anchor: wall street continues to break records, extending the surge. less is more at the ecb. his monthly bond buying but extends qe2 next year. casino stocks face and other difficult day after plunging. and the korean president faces decision day.

this is the second hour of "daybreak asia." it is just past 8:00 a.m. in hong kong. 7:00r: it is just past 11 p.m. in new york. day, wefifth straight have rallied. the nasdaq also rallying. ist kind of bullishness filtering into how asian markets are shaping up. thise: interesting to see rotation into tech as well. we are trying to decipher the moves from mario draghi. some say it was clever what he did. he was able to appease the doves as well as the hawks. workinge how things are out so far with the market opens in japan and korea just coming

online. 1.5%., up dollar-yen did we can overnight. -- weaken overnight. the, we are waiting for impeachment vote. we have rosalind chin there. on the stocks, modest gains. record theme is the highs in the u.s.. let's bring in su keenan. su: highs again for the s&p and dow. what this means is we are starting to see a real trend here. a lot of green on the screen. let's go into some of the big gainers. is pinktypically see sheets or penny stocks start to soar.

stocks are up some 300% because of high social media volume, and element we did not have an prior bull markets. an element we did not have in prior bull markets. that has returned as we are moving higher in a sharp manner. bloomberg,to the really quickly. the fact that we are seeing again, higher highs. one of the things many of those looking at right here. the question is, do we have room to run? dow transports index is simultaneously together, we will look at that a little later, very positive sign. a happyooking to be friday for us, too. fresh data on jobs.

seems like another healthy picture. this is the last report we are getting out before the fed. 100%. that is the gauge we are getting from the fed funds futures. the expectation is they will raise rates. jobless claims continuing to fall, supportive of that. let's go into the bloomberg , we areows in terms the fed the place where is ready to pull the trigger. there are a lot of questions out there. with this election, have we gone too far too fast? when you look at the chart watchers, where you have the dow jones industrial average hitting a record simultaneously. the transportation index, a big part of the economy, this is a

signal this rally has room to run. let's look at one more chart. , thein to the bloomberg relative strength index. the highest in 20 years for the dow. supportive of a continued rally. yvonne: thank you so much. su keenan on wall street. the european central bank confounded markets with the policy decision. how was this possible? our central bank watcher is here to explain. this move in its entirety i don't think was expected by anybody. let's start with the fact that they extended the bond purchases. that was expected to go past march of next year, 3-6 months. they are going to keep it until the end of the year, 2017. it is nine months at least. the other thing is the thing

that they cut the purchases back 0 billion euros a month. don't call it tapering. this is what he said. it is acting in a pragmatic and flexible way to cope with what may materialize in this time. there is no question about tapering. tapering has not been discussed today. halfling: here is how mario draghi explained why they did this. when they started the qe program, they extended it to 80 billion last month. that is when there were concerns about inflation. instead of moving higher, it was moving lower. now inflation is back to where it was. it is gradually moving higher. it is time to move the size of

the bond purchases back to where they were when they started. he said the ecb, if it needs to, can increase the bond purchases. betty: investors, they sold off their debt because they saw this as less stimulus. they saw you were tapering and that is not good for the bond markets. even though the move is going to add $540 billion bond buying next year. the total of bonds will be almost $2.3 trillion. let's look at the volatility. it was considerable. we will see a bloomberg television chart. atari in bonds are purple, german bonds are blue. the italian selloff, the worst one. those are the yields, going way up and coming down.

yellow line, that is when the first news of the decision came out. one person says the market is not focusing on something that is important. the ecb changed the parameters on the bonds they can buy. >> it is a stealth rate cut. they are cutting rates without actually cutting rates. they are cutting rates because they are expanding the eligible universal lawns down into the one year area. they are giving themselves the at interesty bonds rates below the deposit facility rate. kathleen: take that, you bond bears. he mentioned election uncertainty. he is talking about that french

election, being a source of potentially major uncertainty and impact on markets around the world. yvonne: thank you. first word news with courtney collins. courtney: a russian official says there is a higher risk of opec faulting on its output commitment. moscow will seek assurances at talks on saturday about how the cartel will comply with its plan to cut 32 million barrels a day. tosia will only fill its cut dust pledge to cut if opec -- russia will only fulfill its pledge to cut if opec delivers. a trump pick was an economic advisor during the campaign and donor.

