♪ >> it is the biggest change in turkey. >> the u.s. reviewing its plans for north korea following a weekend show of force. china urging calm on both sides. >> australia's opposition leader says a government loan is not justified. veil on itsing the finances for the first time

ever. haidi: hello from sydney. this is daybreak australia on this easter monday. betty: a happy easter to you. it is just after 6:00 p.m. your in new york. -- here in new york. we had some surprising news here in the u.s. on friday which show that inflation not robust -- not as robust as we might have expected. falling for the first time in a long while. that indicating to several investors that the trade we have been talking about since trump was elected might not really be planning out. that is what you saw the index is also heavily on friday. the nasdaq down almost half a percent. these tensions with north korea not helping things along either. haidi: that is right. the fragility we are talking

about. the sentiment that it could go either way from here. it is quiet on the side of the world in terms of markets. we have no trading today in australia, new zealand, or hong kong. check of currencies underway. we had a jump in the lira. referendum of the result. the aussie dollar sitting at .7 574. the biggest news in terms of currency is the treasury report. we were not expecting -- we will be watching the aussie dollar with a slew of china data out domesticp and other indicators.

>> good morning. north korea's latest failed missile test is not expected to change washington's plans for dealing with the regime. sources in seoul and the u.s. say sunday's launch was a medium-range missile and exploded after about five seconds. president trump is prepared to take unilateral actions if china will not take the lead. president trump says a decision not to label china a currency manipulator came as a result of withng helping to deal north korea. they never of people killed in the collapse of a garbage dump in sri lanka has risen to 26. 20 could still be buried.

people were celebrating new year. 78 homes were destroyed and 150 were damaged. survivors say they have been protesting for gears about the danger. -- four years about the danger. global news 24 hours a day powered by over 2600 journalists and analysts in more than 120 countries. this is bloomberg. president has claimed victory in a referendum of the most sweeping overhaul the country's government since its founding 93 years ago. voters narrowly backing plans to give him wide-ranging new powers expecting he will safeguard security and kickstart the economy. >> i hope today's constitutional changes will be good for our country. our nation showed maturity by voting with free will on changes that have been approved by parliament. betty: let's cross live to

istanbul. what is going to be the immediate impact of this? >> the immediate impact on the -- the lira strengthened 2.4%, the biggest jump in three months. it seems investors are greeting is positively. it was a narrow victory, a contested victory, but it was a victory. be forit does seem to the markets that is what will matter. what will be the first task or undertake? >> people are closely watching his next move. they seemed relieved when he ruled out early elections. he did voice other sentiments

that might give it investors alarm. he would consider a referendum on reacted to ding the death penalty -- reinstituting the death penalty. that might cause problems with the eu. eu officials complained not about that proposal but about the constitutional package the turks voted to approve. saying it could cause problems. haidi: talking more about the reaction from the eu, the election environment in turkey as unfair, what kind of reaction are we expecting? not the onlyare one to have called this referendum unfair. the opposition parties say they will contest this.

it did not sound like they would get a very sympathetic ear. the head of the election board appeared on television to say, we heard your complaints, but it is ahead with over a million vote margin. nothing to see here was the application. the president said he will revisit the relationship, a cryptic phrase he used on the campaign trail. it is unclear what it means exactly for eu relationships. these sweeping new powers, it is understood to give erdogan the ability to appoint ministers and fiscal powers potentially. : that is an interesting question. the thing that investors have always resented is what they see

as his meddling in economic policy. there is some contradiction because now he will be able, we think, steer economic policymaking. he will have far less oversight -- parliamentary oversight. he could have a greater say in the economy, which investors might end up resenting. there is a bit of a contradiction there. haidi: thank you so much for that. higherthat move sharply for the lira, which has been the emerging-market currency of 2017 so far. great to have you back. : this is a big carmichael

minor. -- paul: this is the big carmichael miner. it is in the middle of nowhere. a long way from anywhere. it will need a rail line. there is an application for a government loan two of the construction of that. constructionlp the of that. minister says the loan will be looked at on its merits. all the environmental hurdles, and there were a lot of those, have finally been cleared. the challenges are now commercial. there are plenty of skeptics out there who will tell us those commercial hurdles are very high. haidi: we are also looking at energy shortages again. there could be some sort of hope

that it could be avoided. >> the length government looking -- quthe kingsland eenland looking at a basin, might open that up for exclusive domestic australian consumption. meant to be the biggest producer in the world by 2020. most of it gets exported which has led to domestic shortages. there is a risk of shortages for new south wales and victoria. the prime minister will me with producers on wednesday. markets are closed in australia and new zealand. what about when they are back in business? what economic numbers should be look out for this week?

paul: those gas producers will be in the news a fair bit this week. we have production reports on tuesday, wednesday, and friday. rio tinto will be out with early production numbers this week. a utility company, the shareholders will vote on this proposed deal, take over. the big one is tomorrow, on tuesday, the reserve bank got australia releasing minutes of the april meeting. no huge surprise, the cash rates stayed on hold. we will be watching for a bit more commentary. we have seen the regulator bring in some more rules, tightening things around that. haidi: paul, thank you so much. paul allen in sydney. we will hear from one of australia's best-known economist , ian harper, about the

countries to 25 years without a recession. haidi: the latest on north korea's failed missile test. our guest is from the brookings institute. this is bloomberg. ♪

haidi: that is a live shot of a beautiful sydney harbor on this eastern monday public holiday. shut for the day. betty: you are watching daybreak australia. let's get to a check of the latest business headlines. apple has won approval to test it self driving car software on public roads. sources tell us they will start soon using apple software and existing vehicles. apple started designing a self

driving car to take on google and tesla. haidi: reports from japan say sharp may reenter the personal computer business after seven years. sharp may return to other technology equipment sectors. the company withdrew from personal computers and pretend because of declining profit margins. united airlines has changed its policy on employee areel and will ensure crews booked an hour before departure. a video showing a united passenger being dragged from his seat and forcibly removed from the aircraft. he was taken off the april 9 flight to make way for airline employees. north korea's failed

missile launch may have eased the risk of imminent u.s. action. president trump is still ready to consider a military strike, sources tell bloomberg. his strong preference is for china to take the lead. we have the senior fellow at brookings institution. jonathan, what i find intriguing is this connection trump has made between trade with china, the trade relationships with china and the expectation that it should pull its part when it comes to sorting out these regional security issues. do you think the u.s. has beijing on board? may.think we i do not know if it is linked to trade. i find it a rather problematic assertion that there would be leverage if china cooperates more on north korea.

it is his public posture, even though i suspect it's not really reflected in what those private deliberations. haidi: we have had up the low-key response to what is we haddly a failed test over the weekend. do you think that changes the underlying intention of what washington says it is willing to do? response the low-key was warranted. north korea test a lot of missiles. they fail more often than they succeed. he only wants who seem to work -- the only ones that seem to work either much older missiles. the very fact that this year alone, there have been five sequences of missile test. last year, there were 25. you do not have to react to everyone. part of it, on the part of north

korea, is a political statement. they are trying to elicit attention and sometimes it is better not to web on it too much. proposition, being quieter about these things may be in order because it enables private kind of serious deliberations that i believe have opened between the u.s. and china of a much more substantial sort. a lot of what we say about north korea is not that dissimilar than what the chinese are indicating. that is where there is more of an opening. i would rather keep trade in the trade lane and keep north korea in the north korea lane. betty: it is so true, right? how wise it is for trump in the

white house to be so loud with all of the rallying against north korea if china can ease this on their own. i want to pull up this chart. our viewers can see this. potentially how few trading partners north korea has. only china and singapore of any importance. when you are looking at this, china or the u.s., there are lines coming out from those countries with the various trading they do with other countries. this chart outnt to show how isolated this country is and it does not have much to lose in a situation where you are anti-and up the game. eeing up the game.

jonathan: the u.s. has very important interests in south korea. we are committed to that kind of relationship. you will forgive me, i have a cold and my voice is lingering. the reality is, north korea is a -- it does depend on china. a lot of it is local and regionally based with ethnic korean minorities along the chinese-north korean border. china is trying to find ways that it distances itself from north korea and it makes north korea pay more of a price for what it is undertaking.

the risks for everyone are great, if only because of the element of unpredictability. the perception here, whether there could be this calculation by one or another state. there is a lot of talk of preemption. preemption is a dangerous word. given the vulnerabilities in the north, how they would read a lot of these signals, it is an open question. it is managing that that is essential if we will get through this. go,y: quickly, before we how much do you think north korea can make good on this promise, or this threat that they have missiles that will be far enough to reach the shores of the u.s.? how far away from them actually making good on that threat? jonathan: i think they are some real distance from that. they would like us to believe they have that capacity.

they rolled out all of these canisters in their military parade. they have never, despite their threat, they have never conducted a long-range missile test of that sort, let alone put a war on a missile -- put a warhead on a missile. i think it may take them sometime yet. betty: thank you so much, jonathan pollack, senior fellow at the brookings institution. back in business news, uber lifting the veil and giving us a look at the financials. we will drive you through these exclusive details, next. this is bloomberg. ♪

haidi: i am in sydney. betty: and i am in new york. you are watching daybreak

australia. apple may ride to toshiba's rescue. partnering with supplier or joining a bid with japanese investors. softbank may cooperate. toshiba needs the money. in the wake of huge losses. the taiwanese company faces rising competition from samsung, especially in android devices. betty: universal is on track for the biggest global movie opening of all time with yes, "the fate ." it made almost

$533 million worldwide. that would beat "the force awakens." for the first time, uber has opened the books on the state of its finances. the right ailing giant gave bloomberg -- the ride hailing giant gave bloomberg a look. for so long, they said, they are private company. things are different now. >> it is going to be the lens of what you just mentioned. all of these scandals, accusations of a toxic work climate, allegations of sexual deleteuber, and the # campaign. the company is saying, we are doing something right. they have released their growth

revenues over 2016. at $20 billion. those are the gross bookings. betty: more than double. than 10 billion. net revenue came in at 6.5 billion. they also talked about adjusted net losses. $2.8 billion. when you look at the face of it, it is under pacing gross bookings. disclosure, they are saying, we are still doing something better. betty: people look at the billions of dollars of losses and said wow but if their revenue is outpacing it, they might be ok. >> if they want to go to an ipo, this is something they are armed with.

betty: all right, thank you so much. the exclusive look into uber. we will have much more on

haidi: it is 8:30 a.m. in melbourne. a little bit cloudy. australia is waking up on this monday public holiday. betty: does not matter what the weather is, as long as you are off, right? it is 6:30 p.m. you are watching daybreak australia. says ofsh state media -- voters have approved a constitutional change giving the president sweeping new powers. the president hailed the republic's most sweeping

overhaul. he has the authority to appoint ministers and senior judges and call for elections at any time. shipbuilder has won approval for a restructuring plan with $175 million worth of bonds maturing this month. the national pension service has agreed to a plan. have -- bp is trying to close an oil well on alaska's pressure after a leak was discovered. the environmental protection agency has yet to determine the size of the leak. is containedroblem and no oil has reached the ground.

leaderia's opposition says an application for $680 million government loan should be rejected. labor leader says the case has not been made for taxpayers to provide a low rate loan. adani once the money for rail line to carry coal. an israeli mining magnate is suing george soros claiming he lost $10 billion of business through a defamation campaign. he alleges george soros funded government officials to ensure his mining company lost the right to an iron ore deposit and business opportunities around the world. global news 24 hours a day powered by over 2600 journalists and analysts in more than 120 countries.

this is bloomberg. it is a quiet start to the trading week and markets in this part of the world. there is no trading today here in australia, nor in new zealand or hong kong. the markets are closed to observe the easter monday public holiday. we have nikkei futures pointing to a lower open. currencies, the aussie is trading at .7582 and the kiwi dollar at .7012. president trump said he would not rule out a second term for janet yellen. we asked a bloomberg columnist for his take on the president's

comments on what they imply for the fed's independence. on the think people committee find it easier to do their job without having elected officials commenting so directly on monetary policy choices. they are given independence and they will do what is best for the economy. my do thatt yellen but the conversation is, if she does not wind up getting renominated, the next person will not have that kind of independent mindset and will have a closer relationship with the white house. i think yesterday's comments from president trump about chair yellen -- i thought -- i welcomed them. i thought he seemed more open to the idea of reappointing her. if you look at the outcomes the

fed has enjoyed, unemployment is low, inflation remains close to target. it will be hard for them to argue that she has not done the job that has been given to her. i would say, i continue to be concerned that the president maybe not as alive to some of the boundaries that we have seen previous presidents respect with respect to the fed. i'm a little concerned we might see an appointment, someone in that job that is not as independent from the white house. it is early days. the other question i would raise about the pressure from the president, does it affect the transmission mechanism of the federal reserve's policy in the following sense -- the president is saying, i like low rates. does that complicate things?

