♪ >> titles lowers expectations for growth this year. the emphasis will be on reducing risk. delivering an unmistakable message. president is firmly in control. yellen warns there is a danger in acting too late. confirmingsche bank plans to raise capital as the

ceo plans to change course. haidi: happy monday. i'm haidi lun. is does after 5:00 p.m. here in new york. i'm betty liu. how the looking at action on wall street will be playing into the asian pacific trading day, and while asia was on a weekend break, it seems good guarantee from janet yellen that in fact they will raise rates come we saw the doubt geeking out and other gain barely there, still above the 21,000 level and that of the closing barely above water, just about of -- above one point. due to the snap ipo. we have the jobs report coming on friday, so we will be watching that to where the fed is headed. wondering have to be

if the question is not if they but whatg in march, the core of the fed will be if you will. but what if it changes the pace of how many hikes we get this year, and you mentioned the job numbers on friday, and the question is if it is going to move the needle much at all? betty: we will see. in the meantime, we did not move the needle much in asia so far, right? haidi: no. we are starting out with a bit -- we are cautiously optimistic. we will see if we will see another week of global equities rally happen. stocks are down by 10 to 1% of the moment, we have a bit of mild week is coming through it at the aussie dollar moment. the yen's trading slightly higher, and that will yet -- way on japanese equities with tokyo. is underway on

the s&p is showing a little higher we open at the top of the --r, .04% higher -- point .4% higher. the rate decision is not expected to move tomorrow. there,ds out about .5% awaiting rate expectations as well as it comes to that treasury yield weighing on gold prices. there are some supply issues come up cuts coming from libya. two of those major ports in libya has halting exports, and that is weighing on -- rather supporting the crude price their, 1.1%. no surprises that of china, but i will be one of the main stories we are expecting in australia markers when i gets underway. let's get caught up with news with sophie kamaruddin hong kong. the echoes of the: -- sophie?

the claims came via breitbart news, the whitening outlet -- right-wing outlet formally won by white wing white house- strategist steve bannon. french presidential candidate friends walking young has again rejected calls to step down, the conservative is accused of using wife andney to pay his children for carrying out fictitious jobs. he denies carrying out the fellow but his politicians have abandoned him. prime minister shinzo abe has strengthened his grip on japan, allowing -- the democratic party their- now allowing

leader to remain in office for three consecutive's term. thatche bank has confirmed it plans to address concerns about capital levels by raising more than $8 billion. ceo john cryan has been within the past eight years of plotting the past eight years of legal investigations, and law offer of a partial sales of glitches asset management unit -- the banks asset management unit. news, 24 hours a day, powered by more than 2400 analysts in 120 countries. story, thetop economic target for the year has been delivered, thing the emphasis will be on ability and reducing risk.

tom mackenzie is watching the national people's congress in beijing, and tom, the key takeaway from premier league -- i's speech? ceremonyiddletown and -- all the pomp and ceremony, we had that gdp number, 6.1%. and then the money flows, credit. they are lowering that slightly from 13% to 12%. the context of this is the focus is now on stabilization. it seems like reformers have won the argument. we have seen reformers put in securityding of the regulator, banking regulator. last year there was debate against policymakers here is how there was to focus on credit versus stabilization. it seems like reformers have won

out, but as we know there is a gap between the rhetoric and reality. in the reality, we note credit in china hit record levels. cried it just debt to gdp ratio china's debt to gdp ratio as it 100% over the past eight years. this is a big political year for china as well, with the party congress coming up toward the end of the year. betty: with the target that they need to hit because of that. how likely is it that china will be able to hit this gdp target? data,e have seen all the the export numbers, the factory price inflation, they are looking relatively positive. is on aeconomy relatively stable footing and ended last year with a increase of 6.7%.

sector is not benefiting from a tax cut that it had last year. a have a goldilocks mix here. they range in the prices and there has been a pickup and third and fourth quarters coming -- slightly, and you have the fed and janet yellen and the pressure that new rate hikes will have on the yuan, not to mention trump and trade. to the growing forces of anti-globalization and protectionism, something of a swipe at donald trump and his anti-globalization o and protectionist measures. themberg economists expect target to be met. it would be remarkable if we did not get that, tom. the because political

maneuverings going on before this crucial party congress, but we are focusing on the core. tom: that was really interesting. if you go through this link the work document, he mentioned the president being the core about eight times. that is far more than the last leader who was getting desk even this title. let is just semantics, carries a lot of weight in china. it is quite something to see the prime year -- i like little ability. on when ofe anything local congress comes around this year. haidi: let's look at the agenda

for australia here today. tom: local media reporting blackstone, the world's largest property investor, maybe looking to sell 10 regional and subregional shopping centers around australia with an worth an $4 billion -- estimated $4 billion. they are looking to expand its --million portfolio overall $6 billion portfolio overall, so it was up to wrap up the deal in the second half of 2017. we have to watch and see if it actually happened. expecting to are people to open their wallets a little bit more in january. >> normally with you would see

people pick up for the christmas stretch, but the market is expecting a rebound by .4%. do not get a forecast for the jobs market for february. will be interesting to see what is available. there is a lot of questions of underemployment and week wage growth in australia at the moment. weak wagefar as the growth, that has earned the attention of the treasurer with a budget coming up, right? paul: he is being on the weekend -- boostingressed the bottom line for the government. it was about 250 million terms $250e government looks -- million in terms of the government books, and it has a

much bigger impact in terms of .evenue and commodities prices we tax wages. do not get too excited by what you have seen in commodities growth and fourth quarter gdp figures. that will be going for repair. paul allen in sydney. ,uch more ahead on daybreak sydni is soaring home prices have made it one of the most unaffordable places in the world. how that could affect the rba's rate decision coming on tuesday. haidi: and it has taken just a bek for the markets to doubting a rate hike to pretty much making a sure bet.

haidi: i'm haidi lun in sydney. betty: and i am betty liu and new york.

this is daybreak australia. we have another set of data to come, including the jobs report on friday. little changed from the day before, of slightly and health care financial stocks leading the way -- up slightly in health care, financial slots leading the way -- stocks leading the way. laser bank was down a little on friday, -- deutsche bank was down a little on friday, it could be up on monday because they announced they were reversing course. we will super that goes. exxon has been projected spending at about $22 billion. l mundo is seeking monday -- project. a new crude

and snap ipo, everyone is excited about this. up 10%. and copper surprise. cover has been slipping, as traders are a rare desktop or has been slipping, as traders are aware. there is speculation drop this higher interest rates curbed demand. but copper is just one of the commodities that is directly in question as we into the week. as we have been discussing, fresh economic data will be hitting the table this week. >> that is a focus, especially with the fed or the market on alert for a fed rate hike area -- hike. to bebs are expected

added, they are looking at adding 180,000 jobs. a slight pickup and wage growth expected. again, that is a key growth area. this is in terms of companies expected to report growth. we have hugo boss, adidas. we should point out that 70% of seven 73%0 hat -- -- has exceeded0 earnings reports. let's go to the bloomberg, if we can. tha the stockpile records were way up there. will you and your

easy trading is just the dollar mark. coming back bit from the week. gold is on the decline, surging on the hot this -- hawkish fed comments. haidi: thanks for that. janet yellen has all but confirmed a rate hike this month , and it seems that only a disastrously weak jobs report this week could change that. kathleen hays is here, and kathleen, it has been a remarkable few days. has yet all -- yellen essentially establish the hike or does she have wiggle room? kathleen: we know she has paved the way for a hike, but let's in thiso what she said

speech. we can all decide finishing left wiggle room or not. meetingllen: at our later this month, the committee inflationate whether and unemployment are continuing to a ball line with our expectations. thedditional adjustment of federal funds weight would be appropriate. kathleen: if they do, an increase of the funds would be appropriate. in thate heading direction unless we hit a disastrously bad jobs report. that kind ofg raising when we talked about her speech on friday. as you can see, the market is all but there. on friday inlose

terms of calculating the odds. if you look at the midpoint of the feds range. 94% cotton the -- 94%, not 100%. jumping.ayrolls are i will so you a great chart. payrolls gains over the past year or so. the yellow line is a six-month average. on hundred 83,000 -- 183,000. isn if it pulls back, it plenty strong enough for janet yellen to argue and perhaps a lot of other fed officials to move. we are also looking at the unemployment rate. in this post to come in at 4.7%, so a sign of some strength. and paychecks and wages. that is was to come in at two points -- 2.8% year-over-year.

move --gh number, but moving in the right direction. it looks like a lot is riding on the jobs report. haidi: short of a completely disastrous news on those fronts, a focus shifts not whether they will go or not, but how many times will the rate hikes this year. kathleen: next week, 14-15, they economic us their projections, their dot plots, their interest rate projections, and it is interesting to note what she called in this speech. ofis a big picture view monetary policy, where it has been and where it is heading.

nothing she said in a speech with a response to possible but bill dudley did say when it comes to the fiscal risks, they are all upside, creating stronger growth. das go.ok at. go -- there will be three rate hikes this year is the consultants. an interesting speech over the weekend, they changed one word at how she is looking at policies. policy is now moderately accommodated instead of modestly . very specific. she is saying there is a little more stimulus in the system, maybe you get more rate hikes under consideration at the meeting next week. and what else is in store? what else are central banks around the world watching? kathleen: the central bank is

watching the gdp number because we had officials saying -- the minority, maybe there will be a rate hike this year, more tightening, and the european central bank meets thursday, and the germans are pounding for rate increases because their inflation are rising. the final brexit debate is happening, and the world is watching china. the national people's congress. this is a big deal as tom mackenzie was talking about the 6.5 point sent -- percent gdp target. it is a very big deal. thank you so much, kathleen hays. up next, two years into his strategy, deutsche bank ceo now reversing course. details of his capital raising plan. that is next on bloomberg.

haidi: i'm haidi lun in sydney.

betty: you're watching daybreak australia. deutsche bank reversing course, raising capital, and it will not be selling off its postbank unit. is this a total u-turn and strategy? >> they wanted to hold on -- sell the postbank unit, but now they say we have had a change of heart. asked them to find a buyer, but now the plan is to and for totalnd costs to be $23.3 billion by 2017. plans to selling minority stake in asset management unit next couple of years, and building asset that investment tank. toat least that will help

build that ratio to over 40%. end of last year, it was at 11.9%. what about the cost issues that deutsche is facing? billion -- $24.2 billion in adjusted expenses and another $1 billion, deutsche bank has more than $8 million in losses in the past two years. since september and luster, we have seen deutsche shares nearly double, and that has partly been because of the settlement. increaseis trying to possibilities and has withdrawn from several countries. complete it a turnaround?

you can hear from or from the man himself about deutsche bank plans, the ceo. he is coming up in london. stay tud for that. stay tud for that. up nexways wins. especially in my business. with slow internet from the phone company, you can't keep up. you're stuck, watching spinning wheels and progress bars until someone else scoops your story. switch to comcast business.

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in sydney, markets open locally in about 30 minutes. we are looking at the knees -- sydney session opening up on smooth footing, about .4% right now. i'm haidi lun in sydney. learned --i am betty betty liu in new york, where it is 5:30 this sunday evening. sophie, what's going on in the news today? >> target -- china is targeting 6.5% thispoint 6.5 --

year. aims of thehis national people's congress. it compared to last year's goal of 6.5%-six .7%. reduce thet to dangers of excessive borrowing. coal capacity is trying to be lowered by 20 50 million --s, and the soda lowdown lowdown could lessen social cost as hundreds of workers faced the laid off -- janet yellen has left little doubt that she will raise interest rates this month, telling an audience in chicago there are dangers in being too slow to move. she all but declared the rates will rise at the 14th and 15th , saying more could be

determined if policymakers determine that the economy is staying on track. at our meeting later this month, the committee will anduate whether employment inflation are continuing to evolve in line with our case, aions, in which further adjustment of the federal funds rate would likely be appropriate. sophie: south korea has promised to protect companies against unfair trade measures in china. this is a tensions rise over a u.s. defense system. for -- cointreau stores have been shut out in china for alleged fire safety violations. global news, 24 hours a day, powered by more than 2600 journalists and analysts in 120 countries. this is bloomberg. haidi? haidi: thanks for that, sophie.

let's look at how the markets are faring on this early monday session in asian -- asia. is pretty flat, little bit of weakness for the kiwi and aussie dollar after those remarks from yellen. --ni showing off it for 10 percent -- for 4% -- .4%. we are thieves outside pressure for the yen. a 10 year and also yield coming down a bit when it comes to the u.s. 10 year, and that is being tracked through. closing up against the 10th of .1%.s

and let's see what was going on with news this weekend. get oury for us to heads around, but i would not be .xpecting any big moves the yen is stronger than where we were then -- when janet yellen spoke, but we will be looking at this before the fed moves. that is priced into the market. intoarket this week moves australia and the rba tomorrow, the ecb on wednesday. we digested that news and see how it plays out with chinese assets. it is a tough one to call, but also there is the deutsche bank

capital raising. it will be a lot of invest in focus in terms of how, what that means the rest of european banking actor. -- sector. we were discussing the rba's latest rate decision. how are investors positioning themselves ahead of this meeting? it is a very neutral bias the rba now as far as explaining, but what has been interesting this year is how much the aussie dollar has been rallying. , it ishe best-performing of than 5% this year. the job even harder. we saw expectations for a rate hike later on in the year but significantly after we saw the gdp down last week after the gdp reading in the previous quarter, so that certainly is moving expectations later on in the year. tomorrow, we're probably looking

for a neutral stance. i think traders are wanting to keep their powder dry and remain slightly cautious going into that meeting. the wording is around the housing market, which is continuing to be a problem in sydney and melbourne. to riseices continue and we are focused on how that is playing out. adam, thank you. on the rba meeting just ahead, a senior eu official says donald trump's protectionist stance may push other countries into working with the european union block. union vice president says they want a trade relationship and the smoothest transition possible as they wait for details of president trump's policy. >> we have just read the treats -- tweets and her the speeches and statements, said -- but

there is very little on paper yet. knows, the eu is a trade superpower, and we are the market, so it is in our power to support free, poole-based trade. it is a big, significant part of our strategy and well-being thomas o what we want to do with states isunited create as smooth of a trade relationship of possible. haidi: you want to see the detail of the policy, i understand. unionharder for european businesses to do business in the already?ates hasn't gotten harder for european businesses in america already? any feedback heard yet from european businesses,

but everybody who has heard what has been said has some concerns. it has not materialized yet. we hope we could continue fruitful discussions and corporation with the u.s. administration on trade. we are also willing to look at opportunities to deepen our trade relationships. negotiating on tv for years and achieved a lot these negotiations, so we are now just waiting on the response from the u.s. side, what we could do more in order to open up markets. betty: one feature on the bloomberg we would like to bring to your attention, your interactive tv function. you can find it on tv . justill not be able -- not be able to watch us live, but see the products that you just thought -- saw.

you can also send us instant messages during our shows. this is only for bloomberg's drivers -- subscribers. haidi? what a great function. up next, we assess the impact of a fed rate hike is month. this is bloomberg.

haidi: i'm haidi lun in sydney. betty: and i am betty liu in new york area this is daybreak australia. a check of the business headlines at this hour. kingfisher lenders are selling recover funds. their asking prices will be lowered by about 10% after previous attempts to sell them amounted to nothing. togfisher houses amounted

about $15 million now. and they fall in the end boosted overseas investment. cif has over 18% of its dock investments and track -- strategies in stock indexes. standard life is in talks to create one of europe's biggest asset pools more than $800 billion. the tensile deal would be -- dental deal would affect current life sure stand holders -- life stand shareholders. let's get back to our top story. targets trimming the nations be china trimming the

nation's target to 6.5%. joining me now to the sex this -- to dissectt of this is our chief economist. our growth is very -- numbers and trying to convert on what the growth is actually. are we passed the point where we are questioning the gravity of what comes out of china. but also today is in setting the target all? >> they are trying to downplay the target a little bit, using words like around, downgrading the money supply of it. you can see where they think it is relevant. but if you look at the government produced budget, whether they are designed that way or not. is it less gdp,

relevant? i think it has always been a bit less relevant, because what is less relevant for markets in the liquidity cycle are swings in the industrial economy, and that has been a lot more volatile and it is ticking or at the moment. one of the systemic risk that they are not addressing at the moment? >> of course the big question. how do these with -- they shift their financing model? thethis does determine how constraints are. but i suspect through the better part of this year china will start to low because the entities are titans, and when we tighten in an economy with leverage, growth will low. that will come through with the second half, and the real turn about the construction role -- structural issues will be few later. betty: do you think reform has

to be much harder and stronger on economic reform to feel like in fact there is change coming? in an ideal world, absolutely. if you had expectations for the way china wishes they away from from leverage toward other forms of sector driven growth, you would be disappointed by what has happened over the past couple of years. the political reality is that there are populist demands -- demands from the popular -- ace for outcome and reform. and this is especially when you are looking to shore up the , and theset shorter-term concerns exist in china, less -- much like they do

everywhere else. betty: and china has watched the rise of trump to the white house. is that the biggest wildcard for china? i was there in china very shortly after the presidential election last year in the u.s.. it trump is a major? . -- trump is a major question mark. -- mutual is a mute partnership view or a view that has more antagonism in it. both froma bit of president trump, so we are not clear about where he sits on that front. does that lack of clarity matter in the end? is it remains confusing it, is it a big drag for china? do not think so. presumably as policymakers they are more focused on issues external to china rather than

internal to china, because china accounts for about one third of gdp growth. india has about 17% area to economies, more than half of gdp growth. nobody is a beneficiary of a sharp, abrupt adjustment in the chinese economy. -- y: haidi: one of the things is that the yuan exchange and -- exchange rate might be further liberalize. does that mean more volatility? will that give rise to the current debate between the u.s. and beijing? that it will.ow the u.s. can back off that debate, i suppose, but it is the one issue. every president in the past couple of decades has spoken about be chinese current -- the chinese currency being an issue. >> they are on the technical

fence, and you can justify tax or trade policy to do whatever he likes, so the broader kind of relationship, which is in focus. and there we should expect that there will be some change in the way the u.s. treats china as a trading partner, certainly in most other areas. the ministration has delivered something, and we should risk spec something that is uncomfortable. haidi: in terms of the pace that we are seeing, the commodities, growth, if this is good -- is this as good as it gets? >> i do not think so. in the u.s. it is mature, but in australia it is an early cycle. it is difficult to do that when

you see what happens every weekend with the prices in the housing market. i think if they will do nothing for an extended. of time. -- extended stretch of time. something mentioned about the philippines being the first to raise rates, and i was wondering why you say that? >> the philippines has been a strong performer the fast -- past five or six years, growth six or 7% very persistently -- 6% or 7% very persistently. the budget is not ideally where certainlyo be, but growth has been strong and money growth has been strong. you can see that for instance, it is almost back to balance. of all the economies in asia, acth running this high wire between fed driven rate hikes on the other hand and a global trade cycle which is picking up,

i think the philippines is likely to handle that makes the best. betty: good to see you. .ichard is zynga in sydney up next, boxed in. how australia's big city housing price boom is that to keep going. it --th the rba on how keep the rba on hold.

haidi: i'm haidi lun in sydney. betty: and i am betty lynn in new york. the rba will make its march rate decision tomorrow. expecting no change among the key concerns for the central bank. bloomberg's emily cadman is in sydney with us with more. have inus, because we hearing about how much prices have risen life is like sydney. how is that affecting the outlook? >> is making it much more

difficult to think about cutting rates. in australia at the moment, the economy is growing areas there are pockets of problem. wagetion is low, and growth is anemic. the economy is taking the good and creating the good time jobs you might want to do, but on the other hand prices are soaring, and the risk of household that's continuing to grow is very much in the rba's mind. betty: but what is driving the increasing concern about these rises? are they just going up to high gap go -- hi? >> as you know, prices have kept startingand they are to come to a head. that is partly why the oh -- a ocd put out there warning about

being unsustainable. betty: what is the government doing about it? >> in melbourne, the government announced new measures to cover it. that includes giving first-time buyers a discount. that should be good for a while, -- economists are wondering if this will fuel it in the future. it is becoming a hot political issue all across australia. haidi: thanks, emily. thes go to a quick check of latest business headlines for you and the promotion of electric cars in china may be down after it is suggested that targets may be overly ambitious. companies are failing to do so, and they will be fined.

betty: china's second-biggest copper refiner expects prices to fall is here on higher u.s. interest rates and political interest in europe. would boost speculation that president trump would spend heavily on infrastructure. plans to boost production about 10% to almost 1.4 million tons. this chinese tech company says it will be all five or 10 years before virtual reality is truly popular. the chairman spoke on the sidelines in beijing, saying it will be sometime before users are completely comfortable with the idea. he also said artificial intelligence will be tied spread -- widespread by 2020, and called for lower taxes and fees across the tech industry. betty: hugh jackman's eight out eighth outing as the

took theaters again. thriller get out second, but no time to watch movies, heidi. haidi: i still haven't caught up with the oscar nominees. we are almost out of time, but betty and yvonne are up next in theybreak asia -- next few hours with daybreak asia. we are going to have some data coming out of australia, right on? -- right? >> we are looking for a rebound for the month, because it was not for what we saw in december, the decline of the 10th of 1%. this is what we did see during

the holiday shopping season, so we are seeing a turnaround here, as much as 4/10 of 1%. but the breakdown last month seems to be that australia -- they were buying food, clothes, but not hitting the restaurants, cafes, or shopping malls. we are looking for a bit of a turnaround on that front. and regulars coming on at 10 past 8:00. interestinga really contrary in view. this man is saying where is the of we can make money next to her it has not happened over a decade. governments do not want to say it for fear of being politically incorrect. >> well, he should say it. we'll have the

vice-chairman of jpmorgan. she is joining us to talk about thetop story, which is target from the npc.

♪ >> china, lowering expectations for growth this year. the emphasis will be on reducing risk. >> the premier delivered an unmistakable message. he is firmly in control. rate rise,fed sheet janet yellen warning there is danger. abe tightens his grip on power and may become the longest serving prime minister in japanese history.