♪ >> stocks are rising as janet yellen confirms the worst kept secret. the fed sees two more hikes this year. plunge, expectations happen for more action through the coming months. >> delivering the verdict on nationalism area -- and nationalism. mark rutte pushing for victory. >> trump's new travel ban is blocked.

they say there is no evidence of wiretapping. >> this is "bloomberg daybreak: asia," i am betty liu in new york where it is just after 7:00 p.m. >> it is just after 7:00 a.m. in hong kong. it is looking to be a dutch election that is pro-europe. all things good in asia this morning. the big news in the last couple minutes has been the judge in hawaii putting trumps travel ban on hold. putting that on hold. at this idea that his travel ban was going to be possibly legal proof. we knew there would still be here and it could be upheld in the courts. is the white house going to appeal this ruling? where does it go from here? what happens at airports? it feels like deja vu all over

again. in the meantime as you mentioned, the fed was the dominant story in the markets. you saw equities and bonds rally immediately after this fed decision. yvonne: yields plunging along with the dollar. let's see how things are playing out in asia right now. we see more than a 1% move lower against the g10 currencies. dollar, risingi 4/10 of 1% from the previous quarter. stocks up 7/10 of 1%. the open of sydney, watch out ba's.hem -- the c the cert -- the aussie surged against the dollar. jobs numbers out in about 90 minutes from now. japan, possibly the biggest loser here today. a more than 1% drop in dollar-yen.

113 against the dollar right now. looks like a headwind for the nikkei. and we contemplate the boj later today. betty: indeed. let's see how this played out on wall street. abigail doolittle standing by. -- buy, buy.ye, >> all of three higher on the session. as fed chair janet yellen did fed isout the idea the there, she used the phrase accommodation. a bit more dovish than what they were expecting. rallied, major averages having the best day in two weeks, then this. we have been talking about complacency and the lack of volatility. plunge 5.5%. two hikes, as opposed to three.

bit more dovish. where we saw a big shift was the bond market. bonds rallied, as well as the 10 year yields, dip in a big way, down 11 basis points. move downst, biggest since september 6 of last year. taking markets by surprise, that did weigh on the bloomberg matrix. a big shift on this fed day for the financial markets on wall street. rally forhin the stocks, what do you see, -- sector-wise? banks of not getting a boost from yields coming down. see things investors that help of their lending activities. we saw banks trade lower.

from a technical perspective, these stocks could drop even more. when we hop into the bloomberg and take a look at this, this is a one year -- excuse me, a two-year chart of the s&p 500 financial sector. we see a strong uptrend with some interruption. average, anmoving indication of moving up in yellow. the bank sector is 20% above that moving day average. you can see a few times it has been well above. on the bottom another indication of momentum. all this suggests we could see the banks traded that lower in the days to come. but we did see some sectors a rally on the rates dropping including real estate, and telecom. those high dividend stocks look more attractive when yields fall.

marketsaction for the today on wall street this wednesday. yvonne: looks like we are about to follow that. abigail doolittle, thank you. let's get to breaking news. president trump's second travel ban has been blocked in a court in hawaii. let's get to our legal reporter joining us on the line this morning. this is the second and another defeat, one of the core tenets of president trump's campaign. what led up to this in hawaii today? >> the day started with a maryland federal judge reviewing complaints by nonprofits the claimed a travel ban was unconstitutional. he rolled on the matter immediately. next up was a hawaii district court where, supported by other that thisargued travel ban is unconstitutional because, in spite of the

revisions to the executive order, there were too many references to religion. president campaign called -- called for a muslim ban and muslim registry. the questions raised by the judge were why he should consider those arguments. the justice department was not able to sway him to ignore it. they did roll to ban the travel ban. betty: nothing yet on trumps twitter about this. can we expect there will be an appeal? i think almost undoubtedly. the irony there is that hawaii is part of the same ninth circuit court of appeals that heard washington's appeal last time around. we know how that went. the court declined to overturn the temporary restraining order a morefact, rolled

formal -- we will leave it at that. at that. the ninth circuit ruled in favor of a ban last time. it will be interesting to see how they weigh in this time. this: thank you so much on latest breaking news about the hawaii judge issuing this ruling to block the travel ban from taking effect. getting back to the markets. the fed raising its key rates by 1/4 percentage points. the only surprise was those who would bet policy makers would have a faster rate of hikes. breaking it down is our global economics and policy editor, kathleen hays. the guidance was a surprise, right? >> exactly. many people figured, they saw the fed going into the beginning of this year having a high fatigue rate in december. they were looking for a hike in

june and a hike in december. that is what people were expecting. but what happened? donald trump got elected. people started talking about animal spirits and small businesses shut up in the united states and consumer confidence rose. the interest rate, 0.25%. clear at an made it press conference after the policy statement, after the meeting, that donald trump was not a major force behind this decision to hike the rate but not move the guidance. emphasize that while some participants have penciled in some fiscal policy changes into their projections, the basis for today's decision is simply our assessment of the progress of the economy against

our long-established goals of the maximum employment and price stability. if you want to see this as a cautious, dovish stance, maybe they did not jump for a rate hike as a majority because they are uncertain about donald trump. one thing the market is sort of sure of, let's look at world interest-rate projections. we have a whole new set of things to be staring at. in the upper left-hand corner hike, 13%e may of a probability. the fed would probably not move without a press conference. june there is a press conference, 50% odds. december, the odds for the next hike are at 34%. not convinced yet, but that is where we stand. in terms of the dots, yes, the fed is seeing en masse, three

rate hikes. but it has gotten bigger. , itleft-hand side you see looks like a spaceship. the line in the middle is now nine dots, it used to be six. 1 you have at least three hikes. seeing four rate hikes this year. you see six hikes in 2018, that is what people are saying. the fed is saying they have metric targets. the fed targets can overshoot or undershoot. she said if it overshot too much the fed would adjust its view of rate hikes. of --ittle more unity with the fed governors, it seems. let's get the first word news with courtney collins. to its higheste

level in more than a month. the prime minister, mark rutte seen as an easy winner in the dutch election. anti-islam over the party in europe. aftering gains in made the earlier fed decision to raise rates. the u.s. government is accusing russia of masterminding the hacking of yahoo!, saying it was part of a broad scheme of cyber crime and intelligence gathering. indicted two russian security agents and hackers, although one person has been arrested. they are accused of a series of attacks, including one at yahoo! that compromise information of hundreds of millions of users. withng doing a -- business kushner's company. it would make them partners in

the tower. it would earn donald trump's son-in-law more than $400 million. anbang said they had no investment in this deal. alibaba has been tracking and blocking japanese products that may be contaminated with radiation. the statement came after they were named on state television. wave, alibaba has taken action against businesses and delete it links to 22,000 suspect products since the nuclear disaster in 2011. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. ♪ looking ahead. a man on a mission. rex tillerson starts his tour of asia. we look ahead to what he will look at in asia. >> next, our rate hikes seen as

certainty. we will talk to the former fed governor. ♪ >> this is daybreak asia, i am

betty liu in new york. >> and i am yvonne man in hong kong. said to be near an agreement to merge its indian operation with cellular. it would create the largest telecom company in an increasingly competitive market. an announcement may come this month. are unlikely as due diligence is yet to be completed. >> toshiba is said to be offering equity and assets as it faces a multimillion dollar losses in america. wednesdayt banks on

and put up property in exchange for a loan extension. the three lenders intend to maintain their backing. >> deutsche bank is weighing the sale of its indian businesses. disposing of assets to boost capital levels. sellingso considering retail operations in european countries, including spain. the ceo announced a strategic overhaul this month. >> let's return to our top story, that fed rate rise. the decision was the worst kept secret and hardly a surprise. markets were caught offguard by policymakers maintaining guidance about the pace of tightening in the coming months. theing us to discuss is former fed governor, professor of the university of chicago business. randy, it is about the rate hikes passed.

i want to show our viewers the chart. there iseresting, now less certainty about when we will get rate hikes and how many. it seemed like a couple days ago we thought three or four. now there is less certainty here. randy: i think the markets were expecting they would take out the word gradual. that is how they have been describing the pace of increases. they left that in. janet yellen made it clear they do not want to move rapidly. surprisedat is was the markets. that is why the dollar weakened. betty: do you think it also ,eans the committee members even though inflation is something they are watching, that they may be willing to tolerate a little bit of an overshot in inflation in order

to allow the economy to continue to recover? a new word they put in was symmetric. they said they wanted to reach their inflation goal and it is asymmetric role. they do not want to be too high above or to hide below. they do not want to say things have been so week before, we will run hot for a while. symmetric,the word it is clear they will not be doing that. betty: what do you think they will hike next? are on a less data-dependent path. willing to signal they would raise rates this week, even before the employment report came out. they are saying we are confident enough about where the economy is going that one data point will not matter.

if the data continue to say the economy is coming back, that they maintain their confidence, june is certainly on the table. betty: i know used say you're not focusing on one data point, but that gdp forecast was the big shocker we saw last week at 1.2%. does that translate still to three rate hikes in 2017? yellen wasandy: asked about that and she said gdp is a noisy measure. you can focus on whatever data you want. but with the confidence numbers up strongly with expectations, there will be more investment and potentially, tax reform that could help to boost productivity and help things move forward, even if the first quarter is a bit weak. you mentioned mentioned, yellen

animal spirits in the market, but no hard evidence of change when it comes to spending decisions among consumers. i want to throw up a chart of consumer confidence. we are back to those prerecession levels. present,e in the outlined in white, still outpacing the confidence in the future in the yellow. what could be the biggest worry among consumers in the long-term? randy: i think there is a lot of optimism about the broad program president trump has put forward with respect to the economy. optimism about tax reform, regulatory reform, bottleneck through infrastructure spending. the key risk is the execution risk. there was a lot the president wants to get done very quickly. key is, what will the president and administration be able to execute on and how quickly will that come through? that is one of the key risks.

there has been talking about winding back on the balance sheet. we did not get a lot of mention in this meeting but we have treasure maturities in 2018. what will the impact be and signal? randy: i think the fed will be reluctant to start reducing the balance sheet before 2018. 2018 conversation or beginning of 2019, they reduce the balance sheet a bit. they are not sure what the consequences will be. everyone remembers the taper tantrum and nobody wants that to happen again. yellen and the fed are focusing on interest rates as an instrument. we will talk about the balance sheet later. they want to get where they are comfortable, the 2% to 3% range before a serious public

discussion on the balance sheet. yvonne: randy, great to have you. former fed governor and professor at a school of business. the chinese tv show hot on the heels of nike. all the brands named and shamed for allegedly consumer abuses. ♪ >> this is daybreak asia, i am

betty liu in new york. >> i am yvonne man in hong kong. andchinese tv show has nike muji in the crosshairs. the name and shame shows say nike falsely advertised it ask a ball shoes. let's bring in rosalind chin for more on this. it is like a bad infomercial. what more do we hear about nike in particular?

>> they accused nike of false advertising. that one issue had zoom when it did- soles not. they said they were not properly confiscated -- compensated. nike came out with a statement in april last year, 300 pairs of its hyperdunk shoes were sold in they inaccurately stated the shoes contained airbags. beensaid the customers had contacted and offered compensation and an apology. we did see nike shares in depth a little bit but they did go to 0.7%. we have not seen the full impact of the show. the government of china is starting an investigation into

it. hugely important the nike, the second-biggest market for nike. sales in china growing hugely, while dropping in the u.s. china is a country nobody wants to be in the crosshairs of. >> what does it say about muji? they were accused of mislabeling products. the fact that some of these came from areas that may have had contamination they say was hidden. bloomberg was unable to contact representatives from muji after hours. the show also targeted e-commerce sites that sold japanese products from radiation-contaminated sites.

people really do watch it with care and the impact it has on the market. >> thank you so much. president trumps ♪

it is 7:30 a.m. thursday morning in hong kong. asia's first major market opened. p.m. wednesday evening in new york where markets close on a very high 8/10 of 1%. i am betty liu in new york. yvonne man in hong kong. you are watching daybreak asia. now to first word news with courtney collins. >> gopro soared in after hours on news of it cutting jobs. there was growing skepticism on wall street that the camera

maker can return to growth and profit. gopro made a second round of cuts. 15% of its workforce was dropped in november. full-yearduce operating expenses to below $500 million. the new zealand dollar fell a for the economy grew less than economists forecasted last quarter. 0.4%, the lowest since 2015. it saw food contracted. a housing boom is helping new zealand's economy. projecting 4%nks growth by mid-2017. also in new zealand, looking to become one of its first associated space, the alliance. they are speaking of a foreign nation bloc that includes mexico, colombia, peru, and chile. new zealand wants quick agreement on a deal.

15 nations from the pacific rim are meeting in chile to discuss trade after president trump pulled the united states out of tpp.tp -- offer 250 million dollars in shares and $750 million in convertible debt to strengthen its balance sheet and reduce any risk associated with the launch of the model three. the proceeds may exceed $1 billion if they fully exercise the option to purchase additional shares. 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. ♪ at howk you, let's look the asian markets are shaping up. the fed did move it -- move rates. >> the fed keeping a gradualist tone.

treasuries advancing while the dollar fell. aussie bond tracking that move in treasury shares, falling eight basis points. oil rallying 1/2 a percent. holding it at $49 a barrel. it dropped for the first time since december. gold steady at the 1200 mark since climbing the most in six months, which brought a relief rally in mining stocks. this is up 1/3 of 1% and new zealand shares up 7/10 of 1%. this is helping miners on wall street. it is playing out in sydney, as well. materials leaving the gate, along with energy stocks. gains movers, leading the in sydney. the rest of the region looks fair. futures,oking at asian

looking broadly higher except for japan. stocks weaken in tokyo as the yen strengthened ahead of the boj policy decision. looking at the function on the terminal we do have the yen coming up less than 1/10 of 1% after getting to 1.2% overnight. stand withpected to a rates, along with new zealand and the u.k. overnight. above 123 of the euro trading near a one-month high following the dutch votes. the aussie holding onto most of its 2% gain overnight following the fed's move. the key we the biggest beneficiary of the fed's decision. of the kiwi extending losses after fourth-quarter gdp missed estimates. on the new zealand front, jobless numbers due in one hour. offshore yuan dropping the most

in two months. breaking below the 50 and 100 day averages as you can see on the chart. >> sophie kamaruddin on the markets. donald trump a second a feat for a travel ban trying to ban from sixr people muslim-majority countries. ramy inocencio has been following this story that broke in the last hour. >> it was a little unexpected because he would say he had it before midnight. but after it ended he cannot with this decision. it appears for the second time in a row, the issues of religion as well as economy are winning arguments in order to push back this travel ban. that is what hawaii's attorney general pushed on, argued on. clearly, they have been successful. what does this do? it pulls back restrictions that would have gone into effect at midnight tonight. one of which, the halting of the u.s. refugee program there.

in addition to that, it prevents no new visas from being issued for six muslim-majority countries for the next 90 days. it was one of three courts in addition to maryland and washington state that were also considering the push back to this travel ban. for hawaii, the nationality issue was one of them. for example, the lawyers argued it was against the establishment clause of the first amendment because it amounted to a muslim ban. at the heart of it, one of the of theffs was the imam muslim hawaiian population. number one, he was muslim. number two, he was prevented from seeing his mother-in-law that lives in syria. he was afraid she would never see him. for one thirdnts of the states economy. there. inocencio it lets get to our top story,

that fed rate hike. janet yellen saw to reassure investors that the rate increase was not to abate fears. guests.us now, our kathleen hays continues with our coverage here. were you surprised by this lack of a hawkish tilt? a little surprising. but when you look into the data they are more confident about their three to four rate hikes forecasted this year than they were in december. that is despite the fact the forecast in this -- is the same. the economy is performing at what the fed. it would. so it can act now on the idea that it will raise rates. -- this is something it failed to do in recent years. we see it come to fruition, in reality. kathleenwitters to

covering the fed conference for us, you raised some issues with janet yellen about, is the economy doing that well? let's dig into the numbers. i know you dug into that with her. you alyssa did this response from yellen. there is noise always in the data from quarter to quarter. but we have to change our view of the outlook. we are on the same path. we have not boosted the outlook, faster growth. we think we are moving along the same course we have been on. to losenk you got her her cool a little bit, which is very hard to do with janet yellen. >> i have a lot of respect for janet yellen as a fed chair and economist. let's go to the answer first. she says the data is out there and can be noisy but we are still forecasting labor markets improve, inflation gets --

closer to target. it speaks directly to the dissent -- descent. why are you worried about inflation? i asked about the gdp tracker. it is not the end result but it is down to 0.8%. if you were janet yellen, how would you answer that? why from december to march does the fed decide it has to move and now we know we will get three rate hikes? >> i think from the fed perspective the economic data they care most about has come into alignment. inflation has moved up, core inflation is stable, suggesting we will converge to what the fed things we will get on a 2% target. the unemployment rate has remained low and wages are accelerating. everything is moving the right way. from the fed perspective they are looking to take their foot

off the accelerator, not hit the brake. there are still people on the sidelines that would not mind joining in on the dance floor. that is important from janet yellen's perspective. she has come to terms with the symmetry of the inflation target. it argues of are allowing for some catch up and undershooting on unemployment. she has made very clear there is only so much as they can do with monetary policy. you can only shoulder the expansion for so long, so much they can do for healing the economy for the microwaves they can do it, monetary policy alone. >> she did it knowledge there are these forces that are holding things back. she'd knowledged -- she did not refute. based on that i want to ask you more specifically. it is one thing to say what the

fed is looking at and she has consensus. janet yellen herself is dovish. as the fed chair she has to represent the bulk of the opinion on the fomc. ? what do you see next is there any chance we get eight -- what do you see next? any chance of another rate hike? >> it depends on how strong the economy shows up, the sustained in wages. we can see wages go up by the end of the year. we are numerically set up for it. inclusiveee more gains as the unemployment rate falls lower. that is the good news. it also means the fed may be forced to raise rates four times. there will be a lot of noise in the data. we just had a winter storm that hit the week they do the employment survey.

it was unseasonably warm in february but this winter storm hit much of the east coast and midwest of the united states at a time it usually does not. it means a lot of payroll jobs will not show up in the employment report. >> what are the chances we could see inflation get out of hand? is that nearly nil? >> the fed is willing to run things hot, 2.25% for a period of time. they have to let us know their parameters. but certainly not 2.5% or 3%. , in that sense. within a year we will have a completely different face for the fed. we do not know who will replace people on the fed. we will see a new budget tomorrow from the president in terms of what they want. they are not realistic. at the end of the day, most

people and most economists are very concerned about the dovish-inducing side of proposals come out of the administration of this side of the game. and they want to appoint people more dovish then hawkish. why would they do that if they want to run up debt? it is not the best outcome for the economy. it is something we are worried about. >> great to talk with you, as always. up next, we will be unpacking theonite's results with ceo. ♪ ♪

>> this is daybreak asia, i am betty liu in new york. man in hong kong.

it is in the bad for samsonite. the world largest luggage maker had an income statement at $225 million, which is 22% more than the highest estimate among the analysts. ceo,ng us in studio is the ramesh tainwala. it is a very good set of numbers but i want to break it down by region. take a look at your sales in the past three semiannual reports. asia and north america have seen declines. what is the strategy behind this? these regions account for 70% of your revenue. will it be enough? >> i do not think it will make a big difference. otherwise with samsonite come up we were missing it. at 2018 team growth. -- brand hase band

a presence in north america. asia is the one to watch out for. why do you think we are seeing behaviors changing? is it that we are seeing different trends in part of the region? >> one thing that is changing is the elements. we see e-commerce gaining at the cost of more traditional outlets like the shopping mall. it has some impact on our numbers. how you could reach your topline growth. but what determines if this deal can have real synergy and be the big driver in growth? what will you be looking at the most in meeting the goal of doubling your sales? it has a very small footprint in europe and asia.

one key objective moving forward is to make it strong in europe and asia as it is in north america. number two, we can bring the two brands together, thereby have more growth surges. they will have a significant impact on our top line. >> you talked about integrating samsung technology and have products that are more lightweight. are there any in the mix this year to be launched? >> absolutely. we hope to launch the first collection, using samsonite with technology. >> customized for the asian region as well. >> yes. and the brand tumi should be in quarter four this year. that will make a difference to our business tumi, in asia. >> i want to follow on that about your business.

you mentioned you make a good percentage of your sales here in the u.s.. are you looking at producing more here, and in what capacity? >> we have been working on a project a couple years back to explore the technologies and meanwhile have change. the last couple years back we decided to increase our oil manufacturing in europe. to the extent that as i speak to you now, 1.7 percent are made in europe. that, we started to challenge ourselves. does it make sense to do manufacturing in the u.s.? it has nothing to do with the new presidential policies because manufacturing is about to scale back the next 10 years.

a long game.ly is but if you were to do something like that, what you want to do it now with a president pressuring companies to move their operations to the u.s.? i would not say it is because of the policy movement. at this stage we have completed an internal study that shows a could be interesting for us to do manufacturing in america. we are looking at cost of goods in america versus cost of goods if we're reducing elsewhere. the number looks like with a new technologies in place we can do manufacturing in the u.s., which brings us closer to the market, and be able to respond to the market faster.

we have decided to engage an external agency to validate our internal numbers. we do intend to pursue this further. >> sounds like we will be waiting for some news, possibly. thank you so much, ramesh tainwala, samsonite ceo. all theget a roundup of stories you need to know to get your day going in today's edition of daybreak. primers --g is the subscribers can go to the terminal. it is also available on the mobile. you can customize settings to get news about what you care about. ♪ >> president trump's latest

travel ban hit a roadblock. a judge in hawaii lock the decision that will be appealed

by the white house. we are joined on the line by attorney general. thank you so much for joining us. we know that in your case, you --ed tourism, the economic the economy in hawaii as a reason why this ban should be rejected. what proof do you have that this could hurt the economy in hawaii? >> we are ready had diminishing tourism numbers that were taking place as a result of the executive order, where we were year,o compare, year to 2016 versus 2017 visitor arrivals from the middle east and africa. today's decision by the judge focused more on discrimination, according to religion. and so it looks like, and

looking at this more closely, his ruling is a little different from what occurred in the washington state case where they were rolling on the process. there is no ruling on the establishment clause, not discriminating against someone on those grounds. >> what happens next? this ruling has come down. we have not heard yet from the white house, there has been no statement, no tweets from a president trump read what happens next? we are anticipating just about anything. but it is possible the u.s. government could seek an emergency stay of the ruling in order to appeal to the home circuit. that would go in front of the judge to decide whether to do something like that. i guess the next possible move for the u.s. would be to appeal

to the ninth district. >> attorney general, this is yvonne in hong kong. this is the second setback we have seen for president trump. one of the core tenants -- tenets of his campaign. our things already unraveling for the administration? happening, ast is the judge was observing, statements, ip's am paraphrasing, this is coming back to haunt him. having realized some of the things he said on the campaign trail when he tried to get into office and issued an order, those hang around with him. out incourt pointed their ruling today, even if you try to mask it in neutral language, the court is not going

to ignore the fact there was a lot of motivation and religious animosity behind it, and it is unconstitutional. >> do you think the administration and president trump will appeal this and take it all the way? >> there is definitely the possibility. we are anticipating they could appeal this to the ninth circuit. and depending how the ninth circuit rules, either side could have the option to appeal it all the way up to the supreme court. your prediction may well come true. >> attorney general douglas chin of hawaii, joining us iphone to talk more about this decision by the federal courts. plenty more to come. not just about the travel order, we have news about the fed and the boj. lots going on this morning. >> indeed. as you mentioned, we're watching

the markets closely in reaction to the fed decision.

>> asia-pacific markets are set to follow wall street higher after the s&p 500 jumped the most in two weeks. stocks rise as janet yellen confirms the worst kept secret that the fed still needs to more hikes this year. back on the president, trump's new travel ban is a block and lawmakers say there is no evidence of wiretapping. is the second hour of daybreak asia. live from asian headquarters, it is just after 8:00 a.m. and a

busy morning for us here in asia. and aon to a dovish fed dutch election. looking to be more pro-europe. not to mention this travel band that has been on hold, kept on hawaii federal judge. not the only game in town, the s&p into turkish central bank. these markets are open. for markets. ahead what they wanted from the fed with the gradualist approach. asian stocks at to follow wall street higher. we do have the cost be up over 1% after falling on wednesday. the nikkei 225 lower. yen, it falls.g the dollar falling the most since july after the fomc decision, asian currencies could be playing catch-up.

the events in treasuries and gold steady here after climbing the most in six months. in sydney, it is up .4%. and oil extending, up above the level. the first timeor since december. we are seeing oil producers now leave on the nikkei 225. energy up about .5%. yesterday, they were the leading decliners. take a look at what is going on with currencies. we have the yen a softer touch after advancing 1.2% overnight as japan expected to stand pat on rates today. offshore treading water below the handle, slightly weaker than the daily fixing. it did break below the 100 day moving average. i just wanted to end on this.

the editors, they are seeing them prepare for a break. the momentum seemingly on their side. the aussie holding on to most of its 2% gain after the fed move. we could see the ever volatile australian jobs report out at the bottom of the hour. the aussie one of the biggest beneficiaries. looking all things good for asia here after all of these expected the fed rates signaling more vigilance as it approaches 2%. the only surprise, the policymakers signaled a faster pace of hike. editor us is the policy at the press conference with the chair.

the guidance was a bit of a surprise. >> it certainly was, for anybody in particular who thought the fed would be picking up the pace of price hiking. they had to move twice this year. in june and december, they suddenly could start signaling the march hike. that was the first surprise. they are getting is geared up for a faster pace of rate hikes. 0.75% to 1% was taken in stride. meeting improving and the objectives for the economy. that all supported it. thatimportant to point out at least once during the press conference, it was not really predicated on any hopes or expectations that donald might read about the economy with his fiscal spending plan. do want to emphasize that

while some participants have in some fiscal policy changes into their projections, the basis for today's decision is simply our assessment of the progress of the economy against our long-established goals and of maximum employment. >> let's take a look where it has rolled interest-rate projections. of the upper left-hand side your screen as we look at over the next six meetings or so. june 14 is where you see the odds down to 50%. to devour lot of data and i just between now and then. the marketsr day are looking at is december. but we don't have odds anywhere near 50% yet. that is way too far out in the future. the fed did say in janet yellen

did say that we are on a gradual rate hike path and we intend to stay there. the fed also released its new summer of economic projections. they barely changed in terms of unemployment, gdp, and inflation. if you go to the far left side, you see that first shape. it's a very long line. three rate hikes for 2017. it used to be six. if you add the five above that, there are so many expecting that many. consensus now is for three hikes in 2018. that is what the dots are telling us. onjust spoke to diane bloomberg television and she said that she thinks the four rate hikes are possible this year. as janet yellen said earlier at the press conference. but if the economy continues to

pick up strength, it could actually happen. make -- markets are down and they will wait to see if actual numbers are materializing. finding out what donald trump can or can't do before they change their minds about what is next for the fed. >> the former fed governor said the market is a bit surprised. kathleen hays, thank you. let's get to first word news with paul allen in sydney. euro rise to its highest level in more than a month. seen as an easy winner in the dutch election. his victory over the anti-islam party brought concerns over the rise of right-wing nationalism in europe. the euro headed for its biggest advance, extending the gains made after the earlier fed .ecision to raise rates aing russia of masterminding

broad scheme of cyber and intelligence gathering. authorities have indicted to russian security agents and a pair of hackers. only one person has been arrested. one at yahoo! has compromised the information of millions of users. has denied aance deal with a manhattan office. numbered news reported monday that it would have made kushner partners in the deal. than $400 firm more million. the enough says they have no investment in this deal. blocking japanese products that may be contaminated with radiation. the statement came after the company was named in china's annual consumer rights on state television. they have taken action against

more than 4000 businesses and deleted links to 22,000 products since the fukushima nuclear disaster in 2011. global news powered by more than 2600 journalists and analysts. i'm paul allen. this is bloomberg. yvonne: let's get our other big story of the day. president trump us travel ban has been blocked by a federal judge in hawaii and it marks the second time one of his prominent campaign platforms has been defeated. honolulu androm covering this ruling for us. talk about how big of a setback this is for us. >> this is the second time to have tried to deliver on one of the president's core campaign promises. without it, i don't know

what they have up their sleeves to ensure security as for the evidence and intelligence they have. it is certainly a threat both politically and personally. was there anything different or anything we heard from the federal judge that led to this decision? and how this was different over the previous initial order that we got? >> the arguments today were far on thecused constitutionality of the executive order. the first go around, the seattle district judge and the ninth circuit looked at issues of religious discrimination and , whetherto file suit nationalities.of

and whether refugees have standing to file suit. it would strike to the core of some of the countries oldest. though the court has cut to the core of the policy rather than simply looking at the emergency. we were just speaking with the attorney general of hawaii and he said he does expect it is possible that it may appeal this ruling right now. they are prepared to do any kind of response if that happens. how likely do you think we could get that kind of response from president trump? indicator,ry is any there will almost undoubtedly be an appeal to the ninth circuit. hass a policy the president

carried very close to him. sure it will be the end of the fight right now. where the appeal will be noteworthy. last time around, it was the court that ultimately killed the original travel ban. court where supreme a ruling gets right now. yvonne: always great to have your perspective on this on the line from honolulu. still ahead, touchdown in tokyo as secretary of state rex tillerson arrives. they look at the agenda later on in the show. perspective is a bunch of central banks. ett joinss adrian mow

us next. this is bloomberg. ♪

yvonne: this is daybreak asia. in hong kong, the latest headlines. they said to be offering equity for collateral and financial support. the billion-dollar losses in america. up stockday, putting and property in return for loan extensions through april. also, three mainlanders plan to maintain their backing separately. she but will offer student shares as collateral. opponents said to be near an with ideato merge cellular. a deal would create the largest telecom company in an increasingly competitive market. announcement may come this month. full details are unlikely is due diligence is yet to be completed.

country's number two and three operators. sources say that deutsche bank and retail businesses as the lender considers disposing of assets to help boost capital levels. selling considering retail operations in european countries including spain. the ceo announced the strategic overhaul earlier this month. they hold more than $10 billion in assets. reacting,how asia is keeping their forecast unchanged. to positivityg here in asia. the cost be leading the gains up close to 1%. that dollar-yen, we saw more than a 1% move. it is weighing on the nikkei today at 19,504.

we saw this bump in adr's aspect decision. let's get some reaction now to the fed. and bring in adrian here. talk about the wider impact, the chief market strategist at jpmorgan. i want to talk about e.m. in particular. you talked about how history suggests that it doesn't have much impact on e.m. it in yellow there. two more this year, possibly, does it change the trajectory? think the key thing to think about his interest rate is a symptom rather than a driver. the fed is increasing rates because they are confident in the economy and they feel that they can normalize rates. it's a good signal for buying

equities. we have the higher growth equity asset class. if you go back to 2004 to 2006, it was moving from 1%. much more rapid move then we are seeing in the current cycle. was coincidental with strong performance in emerging markets. and also generally in risk assets. yvonne: you also see some of this cracking, right? the yield curves are flattening as well. right now?ts course >> the best part of the inflation trade has. you go from deflation to positive inflation. months of inflation that

comes to an end in september. because of the base effect, it will moderate. differential.nd it tends to be when you lose the biggest driver of that particular trade. for me, the trade is looking at the specific earnings growth story coming through. also looking at stories on free cash flows. a lot of the old economy. it means the remaining cash flow is up. it will be good. this is incredible. yvonne: of course, with this immediate reaction, it comes to

treasuries. when the dust settles, you see this dollar going. >> we have a different view. it the consensus for the euro or yen, we have the dxy at 94.3. it is around 103. the euro at 115. have 99. we think the main driver for currency is not the fed. it is well discussed and understood. and we do expect a lot of speculation on tapering. .e might see some modification that is what surprises the market and causes those

currencies to strengthen. one of the big fears people have is dollar strength. future, webe in the talk about some kind of self tapering. will not be hitting those annual targets this year. >> the bond buying is somewhat reflexive. we think it will guide at some point. we think about the second half guiding a slightly higher 10 year bond yield. nothing amazing. thehink this could be surprise. the other way it works and markets as we begin to talk about it a bit more and speculate on it. the markets will try to discount it before the actual event. how does this affect --itioning when it comes to

also a lot of protectionist fears in this part of the region as well. >> the protectionist fears are interesting in terms of strategy. we took the view that trade disputes were underpriced. it was much last on trade disputes and the feeling that the trump administration will get bogged down relatively early. some of the other factors like s on immigration in other countries. when we get around to some sort of tax reform, that adjustment comes in. you can actually bring down the tax at the corporate level. we are worried about tariffs. got three risk premiums moving in its favor. everyone is worried.

what about the challenge of opening up the bond markets? >> i think that will be attractive. you have a premium bond yield. with the fears that they moderate, you will see some capital flows in that direction. i think there is also a signal that they are less anxious about the currency if they are willing to do this type of opening up. yvonne: always great to have you from jpmorgan, chief agent and emerging markets strategist. nike on notice. the consumer rights tv show accuses the sportswear giant of false advertising. this is what they are talking about here. this is bloomberg. ♪

yvonne: this is daybreak asia.

china's annual consumer rights tv show has put nike and moody in the crosshairs. nike have falsely advertised its basketball shoes. we have more on this now. we know the show attracts plenty of eyeballs. it really did put nike in the hot seat. we have seen what you might call results in the past from other companies, but yes. , in conjunction with consumer rights day. the accused nike, saying that some of their shoes had their souls and they complained to nike about this but they have not compensated the customer. of the segment from nike saying that it will fully cooperate with regulators.

300 pairs of the 2008 was sold in china that in accurately stated the shoes contained airbags. nike offered compensation with apology. yvonne: very interesting as well that they targeted muji and all this. mislabeling. saying that the food it not reveal that they may have come from areas that had been exposed to radioactive contamination. bloomberg were unable to make contact with representatives from the company. they sold products from radiated areas as well. it includes alibaba in the past. 1.4 million potential consumers there.

in china, it is a very important market. comee: plenty of more to here on daybreak asia. it will bring those job numbers after the short break. this is bloomberg. ♪ ways wins.

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xfinity. the future of awesome. yvonne: it pretty rainy day out there in sydney. taking a live look of the iconic sydney opera house. nine minutes into the trading day at sydney. up .4%. we got some breaking news. i strut your releasing its latest jobs data. and yet another interesting set of data. wild one. another right up to 5.9%. we were expecting it steady of 5.7%. a big jump. let's look at the numbers. employment change's 6400 jobs lost. was for a gain

of 16,000 jobs. a big reversal there. full-time employment, 27,100 jobs created reversing a loss of 44,800 jobs in january. part-time employment 33.5 thousand jobs. numbers in of wild the unemployment data. i'm sort of reading these slowly because they are rather difficult to believe. normalticipation rate is and held steady at 64.6%. falling, maybear currency traders a not quite sure about the credibility. another wild swing. 5.9%. >> you wonder why they keep bringing these numbers. it seems what they got right

this time is unemployment at 6.8%. the aussie dollar as well. >> we did see a drop below the semi. we are seeing it kind of shutter there. perhaps not picking up despite the aussie being a big fed'sciary following the gradualist tone about the rate hike half this year. , given thea look fomc's decision. given the fomc stent, it is -- jpmorgan saying the focuses back on the 1225 to 1116 support. it rising to the strongest level in five weeks. strengthening the most since january.

we do have miners in energy stocks with gains in the region. have stocks in focus today with the likes of rio. i hope i'm saying that right here. the stock has fallen today, following the cctv report that takes place on wednesday. the stock falling about 3%, one of the biggest laggards in the region. this is the operator of the muji chain looking to expand outlook overseas. in japan, the following support. some other team movers today. iron or miners with the biggest gainers and age are -- in asia. tracking the rise in iron ore prices. yvonne: let's go to first word

news with rosalind chin. : cutting more jobs, the decision comes in the face of growth. they can return to growth and profit. 270 jobs will go in the second round of cuts. 15% of the workforce was chopped in november. the latest cuts reducing operating expenses to below $500 million. economy grew last quarter. gdp expanded from the previous quarter. farm production and food manufacturing contracted, a record low borrowing costs at new zealand's economy. the central bank projecting 4% growth by mid-2017. thes looking to become associated states. trade talks with a four nation

bloc. new zealand wants quick agreement on a deal. 15 nations from the pacific rim are meeting in chile to discuss trade after president trump told the u.s. out of the tpp. than $1 billion to grow from a niche player to a high-volume manufacturer. it will offer $250 million in shares and 750 million dollars in convertible debt to strengthen the balance sheet and reduce any risk associated that belonged to the model three. if underwriters fully exercise the option to purchase additional shares. and the little-known chinese group is said to have lost the backing of its state owned partner. it is in a bid that steps up criticism. takeover discussions continue.

over $300e worth million. global news 24 hours a day. chin, this is bloomberg. drop --president trump's second feet -- second defeat. a judge in hawaii blocking his latest travel ban that will not go into effect on thursday as land. ,peaking in nashville interesting statements coming out from the president. the judge blocking this new version of the travel ban. he says this ruling makes us look weak and we got to continue with the first one. really a surprise for the second defeat. the critics have been lambasting him. it amounts to a muslim ban as

opposed to a national security initiative that was the reason, the arguments at the white house as well as the federal government was arguing that this should in fact become law of the land. let's talk about what this means. the refugee program will stay in existence. it will not be halted for six months according to what mr. trump had wanted to do. the 90 day travel ban on these is will continue at least for now for the six muslim majority countries. in addition to that, we take a look at how the state of hawaii won this for the second time in a row for all these critics. it is more so nationality and economy versus the national security argument here. echo of the an first when they argued for the pushing back against the first travel ban.

they said it violated the first amendment. muslim ban.t was a of the muslimm association of hawaii. they argued for the fact that hawaii relies on tourism for a huge part of its economy. a third of its economy. they say this also adversely affect that. you as well as betty liu actually spoke with the attorney general who argued this in court. let's listen to him as opposed to what going to be next. >> it is possible the u.s. it withnt could see that ruling. rules the ninth circuit on either side, we have the option to take it to the u.s.

supreme court. >> he said it was donald trump's ghost of campaign past coming back to haunt him. thattually cited 12 times donald trump said that he wanted to instill and muslim ban. ignore court will not the fact of religious animus and the bottom line is that it is unconstitutional. yvonne: we will get the latest headlines from the president. the one thing he mentioned about this ruling is that he will take the case to the supreme court if necessary. he said that we will fight this terrible ruling. also talking a bit about tax reform here. you want to talk taxes and when it comes to health care, we will repeal and replace obamacare. we want americans to purchase health plans that they want.

, wehealth care legislation are going to get something done, he says. and all get together. clan, givinghis them greater flexibility. the are going to work on bringing down the cost of medicine. coming out from the president, we see these lines coming out in nashville. story, knows of prizes from the fed decision to hike rates. but what did we learn from chair janet yellen's comments after the meeting? bill gross joined us on bloomberg television and said that one thing was clear about yellen's stance. >> we learned that janet yellen is the perpetual doves, i suppose. even when conditions are rather hawkish in terms of full employment and employment growth

, it proceeds in a gradual way. i don't think it's inappropriate . i think it's high leverage in the u.s. economy and the global economy. they have to proceed in a very gradual way. but she is a dove and that is why the markets reacted like they did. coming in this afternoon, i guess that's a good thing, bill. help me here with where we are going. i think there is great confusion about where neutral is. we have a restrictive policy and and our financial repression. which year will we get there? it will take longer than two years which is what the fed has suggested at the end of 2019. they call the neutral rate of interest. zero significantly below for the last five years.

it is 1% or 2%. the question becomes what is the in a world damaged significantly in 2009 and 2010? the fed is proceeding gradually. i think the neutral rate of 2%erest is probably around to 2.5%. the fed suggested 3%. they suggested that it referred to 0% on a longer-term basis which means real interest rates at a 0% level. it is a delicate process. in the central banks have to tread very carefully. >> i wonder because janet yellen stressed that they are looking for a gradual rate, a gradual pace of rate increases. gradual commitment to a

pace coexist with discussions on how to shrink the balance sheet? bill: perhaps. as i have spoken before on your program, scarlet, i don't think the fed will ever reduce it. i think it is all poppycock. basically, it is reflective of the economy were there are $65 trillion worth of credit and reducing it to $1 trillion where it was before. the 65-1 type of level. so the fed and the boj will never reduce their balance sheets. scarlet: there is pressure on the european central bank to do just that. quantitative easing. what will it look like making concrete steps in that direction?

same asat is not the reducing the balance sheet, it is reducing the additions to the balance sheet. it is increasing $80 billion a month, almost $1 trillion a year. i think with the ecb does in terms of tapering, it is the most significant factor. the ecb continues to taper. risk.lly, they are at the competitive comparison between the 10 year bonds, it will probably narrow. jgb inement to treasuries will cease. as far as institutional investing. the ecb holds the key. they are like tapering. it's what we saw on 2013. yvonne: that was bill gross

speaking earlier on bloomberg television. coming up, touchdown in tokyo. rex tillerson arrives in japan. we will look at his agenda coming up next. this is bloomberg. ♪

yvonne: this is daybreak asia. in hong kong. secretary of state rex tillerson in tokyo ahead of talks with prime minister shinzo abe, his japanese counterpart. they are following it for us. good to see you. north korea should top the agenda here but smoothing ties. >> all of the above, as you just mentioned. we are outside the guest house for the ministry of foreign affairs were the talks later this afternoon will be held. maybe we can pan over. rex tillerson arrived late last

night at the airport. and the talks will be later this afternoon. and also shinzo abe, he will be hosting dinner for mr. tillerson later this week. it has been a low profile start. it is a high-profile meeting for mr. tillerson. he has not really spoken to the press. at least from the press community for bringing one journalist on the plane over from washington dc from a fairly conservative publication. they have their chance this afternoon to get a couple of questions and to mr. tillerson. four-way -- for

ay into the economic front. and it will be beijing over the weekend. we did hear from one temple university professor that says north korea is going to be high on the agenda. china will be high on the agenda. but don't forget about the key ally, japan. these are janitorial trends after the statements with -- that the president has made. his total lack of professionalism and his aggressive relationship. things aren't really changing. the u.s. is still in asia, we are a reasonable power. yvonne: as you mentioned, these meetings in tokyo and in seoul have reported that the leg of the trip in beijing -- how

pivotal will that visit be? >> absolutely pivotal. getting china to come on board with the u.s. vision of how to get north korea to rein in its missile and nuclear programs. that will be the key. rex tillerson will be going to seoul tomorrow. there is a huge power vacuum that complicates matters. meeting with the acting president of south korea before heading on to beijing. not happy with the u.s. deployment of the antimissile system in south korea. keep in mind that rex tillerson has very important remarks. there is the prospect of a trade war. of currency manipulation. so much to talk about the next three days. yvonne: stephen engle joining us

live from tokyo there. let's look at the headlines this hour. prosecutors investigate. two of the country's biggest conglomerates. they paid hundreds of millions of dollars to a confidant of the former president to buy favors. they have access to the highest level. guard has been accused of insider trading by the sec. say that toddtors david worked on security for a heinz board member when he received an email spelling of the terms of the company's impending takeover. he called his broker the next day and bought heinz shares, selling his position for a profit of $44,000. wall street bonus pool rose last year to just under $24 billion. the new york state comptroller said the average payout for

$138,000. it was to profit as the sixth largest u.s. bank. more than half a million wall street jobs lost since the financial crisis. and it's been a busy day, a roundup of the stories. hitting your day going on today's edition of daybreak. are you bloomberg subscribers -- it is, go to available on your mobile and phone. you can customize settings and also get news that you care about. to come on daybreak asia. this is bloomberg. ♪

yvonne: this is daybreak asia. record profit last quarter, and it translates to nice pay raises for staff. the annual spring wage talks between management and unions has just wrapped up. he will look at the important points with chris cooper joining us live from tokyo. chris, good to see you. i feel like we have been around this block before. companies paying smaller wage hikes this year? chris: the annual wage talks in call ithe shinto as we here.

the spring offensive. one thing to remember, it is back with looking. what happened to the currency last year. what happened was, japan had deflation. in all but one month last year. it isn't any inflation to account for here. the wage increases down from last year. but it is still positive. the other thing is the yen last surged close to ¥100 per dollar. and that is all going to be accounted for in this fiscal earnings which and march 31 this month. based on this time. all right, so it could be a bit dated, but how will this affect consumer spending overall? chris: japan a strike to boost its economy and open up their

purses and wallets more. this isn't going to do it. the raise is about ¥1000 a month. so for consumers, it is going to be a tough year. yvonne: chris cooper. always good to have you. joining us live from tokyo. a quick look at what is coming up over the next few hours. markets reacted quite positively. >> it was perhaps the most telegraph said decisions we have had in recent memory. 25 basis points playing out today. when it comes to the open right here over in about 33 minutes from now. [indiscernible] what does it mean for them if we

have a more gradual part of increasing or tightening world? does it mean that corporate's can be safe from issuing more money? yvonne: he also got some interesting guests, alan joyce joining us. >> what a turnaround story. it looks like a basket phase. this is going upwards and upwards as well. in about 40 minutes time. qantas goeshere next. and we have ubs director of -- in the commodity sphere. that is when gordon from ubs world financial. yvonne: markets asia coming up next. this is bloomberg. ♪

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