♪ up people at the fbi. president trump by ring james comey saying the bureau needs to restore trump. promising to unite the country after nine years of conservative rule. australia pushes and nationbuilding budget promising jobs and growth but projections rely heavily on higher wages. trade,mps in extended spending more to show sports and

losing subscribers. is daybreak asia coming to you live from bloomberg's u.s. asia headquarters. it is just after 7 p.m. here. big storytty, the here today is going to be the victory of moon jae-in. it was not an easy win for him overnight. long looming challenges ahead after suffering from the present election. he has 41% of the support. he campaigned on a stimulus program to create jobs and growth and promising to unite the nation after nine years of conservative rule. shery ahn is live from seoul for us this morning. good to see you. moon obviously has a lot on his plate. shery: yeah, he does. you mentioned some of the issues

but he has to deal with north korea relations with china and the u.s.. moon led the conservatives to victory by a margin of 41% of the vote against 24%. his first task after declaring victory comes here at the seoul national cemetery where he's going to pay his respects. he is expected to visit the andes of former presidents, even the late father of a former president. he wants to show unity for south korea. after he declared victory, he gave a speech to supporters and said he wanted to be the president for everybody, not only for those who support him, but those who did not vote for him. a lot on his plate for now. the first day at hand is he is

expected to give an official speech at a national assembly around noon. given this is an unprecedented election, we are not expecting a transition period. that is usually around two months. he will be sworn in a immediately which could happen sometime today. it's expected to be very informal as well. also, we are expecting him to announce some nominations for parliamentary confirmation such as the presidential secretary and spokesperson. betty: i wanted to bring up a chart. i know you cannot see it. it is a terminal chart that shows the situation of the average korean right now. what you see in the blue line is their income has pretty much gone nowhere. it has gone lower and they had to borrow more as represented by the white line over the last several years in order to

maintain their lifestyles. they are growing increasingly frustrated. they are wondering where the wage growth is, where the jobs -- how are they going to improve their spending power. what does someone like the new has he promised the average korean in improving their lives? wants to first of all tackle reports. he believes these conglomerates have taken over south korea and not letting the average korean prosper. he wants to tackle those reforms. there are a few bills sitting in parliament. that will be his first priority. you talk about the situation in korea, yes, it has been challenging. youth unemployment is double the rate of the general population but we have to talk about unemployment among the elderly. they are struggling to survive,

many of them are struggling to survive because of the weak system. when it comes to household debt, bank lending figures in a few hours. while that has been at the end of last year at $1.2 trillion, that is pretty high and key issues that moon jae-in will have to tackle. keyfor moon jae-in, a question will be what to do with north korea because he is a son of north korean refugees. this is a matter that is very close at heart to him. and a lot of people are expecting a softer touch from moon jae-in when he takes office when it comes to pyongyang. betty: some new remarks coming as well. thank you. we will see how that plays out when south korea opens in about one hour. it will be very interesting to see how things trickle through. let's see what is

happening in the let's see whats happening in the rest of the region. new zealand is flat as well. australia, the big news will be the fallout from the budget. watch out for the aussie banks in the face of this new levy. at theanging in at 73.47 moment. we saw a little bit of relief on the iron ore price. the aussie yield actually ticking higher here. not much of reaction from bond traders on the state of the of yet's aaa rating as but we have seen yields pickup for four straight days now. futures pointing to slight gains as well. japan slightly lower on tuesday. plenty of earnings out including tokyo that and southbank -- toyota and softbank. that theye strength will not proceed with a nuclear test.

some modest gains in tokyo. that is another look in the region this morning. betty, we didn't get that good lead in from wall street once again and it seems like the boost was around record high. betty: absolutely. that is the good news. the bad news is there are not many catalysts right now to propel the market higher. disney earnings coming in which didn't really do much. that was more of a disney story rather than a u.s. economic story. still a lot of problems with espn. we will dig more into that, but let's pull up how the u.s. markets closed today. you can see the s&p pretty much unchanged. the dow jones down about 36 points. the nasdaq composite closed a little bit higher, up 3/10 of 1%. that is the outperform or of the three indexes so far. newsng in the u.s., big that broke out about one hour ago. president trump firing his fbi

director james comey. megan murphy is here with the latest on this. right sort of a shocker after the markets closed on comey and his dismissal. were there any rumors this was in the making? megan: there are days in the trump presidency were the mind baffles. this is another one. this came completely by surprise, although director comey, former director comey came under intense criticism after his appearance before the sayingcommittee hearing, how he was defending his role in the clinton email investigation. his very controversial decision. making very saying pointed comms about that days before the election. his sacking comes as a surprise, particularly because the fbi was leading the investigation of trump and his administration's potential ties

to russia, the potential potential, not even but meddling in the 2016 election. the justification was not for it which is specifically puts it on the door of comey's allegedly mishandling of the investigation which will raise a lot of questions on both sides of the aisle. yvonne: potential, but meddling in the 2016 comey did kind of throw himself in the limelight during the election. even hillary clinton herself has admitted it cost her the presidency. who do you think trump will put to head the fbi? megan: the normal names are being floated. rudy giuliani, chris christie -- chris christie drifted away from the campaign a little bit. we will have to wait and see on that. there are going to be questions of this action taken mainly so the administration could put someone more friendly with them

on this russian investigation. there are intense calls for a special investigation to be made in the wake of this firing. democratic lawmakers and commentators suggesting this has strong overtones of secrecy, wanting to get rid of this. if they have kicked this political qua quagmire down road, there creating further, perhaps more political problems down the line should the investigation in fact be closed or shut down with no findings. it is very difficult to understand why the timing has been such, particularly if you are going to fire someone based on conduct that was known in october and earlier in the year. betty: the timing is very quizzical. what is the global impact here, if any? megan: two things that the fi is

investigating worldwide things -- terrorism and other complex actions. the russian issue continues to hang over the administration is not going away. today's actions only make the situation more murky. betty: thank you so much, megan murphy. t's go back here to asia. the australian government is pushing ahead with a nationbuilding program, taxing the big banks and sticking to a surplus rejection -- projection. let's bring in paul allen. what a difference three years makes, right? this is more of a labor policy than coalition. take us through the highlights. paul: yes, that is what much of the commentary is saying. the deficit disaster of four years ago, we don't hear about that anymore. all that spending on infrastructure.

$29.4 billion -- it is coming down. it was forecast by the 2020-2021 budget. it's to peak in 2018 and falling back to a .5% of gdp -- 8.5% of gdp. it's clearly to protect australia's aaa credit rating. i spoke to the treasurer scott morrison and asked him if he thought he had done enough to achieve that. >> it has to be a matter for the writings. a balance of 2021. ensuring the measures included in the budget, measures we can reasonably expect for a forecast and set that is in the conservative range. i think the budget addresses all three of those things.

what it does rely on some some colleagues are calling fairly heroic assumptions surrounding growth forecasts, particularly wage growth forecasts. noted: the budget as we also targeted the big banks. a levy on the big banks. paul: that is right. this levy is lifted from the green playbook. when suggested we would get laughed at for the policy and that is expected to attract bipartisan support. the opposition labor party also supports that. fair to say there is not a lot of love lost from the australian public either. as for the banks themselves, the chairman of the bank of melbourne came out and called this a tech grab. are going to be

underperforming. all the big banks weighed when news of this leak on tuesday. yvonne: paul allen with more details on the budget. we will have more analysis of the astrolog australian budget throughout the morning. jim chalmers is with us. 10:10 in sydney. after that, the finance minister joining us live at 9:45 in hong kong, 11:40 in sydney. we will continue our conversation on the budget next with the government facing a collapse in the iron ore pric es. what does that mean for the miners? betty: later, not such a wonderful world at all at disney's television division. we will see what espn means for disney overall. this is bloomberg.

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yvonne: this is daybreak asia. betty: excuse me. i'm betty liu in new york. we are live here. the aussie budget sees iron or falling. joining us now is the senior analyst for metals and mining in sydney. peter, we saw in the australian budget, there was forecast for iron or budget by march. you mentioned in your notes, if you look at the budget to give you a forecast on where iron ore prices go but how accurate you think they were in their forecast?/ peter: the $55 number resonates

on what we expected, but you said $55 per ounce. it is per ton. betty: excuse me. peter: it is the normalized price for iron ore. is a normalized number longer-term. short-term it was 2.17, but it reflects a longer-term higher demand. it is about marginal cost-based pricing and that is where we see producersn world sitting around the $50 level. short prices will move higher and lower due to the movers in trend should be down to about $55 and we expect that sometime during the second half of the year. betty: what will be the biggest factors for iron ore? prices?l drive the

peter: there are a couple of factors, but the most important one is supplied push. it is not driven by demand at all. supplied push could be a key. we are seeing that in iron ore. it is not the story for the last two or three years. supply coming from major players in australia and also in brazil. an emerging producer as well called roy hill. that amount of production is coming into the market. after the typical seasonally eeak first-quarter, iron or prices have fallen higher -- gotten higher. prices are starting to normalize on supply and that growth will continue through the course of the year. roy hill is doing in australia but also in brazil. that will adjust to the new

supply in the market. on demand, we have seen a supportive market since december 2015 driven by economic expansion. it does feel that the index numbers around the world that that pmi trend peaked last month or this month. it is nice to see that roll over . it is also a correlation between the restocking and destocking. to be some destocking part of the trend and that will see less shipments required by china and emerging supply coming up. that is why price should normalize at the $55 range. yvonne: you mentioned the low cost of ore in brazil and china. i want to throw up a chart for our viewers to see. you talk about some of the questions on the global inflation story as well. we kind of see this dynamic where metals have been held

hostage to the tightening we have seen in china. we are continuing to see talks of capacity cuts. how much more can capacity fall further to remove that access supply before we actually reach a balance? does it worry you? peter: late last year, this reflation versus non-reflation whole euphoria along inflation versus what the u.s. government may or may not do as well as china. from chinaalf growth and the reflation trade based on what the u.s. president may do. the markets ahead of themselves in terms of pricing. we don't see a lot of supply required to balance the market growth at aconomic

growth at a local -- normal level. we are in a world now where it is normal. we are not in a world which was 2005 which is chinawe are nh was 2005 which is china inspired large growth. maybe once in a generation. back to the growth levels of gdp may be 2.5% is something we expect. in that sort of environment, growth is at a lower level. betty: we have seen the aussie had declines in iron ore. holding around the 73, 74 level. do you think that will hold and be a boost for the miners? rising the australian dollar is what we want for the australian miners. the rising dollar impact their earnings positively. we would need that to see this space move higher. there are a couple of factors tracking the aussie dollar. an 88% probability to tighten rates next month and that will see the spread close down and put more pressure on the aussie. in terms of trade, softer now

than the last two months. both factors will see a movement in the dollar but i see it staying around the mid $70 le-- mid-75 level. a balance in terms of trade and interest rates. peter o'connor, thank you for joining us live from sydney. we will also focus on the effect of producer prices in china. o'connor, thank you for joining us live fromwe willg ahead of china releasing its inflation data in a couple of hours. ♪

asia.: this is daybreak betty: ups currently gets more than 60% of its sales from the u.s. but that may soon change as it expands to other regions, including asia.

abney aboutdavid the global expansion plans after announcing a partnership in dubai. international is the growth standard. we have a presence in the u.s. where we are growing is internationally. emerging markets, naturally you think of china, india. the middle east just got a lot of potential. >> why is that? david: one, the population is so young. emirates israb really focusing on not being oil dependent. i think their goal is to be the next singapore, hong kong, where they are trading hubs around the world. >> you mentioned china. there are always concerns about china slowing down, protective of their own market.

what is the potential in china specifically? david: we are very optimistic about china. and the end ofr last year, china has really exceeded expectations. there are people that still compared to the 10% gdp days. gdp growth on top is a good number so we are very optimistic. betty: i always want to pull up this chart that shows how ups shares have performed versus their otherbetty: i always wantp competitor in the package shipment space which is fedex, and the broader s&p index. you see it pretty much underperform these last several months. some of it has to do with the concerns of the e-commerce side of the economy here. ups has certainly expanded, delivering packages to homes

has lower margins which is a worry for shareholders in this company.

yvonne: it is 7:30 a.m. here in hong kong. we are 30 minutes away from asia's first major market betty: it looks -- major market. betty: it looks quite nice, cloudy out there. markets closed in new york unchanged. at the nasdaq did finish off a little higher than the other indexes. i am betty liu in new york. i am yvonne man in hong kong. you are watching daybreak asia. now to first word news with alisa parenti. president trump has fired

fbi director james comey on the recommendation of attorney general jeff sessions and his deputy. comey becomes only the second fbi chief in the history of the bureau to be dismissed. he is been leading the investigation into alleged russian meddling in the presidential election and moscow's links to trump aids and associates. has claimed victory in south korea. rule had ended with the impeachment. votes counted, moon has 41% of support. moon campaigned against a tough line on korea's sprawling conglomerates, and a softer approach to north korea. walmart is said to be ready to million dollars to resolve a long-running investigation into alleged bribery. the deal is still being finalized and may change, but would mark a significant concession by the government. has thought twice that

amount since last year over an inquiry into claims that linked to walmart's business in countries including mexico, china, and india. watchdog saysnce it is scrutinizing the industries and investments to resolve risks and contain potential new ones. the regulatory commission is focusing on insurer's major stock purchases as well as real estate and assets. last month, they began an investigation into the commission's chair. china may raise executive compensation at banks and other state owned enterprises to retain talent. sources the premier told top business figures he may review a cap their pay at a fraction of their foreign peers. they saw earnings, the china construction chairman turning to

half of $87,000 in 2016. jamie dimon earned $28 million last year. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. i am alisa parenti, and this is bloomberg. we are counting down to major market opens in the asia-pacific. let's get to adam haigh, joining us live from sydney. what will the focus the on aussie banks, with a spotlight on the budget? we saw some leaks about the new levy. indeed, that is a big thing. we saw a bit of a move yesterday afternoon as reports late through the local media. but now we have more detail about how this is manifested self. the research analyst at the banks put 85% eps number on the hit to the big four banks in

e wouldf how this leve materialize in earnings. they would list mortgage rates at around five basis points. continued pressure this morning when trading gets underway for the banks shortly. unannounced infrastructure plan. there may be better movement in those stocks, as well. and credit suisse say people are more inclined to add to their pensions. that should help the managers, as well. betty: one money manager discussed taking markets -- money out of emerging markets, putting into an undervalued market in japan. does this argument hold up? yes, it is an interesting one. a chart on the

bloomberg, the nikkei 225, and look at the performance of japanese stocks this year, it speaks to his arguments about undervalued and under loved market that has been under pressure of late. the cell up of japanese stocks reached peak in march. there is a safe haven with the yen, made it tough for shares going to the april low. it started to rally fairly significantly. we have seen foreign investors returned to the market. is saying, valuations are appealing for japanese stocks. we have had a market that underperformed on a regular basis. perhaps there is an upside to relative markets. is taking his yen positions into japan. ofre was tactical timing when to get into the market. this'll be an interesting watch

here. the goal seems to be in charge, the nikkei 225 gets close to breaking through the 20,000 level, not far off. whether thatl see holds. thank you, adam haigh, from sydney. despite the yen weakening, historically high profit margins, as he described, it is rare. companies have a conservative outlook among the labor shortage and sluggish demand. we have more on this story. conservatives in japan, they seem to go hand in hand. they do, there is a long tradition of company executives making conservative forecast at the beginning of the fiscal year, and upgrading when things go as planned. if things are better as planned, there will be more upgrades coming. that is what happened last year.

most of the analysts are looking for that to happen again. their numbers remain higher, there is quite a big gap between what analysts see with expectations for the year, and what the companies themselves see. there have been significant misses. they are putting that down to conservativism rather than pacifism. there is concern about labor shortage. that is one factor that is a wildcard for companies. we do not know how much they will be forced to raise wages in order to keep their company staffed. we see that trickle through within a some industries. the companies, how are they expanding their profit margins to these historic highs? there are a few different trends. some are market wide and some are within specific industries. energy costs have been held down. that makes it easier for companies to control their costs.

industries, you have cases such as the mobile phone industry, mobilephone carriers, a huge business here. they have changed the way they sell handsets, it is pushed their margins up. it is a big boost. likee market cap company fast retailing had a tremendous cost-cutting program that is pushed their margins up quickly. the trends are industry to industry. but with a profit margins at historic highs, it does raise the question, how much higher they can go in terms of cutting costs, especially when you have pressure to increase wages. yvonne: it will be all about the top line. we had the nikkei 225 poised to rise 20,000. companies are ending -- missing these endless targets. wire investors buying in? is it because the market is undervalued at the moment? . you exactly, that is it

had adam talking about how investors are still bullish. thee is a chance we get it 20,000 mark on the nikkei 225 today. some of the value is down to the weakening yen. when you look at the forecast companies are making, they are basing their forecast with the yen at 105. that is very conservative. today we see a trading closer to 113. it is why the analysts's -- for profits looked good for japanese us stocks. report toyota is set to results later today, with the yen weakening again. let's go to the automakers. dave: with of the yen, the automakers get a huge boost. they have diversified geographically, to lessen the impact of the yen. but it is still there.

when they repatriate their profits, they get an impact from the weaker yen. still, expecting it to be conservative with regards to their outlook. when they are forecasting a profit for the year ahead, you can expect them to be very conservative on the yen in particular. you so much thank from tokyo for us on japan. report later.o 95 million dollars, we will look at what is expected in the next hour of daybreak. electionssouth korean , how it could affect a stock market that is one of asia's best performers this year. the most attractive in the region. this is bloomberg. ♪

betty: this is daybreak, i am

betty lou in new york. yvonne: i am yvonne man in hong kong. the world's second-largest shipbuilder well trade as four separate entities after splitting off several businesses. andr move helped cut debt half and reduce equities to 95% from a 106%. the breakup will allow them to streamline operations and make it easier to grow a divisions unit and attract investors. betty: noble expects a first-quarter loss of $130 million because of coal. the singapore-listed group was once the largest trader in asia. they had falling sales. research,lled iceberg their members are anonymous. yvonne: apple's tenure rally set worth 800he iphone,

billion dollars. shares continue to rise as a report slowing sales for the device to read it declined to 33% this year, adding $185 billion in market cap. a wall streeted implying a market value of more than $1 trillion. stocks in south korea having a remarkable run. stocks trading in 15 minutes time, after having a day off for the presidential election. the cost be rose to an all-time rose tomonday -- kospi an all-time high on monday. how is president moon's win going to affect the market? has been priced in already? >> it will remove the of that uncertainty. a lot of the polls had moon ahead of all opponents earlier. the kospi is at an

all-time high. this with ourut next guest, he is a strategist. thank you for coming out. we're in front of the seoul national secretary. we're expecting moon jae-in anytime now. will moon be positive for the market? >> yes, we had a moon a rally last week. delivers the many things couldmised, the kospi reach 3000. we started out the year at 2000. shery: 2300 right now? thehe cost be rallied -- kospi rallied. 3000 may look far-fetched. shery: expectations were high

that moon jae-in's would lead to better relations with china. there were deteriorating relations with china? >> moon said he would read -- reconsider deployment. he wants to ease geopolitical tensions in the korean peninsula. they'll be a positive story for any stocks it in china by economic retaliation. but it is more than that, is fiscal policy is expansionary. he proposed 7% increase every year, through his term. he also wants to create a lot of jobs. , couldf his policies improve domestic demand. if they areder necessary, given we see a modest rebound in the south korean economy. the government may not feel that

pressure to actually boost fiscal options. >> i think the recovery is driven by the exporters. domestic consumption is still lagging behind the export. expansionaryfiscal possible -- policy to boost consumption. it is important for them kospi, i think. shery: we have seen the korean in more than 5%, if i am not mistaken. how will that pressure exports and their prices the become more expensive? theorea does not compete on price anymore. a lot of products we sell, the tech components and so forth, you cannot get it anywhere else. of korean won becomes less an important factor. if you look at the value change of these korean exporters, it is not just the focus in korea.

it is a global chain may have. shery: when it comes to firms injuria, we have improving dividend payout ratios. will this trend continue? hope so and think so. president moon said he would corporate improve governance and lead to better shareholder returns. shery: when it comes to corporate governance, a lot hangs on financial assembly and bills that still need to get past. some say we could see easier ones at such as electronic voting. they can pass. but what about the more difficult ones, like restricting treasury shares and so on? will moon of the political capital and backing to get these bills through parliament and get them done? michael: this election, the people have spoken. they want change, they want

reform. mooning gained enough political capital from this election to put through those reform bills. let's talk a little about the bank of korea. not have many monetary tools at their hands. given they cannot loosen monetary policy anymore, what does it mean for the market? boj'sl: i think the monetary policy is already accommodative. household that is not a big issue for us. at the end of the day, household debt looks high. but if you look at the quality of the household that, it is not that big of a market concern. i think the bok knows what it needs to do. fiscal policy needs to kick in. shery: conservatives have

criticized moon jae-in's policies as choking growth. michael: i do not think so, it is business friendly. maybe for the chaebol owners it will not be friendly, but for the businesses, it is. shery: thank you for joining us out here. the weather has cleared, it is a beautiful day out there. that was michael na. we will be covering the seoul election as the day progresses. and, what happens to moon jae-in as he gets sworn in today. betty: thank you so much, shery ahn with michael na of nomura. researchave the vp of at an institute for policy studies joining us in seoul at 10:10 hong kong time.

you can get a roundup of the stories you need to know to get your day going in today's edition of daybreak. bloomberg simply -- subscribers go to dayb on your terminal. you can also customize your settings so you only get news on the industries and assets you care about. this is bloomberg. ♪

♪ yvonne: this is daybreak asia, i am yvonne man in hong kong. liu in newi am betty york. let's talk earnings in the u.s.. it is neat down more than 2.5% in after-hours trade. was, in china,ng ramy inocencio has the details. espn continues to get a drag.

ramy: the biggest drag. once over lining have to do over china. more of that in just a little in terms of subscribers, you want a bigger foundation. but that is shrinking, while costs are getting bigger for them. nba games,broadcast it costs them $600 million more than in the past. also, a scheduling chip with college games makes them put out more money. let's look at what is happening in terms of espn subscribers over the past few years. i want to show you that for the past three years exactly, subscriptions have been falling. right now they stand at 90 million subscribers. ever since 2013 when they were at the 99 million mark, that led to the knock on the top line revenue. the revenue missed by about $200

million, $13.3 billion, the estimate was for $13.5 billion. iger, the head of disney, he had to put on a brave face, saying espn is still the powerhouse it once was. take a listen. >> we are feeling very optimistic about it. the reaction says otherwise, but that is not the case with us. we have taken a number of steps to contend with exactly what we are seeing. it is something we have been working on for a few years. it is high time people start looking at espn in a very positive way, and not a negative way. think about how mobile devices are being used and what for. ramy: take a look at how important media networks are to disney's bottom line in this pie chart. 43% is the revenue that comes off of the media networks. it is clearly the lion's share. number two are parks and

resorts. at 17%.ntertainment in terms of cable networks, revenue missed. 5.9a networks missed billion dollars. parks and resorts also missed, $4.3 billion, versus $4.4 billion. the one silver lining in terms of income was with the parks. yvonne: you mentioned the parks. we have to talk about china and shanghai disney. how did it do? ramy: bob iger said it was the best thing that cannot of this. opened lastney june. in terms of numbers, they are hitting one milestone. take a listen. >> we are probably a few days away from hitting 10 million in attendance. it had been our goal to hit that

in the first year. we celebrated the anniversary in mid june, so we are running ahead of where we thought we would be. attendants are from -- attendance is from outside shanghai. it is an -- international destination. 23% of their, revenue could come from parks abroad. betty: that is it for the first hour of daybreak asia. we are getting to the first big market open. we are watching how seoul trades, south korean markets trade, after the election. for the second time this week, elections came right in line with what the polls were saying. yvonne: thing goodness, right? --thank goodness, right?

market reactions to the sufficient plan when it comes to the growth of forecast. putting their money where their mouth is when it comes to infrastructure spending. this is bloomberg. ♪

as we havei reopens a new president in south korea, promising unity after nine years of conservative rule. >> a few hours ago, president trump firing his fbi director, james comey, tsonga bureau must restore crossed -- trust australia pushes a nationbuilding budget. projections rely heavily on rising wages. >> softbank set to be close to fulfilling its technology fund

with commitments reaching $95 billion. this is the second hour of "daybreak asia congo coming to you from our headquarters. i'm yvonne man in hong kong. betty: just after 8:00 p.m. in new york. we are tracking to have the big political stories today, south korea's presidential vote and also reactions to australia's budget. yvonne: we are waiting for the markets to come online, which takes a couple moments in australia. everything does, in line alphabetically. we wait for things to trickle through. we are starting things on off strong, about 1/10 of 1%. we did reach up to that to 2.3% for the kospi already. we will see if that continues. korea first. moon g has claimed victory and begun his term as president. let's get the latest from shery ahn from seoul.

what will millon bring to the table? what is the first priority? shery: we have to talk about the economy, because reform has been a top priority for the candidates leading up to the selection. of thehe historic ouster former president over a corruption scandal. that will be top of the agenda when it comes to his policies. today, moon is expected to be sworn in. it will be pretty informal, because this is an unprecedented election. toare now expecting him arrive at the national cemetery first before his official duties at the national assembly. he is expected to pay his respects to former presidents, and even the late father of the former president. he wants to show unity for the country.

topping his agenda is going to be north korea, but all of those issues may have to wait a few days, given that he needs to make formal announcements for his top posts. for now, we are expecting some posts to be announced, such as presidential secretary, the spokesperson, posts that do not need parliamentary approval. >> i'm watching because be right now in the open -- i'm watching the kospi, up slightly. not a huge reaction to these results. talk about the new administration and what they are going to do. what can they get through to change korea? mean, i was just talking about 10 minutes ago the michael and he was telling me that because we have seen this huge run-up to the election, a lot of moon jae-in's potential

victory may have been priced into the market. doing great ati an all-time high. expectations are very high on what moon jae-in will do in terms of reforms. there are dozens of bills of sitting in parliament, including treasury shares doing restricted in mergers. like simpler stuff electronic voting that allows minority shareholders to vote remotely. all of these issues will be top of the agenda, but for moon jae-in, also it will be about dealing with north korea. this is the first liberal administration after nine years of conservative rule in south korea, where we have seen a tougher stance against pyongyang. moon jae-in used to be a top aide for former president. so a lot of people are saying that we could go back to the sunshine policy of engagement with north korea.

still, moon says that when critics say he could be week toward the north, he cites his military experience in the 1970's with south korea special forces, saying he will be a strong president. betty, yvonne? great work, joining us live from seoul. let's get to the market reaction with haidi lun joining us live. the kospi seems to be shrugging this win off. no surprise, i guess, because it has been quite overbought. haidi: as david ingressive just said, yachting it off. maybe surprising giving that markets were closed yesterday for election day. there was some pent-up rice activity. -- pent-up price activity. we are up just under .1%, seeing some nice gains when it comes to financials, about .7%, but a

pretty lackluster session to begin with. we will be watching south korean defense stocks, given more saber rattling from the north. as we get more details about moon jae-in's approach when it comes to dealing with pyongyang. let's keep in mind this is the consensus result that the markets were looking for. as you said earlier, this is the second time in a week we have had polls proved to be correct when it comes to presidential election outcomes, which is a nice change. analysts are saying we may see gains over the next couple of days, but then a pullback. kospi pointed out, the has broken out of the range of has been in to hit record high after record high. and otherapital examples, saying after the initial jump, there will be some selling. the next two to five days will be adding to their position on certain dips. betty: the pollsters still get

to keep their jobs, at least for now. thank you so much. budget focusing on infrastructure spending, as we saw, while taxing the big banks and sticking to a surplus projection that relies heavily on wage growth, may be too optimistically. paul allen in camera with more. take us through the highlights. describinglleagues -- future budget results, rather heroic, particularly when it comes to wages growth. forecastillion deficit for the year 2017 and 2018, and a return to surplus in 2020-2021 of $7.4 billion. that does require some assumptions, gdp at 2.75%, falling unemployment, and iron

ore at $55 per ton in the march quarter 2018. iron or price so important to the government. every one dollar movement effectively means $250 million for the bottom line. as you say, a lot of money for infrastructure, $75 billion over the coming decades, including $5.3 billion for a second airport in sydney and $8.4 billion for an inland rail route between melbourne and brisbane. a big revenue, big spending budget, very different to the debt and deficit disaster four years ago. >> making the right choices to secure better days ahead. it does not have much of a ring to it. we have been talking about this budget and the bank and this new levy. we are seeing bank lenders falling once again, cba down 1.5%. is there any discussion on who is going to cover up the costs?

banks, shareholders, customers? the traders got morrison is determined it will be the banks and will come out of the profits we see from the banking sector year after year. i did ask him if he thought the banks would past those charges to consumers. he said if they do, that is going to be a matter for the a , thee see -- accc australian consumer watchdog. the move will have widespread support. i saw the greens leaders saying it was a policy of green party floated a few years ago and everybody laughed. now it is in the 2017-2018 budget. it is also likely to sit -- to attract the support of the opposition labor party. the shadow finance minister is going to be joining me in a few minutes time. >> looking forward to that. all, joining us live from canberra. let's get live to the first world news. have been reporting,

president has fired fbi director james comey on recommendation of the attorney general and his deputy. comey becomes only the second chief in their bureaus history to be dismissed. he had been leading an investigation into alleged russian meddling in the presidential election and into moscow's possible links to trump eight and associates -- two trump's associates. >> if the administration had objections, they had those objections the minute the president got into office, but they didn't fire him then. why did it happen today? now, softbankgy is said to be close to fulfilling its tech fund with commitments reaching $95 billion. we are told the fundraising may wind up next week with interest from saudi arabia and abu dhabi and from companies including apple and qualcomm. softbank plans to contribute at least $25 billion of its own capital to the vision fund in

the next five years. since the year rally arrival of the iphone now sees the company worth $800 billion. shares have continued to rise even as the company reports slowing sales. they climb to 33% this year so far, adding $185 billion to its market cap. another company has raised its 12 month price target to a high, implying a market value of more than $1 trillion. the world's second-largest builder is surging after splitting off a business. this helped cut debt in half and reduce its debt equity 95% from 106. the breakup will allow the group to streamline operations and make it easier to grow individual units and attract investors. mitsubishi motors expects to turn a profit in the grant financial year after posting its biggest annual loss in more than a decade.

the carmaker is recovering from a fuel economy scandal that prompted a rescue by nissan. mitsubishi says it sees net income of about $600 million through next marsh -- march, comparing with a loss last year of $1.7 billion. shares of surging by the most right now in three months. global news 24 hours a day, powered by more than 2600 reporters and analysts in more than 120 countries. i am ramy inocencio. this is bloomberg. >> coming up, we check in on the big equity gainers and losers after australia's budgets. banks selling off this morning. plus, we are joined by the shadow finance manager -- minister. this is bloomberg ♪

>> this is "daybreak asia." i'm yvonne man in hong kong. betty: betty liu in new york.

trading in new york has been underway from is 15 minutes. the s&p is just down about .3% in reaction to the budget unveiled yesterday. haidi lun has more on the major market movers at this early stage. haidi: that's right, major movers to the downside are the ones we saw yesterday, because this move -- news of the bank levy was leaked yesterday afternoon and we saw the selloff in the big banks. cbo was the worst of it. the selloff was down by the most in 15 months. taking a look at how they are faring, we see the route continuing when it comes to the big five banks. the banks go,when the rest of the markets in australia go, too, because there is such a huge waiting in the index. commonwealth bank is almost 10% and down by about 1.25%. another one continuing to extend declines as well. a bit of a reaction from analysts at morningstar, their banking analyst saying it will

be a bad outcome for the banks, consumers, and economy. significant overhead when it comes to the banks, a terrible outcome. pretty strong words. there is some concerns these penalties and the new levy will be weighing on profitability or will, in addition, be passed on to customers as well. taking a look elsewhere around , we areon on the asx keeping and i on the miners. some of these materials prices could come under pressure. rio,opping up by .5% in falling by the same. we are expecting a $75 billion infrastructure spend announced as part of the budget as being good for some construction materials companies, but infrastructure investment being a very long-term play, not expected to see much reaction today. i suspect what they will be reacting to his any moves ahead

and after the chinese inflation number comes through, whether that inflation or reflation story for china is on cap. watching the pp the number number,he -- ppi because the second half of the year is less flattering. bad when it comes to the demand for australian commodities. you,e: haidi lun, thank with a breakdown of the markets. let's get back to australia. the opposition has labeled parts of the turnbull government budget as unfair. let's cross over to canberra, bloomberg's paul allen. it is very interesting. the decline could have been delivered by labor, so what don't they like about it? let's ask the man himself. i'm joined outside parliament by jim chalmers, the shadow finance minister for the labour party. when i first looked at this budget, i thought this looked like an election budget.

one of my colleagues said that, it looks like a labor budget. how are you going to oppose this? washere is no doubt that the objective, to make it look like a labor budget, because we have been leading the policy debate for some years. there are important differences. it is not a labor budget by any stretch. we would not have given a $15 billion tax cut or taken the deficit levy off the highest income earners, would not have cut schools and universities, because that follows the future of the country. there are -- because that hollows the future of the country. there are important differences. paul: one thing you might have done was the bank levy, lifted from a green policy. i asked the treasurer about this, whether he thought the levy was going to be passed on to consumers. let's take a quick lesson. >> banks need to explain what they do to their customers, and their customers can go elsewhere. smaller regional banks are unaffected. the competition

regulator, will be keeping a close eye to make sure they represent any changes in charging more fees in relation to this matter. is not a policy you can get behind, and you think the banks will pass that on to consumers? >> we don't intend to oppose the bank levy, largely because the australian budget has got record debt for the next three years, record gross debt about to crash through $.5 billion for the first time in history. there are severe fiscal constraints we are dealing with, so we don't intend to opposed the bank levy. the onus is on the government to guarantee that it won't be passed on in higher fees. the clip you played from the treasurer talked about the competition watchdog having the ability to police these things. what people need to understand is that the accc funding has

only been extended for one year, so expect the watchdog to do the job and guarantee the fees are not passed on. they haven't adequately funded the watchdog. >> i am curious overall on this budget, do you give any credit offurthering the easing these fears or concerns of the aaa rating in australia could be jeopardized? do think it makes any strides towards that? >> it was a substantial concern that the aaa credit rating, which was so coveted and important to our economy by the last labor government by all three of the major ratings agencies for the first time in our history, it did concern us that the big debt and deficit blowout under this government did put the aaa credit rating at risk. we will let the agency speaker themselves. no doubt they will make their views known.

there are $21 billion worth of tax hikes in its budget, which may be a factor, but we don't think it should have gone to this. it would not have weren't not for a substantial increases in debt and deficit. kong, there has been talk about growth targets. the budget projects 6% revenue growth. wage growth seems to be the issue, 3.75%. some are saying this is overly ambitious given that unemployment has not fallen a much. do you think if we don't hit these targets, australia could be at risk of not returning to a surplus by 2021? >> there are certainly risks. they have got the forecast wrong again, consistently wrong on wages growth. we have record low wages growth. and a lot of people are focused on that wages growth number in the budget last night as an indication of the sorts of things are asking about.

it is important to understand that the government said this would be a budget about jobs and growth, but they have downgraded all the key measures, whether gdp growth, wages, unemployment rate. in their own budget papers, there is a forecast of all most an extra -- forecast of almost annexed show 100,000 unemployed people. the rhetoric has not matched up with reality or forecast. paul: i just wanted to ask you a political question. four years ago, we were hearing that the country had a debt and deficit disaster, that it had a spending problem. no talk of debt and deficit disasters anymore. revenue raising is up. what do you make of this? >> when gross debt was about $300 billion, the liberal party said that was a disaster, as you say, and they said there was an inconceivable amount of debt. last night's budget, something

like $725 billion of gross debt. the treasurer has had to lift the debt cap to 600 billion for the first time in our history. that is for them to explain why it was such a disaster before and why it is not now. the real point is the $21 billion in tax hikes in last night's budget would not have for necessary, were it not years of missteps and miscalculation and division and incompetence. australians are being asked to pay the price for that. paul: jim joe morris, the shadow -- jim chalmers, the shadow finance minister. betty: as the two of you were talking, scrolling through the stock charts, the bankshares certainly getting hit after the budget. jim chalmers, australian finance minister, with paul allen. plenty more to come on bloomberg television. ♪

gets more thany 60% of its sales in the u.s., but that may change. it is hoping to expand asia, just announced an agreement to be a logistics provider for 2020. i spoke to the ceo earlier today. >> international is our growth engine. we have considerable presence in the u.s., have for years and will continue, but where we are .oing is internationally china, a lot of potential. class why is that. >> the population is so young, pretty affluent area, and united arab emirates is really focusing is not being as oil dependent. i think their goal is to be the next hong kong or singapore, where they are a trading hub of the world.

>> you mentioned china. there are always concerns about china -- are they going to slow down, are they protective of their own markets? what is the potential in china? >> we are very optimistic. we have had a good experience there for the years we have been there. in the last quarter and the end of last year, china has really exceeded expectations. there is people that still ,ompare it to the 10% gdp days a solid high 6% or 7% gdp growth is a pretty good number, so we are very optimistic. >> he has been a big proponent of corporate tax reform, even though there is some uproar in other countries, like china, where chinese companies are saying if there is corporate tax reform, that could make china is competitive and have income companies in china move over here to the u.s.

staying on china, china's latest inflation numbers are due out in the next hour or so. we are going to ask will be can expect from cpi and ppi numbers. this is bloomberg. ♪

>> 8:30 in singapore, just half an hour away from the open. looking pretty picturesque on this wednesday morning. i am yvonne man in hong kong. betty: i am betty liu in new york. you are watching daybreak asia. let's get to the first word news with ramy inocencio. ramy: first, australia. the country has announced $55 billion funding for infrastructure. a return tot, surplus predicted by 2021 but that requires wage growth to accelerate above 3% from below 2% at the moment. big banks face a new tax which will raise $4.6 billion over two

years, calling it a direct attack on jobs and growth. hasouth korea, moon jae-in claimed victory, pledging to unite the country after nine years of rule that ended with the impeachment of the president. moon has more than 40% of support, well ahead of his rivals. he campaigned on taking a tough line against korea's conglomerates and a softer approach to north korea. and china, banks and other state-owned enterprises may retain talent. sources say top business figures may review a policy that cap pay at a fraction of their foreign peers. that saw the earnings of china construction bank chairman halve to $87,000 in 2015. earned $20dimon million last year. and embattled commodity traders says it expects a first-quarter loss of $130 million because of

wrong way bets on coal. the group was once the largest commodity trader in asia but has faced years of falling profit, asset sales, and credit rating cuts. it has been attacked for its accounting methods by a group called iceberg research, whose members are anonymous. global news 24 hours a day, powered by more than 2600 reporters and analysts in more than 120 countries. i am ramy inocencio. this is bloomberg. >> thank you. time to see how the asian markets are shaping up. the fallout of the budget and the south korean election. let's go to haidi lun with the latest. haidi: that's right, fallout when it comes to the australian markets, perhaps less from the budget perspective, which was delivered as a very progrowth budget, australia first, nationbuilding. i suspect what we are seeing when it comes to the declines is due to the selloff in commodities overnight, from oil all the way to gold, we saw these declines, and that is

going to weigh on some of the big miners we see in australia. gold falling to the lowest level in almost two months, a recession, if you will, of political risk, two elections having come out with a consensus result. we should get a quieter situation. gold also following -- falling as we get increased fed speak, the next fed rate hike next month, adding to the bets as we go through the work function on the bloomberg. elsewhere, we are watching south korea, seeing more gains when it comes to the kospi, a market that has so much interest when it comes to foreign inflows, hitting a record high after being bound for some many years. analysts are saying, we may see more of a selloff over the coming days as the priced in aspect of the election result starts to play out. heavy -- monday heavy is one of the stories we are following, the world's second-largest

shipbuilder that split into four separate trading entities. trading begins today. hyundaih-end a heavy -- zynga bomb, the spinoff helping the company's net debt situation. analysts positive, saying it will make it easier or the management to grow individuals and attract interest. the big story is more china and the macro situation, so much of that hasationary story been focused on rebalancing the stabilization of growth in china. if those producer prices in particular today comment on the disappointing side, there will be a question mark over whether the rally has legs, given how fragile the markets are. fixed income and equities close to those 24 year lows, the stocks. >> that's right, thank you.

let's get to china. analysts are predicting that china's consumer prices rose slightly in april, but i do see the slide and some prices that haidi was alluding to. inflation data is do a little this morning -- a little later this morning. we will talk to the top-ranked forecaster. consumer prices, we see a lot of volatility and food prices, but we have to hone in on the ppi prices this month, expecting about a 1% drop. i will throw up a chart on my bloomberg terminal. you can see how things have edged off a little. it started with some of the pmi data when it came to the manufacturing data, really coming off soft. do you think this is really the peak in the global reflation story? likelyppi inflation dropped quite significantly to

6.6% in april from 7.6%. sharps confirmed by the fall in the middle price in march, also confirmed by the pmi number, the posed input price and producer price index under the pmi. we think we have already seen the peak of the ppi in china in february. going forward, we expect ppi inflation to continue to fall due to high inventory, softer demand, but also a fading base effect in china. together, wed ppi think inflation is likely to be subdued this year, and it will not be important driver of the macro policy. yvonne: seems like it is reducing leverage and stabilizing the yen as well. at what point should we get worried, then? you mentioned the favorable

basis. that is fading quite quickly. ppi really a pillar of global growth. is there any indication we could be heading to negative territory? mayur expectation is ppi drop to around 2% by the end of the year. on average, the ppi inflation would still be 5% to 6% this year, but the active side of this trajectory is related to the profitability of the copper sector. copper sector profitability is very closely related to ppi, so profitability, profit growth, may drop for the rest of the year. in general, we think china's growth may decelerate for the rest of the year, based on the recent incoming data, including the manufacturing pmi. yvonne: how about the deleveraging process, which is

certainly good long-term for the chinese economy, but is going to weigh on the country in the short-term? how much more pain? we were talking about this earlier this week in a story about how much more pain the government can stomach with the leverage and process. >> if we look at the policy priorities of the government, i would say the growth target is still the first priority, but followed immediately by deleveraging. the first quarter gdp gross was very strong, which created a comfortable cushion for the government to achieve any gross target of around 6.5%. it also created a window of opportunity for the government to tackle some of the more difficult structural issues, especially the high leveraging. we have seen the central banks start to tighten liquidity in the markets. financial regulators tighten regulation over the asset management and insurance

pullout. we have seen enhanced coordination among the regulators. those are quite unprecedented. my expectation is, as long as the growth target of around 6.5% can be reached, the tightening buyers is here to stay. >> that bias has also had a pretty significant impact on property investment. what is expected there in the next quarter? >> the tightening has already affected the yield in the money market and also bond issuance. it has not transmitted to the real economy yet, because the central bank has not hiked the benchmark lending rate. for the moment, i would say the property market -- we expect a deceleration of property investment, not because of higher cost of funding, but

tighte of the various property market policy in terms of purchase restriction and mortgage lending. >> you are mentioning about this massive cleanup we have seen from the pboc, trying to reduce leverage. the were thinking there is still a tightening bias, but what if growth starts to spider tour the later half of -- what if growth starts tosputter towards the latter half of the year? with a have to reduce restrictions? >> to put it in context, this year we will have a congress. in this year of a major political event, we think stability is the first priority. yvonne: what about after that? >> after that, there could be a little more tolerance, as you said, if, for example, there are more defaults in the market which cause systemic risk. i think the central bank will shift course very quickly to

first and sure the growth target can be reached, and second, to maintain financial stability. yvonne: quickly, we have seen the spillover effect in the commodities market. is there any indication it could go further? >> i think the commodities market is affected both because of the real economy, weaker demand from the real economy, and also financial markets. for the real economy, the first quarter gdp growth was strong because of a favorable inventory cycle. but that cycle may have run its -- the and there will be inventory is already very high and there is no further boost. from the financial side, the recent tightening of financial regulations leads to some selloff of the money market funds. catalyst ofes as a the recent drop of the commodity price. yvonne: great to have you, the

chief china economist joining us. think up next, investors the yen will weaken against the dollar. we will talk to the former vice minister of finance and see if they are right. this is bloomberg. ♪

collects this is "daybreak asia." to a: the u.s. dollar rose second day of gains as traders adjusted positions while comparing the diverging monetary policies of the fed, doj, and ecb. let's get to kathleen hays, live from tokyo with someone who can give us a better idea of where currency markets are heading. kathleen? kathleen: currency markets are heading, the global trade system and economy, and so much more. the formerto welcome

vice minister of international affairs at the ministry of finance in japan, where he spent 35 years of his long career. he is now president of the institute for international monetary affairs. welcome. i want to start with the question of divergence, because this is an overarching theme for the global markets, including currency. you have got the fed raising rates, boj not doing anything, ecb may be tapering. if the fed goes on this path, you would think the yen would weaken, but so far it has hung in there. why? is the higher interest rate brings the currency, but i think the market is diversified. i think the position to raise interest is one element. the other concern is what remains in the market. the people have some kind of anxiety with their future that

trade issues, especially that mr. trump is raising many. i think it could have some kind of shadows to the market. that is the reason why you see , even with a rate hike in the coming days. ramy: the yen -- kathleen: the yen trading this morning just about 11386, it weakened a lot after trump got elected, then strengthened again. what is your view of what is driving the yen and where it really is going to settle? where should the yen be right now? >> the rate is always changing, according to the current situation. , it is going back to november in the last three years. the markets have been volatile to create surprises. another market is going to have

the ability to absorb the impact from the outside. the money market is just moving over the economic performance to trade and protection and gdp. days, -- not to be stimulated by the presence of the proposal -- that is the current situation. >> i was just wondering, how do you factor geopolitical risk in your forecast for dollar-yen? we continue to see the north korea story and it does not seem like it is going away. are we getting a little bit complacent about some of these concerns right now? , we havest two months been worried about the situation in north korea and how the u.s.

is going to respond. i think so far, the last two weeks. i think the market has somewhat calmed down on the situation, but it is difficult to say what will go on tomorrow and the next week. if something happens in the relation between north korea and the united states. yesterday, we have a new president of south korea. what he is going to do on north korea will have some impact, but so far, there is no acute change in the coming months. you aboutant to ask going back to the bank of japan and how much they can and cannot do in the markets. aside from the yen, they have been very active in the equity markets, particularly through the buying of etf, to such a degree that they are credited

with a rally we have seen in the nikkei. is that becoming a headwind here as the markets are becoming more and more reliant on the boj being active in this market? >> i think at least in the japanese market, the boj is very much strong for that. the market is so into related to other markets, so i think with the power in the united states and some movement in europe is going to have another big inferences in the current situation. the boj is not making any operation and targeting the currency rate of the yen. they are still working on hiking against the differentiation in japan. we have worked to get out of such differentiation. .

there the enterprising action is not so much -- [indiscernible] statessaid, the united will be moving out and also the ecb is not for korea, but there is more deepening on the action for easing monetary operation. i think the boj is going to corral outside movement? >> currencies seems to be taking a backseat particularly after the g7 meeting, when trump did not declare china a currency manipulator. you remember the days when central bankers and finance ministers would have a chorus or agree on moving exchange rates the correct rate in balancing. they don't seem to be doing that anymore. is that a change for the better or worse? are exchange rates no longer help changeo

current account surpluses or deficits that are persistent? i think the currency rate does not have any impact. , we have [indiscernible] most of it is not coming from the trade balance, but if you look at the balancing, the currency rate is working on to it. there is an inference that trade balancing is not so much for the currency market. especially in the dollar. notsee the dollar rate being in the balance of payments. i think how the dollar is easy ability of thehe dollar is keeping high barriers to that. renminbi is not have -- you see the current account and trade balance and the usability of the currency should be

checked in the close range, so that is quite important. kathleen: thank you so very much for joining us today. ministere former vice of finance in japan, also currently president of the institute for international monetary affairs. back to betty in new york. betty: certainly someone to listen to very closely. cap, thanks so much for bringing us that interview. you can get the stories you need to know to get your day going in today's edition of daybreak. bloomberg survivors -- subscribers, go to your terminal and it is available on mobile. you can customize your settings so you only get news on industries and assets you care about. this is bloomberg. ♪

>> this is "daybreak asia." i am betty liu in new york. yvonne: softbank is said to be close to fulfilling its technology fund with amendments reaching $95 billion. we are told the fundraising may wind up next week. let's go to peter elster, joining us live from tokyo. the closing out the vision fund has been delayed before. how likely is it to happen now? peter: that is a very good question. we have heard this a couple times before.

softbank announced plans for this $100 billion fund, the largest ever, last year in september, and since then we have heard a couple times they are getting close to being able to close the fund. said they son himself were nearing a couple months ago. now we are hearing from sources that they are close to finalizing the fund. the first wrench and they are going to close is bigger than we originally heard. it is going to be as much as $95 billion, we heard before it would be smaller. it sounds like there may be a second round of closing which would add additional capital? >> with the backing from saudi arabia, abu dhabi, apple, what kind of investments with the fund be interested in? >> this would be an extension of what softbank itself has been doing through its investments and would give them firepower to be able to execute on these investments. softbank recently has invested in a range of technologies, put money in to the chip designer,

the right hip and company -- the ride hailing company in china that was successful in driving over out of that market -- driving uber out of that market. they said it would be a mix of some very big deals on the scale of arm and some smaller deals. by small, still pretty big in the venture capital world, $1 billion or so each. -- ok, petertbank ahlstrom. we will leave it there, ran out of time. as here onfer "daybreak asia." let's bring in rishaad to talk about what is coming up. we did hear from jim chalmers saying we are not going to oppose the bank levy, but there are parts of the budget they said was unfair. rishaad: and not what labor would have done. he is bound to say that.

the finance minister joins us in about 45 minutes to talk about the government. we already heard from scott morrison. on top of that, looking further afield at what is going on when it comes to inflation in china. we have got stephen from deloitte joining us to have a look at cpi, ppi. betty: plenty happening in china. we just talked about cpi and ppi numbers, plus this summit on infrastructure. you have quite a few guests on this. rishaad: absolutely. joining me on that is commodities, and greg smith will be joining us in about 12-15 minutes for a look at what is going on there. ♪

>> i am sophie kamaruddin. rishaad: i am rishaad salamat coming to you from bloomberg's headquarters in asia and hong kong. this is "bloomberg markets: asia." ♪ sophie: the yen climbs from a two-month low as investors seek safety on reports that north korea will proceed with the nuclear test. rishaad: the own yang high on the agenda as the new president takes power in seoul, korea. -- pyongyang on high