue. the bank's new compensation

plan will require brokers to raise revenue by about 10% to have the same pay-out as this year. they are leaning on the wealth management division to reach profitablity targets in quarters. b.h.p. for a osen project in the gulf of mexico. b.h.p. defeat add bid from b.p. with an offer of $624 million. the deal end a 73-year monopoly after they opened it up to foreign companies. >> the air conditioner maker per stwaded by donald trump to stay in the u.s. is raising its prices to stay competitive. carrier corporation will raise prices for residential and commercial customers by about 5% starting january 1. it's parent agreed to keep about 1,100 jobs at its

indianapolis plant. up next, par barrons and robbers. at is what the chinese regulators call the pile of debt on acquisitions. that is next on bloomberg.

>> this is isaiah break asia. i am in honing congress. >> and i am in new york. china's top securities regulator has railed against leveraged acquisitions of shares in listed companies. officials have been trying to reign in financial risk linked to a serge in deal making. tom mckenzie has more on this from beijing. really harsh words from the csrc, calling them robbers. >> yes, some strong comments from the chairman of the china securities regulatory

commission, saying that -- and really taking aim at companies financing bridge, long-term debt, buying stock in other firms, often their rivals. he has a quote. he said by using improperly obtained money to conduct leverage acquisitions, you have gotten from strangers at the gate to barbarians and eventually robbers of the industry. the chairman also said that these acquisitions showed retrogressed decay in humanity and commercial morales. often when chinese officials, you have to pars their language. not in the case of china's top securities regulator. >> but this is negron new. we have seen a series of acquisitions since 2014. what prompted such a rebuke? >> growing angst really among

officials here. he didn't point out any names, didn't name names, but it does come a couple of weeks after china's largest property developer upped its stake in another property developer, and that followed comments from the shenzhen stock changes saying they are going to be monitoring the stock acquisitions from evergrand, particularly from the insurance unit. they are part of a three-way tussle, there is another company that owns 24%, and it borrowed money from brokers, offering products to their wealthy clients. there are a number of actors involved in this, including an insurance company and 4 c life. we heard from an analyst who said these leveraged acquisitions do pose large financial risks, and that is why officials here are now so concerned. >> tom, thank you so much for

joining us. tom on the regulators slamming he acquisitions. coming up, australian banks, the latest account numbers. we have them live for you next.

>> breaking news out of australia. paul has the numbers from sydney. better result than expected. we have a current account balance. market was expecting a $13.5 billion deficit. it is pretty well on the second quarter improvement on the $15.5 billion deficit we saw there. hasn't changed at all on the back of these numbers, just waiting on a few lines here.

exports cut by .2% on the back of this. the second account deficit has been revised up slightly to $15.9 billion. a little larger than before. expectedt of an deficit. >> this is the last piece of data the bank board gets. it's about three hours time. >> 27 of the 27 economists see no change for the cash rate for the final meeting of the cash year. 1.3% chance.

about sydney house prices, hasrtal words that the bank been willing to tolerate lower consumer prices. both the governor and his predecessor have warned that limits as the cash rate approaches 1%. all and all, very unlikely we will see a change when the bank make the decision. this is the last meeting until february. >> we will be looking forward to that in three hours time. paul allen, thanks very much. first news now. of nine korean industrial giants are set to face questioning from lawmakers on tuesday about the peddling scandal. billionaires will be asked about tens of millions of dollars

donated to foundations controlled. the national assembly may vote to speak on impeaching the president. of implementing them have been hit by three african members. it rose to a record 32 million barrels in a day in november. nigeria and libya boosted but are not bound by the cuts as they recover from damage. they work together to remove terror related content. facebook, microsoft, twitter, youtube criticized for not doing enough. .hey will be hosted a unique digital fingerprint for each piece of content. will be restored.

and one of the most powerful regional leaders. says she steered the state and becoming an economic powerhouse. critics accused her of corruption. before the court cleared her. news 24 hours a day powered by 2600 journalists. this is bloomberg. >> prepping for their final meetings of this year. they do not do much about the economic landscape. i guess that's an understatement. how about next year? strong economic reports, u.s.

services as the year draws to a close. let's look at the isn services. the blue line, you can see, is the services index is up to 57.2 for 55 in change. the white line is the business activity. services are definitely picking up. he signaled the pace will still be gradual. i would favor making monetary policy somewhat less accommodative overtime by gradually pushing up the level of short-term interest rates.

cracks you can gauge the trump impact yet. another said if he can boost they can do it but not yet. >> it will probably be supportive. >> not just for a single country. but the ecb surveyed by bloomberg's getting ready to announce an extension of the bond buying program. 80 billion a month. the back of the bloomberg now. and 1124. now what you are seeing is the above 0.5.arely

the target is 2%. the white line is an indication of inflation expectations as measured by the yield. it is gradual. one more reason for the ecb to move closely. plus the risk of capital flight out of italy. they gain the rains there. it can cause a harder time for the banks. something else the ecb is watching very closely. >> the reserve bank of india on wednesday. are we expecting anything this time around?

