♪ in hong8:00 a.m. here kong. yvonne: welcome to daybreak asia. best pacific markets recovering from losses. the dollar fell. janet yellen confirming she believed he said -- she will after herfed successor takes ever next year. germany facing another election as angela merkel rules out trying to rule by majority.

the united states designates north korea a state sponsor of terrorism. ♪ ♪ ♪ yvonne: geopolitics with north korea. all political risk and uncertainty in germany. markets quite resilient in the last 12 hours or so. it seems to be the case of that this will not derail the global synchronized growth. sophie: you saw the muted reaction even though it was a whipsaw in europe. europegiant or hard in given those headlines coming out from germany. here in the u.s. and there is

uncertainty over taxes for the markets continue to rise. aheade several more weeks until the end of the year. let's get to the first word news with emma. confirmedt yellen has she believed the fed once her successor is sworn in. governor doese not end until 2024. she was said to be vice chair fore that he was chair of the san francisco fed and chair of president clinton's council of economic advisers. yelle --merkel said she would face another election rather than form a coalition. merkel said she would rather go back to the electorate and

attempt to govern without the majority or a clear mandate. the u.k. has been warned it must it be more to break and the impact from brexit. the negotiator from the eu said london must offer a solution to the irish border and the ones who wanted brexit should come up with the ideas. the former italian minister told that the ball is in the u.k's court. >> what i think confuses the ideas of the british public opinion is probably that what is out there under all the attention is the amount to be paid. correspondent: the washington post is reporting that 8 women have accused the tv has charlie uote unwantedng q

sexual advances against them. pbs has suspended him and his show has been suspended from tv and radio. global news 24 hours a day powered by 120 journalists and in over 120 countries. betty: equities, we are in the green after a late day rally and resurgance. investors overlooking the political risk in germany as well. correspondent: we are seeing japanese stocks gain ground at the open. topix 225 gaining and the as well. aussie shares gaining ground.

let's take a look at some movers in sydney. he rise after t its profit jumped 132%. andmoving the most graincorp is following as it sees global grain stocks at record high. keep an eye on toshiba. slide to a new low and it was raised to out perform. andhitachi is on the radar mitsui is gaining ground at this is said to acquire dubai-based eec. look at the korean won gaining against the dollar.

exports rising. won reversing the loss on dividends payments. changed and holding onto overnight losses as the swiss had boosted the dollar. aussie dollar a little changed. the aussie heading for its steepest 3 month slide. yvonne: thank you so much. president trump designating north korea a state sponsor of terrorism. paving the way for additional sanctions on kim jong-un's regime. unlawfult end its nuclear ballistic missile

development and cease all support for international terrorism. yvonne: it is part of what the president called a maximum pressure campaign against pyongyang. tillerson calling this a symbolic designation. what does this status mean for north korea? correspondent: the secretary of state has said it closes l oopholes in the designation. it is more symbolic but as part of the campaign of piece of pressure to try to bring other countries along, but it's probably more significant than anything else. the sanctions themselves have already been covered by other sanctions. it allows u.s. citizens to be for to s north koreau

terrorism. -- sue north korea for terrorism. betty: is it going to change how other countries interact with north korea? correspondent: the u.s. was trying to get other countries to go along and are saying we are doing everything we can to pressure north korea. the president was in asia recently and part of the reason for that trip was to try to put the pressure further on other countries to do what they can about north korea. trying to get china to ban oil sales, which they have not been willing to do. this is part of the overall campaign. betty: we've seen the president approach this in a more unilateral way, getting the international players involved but north korea has been here before. back in 2008, this move was

reversed under president bush. what were the circumstances? >> there was the designation previously. at that point the north korean had pushed to have it removed and the bush administration, in trying to go a diplomatic route nuclear agreement, trying to get them to halt. betty: -- correspondent: we now know what happened. that did not work. the obama administration's campaign of patience did not work and at that point north korea ramped up their nuclear program. this administration saying we are now going back to that. betty: are we expecting a

response from pyongyang? it has been 60 days since we have heard from them. correspondent: in the past, president trump made his speech from the united nations, we heard back from the north korean leader. thealled him names and north korean leader called mr. trump names. betty: thank you. still ahead, the world's largest carmaker looks to increase its focus on china. yvonne: our next guest says the germany's political deadlock is not good for markets. this is bloomberg. ♪

♪ this is a daybreak asia.

