>> disappointing data. japan's economy did expand in the third quarter but far less than expected. >> daytime asian-pacific stocks take their cue from wall street. jumping to fresh records. >> the ecb is not seen altering strategy but qe is -- qe extension may be announced. >> china's foreign exchange reserves held to a low amid efforts to shore up the slumping unit. >> this is the second hour of

"daybreak asia." it is past 8 a.m. basking in the green glow of the markets. mark.g past its there is optimism coming out of the ecb with potential for more easing past march. if on: the rally was quite remarkable. a lot of events in asia that could change things in the region. when it comes to china trade. that is a big one to watch but the figure we are working -- focusing on. are getting strong bang straight out of the open.

1%.re up by we have seen some strong gains and a bit of weakness and health care extended from yesterday. we saw this rushing off the miss. these new accounting methods may have something to do with it. a quick look at the yen. we are seeing dollar strength, the yen weakening on the back of that news. we had that move right there holding at 113. we are taking a look at what the south korean markets are doing. this political instability and uncertainty still carrying on. we have the impeachment vote that is coming up in parliament on friday. potentially more protests that we have seen over the past few weekends. holding strong. by close to 13%.

we are seeing australia extending on these gains, we had the shocker of a construction -- a contraction when it comes to gdp bouncing back today. we have seen strong gains across the mining sector. we had a very big day out of china. the trade numbers coming out, they are expected to show a bit of a pickup when it comes to imports and slower decline when it comes to the export numbers well. ahead of that in anticipation of this commodities rallied there has -- that has been driving some of the growth we have seen out of australia and these miners seeing a lot of strength. a little bit of weakness we did see across the oil patch because we do have some uncertainty going into this meeting on the weekend between opec and non-opec members. the vti trading up by .4 of 1%,

just shy of $50 a barrel. bureau chief has been going through the data. there was a lot of optimism, they were going to revamp the measure and change the accounting standards. it was quite a big miss. what are the key takeaways? muche headline came in weaker than expectations. it looks like business spending was the key factor for that weakness. as you know, as you mentioned earlier, there is the data today based on new calculations, new accounting. that needs to be taken into consideration. i would caution about reading too much into the headline figure at this point. there policy

implications we can imply from these numbers? -- the bank of japan does not have a large arsenal for the cuts. negative interest rates and option but they have come from criticism -- come into criticism. with the mark -- the yen weaker than it was compared to its previous meeting, i do not think, it is hard to see the bank of japan jumping on the state and taking further action. has surprised many occasions in the past. hovering sideways at the 113 spot. let's get the first word news with courtney collins. courtney: fresh records amid speculation that the european central bank will extend its asset buying program. the s&p 500 and the dow come to

all-time highs as telecom and property stocks join the postelection rally. oil fell bill of $50 in new york, sparking a retreat and industrial metals. gold and metal rose with some investors remaining cautious. bought stock that night. i thought that was crazy. i think now the markets are running ahead of itself. run out and buy stocks today. i think it is running a little ahead of where it may be should be. >> interest rates are low enough to return inflation to its 2% goal as the economy expands. last month the bank indicated that it's official cash rate is 1.75% to remain at a rate. developments are not causing him to change that view. sincer has cut costs

2016. for th asking shareholders toe first time, support their removal. he focused on growth and new leadership after the board lost confidence in the ousted chairman. had been given a chance to quit which he rejected. italy's outlook has been cut by buddies from stable to negative. the agency says it expects the country's debt burden will increase next year to more than 133%. and only decline very slowly from then on. it also said it sees slow and halting progress on economic and fiscal reform. the news comes with prime minister matteo renzi said to be wavering on resigning following his referendum defeat. 20 for hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. i am courtney collins. this is bloomberg.

stocks as well as bonds are rallying around the world as the european central bank prepares to meet and markets are expecting another stimulus move. the central bank watcher kathleen hays is here. in india this week, it was all about potential rate cuts in india. we were expecting it. we were looking at bond buying in the ecb. kathleen: that is the only tool they have. when your key rates are around zero, you do not have much more to do than by bonds which they started doing in march of last year. buying 80 billion. that seems to be the limit of what they want to buy but the economy has not picked up that much. so what else can they do? they will -- can say we will keep buying longer, make sure we do not withdraw the stimulus too fast. the consensus view is the program is supposed to and in march and it will be carried over. one of the big reasons they are sticking with it, inflation. let's take a look. jumping into the chart.

the white line shows where inflation is right now. at 0.6%. the ecb is looking for 1.2% yearly rate of inflation next year. that will be quite arise. 2018, 1.6. bloomberg intelligence pointing out that when we hear from the 2017hey downgraded those and 2018 forecasts. >> we are looking for an update for those forecasts. what can we expect? we have had so many surprises that could hurt growth and yet they are not changing. the expectation is they will not. brexit, that was supposed to hit the u.k. and europe, not so much yet. donald trump could ring lots of stimulus but so far all we are seeing is rising bond yields. italy voted no to its constitutional reform. all kind's of questions about

its future in the unit -- in the eu. now, in terms of the growth that is expected, i want to show you another chart. things,ooking at two gdp at 0.3ine is percent. year-over-year, one point 4%. not bad but not great. the turquoise line gets a little bit of hope area the purchasing managers index, at 53.9. the reading that could be taken as a good sign. one more thing bloomberg intelligence points out. some want to extend purchases, do not even mention tapering. as a compromise with everybody together, with the ecb may announce the extension of three months instead of six. getill reevaluate when we there. there are some interesting

details to be watching for. extendne thing to purchases and another to deliver them. to buy bonds, the ecb has to have a yield that is above the deposit rate. if something is above zero or 0.2%. bottom line they are going to tweak the role and change something about the relationship to the deposit rate but give themselves a way to why the bonds they need to where they need to buy them along the curve. technicals, the market watching those as well. >> harks critics plan to file a motion for her impeachment. >> our next guest says he sees asia entering a reflationary environment after ending 2016 on a strong note. this is bloomberg. ♪

>> you are watching "daybreak asia." china mobile and alibaba say they are expanding their alliance and the face of rising competition. [indiscernible] china mobile has also agreed to partner with baidu who will help digital advertising and facial recognition at the carriers stores. has agreed to sell in what is the country's biggest privatization. equal shares. russia is trying to raise cash after the collapse in oil prices

. yvonne: volkswagen has been hit with a record fine in korea for false omissions rating. it will seek a criminal investigation into some executives. the carmaker must pay $32 million and wait the filing of vw korea.on against it is struggling with a worldwide investigation into great emissions claims. let's check back in on the markets. asia stocks tracking gains in the u.s. , theng us from singapore head of asia-pacific equity and credit at ubs wealth management. great to have you. you mentioned about these records, the dow rallying more than 300 points, bonds also up. it seems like there's a lot of pressure on mario draghi on this one once again. what if we get another disappointment that we saw in december 2015, it is not seem

like we are setting up for that disappointment right now. howard: starting with the u.s. perhaps, we have [indiscernible] as compared to the first half where we saw earnings decrease drag by oil and other factors. the third quarter was evidently the first one since a while since -- that we see earnings growth positive year on year and that trend will accelerate. -- 2016omparing i-16 and next year followed by 8%. what the market does right now is to start pricing in and anticipate that better momentum and earnings. i think it is quite logical for the market here to follow the future ending trend upwards. yvonne: i you surprised by these impressive moves we have seen overnight? nine --ot exactly had

headline news driving it. guest: it was fairly substantial move. we had this in the cards already. markethink also the comes more to grips with the trump presidency. being progrowth, being pro-inflation. it is also starting to spill over to asia. we can also talk about the fundamentals here. was an argue maybe it little too fast. i think the fundamentals on the gdp side and the earnings side were already in place. we needed him as a catalyst for everyone to see that this trend is in place and he accelerates the trend a little bit. mentioned the reflationary trend we do see in asia. -- the surprise index that we see, as well as emerging markets all above this month for the first time since august.