>> something more aggressive. he has a different view. >> a central-bank watcher. let's he how the asia-pacific markets are shaping up. let's bring in adam hage in sydney to take us through the markets. what are you watching. board.t across the a strong selloff on the back of the vote.

that risk on trade. strong gains across the board. >> i will take it from here. what is the prognosis for the rest of the year moving forward and into 2017? >> it is a tough call for the asia pac region at the moment. year.e been a very tough we are coming off of two down years. it is difficult and a dichotomy between the development of its and the emerging markets.

it obviously has been under pressure. where we get high u.s. rates putting pressure on those currency. especially japan, obviously linked to the yen there. >> if you missed the rally in the back half of 2016, there is still plenty of upside into 2017. still looking very good. >> a few weeks left until 2017. thanks for a look at the markets. after five years of pain, relief could be insight. they are set for the first annual gains since 2010.

from alex kirk ascii. >> the cyclical nature of the market. they cut back spending on that supply. because of those low prices. that is essentially what we are seeing now. that is drawing a line under the collapse in prices. >> we have metals, oil, we try the standout commodities.

>> the real standout on bloomberg commodity index is 72% this year. it is part of a general resurgence in industrial metals. speculation that china is going to boost spending on infrastructure. they see more commodities in any other country in the world. them 16 monthouch high yesterday after those opec production cuts. in the cutbacks. >> where do we go from here? >> they see this rebalancing continuing over the next year as global economic growth picks up in that process of rebalancing. it's not universal.

it is somewhat dancing to the beat of its own drum. it is set by high stockpiles. we've seen both commodities. it remains to be seen. -- highes cure low prices can cure high prices. more production and that puts a cap on prices. cracks thanks very much. >> this is bloomberg.

>> you're watching daybreak asia. check of the latest business flash headlines. southwestern energy and some of wall street's biggest banks are being sued by a pension fund who says it was misled over a $1.6 billion stock offering last year. they claim that bank of america, citigroup, and jpmorgan failed to conduct due diligence on southwestern by downplaying what the exploration companies severe liquidity and debt issues. >> amazon has lost technology that aims to eliminate queues at the checkout. amazon go will allow shoppers to buy products without having to physically skin and pay for them. the at tracks which items you pick up and put them in a virtual cart in real time. customers will be charged via their amazon account automatically. it's being tested in a shop in seattle washington.

they soar 50% in new york after the french drugmaker is said to be working with advisers to explore options. the company has attracted interest for other pharmaceutical companies for a type of disease linked to obesity. japan's slumbering economy may have been dealt a trump card. for u.s. growth of push the dollar higher against the yen by close to 10%. it makes it easier for policymakers. the economic correspondent joins us now. i saw you smirk when i said that. greatrump make japan again? are coming behind japan, policymakers wanted to get a break up there. at what is happening

in the u.s. with the election, don't is talking about fiscal stimulus like roads and bridges. it will drive them underground and perhaps need higher interest rates. for someone like japan and u.s. with the biggest trading partner, it could mean quite an the forced tos of the u.s.. these kind of low growth environments competing for the economically driven projects. make japandoesn't great again, it could help them along the way. at least add to the equation higher oil prices that will definitely help their inflation outlook. >> we are what we are. could lead to higher oil prices and we know one of the big constraints have been lower

energy prices. and now we're are seeing a potential breaker. it will certainly be a tail and for japan next year. >> there are risks to this outlook. it could be a good thing but it could also be a negative thing here. >> there are a number of risks, for sure. that theo guarantee president-elect will be able to execute all of the policy. it is a very complicated thing. dollar andw that the rally may not top out. fed won't be as hawkish. get a negative geopolitical event. guaranteeertainly no

that they will have to find a little bit easier. time, they breathe a little easier heading into the new year. maybe mr. trump will make the whole world great again. president will discuss an issue close to his heart. global warming. rejected talks but said that it was a sincere search for common ground. they famously tweeted the concept of global warming was created by china to make american manufacturing less competitive. the bulk of the time was with president-elect donald trump and i found it extremely interesting. and to be continued. they will leave it at that. >> the japanese prime ministers to be the country's first sitting leader to ever visit pearl harbor. summit.l have a final

the unexpected announcement came two days before the 75th anniversary of the attack and six months after mr. obama became the first sitting u.s. president to pay his respects at the atomic bomb memorial and hiroshima. the british government had a tough day in court to decide if it can go ahead with brexit without lawmakers approval. the prim court justices repeatedly challenged the argument that prime minister theresa may does not need to hold a vote in parliament. more about herl brexit plans. up next, rising fuel costs could mean the end of free food and drink. some of asia's biggest headlines. details are just ahead. this is bloomberg. ♪

>> you're watching daybreak asia. >> this is what is coming up.

>> they will be discussing a south korea is too corrupt. now, thetes from headlines will be coming out of that. they will be disguised -- talking about what is going on. barclays.it from >> in-flight entertainment could

be the thing of the past. >> according to at least one airline analyst, and aviation they are also seeing there is excess capacity. usually the airline's biggest cost. fores will come in line cost cutting and affect these airlines.

airlines in the u.s. already adopted this. >> it will be awful. in delta, they reported profits every year from 2010. we could see the fuel surcharges coming back. they could announce in the coming weeks that they could reintroduce that as soon as february next year. it is asia's biggest international airliner. down 22%. how are they looking. that 2017 was saying will be a crucial year and are undergoing a business review of their operations. they posted a net profit down 82%.

competitiono facing in the regional ones as well. they say that they are going to start a direct flight to london. the competition of sucking away the potential customers. come.nty more still to bloomberg markets asia still to come. counting down to several market opens with the us trillion cash rate coming in. >> not just markets, we have south korea's politics just exploding right now. this is bloomberg. ♪

>> 8 p.m. in new york city. in hong kong, this is bloomberg markets asia. asia-pacific stops joined the post italy relief rally. the influence scandal and broiling some of the country's biggest companies.