he is said to be against raising the minimum wage. one of wall street's top cops is stepping down. is the latest leaving before an expected shift in the agency's priorities under the new president to read the 45-year-old has run the sec enforcement division since 2013, overseeing an increase in prosecutions by the agency. and the british supreme court has said triggering brexit without the approval of parliament would crucify human rights. similarly, on july merkel's merkel'sr -- angela

chancellor said brexit his is taking far too long. in asia,ur top story the south korean president expected to learn her fate when movement tote on a in future. impeach her. we were just thinking to a professor who was saying, it is not clear this is the end of the road for the president. what is going to happen today? this is a landmark day for south korea. the second time ever lawmakers will vote to impeach a president. it is getting increasingly rowdy where i am, outside the national

assembly. there are protesters gathering. you can probably see this guy holding a flag. he is a supporter of the president, as is another guy waving a sign.-- saying, why are you here? today, a big day for south korea. this 40 page motion submitted by lawmakers to impeach the president accuses her of among other things abuse of power and violating constitutional duties. time, there will be a vote. the motion needs 200 votes to pass. if it does go ahead, the president will be relieved of her duties. she will be suspended.

the prime minister will take over in the interim. when the motion was put through, it was endorsed by 171 lawmakers. it still needs 29 to go through. if it does go through, it will go to the constitutional court and they will decide whether the abides bybytes by -- the court and reflects the will of the people. the whole process could take about eight months but in reality could be shorter. tell us the impact it is having on the country. there has been a lot of anger and south korea. more and more protesters joining the weekend protest. they are angry at links between government and big business. seeing the political influence scandal engulfing the nation, the president.

family-run conglomerates like some song. coming in front of lawmakers to discuss the fact donations were made to foundations controlled by a close friend of the president. but they denied seeking political favors in return. the relationship between government and big business is a focus point for protesters and those angry at what is going on. betty: thank you so much. still ahead, china set for a 26 year of auto sales. but attacks change may put the brakes on it. the brights, finding spots for investors in asia in 2017. ♪

"daybreak asia."

yvonne: a quick check of the headlines. an insurer has increased its ipo. theold shares -- third-biggest u.s. offering of the year. 's shares will begin trading friday. betty: folks wagon officials set to face of further grilling from the u.s. federal trade commission over rigging emissions. they have already sued vw over the scandal. they are set to give and updates update on efforts to repair affected vehicles. the switch is due for

release in march. nintendo is hoping the design well attract gamers. like an updated gameboy. how is the outlook for equities in the coming year? our guest joining us in the studio. great to see you in person. levels, yourecord do get nervous when you see this kind of rally. guest: we are clearly hitting a bit nervous. we are participating in this. there is still some potential the higher we are looking if we have to trim our position. let's talk about the ecb overnight. thati try to hammer it

this is not tapering. how do you interpret this now question market dovish question h?rk h hawkish? guest: the continuation until the end of the year will hopefully end the discussion about further tapering. if anything goes wrong or not in the right direction, they can still increase the program again. that is what we are seeing also on the fx markets. the euro has been trending down. you can consider this a dovish move from draghi. yvonne: is it much of the same? everyone was saying we are due for this correction. what is going to break this rally? everybody cut the doomsday was

going to be brexit or trump winning the election. that has not happened. guest: we still see most of the central banks, boj to be very accommodating. on the other side, the fed clearly hiking interest rates next week. year, it should be to bring more rate hikes -- two more rate hikes. the risk for our side is complacency of investors. on the other hand, all the political uncertainties, we have a lot of events already. this past weekend with the italian referendum. looking forward, we think more and more of the european elections, whether it is the new election in italy coming, french, german elections, this will be the key event for us to

watch and monitor the markets very closely. yvonne: you mentioned you are a little bit more nervous. what would you say is top of mind in terms of the biggest risks? think currently, i political risk is one of our key risks. key election next year. on the other side, if you look at equity evaluations, p any e ratios, what we need to increase inr is an corporate earnings to read that is why we are quite positive for next year, we might see earnings growth, especially the u.s., and the high single digit area. further price increases from current levels as of today.

so political risk is top of mind for you. does that mean, you have given us few recommendations, do you just kind of hold tight? for at least the first couple of quarters of next year and then you start really shaping more of a longer-term strategy? guest: we of course think it will be a one-way street. in between this rally, you also will see some up and downs. we have been increasing equities over the past few weeks, turning fixed income into equities. if the rally continues, at this kind of pace, we might think about trimming down our position. maybe here and there, maybe some small corrections. a bigs quite normal after

rally. we might use the correction to increase equities again. for 2017 isview positive on equities, especially u.s. equities, who could benefit from a weaker yen. betty: thank you so much for joining us. thinking about nervousness, casino stocks take a hit over reports china is set to withdraw. details next on bloomberg. ♪

."onne: this is "daybreak asia casinomacau's fragile recovery is facing a new threat. at least one bank has cap atm

withdrawals as china further tightens capital controls. what do we know here? steve: this is a bit worrisome. have seenng companies a bit of a recovery come to a halt. was it over reaction or a sign of things to come? these were double-digit losses for companies like las vegas sands which runs their new parisian resort over there. had a palace resort as well. they have invested heavily. china is imposing about 50% cuts on one bank's atm withdrawal limit. is worth a lot more than just a $600 wager. 1.25onth alone, there were

billion u.s. dollars withdrawn. foreign-exchange reserves have not been dwindling, but gone $4om 420 and dollars -- trillion.own to $3 betty: how much of a blow is this for macau? : there is about a two year slump in gaming revenue growth. we have seen increases over the last three months. this is a potential blip or damaging effect. yvonne: we will see how the casinos perform later on.

up next, investors worry whether opec will be able to persuade nonmembers to cut. what is expected in vienna on saturday. ♪

it is 8:30 in singapore. monetary authority of singapore saying they had instructed the singapore's tonge -- singapore exchange discover the root cause with the opening of the derivatives training. more to come on that. i'm you yvonne man. of a dark, shadowy day in singapore. let's get to first word news with courtney collins. list seems to be more at the european central bank.

mario draghi cut his bond buying program from the equipment of $85 billion a month to $64 billion. he also added three more months of buying than expected. he says qe is essentially open ended. draghi: the two options are those started by committees in the preceding months. one is the option of continuing with 80 billion euros a month for six months. the other one is the one that received a very broad consensus. air isy: shanghai's again heavily polluted. internationally accepted safe level. days of suffered choking smog a week ago.

young people and the elderly have again been warned to stay indoors. half of alls banned cars in the city and made public transportation free as it chokes on the worst smog in a decade. a paris pollution monitor says commissions -- emissions fell by about 10%. i'm courtney collins. this is bloomberg. yvonne: let's see how that asian markets are shaping up. haidi has more. haidi: another record close when it comes to stocks, particularly japanese markets heating up on positive sentiments. there's a sense investors are trying to digest what happened

overnight. the mixed message, if you will. on one hand, it looks like tapering is closer on the horizon. pushing out hand, the duration of this asset buying program. all in all, mixed. nice gains when it comes to japanese stocks. a markedly lower yen thanks to the dollar rally. that is lending support particularly to retail. we've also got gains coming through from sydney, particularly when it comes to oil and energy. wti goingve the vti -- over $60 a barrel. significant movers. almost 18%t gained yesterday, the nikkei report saying the government would be

upping its credit line to deal with the financial fallout. another report from the nikkei saying those costs associated with the disaster have more than trillionto 21.5 chilea yen. the shipper following more than 7%. we have a report the senior member of the alliance, the shipping alliance, has said they are no longer interested in having them join. finally, one of the many energy and mining stocks that are gaining. we are look at what

sitting up. this is why we are seeing the nice boost to japanese equities. ing like it is ahead. russia also saying it intends to follow through with its promises if opec members come through with supply cuts. looking good at the moment. yvonne: let's stick to oil at the moment. customers of saudi aramco have have beenyers informed the kingdom will stand by its promise to reduce output 86,000 barrels a day. oil is continuing to climb as david, they are all

meeting on saturday. russia, early signs may be warming up to this as well. david: we are hearing from government officials russia will seek to talk at this meeting about exactly how opec will come around to complying with the agreed production cuts. this comes after a bloomberg news survey of analysts, oil companies, and should tracking to ashows opec output rose record output per day. we heard russia will hold to its pledge if opec can follow through on coming down to 32.5 million barrels per day like it agreed to. market feelinghe about opec getting down to that number? david: optimism is probably the

best word to use. we saw oil prices rise today in new york. 2.3% higher today, after previous sessions. coming around. obviously, traders are feeling jittery. the feeling we are hearing is a deal could be struck saturday. betty: david, thank you so much. inflation in china is expected to have edged up in november, boosting corporate earnings. our china correspondent trains us with more. the latest reading comes out a little bit later, in an hour. what are the forecasts? kick it off with the consumer price index. expected to go up 2.2% in november. versus 2.1% in october. isis non-food inflation that

expected to become more robust as domestic demand continues to strengthen. the consumer in china remaining fairly bullish. vegetable prices are expected to pick up but pork prices, the staple of the chinese diet, edging off. in terms of the tpi, this is important. the ppi, expected to come up 2.3% for november. that compares to an increase of 1.2% in october. from the chart beginning of the year. the deflationary funk, since 2011. a 2.3% number in terms of tpi well signal we have made the shift to inflation. oil prices are rising as our metal prices.

anchor: positive prices coming early. tom: the higher prices, good news for china's factories. offsetting some of the higher wages. wee of the higher costs talked about as well. factories putting up their the environment of stronger demand. it means of course of their earnings will go up which means they can pay down some of that corporate debt. what it means in terms of broader chinese inflation, they expect chinese inflation to hit around 6% in the third quarter of 317. broader picture of the inflation of the global economy at a time when donald fiscals expected to up and infrastructure spending. we could see a broad pickup in inflation. good news for the likes of the ecb and mario draghi. good news for the boj.

not so good for the consumer. in terms of where the pb oc stands, analysts could expect them to tighten at a moderate rate. numbers expected in a little under one hour in beijing. yvonne: joining us live from beijing. china, putting more cars on the road with retail sales headed for a record. deliveries surpassing last year's tally. year, what is driving these sales? >> pollution concerns aside, we are seeing consumers try to get in the new set of wheels in times for the tax break. we are seeing a pickup. this tax cut is on small engined

cars, up to 1.6 liters. we are also seeing super luxury car buyers looking to get in their buying before an additional tax is imposed. l arewe are seeing as well a the sales through november, 21.1 million. that is the fastest we have seen since last year. yvonne: are they going to have to extend this tax levy? is not a clear indication as to whether authorities will extend this tax break. there was a hint in october, but there is no certainty. with that, it is going to perhaps cause local carmakers and foreign brands to provide more incentives to ensure all humans do not fall. what we are seeing, for example,

someone saying you could expect a 2% decline or even 0% growth. see a are we likely to year of 2017 record sales? >> this is something local and foreign carmakers are hopeful for. they are sealing themselves or perhaps the tax breaks not being extended. if you look at performance thus the fastest sales growth against local peers. almost doubling deliveries in november. nissan, honda, gm china also seeing substantial sales. ford sold over one million this year through november. china is the biggest international market. is not only market a benefit to local makers but

foreign players. anchor: up next, we speak to one of malaysia's biggest banks git.t the weekend ring ♪

."onne: this is "daybreak asia betty: a quick check of the latest headlines. airline earnings set to suffer the first annual decline in six years as oil prices trim margins. that air transport association says combined income will be a fraction under $29 billion. however, airlines are increasingly resilient. >> we are being helped by the oil price in 2016. we must be aware of the ability to very well and

efficiently restructure their business. we have increased the resilience of the industry. airlines hasppine confirmed an order for 12 planes. the manufacturer says the deal -- it could rise to 400 million. starbucks is seeking to foode the growth of its sales by persuading customers to come back for lunch. they want to boost food from 20% of sales to 25%. they want to add cafés over the next five years. hasthe malaysian ringgit lost more than 5% of its value

in the last month alone. that is after the central bank crackdown on trading. the second biggest lender thinks the drop is overdone. we spoke to the chairman about how the currency can recover. >> i have learned over the years not to question the markets. my economics department are putting a fair value -- saying theome people move was pretty unnecessary. do you share that view? >> no, i don't. it.s look at the move was really a manipulation.

