♪ betty: breaking up the banks, president trump tells bloomberg he is looking at separating consumer and investment operations. blames goldman sachs clients lack of convictions for disappointing first-quarter. not bad wagers from the firm. rose: first-half profits 23% on a strong domestic performance but slightly missed the wall street estimates. yvonne: taking a wider view, steve mnuchin says the administration is looking at altra long-term bonds. daybreak asia

live from bloomberg's u.s. and asian headquarters. i am betty liu in new york where it is just after 7:00 p.m. yvonne: and it is just after 7:00 a.m. herein yvonne man. -- here in hong kong. i am yvonne man. the estimate was for a 2.1% gain. month on month, we saw prices heading in the negative direction, down 1/10 of 1%. we had seen this inflation story pick up since the start of the year. inflation was that 2% for the first quarter, which is right where the bank of korea wants it. a little bit of weakness here can be giving the bank of korea another path when it comes to where they go first and keeping policy accommodative for now. the domestic demand story

remains subdued for south korea. one to watch when korea open's in the next hour. check out how asia and the rest of asia is performing with many markets coming back from the labor day part -- holiday. slow going in that -- in new zealand. the kiwi yet .6913. it is at the high side of the range. futures looking pretty firm, slow going in sydney. ahead ofthe aussie, the rba decision. rate cuts could get stronger, look back for some of that guidance from the central bank later today. dollar-yen, a solid session in japan monday when most of us were off. giving a green light. 111.87, a 70 point pop.

decisions, anda china tightening manufacturing data. the official numbers come in soft over the weekend. it was a pretty mixed session on wall street. donald-front was soft. trump talking about breaking up the banks. betty: a lot of headlines moving the markets. we closed here on how a few hours ago. let's bring up the boards. the s&p closing slightly higher, the dow softer. we had mixed economic numbers. personal income and spending coming in below estimates. the focus for investors was tech shares. nasdaq to aed the record high of 7/10 of 1%. , many futures, are.

pretty soft here so far. ago, bloomberg news met with donald trump in the oval office for a wide-ranging 30 minute interview. notably, the discussion focused on breaking up the u.s.'s biggest banks. ramy inocencio has more. talk on banking. he is going to look into it, that caused a shudder in financial stocks. but they rebounded after that. we are talking about a 21st century glass-steagall act, a wall between the money on the consumer side. a lot of critics say that led to the financial crisis. people on his- cabinet like steve mnuchin gary cohn say they favor some kind of 21st century version of this.

let's listen to what donald trump had to say in this exclusive interview with bloomberg. trump: some people want to go back to the old system, right, so we will give them that. we're looking at that right now as we speak. is going to be very, very seriously changed so the backs can go -- banks can go back to loaning. r, a: there was a shudde little bit of an earthquake in financial stocks. let's look at this bank index, it looks at the u.s.'s 24 biggest banks. you can see on your screen we saw this plunge at about the 1250 mark when donald trump made those remarks. it did climb. still higher by about 1%. we will callnking your bluff on this, donald trump. we do not think you're going to

do this because you have not had successes and other things. right now it could be all talk and very little action. the direction not coming anytime soon. i did speak with a government policy analyst in d.c., he said it is tough to task in the u.s. senate. he does not think any pragmatic senators will put their next on the line for this right now. yvonne: in that interview the president talked about his relationship with two controversial asian leaders, north korea and the philippines. the headline was that he would be opening to meeting with kim jong-un. ramy: not just open, he itd he would be honored -- made a lot of people say, really? mr. trump: yes, under the right circumstances i would love to meet with him. most political people would never say that. but i am telling you, under the right circumstances, i would

meet with him. ramy: he did not say what is right circumstances were, but remember if we believe any reports coming out, kim jong-un has ordered the executions of those close to him and his own family, as well as's top leadership there. that is just one side of that story with him reaching out to leaders in asia. another is the philippine president duterte. already invited him to the white house, and gotten criticism for it. he says he is convinced -- confessed that he killed people before becoming president. take a listen. been very,he has very tough on the drug problem. he has a massive drug problem. he is very popular in the philippines and has a high approval rating. yes, i look forward to meeting with him. if he comes to the white house, that is fine. i look forward to meeting with him. have seen already in

the past, donald trump turning heads for a lot of reasons. this time both financially as well as geopolitically. yvonne: quite a headline there. thank you, let's get the first word news with nina melendez. >> bloomberg has been told several big banks have been subpoenaed as art of a criminal investigation into possible manipulation of the u.s. treasury market. morgan stanley, and others have are for information on the $14 trillion market. they have been examining u.s. treasuries, vocus thing on issued securities. posted sachs disappointing fixed-income trading results in the first quarter. however, its copresident said it is because of their lack of conviction. they spoke at the milliken institute global conference.

he denies the bank has risk management problems. defined by losing money, but lower client activity. the firm, not maximizing revenue opportunity. we had more revenue in those businesses, probably would not be happening. >> global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. yvonne: still ahead, we are awaiting a fed decision. what to expect in the week ahead. setting five some japan after the legalization of casinos. this is bloomberg. ♪

yvonne: this is daybreak asia, i am yvonne man in hong kong. betty: and i am betty liu in new york. our chief correspondent from south eight -- southeast asia is in beverly hills with more. attention turns to the recovery we have seen. we talked about the casino earnings last week to read the recovery in macau. is a sustainable after a two-year slump and eight months of recovery? let's get a perspective from the melco ceo and chairman. it has been a long, long time. >> thank you for having me. >> are you convinced of the recovery of melco? >> there has been eight months verypular growth after two tough years. we were very happy with the recovery.

ultimately the crackdown was not focused on gaming. it was focused on anticorruption and anti-extravagance. like all luxury sectors, was really collateral damage. peak of that crackdown is passed. >> what is making the gamblers come back? >> the middle class and the wealthy individuals in china who did not do anything realize they are in the clear in the can go back to delivering their upscale -- and have fun again. that is why we see them coming back, and visitors are spending more per visit. that is the ultimate solution. is growingmarket very strongly. it has been growing for the last eight months. is there a sense that the growth in your vip market will outpace the others?

>> i do not think so. the vip markets account for about 45% of the total revenue. the vip market margin is about 1/4 of the mass market. at melco we pride ourselves on going after the middle class. that is been our main focus. we are a luxury operator the goes after the middle class. 5, 10, 20the next years, integrating resorts and macau, we will be focused more on this niche here. >> what kind of growth can we expect? >> your today, macau is growing at 15%, that is above all the south side analysis. reasonable rate -- chinese gdp

is 6.5%. anywhere in the high single digits or low single digits for the for seeable future is realistic. >> gathering sales and marketing efforts is tricky. the chinese government has clamped down. some of been detained. have you seen an improvement in the marketing environment in mainland china? advertise purely gaming in china, it is illegal. that is why as a company, melco resort is proud of the innovative, attractive -- attractions we have. there are a lot of non-gaming attractions. we have one of the world's greatest shows, studio city has the batman ride, ferris wheel. it gives us non-gaming tools to advertise tour customer based -- base.

we are an operator that has a lot of amenities. it is not just about gaming. >> are you looking to invest more in macau? is it on track? >> we are very excited, macau is the greatest market in the world. up, it will be the second best market in the world, which is why we are so interested in it. being a young, entrepreneurial company, we think we are well suited that. in terms of macau, we are april, a veryt iconic landmark to be put in macau, a $1 billion hotel. as part of studio city, there is a phase two. we are liaising with the government for what they want in the years to come. we are extremely bullish about macau for years to come. >> you touched on japan and you

have said before, you will do whatever it takes, spend however much, to ensure you get a license in japan. how confident are you of that and how much are you willing to they are willing to put in $10 billion? gamingink all the global operators, we are one of the top 10, we are all capable, we have the financial capacity to write a $10 billion check. that neutralizes it. we will do whatever it takes. we do not want to put a dollar figure on it. ultimately, the opportunity is priceless. how confident are we to win? process as we are hearing it, they want innovative focus on quality and luxury,

local cultures, then melco resorts is the perfect company to do it. if you look at our track record, we have world-class management, the most michelin awards where we operate, and we are very respectful to our local governments and local partners. on that basis, we are very confident. >> will japan be a game changer for you? if you're willing to put so much money in japanese market, will it change anything? what kind of impact will it have? >> it will be massive. , at theu gaming market peak it was $45 billion. over time, macau will grow. over five years they will go back to the $45 billion gaming market.

the non-gaming market is significant, as well. japan depending on how many cities or jurisdictions, each of those cities, if it was one or two sites per city, it could easily be a $20 billion market. two orlion divided by three or four operators could be significant. >> what is the risk factor for the gambling industry? is a young company, so we embrace technology. we look at these disruptive businesses around the world, the internet of things and online, how do we embrace the younger generation? sufficient are because we have non-gaming amenities that attract people and consumption. just your is not

grandfather's back alley gambling debt, that is not what we are about. we are about total entertainment. we have the biggest nightclubs in macau. in the most michelin star restaurants. solutions fromal nights to entertainment to. attractions it appeals to a broad spectrum of the demographic. thing we talk about here at that conference is globalization. what role d.c. china playing in the future of globalization? >> a huge role. if you look at their initiative, it will reach 4.4 billion people. effectivelyansform significant economies and people involved. i think china's attitude is andly on interconnectivity

other chinese population and consumption can benefit more countries. ais is really a once in century opportunity. china's commitment is for the next 30 or 40 years to benefit these countries and improve free-trade. >> as they spread their influence, there are also the likes of alibaba, what role do you see them playing? chinese capital, and for us, chinese travel, chinese tourists , they are the most coming from one country. stillllion people, but less than 10% of total population of china. they're becoming more and more affluent, climbing the consumption latter -- ladder.

in terms of exporting tourists from around the world, or china inc, growing our knowledge and capital. only the young innovative companies are succeeding. tencent, those are all young, innovative companies. traditionalmore mindset companies will be hard to translate globally. >> we have to leave it there. coming to live from the milliken institute mobile conference in los angeles. back to you. yvonne: a great interview, that was our chief correspondent chairman.ith melco steve mnuchin says altra low bonds can make sense. we look at how his comments have affected the treasuries curve. this is bloomberg. ♪

betty: this is daybreak asia, i am betty liu in new york. yvonne: and i am yvonne man in hong kong. altra long-term bonds can make sense for the u.s. economy. he told bloomberg a group is looking at structuring and pricing issuance eons of the 30 year limit. longer-term yield treasuries jumped, reaching its widest since february. --we are studying cultural ultra long bonds. it could absolutely makes sense for us at the treasury. what was thought of as batting around ideas, with these comments, steve mnuchin has the

markets thinking seriously about this. we did see the treasury yield curves steepen. let's bring up the chart here that shows that. you can see it is the widest since february. the yield curves, there is this idea either the economy will do better or inflation will be back in the markets are economy. justice prospect of, we might see 100 years of data bond? that is enough to get the yield going on the long and -- end. we will see how long that lasts. as we have noted, there is been a lot of talks coming from the white house. er it passes congress or is put into action remains to be seen. yvonne: we have heard this story

before. what is interesting, we look at the views from the primary dealers, the treasury did a survey of this leading up to this may 3 refunding announcement. it was a mixed picture. mostly people were against this type of idea because they were saying, we're not sure if this will bring us sustainable demand if you go to these ultra long bonds. it want to increase the 30 year supply first because it is a little unpredictable moving this way. also, you have to talk about the fed. back in be a potential wrinkle as they try to unwind the balance sheet. they do not have that support and it is part of the curve. betty: absolutely, although there is precedent here. the u.s. would not be the innovator here, but we would see. we are just about half an hour

away from the open in tokyo. nikkei futures showing a slightly higher open. we are also waiting minutes from the boj meeting. the boj meeting. did you know slow internet can actually hold your business back? say goodbye to slow downloads, slow backups, slow everything. comcast business offers blazing fast and reliable internet that's over 6 times faster than slow internet from the phone company. say hello to internet speeds up to 250 mbps. and add phone and tv for only $34.90 more a month. call today. comcast business. built for business. hey you've gotta see this. cno.n. alright, see you down there. mmm, fine. okay, what do we got? okay, watch this. do the thing we talked about. what do we say? it's going to be great. watch. remember what we were just saying? go irish! see that? yes!

i'm gonna just go back to doing what i was doing. find your awesome with the xfinity x1 voice remote. yvonne: it is 7:30 a.m. tuesday

in hong kong. it looks a little more clear right now. first major market open. betty: it is 7:30 p.m. monday here in new york where markets closed pretty much makes. we had the s&p and nasdaq rising. the nasdaq hitting another record high. i am betty liu in new york. yvonne: and i am yvonne man in hong kong. china's markets and economies are going in different sirections as president xi' moves to rain in risks are rattling investors.

they think it will be good for the nation's long-term health. but there is concern over whether officials can deliver that without long-term pain. they shifted the focus to tackling risk and leverage. president trump says he is willing to meet with kim jong-un under the right circumstances. speaking to bloomberg he said it could happen at an appropriate time. conditions are clearly not right at the moment. north korea has become the most urgent foreign-policy issue facing the president in his first 100 days in office. president trump told bloomberg is actively considering breaking up big wall street banks, reviving a depression era law separating consumer and investment banking. he may raise the gas tax to fund highways and would be willing to meet north korea's kim jong-un. they supported a 21st century version of the glass-steagall law. mr. trump: we are looking at that, some people want to go to

the old system, right? we are looking at that right now, as we speak to read -- speak. dodd-frank will be seriously changed so the banks can go back to loaning. >> there seems to be life in the transpacific partnership overall, despite the withdrawal of the u.s. the remaining countries are in toronto for their tpp minus one talk. the talks are assigned the canada once to move away from its biggest trading partner, the united states. activist investor elliott management meeting with bhp shareholders, urging a major overhaul. elliott owns a 4% of bhp and said there putting that -- laying out changes to other shareholders. will combine of their sydney and london entities into one based in australia. global news 24 hours a day,

powered by more than 2600 journalists and analysts in more than 120 countries. i am nina melendez, this is bloomberg. are counting down to some of the major market opens in the asian pacific. let's listen to our reporter, adam haigh, from sydney. good to see you. the aussie is enjoying a rally decision.b -- rba will they have dovish language? absolutely, i think that will be the focus. the aussie is holding just above the fibonacci retracement level. [nosign of dovish language audio] yvonne: had a little bit of audio issues with him, we will

try to connect back with him later on. the big banks will be the focus here today after president trump told bloomberg is actively considering breaking them up. it is a notion that excites said , they say ittadel would reduce regulation. the move to reduce regulation in the united states i applaud. it is the single greatest leverage of they can pull to get our economy to go faster. my'su recall, i started nest in a dorm room and harvard, $255,000 and i could launch a hedge fund in 1987. you cannot launch a hedge fund today without several million dollars, given the costs of compliance and other regulatory matters. has discouraged new business formation and asset management.

the energy space, the transportation space, is everywhere in america. the weight of regulations reducing business formation in america is a tragedy. the administrations focus on reducing the burden on the american new has a dream, i applaud that vision. the last ministration was very interested in introducing more transparency to the bond market. what about this administration? >> i really hope they follow through on that. transparency is what is creates confidence. confidence you understand what is taking place in the marketplace. transparency is underpinning of a healthy capital market. in a market that is ok, the incumbents enjoy information about opacity. but it does not make for good market. continuesministration to carry that forward and shine

light on how treasuries are trading, they'll would be really good for the entire market. >> and if they don't? >> if they don't, it is unfortunate. this bill, whether it is the reform for obamacare, the tax bill, the infrastructure bill, we are taking our deficit higher. it is important we take steps that continue to drive the u.s. fixed income market and treasury market to be perceived as the most liquid, fairest market in the world. oft will drive down the cost borrowing, which will benefit and save money for every american tax. there just today, president trump told my colleagues in washington he is taking a serious look right now of steps to break up the big banks. would you be in favor of that? >> i would. i believe when a market becomes overly concentrated, you reduce competition. competition is the lifeblood of what makes a free economy work.

when you have many firms that are vigorously competing to get that is when creativity happens, ambition takes place, that is when consumers when. in the financial crisis of 2008, a number of decisions were made very quickly that resulted in a massive consolidation of the u.s. banking system. i do not think that serves the interest of art country well. when i -- what i argue breaking these up into many, many small banks? no. but separating investment, a new glass-steagall? i would be excited to see that. >> you think it would be good for the economy? >> great for the economy. >> for your firm? >> it is a mixed blessing. we would have more vigorous competitors, but that is good for america. when american investment banks are at the forefront of innovation -- not all innovation is good, but over time, the

majority of innovation creates meaningful values for our economy. ceoy: that was citadel speaking at the milken institute global conference. let's get back to adam haigh in sydney, looks like we fixed his microphone issue. investorslking about launching this rba rate decision later today. does not look like they are going to do anything on rates. why is the aussie dollar enjoying this rally ahead of the decision, will it last? see if wee looking to get dovish comments that might lead us to test of that fibonacci level that technical traders are looking at. key behind the rba statement will be new want around the housing market. we saw video yesterday that

shows growth in the housing market across australia might be showing early signs of moderation. that will be malcolm -- welcome news to the rba. but they need to take these macro prudential measures that they have been in forcing. they need a few more months to be commenting in any material way about changes to the housing market. there is plenty to get through. today,re in the markets a lot of the asian markets and in europe returning after that monday holiday, we will see if we get the follow-through that has been -- follow-through. there's been a lift and equities in the last few days. we may see that in the hong kong markets and singapore when they get underway. we have seen the yen weakening. it should support tokyo equities. plenty today on the radar. rba will besure the

watching the figures coming out of china later this morning. we have seen how the economy and financial markets and the mainland are moving in different directions. solidonomy is on more footing, gives excuses to the pboc for this tightening bias and risks in the financial system. think it -- do you will have big implications for investors? that is the tricky question at the moment. as you say,, as this chart shows on the bloomberg terminal, it shows how poorly the stock in the bond markets have been performing in china the early part of this year. the context of a well performing economy, better than the many investors is all going into this year. the question now is whether there is short-term pain around

these regulatory changes that are occurring in china, or whether it follows through and starts to see the economic data itself stumble somewhat. we speak to big, long-term investors that certainly have happy buyers. guys at fidelity are willing to buy back into china ratios on the mainland if we see further weakness in the market. they are of the opinion that it holds substantial negativity. it is that tension point at the moment. betty: thank you so much, adam haigh on the two indexes moving in different directions. an increase in first-half profit ahead of the open in australia. the first of the country's big banks to report, they have been benefiting from low interest rates. over the sydney again paul allen. tell us first of the numbers and how they stack up. reasonablyck up

well, up 6% to $2.9 billion. it is up 23%. the market was expecting better than that. most of the strong performance can be put down to the domestic banking units as it unload some of its asian assets. the rest of it was a mixed picture. net interest margins falling from 2%. also falling to $720 million, dividends of $.80 from anz. intense competition in pressure on margins. the second half outlook looking broadly neutral. thank you so much, certainly we will be watching bank'seting and the

reaction to that. up next, what should investors be watching out for? we will take a look. this is bloomberg. ♪

yvonne: this is daybreak asia, i am yvonne man in hong kong. betty: i am betty liu in new york. luxury hand back -- handbag maker coach reported 12% this year. interest inrevealed buying footwear and clothing brands, and as a war chest of more than $1.8 billion in cash. coach approaches three straight quarters of gains, despite a broader slump in the handbag industry. trades.fallon extended

-- they fell in extended trades. investors do not appear convinced for new servers, desktops, and laptops. the stock and rallied 20% this year through monday's close. bought inie's list is a deal that values the site and more than half $1 billion. they can have $8.50 per share. will have a new name. yvonne: saudi aramco has cut prices for june's oil exports to asia. by $.40 to 180

five cent budget. they raised prices to all other regions. saudi arabia has seen market deeperrise by making reduction cuts under the cartels deal to stabilize prices. betty: a quick check on how the markets are trading right now. you have the new zealand index slightly higher than the kiwi, trading up 2/10 of 1%. we are also counting down to the opens in australia, japan, south korea. you can see futures trading. the futures in japan trading up one tempest of 1% -- 1/10 of 1%. nikkei futures are trading softer. decision, and the

monthly job numbers, let's take a look. kathleen hays is joining us in tokyo. just like we see here in australia, no changes expected on interest rates. we are going to be watching more for what they might indicate in the future. what might we expect from the fed this week? >> the most important thing to realize is we have two very important data points in the last 24 hours. it will be interesting to see how the fed can respond to those. at the end of this meeting the fed will do a policy statement, no press conference. in five paragraphs, signaling to the markets what is on its mind. they advertised publicly three rate hikes total this year, starting to reduce the balance sheet. look at the numbers for march. consumer spending was flat in nominal terms. personal income did rise.

that is a good sign for future spending, but manufacturing, the index out decelerated 54.8. in april.n 57.2 inflation moving away from the fed's target, not closer. 2%.ulled back to 1.8% from that headline decelerating as well. will the fed it knowledge this when they get a full review of the economy? this is what people will be looking for. betty: they certainly will be. is that what people will be looking for? >> absolutely. a 70% chance they move in june. most people are not expecting anything in this week, in part because of the slowness of the pace of growth. they have time to do their three rate hikes. they do not have to rush them

and do them all at the beginning of the wheel -- year. it is a slower rate of growth. the only thing that pushes the fed's hand is what is going on with wages. if you look at a measure like the atlanta said index, which takes families earnings $150,000 taxess, and is not covered -- health care benefits. that leads to pull through inflation. you might see the fed get there three rates done. in with as coming little bit of promise here. interesting, kathleen honed in on the inflation numbers. we can talk about the core pce, the fed indicator, was going the opposite way from that 2% target. cpi, the same story.

it is the first time in the same month we have seen both of those gauges falling. the last time that happened was back in the 1960's. does that change the trajectory for further rate hikes for the fed? >> you should never look a just one data peace and say it will change the trajectory. we need to see what this looks like one month, two months from now. you are looking at month over month data. you can have month over month declines and it does not necessarily translate to a decline. of ae talking about tenths percent different from the target. i would not be concerned about one month. if we see several months, the same categories within that index as a break down the different categories starting to fall, if it was falling because of a collapse in demand, it would be worrisome. but i do not think the fed would

be that worried about one month. i want to jump in here with a look at the latest headlines out of japan. the monetary base, a volatile number, up 19.8%, starting to get headlines from the boj's last meeting. last week they agreed the japanese continues on a recovery trend. off theird 1/10 recovery forecast. it seems to be another central bank having a tough time getting to its inflation target. for the boj it is more extreme. but central banks around the world, if this continues, how does the fed justify when there is new scrutiny from the trump white house and congress about its policy, how will a justify raising rates is spending is not growing, if inflation is further away from target in june, when the expected rate hike is what everyone is focused on?

>> the thing about the fed is that it is independent, it is not have to justify itself to congress or the president. it is independent so we can be free of political influence of just the type you're talking about. they are looking in the long-term, at the impact of these higher wages that could potentially happen down the road. they're looking at the lag between policy action and when it takes effect. but i do see her point, the data is weaker. it is a chronic problem around the world. we are seeing the lower growth rate of the population in the u.s., it is declining in japan by 30 basis points a year. it is a chronic problem for banks. betty: we have a chart that shows the economic surprises. we have outperformed on soft data, but hard data like housing and retail sales, we have not surprised much at all. what you think is happening in

the economy? >> we have been forecasting a slowdown or pause in auto sale'' growth rate. cars are being better and better made so the average life of every car in the road is extending every year. we're up to almost 11.5 years. that is such a big part of our economy. if that starts to slow, it'll take a bite out of retail sales. betty: thank you so much. we will have much more on daybreak asia. this is bloomberg. ♪

betty: i want to recap these headlines from the boj minutes. the board agrees the japanese economy continues a moderate recovery trend. we have been getting mixed signals and data from japan. recent headlights, many boj members agree it is not

appropriate to raise long-term rate targets. sophie kamaruddin has more as we are headed to the tokyo open. something for investors to gauge when it comes to the boj headlines. when it comes to the open in tokyo we are looking at earnings in tokyo and sydney, anz kicking off for the big four banks. out of seoul, we will see if they take to heart improving earnings this year. they doubled in april, helping boost exports for a six-month. here is the set up in asia when it comes to equity futures. we are seeing japanese stocks set for a higher open here. tracking the s&p 500 and nasdaq higher. south korean shares marginally weaker the open. we will gauge the latest reaction to that data.

-- sevenn equities days of events. we will watch when trading is

yvonne: earnings are the key driver as asia returns. -- betty:tocks that president trump says her to break up the banks. yvonne: australia banks earnings slightly missed estimates. betty: steve mnuchin divining -- but u.s.lans, securities always come first. yvonne: we're coming to you live

headquartersomberg . betty: i'm betty liu. markets move past the headlines with seen in the u.s. we're getting comments from the last doj meeting. we are looking towards the rba rate decision. no change at all expected and rates, but certainly more comments coming out from the rba on inflation and possibly a housing market, and whether that forming ais housing bubble, and how to get concern that is for the economy. we certainly are waiting for that announcement and statement coming up from the rba. things could move lower for the aussie. it has had quite a rally in the last couple of days, but looks tepid here in markets. we didn't get a clear direction from you guys given some of the earnings were obviously strong,

but the ego data was a bit soft. donald trump also roiling some of the markets with talks about breaking up the big banks. let's get to the markets with sophie kamaruddin. asian marketsl coming back online today after the mayday break. we do have the rba decision anticipated at midday. we have the boj meeting minutes this morning. some of the highlights were the board of agreeing they do see moderate expansion on the horizon. we also had one board member saying that the boj should reduce its jgb buying, something for traders to consider. we are anticipating a moderately upbeat total when it comes to the tuesday session. for now, we do have japanese stocks experiencing gains after climbing to a six-week high on monday.

-- aussieares down shares down. looking out for share price reactions to the latest results in the earnings season of aussies big four banks. tray numbers showing exports climbed to a six-month high. -- the bestlink at for april, by the way. event with the potential risks on the horizon, are the markets getting too complacent? ,ophie: i want to show you this highlighted by our daily profits and are. he is saying that those who are in that camp, that markets are being too complacent, this is something to chew on. this is the merrill lynch market list index, continuing to drop, the lowest level since about

late 2014. pricea gauge of expected swings in the future implied by the options market across several asset classes. levels at less than zero indicates less stress than typically normal. this has been falling since the november u.s. election, and the options market seems to be encouraged by the global growth outlook, which we had seen markets also gauging when it comes to that positive tone. there is the question of whether we are seeing too much complacency. betty: thank you so much. certainly going to be watching for that. let's get to the first word news with paul allen. bloomberg has been told several big banks have been subpoenaed as part of a criminal investigation into possible manipulation of the u.s. treasury market. , bnp paribas,s rbs, and morgan stanley have received request for information on the $14 trillion market. the justice department has been examining u.s. treasuries for

about two years, focusing on issues of securities. goldman sachs posted disappointing income trading results in the first quarter. its copresident says that because of clients lack of conviction, not because of lack of wages on the firm. he denies the bank has a risk management problem. >> this is not a quarter that was defined by losing money. this was defined by lower client activity, and the firm not notmizing the revenue -- maximizing the revenue opportunity. dbs has announced a 1% increase in first-quarter analystshelping beat expectations. southeast asia's largest bank reported net income of $7.8 million -- of $17.8 million.

regional oil services firms battle low oil prices. profit rose 22% on a strong performance for domestic banking for anz. the banking environment remains constrained by intense competition and pressure on margins. australia's other big banks will report in the coming days. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. i'm paul allen. this is bloomberg. president trump telling bloomberg he is considering breaking of wall street's biggest banks, a revival of the depression era glass-steagall act. minutee to us in a 30 interview in the oval office on that, as well as facetime with two controversial asian heads of state. ramy inocencio has more details.

always one for surprises here. in this 30t a few minute interview that bloomberg news did have here. but first to the potential 21st century glass-steagall act that people are talking about. we got a little bit of a headache in terms of the markets. terminalthe bloomberg to show you exactly what i'm talking about in terms of the banks. what you're looking at is a kbw bank index, an index of the 24 biggest banks in the u.s. donaldcy exactly when spoke about potentially breaking up the banks right here around the 12:50 p.m. mark eastern time. also look at how short-lived it was. in the next 45 minutes or so, investors pushed back the kbw bank index to where it was, and that even higher. 1%,losed up still by about regardless of what donald trump said. let's take a listen to his exact words. mp: we are looking at

that. some people want to go back to the old system. we are looking at it right now as we speak. is going to be very, very seriously changed so the banks can go back to loaning. ramy: he is talking about taking down dodd-frank and establishing some kind of new 21st century but i spoke with nathan dean, our bloomberg government policy analyst and washington, d.c. he said we should not hold our breath with regards to seeing any kind of reality when it comes to a 21st century glass-steagall, if only for the fact the senate and the house both probably won't be able to get anything together because of a lack of support. mr. dean says he is not seeing any "pragmatic senators" supporting any breakup of the banks. also of note, there is already some legislation out there trying to be pushed out in terms of the senate for a 20 for central glass-steagall cosponsored by elizabeth warren of massachusetts, a very fierce

consumer advocate, as well as senator john mccain of arizona. that's a bipartisan thing that hasn't gotten any traction so far because there are no other republicans who are supporting it. there is support within the trump administration, cpc steve -- you can gary cohn see steve mnuchin and gary cohn saying that both support it, but again, don't wait for it to happen anytime soon because there are a lot of other priorities that also need to come up with regards to this. betty: he talked about his relationship with two controversial asian leaders, kim jong-un and regroup terratec -- and rodrigo duterte. he said he would be honored to meet kim jong-un, the dictator of north korea. he said in our interview that he would do this if the timing was right, if the circumstances were

right. he didn't go into the exact details of it, take a listen for yourself. trump: under the right circumstances, i would absolutely meet with him. those -- most political people would never say that, but under the right circumstances, i would meet with him. ramy: definitely taking a different kind of diplomatic tact when it looks to north korea here, changing decades of u.s. foreign-policy. something else to look at, the philippines with president duterte. donald trump did invite him to the white house last week. it is interesting because, of saide, we know mr. duterte himself he has been behind murders before he was president. inis come under criticism the philippines and here in the u.s. about human rights abuses, but mr. trump has said he welcomes him and sympathizes with him, especially because the top best because of the country's drug problem. : he has been very

tough on that drug problem, but he has been tough on it. he is very popular in the philippines. yes, i look forward to meeting him if he comes to the white house. i look forward to meeting him. ramy: that will be an interesting meeting. if he does meet with kim jong-un at sometime in the future, this is an about-face between the philippines and the united states, because under president barack obama, there is a lot of verbal sparring. eventually some kind of freak that best some kind of reset with the philippines? we're not sure. it this all turns into reality is another story. betty: thank you, ramy inocencio there. still ahead, a run of solid ego data proves little consolation for the stock market so far. we look at why they are going in different directions. up next, treasury secretary steve mnuchin says the

u.s. government may issue ultra long-term bonds. that is next. this is bloomberg. ♪

♪ this is "daybreak asia." betty: treasury secretary steve mnuchin has signaled that the u.s. won't restrict foreign investments. he says the review panel should focus on national security, downplaying the speculation that they would expand their authority. >> we believe in free and fair trade. where we are attacking days is where it is not free and fair. if we are charging someone zero tariffs and they are charging of 20% or 25%, that is not free trade.

free and fair trade is a reciprocal agreement, like anything else, any deals that companies do or countries should do. it is about deals that should be fair in both directions. we want to make sure u.s. companies have every opportunity to export. we are focused on growing exports, not cutting imports. our trade imbalance is too big. it hurts the american worker. that is something that the president is very focused on. whole issue of calling china a currency minute later, do you think walking back from that has made sense and make your job easier? >> i think we had a very important meeting with the chinese. i think the president has made it very clear that the number one priority is to have them help with north korea. that is something that they are doing. your the security side of job, and has become a bigger factor than you expected when you went washington. >> it is. i'm spending a lot of time on the sanctions programs and terrorist financing.

is a very important part of everything we do. -- it is a very important part of everything we do. yvonne: let's get some reaction to those comments. joining us from sydney is elias haddad. good to see you. you heard him mixing security issues with currency, as well as trade when he tries to strike a deal with china when it comes to reining in north korea. do you think that is actually eliminating the risk when it comes to pricing in the markets? guest: i don't think it has much invocation for the u.s. dollar in terms of movement. the u.s. treasury essentially avoided to label china a currency manipulator. china does not fit all the three

criteria necessary for the treasury to label it a currency manipulator. if it's only one of those three categories. is petition for the chinese at this stage, china is still on the treasury department's monitoring list. --will [no audio] -- yvonne: since the french election we have seen the u.s. avert a government shutdown. what i would seem to have our when it comes to some of these safe haven trades like the yen, as well as gold? the yen has actually outpaced

the gold in prices. could this widen any further? guest: i think a lot of the stage isn move at this the broad-based u.s. dollar move. we currently think the u.s. dollar will struggle to head significantly higher, at least until we have a trump administration aggressive fiscal stimulation agenda panning out through congress. until that time, the u.s. dollar will struggle to had higher. that means the dollar-yen will continue to trade near the current level and even lower. we don't expect the bank of japan to ease monetary policy further. yvonne: just to illustrate -- betty: just to illustrate on the

dollar and its struggles, we are pulling up a chart that shows the dollar going through its third week of weakness. it is now flipping past its 50 day moving average as you see in the aqua line on the bottom. our viewers are looking at this. on the top half of this chart, represented by the white line, the euro is moving above its 50 day moving average. perhaps you would sell the dollar and by the euro instead? guest: i still think the significant upside for technical trade on the euro is limited. it is going to be difficult for the euro and the short-term to sustain a move because it is still easing monetary policy. significant upside in terms of an opportunity for the euro is limited. certainly the euro area is

diminishing with french political uncertainty. essentially, expect the euro to consolidate around current levels going forward. factors that will influence the euro will be the actual trend in the u.s. dollar. that will essentially be determined by the trump administration's ability to get it aggressive fiscal stimulus platform through congress. that, for the time being, is not a certainty. betty: although certainly a lot of investors are looking at it for the end of this year to have some certainty around that. i'm also curious what you make of the ultralong bond talk coming out from the treasury secretary, and how that might affect the dollar. guest: implications for the dollary -- the u.s.

essentially ignored it. treasury yields didn't. treasury yields have been an interesting reaction because this is not what you would expect the treasury yield to have following a disappointing set of u.s. economic data released overnight. defense favorite measure of -- theon slowed in march fed's favorite measure of inflation slowed in march. yvonne: before we let you go, when did we start repricing the that bet? -- the fed that? guest: right now, money market

have fully priced in a 25 point basis rate hike this year. we think there is a likelihood that the fed will raise rates to more times this year and begin tapering its asset purchase program. in u.s. economy is still good shape despite the slowdown in q1. ofency pick up in the pace average early earnings on friday -- we should see pick up in the pace of average early earnings on friday. this means the fed is on track to raise rates to more times this year. that could potentially provide the u.s. dollar with some support throughout the years and. yvonne: thank you so much for joining us. senior currency strategist at commonwealth bank of australia on the currency markets. betty: one feature on the bloomberg we would like to bring to your attention is the interactive tv function. find it at tv . in see watch us live previous interviews and dive into any of the securities or bloomberg functions we talk

about. become part of the conversation by sending us instant messages during our shows. for bloomberg tv subscribers only, so check it out at tv . ♪

betty: this is "daybreak asia." yvonne: let's do a quick check of the latest business flash headlines. amb says revenues will increase from the $984 million reported for march. convinceddon't appear in the new chips. stocks have rallied 20% this year through monday's close. betty: boeing says it remains on track to deliver planes to iran, and expects the first to arrive next year. the $16.6 billion deal with iran air for haidi: haidi: haidi:s

would beir for 777s the first since 1979. airbus has already delivered the first planes in a $19 billion sale last year. yvonne: fox news copresident , theshine has resigned latest high-profile departure over the handling of sexual harassment claims against executives and ours. he has not been publicly accused of harassment, but a former host said in a lawsuit that he ignored alleged misconduct by former network chairman roger ailes. he denies the allegations. betty: angie's list is being bought by iac in a deal that values more than $500,000. they say investors can choose either one class a common share of the common company or $8.50

in cash for each share they currently own. it would be a 44% premium over the stocks last close. the new company will be called a mgi -- called angi home services inc. yvonne: spacex is but a size satellite -- a spy satellite into orbit. it lifted off after being delayed for 24 hours because of a sensor issue. if the first time spacex has worked with the said department -- with the fed department. yvonne, some breaking news out here on softbank. talks to invest $1.4 million in communication. they have seen a surge after that demonetization move by the indian government. this would value the company at

billion according to people familiar with the matter. yvonne: up next, asia's biggest lender has posted profit. we have the estimates. ♪

host: just half an hour away from the opening in singapore. betty: looks perfect. you are watching "daybreak asia." time to see how the asian markets are trading so far. , asie kamaruddin has more we are trading about half an hour into the tokyo open. asia-pacific markets right now are slightly higher, up about 2/10 of 1%. we are just getting headlines up from the boj in the last hour. no surprises there for the asian

market. we have seen the yen declining, and that is helping set up some of the gains we are seeing here in asia. take a look at the leaders here on the nikkei. we have yamaha surging as much as 14% earlier this morning after setting its all year operating profit outlook above estimates. take a look at j. front retailing, leading gainers in the retail sector. with sales coming in higher. 1% higher for up the much of april. dbs is ahead of wealth management. that is going to impact the

performance for 2017. the electronics and solar panel maker on the rise as it posted a slump in annual profits on weaker sales in solar equipment. they have climbed about 22% in the past year, but technicals are signaling the kyocera stock could be over budget is. we do have the likes of sony financial on the decline here. yesterday we had sony corp. highs rising to a 22 month on a bullish earnings report that led analysts to for see a record profit for that company. we do have adventist continuing to slide down about 1%. up in ar we did see it year-over-year profits. that's just a look at some of the reaction to the earnings season so far this week. betty: certainly earnings in

focus across the world. let's get to the first word news with ramy inocencio. ramy: china's markets and economy are going in different directions as president she desk president xi is rattling investors. they think reduce debt loads will be good for the nation, but there is concern over whether officials can deliver that without short-term pain. chinese stocks wiped out gains for the year last week as the government shifted focus to tackling risk and leverage. he would beump says willing to meet north korean leader kim jong on under the right circumstances -- leader kim jong on -- leader kim jong-un under the right circumstances. north korea has become the most urgent foreign-policy issue facing the president during his first 100 days in the white house. also president trump has told bloomberg he is actively considering breaking up a wall street tax, reviving discussion of a depression era law

separating can toomer and investor banking -- separating consumer and investor banking. he also may raise the gas tax to fund highways. supportedstration has a 21st century version of the glass-steagall law, although it has offered few details. pres. trump: we are looking at that. some people want to go back to the old system. so we are looking at that as we speak. and dodd-frank is going to be very, very seriously changed so the banks can go back to loaning money. ramy: there seems to be like in the transpacific partnership after all, despite the withdrawal of the united states. trade officials of the remaining countries are in toronto this one for so-called tpp minus talks. a sign thatare also canada wants to move away from its biggest trading partner, the united hates best the united states. sydney airport will not take up the australian government offer

to develop the city's long-awaited second airport. it's is considerable risk around the $3.8 billion project are not in the best interest of shareholders. the operator of kingsford smith airport was given first right of refusal to develop a second hub. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. inocencio. this is bloomberg. yvonne: breaking news out of ,mphasis cap -- out of infosys the indian id company, and nothing they are hiring 10,000 u.s. workers over the next two years. this is part of this plan from the company to open four new tech and innovation hubs in the u.s.. we can you see more news of investment heading into the u.s. , but this one is coming from infosys hiring 10,000 u.s. workers in the next two years. betty. betty: certainly the company has

been having a hard time dealing with some of the policy changes here in the u.s. particularly on the work visas. that has affected the company. also, rising wage costs locally have also get their margin. this looks to be sort of an olive branch here to the u.s. yvonne: no change is expected from the reserve bank of australia when it says the cash rate later this morning with all economists. we expect policymakers to sit tight on 1.5%. over to paul allen with more. betty: a couple encouraging developments since the last cash rate meeting, right? reporter: that's right. we had the inflation rate with crept back into the rba target band between 2% and 3% inflation in australia, now running at 21% -- at 2.1%. for years now, it has been saying that it can't handle stimulus on its own, which has been gently prodding the

government to do something. last week we had the treasurer scott morrison suggest the government may be about to redefine the way it explains debt in the budget so it can borrow these low rates, get a good deal locked. in, and start investing in infrastructure if you keep it up -- locked in, and start investing in infrastructure. economists are unanimous that the bank will stay on hold at 1.5% this afternoon. so it is all about the nuance around household debt and weak wages growth. betty: it certainly is, given the fact we see the case against rate cuts seems to be getting stronger. yvonne: elsewhere in australia, you have been watching the first australia banks report this week. how do the numbers stack up? reporter: reasonably well. i will give you some of the numbers in australian dollars. net profit up 6% to $2.9 billion.

billion,it was $3.41 up 23%, but still considered a slight miss. these numbers are really built on the success of anz's domestic units. paintf the other numbers more of a mixed picture, particularly interest margins, 2%.ing from 2.07% to -- that is global the lowest levels of the global financial crisis. the market is not terribly impressed with the anz shares, of about 2.5% right now. yvonne: thank you. sticking to banks, watching the banks in singapore after southeast asia's biggest lender dbs reported profit estimates.

we have seen some better-than-expected earnings. are you seeing comments on the improvement? guest: it was a bit of a turnaround for dbs. they had a week fourth-quarter. then they had a 1% gain in net profits. in this one, we see a bigger fix from wealth management, so the wealth management business is doing well. i think the common thread is that both oil and gas debt problems, which these singapore banks have had, seem to be under control. so dbs was flacking that asset quality pressures are easing. we also saw that quite nice result from you will be -- from you will be -- from uob. yvonne: there's all these worries about these bad loan problems. is there any sense this maybe finally bottoming out here mark

-- here? guest: i think the sense that it is under control and easing, but biggest difficulties are behind us now. yvonne: peggy so much. -- thank you so much. up next, market moves in china. why equities in the economy are going to different ways. that is next. this is bloomberg. ♪

yvonne: this is "daybreak asia." betty: a quick check of the latest business flash headlines. aramco lowered oil prices to an 80% discount for the world's to asia,rude exporter

raising prices for all of the regions. luxury handbag maker coach reports results up 12% up this year and plans to expand. the ceo has revealed interest in buying accessories and clothing brands, and has awards of more --n $120 billion in cash $1.8 billion in cash. australian retailer woolworths says it has seen the widest second have losses for stores. they expect to report a loss between 86 and $95 million after a first half shortfall. 6.7% year on year .

5% year onare up year. china's markets and economies are going in different directions at the government pushes towards reducing leverage. let's go to our chief asia economic correspondent. we talked about the divergence, and it has been quite interesting because we see solid footing when it comes to the economy. you have the likes of mark mobius trying to clean up the financial system is a welcome sign. there's a view out there that this is exactly what needs to happen, it's just markets are seeing that way. we saw when president xi jinping said they needed to reduce carbon risks and bonds selloff. economic activity continues to hold up and do better than expected. when you look at the key indicators and exports and factory prices continuing to push higher, you see the factory

sector holding up quite well, consumption is up. the whole underlying economy continues to hold up, even though the market quite buy it. outlook foris the the economy for the rest of the year? reporter: i think there is a view out there that perhaps the economy has peaked in the first quarter, that china has seen its best for the year. it is going to have a lot of hrough, andowing t cracking down some of these shadow banking risks. nonetheless, there is still a huge infrastructure story and china. there are still vast parts of china that need upgrading to rich, approaches -- roads, bridges, public housing, and the like. theg forward, we have

government making sure growth remains on track and people are not being put out of work. maybe it has peaked in the first quarter, but it is on track to its growth target for the year. we are mentioning the official numbers out of the weekend were slightly soft. there is a sort of cloudy outlook here. we have seen two straight quarters of pretty robust growth. look at the u.s. gdp soft in the first quarter. a softening of the u.k., as well. but right now, all forecast for global growth are typically quite strong, especially for global trade. that bodes well for china. yvonne: but perhaps maybe reaching a peak for the first quarter. thank you. good to get your perspective on that.

talking more about china looking to raise its investment overseas. pic executive vice president spoke exclusively to haslinda amin in beverly hills, and that it will be a strategic shift. -- it is very difficult to compete in the market where the market is very efficient. [indiscernible] haslinda: so it is a strategic shift. what exactly are you looking at? have you identified asset classes, market sectors? >> is going to be a strategic shift. opportunities where

we can add value. [indiscernible] -- we can help them seek a strategic alliance with chinese counterparts or marry them with the chinese customer market. disrespectful,e but the return of the investments have been very low in 2016 in 2017. it was -3.7% because of the fluctuation in currencies. satisfied?en what you intend to do to raise the level of returns? >> i'm new to the firm, but i that's why i am not allowed to disclose the number i think that has not been a

testicle fabulous return -- haslinda: [indiscernible] the problem i think is we will find out -- [indiscernible] -- that is how we are going to make this shift to divert into areas where we can add more value. betty: that was china investment operation executive vice president speaking to bloomberg's haslinda amin. you can get this story and many get your you need to day going in today's edition of "daybreak. " also available on the bloomberg and mobile app.

you can customize the you only get news on the industries you care about. this is bloomberg. ♪

betty: let's get a quick check on the markets that are trading right now. the nikkei to 25 of about 7/10 of 1%, some gains after the yen fell. sydney, has also opened, you

the 200 is down slightly ahead of the rba meeting about 3/10 of 1%. the --t be -- the cost ospi is up about 8/10 of 1%. singapore starts trading in just under 15 minutes. also looking at a higher open there, up 3/10 of 1%. had this news out about softbank, said to be shopping around again and talks about $1.4 billion in an online payment service in india. we are told the deal is not yet final, and things may change. let's see what we do know about this. here is our asian tech reporter. them if thiset by gets done. reporter: that's right.

that would value atm electronic payments company at $7 billion. $1.4 billion would make it the biggest indian startup. softbank has invested in india for years, pouring in hundreds of millions of dollars. they especially stepped up that effort under the previous president. there before low is pretty much the who's who of the indian startup team. there is snap deal, then the adrian be best the airbnb of india, the uber competitor in india. he is not the only billionaire interested in the indian market. makingzos has been inquiries there as well, and that's been making things difficult for softbank's

investment portfolio. there's already talk about merging flip card, another e-commerce competitor of snap deal, together so they can resist and mcgahn -- resist amazon and the market. yvonne: even with 197, 1 of the biggest backers alibaba. softbank is also developing a hundred million dollar vision fund. where's that fitted now? -- where does that fit in now? reporter: for months we have been saying it is due to be announced week. we still believe the fund is on track to be completed. our sources tell us the first round will probably be around million and -- $100 will potentially grow. the investor lineup has not really changed. we still have saudi arabia contributed the bulk of softbank, as well as i would be -- as abu dhabi.

larry ellison might join later on. haveow some of the deals already been announced, for example, satellite operator oneweb. our understanding is a deal by softbank over a certain amount, which would probably include the what havelude patm, to go through a vision fund. so that uber rival in china will probably also fall into the vision fund portfolio, but there is still speculation to that point. when he announcement comes, we would like to see some big splash. not a whole lot of reaction from investors right now. softbank is pretty much flat on that news. headlines,other elliott management is setting to meet bhp investors, urging a major overhaul. 12% of bhp. about

there was then bhp's oil assets to combine into one based in australia. an uber like service for trucks in china is near agreement to raise more than $150 million. we are told the investment will be led by baidu capital, and could be sealed this week. it would follow raisings of $115 million and december, pushing his valuation to about $1 billion. is backed by tencent and all-stars investment. yvonne: that's it for us on "daybreak asia." time for a look at what is coming up on " bloomberg markets." the rba is not likely to move, but they have been in a bit of a quandary because you've

got these house prices that some are saying have entered bubble territory. any tightening could seriously have some ripple implications. also you north korea and tools there with president trump saying he would be willing to meet. yvonne: it would be an honor, he said. [laughter] betty: how would that even happen? what would that even look like? talk us through what guesses you got. rishaad: james rooney is going to be talking about that i'm a north korea and the tensions there. withll also be talking someone from a&p capital. ♪

kong, and if i am in hong 11 a.m. in sydney and 9 p.m. in new york. i'm haidi lun. rishaad: i rishaad salamat from bloomberg asia headquarters. this is "bloomberg markets: asia." ♪ haidi: earnings for the key drivers of asia returns from the mayday breaks, japanese stocks seeking to extend monday's game. rishaad: president trump telling bloomberg he's prepared to break up the banks to separate consumer and investment operations. haidi: