♪ >> today, the government acts on the democratic will of the on the cleare, and and convincing position of this house. >> no going back. theresa may says the u.k. is taking control of its future and pitches for a friendly divorce. a sixth heading for straight quarterly game, the dollar and sterling fell. >> pick up the pace, the boston

fed president wants faster tightening. saying there should be four hikes this year. >> toshiba sees losses doubling to more than $9 million as westinghouse filed for chapter 11. we have world coverage on daybreak asia, live in new york, hong kong, and the singapore for all the market reaction and implications of brexit. >> and we will also be in tokyo to talk about toshiba and its westinghouse unit which filed for bankruptcy. it is now up to others to pick up the pieces. this is daybreak asia live from bloomberg's u.s. and asian headquarters. this is betty liu in new york. 7:00 a.m. in after hong kong. this is yvonne man. brexit has just begun. betty: some are saying maybe the beginning of this is priced into the markets, which is why you did not see it.

a lot of movement here. around been throwing these words, an amicable divorce, a friendly divorce. is there ever a divorce that is that friendly? i think it will get pretty ugly. yvonne: it could be dragged out as well, the two years they have been forecasting. let's see how markets in the asia-pacific will be waking up to the big divorce. new zealand pretty slow going for most of the region. cents.i at 70 u.s. the biggest move out of wall street was oil overnight, nearing $50. the open at sydney pretty slow going. the only currency that saw gains overnight. to japan, or hacks saw support for the dollar-yen above 110, -- 111 now.now

on day one of this brexit brexit before. theresa may has struck a conciliatory tone. the primeolutely, minister theresa may saying she wants a friendly split from europe, striking that conciliatory tone after she launched brexit. however she also wants a sweeping free trade agreement including financial services. is this divorce going to be amicable or are things going to turn ugly? policy editor kathleen hays here with more. now but thisight will be at most a two-year process? kathleen: at most. some say it could take three or five years or longer. divorces, those who will do well are the lawyers. saidsa may's brexit letter

she wants a special relationship with the european union. the president of the european commission said, we already miss you, britain. you mayude juncker said regret the choice one day. we just spoke with a professor of economics who is also from the u.k. he said the u.k. will regret it because and a lot of ways it does not make sense. >> essentially what the people want is to have your cake and eat it. to thet all the access markets that you currently have, you do not want to pay the money, and you do not want to have the immigrants. it is like on my golf course. if you pay money you get the play. if you do not pay the money, you do not play. there you go, golf thing and

exiting the e.u. are very much the same. another analogy to divorce, the e.u. is saying to the u.k., we want our divorce settlement before you leave the european union, before we discuss a big trade deal. this is coming up over and over, something that will surely be an early contention. the brexit talks for the e.u. start april 20 9, 1 month after this historic day when the brexit was triggered. talks will hammer out the guidelines. that is another date to be watching. are the dax stacked against theresa may? what are her bargaining chips? >> in this letter she was talking about security, playing the security card. she mentioned the london terror attack. it is a time when more cooperation is needed, not less.

she said security is at risk if involve deal does not the economy and link security to trade. , the head of security, she said the u.k. is contributor to the european police office and they fight organized crime and things like this. that they may take their information with them and the e.u. would not like that. let's look at trade. possibly one of the biggest trips she can play. what you see in this chart is really simple. growing has a large benefit from the u.k. because the u.k. has a large trade deficit. they are buying more stuff from the e.u. then the e.u. is buying from them. that has got to be something that matters. theresa may has set on british

television and the last day or so that the u.k. is a law-abiding nation that will pay its obligation. but what is the bill and what are you charging us for? to becomeent is going louder and more articulate as the u.k. and the e.u. enter into serious brexit talks. >> now she will have a little leverage moving forward. kathleen hays, thank you for joining us live from boston. u.s. stocks head forward on the slowest trading day of the year. let's get to abigail doolittle with the wall street action. did you markets take the brexit trigger, it seemed tame? >> not much of a reaction. it was largely priced in. a mixed and unchanged average. , down and up&p slightly. the tech heavy nasdaq and nasdaq 100 both up.

nasdaq 100 finished at a record high, some strength there. one market you would expect a reaction, not too much of a reaction, the british pound. we have a five day chart that will show a decline. from pete to trough over the past few days, nearly 2% drop. even.day volatility is we have a great chart. when we hop into the bloomberg, this is the bloomberg brexit index. the point here, a lot of green. you see a little red in july of last year. it has been green since then. reaction since the triggering of article 50 through this index another markets we have been watching today. betty: if the markets largely shrugged off brexit, what are

the risks? we saw financials fall. >> relative to the banks we saw banks dragging on the markets today. bank of america, jp morgan, wells fargo, all lower on the day, as yields also fell, reversing yesterday's action down a four basis points. may a haven day, hard to say. oil had tailwinds. more than 2%, better than expected government inventories reported. one reason this could be important as we still see, oil is below $50 a barrel, something that could be psychologically negative but also perhaps a drag on stocks, longer-term. when we had back into the in white we have the s&p 500 year to date. in orange, we have oil. the s&p 500 is down 5%, but oil is down.

relative to the reflation trade, oil is not re-fleeting, it is deflating. will that drag on the s&p 500? if it has momentum beneath it haps it will catch up to the s&p 500. betty: what about the tailwinds from tech? >> lots of big movement from amazon, facebook, alphabet, and apple. record highs for amazon, facebook, and apple. lots of strength of their. -- there. liking amazon the best, the top story out there. this is really on the year, the story when we take a look at a , we see the bloomberg in white on top a chart that comes up. i think we have a little freeze, but the chart shows that tech is the top sector through the nasdaq.

the nasdaq is up in white. on top is the nasdaq 100, up nearly 12% on the year. that s -- s&p 500 up in blue about 5%. and the dow up 4%. relative to the nasdaq for technique, -- tech. the first wordt news with courtney collins. >> first up, the balkans had president said the rate increase at every other meeting in 2017 should be default policies. that would imply rate increases in june, september, and december the follow the one we had two weeks ago. other fed president see two more hikes this year. chair janet yellen supports that consensus. r in one year would be

much less than the last period, coming out of a recession. at that time we were changing at every meeting. relative to that this is much more gradual even if we did it every other meeting. >> china looks to be planning a major energy deal before -- between its largest coal producer and biggest power generators. regulator hasd asked a mining giant to have a merger. it is at an early stage but if the deal goes through it would create a new entity with access to more than $240 billion. arenesia says talks resuming operations at the grasberg copper mine. -- indonesiang to wants producers of semi processed metals to apply for a special mining license, and

intends to have a majority stake in the local unit within two years. s8sung has launched its new smartphone as it looks to win back buyers after the note 7 debacle. it has a host of new features, it is taller with a curve to screen, has increased facial recognition, voice assistants, and can be turned into a desktop computer. in twoaxy s8 comes colors and new sizes. it will be officially released on april 21. 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. still ahead, more on brexit and its implications for asia. we are joined by citigroup's top economist to discuss china's prospects in the u.k. betty: plus, what this means for the company, its customers, and

southern company's and its partnership with westinghouse. ♪ ♪

>> we are counting down to asia's first major market open this morning, as you can see. trading in sydney is already underway. a sign ofat here, what we have seen all day. not a huge amount of reaction to brexit. i am betty liu in new york. yvonne: i am yvonne man in hong kong. let's look at business lash headlines. raising its game in china. while some foreigners are headed for an exit, they are doubling down on chinese bonds as the market opens up and plan to hire more staff. earlier this month, morgan stanley said the inclusion of

bonds and indices may trigger $300 billion of inflows into china's onshore. reports from japan say the owner uniglo may exit the u.s.. saying the move will not be good for american consumers. they're looking at overseas markets that contribute to thirds of its revenue. its annuald production loss could double to $9 billion as its u.s. nuclear unit files for bankruptcy. westinghouse was once the linchpin of toshiba's plan to diversify electronics. it is a disastrous run. it toshiba has put its memory chip business up for sale, just as it was recovering to an accounting scandal. the bankruptcy filing by

westinghouse is a very important step to revive the company. it is also significant for toshiba, as we try to block overseas nuclear business. we are working to announce third-quarter earnings on april 11. let's get more on this story, toshibas unit moving toward dismantling nuclear unit. westinghouse has a contract to build a massive nuclear project for southern company with some saying there may be a $3 billion additional cost to overrun. let's assess the situation with southern company president and ceo. tom, chasing you around the world and now you are there in tokyo. i know you must be dealing with the fallout from this. how will you hold westinghouse accountable? you again, be with

betty. it is a very serious issue. we entered into an agreement with westinghouse many years ago . but importantly, when we signed a contract with westinghouse we insisted on having toshiba at the table. not only do we have financial guarantees directly with the parent toshiba, but also we thought it was important to have their moral commitment. when you start a project well over $15 billion and will take 10 years to build, you know there will be good times in challenging times. we wanted everybody's moral commitment not just when things are good, but when things get challenging, to make sure it is as successful as possible. put it ineresting you those words, the moral commitment. getting back to that question, how do hold them accountable? how much is this going to cost you, this bankruptcy? yet.it is unclear as

what we have just done is enter into a 30 degree -- 30 day agreement for funding at the site. weing this 30 day period will assess what is left in terms of cost and schedule. we are working cooperatively, constructively to get these units done. that is the most important point. we want to make this project successful. when you think about the very successful trip that prime minister abe had with trump, when you think of the partnership established between vice president pence and japan here, one of the three legs of the stools of their cooperative efforts is energy and infrastructure. this is arguably the foundational project they are thinking about. project hasw this been very important to you.

a point whenhere you say given the cost overrun, you abandon this project? the clear indication is we want to complete this project. it is important for america, the citizens of georgia, the world, really, to have america complete its renaissance of nuclear. when you think about all the challenges we face in the world in terms of energy production and how that -- how important that is to the economy just at that plant alone we have 5000 to 6000 people working directly on site. around the site, 30,000 people. think to president trump's commitment to the united states electorate to provide jobs, promote investment and grow the economy. this nuclear project is the greatest example of that in terms of united states and japanese cooperation. we are committed to making the

successful. over the next 30 days we will a value with the data in terms of schedule and cost and make whatever decisions we need to make. to look bet ceo of toshiba in the eye and figure out a constructive way to get the work done. yvonne: thomas, i am yvonne man in hong kong, think you for joining us. completing the project itself, or are you looking for a new partner? tom: no, no. of the two units we are building at the plant, we are the owner of 45.7% of it. we have cooperative utilities in georgia and municipal utilities in georgia as our other partner. we are shoulder to shoulder with them in evaluating these issues and certainly we will make a decision jointly. what about the clean

coal plants? you've been facing troubles there about getting it started up. how confident are you that you will meet that deadline now it has been delayed several times? it has been a challenge starting that up. this is a first of its kind plant. it is important in terms of advancing the interest of coal being used responsibly in america. the technology we are using their reduces the carbon dioxide output by about 65%. therefore, it has less of a carbon footprint and even natural gas. it uses a native mississippi resource that otherwise goes unused. we think this is a real win for mississippi's customers and we will deliver a plant the way we said it would back in 2009 and 2010 when it was planned to be built. it will have the energy profile

we promised. than enjoying the nice weather and great food in japan, who are you meeting with since you are facing that tough decision in tokyo? the primary focus of this visit is to have a face-to-face with the ceo of toshiba. he and i have had a phone call since the change was made. we have a long history of having a very constructive relationship with the people that came before but nowther that was -- i think it is important not to do business through financial advisors are lawyers, but really businessperson to businessperson. to have a real relationship and figure out a way to get this project done constructively. betty: tom, thank you so much. the chairman and ceo of southern company.

he is in tokyo joining us. to get your day going with daybreak. bloomberg subscribers can go to on their terminals. ♪ betty: if there was one chart

that could explain the leverage theresa may has with brexit, it is this one. are dropping,ts those coming into the u.k. but not as fast as you see in the blue bars. clearly they are providing more of an engine to that you economy than they are getting back. that might be something theresa may can use to say, let's make this a friendly divorce. yvonne: and hopefully it goes amicable. it looks like the u.k. wants to have its cake and eat it, too. they want trade talks and to

talk divorce at the same time. the e.u. says, hold up. we have to go through this first live-stream your favorite sport at the airport. binge dvr'd shows while painting your toes. on demand laughs during long bubble baths. tv everywhere is awesome. the all-new xfinity stream app.

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a live look outside this morning, it has been dreary the day after the u.k. triggers brexit. a.m. coal he 38 -- 7:30 here in hong kong. here in newp.m. york. a gorgeous evening. calm.s closed, pretty slightly higher, but some declines in financials despite what we thought would be a rocky day, given brexit. i am betty liu in new york. yvonne: i am yvonne man in hong

kong. you are watching daybreak asia. let's get first word news with courtney collins. is calling for a friendly switch. there is no going back after launching the brexit process. prime minister theresa may's letter to the resident starts at least two years of negotiations that are unprecedented. no other country has decided to leave the block. there is a sweeping free-trade deal with the e.u., encompassing financial services. an historic moment from which there can be no turning back. britain is leaving the european union. we will make our own decisions and our own laws. we are going to take control of the things that matter most to us. and we are going to take this opportunity to build a stronger, fairer britain. a country our children and grandchildren will be proud of. >> japan urged to arm itself

with a long-range offensive methyl -- missiles. a research group says the government should introduce the capabilities to strike abroad, citing the rising threat from north korea. they will look at the proposal later on thursday before reporting to prime minister shinzo abe. phil ackman has apologized for his dealings with valeant pharmaceuticals. he is accepted part of the blame for the drug makers downfall. he said the investment was a huge mistake that cost his firm $4 billion. a surge in amazon share prices, jeff bezos is now the world's second richest person. topping even warren buffett.

he added $1.5 billion to his fortune on monday. $75.6is now worth billion, about $10 billion less than bill gates. 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. betty: back to our top story, brexit and what happens next. let's bring in our bloomberg global economics executive editor, dan maas. earlier today, just the last hour we were talking to danny, who said brexit is like a country writing itself a suicide note. is that a little too extreme? dan: in the run-up to the vote there was a sense there would be an apocalypse.

data, thereat the has not been an apocalypse. if this had been a normal economy, normal environment, interest rates would be on the way up in britain. betty: but that does not look like it will happen anytime soon. forbes voted for an increase. but she is on her way out. if you read the minutes carefully, there are a number of members that could flip. if we go back to that night of brexit, it looked like the boe would be forced into some end they cut the rates just once. what is a reason for why this catastrophe has not played out yet? dan: danny could be right. it could in the end be a suicide note, just no sign of it yet. as we discussed on the show, there is much more going on in the global economy than in the united kingdom.

there is an idea of a global which beganrrative, around september last year when a number of things happened. to deflation started diminish. it also ended a four year decline. the imf forecasts have been consistent. we are in a world of 2% to 3%. britain is not a great empire anymore. there is a limit to how much advancing any one country, even the united states, can disturb that picture. after the brexit vote and the election, some were predicting the end of globalization, at least saying it has peaked. how is that playing out? dan: it may be the beginning of the end of the multilateral trade version of globalization,

but that does not mean globalization is coming to an end. we are here in new york, you are in hong kong, there are people watching us and hotels, some of them owned by international chains, at their homes, on their commute, and customers can still and $1s button, enter, billion can fly around the world just like that. so global supply chains are entrenched and finely tuned they stretch across continents. disrupting them is not easy and probably would be economically painful. look at the mexican peso, it has done well this year. there is a perception that despite the rhetoric of the campaign, the only protectionist measure they have taken is withdrawing tpp, which is the walking dead anyway. they have not dismantled nafta. mexico is saying, get on with it. betty: that is true. it is interesting because despite these claims of

globalization, are these calls the global growth will slow, are they too premature? dan: there is no indication in the data that we are at the beginning of a big or small global slowdown. if anything, the data are strengthening. the sentiment is running ahead of the hard-core data. there is a sense of the global economy, something happened in the second half of last year and we are past the worst and on our way up. betty: before we go i have to ask you about the fed. they are saying we may see four hikes this year, what did you make of that? is an interesting guy. when he was appointed to run the boston fed he was the only one with experience as a banking supervisor. when the process was playing out, he is interesting because he has a record of the sending

both theting on hawkish and dovish side. thisid to ourselves, sounds like the return of a measured pace. 2 2005riod from 2003 that janet yellen us war we would never go back to. we would never go back to. it is a question of who to listen to. some things are more important than others. when i saw that scroll across the terminal i said, that is interesting. betty: i will have to decipher more after this. when dan maas says that is interesting, i want to know what i should do after that. thank you so much. let's take a look at how asian markets are shaping up. david has more. pick up on what you

are mentioning, this will be interesting in asia. one data point, hong kong sales are out. green, your charting retail sales of falling for about two years. chinese gdp growth playing hardball. there is 7% growth. one aspect that want to bring up when it comes to the brexit talk, where are these people going? they went to japan, south korea. that is one thing and how it all plays into properties, london properties. a cautious start to the trading session. you get a bid when it comes to aussie energy trades. but the other side of the spectrum you see utilities in australia. of 1%, australia is dead flat. flat across majors at the

moment. if you compare the levels right now to yesterday, the dollar is on the front foot when you compare it. have a look at the bloomberg dollar index. oil had a big pop overnight. you are seeing what we saw in australia. this is the latest trade overnight. concerned,onds are not a lot of movement. it yields are on the way back. where are we were the rally is concerned? let's zoom out. that was my mistake. look at where we are, 2007 just eight points short. if we do manage to get above that it takes you back to the following the global financial crisis.

it has gone up and up very quickly. japan declines. yvonne: we will check how samsung shares trade as well. the company trying to put the fiasco behind it and take the fight back to apple with its new smartphone called the s8, it features a new idea. good evening. we saw some of these new features on the screen. bixby has been big. can this one phone turn it around for samsung? >> very high-stakes on this one phone. it is a very good first step in the right direction for samsung. it has a lot of new features and is likely to do very well with consumers. whether or not it can turn around the company's wider problems in the long term that is a different question. they have structural issues such

as a slowing iphone market. they have apple on its tail and the new end incoming players. we saw in the recent quarter for the first time in four years, samsung's market share fell below 20%. they have other headwinds as well. yvonne: we saw the run-up to the s7 was positive. what is the consumer reaction for this phone? >> i spoke to the company's ceo before this and described this phone as beautiful, one consumers would like. it is attractive with a sleek design, curved sides facial recognition, voice control, and ability to turn into a desktop computer as well. it is a strong first phone. whether it can stack up to apple, that remains to be seen. yvonne: i want to pause for a moment. ,ou are talking about samsung

let's bring up this live shot outside the residence before she attends a questioning session that will be determining whether or not to arrest her on those corruption charges. we know samsung is tied into all darkis, it has cast a cloud over the company and the country. addressed.t directly has that affected the company at all? >> it is interesting because when you talk about -- to analysts, from a consumer perspective, no. streetrage joe down the in new york does not know about corruption scandals and this corporate overhang. they do not know about jay y. lee, the fact that he is arrested and has been in jail. that does not affect consumer mindset. last quarter they did quite well, in many of their

businesses aside from the smartphone. it was a horrible the back away happened last year, but business has been pretty robust. they went on with their business. thank you. much more ahead, citigroup saying chinese investment into nowu.k. will now increase that brexit has officially started. we will hear from the bank's chief china economist. ♪ betty: this is daybreak asia, i

am betty liu in new york area the -- new york. yvonne: now that britain has begun the process of leaving that you, is a re-trade deal between the two countries more likely? we have the chief china economist at citigroup joining us on set. great to have you.

wereis interesting, we talking about that you and u.k. and the negotiations when it comes to trade. chart.to throw up a even then we do see you have a substantial trade deficit with china, even bigger than that you -- the e.u.. is that more leverage for theresa may or are they at an economic loss? >> its leverage on china would be yes because china is a big market for the u.k. have seen a lot of tourists and students going to the u.k. using a lot ofen services in china. china runs substantial trade surplus on the service trade side, the u.k. could run

substantial trade surplus. need forwith the capital inflow into the u.k., perhaps that is less leverage for the u.k. to talk about the trading balances with china. yvonne: the prime minister says that she wants to talk trade in the midst of this negotiation process with the e.u. by the e.u. says no, we have to talk about this process first and for the bill. does this hold for the next two years? nobody knows at this point. >> it could slow the free trade discussion between the u.k. and china. we know china would like to have a free grade at -- free trade agreement with the e.u. it it is very difficult,

will take more than the short-term to decide. until theve to wait u.k.'s divorce with the e.u. is done. betty: i want to bring up a chart that shows the short position of the british currency, the pound. they have been building up end up -- up and up. that is putting pressure on the currency. continues to it fall, does that make the u.k. more attractive to chinese investors? are they sniffing around more for investments there? >> i think this could be a good of chinese for a lot residents who like to go to the u.k. to purchase properties. we also know that chinese big foreignere is a body of students in the u.k..

they could be another opportunity. more chinese students could go to the u.k., and in addition, ists plus chinese investments like high-tech investments. detty: could you see more m an a activity? more mergers and acquisitions because of the pound? private firmse will continue to look for opportunities in the u.k. under this guidance this year, ,hey could be more cautious especially mature markets. over the longer-term, we do think the u.k. will be a favorite market for chinese investment. yvonne: what does this mean for

the yuan? britain was seen as the linchpin for the renminbi. now that they have divorced from they couldotentially be losing the status of a global financial hub. what does this mean for the renminbi's plan? does it take a backseat now? >> the authorities do recognize the u.k. could be the linchpin for renminbi's under nationalization -- internationalization. i would thing that hong kong and singapore's role will be enhanced. this could also depend on what kind of tax policy the e.u. departure the u.k. would like to adopt.

i am sure the u.k.'s financial law will be strengthened rather than diminished. yvonne: great to have you. the citigroup chief economist joining us from china. we will have a follow-up to article 50 throughout the day here on bloomberg television. next hourned in the to look at the reaction among currencies. bloomberger on markets asia we will assess london status at a financial center with mark mcfarland. ♪ is daybreak asia, i

am yvonne man in hong kong. betty: i am betty lou in new york. over to washington, round to go

with russia and the repeal of the affordable care act. ramy inocencio has more on this. first let's start with russia. it does not seem like this is going away at any point. >> at the intelligence committee they are saying hold on, it will go on for a very long time. it is interesting, the juxtaposition between the house intelligence committee. we have seen the drama there. smiles congeniality and from the senate intelligence committee chairman and vice chair, the top ranking republican and democrat there. they have an agenda. they have 20 people they want to interview. five have been scheduled, 15 others are going to be scheduled over the next 10 days. let's look at the main people we know will be on the list as well as some people we expect to be on the list. jared kushner is one of them. he has already said he will testify, that came up on monday.

he is mr. trump's son-in-law. he is in focus because he was a main contact between kislyak. the campaignfort, manager the white house is trying to distance itself from. he has agreed to testify. roger stone and political operatives as well as a policy advisor are potentially on the list. that does include the fbi director james comey. we are expecting him to come out at some point because he is already come out on capitol hill talking about this. yvonne: and the come back of the affordable care act we have learned today has a lot of us scratching our heads. can that much had changed in a week? >> the short answer is no. we do not know what has changed on this. two are public and congressmen have said the vote could come up

as early as next week, potentially over the weekend. they have to take a look. they are talking about a form of compromise between the house freedom caucus, those are the conservative republicans in the moderates. the onesservatives are that actually stopped the first revision and reveal -- repeal. yvonne: we will see you next week. thank you, from new york. more to come with daybreak asia. markets, japan and south korea about to open in a matter of minutes. betty: we will be watching samsung shares at the open. stephen engle a's is going to tell us what is going on there. smartphone, will it be enough to make up for past sins? it will be taller with curves and facial recognition, ironic given south korea is the epicenter of plastic surgery. it looks like we will be down a

3% to 5%. posted at 1400. a lot to talk about.

yvonne: does she received losses don't link to almost $9 million. chapterouse files for 11 protection. betty: theresa may says the uk's taking control of its future. yvonne: take up the pace.

the boston fed president says there should be faster tightening and for hikes this year. o may go.iql they say they may quit america if president trump insists on local production. yvonne: this is the second hour of "daybreak asia." i am yvonne man in hong kong. betty: it is just after 8:00 in new york. we're watching overall market reaction to brexit. samsung is one stock on our radar. of s eight giving the iphone run for its money. yvonne: it is sleeker, taller, bixbys some features like as well. we will continue to watch what goes on in south korea. let's get to the market open with david. david: the market opening 110 .igher in seoul

similar in australia. it really comes down to the fact that you had a decent pop in oil prices overnight. have a look at the asx 200. continuing 14 points on the upside. the nikkei open in line with what the futures were indicating. down the list, 62 points. nikkein the range of the . not necessarily a bad thing. it has held up well. moved, thaten has is another conversation for another day. let's move along. a stop you're watching closely ishares of toshiba. three day chart. we are opening higher, surprisingly. what is key here, and a

lot of analysts have come out to agree on it, the chip business. how much they get for that. that is key, i guess. it does not need to remain listed. any uncertainty surrounding that? it is cheap, but is a cheap it cheap enough? kansai electric power, a big pop yesterday. got it appear. to a courtcome down order which essentially allows it to open some nuclear reactors. the story there is much more than the company itself. have a look at this chart. it tracks the trade balance, if you will. going all the way back to 1971. here you have the good times into the 1980's. there is the bubble. of anly there's a blip

few years, when the earthquake happened. they shut the reactors, and had to import their needs. that drove them into a deficit. is this the start to something better? that is something to watch for closely in the months ahead. betty: certainly something to watch. let's get to the first word news now with paul allen. paul? paul: betty, the u.k. is calling for a friendly split but says there is no going back after launching the brexit process. prime minister theresa may's letter to the eu president starts two years of negotiations which are unprecedented. requests ae letter sweeping and to the deal with the eu. >> this is an historic moment for which there is no turning

back. britain is leaving the european union. we will make our own decisions and our own laws. we will take control of the things that matter most to us. we will take this opportunity to britain,tronger, sarah a country that our children and grandchildren are proud to call home. china's central bank may keep a tight rein on market rates this year. most analysts anticipate the pboc will raise the rates at least twice, putting pressure on bonds. producemoney retired to leverage in the financial system, but they also need to produce a cash crunch. l courtl court -- seou will say in the next few hours to decide whether they arrest former president park. they say the arrest would be

lawful because there is a risk that she might destroy evidence. samsung shares are looking like this after the launch of its new as eight -- s8 smartphone. the phone has a host of new features. recognition,ial voice assistant, and can be turned into a desktop computer. it comes in five colors and two sizes, both of them larger than the iphone 7 and seven plus. global news, 24 hours a day, powered by more than 2600 journalists in more than 120 countries. i am paul allen. this is bloomberg. betty: toshiba saying it's projected annual loss could be more than double to $9 billion as its u.s. unit files for bankruptcy. stephen is in tokyo for us. we were just speaking to the ceo saying heny

is meeting with the toshiba ceo to work all of this out. i'm curious, what kind of recourse does a company like southern company have with toshiba? withen: that's it, i spoke the southern ceo after the interview on bloomberg tv and he was saying he is concerned because it seems the toshiba company is not looking at the obligation of its customers. he said southern was arguably the biggest customer that toshiba has and when all of this was happening, when the news reports were coming out about a bankruptcy or all the problems over the last months, he did not receive a phone call from the new ceo of toshiba. he is hoping he will be able to create a relationship and build that out. going forward, we are not sure. there will be this 30 day period

where they will see what happens with the local project and that will really build the relationship between the companies. betty: he is saying they are sticking, they want to complete that project. what about westinghouse? who picks up the pieces here at westinghouse? how do they restructure? what are people saying? stephen: that is kind of the big question at the moment. westinghouse is nuclear waste to the industry at the moment. it has the u.s. projects that have gone on for far too long. they are over budget and delayed. no one wants to buy that. what we are looking at now, with the bankruptcy and the chapter 11 filing, they will get restructured. unfortunately, who fits the bill is still a question up in the air. local broadcasters here in japan have said that potentially it electricity korean

that could be a sponsor for westinghouse as it gets restructured. they are building a plant in the uae and want to build more around the world. buying westinghouse or having a closer relationship with them could help them to build plants in south africa, in the united kingdom. be on that, we will be looking a lot and what the government does in japan and united states. there might have to some kind of intervention from the government in japan, even though they said they would not, with figuring out exactly what happens but the restructuring of westinghouse. you have to remember, i went to fukushima. here in for, they are cleaning it up. a lot of the technology they are using action has westinghouse written bright on it. they are using this technology and will depend on it a lot going forward.

just because toshiba is distancing themselves from westinghouse does that mean that toshiba -- japan will give them up. yvonne: westinghouse technology is in half of the world's reactors. our others going to follow? stephen: that is exactly it. areva, which basically got bought out by the french government. they also had cost overruns. now you look at westinghouse, they filed for chapter 11. the question is what is the future for nuclear? these private companies have proven to fail because nuclear pants -- plants cost a lot of money. the future for nuclear is not as bleak as one may think. you look at china, they are

building a lot of plants, and developing technology, all state backed. i mentioned korea earlier, that is state backed. the future of nuclear is really state backed. local -- ahead, how low can ago. what brexit means for sterling's prospects. betty: before that, we will get the view on energy and infrastructure at credit suisse there with stephen engle's. this is bloomberg. ♪

yvonne: this is "daybreak asia."yvonne: betty: avonne man quick look at the business headlines at this hour. you see shares down on reports may the owner of uniqlo consider quitting the u.s.. the company would pull out if

trump demands that goods be made locally. the ceo says the move would not be good for u.s. consumers. fast retail overseas looking at interbank revenue over the next four years. msgne: the maker of seasoning is armed with a 1.8 billion dollars war chest. the 108 year company says they are interested in buying firms that could help businesses and mid sized markets. japaneseare holes of advertising giant dentsu involved in a work scandal. the president step down -- predecessor to the president step down after an employee

denounced overwork. yvonne: it is the final day of the credit suisse asian investment conference in hong kong. the event has coincided with brexit. the event is no doubt going to be on the days agenda. good morning, steve. morning, yvonne. yes, we will talk about brexit. we will talk about a number of things with our first guest this robek of michael stro credit suisse. we can talk about brexit, but i want to talk about overall trends, and protection of -- protectionism. one of your analyst said yesterday, in 2017, be have already hit the target for equities ahead of schedule. one thing the bank is struggling trump. is with mr.

>> i do not think the risk should be overestimated. in the totality of things, they are the way they are because of mr. trump, and recovery overall. i think some of the policies that he could be introducing, perhaps fiscal spending overall will continue to drive the u.s. and potentially the global economy. equitiesctivities -- should be the path of least resistance. they are not cheap, but it is too early to say mr. trump is to blame for everything. stephen: two of your main themes go in lockstep with what mr. trump is talking about. you have gone more positive on the energy sector and also infrastructure investment. >> for different reasons.

energy, we decided to buy when it was correct. inventories, opec, the saudi's awaiting the big ipo. all of this could put fraud to the price. oil is not, in our view, expensive. very different. it is something that the developed world has not done much about for the past few years. china has been building a lot of stuff and may have some catching up to do in the u.s. blowing inas been this direction with policy tones as well. overall, what is underlying this is more of a shift from relaxed monetary policy to fiscal policy beginning to take over. that is positive. stephen: it is interesting,

later on, we will speak to a credit suisse analyst to head interesting results from the survey, asking how much cement china has used over the past few years. doesn't equal what the united states spent over the evil timeframe -- equal timeframe? china has spent the same amount in five years as the u.s. in the last 100 years. country, need a lot of housing. not that surprising, but incredibly fast. stephen: what do we need to focus on with brexit now that the trigger, if you will, has lled?pooled? -- pu >> the negotiations will not be very nice. each side has strong arguments for their case. 70 million 60 or

people wanted to leave, which is not true, half of them. and, the world tried to keep its members, discipline, and vision together. it is likely that the nations will harden up also because the thannctions different me the u.k.. they need to get aligned. there are vested interests for the eu picking pieces out of what the u.k. is doing. other cities like london, madrid, frankfurt, paris, wants to do stuff that london has been doing, so they will make it hard for the brits. now we are where we are. i have to say, when brexit happened, and i thought, i was saddened. it is, for me, a paradox being very european, danish living in switzerland, that the u.k. if countries, the victor of the allied powers of the

world war, saying, we do not processes part of anymore. not only the integration process , but we will halt see with elections in france and germany, how strong is the coherence of this. stephen: how strong is the monetary union in europe as much echo -- europe as well? perhaps another debt crisis in the south developing. and again the nationalists sentiment that could come to power in france. overweight europe. you have turned positive. >> we have turned positive. given that we have done it now and we are obviously singly very strong, we do not believe the french election will end up in a difficult place.

long, but it is clear. how does the european union, and the eu have an economic agenda that could possibly blow up beyond the european union. she needs to get it done in france, unlikely that she can. we also think it is unlikely that she gets elected as president. pretend tohave to swing to the right. the french don't want that. they want to stay. they are saying to the establishment, we are fed up with the way things are working right now, and if you do not listen to us, we will swing. stephen: very quickly, from your purchase in zurich, what is your view on china? >> we like it. it is cheap. stephen: thank you so much.

global cio of credit suisse joining us here in hong kong. we have kicked off day four of asian investment conference. yvonne: thank you. stephen engle there. we will have plenty more, as stephen mentioned, from the conference later on. in the next hour, we will be joined by tony fernandes. we will also hear from the global chairman of global markets and we will round off with gerard bond. betty: a great lineup there. of next, barriers and democracy. why some manufacturers are fearing for their supply change -- chains. this is bloomberg. ♪ naypyidaw naypyida

betty: this is "daybreak asia," i am betty liu in new york.

yvonne: i and yvonne man in hong kong. now that the u.k. has triggered article 50, some manufacturers if your barriers when they try to sell their project -- products. steve, tell us what the likely is of brexit on the region. it will impact the economy in many areas. one of the areas it will impact the most is the manufacturing side of this. you heard the sun talk about how they are going to position themselves in the u.k.. it will have a greater implication, not just for the automakers but also manufacturing for the whole of the eu. if the protectionist movement spreads, it will have global implication. manufacturing, automakers, for

example have built up a supply chain for example that is very flexible and efficient over the years. if the protectionist movement comes about, it probably breaks of that puzzle and things will have to be reworked again. yvonne: how about some of the silver linings here? perhaps this could be an opportunity for the asian companies? steve: there is. a activity, mn because of the location, if there is a protectionist movement, plants will have to break up, things will be moved around and production will be shifted. one of the things that when that theens, there will be economy d scales, cost will have to come down, economies will