that has never been right. there was some change in export proceeds. these should be converted back to the local currency. haidi: is there is -- haslinda: is there a sense of running out of options? >> i don't think so. the idea of reintroducing -- that has been discussed for many months.

maybe the timeline was somewhat accelerated by the drop in the ringgit. there aresurely concerns that a weak currency has a cost to businesses. >> we are not celebrating where the ringgit is for sure. we have to look at the fundamental reasons why the ringgit may have over dropped. one might be that it was driven by the markets. they are relatively liquid. will go backggit to more fundamental valuations. up next, a special report on the maritime tensions

in the south china sea. this is bloomberg. ♪

."tty: this is "daybreak asia yvonne: time for a quick look at what is coming up. more china data your way? >> just about 40 minutes to go until we get that reading. index.sumer price

how far they are drawing down inventory and how they are dealing with overcapacity in chinese industry. we are going to get the reaction to all of that. creating all the headlines at the ecb. theo draghi bringing down money they are going to be spending on bonds. when is a taper a taper? it is not a taper. others say and, if it looks like a taper, it is a taper. called also at a company carousel, coming bit later. the amazon of south asia, a consumer to consumer marketplace. idea of where the

company goes next. how is it expanding across the asia-pacific? how well it is doing their. there. that is coming up as well. that is a look at what is coming up. ahead, thank you. taiwan is a potential flashpoint in u.s. china relations after donald trump broke protocol by speaking to the taiwanese president. taipei also reasserting its claim over contested territory in the south china sea. stephen engle reports from the tiny contested island. alert in thed south china sea. the chinese coast guard quickly coming to its aid. the crew abandoned ship and had to be plucked from the sea.

inare right there with them what is of course a drill, but one that is critical to the taiwanese claim to the largest naturally occurring island in the chain. they are reversing the island as a search and rescue center, to assist in key and contested international shipping lanes. >> the sovereignty is a fact. we want to show the international community we protect peace, defend free and safe navigation, and defend humanitarian values. long been trying to frame it self as a peacemaker in the south china sea. the issues of sovereignty are not yet resolved. of course, that is sort of the key, fundamental issue. held in taiwan has ministry of control for six decades. china, too, claims the

spratly's. theed by what is called by dash line. vietnam and the philippines also say the chain belongs to them. taipei have dismissed the ruling as having no legal merit. the wildcard is the threat of a more hawkish u.s. military under president trump. >> it could potentially embolden claimants. it could also embolden the united states and other major stakeholders to back up their policies with military action. taiwan, for now at least, is pushing a softer approach. it has built a hospital. a new wharf, capable of handling

larger ships. and the 100 inhabitants, mostly coast guard personnel, raise their own food. >> it is definitely self-sufficient. stephen: the most dominant feature is this long airstrip. designed tocise is show the island is more than just a rock. taiwan says it can serve and protect international trade busys through this and vital part of the south china sea. up.ne: close to wrapping let's take a look at how markets are trading. japan, one of the big gainers. your .6%. 114.r-yen hovering around there is a bit of digestion

after the ecb meeting. is it a trend or a taper? -- trim or a taper? a good way to wrap up our friday. betty: it will be a good way to wrap up, at least for the bulls in asia and here in the u.s. as well. five straight sessions of gains. we will see how that affects trade. "daybreak for us on asia." yvonne: plenty more to come. the impeachment vote in seoul going on this morning. this is bloomberg. ♪ rishaad: it is

a clock a.m. in singapore, 8:00 p.m. in new york city. bloomberg markets asia. rishaad: asian-pacific markets, record highs headed for their biggest weekly advance since september. face thecasinos