♪ host: the trouble administration tells an appeals court the suspense and of the travel ban was a judicial overreach. china is in a fault as pressure grows on the yuan. host: bob iger says he wants to stay on at disney. >> australia's trade minister says they can go ahead minus the united states on the tpp. host: this the second hour of

"daybreak asia." i'm yvonne man in hong kong. betty: i'm betty liu. , i guess youd of could call it lackluster. we tried to rally earlier in the session, but we just pretty much ended up flat. we will see whether or not earnings from tomorrow are going to help these markets. another thing we are watching tomorrow is the decision by the courts on this travel ban that was issued, this executive order by the white house. over the past hour, a federal appeals court has been hearing arguments for and against president trump's executive order to ban refugees from these muslim majority nations. ramy inocencio has more on the story. off listeningot to what has been happening over at the ninth circuit court of

appeals in terms of the oral arguments on behalf of the department of justice and the lawyers for the state of washington. i'm not sure if it is finished yet, but it was interesting at least for the first half hour. department of justice lawyer gave his argument, saying that washington state has no standing in order to bring this case to the court to begin with.

he was talking to three judges on this appellate court. two of them are democratically , and the conservative is judge clifton. one thing is that he stumbled as he was challenged by all three of these judges. that he wasn't sure that he was convincing the court . not a great way to open this here. he said, "i'm not sure i am convincing the court, one key point about injunction and that it is overbroad."

i have to say, it wasn't easy writing for the washington solicitor general as well.

the three judges challenged him on the issue of whether or not it is a muslim ban or not, whether it is a religious test were not, and asked about what other kinds of+++

existing plants. the demand for clean cars is expected to grow. last month, honda said it is jointly making fuel systems with general motors. >> motors made will be used in electrical vehicles and hybrids who are already quite competitive intellect motors. we aim to have 2/3 of the global market share by 2030. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. i mean a melendez. this is bloomberg. -- i'm nina melendez. this is bloomberg. let's bring our china correspondent on. through, howking significant doing look at these numbers now? reporter: this the seventh straight month of decline and the fx reserves. --y fell in january by 12.3% by 12.3 billion u.s. dollars. that is despite the fact that the u.n. was -- that the yuan

was up against the u.s. dollar. currencies in the mix like the euro and the yuan are strengthening. , saying thatn some this has set up a tremendous battle for policymakers and the pboc if they want to try and control these continued outflows and maintain confidence in the yuan. those outflows are likely to top around $83 billion according to bloomberg intelligence for the month of january. rbs economists say is clear that this tree chilean -- that this 3 trillion level will not maintain that, despite concerns by some and the position that this is a psychologically key level. rbs saying they expected to stabilize.

a couple of warnings on this, but rbs taking a more sanguine view of what is happening. yvonne: thank you so much. tom mackenzie there on the chinese foreign exchange reserves and what we heard. and the meantime, some breaking news of the trump travel ban hearing. that has ended at the sanford fiscal -- at the san francisco appeals court. a decisionjets says will be made as soon as possible, possibly as soon as tomorrow. we will be waiting for that decision. still ahead, softbank set to release its third quarter warnings. will get how the expanding business could affect profits. yvonne: our next guest says markets appear to be discounting the outcomes of a trump presidency. more next. ♪

yvonne: a quick check of the latest business flash headlines. that profit was $34 million as compared with a loss a year earlier. has seen profits jump after prices advance because of profit stimulant in china. lenders earnings fell short of analyst estimates. fourth-quarter net income missed estimates by about 12%, coming in at $1.5 billion. consumer banking earnings fell 36% thanks to record low interest rates and sluggish economic growth across europe. the bank is looking to cut millions in cost, but says it will spend to upgrade its digital banking services. getting tought is

on harassment with its latest update. the social network is whirling out new changes to combat abusive content and preventing banned users from creating accounts. the updates are part of the ceos attempt to clean up twitter. follow years of criticism that not enough has been done to curb abuse and harassment. look at the trading day ahead with asian-pacific strategist at b.n.p. paribas. now in the narrative markets as did trump versus bad trump. where are we now? what are the negatives right now? >> the market seems to have priced in a good trump. if you look at most of the economic indicators and, in particular, things like the fed survey in the united states or the nfib survey, small companies and large companies have expressed a great deal of optimism about future