asian stocks are rising early tuesday morning with a drop in bouy equities. .oining us is ronald won good to see you. give us a read on what you think seen intoe we have the sentiment in the last 24 hours. you are noting this political uncertainty in europe is going to be bad for emerging markets. but we have seen europe recover in the wall street session. termose were short impact. we have seen the asian market has been performing strongly

because of tax stocks. the uncertainty in europe has only traded a short-term impact on the market. betty: take a look at the recovery we saw. things have fizzled out. generally move higher? -- can we move higher? >> it is difficult to say. toward the end of the year, people look at the micro aspect of the company's result. let's talk about china has well. there has been a lot of turbulence with china's mentioning this claim of shadow banking and they are highly regulating these asset management products. you look at the rally in

shanghai and they doubt the fact they are going to be honing in on this. why is there doubt that president xi is not going to be as aggressive? worrieshe messages and about polity factors -- last friday the government announced a drastic control on the upper management industry and we have seen the liquidity measures are affecting the market a little bit. interesteing rising rates. should spook investors that people have is the default for something to see

if this is true. >> in the short-term, any messages that tend to hold back put they -- they will money into the property market. over time, the stock market can generate decent returns. i think the asian market will have stronger employment the end of next year. betty: you mentioned tech stocks are still attractive, why? the fundamentals of the economy is not in good shape. stock offers strong

performance. it creates hope for the masses to put money in. we see investors pouring money into those stocks. the strong performance has been the liquidity in the market and the market has nowhere to go. yvonne: it seems the market is stuck here and there is lots of money look for a place to go. do you see a lot more driving into the tech sector. is that going to make these stocks too pruicy? >> stocks have been very and said. at the same time, we have seen financial results. the chinese government has been

promoting a lot of positive policy to support the tech stocks and concepts. risk, whaterms of are the biggest risk? correspondent: the biggest risk is still the fundamental of the --at the end of the year, liquidity will become a serious concern. the central government of mainland china is still launching a lot of policies for structural reform. they will create a tightening impact on the liquidity. if that affects the borrowing, investors may hold back and we of adjustmentort in the asian market over the next few weeks. yvonne: what is going on with

the dollar? we've seen the flights of safety to asia and europe but with the scandinavian currency, we are seeing year high. the dollar seems to be in trouble. >> not in trouble. but it seems to be affected. we've seen towards the end of the year, the money is going back to the emerging markets so we are creating strong demand for local currencies. this is likely the u.s. the dollar will be weakened by the end of this year. we help the dollar will get stronger in the first quarter. betty: even if we do see foribly four rate hikes the fed in 2018. >> i think the correlation still works. we need to see if there will be a rate hike in december.

weak andr november is strong.ar is not betty: what other areas are you looking at four 2018? people are still looking at the fundamentals of the chinese economy. a lot of domestic, transportation and property. there will be strong demand for those sectors because the money has nowhere to go. yvonne: thank you. you can get a roundup of the stories you need to know to get your day going on today's edition of daybreak. it is available on your mobile app.e bloomberg anywhere

this is bloomberg. ♪

yvonne: this is a daybreak asia. betty: i'm betty liu in new york. inquisitive group has been delaying repayment of a it isnd sources say wanting to double the interest rate if the bank will pull the p february.ck to the kentuckyead of plant used an internal video to partsat it can make the

ship it tod then america for cheaper. uber will make a major commercial auto purchase. uber will add its software. the fleet is small compared to the people who drive for uber but it's an effort to replace human beings, the biggest economic cost in the service. tonne: they are looking improve their offerings wants to buy volcom. braodcom rejected their approach, saying it was too low.

they say they remain committed to a deal and has received positive impact. &t says its plan to take over of time warner is a vertical merger that does not violate and who trust -- antitrust laws. say the deal will greatly harm american can increase. -- consumers. correspondent: big news today. the u.s. justice department is suing at&t's $85 billion merger with time warner. two ofs to unite the largest broadcasters and it has been in the works, it was widely expected to go through.

one is a distributor and the other is a supplier. recently we have been getting indications that the justice department has a problem with this. they think it will hurt competition. at&t came out in a press conference saying they think this suit stretches the limits of an anti trust law. at&t ceo randall stephenson said they proposed some solutions going forward but they will not sell cnn. some think this deal is politically motivated. president trump not a big fan of cnn> . they said they will fight it in court. they played a tape of antitrust chief megan bellingham indicating before his confirmation that he was in favor of steel.

-- of this dea. l. yvonne: that was chris paul barry talking about the at&t deal. it looks like the doj has made good on its word here. deal.to block this at&t ishe industry, already being disrupted by competition from netflix and others like that. willrgument is saying it raise prices on consumers. yvonne: it could have implications. it could have far and wide implications from the court case as well. we have more coming up, we are

yjeted by the jets -- eas boss. this is bloomberg. ♪

♪ ♪ and singapore. kong.vonne man in hong betty: you are watching daybreak asia. let's get to the first word news. the united states is that maybe north korea --if designating north korea a state sponsor of terrorism. but was been there removed by president obama a few years ago.

aalthy people in saudi arabia asking banks and protectrms how to their wealth. among those detained is the andr of part of twitter citigroup. officials say the wording should be consistent with a withdrawal from stimulus and draghi has made clear that guidance has remained a tool. he said the exit from qe remains on track. >> the economic expansion are made broad-based across sectors. many supported by domestic demand. recentng to the

estimates, real gdp growth has continued in the third quarter at a rate of 2.5% year on year. relentless ands volatile rally showed no sign of coming to a close. 6% currency rose more than to a high of $8,220. another chapter in a dramatic year that has seen three different slumps of 25% all follows by rallies. incoin has risen over 700% 2015. quite remarkable. yvonne: breaking news out of australia, the reserve bank of australia releasing the minutes from its november meeting. paul allen in sydney. >> as always, a large amount of detail from the reserve bank of australia. , an area of

particular concern. rba said there is considerable uncertainty about how quickly wage pressures might emerge. rba noted that mr. developed economies have the same --most developed economies ahve the s ame weak wage growth. mining investment, dwelling construction likely to remain high given the large amount of work still in the pipeline. conditions in the established housing market easing. strong in melbourne. global outlook, not much changed for the growth outlook for australia. nothing mentioned of the currency in these minutes. aussie dollar hovering around

75.5 percent. betty: the governor speaking later in sydney. is this fair to say it will generate more tension than today's minute? >> that if the event everyone is waiting for. predate the last wages figures. the dollar now at its lowest since june as yields continue to slide. morgan stanley seeing the aussie dropped to 28 percent. that is something he might address in his speech tonight. he had used to this annual thech to say new things and title of the speech was interesting.

it is called some of all the questions. this is what the market is waiting for. 7:30 sydney time tonight. yvonne: thank you. paul allen joining us live from sydney. asian markets shaping up. the shrinking yield gap weighing on the hockey. seen,pondent: that has the policy lose over 1%, making it the worst g10 performer. investors expect the rba to stay longer. mentioned, there was not much changed to the growth outlook in australia. and gold take oil a toil. the drop in the currency to about 75 and 46. we are seeing the u.s. two-year yield get higher so the

convergence is also further eroding australia's premium. that is illustrated by the following white line. morgan stanley says the aussie will fall to 65 cents in 2019. all the stoxx tracking higher. stocks tracking higher. consumer staples holding on to slight gains even as growth is slower in the 3rd quarter. on profit surge. macquarrie ad-libs is

is climbing.tlas a few stock ratings to consider. betty: let's turn to germany, where the political future of europe's weakest economy is hanging in the balance. angela merkel's coalition talks collapsed on the weekend. more with ramy. the dax defied the negative news. david: one might expect off of the negative news is that the dax investors would pull out of the index but we saw it rise by half a percent. your first of my three bloomberg terminal charts. the blue is the dax. it has been outperforming its u.s. peers since the

election. -- the footsie 100 in thate trending below line. analysts saying this is speaking to the strength of germany's economy. business confidence. take a look at this chart. the white line here is business confidence and it is now at a record high, 116.7. ins is being helped by this green. you can see it has continued pace since the middle of 2013. unemployment at a record low of

5.6%. i spoke with our own matt miller in berlin. we were chatting about why and he was saying that belgium, holland and spain had caretaker governments. investors in think this could be the case in germany. chart, we areis talking about the euro. ago, we saw its fall by about half a percent. and it isng, it rose down about half a percent. this is the only uncertainty that is out there that we are seeing in terms of the markets and currencies. german immigration, now in terms of policy uncertain. brexit uncertain. angelaitical future of merkel herself.

those are the terminal charts i'm talking about today for germany. yvonne: coming up, focus more on ratings,os and fitch asking why the strong demand for luxury cars is going to last. this is bloomberg. ♪

♪ betty: this is daybreak asia. the automobile group is in talks with fiat chrysler. speaking exclusively to our zhoua correspondent, guang the it is ready to enter u.s. market. we talked about chinese

break intorying to the american market for years now. can guangzhou do it? correspondent: that's right. it is all about quality. in 2007 when you had chinese companies trying to launch themselves, it was a flop because some of the brands were seen as outright copies and others were seen as having bad builds.uality that has changed over the last 10 years. that is part of this greater bay series. push thept to production up. we visited the factory for guangzhou auto. guangzhou thinks they can do it. it is important not just for their revenue, it is important for china because they are a state-owned company and this is

part and parcel of china and the chinese government's made in china 2025 push. to break into the market successfully would be seen as a victory for guangzhou. volvo sells in the u.s. but guangzhou auto would be the first chinese automaker to sell their brand in the u.s. it will be the trumpchi brand they will be selling. they may have to change the name. a name they came up with a decade ago. the president says the axis would be significant for this company. >> we are aiming to enter in the u.s. market in 2019.

this is a crucial move for guangzhou auto. at the current stage, our internationalization process has just taken off. we have laid out all the groundwork and set up operations in 14 different countries this year. entering the u.s. market will be a huge breakthrough for guangzhou auto. correspondent: part of this will be trying to move away from the ina stigma. u.s. auto consumers very nitpicky when it comes to their cars. guangzhou still quite they are in a position to do that by 2019. tesla is looking to set up a factory near shanghai. the president of guangzhou auto welcomed that competition. likely to launch the

internet connected cars in 2018. something that will be a key driver for guangzhou auto sales. the president says he expects sales to pick up by 5% by 2018. yvonne: stay with us. always it doesn't seem like the grass is greener on the other side. rtoalways want to go like the other market. just gave this great be brief about guangzhou auto and its plans to go into the u.s. market. we hear a lot of chinese companies wanting to break into the u.s.. will they be successful? correspondent: i think for --they brands they are

have already had their brands in suv boom inhinese the mainland market. technology has improved. they have more confidence to go and attractmarket consumers with their better interior and exterior designs and better technology and high value for their products. betty: how do they get over that perception? you see them at the detroit auto show, how do they get over that

perception that the cars are not as well made as of their u.s. or european counterparts? correspondent: they have learned a lot from the previous few years of the auto boom in china. rapidained a lot from the expansion of the suv market in china. this is a special market because chinese consumers preferred those city use suvs. they found new retail consumers to bring larger space and the better vehicle performance in the city. they may want to crack into that market with their successful models as well. yvonne: the government

considering relaxing some of these requirements it has for foreign automakers to expand and the printhare in china as well. fromdoes china gain opening up to foreign competitors? do they need the know how now? correspondent: if they open up -- what they want is to bring in the technology. --technologieshe e from the automakers. bring more brands, more competition to the market to boost and improve vehicle

the productd customers.the >> the president of guangzhou told me he expects sales to increase by 2018. if that in line with fitch's predictions? fitch is around growthgle digits sales vehicles inr china. this might be a better outlook. growthre not manyy

catalysts for this year. the mass market, low end passenger vehicle markets and in the 4th quarter. to growt the market with the recovery of some brands like korean brands. there will be structure growth and luxury cars. yvonne: thank you. our series,ue tomorrow we are going to focus more on autos and aviation.

sector and talking to air bus as well. we talked to the air bus ceo. it maturing to an innovation powerhouse. >> if you look at silicon valley in california, there's very little silicon that happens in silicon valley. the name goes back to the 1980's. today it is mostly a software and web services-based innovation ecosystem. shenzhen is the silicon valley of today. the goal of the innovation center is not the same they do in europe but really expanding outward. they are looking for potential

partnerships with some of the tech giants. that is going to be an interesting conversation moving forward as they expand their reach. shenzhen did launch as an innovation center last week. any company right now that is in a traditional industry would be remiss not to throw a lot of money into research and development right now. including the rmb behind the -- r and d by the more out there concepts. idea that you cannot only hail an uber or taxi on the ground, you can

get one in the air. paul,: sitting down with he think this can be a reality. he thinks the vahana can be there by the 2020's. trying to bring some new tax into the industry. check up an interview coming up. plenty more to come here on daybreak asia. this is bloomberg ♪

yvonne: this is daybreak asia. betty: the trump administration is asking the supreme court to reinstate fully the travel ban. earlier this month, a court in california ruled part of the ban can be reinstated. this is the third time the ban has been put in effect which includes restricting people from 6 countries. interesting the trump administration is making the statement shortly after president trump declared north korea will be designated a state sponsor of terrorism. you have to wonder why he's bring this about once again. this is the third attempt he has

tried to get this through and it has failed. perhaps he's looking for more of a success on that front. there are other things hanging on. not during the thanksgiving tax reformecess but is going to be front and center after lawmakers come back. betty: first time we have not talked tax reform during the last few hours. i expect we're going to do so again tomorrow. benefit from daybreak asia. our markets coverage continues next. standby for bloomberg markets. this is bloomberg. ♪

rishaad: it's the end of an era. prepares to give her successor the reins next year. angela merkel also in the news, saying she is ready for a new election. at&t possibility for time warner taking a hit. the justice department taking them to court to brock -- block the deal. aidi: coming at this hour, electric cars are increasingly the choice. we will have a