have to be improved. there will be a lot of and and a -- mna activity going forward. yvonne: when you talk about the u.k., of course it is known for services, but also the auto industry has been quick the success story. what are automakers going to have to do? will they have to move their plans? it is the big unknown here. steve: it really depends on how the negotiations come about, what the terrorists and taxes are. automakers will have to rethink their strategy, look at their portfolio, and what the customers are willing to pay and reassess their costs. that will have implications on

whether they have to move the plants to other locations to improve those costs. heare: great to have you from bloomberg intelligence break coming up next, how the asian markets are reacting to the brexit push. we did not get a good lead from the wall street session. things reacted tamely. it looks the same in the asia-pacific. more to come here. this is bloomberg. ♪

yvonne: it is a: 30 in singapore. 26 degrees out. a bit cloudy for the forecast. we are just about half an hour away from the beginning of trading. i am is on man in hong kong. -- yvonne man in hong kong. betty: let's get to first word news with paul allen. paul? paul: to shiva says it's projected annual loss could

$9uble to $9 million -- billion. to she was -- toshiba needs to raise cash as it has but the memory business of for sale. the company has delayed the latest earnings reports. >> the bankruptcy filing for westinghouse is an important step to revive the company. it is also significant for toshiba as we try to block the risk for overseas business. announce earnings on april 11. paul: plans to take over the london stock exchange have been blocked by the eu. the decision had been flagged just five years after of potential move.

sameey both provide the services. in some of the markets they are essentially the only players. they have led to a de facto monopoly. our concerns are very serious. paul: indonesia is preparing to expand its crackdown on tax invaders with the amnesty perioed ending on friday. this after the amnesty program revealed previously undeclared assets. may face ups made -- to a 200% penalty. government documents obtained by

bloomberg indicate new regulations could involve ways to make the pinball like game less addictive. global news, 24 hours a day, powered by more than 2600 journalists in more than 120 countries. i am paul allen. this is bloomberg. thank you. time to see how the asian markets are shaping up on this thursday morning. here is david. angle on interesting the casinos. just saying. someng at australia, momentum in that market. we have come back a couple of points. a little to your hi there. japan, a curious rate as well. again seeing the dollar hitting a session high. we are getting about 150 stocks

out of the 225 including heavier weighted stocks pulling the stock down. the rest, fairly uneventful. we are also watching south korea, stronger, ever so slightly. let's move things along. having ake a step back look at australia. something to watch. a longer-term line here. look at where we are. we have been floating around these levels. that is 2017 right there. do we get above this? it takes you all the way back to the -- let me see if i can push this back -- there you go, global financial crisis. do we get here, when do we get their? that is far away. where are we now?

this court has been good for investors, taking japan out of the equation. still on track for the best equities out of the asia-pacific four years. the nearest comparison would be this here. about 11%. that is third quarter of 2010. where do we go from here? this is a very interesting chart. this is the ratio that basically tracks valued stocks over growth stocks. getr the ratio falls, you outperformance and value stocks. gives a macro outlook, is growth improving? very interesting. it looks very much intact.

you look at a five-year chart and we had a bit of a positive and 2016. value stocks outperformed. very interesting here given the outlook we had with brexit and all of these things on the horizon. thank you. staying on brexit, theresa may calling for the friendly split from europe, striking the conciliatory tone as she struck brexit. be amicable ore will it turn ugly? editorrg's global policy kathleen hays back with us with more on this. it is starting off on the genteel note. what could be the biggest sticking point here? halfing: when they have to decide who states in the house.

everybody trying to say yes, week agree with each other. when they get into the hard details, who gets what, that is when it gets tougher and things get less amicable. said frexit will maintain a special relationship with the eu. withd tusk speaking reporters saying, britain, we already miss you. the eu commission president said some ok thanks also. he said that some day the u.k. will regret this choice. parliamenturopean said, these negotiations are going to get harder and they may take a lot longer than the two-year time limit that theresa may has. i have talked to the

negotiation and said, have you ever finished something as complex as this in two years? they say no. will beity is there some uncertainty in the marketplace for 3-5 years at least. out of the gate, they the budget about bill. they say it is 62 euros worth. they question this. they say the u.k. is a .aw-abiding nation they say you may have to think of it as a divorce settlement likee you talk of anything any of this. yvonne: so far we have seen indicators that it has held up well, but what is next?

we have not gotten to the true brexit. we have not felt the troop impact of the pound weakening so much. we certainly see economic uncertainty. .ump into the bloomberg now this is an economic uncertainty in text -- index. it peaked in the months leading up to brexit then it came down a bit. will the uncertainty rise again? a member of the monetary policy said earlier the u.k. will realize, the citizens who voted for this, they are making a big mistake. cannot think of any other suicide note that the country has ever written.

kathleen: the british pound is down 16% since last july. if you look at the derivative market, this could jump even further. you look at the white line, u.k. inflation. the blue line is looking at wage growth in the u.k.. what has happened is the blue line has flattened out. cpi keeps rising. the price level goes up if inflation is more. you are getting less money, less disposable income in your pocket. this is one of the reasons that the bank of england is responding and doing nothing.

.ot raising rates this is just the beginning. writteny has yet to be about how this affects the global economy. betty: we will take a look at where the currency is for the rest of the year.

yvonne: this is daybreak asia. ime yvonne man in hong kong. assigned the housing

market may have bottomed off. developer won the rights to operate the sotheby's properties franchise adding offices to depend, the philippines, and hawaii. list sotheby's international said they are also looking to open an office in hong kong. yvonne: china looks to create a major energy deal. asked andgulator has mining giant to explore a merger. talks are said to be at an early stage, but if they go through, it would create a new entity with assets of over $240 million. betty: the london-based company that developed self driving robots might use that technology to deliver all important pizzas across europe. they have teamed up with dominoes to serve select cities. dominoes has already tested the

idea in australia and new zealand. the robots can carry up to eight pizzas and travel up to six kilometers per hour. all of this technology just to deliver you a pizza. how lazy can you get? yvonne: quite cute, though. more on brexit, less on pizza. talking about the potential impact on currency markets. analysts say there is further of the pound.nes claudioing in piron, joining us live from singapore. great to have you. talking about the pound -- we felt another slide after the trigger of article 50 yesterday -- how much further can we go? w continue to see the shorts rising of.

the barometer continues to define the doomsayer. point?ling abuy at this should we be pricing in more negativity? >> i think we should price on the downside, 150. the dollar is weaker in april. we have the french elections coming up which may make the euro weaker, giving the euro-sterling more downside. it is tricky. i think the one thing that does not look well is volatility. three-monthat implied volatility and even longer into the two-year section, looks too low. i think there is a lot of uncertainty, as your report nailed it on the head, in terms of the uncertainty around these negotiations.

i think volatility will go up. overtime, in the next two to three months, 120 downside will be the risk. we could be even further downside risk as we go further on. yvonne: 120 down, the downside. claudio, it is interesting because we have been stuck in this range for the past few weeks now. what exactly will trigger the break to the downside? .> yeah paul looks at this, we have a deep range of 129-120. if you look at the broader sweep of history, as your previous 60%rt pointed out, about a correction. if you look at the broader sweep of history, there have been about four episodes where it has dropped as much as 30%. throughnly halfway correction. if the initial good mood

surrounding the potential talks turns out to be a lot nastier and it seems to be more debate going on around the cost of the deal. , andly, i think april 29 donald tusk response, that will be a good date. how we will deal with the future, the trade deal, and so forth. if we do not get the parallel the guns ofck to the exit cost first, that will at some uncertainty. betty: i want to pull up a bloomberg terminal chart. this is one that we introduced in the last hour. claudio, i don't know if you can

see it, but it shows how the imports and exports have been declining to and from the u.k. into the eu. it is interesting to note that imports from the eu have been declining less, at a slower pace and the exports are falling. how do you see this picture falling or if it does at all given the potential and probable weakness -- continued weakness in the pound? >> in a certain sense, one of the areas where the u.k. has excess strength, gdp in is a point of weakness and that is one of the reasons the sterling has corrected significantly. services tend to be .ess price sensitive

that is rarely the crocs of the cru of the issue -- crux of the issue. that will be the critical point for the u.k. and survival outside of the european union, having some kind of services agreement. i think that will be the sticking point. that is where i think we will see a a lot of negotiation and coming down to the point about the trade relationship. yvonne: it is very hard to be dollar bull these days, but asian currencies also performing very well. this function shows the spot returns we have seen to date. taiwanese dollar

outperforms. how would you play this at the moment? >> i think in the context of what we are talking about, europe, we have so many uncertainties. when you look at the emerging baggage. we continue to see progress on tax reform, infrastructure, and so forth, even political consolidation, as we saw in india. what we like are the carry trade and the yield trades. india.nure in bonds are favorable. we like that. we like being short dollar. those areas are where we see strength in emerging markets at this moment when there is so policynfusion within the of the western developed market currencies. betty: just before you go, i want to ask you about the greenback, the u.s. dollar. do you think we have seen a

definitive reversal of dollar strength after trump's election? >> know, the demise of the trump trade is too early to call. in fact, i heard fixed income research pronounce as well that we look for an opportunity to asld into trump trade again we get through april. there is still probably some pain and downside, but if anything, the early kind of death of the informal care act, repeal and reform bill, means we have tax reform back on the table. that is what we will be looking forward to provide the trump trade going through in the later weeks of april and may. betty: we have seen the greenback at least stabilize in the last hours. thank you claudio piron so much for joining us on the currency markets. coming up, the boston fed hikesent sees four rate

this year. that could also be good for the u.s. dollar. that interview is up next. this is bloomberg. ♪

yvonne: this is "daybreak asia." i am yvonne man in hong kong. betty: i am betty liu in new york. the boston fed president says rate hikes should pick up the pace. in an interview with bloomberg, he says the benchmark make need to be raised to four times this year. >> four in one year would be comingss than the period

out of the recession. that time, we were raising every single meeting, twice as fast. relative to that, this is much more gradual. over the course of this year, i've you four. we have argued down one. i would say we have been very gradual up until now. once a year until december is a gradual pace. as we get to employment, close to the 2% inflation target, we do not need to make up much more ground. that would indicate we need to raise rates more quickly to make sure we don't overshoot where we need to be. in my own view, the economy is likely to be strong enough and grow fast enough that it would be consistent with raising rates roughly every other meeting. that would get us to the point where we have an unemployment rate a little below what i believe is full employment and likely at 2% inflation, though there are many forecasters now forecasting a little above 2%

inflation at the end of this year by the total pce measure. to the fed's aim to go less than 2.1%? >> our goal is to hit 2% inflation, hit the employment rate -- unemployment rate. if it is possible for the economy to grow without tightening labor markets, that would be wonderful news. it would indicate the economy is much more productive. we have not had a predict -- particularly productive economy over the past two years. we have had a drifting down of the unemployment rate over this period. that indicates that indicates the potential is lower than we thought before because project to be has not been as strong. it would be wonderful news for the economy if we were growing fast but not needing to tighten

labor market significantly to do it. yvonne: again, that was kathleen presidentboston fed rosengren. up a look at what is coming on bloomberg markets. rish will look into the real state sector. rishaad: of course, article 50 has been triggered. we have these to your negotiation period. we will be at the investment .onference in hong kong all of that to come. ♪

♪ you started outcome your father was a stockbroker. have you ever considered go into banking? jamie: i did not want to be a doctor or a lawyer. jobs, you had a lot of the ceo of home depot. jamie: i am not a hired gun. david: do think the country is better off for having dodd-frank. jamie: the system has recovered. part of that is dodd-frank. david: you have never considered running for office, have you? >> would you fix your tie, please? david: well, people wouldn't recognize imy