investments. that is the classic sign of future growth acceleration being priced end, and that is reflected in the markets, as well, and the markets and in asia. the bad trump effect i don't think has been priced in. at mexican peso's it has partially, but some of the exporters of this region could potentially feel the pressure. as of now, there is no sign of it. thatme of the measures of border tax.re the we have not seen that being priced in yet, and i think that is one of the biggest concerns to equity at this point in time. yvonne: back is back to china, the supply chain that makes the factory of asia. the whole trump narrative has been about bringing jobs back to america.

inwe see these tariffs place, do you think china can still compete? >> it's not going to be very easy to implement in the way the trump administration has been talking about, and even previously during the campaign. costs that if the import increased significantly, if there are punitive tariffs imposed, it could also increase the cost that the american consumer has to pay. there are very cheaply priced consumer staples available in the interior part of the united states. that is essentially because they are manufactured in the low-cost regions. i don't think it will be so easy to and limit. but yes, i would obviously be slightly cautious about the exporters in this region. particularly those which have large exports into the u.s. or those whose exports are used by u.s. companies.

that is what the border tax tends to threaten. are focusing on the energies and financials, as well as consumer staples. asia, also saying here in after a pretty solid performance in the month of january, this could be a bounce. what are you seeing? >> we had seen a correction in the market immediately after the u.s. election became clear in november. there is a significant bounce right from december onwards. having said that, we have a of 575 at the end of the year. it's close to 554 when i saw last. think, the near terms, the market is possibly priced in too much, too soon. it would be possibly prudent for investors to be cautious on markets at this point in time. betty: want to ask you about some of the markets. it looks like you overweight

japan, and indonesia. if you compare were the markets are and help economic numbers have performed, the chinese economic surprise index actually has been rising. so more numbers have been coming up on the upside, and yet the markets haven't moved. what are you seeing as of right now that investors aren't? >> i think the big concern on the part of the investors in terms of china is the currency. you're quite right in pointing out that the economic surprise indicator has jumped. it has improved consistently and, in particular when you look at some of the ground indicators , that has accelerated quite officiallyly while declared gdp growth numbers have not.

there is on the ground improvement in the economic indicators. but i think investors are concerned about the currency at this point in time. today we noticed the foreign reserve has debt below $3 trillion for the first time in many years. i think that is possibly playing on the investors minds. betty: does that mean that i can infer that you are not as worried about the currency or that you have a different view from what the investors are worried about? >> let me put it this way. we are trying to avoid the kind that could suffer moche -- that could suffer most as to this currency. these companies draw

predominately from real estate and materials. i would think investors would be best advised to avoid those companies. betty: thank you so much for joining us. more ahead. bob iger saying he was to stay on with disney beyond his contract if it is a benefit for the company. that is next. this is bloomberg. ♪

yvonne: this is "daybreak asia." betty: sales in disney dropping in the first quarter. but get more on this and the rest of the earnings with su keenan. reporter: the topline stock was down about two hours immediately afterward. espn was the big story, there was the weakness. hard time for them to match the

huge success of the star wars 2015 film. 3%, and theyabout talk about bob iger staying on. let's take a listen. >> i been with this complete for 43 years and have been ceo for almost a dozen years. i am going to do was in the best interest of this company, which -- somethingdoes that the board will clearly helping term in. if it is in the best interest of the company for me to extend my term, i am open to that. he is staying on after his contract, which everyone sort of expected. some 13%,business up helped in a big way by shanghai, which is expected to hit 10 million visitors in the first year. we also got earnings from mgm. what does that show us? reporter: young revenue came in

a bit light. areysts say investors focused on the outlook of the company. yvonne: thank you. still ahead, the r.b.i. cutting rates later on wednesday, but will it be the end of the easing cycle? that's next. this is bloomberg. ♪