we are taking a look at the market, it paints a different picture if you exclude japan. outperformance has erased after the election. you talk about the relative strength of asia excluding japan against the world index, the msci world index. what will be the next catalyst for markets as we deal with the stronger dollar story next year and a potentially more aggressive fed? guest: the reflationary trend is not as new as we sometimes think. example, ther numbers have [indiscernible] even though it is not a hyperbolic inflation trend, things have turned and there is a reason for this also in asia. there tracking what we call to sales ratio.

the investment opportunity of the asian corporate that we can track, the listed ones in particular, they have since about two years shown us a downward trend. this is encouraging and the headlines it reflects when we talk about china and cement, steel, taking capacity at but this is part of the picture. these are political measures that have been taken. other countries like india, it was also financing conditions forcing this but what we are seeing now is pricing power coming back. i think the story for asian equities next year is not ,ecessarily a big boost certainly not too real gdp. if anything it will be slightly softer. getting a big -- bit more inflation back and some margin improvements. that is very credible. that is the catalyst next year for asia. ramy: you are talking about spillover effects as donald trump to find his upcoming presidency. i want to bring up the relative valuations of some of the major markets between the u.s. and europe as well as asia.

this is the mrv function. we're looking at the s&p -- s&p being in the red. the hang seng being undervalued. what do you think in terms of the relative under valuations between the u.s. and asia? an argument a lot, many investors looking at record levels on the s&p and getting a bit concerned. whenever we had a new record, people were concerned. the i would argue here is earnings also on record levels. that mitigates the picture also. if you look at trailing pe's. the s&p does not look by istorical standards, it slightly above what you would say. thinkn itself i do not that investors should leave the party. we have seen in previous cycles

that you oftentimes see an overshooting specially on valuation levels in the s&p when the fed starts moving rates up. maybe have another 18 or 24 months here where the valuations themselves also pull up. i would be hasn't to say because we have reached the middle of the historical valuations, we need to get out at this point. ramy: let's look ahead to 2017 in terms of strategy. you are also looking into cyclicals, what sectors, what specific stocks do you like? guest: maybe if i can highlight one thing here coming back to the u.s.. it is not widely discussed and it underperformed for 18 months and after the trump elections. something we can argue there is a catalyst in trump but it is not widely recognized by the market and that is cyber security. not often discussed but mr. trump has laid out what i think is very sensible program, you

can almost call it a vision on what he wants to do to security especially on the federal side. also for companies. he takes it very seriously and he wants to shield the american authorities and the companies from cyber attacks. the stocks have not gone anywhere since election. we are seeing this is an area that investors should look at as a subsector that has been underappreciated at this point. thanks for your insight and strategy. coming up next. signs of improvement. exporte weaker yen help data outlook even healthier? we will discuss what to expect in the country's november trade figures next. this is bloomberg. ♪

ramy: you are watching "daybreak asia." softbank rising as much as 7.6%. this is the biggest reading -- three day game we have seen since february. -- for very 18. -- february 18. he wants to create 50,000 jobs and a lot of questions on how he will fun that. there is this investment fund he has created. still trying to gather the funds to validate that figure. investors are shrugging off those doubts. 7.6% up for softbank shares. release its latest

trade figures in the next few hours. analysts forecasting a slower decline in exports. tom mackenzie joins us live from beijing. that would be an optimistic sign . how realistic is it? for 4%e forecasts are up or 5% year on year for november exports. compared to what we saw in october which was a drop of 7.3%. that is the context and it comes after the pmi manufacturing numbers. the upside showing expansion in that sector. we have seen export numbers improving and south korea which has been something of a gauge or weathervane of what kind of picture we might see in china. we are looking at how much the yuan plays a role. it has softened the blow for exports but it did not supercharge those numbers. we will see how much of a factor they play into this time. in terms of the pressures porters are under, we have

seen a rise in input costs and wages, that has flattened out profits for exporters. they may hike prices in the months ahead, that may feed into 2017l inflation in early according to some of the analysts. in terms of imports, they are expected to drop 1.9% year on year in november compared to the fall of 1.4%. we will be looking at crude, coal, and copper as an indication as to much demand there is from the infrastructure spending splurge we have seen in china, trying to prop up some of the growth. ramy: thank you. coming up, it is australia's turn to import trade data. we will be live in sydney with those numbers next. this is bloomberg. ♪ generosity is its own form of power.