>> i do not really think so. creates some political pressures. that is the benefit of being as politically insulated as the fed is. they do not really have to be taking those comments on board if his next conversation says something opposite of that, it will not affect the fed either. it is focused on achieving its economic objectives. politicst effect does affect the fed? the growing dispute with russia over syria? could that have a pause in raising rates? about how are talking political events can influence

the course of the economy. that is something the fed has to take on board. i've been concerned -- i see a lot of uncertainties politically that could spill into the course of the economy, both here at home and overseas. -- youu are so close really have to be cautious about raising rates because any kind of downside risks you face limited tools to deal with. you want to keep the economy as healthy as you can to avoid the downside risks. -- geopolitical risks show the fed has to be taking that uncertainty on board. minneapolis fed president speaking to us. has made themp decision not to brandt beijing

-- not to brandt beijing as a currency manipulator. what have we learned from the treasury departments foreign currency report? newsnald trump stole the thunder of his own treasury department's report when he tweeted and told the wall street andrnal he would not br china a currency manipulator. the united states did not name manipulator, but there are many that remain on the list. it is not just asian nations. in the case of china, what the u.s. has done has emphasized that china has a very large trade surplus and that continues to be an issue. let's take a look. china has an extremely large and persistent bilateral surplus

with the united states which underscores the need for further opening of the chinese economy to americans goods and services. the report also said china needs to continue to pursue a policy of consumption led growth rather than export led growth. it is interesting if you jump ato the bloomberg and look what the u.s. treasury department is looking at. china's surplus with the u.s. is about half of what the u.s. is looking at right now. that is why it has so much emphasis on that. even before last week, trump had started to tie getting a trade deal with china or making steps in that direction after his meeting to cooperation on geopolitical questions. beene yuan has

strengthening. is there any surprise by this decision? big surprise but the united states has made it clear. it is great that you are strengthening your currency but you still have a very big trade surplus. it is interesting donald trump had already been starting to say, i had a great meeting and now we can cooperate on trade. he is linking this all to one package. look at the famous tweet he put out. we will see what happens. we certainly well. >> is that unusual to tie do different things together? -- to tie two different things together? >> some people think it is unwise. true and united states did note in this report that china

had weakened its currency for more than a decade. they want the policy to be durable. there is a lot on the plate and it is interesting donald trump is so optimistic. china has not commented on this report yet. betty: where does this leave other countries? >> a lot of asian nations are dependent on trade with the u.s.. taiwan is only violating one of the currency manipulating -- manipulation criteria. germany is more dependent on trade then china. we have all of these charts on china. germany has a large trade surplus. let's jump into the bloomberg and look at a chart we just made. germany surplus is more than 8%

of its gdp. china is around 1.7%. 3.8%.-- japan, the trade report had some things to say to germany about what it must do in order to get off the watchlist. it has to take global responsibility for what the surplus means to the rest of the world. your this at every -- you hear this at every g-20 meeting. euro. pressure on the the country that benefits the most from being in the eu is germany because if they were not part of the euro area, the currency would be much stronger. taiwan, japan, south korea -- the u.s. said please minimize your currency market intervention. the report said the u.s. will

not bear the burden of an unfair trading system. we are very focused on china but there is a lot of important statements and applications for the rest of asia -- implications for the rest of asia. haidi: it is pretty easy to argue that maybe china is the one that should not be the focus. we do have the vice president coming through on his 10 day trip through asia. our previous guest, jonathan pollack, said keep trade in the trade lane and security and diplomacy and another lane. it does not look like the trump administration is interested in playing that strategy. >> this is an old-fashioned way of looking at it. you really cannot separate things like foreign security, .ational security, trade

true cooperation comes when you get all of these things lined up . to an extent, that is what donald trump is trying to do. that is what he is trying to do after his meeting at mar-a-lago. haidi: he also tried to do that from the outset. kathleen, thank you so much. up next, if it ain't broke. hear from an rba board member. ♪

betty: good morning. i am betty liu, here in new york. haidi: you are watching daybreak this trillion. in harper is -- you are watching daybreak australia. i met ian harper in melbourne.

>> it has been a mixture of good luck and good management. we have enormous resources in this country. we that episodes where our review of economic reform has been single-minded. wanes.me, it waxes and i emphasize politics and economics go hand in hand. economists need to be convinced the policy is worth its cost as well as its benefits. >> what is your take on the triple-a rating debate? there seems to be a political obsession about holding on it. >> i do not think the government is driven by the credit ratings. it is a sovereign. in makes its decisions on what it considers best for the

people. it is not clear what the ratings agencies will do. you should not run government policy on the back of what the rating agencies might or might not do. >> property prices when it comes to major cities have been on a tear. is there a concern that despite measures put in place, we are setting up for an asset bubble? >> property prices are growing strongly in sydney and melbourne but it is not a nationwide phenomenon. property prices are falling in perth. it is triggered by population growth in both of the capitals. >> it is quite a headache for policymakers to be setting one monetary policy for a multifaceted economy around australia. >> the reserve bank is focused

on inflation. what it is concerned about his financial stability. -- about is financial stability. it is clear the reserve bank keeps an eye on that. different parts of the country are operating at different speeds, different places on the economic cycle. the instrument was never designed to be the only instrument to design not. -- two design that. there has been this perceived shift away from free trade, globalization, backing out of things like the tpp. you see the impact on australia as being an extremely negative one given the exposure to trade?

wass there one -- if there some sort of retreat from trade, that is something that could have a negative impact on us. on the other hand, when certain countries ceased to trade with each other and start to trade with third parties, you can benefit. from trade thy version. -- diversion. it is very difficult to pick. we would all be better off if there were more trade. if there is an anti-trade sentiment coming abroad, that is something we would prefer to see less up. >> we have had 25 years of uninterrupted growth in australia without a recession. what could interrupt that question mark >> -- what could interrupt that? geopolitical

uncertainties. we have to navigate our way through. years, we have5 had uninterrupted growth. there have been ups and downs throughout the process. we went to the global financial crisis and we went through the asian financial crisis. there have been a range of challenges. good strong policy with good institutions have seen as through. i would not want to change that formula. betty: that was ian harper. america has a preference for wine in your part of the world. it is not aussie wine at all. we will talk about that in trends, next. this is bloomberg. ♪

betty: you are watching daybreak australia. american drinkers are increasingly picking more expensive wine from new zealand ahead of cheaper options from australia and argentina. imagine the story has some national pride here as well. i know you are there and wellington. how has this happened? the wine industry in new zealand realized it cannot compete with large volume producers like australia. it has deliberately targeted a higher quality wine and americans are quite liking it at the moment. exportse of australian

-- to the united states fell and new zealand rose. we overtook australia for the first time. >> at the south this trillion, i'm a little -- as i south australian, i'm a little perturbed by the story. is this the case of millennial's drinking more expensive wine than their parents? >> absolutely. increasing premiumization. forle are paying more good-quality wine. the baby boomers started drinking wine. y, andids, generation x, millennials are setting to drink wine earlier. >> what is a challenge for australia to regain the top

spot? now that new zealand has turned out to be a formidable competitor? >> we do not want to forget australia sells twice as much more wine by volume in united states. new zealand has been able to develop varieties. identified asbeen a cheaper, bulk sort of line producer. there are some very good quality wines in australia. it is a matter for them to target those high quality wines and make more of them. here, we could do our bit

i suppose. that is it for daybreak australia. yvonne and betty are up next with daybreak asia. not over a glass of wine, unfortunately, ladies. chinaare taking a look at because we have been focusing on gdp data and president trump has been talking about mixing trade dynamics with geopolitics. does this have any implications on dollar or yen? betty: thinking about geopolitical tension. bill rhodes will be joining us. he has spent more than 40, 50 years at the citigroup senior

vice president -- chairman. haidi: that is it for daybreak au

♪ jumping asish lira president avalon declares new powers. plans for. reviews north korea following the weekend show of force. china urges calm on both sides. >> beijing escaping being branded a currency manipulator. the u.s. links it to count young. >> revenue growth is outpacing losses, the road ahead is clear. >>