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betty: 8:30 in beautiful singapore right now. have an hour away from trading there. i'm betty liu. you are watching "daybreak asia." reporter: lawyers for the trump have told the san francisco appeals court that the president 's travel ban was well when -- was well within the powers granted to him by the constitution and congress. the justice department is seeking to overturn the ruling that puts the executive order on hold. one judge called the argument about a terrorism risk "pre-abstract." and aaring has now ended

decision will be made as soon as possible. reserves fell by $12.3 billion $2.90 trillion. policy makers may step up their efforts to limit private and corporate outflows. china kept its gold reserves unchanged for a third month in january, lending -- leaving some analysts that it is causing gold buying prevent more drops. the pboc may be using its foreign currency reserves support the u.n.. the global governing body says an internal investigation has uncovered wrongdoing beyond the foreign corruption allegations. the details could prompt new

charges should authorities in the u.s. and switzerland choose to pursue them. the findings maybe presented to fisa --- to fisa -- to two fifa. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. yvonne: let's see how the asian markets are this morning. reporter: fairly mixed as you can see. when you look at japan, you have to consider the dollar yen is range. at a very high that is providing a little bit of a list. taiwan's cdi just coming through right now -- taiwan's cpi just coming through right now. when you look at this number out .f taiwan, 2.25% we're looking at inflation of roughly 2% the estimates. it would highest here in a year.

that is now four out of five asian academies that have reported inflation for january that have come in higher than estimates. equity markets fairly mixed. flat and is basically new zealand not really doing anything. just to mention, we have been talking about how calm the markets have been. have a look at this bloomberg chart. graphic is inspired by this note that came out of bank of america merrill lynch. we all talk about the popular trades right now. saying is that when you look at hong kong -- at how call on the markets are, it seems we are not really pricing in the sort of risk that might come to for asian at this point this year. they are saying the cheapest

trades, you go along a lot of these things. that is a very telling chart that we are at historic lows when it comes to how confident the price of protection that markets don't seem to be pricing in at the moment. yvonne: in terms of specific stocks that you're watching, you are watching chinese property shares today. why's that? reporter: that's right. there is a great story on the bloomberg that comes out top one or two on your terminal. the reason i am watching this is that when you look at how pessimistic the market has become over this group of shares , this is a two-year look at this peer group from bloomberg intelligence, it seems that these stocks are too cheap. the likes of goldman and city have all come out and said there

might be some structural problems, but some of these stocks are just dirt cheap. as a group, we are looking at .6. that is even cheaper than my wet socks after a 10k run. there is value to be made. when you look at the estimates for sales this year, i think city has it for 15% increase. is an upside to be made. that is a group of stocks i am watching. you see the ticker right here. that is dirt cheap. price for disaster as this aliens were coming to devour the earth. it's definitely worth keeping look at. yvonne: quite exciting. this week's asian center as therade continues

bank of india continues another in what may be the last of reductions. kathleen hays here was a look at what we are expecting in the r.b.i.. reporter: we are watching the r.b.i., they are expected to cut their key rate today. what is going on here is they are expected to cut it by 25-20 6%. .5% to -- 25% to 26%. you can look at the inflation chart. you've got a lot of lines there. that white line is bloomberg intelligence. we put together our own chart of indian inflation based on the 4.6 percent.a

that's what everyone is watching closely. is down to 3.4%. that yellow line is what the r.b.i. is forecasting march 2017. it is already well below that. the other thing we are watching is the budget. india's budget could track now. they are expected to cut the deficit to 3.2% of gdp from 3.5%. bond yields are expected to move down. that should boost demand. there is a question about what is going to happen next because the indian economy is still recovering from demonetization. why is it that the r.b.i. is going to cut rates when it seems like the other central banks in asia are standing pat on their rates? reporter: they got all these

issues. there are moving the right direction on the budget deficit and the economy is still expected to flow down. the other side of the coin is that, if you look at things like goldman sachs, there talking about the purchasing index and thoseles, and saying that have already started to look better. so that is a reason for the r.b.i. to stand pat. that is the minority view. the reserve bank of india is definitely expected widely to cut after having a great week. it looks like people are bracing for this move expected later today. rupeeu can see how the has had that little decline today. you're looking at the dollar, and the dollar has been falling. the consensus is for a

rate cut, but you have goldman sachs saying it could be a close call. how is this all pricing in the markets right now? reporter: markets are playing it safely. goldman sachs also saying it may be time for the rupee to be looked at as a good carry currency and it may be the rupee's time to shine. cuts from theeven r.b.i. since january 2015. if they don't move now, that is really going to surprise people. maybe we will see an abrupt turn in the rupee. yvonne: thank you. show no --mbers passenger numbers drop and southeast asians biggest carrier -- have a breakdown.

talk all about about the results here that continue to get pandered. reporter: it remains turbulent for singapore air. overcapacity,th over aggressive pricing for rivals, in particular, the big three gulf carriers. they are squeezing singapore air by keeping ticket prices competitive while operating premium customers luxuries like i've it suites, caviar, designer pjs. and q3, profits dropped. they say 2017 will be no different. they will all continue to be under a lot of pressure. i want show you this chart. you can see how singapore air shares have underperformed the benchmark sti. take a look at another tort --

at another chart. it has been struggling to get past the $11 mark for the past six months. bnp paribas downgraded singapore air just this week. the bloomberg recommends dumping singapore air stocks. how is the uncertainty of oil output affecting singapore air? reporter: singapore has said is said isgapore has expanding. pricesetting on rising opec production cuts and rising tensions between the u.s. and iran. take a look at this chart. prices have been volatile. they will likely remain so.

prices have been trending upward since the last quarter, and jet fuel accounted for about 1/4 of expenses last quarter. costs.s to rein in for the kind of quarter it is had. yvonne: thank you so much. more ahead. australia hangs on to that tpp dream. our interview with the nations trade minister is just ahead. this is bloomberg. ♪

yvonne: this is "daybreak asia." betty: jpmorgan says iron ore prices are going to hold firm over most of this year, easing only in the final two months. correspondent paul allen. pretty optimistic appraisal

here. yes, according to jpmorgan, they were remain high for a little longer, upgrading their iron ore forecast by 22% for the coming year. for this upgrade, they got iron ore would average $60 per ton. it will taper off as the year goes on, and by the fourth quarter, j.p. morgan expects to see the price at $66. that will be great news for the australian government because to the iron ore price equals a $50 million increase to the budget. however, there is a caveat attached to all of this. jpmorgan says the risk is nontraditional supply growth. it's iron ore producers look at these high prices and decided to rent up supply, this optimistic forecast will be revisited.

one of the big beneficiaries is rio tinto. they are expected to come out with earnings later today. what should we be focusing on? is a return of this dividend policy? we will see aubt return of that policy, but the good news is that since walking away from it, it looks as if the dividend will be more than forecast at this time last year. analysts are anticipating a dividend of about $1.44. is definitely helping rio's bottom line. analysts are expecting net $4.75 come in at about billion and revenue at about $34.3 billion. but we will find out later today. yvonne: thank you. they willf australia,

push the case for a trade deal without the u.s. with potential embers of the tpp meeting next month in chile. the transpacific partnership remains relevant, but will always require minor tweaking to allow for america's withdrawal. >> there were a lot of hard-fought gains that were achieved through intense the negotiation's over many years in response or in relation to the tpp. i don't want, and i know a number of other countries don't want those gains to slip through our fingers. that's why i put a focus on whether we could have a tpp 12 minus one, the tpp less the united states, given the u.s. doesn't want to be part of it. we will be having a meeting in chile in march to canvass all of the options. i just would reinforce that the benefit of the tbp are numerous -- the benefits of the tbp are numerous for small and medium sized businesses. you get lower compliance across

the tpp network, and i think it's important try to capture those gains. betty: earlier today we heard from the newly confirmed secretary of state rex tillerson, saying that the u.s. is going to work with many foreign governments including australia, japan, and south korea. the poor it into that, saying that he is trying to repair with australia the relations that were damaged by that phone call between donald trump and malcolm turnbull. do you believe this is an administration you can work with? >> absolutely. our ambassador in the united states has done an outstanding job at maintaining strong open lines of communication with the new trump administration. has had an minister number of conversations with vice president pence. our prime minister has spoken to the president. we have officials that are communicating all the time. i am very confident that the

long-term nature of the friendship between australia and the united states will continue. betty: was it damaged by that phone call? >> not at all. betty: not at all? here andhe reaction his strong comments? we are focused on making sure that we pursue a good outcome for australia. we had a deal with the u.s. administration. the prime minister made it clear that we expected the deal to be honored. i think it is a sign of a healthy, mature relationship that the promised her a president can have a repost -- have a robust conversation that doesn't have an impact on the long-term friendship. betty: that conversation very it underscores

that in order to get tpp done, australia needs the u.s. the u.s. is considered a cornerstone for tpp. it would be hard to see other countries want to be involved in this or stay involved if the u.s., a huge trading partner, is not involved. headlines onee the bloomberg news, it is tpp minus one. and that is a big one. some of these countries will meet in chile. the focus is on another meeting in japan with the other trade deal that china is trying to spearhead. was the outlook for that now the tpp seems to be a little alive? a big question there for february. let's do a quick check of the latest business flash headlines. general motors has swelling and is -- swelling inventories.

gm reported $12.5 billion of annual earnings before interest and taxes, adding that outlook as the trump administration levies. electrify america will invest in the construction and maintenance of electric vehicle charging stations, plus fund advertising campaigns promoting awareness. vw's investment is part of a legal settlement after the company was caught cheating on an admission test. a court filing said that fitbit is under investigation by a criminal gang jury -- a criminal grand jury for threat of trade -- under a grand jury for stealing trade secrets.

coming up, we look at what is to expect when softbank reports third quarter results later on wednesday. this is bloomberg. ♪

yvonne: this is "daybreak asia." betty: time for a quick look at what is coming up over the next few hours.

we are watching the dollar and whether the rally might be over. tag,ad: we saw this price that can be sterling pacific -- sterling specific. we're looking at moves in the yen. plus looking at the rate decision out of india. the bank of india coming out with its decision on the cost of borrowing. we have a lot of pressure on them as well. going to be having a look at the prospects there. as we have this war of words going on between china and the united states under the new administration of president trump, we are looking at what usea is doing to perhaps

soft diplomacy as they try to try to woothey yvonne cattrall and her husband jared kushner. yvonne: look forward to that. thank you. softbank reports that third-quarter performance later on today. it is one of the day's most highly anticipated result. let's get a breakdown. going on for softbank, particularly when it comes to their purchase of a rm in the sprint turnaround. what are you looking for? >> in terms of the actual hard numbers, much of the news is already out. yahoo japan reported a profit that beat estimates. shares went up to a multiyear high. sprint reported earlier. the losses are narrowing. what investors are looking to is the comments about the future of the company. is sprintf interest

in the future of the company under the trump administration. there are reasonable expectations that trump administration will loosen regulatory restrictions, potentially allowing for a merger with t-mobile, something that they have aimed for from the start. even more importantly, any billion on the $100 fund with saudi arabia would be welcome by investors. betty: it absolutely will be. what about outlining the vision for softbank? what might we hear on that? >> that's a good question. the fund was announced in october, at softbank has said precious little about it. billione contributed 5 -- conservative 25 billion. it still leaves room for a few partners. a bunch of names have serviced including foxconn, apple, and other gulf states.

with them saying so little about the fund, investors have no way to figure out the shares. any comment about the future or deadline for this will go a long way. yvonne: thank you. and that is it from us. plenty more still to come. betty: sounds like a jam today today in asia. you have a earnings, much more ahead. yvonne: the decision will be front and center in a couple of hours. the kids this saying they do expect a cut is in the cards. this is bloomberg. ♪

rishaad: 9:00 in singapore. 12:00 in sydney. this is louvered markets: asia. bloomberg markets: asia. extendingoor airline its fuel hedging after a drop in profits. how china's balancing act is putting the bond market in the firing line. an appeals court wraps of the hearing on the trump travel ban. just