you can handle being a mom for half an hour. i'm in all the way. is that understood? i don't know what she's up to, but it's not good. can't the world be my noodles and butter? get your mind out of the gutter. mornings are for coffee and contemplation.

that was a really profound observation. you got a mean case of the detox blues. don't start a war you know you're going to lose. finally you can now find all of netflix in the same place as all your other entertainment. on xfinity x1. yvonne: we have australia's latest trade balance for october. the numbers just came in. let's go to paul allen for more. it is not particularly good and not a big miss. the trade balance for october deficit of 1.5 billion dollars. $1.54 billion if you want to be precise. ofwere expecting a deficit $610 million and that is worse than september's trade deficit of one point two $2 billion. if we take a look at some of the figures, imports rising 2% from a month earlier, exports rising

1% from a month earlier. this coincides with a time when we saw the iron ore price recover creeping up from the low 50's to the mid 60's during october. it does not seem to have had that much of an impact on the trade numbers. the aussie dollar pretty flat on the back of these but just to recap, that october trade figure another big miss. it is a deficit of $1.54 billion. will see if there is any reaction. taking a look at the aussie, we are not seeing too much of a reaction. a little bit of weakness still saying at that 74. -- .74 handle. to the currenton levels when it comes to the aussie. --t to take a click look at

quick look at some of the movers. goldman coming up and overweight when it comes to the australian miners in the banks. we areeeing this ral getting extended. fortescue metals up, bhp billiton lagging. independent up close to -- independents up to 5%. cba is lagging but westpac is these are outpacing the rest of the markets. -- this is jumping up to close to 6%. the highest on the report that this is about to start output from the new plant that was due to start in june but that was delayed on the back of disappointing sales. this is speculation that perhaps will get a bit of a pickup when it comes to demand.

stages jumping at one close to 12%. the most since october 2014. another unverified report saying the governor will raise the quarter lines. and softbank touched on this rally -- earlier. this is the highest level in at least a year. -- the relative strength index at about 70. there are indications that the stock is looking a little bit overbought. we are seeing the trump effect at least with soft inc.. china's foreign exchange reserves fell to a 10 month low in november as .fficials try to shore up

it comes amid a tightening of capital control. we will get another reading with the help of the chinese economy with the release of trade data. it is that experts may have fallen at a slower pace in u.n. and [indiscernible] is notopean central bank expected to make any changes in its final recall of the year later. markets are expecting an extension of qe2 sustain recovery. it is what mario draghi wil choose to prolong asset purchases at a current rate of 80 billion euros. the ecb will also update its forecast for growth and inflation. 48 people died when a pakistan airlines plane crashed through the northern city. it came down soon after take off after the pilot reported engine failure. beenlight recorders have recovered and authorities say there is no evidence of human error. it is the worst air disaster since an air flight crashed near

islam a bod in 2012 killing all 127 people on board. changing strategy. relaxing its attitude to regulators around the world in favor of working with rules. this will vary from city to city but he wants to collect taxes and enforce limits on the maximum number of nights per your people can rent out their homes. this comes as airbnb inches its way into the enormous chinese market. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. i am courtney collins. this is bloomberg. u.s. lawmakers have grilled the ceos of at&t and time warner about their proposed $85 billion merger and wooded benefit consumers. many try to figure out if donald trump's against the deal following his election when after saying he would block it. su keenan is here to make heads or tails.

what were the concerns about this possible deal? perhaps rising prices and restricting content and what it hurt rival distributors of content. it is a tough question we will put to the ceos. we have seen this before. monopoly and the 's say that is not happening. >> the benefits of combining distribution with the world-class content and for your constituents, we believe the benefits are straightforward and they are substantial. they will get more choices and wer-priced options and that means more nationwide competition against the cable companies in each of your respective states. su: check out the stock price of at&t. wall street trying -- starting to see greater benefit. prices rebounded from the initial dip in terms of bully

