♪ >> renewed optimism about the u.s. economy helped stocks recover from the worst selloff in the year so far. the dollar is also strengthening. yvonne: no, no, next question. trump tries to deny the russian inquiry, calling the whole thing a witchhunt. wall street breathes a sigh of relief. secretary mnuchin says there are no plans to break up a retail or investment operations. yvonne: alibaba investors are not impressed, despite revenue

surging 60% to nearly $6 billion. we have world coverage here on daybreak asia, we will be live in hanoi ahead of the summit this weekend. >> we will also be live in washington, d.c. ahead of trump's visit to the middle east. this is daybreak asia live from bloomberg costs -- bloomberg's asian and new york headquarters. i am a ramy inocencio. yvonne: i am yvonne man. after that brutal selloff on thursday we are seeing a little, returning to the markets. president trump trying to whether this political storm, denying he tried to quash the fbi investigation. there is still cautiousness over where the probe will go. ramy: we did see optimism in u.s. markets. the s&p 500 up 4/10 of 1%.

economic datas. outweighing the political storm, political storms, i should say. yvonne: absolutely, jobless gains in manufacturing data, with the dollar rebounding among its peers. let's check out the asian pacific this friday. new zealand, up 1/10 of 1%. modest gains. the kiwi flat at .6896. futures looking pretty soft. not much direction where we can go this friday. the aussie at .7415. gains after as solid aussie jobs number on thursday. a three-week high, opec has reached some consensus that they could be extending supply cuts. , aan crude after that drop

brutal selloff yesterday on the nikkei futures. a 50ng like we could see point gain at the open in tokyo. that is the latest. risk on to gauge the what is the sentiment at the moment. balance, orad cap are investors trying to buy? let's get the first word news with courtney collins. the u.s. treasury secretary, steven mnuchin, is breaking -- says breaking up the big banks would be a huge mistake. there are concerns the trump administration is planning a revamp of wall street. he told the banking committee he does not support separating retail operations. that would have a significant impact on the markets and economy. iran has had back at u.s. sanctions pronouncing them as illegal and proposing counter

measures. entities.eting seven the management consultants work in israel. they are working to curb iran's ballistic program and will continue to cut measures under the 2015 nuclear deal. iran both saying the presidential election, seen as the most important since the founding of the islamic republic. it is a straight fight from the moderate incumbent. economy has been the major issue. i is defending his deal, while his opponent said it failed to produce the promised benefit. investorssappointed despite beating estimates with a 60% surge to $5.6 billion. earnings were hurt by a higher tax bill and greater spending on an attainment.

the cloud field growth. they saw the biggest intraday drop since june. but recovered to close in positive territory. found her and former presidential adviser roger ailes has died at age of 77. he launched fox in 1977 with rupert murdoch to promote a conservative agenda. he stepped down last summer after allegations of sexual harassment. he fell in his home in palm beach and suffered from internal bleeding. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. i am courtney collins, this is bloomberg. drama is still playing to packed houses in washington over president trump's alleged links to russia and whether he tried to derail an fbi investigation. deniedcategorically

anything that would warrant impeachment talk and claims he is the victim of a witchhunt. mr. trump: i hate to see anything that divides. i am fine with whatever people want to do. but we have to get back to running this country really, really well. yvonne: let's get the latest from washington. good to see you. the senate did meet robbers and stain on the russian investigation. what was the outcome? them he knewe told trump planned to fire james rosenstein wrote out the rationale for the firing. they initially said rosenstein's memo is what initiated the comey firing. senator dick durbin, a democrat, said the president had told him that comey had to go. did not say who told

him to write a memo, which criticized comey on his handling of the investigation of hillary clinton's emails. said heresident trump was thinking of the russia investigation when he decided to fire comey. ramy: we're going to bring in former fbi director robert mueller. could it change congress's efforts to investigate in the senate and house? lori: several senators say so. republican,am, a said it would impair congress's investigation. thexpects mueller to guard pool of witnesses. senator graham says that may indeed keep comey from testifying before congress. a number of lawmakers have demanded he do. and mark warner, the vice-chairman of the senate intelligence committee, say they see no reason why comey should

not be able to testify before congress about his firing. ramy: in terms of mr. trump's response, i have heard the term "lukewarm." how is he responding to this? laurie: president trump's response and a tweet a news conference called the investigation a witchhunt. yesterday he said nobody has been treated worse or more unfairly. he said he accepted the decision to appoint a mueller. he denied asking comey to drop the investigation of trump's former national security adviser. he also denied collusion with russia. ramy: we have to bring up there, but thank you for the latest on what is happening in washington, d.c. u.s. stocks rebounded from the worst selloff of the year. investors rushed for havens as the washington turmoil sparked a jump in volatility. joining us on set is su keenan.

>> a lot of u.s. investors itshing the hill because own crisis has caused assets to tumble. earnings is the big story. we will get to walmart in a minute. cisco was down. we had a huge jump in at health care company that was a stake by elliott management. walmart, we have this bloomberg for anyone following at home. huge sales is, the growth in these last couple of quarters. int analysts are saying is, addition to the total revenue sudden, 1.4%, all of a walmart is the primary number one competition to amazon.com. it is head-to-head, game on. before it was a cluster of

online retailers against amazon. now there are two giants in the picture. yvonne: and we have to talk about the chinese giant, alibaba. give us the highlights. su: alibaba had a strong run up going into these earnings. up and down as the earnings came out. a couple different stories. they are increasing their payback in terms of $6 billion. investors like that. a very mixed story. the growth fueled by ads, cloud, media. what has become clear, analysts have pointed out, tencent is now their number one competition. are in the u.s. we have cluster of tech groups, facebook, amazon, google, netflix. -- iare saying facebook should say tencent and alibaba

are the chinese version of fang. they make up the hottest stocks in that sector. they are investing into video content. we are talking about other widely anticipated earnings reports. tell us about applied materials and salesforce.com. su: both reported strong numbers. let's go to salesforce first. we saw the top price soaring the report. what we have with salesforce, they are seeing increasing demand, they're raising their fiscal forecast. revenue topped estimates. the game we are seeing after-hours, likely to extend in friday trading. applied materials, this is another success story.

their positive earnings have a lot to do with increased demands. they definitely give a strong forecast. it is also interesting they make these chips that are in the sweet spot of a lot of tech products, whether it be screens, phones. this is a strong report that is likely to carry forward again. yvonne: thank you, su keenan live from new york. we will talk about alibaba's earnings later this hour. ramy: president trump puts on his dealmaker had for his first foreign trip. we will discuss what is on the agenda with verizon investments. this is bloomberg. ♪

♪ we are counting down to asia's first margin -- market open. a cloudy day. futures heading higher today. could see a modest rebound on

225 after falling several points after yesterday's fall off. i am yvonne man in hong kong. ramy: i am ramy inocencio in new york. awayd trump will be flying from the of people in washington for his first foreign trip. first up is saudi arabia, followed by israel and europe, the stop in the vatican. let's see what investors are looking very joining us from california is verizon investments chief global strategist, greg valliere. i want an overlooked. what should investors be looking ahead to, in terms of potential deals? the white house and president trump have to avoid mistakes. the have to lower temperature on the extraordinary developments of the past few weeks.

bethey do that, it they will focusing on talks between trump and the israelis over mideast peace. there is a lot of anxiety in the make --camp that trump may make promises to the palestinians. arms you mentioned an deal. what could that potentially look like? greg: many millions of dollars between u.s. manufacturers and the saudi's. i think the deal is pretty much cut. but the announcement will generate some publicity. my sense is, the saudi meetings will probably go well. the more interesting one is with nato leaders. more may press them to pay for defense. ramy: one thing we have been reporting on in terms of a possible deal has been this $40 billion possible deal in terms

of infrastructure from saudi arabia into the united states. should we be expecting that, as well? greg: it is on the table. i do not know if the details have been ironed out. in washington, i'm infrastructure bill in congress is going nowhere. if he can get anything for infrastructure from the saudis or elsewhere, that would be a plus for him. yvonne: greg, it is yvonne in hong kong. expectations are high for the president's trip abroad. what the saudis want is commitment from the u.s. in terms of countering iran's dominance. and the president has talked tough during his campaign. the willie act on it? greg: i think he will say the right things. frankly, i worry more about iran the north korea. it is inconceivable to me we would precipitate a great crisis in north korea. generals are quite

hostile toward iran. they feel iran is arming hezbollah, could resurge work on a nuclear bomb. the antipathy on the part of trumpet toward iran will get a very warm reception to the saudis and other muslim countries. yvonne: is he serious about scrapping this nuclear deal? greg: there had been talk about trying to redo it. i am not sure if they are ready to go there yet. i don't know if they have details ironed out. there is no question, the trump generals are united in their dislike for iran. we have an iranian election coming up. seeme hardliner wins, they to be gaining in recent days, that will complicate the story. ramy: i want to bring in the bloomberg terminal. i want to show you fix futures -- vix futures.

volatility and fear is priced to the front end. but it looks like it could be dropping. do you agree with this? how long can investors hold on before something gives? greg: there are two big stories. number one, fundamentals look fine. moderate inflation, good corporate earnings. on the other hand, that level of uncertainty and volatility on the political front will persist. it is unlikely and impeachment effort could happen anytime soon. we have more weeks like the week trump has had, the key to watch is republicans, not democrats. the republicans may move away from trump if he cannot stop these self-inflicted wounds. yvonne: talk us through some of these self-inflicted wounds. of 12 hours we have heard the president gone from a

welcoming the appointment of robert mueller to saying he is looking at this probe as a witchhunt, saying of these probes are not unifying the country. has the special counsel's appointment elevated or calm down the markets? greg: everyone i talked to thought it would calm the markets down. but for trump to go out and alienate the person who is going to be investigating him, to me, that raised a lot of questions on capitol hill. trump time and again in flick loans on himself, which i think he has done again with this investigation. ramy: i want to bring in one more bloomberg terminal. i have been highlighting it this week. it is donald trump's approval rating, or on the flipside, disapproval rating. the blue line, 53.1%. that is disapproval. robert mueller heading into

special counselor, could that ease things? and joe lieberman, does not exactly strike me as a politician -- they do not want a politician in the fbi position. greg: the key is, what did they discover? what did they discover from manafort, general flynn. there is more to come. especially the notes taken by comey. the notes by comey will be a big heart of the story. i think the story will continue to be extremely volatile. valliere, greg -- great to hear your perspective. we have our interactive tv function. go>.can find it at tv <

any of the other securities of the bloomberg functions we talk about during the show. become part of the conversation, send us instant messages during our program or before big guests that we have. this is for bloomberg subscribers only. plenty more to come on bloomberg television. you are watching daybreak asia. ♪ ♪

ramy: you are watching daybreak asia, i am ramy inocencio in new york. yvonne: i am yvonne man in new york -- hong kong. the financial times says it involves investment in its comacs aerospace arm, -- has completed the first test of its jet. toyota, bmw, and two other

automakers have reached settlements worth $553 million to resolve claims from takata airbag recalls. they have a program to raise participation in the recalls. products have been linked to 17 deaths -- to many deaths worldwide. yvonne: aston martin considering an ipo as early as next year. sources tell us the company is awaiting 2017 results but declines to list in london. in 2015.ent public they traded 14 times earnings. att would value aston martin $3 million. we talked about cars, let's talk about risk aversion.

i do not think we are quite over this political storm just yet. look at this chart. you can see where the traders are when it comes to bond markets. they are going long on treasury futures. the price is speculative and they are returning in a big way. we have not seen it go this fast for some time. -- inde in billet building those long positions. we saw the 10 year yield overnight. did not do much, we are still hovering around 2.2%. in the am looking bloomberg terminal, the 10 year treasuries. are talking about can easily be seen in a general curve in terms of the yield. ever since november 8 until today. jump into my bloomberg, look at this index. the white area has been from november 8 until the peak of the

yield, up 42.1%. then we see the decline. it is down 15%. no surprise in terms of people pushing into treasuries. especially with what is happening politically and in terms of policy with donald trump maybe not being able to get his way. republicans on capitol hill trying to push things, that repeal and replace for obamacare, do tax reform. but is the political capital all spent? yvonne: how was the fed going to respond to this? will they put a backstop on this like the boe had to do? with juney proceed rate hikes or pod for july? for july? ramy: things have been

fluctuating. for the june meeting it had been down as much as 60%. they have gone back up, 94%.

yvonne: 7:30 a.m. on this gloomy morning in hong kong. over here in new york it is 7:30 p.m. on a thursday. markets closed in the green. the s&p up for tenths of 1%. recovering from its worst fall of the year yesterday after what has been happening in capitol hill and the white house. i am ramy inocencio in new york. yvonne: i am yvonne man in hong kong. you are watching daybreak asia. now to first word news with courtney collins. theresaprime minister may called on voters to give her the freedom to walk away from

brexit talks without a deal, reinforcing her hard-line approach to leaving the european union. her conservative manifesto locks a future tory government into blocking her plan for a clean talk and supporting her of talks fail. negotiations will because, but no deal is better than a bad deal. europe say the u.s. is considering extending the ban on laptops and large electronic devices from aircraft cabins worldwide. homeland security officials told e.u. commissioners washington may apply the ruling to all flights heading to the united states. however, they said ample warning will be given to allow nations, airlines and passengers to be ready. violence returned to athens ahead of a new vote on austerity measures. lawmakers are debating demands from greece's creditors that

would include more losses for additional years. they want to release the next bailout installment. that, greece may struggle to meet its debt obligations in july. china unicom shares tumbled in hong kong after falsified -- nine out of the 10 branches in the northwest province engaged in organized taking of results from the year 2012 to last year. the managers have been disciplined. at moreimate the fraud than $60 million over five years. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. i am courtney collins, this is bloomberg. let's get more on what

we should be watching in asia. we have our reporter joining us live from sydney. good to see you. we talk about this rebound we saw on wall street overnight. but there is still a risk off feel to it. yes, it is looking like a steady start. like i discussed earlier, the dollar rose. that was also reflected in the yen, which came off for the dollar overnight. i think that is holding steady. japanese futures, stock futures are looking higher. topix at 1% when i last looked at it. it is the same across the region. it is up and down, but mostly steady. the most important thing that sayingt of the u.s. was

the fed is looking beyond financial market volatility. and they are concerned about the economic situation in the u.s.. best casinoar's stock is not in macau, but in the philippines. what is the story there? vivek: it is linked to macau. this year is the philippine unit. melco has a big presence in macau. what is driving the philippines stock should not come as a surprise to people who are watching the sector. it is a chinese customer. the philippines president rodrigo duterte, and that link that keeps the casino familiar to the chinese

customer. the last thing is, you can call -- those three things combined are making the bet a pretty good bet. if i can say that. much fornk you very that. alibaba posted profits that lagged estimates with adjusted earnings per-share coming in at $.63. selina wang is in new york with more. what was the big surprise here for investors? they missed on earnings per share. it is a big deal because they historically always beat. investors reacted strongly. because al fear was tax rate would increase significantly. on some of the writers spots, they had significant topline astronomical, as usual.

if you look at the numbers, you will see revenue growth outpaced -- growth. they got merchants to spend more add dollars on their site. ramy: what about other lines of business? growth, triple digit growth, but still big losses. these are nascent lines, a small portion of revenue. cloud computing, alibaba had do prices toly slash gain market share. the digital media and entertainment sector, they have to spend aggressively on content. they are competing with tencent to get the most eyeballs on their platform. it is a hotly contested sector in china. yvonne: in terms of expansion efforts, what does management say about international expansion? selina: it is still a talk priority, but they wanted to remind listeners that it is still very early stages.

the goal is to get to billion users on its platform. they are starting out in southeast asia. they are investing heavily through ant financial and alibaba. from there they will redevelop the market. we have seen interesting international news. moneygram acquisition and companies like first data. we will see more investments abroad and competition there. we will continue to see growth in southeast asia as well as domestically. you,e: selina wang, thank joining us live from new york. oneteran bear still short banking stocks, but not as much as he once was. speaking at the salt conference says he still sees china as a disaster. his firm has been doing well

closer to home. >> we mentioned the areas we fromshort, valeant -- early 2014 on. we have notr areas talked about publicly. the opportunities in the u.s. are expanding. we are finding a lot to do here. previously we have been to asia and other places. china anymore? >> we are still sure. china is not any less of a disaster, it is. but we are seeing interesting action. we would rather do those, given the chance. that was from las vegas,

nevada. the great debate. washington's political drama seems unlikely to blow fed policy off course. this is bloomberg. ♪

ramy: welcome back, we are counting down to asia's first major market open. japan futures are up about 1/4 of a percentage point. you are watching daybreak asia, i am ramy inocencio in new york. yvonne: i am yvonne man in hong kong. -- nikkei news is preparing a bid for 51% of the unit. toshiba retained the rest. take theay they would investment through a special company. roleuld avoid a management

to avoid antitrust concerns. raisedndia start up has -- the largest amount of money from indian tech history. they will use the money to grow its user a's and offer financial services. they will join alibaba as a major shareholder on the paytm board. in bloomberg markets asia, we will speak to the ceo and founder of paytm at 10:10 in hong kong. 10 after 10:00 in the evening in new york. yvonne: sourcing in india from $660 million area -- million. they have broken ground on the outlet in dubai with a goal of 25 stores by 2025.

the first ikea india store was slated to open at the end of this year. trump hasident categorically denied doing anything to war and talk of impeachment, having started the day complaining he is the victim of a "witch hunt." kathleen, what can we read into the president's tweets, or take it as we see it? kathleen: it is clear what donald trump is saying. it started out with these tweets were donald trump feels like he is a victim. at the tweet that was read and heard around the world. this is the single greatest which end of a politician in american history. with all the illegal acts that took place in the clinton campaign and obama administration, there was never a special counsel appointed. later he had lunch with nbc anchors and said a special

counsel hurts the country terribly. like as the u.s. look mixed up, divided nation. later at a press conference where he spoke with the president of columbia, he seemed to accept the special counsel and continued to say the russia charges are baseless. here is what he said. mr. trump: believe me, there is no collusion. russia is fine. whether it is rush-hour anybody irony, believe me, is the united states of america. kathleen: there was widespread agreement that robert mueller, who has in appointed as a special counsel, gives this probe credibility. republicans and democrats in a joint statement praised his appointment. the house intelligence committee is requesting comey dismissal documents. they want to look at what is going on. and the comey memos alledge

donald trump asked him to drop the probe of the former nsa advisor michael flynn. this is where the obstruction of justice and potential impeachment proceedings talk has come from. it is interesting to remember that robert mueller, known as a tough, fair prosecutor and investigator is looking at russian meddling in the u.s. election. he can look at whatever he needs to. starr was a special investigator into the suicide of the vince foster under bill clinton, foster part of the clinton administration, ultimately led down many roads, to monica lewinsky, to impeachment proceedings. has a largegation scope when you have a respected, aggressive prosecutor like robert mueller. he will pick up every thread he has to. ramy: it has been a calming sentiment on the markets. it is been read to see bipartisan support in this day and age in washington and in the united states.

that said, what are the effects on the fed, the treasury? kathleen: it has been a big kind of discussion in the past 24 hours. will the fed slowdown rate hikes? there was a speech today, she said the fed has to look past market volatility. it has not changed her outlook. when it comes to rate hikes, they cannot fall behind the curve. let's listen. vigilant against falling behind as we continue to make progress on our goals. especially given the low level of interest rates and the large size of our balance sheet. let's jump into the bloomberg. this chart will show you what happened to rate hikes. they were up well over 80%, close to 90%. now they're at 70%. the odds of a hike in september are about halved.

now it is down to about one in three. bloomberg news a terrific story by rich miller. the fed will hike rates despite trump. have the jobless claims, lowest since 1973. it wasnuchin testified, all about big banks. don't break up the big banks. talking about taxes and pass through. --ge funds might get some might not get some juicy tax breaks. yvonne: what about investors? one reason for the selloff on thursday was that trump trade was down. we are going to watch every step of this investigation, see where it goes. people are saying, let's look back at the fundamentals.

we do not know how quickly trump could move ahead on the agenda. credit suisse says it is time to reassess trump trade. the conferenceom in las vegas, he sees a trump bump in the road. but things will pick up again. european stocks for the second day in a row, it is the worst two-day decline since january, down nearly 2%. it is about all the trump turmoil. one thing that hit europe hard was a report from reuters, that trump campaign advisers had 18 undisclosed meetings with russian contacts. remember a year ago we were looking at chinese headlines every day? we can be sure those are the kinds of things markets will be trading off of in the days and weeks ahead. they haven't moved quite

passes political storm. you can get a roundup of the stories you need to know to get your day going in today's edition of daybreak. be sure to check out dayb on your terminal and smart phone in the bloomberg anywhere app. you can customize settings and get news and industry assets you care about. this is bloomberg. ♪

♪ welcome back, you are watching daybreak asia. i am ramy inocencio in new york. yvonne: i am yvonne man in hong kong. let's get back to the conference in las vegas. black swan," we did not see a train wreck in trump's white house. >> there are a lot of things trump team to do that are

substantial. the first one is, after 32 years, fixing the tax code. the tax code is metastatic. bring quotes unless someone comes in with a gordian knot and cuts the whole thing. number two, obamacare is a disaster. it is a centralized system for 300 million americans. canada is a small country, you cannot scale things, you have to do it differently. >> you support the effort to repeal obamacare? >> to replace obamacare with something more rational. >> you want to cut taxes and repeal obamacare. >> third, the real train wreck is globalization. blacke about it in "the swan." globalization leads to

monoculture, the concentration of companies. >> anti-globalist? >> he is fixing the system. fixing things in the system that are not sustainable, that is the third point. >> when you see the market selloff as it did yesterday, is it people coming to the same conclusion, that he may not deliver? >> this is a blip. >> yesterday's selloff? >> we had a substantial increase, plus or -10%. -- minus 10%. marketame in, bought the

-- obama bought the debt. trump should dissociated himself from the market. hit its low in march of 2009, only a couple months after obama took office. obama had the markets on the cheap. now trump is claiming credit. on the market he is buying highs. it is not irrational. he should disengage himself from the market. he has an heritage a very sick situation. obama had eight years of novocain. crisis, 10 2007, the years ago. 10 years, we are still dealing with the remedy. a patient goes to the hospital and 10 years later you are still giving him --

>> even if someone were to agree with you, how does trump disengage himself from the market? explain there are a lot of things my predecessors have left really with -- left me with that i do not agree with. claiming credit for that rise in the market makes them vulnerable. >> i am not sure the effort to forto explain works so well president obama. president obama inherited a situation, too. he tried to say, up look what i was left with. a lot of people did not buy that argument. >> there is another problem. opinion, we have risks

today we do not have before. every day gets worse. much worse is the tail risk today compared to 2007? >> 2007 the market had collapsed. you have to go back and then start counting to get the difference. that was at the salt conference in las vegas, nevada. come with asia's first major market open minutes away. yvonne: we have a quick look at what we should be watching out for the open in tokyo and korea. >> we are going to get positive vibes out of wall street this time around in the asian session. new zealand, the only market trading at the moment. it is in the green. will it be enough to pull asian stocks from this slump, the worst in six weeks? nikkei futures not doing much. a they are mostly in the red.

the same for the kospi and hang seng. they could be losing ground. up 2/10 of 1%. australia just capped its biggest two-day loss since october. it has been a pretty long time since it saw such a big loss. keep an eye on gold miners. they could be seeing movement. we saw gold retreating overnight after fabulous weeks. it was up half a percent in the last session. australia, goldman sachs. take a look at the next board. independence group, raised. take a look at japan. we do have reports they could be cutting up to 400 jobs.

they could be launching an artificial intelligence powered assistant. keep an eye on the carmakers in japan.

>> a muted trading day. we are really not sure what

is going to happen coming from this special counsel. president trump trying to whether this storm. let's get the latest with shery ahn. shery: those trades have been long gone. the dollar gaining ground. reinforcing stronger views on the economy. trading at the moment in asia, unchanged. that,arly but having said the nikkei close to that.

20,000. slightly in the positive. japan, selling the most of since april. when it comes to the currency markets, another down day for the south korean currency. weakening for the third consecutive session. caution in south korea. have political crisis in brazil affecting sentiment. the malaysian currency come also down. japanesealk about the yen, down. you would expect that to give the nikkei a bit of a pop. we will see what it does. when it comes to commodities, overnight, zinc leading a retreat. bond futures, a mixed

day of trading. treasuries did hold steady. i think the big action right now, when it comes to the markets, it has to be volatility. anchor: the vix was up over the flat line. right now, about 14.6. in terms of asia, what are we seeing? ry: we cap saying, low volatility and then we have this spike in the vix. givenort of a pullback, we are expecting a bit of a more positive sentiment to filter through. not only from the american market but also what is happening in d.c.. when it comes to the nikkei, take a look at this. a huge spike around april 14. it fell to a low around may 10.

today, just starting to trade up around four minutes ago. moreurprising, given positive sentiments filtering through from the u.s. take a look at the nikkei vix compared to other volatility indices in asia. the hang seng, and india. seen in the past three trading sessions, we saw for these at lows into says. -- these indices. we will see what they do as they start trading. >> thanks very much for that. let's get the worst word news with paul allen. the brazilian president refuses to resign, saying the supreme court investigation will clear him of an allegedly ever up. claims her up

approved hush money. the currency, stocks, and bonds tumbled. the bank of brazil were among the it is losers. has targeted seven entities and two individuals, including the ceo of booze allen hamilton. iran votes today in a presidential election seen as the most important since the founding of the islamic republic. it is a street fight between the incumbent and a hard-line cleric. the economy has been the major issue. recordi is defending his

the opponentent -- says -- shares initially fell the most in a year, seeing their biggest drop since june. but recovered to close in positive territory. global news, 24 hours a day, powered by 2600 journalists and analysts. i am paul allen. >> thanks. the presidential drama in washington over his alleged links to russia. whether president trump try to derail an fbi investigation. he has categorically denied thehing and says he is

victim of a witchhunt. he went from welcoming the appointment of the special counsel to saying this is a witchhunt. what do you make of this tone? >> confusing. the initial reaction about being welcoming, almost a relief. after all the time of the previous days, and miller is respected. it is almost like he is back in campaign mode. going against the media are the first question was about the investigation and he said, no, i did not do it. let's move on. i control the press conference. and then back to the witchhunt. to raiseusing this money. they did quite well in fundraising over the past 24 hours, sending out emails saying he is being targeted. it is back in campaign mode. it is back in the, i will go

against the media and deny. yet the investigation will continue. >> let's move over to what is happening in capitol hill. have 2, 3ike we investigations. the house, the senate, as well as the fbi special counsel that might be going on. what can you expect from a republicans in the coming days? a defense, a bulwark against criticism? >> yes. i think the investigation -- first of all, congress was beginning their investigation. their machinery to do some inquiries before mr. mueller was appointed. republicanslows the on capitol hill some protection from the schism. -- from criticism. they can say, we investigated. they still are standing by him.

saying he stands by him. at this point, they are going to investigatory machinery move forward. >> where do we expect the investigation to center? >> several things. there are so many different ynn and perhaps what was said to the russian investor. really, it all focuses on whether there was interference by the russians in the election and whether mr. trump, president trump new of things at various points and whether or not -- whether he trying to influence mr. comey in his investigation in to russian interference. which he categorically denies.

>> clearly we are going to be talking about this for days and weeks to come. >> trade ministers meet internet commerce as well as supporting industries. our chief international correspondent is there for us now. also joining the conversation, the chief asia economics correspondent. let's start in hanoi. how important is this meeting? haslinda: it is important. tois a chance for aipac reject protectionism. globalization has lifted millions out of economy -- poverty. it has also amplified disruption. what president trump said. he blames globalization for the loss of american jobs.

others say, it is simply because of technology. the internet of things. this meeting will focus on inclusive trade. also, how technology can help medium-sized enterprises, small and medium-sized enterprises embrace technology. right now, the inequality we are seeing in global trade is due to the inability to cap technology. employ more than 90% of workers throughout the world. this aipac meeting is the biggest yet this year. roleis worth noting is the the u.s. is playing. it is pretty much muted. a big voice,had but not this time around and not since the trump administration because there is a lack of

clarity when it comes to trade policies. a sense the u.s. will be pulling back until there is greater clarity on trade issues. wantrade ministers would greater clarity. it would want to speak to the newly elected u.s. trade representative be here for the first time. yvonne: a muted response from the u.s.. there were talking about trade wars. we got a little bit of that with canada and the u.s.. where are we now? >> we have had quite an evening of tensions. be aption was expected to dominant theme. so far, it has not hand out like that. we have seen to be like a trade deal between china and the u.s.. taking seen china to

steps. allowing imports of u.s. beef. likewise, the u.s. gave concessions to china on imports of poultry. still aess, there is trade review going on by the trump administration. 16 nations who they suspect of trade abuse. half of those come from asia. it not just china who has a traits are lost. also japan, korea, vietnam. -- has a trade surplus. also japan, korea, vietnam. there is a concern over where the u.s. is going. will they inevitably come back on board for something like tpp? air ins much up in the terms of the trade story. haslinda: speaking of tpp, as

it stands, it is not dead. signatories expected to hold a breakfast meeting at the end of the summit. the likes of the naysayers, vietnam and malaysia, even japan, they are now coming on board. japan, it ist playing a leadership role. it is for japan to come forward because it is the second largest economy among tpp members. thee's also optimism, given likes of vietnam are coming forward. vietnam had said, it is making huge concessions on the part of enterprises to get greater access to the american markets. now that the u.s. has pulled back, vietnam has no reason to be a part of it. it has changed its mind.

it sees the benefits. what is being said among officials, it is not just a trade deal. it is a strategic deal. now with the u.s. pulling back, perhapshelp nations strike bilateral trade deals which will be more beneficial to them than otherwise. >> terrific analysis. haslinda amin. we will be back in the way later thisout -- in hanoi later hour. google speak more about what we can expect from the summit. yvonne: up next, how that fx markets are coping with political turmoil in washington. this is bloomberg. ♪

ramy: you are watching "daybreak

asia." yvonne: let's do a quick check of the latest headlines. talksc is said to be in lombardi eight -- bom bardier. mac is also says co talking to royals loyce about engines. othertoyota, bmw, and automakers have reached settlements worth $553 million. these are tied to economic losses for takata airbags. ata's potentially lethal products have been linked with 17 deaths worldwide. yvonne: austin martin is said to

be considering an ipo as you as next year. -- soon as next year. the company is awaiting 2017 results, but is inclined to list in london. ferarriery trades -- trades at 14 times earnings. iran the votes friday in what is seen as its most important election since 1979. seen as a street fight between the moderate incumbent and the conservative cleric. we are in toronto for the vote. vote.tgehran for the >> the playing field has narrowed. saying onenews

candidate is taking himself out of the race and is supporting the conservative cleric, the chief challenger to rouhani. tryingson who has been to push through quite a few reforms. the electorate is going to be voting on the performance of this government over the last few years when it comes to actual quality of life. when you look at what is happening with inflation, economic growth, has it improved as much as people are expecting? also, what is happening on the sanctions front with the u.s.. if there is no clear winner, with more than 50%, the race is too close to call at this time. yvonne: one feature we would like to show off his our interactive tv function.

you are not only able to watch us live, you can see some of those interviews. you can become part of the conversation. a message during our shows. this is for bloomberg said charters only. thisre to check it out -- is for bloomberg subscribers only. be sure to check it out. ♪

you are watching "daybreak asia." ramy: back to the salt investor conference in las vegas. he says he did not get the job for political reasons and not because he sold his company. take a listen. >> i think the fourth estate has the right to do a lot of the things it is doing.

candidly.talk very i think the administration could be doing a better job of softening the antagonism with the press. but i think the president has made a reasonably fair assessment that most of the press is biased against him. there was pew research % of the stories against him are negative. at 88%, i think he is a little upset about that. i think he has some justification. having said that, my personal opinion is, soften it with the press. i don't get a lot of great press sometimes. at the end of the day, you have to take it like a man. when i do get good press, i like to hold the journalist accountable. even bloomberg analysts -- journalists. people see you as a surrogate

for the president. is it getting harder? >> absolutely not. i believe in him. he is a great guy, he has been a good friend to me. you have heard me speak yesterday. there's assistant mac -- assist crisis going on. in terms of inequality, and the president is a champion of that. i like him. incan prosecute that agenda 2017. whether you are democratic or republican, he is our president. we need him to succeed. we need to figure out a way so those policies are in place so those people can do well. look at your shirt and tie. you are doing well. i happen to be doing pretty well. we have to focus on people doing less well than us. he is doing that.

let's help him do that. >> you sit in the remarks yesterday, you are very specific. you said you were offered a job january 12. you set the job did not materialize. who made the offer? what happened? was that a good way to describe it? the chiefprevious -- of staff me an offer. pursuant to that, i sold my business. it did not to realize. someone would have to ask the administration as to why. >> someone i presume give you a an investigation -- explanation. >> it was reported my sale to the chinese gave them a pause. andre was an offer acceptance, and then politically taken away from me, it was not ethically taken away. i did not do anything wrong ethically. >> i wasn't suggesting that. >> some people did in the media.

i used one of our friends to saw the business. everything was done fairly and appropriately. but this is political. ♪

yvonne: happy friday. 8:30 in singapore. i am yvonne man in hong kong. ramy: you are watching a break asia. let's get the first word news with paul allen. minister. prime theresa may has called on voters to give her the freedom to walk away from brexit talks without a deal. the conservative manifesto locks a tour a government into backing her plans for a clean break and supporting her if talks fail. she says negotiations will be to

off, but no deal is better than a bad deal. reports say the u.s. is considering expanding the van on laptops from airplane cabins. homeland security officials have they may applyls the ruling to all flights. they also said ample warning would be given to allow nations, airlines, and passengers to be ready. violence returned to athens ahead of a new vote on the story measures. lawmakers are debating new demands from greece's creditors. minister warned new pension cut and tax hikes -- wants new pension cuts and tax hikes. without that, greece will struggle to meet debt obligations. indonesia cap rates on hold for a seventh month. as rate remains at 4.75%,

forecast by all but one of the economists we surveyed. consumer prices rose at the fastest rate in more than a year. indonesia went on a cuttings. -- cutting spree. global news 24 hours a day. i am paul allen. yvonne: thank you. time to see how the asian markets are shaping up. that rebound, not exactly following through. . shery: especially not when it comes to currency markets. we are seeing a down day. we do have the dollar rebounding in the last session. it is under a bit of pressure. is still being felt across markets. we are seeing emerging-market currencies, such as korean won, losing ground.

this being exacerbated by the risk of sentiment triggered by the political crisis in brazil as well. e.m. a markets suffering a little bit. we have the yen rebounding. when it comes to south korea, it may be good news for exports. are rivals with japan. at one point, we saw the korean gain ground against the japanese yen but right now, it is starting to fall. ramy: power commodities looking right now? shery: it was all about those agricultural assets. because of that story out of brazil, we had michelle the president allegedly being involved in a cover-up.

that triggered a selloff. people started wondering what that would do to their agricultural goods. a top exporter of soybeans as well as coffee. into the commodities function, you can see what agricultural assets are doing at the moment. i want to take a look first at the bloomberg agricultural index. it has plunged. take a look at this line. this is march of last year. something we need to be careful about, especially in asia. now that commodity prices could be on the downtrend, that could affect price expectations. ramy: a great chart there. think you very much. over to earnings. that --posted earnings

coming in at 62 three cents. 0.63 cents. reporter: the renminbi grew at 60%. adjusted earnings hit by a tax hike. rate their effective tax jumped more than 29% compared with 23% a year ago. that is because their acquisition, they were able to set aside a chunk of their earnings. you talk about media, the cloud. a similar story. they are investing heavily into

video and it is sapping into their profits. lulu: eating into margins. alibaba doesn't have much choice. they have to compete with tencent on the new frontiers, cloud and entertainment. management said they are trying to narrow that cost by producing more content in. over time, that might open control costs better -- help them control costs better. yvonne: what about the micro drivers? u: they highlighted a couple things, the shift to consumption within china. also the appetite for more quality goods overseas. that is what is driving the shift for acquiring more assets overseas. also, help more chinese investors go overseas to look for quality goods.

it is a two way trend for the company. another story that defies the slowdown in china. thank you to break down the alibaba earnings. president trump has categorically denied doing anything that could bring about impeachment. he calls it a witch hunt. what can we read into the president tweets? >> there is certainly a sense of indignation. here is the tweet that started the day. greatesthe single witch hunt a politician in american history. with all the illegal acts that and place in the clinton obama administration, there was a special counsel. later he said, the special counsel hurts the country

terribly. it shows the u.s. looking mixed up, not unified. later when he spoke with the bia, hent of colom continued to insist there is nothing to the russian charges. president trump: believe me, there is no collusion. russia is fine, but whether it is russia or any audios, my priority is the u.s. robert mueller, the longest-serving after j edgar hoover, is now taking over as the special counsel. have full range to look at any aspect of this including involvement by members of the trump campaign or even the president himself. credibility to this investigation. even putting on the back burner some of the controversy involving james comey. the senate intelligence committee, a joint statement, democrats and republicans

muller. molar -- and of course, what is so important about the special r issel, the job muelle ticking on, he can follow this wherever he goes. like ken starr in the famous investigation of vince foster's suicide, which led to so many other aspects, white water, monica lewinsky, the proceedings against the president, this is another reason why donald trump is up in arms. muellerlking about being put in as special counsel, we are talking about confidence in terms of political establishments. with bipartisan support, we are getting some of that. how is the fed and treasury reacting? is unusual to see some

bipartisan agreement over something. the president of the cleveland fed speaking, saying market affected thes not outlook. you have to look past market swings and keep your eye on what is happening. she sees conditions in place for a rate hike and says the fed has to stay ahead of the curve on inflation. >> it is important to remain vigilant against falling behind as we continue to make progress. especially given the low level of interest rates and the size of our balance sheet. looking at rate hike odds, trump turmoil has something to do with it. odds of on the top, the a june hike. they had been at 90%. diving down. the odds of a september hike, way below 50. this has all taken its toll.

bloomberg news says, the fed is going to hike despite the tro turmoil. the secretary testified to congress, they didn't get into this, they were talking about banks and new glass-steagall. maybe that is a sign the agenda can get a little bit more, discussions can come out of these important issues besides the investigation, beside what donald trump did or did not do. ramy: the economic data has lent itself to a stronger stability. kathleen hays, thank you. any moment, aipac trade ministers meet in hanoi. we are joined by executive director alan boulder next. ♪

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"daybreak asia." ramy: a quick check of the latest business flash headlines. the nikkei news says it is preparing a bid for 51% of that unit, with toshiba retaining the rest and keeping substantial authority. may make the purchase -- ikea aims to double its sourcing from india to $650 million. ahead of opening its first store in a nation to become the third biggest consumer market. they have roque and ground on the outlet in mumbai and has a 20 35. 25 stores by they have broken ground on

the outlet in mumbai. paytm owner will use the money to grow its user base to 20 million. they will join a longtime partner alibaba is a major shareholder -. yvonne: the transpacific partnership may not be dead after all. japan is keen to revive it, even without the u.s.. we will discuss the idea at the sidelines of the summit in hanoi. amin. get to haslinda i haslinda: it is not dead yet. in fact, the likes of vietnam and malaysia may be back on

board. japan may be filling the leadership vacuum left by the u.s. let's get perspective. good to have you with us. how important is it tpp goes ahead? >> it has the potential to help raise living standards in all the member countries. it is important from that window view. it has taken 5-10 years out of the life of trade negotiators. a lot of capital put into the agreement. it is not a tech, it is a separate agreement. apec, it is a separate agreement. there are still up sites. looking: what are you at when they meet? sunday, bp ministers are going to have a meeting. worst., of we expect them to come out with a communiqué that will either say they are pushing ahead with

11, which they can surly do. do, or something that says they might need to think about it more. this is happening at a time of slower growth. also, concerns about globalization. is this the inflection point for pec? >> we are seeing better growth. it an inflection point? a lot happened last year. ministers in lima said, this is a surprise. aboute to talk and think globalization better. some parts of countries are getting hurt by it. we have to do more around those areas. we are doing quite a lot more not just on trade, but quite a lot on services.

small business, women in the economy. data movement, which is growing and growing. data across borders. that is a different focus as well. that is only focusing. haslinda: is there a concern, will not to leave anybody behind, that seems ambitious. how can that be done? >> i'm not sure that is exactly what we have said, but we want to pay more attention to those who can be heard. haslinda: how can there be inclusive trade? >> we know in general trade increases growth. when you look at what it does to the quality, it is more complicated. what happens internally depends on domestic policies. we realized more and more, globalization sets the stage where we also have to look at things like labor market policy, pension policy.

social support. internal things that need to be robust enough a country or an economy can go through global trade and not suffer the populist reaction. pulled back on its message on protectionism. any final communiqué, statement from apec, you expect the same? >> that is something you are going to have to wait and see. we are going into drafting committees this afternoon. the sense is we are not sure how far there is going to be agreement between 20 economies and the u.s. at the minute. what we are welcoming the arrival of the u.s. trade representative. able to clarify how sensitive the u.s. is on details of policy. we don't know exactly what that is going to mean with regard to some of the initiatives. haslinda: what would you like to hear? >> we would like to get clarity,

here more detail. hope we have an agreement between the u.s. and economies on moving forward. haslinda: what is the greatest risk to trade? >> i am sure rising protectionism. we haven't seen that much actually happening but we have heard a lot of rhetoric. retaliation from other economies risk.we an issue -- be a you do see improvement in trade numbers. a we have seen a pickup after couple of years of disappointing trade stories. trade is fragile and needs to be looked after. haslinda: we wish you good luck. there you have it. bollard. ramy: bloomberg's haslinda amin.

secretary the apec and executive director. a roundup of the stories you need to get your day going, today's edition of daybreak. it is also available on mobile. or customizesee your settings. this is bloomberg. ♪

you are watching "daybreak asia." china has been struggling eo reduce its enormous debt pil stabilizing the market. but some say the worst may be yet to come, especially for corporate bonds. goingng is this bond rout to last? >> khamenei are still telling us stillute -- many are telling us the route is far from over. a big number, still growing. government bonds is continuing to rise. we have seen the premium hit a two-year high.

authorities are showing no signs of slowing down on the deleveraging campaign. we expect the market pains to stay here for a while. yvonne: some saying there is more room to correct as we look for more default. what is the impact on chinese borrowers? arehe borrowing costs indeed rising. for those that can access the bond market, the average coupon is actually 5.4% this month. 1.1% higher than a year ago, with a paid a year ago. --what they paid a year ago. for those not able to access the bond market, they are waiting for the next good window that may not come. some may pay up and that could eat into their profit margin. that could push them into distress. yvonne: given that yields may continue to go up, are there aalyst that see this as

buying opportunity? >> some say they see opportunities in the government bond space and aaa bonds. if you look at the government on deals, the 10 year bonds, the yield has come up one percentage point in seven months. is actuallynt, that a decent yield compared to major economies. yvonne: seems like the foreign investors are still looking. offshoreee the china bond market having little correlation with the global market. it can be a good source of diversification. there are bullish voices, but the consensus is the yield is going to go up before it comes down. yvonne: great to have you. ont is almost it for us "daybreak asia." a look at what is coming up. what are you watching? this firestorm in washington dc and how that is

playing out. the question has got to be, how much of a trump rhenium was there running out to the latest bout of scandals, as it were? if we see a pickup, perhaps there was a discount. have at the we moment. looking at that relationship with russia, too. ono, visiting what is going in tehran with the presidential election. looking at also, what happens in terms of the trading days? that is what we have going on at the moment. my here. is rain it looks like risk sentiment is helped by editor than expected claims. what are we expecting? rishaad: probably getting a bit of a tailwind. fixing asng that yuan

well. we saw it strengthened against the dollar for the sixth time. streakgest strengthening since january, 2016. negotiating and renegotiating nafta. we have a guess that will be joining us 15 minutes from now, having a look at the potential summits for the apec taking place in hanoi. the new tpp as well, excluding the u.s. celking about the divergen and what it means for china's deleveraging. ♪

♪ i am haidi lun. rishaad: i am rishaad salamat coming to you from bloomberg's asian headquarters in hong kong. this is "bloomberg markets: asia." ♪ a muted start, wall street's modest bounce has not traveled far. rishaad: no, no, next question. trump says he is a victim, calling the whole thing a witchhunt. haidi: the biggest bankers to