♪ ♪ >> $7 billion for regional equity. is this the price for reform? >> the white house preparing at the corner of $1 trillion. what -- president gee is expected to increase within the next hour or so. quite as republicans prayer to release the tax plans, secretary -- steve mnuchin has a need for

speed in getting them. >> this is the president's most important domestic agenda item. when are you going to get itp assed? --it will be in the presence it will be on the president's desk by them. says theygroup ceo are raising for a hard brexit. >> in :00 a.m. here, 4:00 a.m. london. here, doingrkets very well amid the morning session. coming in 19 some 1% on the highly index over a, a milestone here. midmorning, at 207 peak. we will be looking at a new all-time high. have a look at the broader

picture here in the asia-pacific. japan still in the mix, 1.8% gain. don't be surprised if this gets a 24,000. more strength coming through in this market. the only thing across markets here, use of, is here. send -- yousef, is here. at the bondk market, it's fairly pronounced .n yields a big risk on session, yousef. as is coming back into the equity space. >> here are some other asset classes in focus. we had u.s. crude inventories out overnight again. climbing to the highest in more than three decades. talk piles unexpectedly rose. this is $57 per barrel. progress is stuttering on the u.s. tax reform plan. u.s. 10 year yield is about 33,

the curb continues to flatten. dollar lira three spot 86. turkey is seeking new relations with the u.s., despite a dispute over visas. just a few hours away from the opening of the emirates markets in dubai-abu dhabi. government funds getting heavily involved in the saudi story. seeing greenu are here. 6/10 of 1%, and materials as well. stock side, symbol helping to continue this -- continue. overall, looking at a four-day losing streak. $6.8 billion have been wiped out in these equities markets. more details later on in the program. >> absolutely. we are waiting, of course. we might get president trump and

xi jinping coming up to speak. we have some viewers joining us this expanded-- bilateral meeting is taking place here. an army of heads of state, heads of corporate's over with the chinese president -- there we go. them to comeg for out and flush out what they talked about during a bilateral meeting. we got a little bit of a preview 30 minutes back. there will be agreements announced. there will be a memorandum of agreements. this is between the state of andka and the sinopec -- the bank of china, 45 billion -- $45 million there. of course, the broader figure that was talked about this morning was about 250 billion u.s. dollars. so far, some rough math -- will if we get more details on that.

could come back -- come out any morning. -- any time. >> the other elements of this is whether or not the administration will use the one as a punching bag -- the war on yuan is ahing bag -- punching bag. there's a different picture than when donald trump took power. you are looking at a molar -- a more volatile currency. yuan, in terms of a more flexible future, also intact. you are looking at the trade imbalance angle, which remains contentious. the key question to ask here is how much room there is to negotiate on that front. it's been a key component of the rhetoric from the white house. it's been a sensitive part of the conversation, hasn't it? >> absolutely. we were speaking with a former

u.s. ambassador of china yesterday with the context. focus onfoot -- people $223 billion tree trade deficits a far this year between the two countries, more so from china, but a trade war is not in anyone's interest. a lot of these things taking place, and we are just waiting for them to start -- come out as tangible things. market access is one things. u.s. a lot of these chambers of commerce, that's a key issue. we will get a lot of these headlines, but the core of the issue remains this. there's still an issue for market access. this is something that can't be -- ised out, and i just really addressing this. in the meantime, let's get more context on this. tom mackenzie is live out of beijing, he joins us now.

the parade, the chinese president -- u.s. president and chinese president made their way into a great hall. a lot of talk. pomp and pageantry. it seems to be the chinese playbook on this trip. they played up this state visits, plus, as they described it, roll out the red carpet, make a song-and-dance. comments about the way the -- that trump was hosted last night, the way he is president -- treated by president xi, saying he had a personal chemistry with the chinese leader, despite the fact said, the trade balance was imbalanced and they can work together to solve not only chinese and u.s. problems, but global problems. president trump saying, possibly even more global problems. we get these executives, 20 or

30 u.s. executives who have traveled over with president .rump they have been working behind the scenes for many months. we were there last night for a joint venture -- venture. we will get a bit -- bigger number of deals out shortly. great response we have seen so far, crossing the wires with this alaska deal. a couple of other partners, 43 billion u.s. dollars, pipelines in alaska. the state governor is here with president trump as well. you've got chipmakers, massive market for them. they've signed a nonbinding agreement with the likes of in vivo, some startup phone makers .ere that is potentially significant. you've got dow chemical, they've done a deal with a bike sharing company. the details are important. a lot of these are nonbinding.

for a long time, they've been pushed to the forefront for this -- for this summit, some key takeaways as well. the u.s. president was insured that he could go away with t weetables, but in terms of what he can deliver on the trade relationship, that is key. this been many conversations, people pointing out that there is that market access for u.s. playing -- companies playing here. become a more difficult environment, many of them say, to operate in china. they want to see key moves, measures taken by china to make place to operate. will we get moves there, structures for companies operating here? north korea, china, president trump talking

it is not sustainable.

we will left restrictions on american energy. restrictions are being seriously lifted. we are taking hold of the stock market -- in the united states, it set an all-time high. get -- hitting already $5.5 trillion. since the very well-known and now, very important, november 8 election. an employment is at a seven-year low, and so many great things are happening to the united states economically and otherwise. frankly, too many to mention. abroad, we are -- committed to a respect for the roll block -- rule of law, private enterprise,

and tray reciprocity. achieve prosperity, we must also have security. security cooperation is critical to addressing a range throughout the indo pacific region -- a range of threats throughout the indo pacific region. i have been encouraged by my conversations over the last number of weeks and, in particular, last night and this morning with president xi,. . much on the very same plane when it comes to security. we both want it for our countries, and we both wanted for the world. threats is these north korean nuclear menace. as i stated in my address to the national assembly of soul yesterday, the united states is committed to the complete and ofmanent denuclearization

north korea. so important. china can fix this problem easily, and quickly, and i'm calling on china and your great to, hopefully, work on it very hard. i know one thing about your president: if he works on it hard, it will happen. there's no doubt about it. [laughter] >> they know. [laughter] >> we call on all nations to implement un security council sanctions command to cease doing business with the north korean regime. all nations must come together to ensure that this rogue regime cannot threaten the world's will -- world with its nuclear weapons. his xi president she for thankthink president -- president xi for his efforts.

thank you and thank you to all of the chinese business leaders here with the united states. time is quickly running out. and, hopefully, china will act faster and more this problem than anyone. i'm also calling on russia to help raven this potentially, situation. the contributions of the business community represented here today are vital to our ensure peace and prosperity for our two nations. together, we can unlock a future of opportunity far beyond anybody's wildest dreams. in your discussions today, i hope you will learn from each other and identify new ways to advance our economic cooperation

. i am depending all of you to work together to find opportunities of mutual agreement and shared prosperity. americans and the hard working people of china deserve the best solutions to achieve prosperity, happiness, and peace thank you very much. thank you. [applause] >> we just heard from the american president, we are awaiting the chinese president. go three chinese president xi jinping about to address business leaders. >> president of the people's republic of china. [applause] jinping: the

honorable president trump . chinese and american business representatives, places and gentlemen -- ladies and friends: it is my pleasure to have president trump with us today for the business exchange. over the years, the business communities of our two countries have been committed to a friendship of our nations. this is the driving force for economic operation and overall relations between our two countries. here commitment and contributions are highly appreciated. this year marks the 45th anniversary of this communique. china's past 45 years, -- economic relations have

achieved hysteric development delivering great benefits to our two peoples. motors,r, the general ford, and yet chrysler the three u.s. automakers, manufactured and sold over 5 million vehicles in china. was bigger than their combined sales and other parts of the world. the chinese investment in the united states is also rising rapidly. over 100 --created 140,000 jobs directly for the local communities in the united states. during president trump's visit, this time, as we've witnessed right now, our companies with -- find contractsl

with over -- worth over 250 billion u.s. dollars. of there great examples win-win nature of chinese-u.s. economic relations -- cooperations. ,he honorable president trump ladies and gentlemen, dear friends: you must be interested in the chinese economy and china-u.s. economic relations. my me share with you following thoughts in this regard. economyhe chinese enjoys wide prospects. the chinese economy is now shifting from the state of high-speed of growth to one of high-quality growth. the first three quarters of this year have seen our gdp growing

by 6.9%. the more important thing is, the structure of the chinese economy is being upgraded. going forward, the chinese economy has the foundation, the right conditions, and the momentum for continued growth. population.big dividends of population will continue to be released. we have a prospering market, and we have rich sources of economic growth. during this year, the imf has revised up its forecast about the chinese economy for a number of times. this reflects its optimism in the chinese economy. is unswervingly committed to reform and opening

up. reform and opening up our critical to -- and opening up are critical to china's development. the measures of reform in the market, fiscal, and taxation -- financial investment, financing areas, and related to the state owned enterprises. andill take big strides comprehensively deepening reform. opening up his china's basic state policy. china will not close at store of opening up, and will open that even wider. we will act on the blueprint laid out by the 19th party congress, break new ground in .pening up on all fronts foreign companies in china, including the american companies, will find a business environment here more open, more transparent, and more orderly.

third, china u.s. business cooperation has fast potential. st potential. china and united states have much more areas for economic cooperation rather than competition. it is estimated that in the coming five years, china will import a trillion dollars of goods. chinese citizens will take 700 billion overseas travelers -- travels. this sees vast economic potential for cooperation between our two countries. china is going to expand crude and petroleum products, and other energy products from the united states. we will also explore the potential of u.s. exports, and

other agricultural products to china. we will deepen corporation and service trade, including in areas of tourism and education, where the u.s. will further ease its export control on civilian technologies and progress to china. we will continue to ensure is -- encourage chinese companies to invest in the united states, and welcome participation of american companies and financial institutions. with our economic relations expanding rapidly, it's natural that we may have differences from time to time. the important thing is, we act in the spirit of mutual benefit and understanding, and seek proper settlement through dialogue. chinese philosopher once observed that trading can generate friendship that mutual benefit.

looking ahead, i have full confidence that with joint efforts of you come in the business representatives present here today, and the business communities of our two countries, china's economic --ations will achieve great greater success on equality and mutual benefit commander to as game increasing benefits long as president. thank you. [applause] from presidentd xi jinping and donald trump. they talked about a lot of these to trade,en it comes where we are when it comes to that relationship, the congressman just coming out, in how, with the figure on much these deals are memorandums of understanding, nonbinding here. the twose two days -- countries they say signed economic trade cooperation deals over the past 48 hours of $250 billion, we want to bring in our guest.

he's a bloomberg view comments and an associate professor. nice to see you, chris. initial thoughts, violent reactions? >> a couple of things. it's going to be interesting to see how this 250 billion plays out. are memorandums of understanding. how much money actually hits the ground is important. it's also interesting to note, it seems like trump and xi, in their speeches, or talking more to domestic constituents than each other and-or the business community. asseems obvious that for xi, is following up on the congress, and trump, this is telling his constituency, look what i am doing getting business opportunities. look at thehelp but two, thinking who need to more. it's a complex relationship.

there's a shockingly high trade deficit. it's a structural issue, but a lot of that money gets funded back into the u.s. in the form of treasuries . in your view, who do you think needs more -- who do you think need to more? >> it's tough to say. trump is focused -- he's felt -- built so much on -- of his candidacy on standing up to china, working for workers displaced by china. his stake in this is much more what he can do for people back home. domestically, xi, is more focused on, china is displacing the u.s. as a local power. for xi, it is important domestically but in a different way, and he is showing that he will be standing next to donald trump as an equal, or, in some cases, perceived in china as a

bigger man. of the other main driver of this conversation, tensions run north korea, perhaps the slightly toned down language pr -- we are getting to from this administration. lead -- it leaves room open for things when it comes to north korea, even though the russians aren't on board. >> it's interesting to listen to president trump. his tone was more measured. it you can tell very well -- clearly when he was, for lack of a better term, going off script. he was pointing to chinese business and -- businessman when saying, xi can encompass anything. there was hushed laughter, and he played to the crowd and said, you know what i am talking about come a building that up. there was very clearly a script. there was a time when he went off that.

you can tell that the script was to try to play to the chinese to say, and chinese ego you can do these things if you want to, and we want to work with you on these issues. >> as we look to market reaction, muted as we speak, across chinese asset classes, could we just get the status quo out of liberations? is an interest of both parties that direct the ship too much? >> think that's exactly what the -- we're probably going to see. there's 250 billion in memorandums of understanding. much we see it remains to be seen. their conversations of market opening -- just this week, there were reports that visa and massive -- and mastercard were being told they couldn't go on a loan in china after trump still in the spring, where patient

agreed to open up their markets to that. that's exactly what we are going to see, is a market -- muted market response. a significanteen shift in the overall framework of the economy in that relationship. >> you could argue bets between two countries, when you look at what the legislation wants to get past in the u.s., and the chinese are putting out an investment. he will stay with us for the rest of the next hour or so. this is ahead of a joint press statement -- that wasn't a press statement. that was a statement following a leaders summit. $250 billion worth of agreements . nonbinding, to get that clear. let's get a pulse of the markets. >> chinese markets are on lunch break at the moment.

have a look at the regional benchmark index. 172s holding at a level, .6, which means it is tempting record highs. as we close today's levels, it will be the highest for the index since it was launched in january 1988. it registers that level in early trade today. we have been watching for some time to see if it would get through that 171 point level. it has been trading higher than we have seen in u.s., european equity markets. in general and is a today, this still rising sharply. that's back to january 1992 levels. we've seen weakness coming through in the yen, holding at the lowest levels since march three dollar strength, across the board as you can see. the asian market today, focus on tax reform. interesting to see the kiwi dollar. it was rising.

trade being led by this currency at 1.75%. you we saw a spark in the kiwi, but it's back now at 69.55. this is 2008 level, continuing here. you can see every center there is moving higher. that strong read coming through from china today, 6.9%. that's getting a solid boost to those material players in this sector. this is holding solid there, on the fact that we had this proper texture coming through. is back in the black there, up by one point 2%. the biggest later today in the region, in terms of index points. >> thanks, juliet.

the are keeping a close eye on deliberations in china, ge and chinese partners announcing $3.5 billion in technology deals. also, some news around the chinese airlines, an engine liftingt $1.4 billion prices. we will keep a close i on that front. still to come, we will widen out the conversation on the closed caught -- cap on the brexit story. we have citigroup saying they are bracing for a hard exit. where does the story fall off from here, and how will that affect u.s. -- u.k. asset classes? this is bloomberg. ♪

>> but get you a check of the business flash headlines. ford finalizing a deal in china

to make and sell a full line of vehicles, investing more than three quarters of a billion dollars. china strife to clean up its polluted environment. ford's top executive in asia will meet u.s. leaders in beijing later on. its forecast by almost 6%, blaming a recall on cars in japan after an uncertified safety inspection. nissan's chief executive parser has an -- partner has an upbeat tone. >> you have the traditional car business, that by the way, continues to grow. even though young people in mature markets, even though there's uber and other cars, still, the traditional business of the car industry continues to grow. anothergoing to be record year for the car industry.

>> uber may have its problems on the ground. it's pushing ahead for its vision of flying cars for an agreement with nasa. uber plans to hold onto a network of political take -- take off. happen,hat can regulators will discuss how flying cars can show the skies. >> you will forget that national is the national aeronautics space administration. since they are the developer of this technology, and connected and engaged in regulatory bodies, this collaboration makes sense in order to bring it to market as fast as possible. >> that is your bloomberg business flash. david. >> thank you. let's shift our attention and talk about brexit. saysacks, this citigroup his bank is raising for hard brexit. he was speaking with bloomberg's

david westin ahead of the latest round of negotiations. but that's between the u.k. and eu. >> we are watching closely. from our perspective, the prudent thing we have to do is assume what has been termed as a hard exit, meaning that there is no transition, no sharing arrangements that are put in place. we've got to be open for for our on that day customers, to make sure we can facilitate the things they need to do. that's the way we are approaching it. we've got some latitude and flexibility. being a global institution, we already operate in 22 of the 26th eu countries. 26 eu countries. it's not that we have been operating in the u.k. and going , we arese territories

on the ground. we have connectivity. areas we have chosen, where we think fed us well into the future, years ago -- before brexit, we made it significant exit into island. we have our european bank cornered an island that gives us capabilities across europe and the continent. that's done. i would call this the final stages of deciding where certain trading settles and clearing -- activities will take place. happy to say this, we been a late stage conversations for all that. report overnight that some of the u.s. banks met with wilbur ross over in london. the said time is wasting. they've got to sort this thing out, or we will have a lot of people out of london. is that true for citigroup? >> going back to business model, we don't have the same construct

, where we arty have a majority of our people in today's eu outside of london. with get significant country presences. we won't be moving as many, but we certainly have some things we and areto move preparing to move, but it likely won't be the same types of numbers or percentages that other people don't have that eu presence already. >> we are a few weeks away now from mifid ii. where are you on charging for research? some may charge, something, giveaway equity research. there were quoted as saying, we are not going to do that. where are you on pricing for your research? >> where we need to separate between fixed income research and equity research. conversation stages, with each of our clients, in terms of their

expectations, but they want, the things they would expect us to deliver. we will come to a price and present that. on thes is largely, fixed income side, there hasn't been that same type of metric in place. my guess is we will continue, as we have, to provide fixed income research. we hope we see value, we hope they recognize that, and we hope they are willing to send business our way for that. more with this cheap economist. economist.s chief does the u.k. have any leverage at this point? itself in. has found a game of cat and mouse.

they thought the eu would suffer from brexit. now, they realize -- the real loser of them. was not sothe eu willing to compromise, they will drag the negotiation deal at the last minute, when they will be able to extract huge confessions. the hard brexit, and no deal brexit will be disastrous for the u.k.. this is all on the side of the eu. >> what kind of deals to expect to take shape? your tsonga have no leverage. what can they sell the jet of this -- you are saying they have no leverage.what can they salvage of this? >> a deal that would put the u.k. in the same's -- space as switzerland, where they will have to pay, by the way, for all of the services from the eu, and they will be under the eu

system. they will have to agree to a full freedom of movement, labor, citizens. be, not exactly what they had in mind. it will better -- be a bad deal the -- and inn the use circles, they know it. >> that was a safety valve, as people point to on bloomberg as well. , in going to be relentless terms of the pressure on the currency. how long can it go? how much pressure in their?how long can it stay up ?-in there ? >> guitar to say. with to monitor the situation, , exit plans rate for the eu.

the economy has artie slow down. inflation has slowed up. real wages are going. this is a situation where, at some point, we will have political repercussions. weak,vernment is already so i don't think it will improve in any way. >> i'm sorry, we have to it there. we are running out of time. we will get back to beijing where this joint press statement is going to take place. have a listen. >> friend from the press, good afternoon. it is my greatest pleasure to together withu president trump. it let me begin by extending, a warm welcome to the president for his state visit to china. today,ay, and earlier the president and i have had discussions on the china u.s.

relations and major international relations. we reviewed the important progress made in the relationship since we met at mar-a-lago. as we discussed, how to further move forward the relationship was months ahead in great depth, and we released a series of new and important consensus. it was constructive and productive. but prepared the policies adopted -- i prepared the policies adopted at the congress. i conveyed china's commitment to deeper reform, greater opening up, and a path of new development. china's desire to expand converging interests with other countries come up from the judge" operation. domestic trump --

the development of china and the united states is mutually reinforced without contradicting each other. there is the interest of both countries. we believe that facing -- >> we are hearing there from the joint statement of the presidents, xi jinping and trump, also scheduled to speak in a few moments. go to latest when we do get them. let's bring a guest back to the conversation. we were talking earlier on what the texture of this relationship, it's obviously evolving.

a lot of this comes back to what you allude to. they talked about low hanging fruits, deals. but, market access is something that everybody wants, but so far, no one wants to talk about. >> yes, that is the elephant in the room everybody is trying to dance around. that's where the hard issues come into play. in most regards, china has lived .p to its legal obligations upn it joined wto, if living to most of its international agreements right now. one of the problems is that there is very little leverage should other than persuasion the president trump or obama and previous administrations have to try and prior open china's market access. even though the president talks about reform and opening up, we continue to hear from the reform

business community, that i think the eu jim of congress in beijing said, there's promise fatigue. we keep. about these reforms, but have more and more problems. last time the lost -- i was there a few years back. it was the same problem. there was a snail pace at which they were opening it. just in fairness, is the market adjusting, or is an issue for everyone it's an issue for everyone. if trump was going to handle ,his much more constructively australia, angela merkel, economy,every major the u.k., has complained about this issue -- these issues.

people don't feel that the companies have equal access to trade or investing in china. >> let me jump in their. let's look at >> and senior high-level chinese military -- [indiscernible]