tactics that lawmakers were concerned about. they say that will not happen. offer ourere to not networks over any of the cable satellites, telco, or over the top platforms that are now the place where increasing numbers of americans are choosing which one to get their tv service through, we would be cutting off meaningful revenue for our company. there is no incentive for us to do that. theyou do not have traditional competitive concerns that you are you losing a direct competitor. some thought there was an easing in the criticism by lawmakers from when the deal was first announced. ramy: if they have softened their town, what does this mean about future deals in media and signals from the trump administration who had signaled they do not support this? su: during the trump election on the campaign he was strong about saying he would block the deal .nd was concerned

not typicallydoes weigh in on mergers. take a listen. >> concerned that this acquisition will concentrate too much power into one conglomerate resulting in higher prices and fewer programming options for consumers. there is also concern about the merger's implications for a free and diverse media. su: the concern on wall street again seems to have been reduced. the premium for the deal has gone down as you see and that means that there is less a concern a deal will fall apart. you might also remember that in 2011, comcast merger with nbc universal was approved. they put conditions on the deal. some believe there is a direct application here. yvonne: thank you. lawmakers are expected to table a motion to impeach the

president of south korea. tracking all the developments. the impeachment debate set to go ahead on friday. parliament may have a motion introduced today. it has the endorsement of 171 lawmakers. -- sets inbased russian and impeachment vote on friday. the reason why there is this they do notod is want someone toropose impeachment and vote on it right away. there is a likelihood that, or more likelihood that there will be an impeachment vote on friday. as for the vote itself, it needs two thirds or 200 of the 300 lawmakers for its passage. the opposition parties and the independents account for 171.

they need trite -- 21 from park's ruling party. that is the case as of this morning. they seem to have enough votes to impeach the president on friday. ramy: if this does happen on friday, what is the process after that? the president is suspended immediately from her presidential duties. the prime minister then takes over as the interim leader. as the constitutional court has to review it, and then has to uphold it or reject it. they have 180 days to do that. if the court was to uphold the impeachment vote, there would have to be a special election within 60 days. and a new president would be voted in on that time. huge amount of turmoil. thank you. we will be live in hanoi at the asean business summit.

talking about opportunities in emerging markets. this is bloomberg. ♪

yvonne: you are watching "daybreak asia." check on the latest business flash headlines. abbott labs is suing to terminate a $5.8 billion purchase of diagnostic equipment lear. ofy have been range problems. the industry continues to advance its recovery from a revenue couldd of

decline. we asked what his priorities will be over the coming year. >> we will continue our policies after this year, 2016, especially in regulating. we will keep doing the auditing of junkets in particular issues like the deposits and on the other hand, they are still a few bills to be approved. iny: apple is said to be talks with film studios for earlier access to movies. try first century fox, warner bros., and universal confirmed they are looking to offer rentalsced home video of movies after they open at the theaters, possibly as soon as two weeks. shares in movie chain theaters fell in new york. yvonne: the third annual bloomberg asean summit begins.

they had winds are blowing through southeast asia, can vietnam beat them? >> that is a key question. we are seeing fund outflows in the region, weakening currencies, a lot of risk coming from slowing demand from china. how can vietnam do? vietnam has been doing well. they are expected to grow more than 6% this year. let's discuss all this with the assets.cio ofpx there are double-digit games -- gains and it is the best performing in asia. can investors still find value? guest: certainly. the market has given back a lot of its gains, it was up 7% or 8%

more than it is, it should be coming down soon. more interesting level as the market starts to open up. it becomes more interesting to a greater number of foreign investors. >> what sectors are the interested in? guest: it is coming through the privatization process. selling 9% of their stake. the government is about to -- they have listed saigon brewery. thes a ug huge move and it is fifth biggest company by market capitalization but it has traded by $1000 so far. >> given the headwinds but southwest asia in general, in the macroeconomic side of things, what should investors be looking at when deciding to invest in vietnam? guest: the macro picture is very good. 6.5% gdp growth

which will increase next year. the currency has been relatively stable. it has a fix against the u.s. dollar but as the dollar strengthens, the currency has been weakening slightly. inflation is picking up a little bit. it is expected to continue around the 3% to 4% level. growing that fast is not too [inaudible] undercould see frictions a trump administration. relies onmuch vietnam trade with china, how will that impact the economy here and also the stock market? a large trade has deficit with china. a lot of the raw materials that go into production, for example, footwear, and electronics come

from china. vietnam is one of the only companies where exports are still growing. work its wayd to through the last four or five years under difficult conditions. people still need to eat. they still need to wear clothes and vietnam as an exporter. it may slow down if trump becomes a protectionist and if we carry on in a similar fashion. we will be fine. >> one of the measures he talked about is shooting down the tpp. it was supposed -- vietnam was supposed to be a big beneficiary. how will that affect companies here? guest: it was expected to be a huge net beneficiary. there are some areas where tpp not existing would then if it brewing sector. is local brewing sector

being protected by the absence of tpp. although vietnam [inaudible] it is not going to stop trading because tpp is not there. we were never convinced it would happen anyway. -- as thegovernment government has implemented measures to open up the market despite these doubts over the tpp, how supportive has the communist party here been in taking the economy forward? very: they are doing a good job. it has been a communist government for the last 40 years. or so. track.re reforms on listed.ers have been the opening to foreign -- two

markets to foreign investors has not happen. we have a degree that is in direct conflict. somebody needs to take charge of that and work it through. if the anonymous to have a chance of getting into the msci emerging markets. given that opening up to doestors has not happened, they want foreign investors to cool down on their interests and vietnam question mark -- vietnam? guest: we will get back to a situation where foreign investors could not buy [indiscernible] so everyone is able to buy. muchped it would be broader across the market. it has not happened. it does not seem likely under current conditions. >> thank you for your insights,

cautiously optimistic about vietnam. telling us that the solid growth and howtnam is saying caution it is -- cautious it is about foreign investors. great stuff there. a friendly face. stranger to the chinese president. we will have the details next. this is bloomberg. ♪

ramy: you are watching "daybreak asia." will be watching that china trade figure. gets delayed.imes we will he joined by julie wang. data into context. looking ahead to what is going to happen next year. the outlook for 2017 when it comes to the economy. also we should have the yuan fixing by that time as well. the yuan has been weekend and we saw a big weakening after strengthening the day before. also in 20 minutes we will be talking and going back to hanoi n businessg the asea

summit. looking at the start of seen in this heart of the world. that is in hanoi as well. back to you. ramy: president-elect donald trump is "time" magazine's person of the year. he is the person who has had the greatest influence on events in 2016. he had to fight expectations and broke the rules and defeated two parties to win despite odds of 100 to one when he entered the campaign. yvonne: the president-elect purportedly has his man for china. people close to the matter say iowa governor terry brett has accepted an offer to become ambassador. four envoys.least these two are longtime friends.

>> he could be the softening touch to what has been hawkish tweets from the president-elect on china. we know he was going to take a tougher line on china on the currency front on the trade front. appointing a long time friend, it that is what the chinese foreign ministry has called terry branstad. he met the president when he was a junior official on an agricultural mission in 1985. he was the governor of iowa, president and hosted ping. he was the main man. know each other and they share a love and respect for agriculture. sandy brant was a diplomat.

was moreman politically provocative. and gary locke, i have met him many times and max baucus is the outgoing, less contentious individual. this is what money managers in the usa about terry branstad's appointment. concept of face and confusion dialogue is romantic but they can outwit you for a centur having someone who has been to that rodeo, who understands the program but has the stature and the prestige of the office i think is a brilliant move. i think it will be terrific. >> probably good news for iowa and the corn belt. number to export destination of iowa products after canada. cop, whohe is the good

potentially plays the bad cop? >> trump, right? we do not know who will be secretary of state. his name has been and it about. you have to look at the treasury secretary and his pic is stephen minutes and -- mnuchin. trump declared china a currency manipulator. as head of treasury, he would be overseeing the committee so that could put mnuchin in the crosshairs of china. ramy: still to come, bloomberg markets asia is next. we have several more market opens in asia. yvonne: this is bloomberg. ♪

david: are we going to start just like this? no foreplay? when you were growing up, you did not have a lot of money. was money anything you thought about. goldman forto blame wall street more than they blame anyone else. >> life-threatening for sure. david: do you think maybe i should step down as ceo, smell the flowers open the more? >> you fix your tie, please? david: