♪ kong, we0 a.m. in hong are live from bloomberg's asian headquarters. buckham to "daybreak: asia-- welcome to "daybreak: asia." democrats say an instruction case is building against president trump. the president was celebrating the republican textbook, saying the passage makes him unbeatable in 2020. >> and from bloomberg's global headquarters, i am ramy inocencio in new york, just past 6:00 on a sunday evening. honda and forward led u.s. -- and ford led u.s. auto sales last month. and justin trudeau wants trade talks with china.

is anyone actually listening in asian? -- in beijing? ♪ ramy: a very good morning to you. it is great to be with you on this morning in asia, sunday evening in the united states, take a look at what happened on the markets on friday. in the united states, like a roller coaster after michael flynn said he was going to plead guilty after lying to officials. we saw the markets up and down. hot on the bloomberg terminal, btv 4046. the s&p 500, we saw it when the news broke, that fell, but not only that, we saw the highest taxed companies in white, were rising inexorably in anticipation of the tax reform

plan. those fell, as well. david, we know what happened saturday morning here, it did we are looking, ahead to markets opening in the united states as well as where you are, to see what reaction there is. david: absolutely. when you look across what is , apening over the fx markets lot of what is going to happen comes down to the dollar, when you look at the majors, decent pickup across a lot of these into this morning. have a look for example at this. 98 is essentially what we are looking out there. as i look forward it the markets in the asia-pacific, lots of dimension. a lot of decisions coming up, rba, r.b.i., throwing the central bank of brazil into the mix. the earliest indication, some downside coming through in the top 50 in new zealand, also some weakness in the kiwi currency. have a look at the yield in

sydney, iron ore is in the mix, that is a contract in singapore, 6.5% to the upside. rio tinto we will flesh out for you in a moment. not the most exciting open. yields in the asia-pacific, there is your tenure for strategic -- for australia and looking ahead to japan, where euro yen and dollar yen, 112-77. you will want to watch the november highs. the k is trending higher, a lot of that comes down to the japanese currency. it will be a very busy next few hours for markets in the asia-pacific. ramy: you bet. we will look ahead to that. meantime, let's get the first word news. haslinda: good morning. rio tinto has named a mining veteran simon thompson as its

new chairman. he has been a real director simply 14 -- been a director since 2014. -- the minor says they are optimistic about china in the long-term that sees a slowdown in the next six months. and ford have showed that cyber monday in black traffic tot change brick-and-mortar. total deliveries fell at gm and fee it chrysler, but both said retail demand was strong. the auto industry is raising its first year of shrinking sales since the financial crisis. u.k. prime minister theresa may is fighting fires at home ahead of crucial brexit talks in brussels. skeptics set out new red lines for her meeting with john paul

yoga. of her social mobility advisors quit, saying she has done nothing to improve people's lives. to -- falling fresh calls one of her deputies is facing fresh calls to resign after sexual misconduct. -- seeks to bring us bailout to an end. the two sides reached common ground on the financial system and social programs, and the conclusion would not only relieve loans but help regain the trust of investors. australian lawmakers say the tuesday deadline to declare possible full-service and ship after the weekend by elections solving prime minister returned to parliament. barnaby joyce was back to the ballot box because he unknowingly held new zealand citizenship.

mp's facing a by election in two weeks. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i'm haslinda amin. this is bloomberg. ♪ david: thank you. let's have a look at the top stories today, the top democrat in the city judiciary committee, diane feinstein, says there is a potential case of obstruction of justice developing against president trump after, national security adviser i complain pleaded guilty to lying to the fbi. trump defended flynn in a tweet saying there was nothing to hide. ross krasny joins us out of washington. ros, a lot of this started out as a suggestion, but there is a case developing. help us understand what it is. one thing senator feinstein

said on nbc this morning, she does not think michael flynn with a rogue agent. she thinks some of the talks he had with russian about specific holocene matters concerning u.s. u.s.ions on russia and the -israeli policy in the u.n. could not have been cooked up by flynn himself that he must've been a directed by someone on the transition team. she is giving the impression that she thinks as more comes out about the talks with russia during the transition, it will lead closer and closer to trump's inner circle, and maybe a case the trump himself has tried to cover it up, especially with the firing in may of james comey, the fbi director. what specific development should we be watching out for to get an idea of whether or not this investigation is in fact getting closer to something or circle -- trump's inner circle?

ros: i think day by day we keep in touch with lawyers on the case, the information could dribble out at some point about others implicated, about who flynn was most closely connected to during this crucial transition period, whether it is jared kushner or others very close to trump at the time. ramy: i want to move on to the corporate tax passage in the senate, and of course with donald trump's comments afterwards. a bit confusing, he said he would be open, or it could be on the table, a rate of 22%. of course, both the senate and house plan have point percent. epic a lot of people are confused. what is happening? ros: a lot of people are confused. the president made the comment on saturday, kind of a throwaway

line as he was boarding marine one at the white house. it came out of the blue. knows ofbe that he some additional negotiations that will materialize when the house and senate sit down to k nit the two bills together, and maybe it was so exciting to him he could not help but dribble out a little bit. we know that president trump loves to have a sense of drama, so there could be a little bit of that. every percentage point that the corporate tax rate goes up from the hoped-for 20% would be another $100 billion or so in revenue, so it may be some of the lawmakers in the house or senate have something in mind they want to use, maybe some tax cuts for other people or other sectors.

i think we are expecting the conference committee ticket going pretty early this week, maybe there will be something that comes out about the 22%. for now, i think it may be more of a red herring. ramy: oh no. a lot of maybes. as you say, we have to wait and see as this week and falls. for now, i guess we have to leave it at that. thank you very much. meantime, the fed is on course for rate hikes this month and next your, but bond bulls are roaring back. --bal investigators investors are running to the safety of government debt. kathleen hays is back again. risk off is also back and bond bulls are back? kathleen: we shall say. the u.s. government bond market, rock 'n roll. let's step into 7824. as the week wore on, there was a

bit of a selloff in bonds, the yield on the benchmark, 10 got up to two -- got up. that's when the news hit that michael flynn was pleading guilty to lying to the fbi. a knee-jerk reaction. who knows what this means for politics, president trump, it has created uncertainty in bond buying. people are asking, will it be a one-day wonder? what next? you have to think about this, think about the economy. also on friday, it was kind of overshadowed by the michael flynn news, the isn survey was pretty healthy. let's look at 861. pullback, ithe isn signals expansion, a good number. 64, maybe jumped to some hurricane bounceback, manufacturing looks good. it is safe to say rate hikes are ahead.

the second day in a row on friday, president of the st. louis flight talked about the flat yield curve. he says it is a negative signal the fed and markets have to watch and it will get more flat if the fed keeps raising rates. obviously he's not in favor of that. contrast that jpmorgan asset management, there are no doubt last friday was if we get these tax cuts, if the tax plan goes through, you can expect at least for rate hikes next year because it will boost the economy. many people are betting it will boost stocks, what else to want to tell you about? the jobs report on friday, again of 199,000 is expected, that is another thing that is strong enough to be a bearish factor for bonds. we will cement rate hikes, it will make people say how many will they do next year? if the tax plan, going into resolution in the next few hours, it would be a bearish mix

for bonds, it would be interesting to see if they can stand up to that. david: absolutely. kathleen, you will stay with us. we will continue the conversation on the tax rate and the fed. we will be joined by global assets management chief. that is coming up next. stay with us. this is bloomberg. ♪

♪ this is "daybreak: asia." ramy: president trump is celebrating the advance of the tax bill in the senate, saying its passage makes him "unbeatable in 2020." he also suggests a critical element of the plan remains open for debate. let's discuss that with a chief economist and kathleen hays is here to join in the roundtable. surprisek about this

that donald trump said offhand, as our reporter said. the 22% tax rate that could be open for debate. eric, what is your take on that? is he trying to get democrats on board? eric: i feel like that's a bit of a stretch. [laughter] it really does make the point there are some significant of five even in terms of what the house and senate just passed. the year of the corporate tax cut is up to question. there are different personal tax rate brackets, and i think the point would be there are still some -- there is still some significant negotiation ahead between these two pieces of legislation, and when you have a razor thin margin, it is still tricky. don't get me wrong, i think something gets done in the end, i would give it differs -- give it a 70%-80% chance. there are still some key predators up for debate.

ramy: what is the top sticking point? the number one thing you think, if anything is going to wreck this, it is this? eric: i still think the northeastern republican moderates that are balking a little bit on the state and local tax objections, these things are still very much a problem for the northeastern republicans. wonder if that will prove a particular sticking point. everybody likes lower taxes, some of the headlines are broadly there, the math needs to be made to work within the $1.5 trillion net stimulus plan they have in place, but i think it comes down to how some of that gets paid for. kathleen: i want to show you a chart. one of the things that has come out from a bloomberg story last week about four big executives saying, we're going to pass on the tax cut in terms of buybacks, or passing it on to shareholders.

ceos, asks if they would hire workers, nobody raised their hand. this is 4509. the title, tax policy is top of mind. we are showing a quarterly buybacks through june of this year and how the s&p 500 has continued to rise. it is bullish for stock market investors, even if the president turns out to be wrong and republicans turn out to be wrong, that it was not so bullish for people getting new jobs or bigger paychecks. what do you think? eric: it certainly is mainly a corporate deal. i think that's where you must obviously it a boost, the sort of map we have done would say the u.s. economy in the short run could be .6% bigger, not trivial but not a huge amount, considering the cycle is looking fairly old and the labor market is quite strong. from a stock market, a corporate income after-tax perspective,

it's worth more like 5%-9%, depending on the slice you're talking about. that is a fairly big deal, i think it is right to suggest that is where the main narrative lies. there was this debate about whether worker wages would go up as part of the tax cuts, and we saw some arguably unrealistic lanes coming from the white house, some academic articles along the way. i think there will be a little extra pop in wages, it will not be the main vehicle, i think buybacks will be an essential feature, and the repatriation, and in the end it is a positive for the stock market and something that is starting to be reflected in the stock market but not quite fully. david: quick question. this debate has been raging this whole year. the question i always have, why do people say this affects the trajectory of the rate hike for the fed next year when incremental growth, at best, kicks in, or shows up in 2019? eric: a good question.

i would say don't underestimate the extent to which expectations and anticipation can be a boosting factor for the economy. willing toies more expand and feeling more optimistic. i think there might be a bit of an effect that comes earlier, but even if this does end up being a 2019 boost, i think there is some for 2018, but 2019 could be central, you can mind for central banks, the effect for rate hikes is also a delayed operation. the full effect does not usually accrue for 18 months or so. i think they are pretty well aligned in the fed might find itself more hawkish as a stimulus comes, there is not a lot of slack left in the u.s. economy. kathleen: that's a good point. some economists think, if you're cutting taxes, don't do it to stimulate the economy, it looks good. the fed has also discounted how much tax reform would go through and not change the forecast yet. the bond market, how do you figure out what the bond market

is telling us, and will the trend change to a flatter yield curve, which sometimes has portended recession? 1652 is the chart, you don't even have to look at it, you can see it in your mind's eye, i'm sure, we have this flatter and flatter curve no matter where you look. as a stocks rally, loving the tax cuts presumably, what our bonds going to do? we have the selloff on flynn. mean, the rally on flynn, will they start selling off on the tax cuts? this really doesn't speak to the attention we see in our own forecast, and clearly identify a strong global economy, we have fairly optimistic views for 2018. however, this is an aging business cycle and getting fairly old. you can see that at how much economics like is around, how narrow credit spreads are, you can see that in the yield curve as well, it is flattening. i would make the point that when you look at the three year, say,

maybe the most relevant when these purposes, the yield curve these to continue flattening at its current rate for 17 months there it would be inverted, cycle should be coming to an end naturally, so i think it is telling us and advanced cycle but not necessarily telling is imminent them. i think when you look at how it is flattening, and is flattening mabel -- maybe in a more way, the short end rising, as opposed to the long and falling. i would take that trade every day of the week. that is the more confident, optimistic interpretation. when you look at the longer end, you can say it has been steady, it has not moved much, but need the surface, and this takes a bit of econometrics, the term premium is falling, the expected policy rate over the next decade to the extent you can tease that of the data has written by that's risen by about 60 basis points in the last year.

that show some confidence in the long end. i think the flattening curve is a bit of an overblown concern. for rate hikes, financial conditions have remained loose. if anything, they have loosened further. you understand the argument that rates are too low. at what point do we start to tighten? what is the catalyst for that? is it the fed? eric: i think it is the broader context. the indices there he, but the spreads her central, rising stocks are a component, oil prices are in their in some of them, oil is in a sweet spot, not too low and not too high. i would say we are losing a little bit of the tailwind, it is actively easing, financial conditions, i would argue that they are easing. there's a bit of a shift. gains from aodest

fed tightening in the next year are not a ticket for ending the friendly situation, i think it would have to be something like credit spreads moving significantly higher and in my mind, that might be a 2019 story. david: eric is sticking around with us to discuss canada and china. we will be discussing the prospects for that one. you can actually get around at your top stories you need to know for you just waking up in today's edition of daybreak. you can get on your terminals, and on mobile on the bloomberg app. you can get the news on industries and assets you care about. that is a very useful function. we get ready for a fresh trading week. this is bloomberg. ♪

♪ ramy: a quick check on the

latest business flash headlines. fiat chrysler is in talks with hyundai about developing hydrogen engines. the news comes as electric cars establish themselves as the dominant post fossil fuel technology. monday initially led the drive toward fuel-cell vehicles, that it is followed by toyota in terms of sales. fiat back away from hydrogen power earlier in the decade and says there is potential in the technology. isid: cbs is buying -- cvs buying aetna, creating a retail giant. $207 perpricing and share. remy was just talking about cars, in a moment, we will get back to that theme. cheap loans are growing car buyers back into the showroom. what is that story about?

stick with us, we will run through the numbers, next. this is bloomberg. ♪

♪ -- david: it is 7:30 in hong kong. we are just about 30 minutes away from the open up markets in tokyo and seoul. figures across. 6:30 in new york, a very chilly evening. markets close down about 2/10 of a percent. 1.6% ine been as low as early friday training -- trading. that was a result of michael flynn coming out and saying he would plead guilty to perjury to officials with regards to the fbi probe. continueee some we

trading today after the markets digest what has been happening with the tax reform. i am ramy inocencio in new york. david: i am david ingles in hong kong. you're watching "daybreak: asia ." let's get your first word news. the topp -- haslinda: democrat on the senate judiciary committee says there is a potential case of obstructing justice developing against the president. senator dianne feinstein told nbc she has been talking about indictments and please involving former trump eight including former national security adviser michael flynn. president trump has celebrated the tax vote in the senate, saying it makes him unbeatable for reelection in 2020. he also said the corporate tax rate could be 22% in the end, having previously said 20% was

the level at which he would support the republican proposal. every percentage point change in the corporate rate equals about $100 billion in revenue over 10 years. visited the world internet conference and china to call for future technology to be infused with the privacy, security and humanity. he spoke at the opening ceremony at an event designed to promote china's vision of a more centered and controlled internet. apple has been criticized for core operating with china removing uncensored communications. china's one thank you as it is hna group's fundraising in the local bond market, and costs are stoking concern about debt burden. that solde installed a bond at a loss last week, the biggest loss for the

corporation. another airline subsidiary highest coupon rate in five years. ariel drills by u.s. and southern forces are grave provocations that pushes the korean peninsula even closer to nuclear war, including to north korea. wouldtv says they consider countermeasures and washington would have to accept responsibility for any topic of violence. they say the u.s. once an excuse to declare war. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i am haslinda amin, this is bloomberg. david: thank you. we are counting down to the open of markets in tokyo and seoul. we're talking about what with you get. looking at my board, you could be looking at this. storm clouds perhaps out of washington. what you're watching in tokyo?

>> we sell a dollar rebound on friday, we saw the flynn drama and the tax vote. taking a look at the dollar-yen, it is trading at around 77, we more.be eyeing 113 once north korea remains on the radar as a sales conducts joint military drills with the u.s. this week. we could see japanese stocks snapped a three day rise. now, at rates are higher little bit of optimism coming through. but we could see an extension of last week's decline. japanese autos, they will be in focus. nissankei report that ,ill cut its production target it cites a faulty production process. honda and toyota, u.s. sales data came out. fiat says it is in talks with a partnership to develop hydrogen engines with hyundai.

you theseo showing companies. the health ministry is to cut drug prices by 1.2 billion dollars as part of the 2018 budget. -- astellasa's plans to raise dividends. david: lots of bad news from you this morning. [laughter] we are sort of looking for good news to latch onto. i'm looking at the data, it is very quiet. we don't have earnings, when we look at australia, what do we have to latch onto onto that market? sophie: a little bit of brightness in sydney, rising about 1/10 of 1%. ,iners and energy stocks perhaps with the rise in oil prices. a light eco-agenda, but

this week we have quarterly gdp data do as well as the rba decision, and november job ads are set to be released. this will be what the rba decides -- considers way decide on its rate. the aussie dollar is extending a weekly decline. a wanted to show you some stock movers in sydney, we have an education company, sliding the most in three years after its earning update. trading with modest growth. rio tinto with modest growth after naming thompson is chairman. juxtapositionf a when you see the movers in sydney. bad news and good news. thank you very much. looking into the asian open, we turn to a closer look at the week ahead on wall street in new york with the deadline for a partial government said --

shutdown looming. on friday, washington grabbed the spotlight as president trump ormer national security adviser michael flynn said he lied to federal agents. what other drama lies ahead? su keenan has a look. su: it's hard to pull the attention away from d.c., but we could do that on friday, at least, up against the flynn fordines, we had the leading sales data for autos. we had honda and ford reporting bigger u.s. sales, not a big transition in stocks, but they got a bum. a lot of it was due to big rebates. it learned buyers into the showroom. and if he is winding down, the first year of flicking honda beat analysts protection thanks to suv's sales anding by 57% for the pilot 58% for another brand.

the immense yet chrysler's truck and suv's had a week month. the trend was lower than october in september, we have the post hurricane bump up in car sales. take a look at where we close on friday. you did not really see a bump from auto sales across the screen. the big question into this week, can some of the deals and the work lift these numbers? ramy: speaking of deals, we just got the headline am a confirmation of cvs and aetna in attire. $207 per share. what can you tell us there? su: it will clearly dominate on monday, for the first time you have a company or you can do everything from buy drugs to get insurance. let's take a look at how the shares closed on friday, bonds expect it be more dramatic as more details emerge, reports are coming out as the boards -- that

the boards will approve the deal. you also have broadcom reporting earnings. as we look to washington, were talking about a possible shutdown due to the budget debate. that could be a big focus, debate over the funding of the mexican border wall is part of the issue. a look ahead to friday, we will have jobs data, it is expected to be robust. mocon direction is key, let's look at the bloomberg, 4422. s&p 500 balls using options to position for more gains. the s&p 500 heading for its mauga street -- longest streak of monthly gain since 2007. it has been a bullish jump back into the market, especially on exchanged traded funds. even other others saying that kind of run-up does wait a wave a caution flag. want to talk about

oil. when you look at how hedge funds are positioned as of last week, they have been boosting their bets that oil prices will continue to rise. what are we looking at? su: they are boosting their bets, it's interesting, because usually u.s. traders question whether opec will adhere to promises they make. that's look at 6050. the title ofs this chart. it is almost a straight line in the past week or so. thats to do with the fact opec and some not opec members agreed to extend cuts into 2018. let's listen real quick to a top citibank analyst as to what is driving oil. a the prices being set by bunch of things, the market in the u.s. has a much bigger role right now than they have done before. price goes now,

and i know it is an old adage, the more it will keep oil in the market. su: let's look at how oil has traded so far, west texas, you can see it has been a very bullish run since the summer. that explains why the net that's are toward -- net bets are toward the bullish. david: a preview of what is to come in the u.s., and coming up on the program, justin trudeau is in beijing. analysts say it could create a rift with the u.s. and japan. we will look at the balancing act of canada, next. this is bloomberg. ♪

♪ ."vid: this is "daybreak: asia ramy: canadian prime minister justin trudeau is in beijing for a five-day trip where a free-trade agreement with china

could be on the cards. fromeporter joins us china. china has rebuffed canada for years. >> it is good to be with you. it is unclear at this point, but i continue that justin trudeau's team held a briefing with reporters on friday going into the visit to china. of course, that very question came up, as you might imagine. this, thataid was they are still weighing the risks and opportunities. protectreally trying to they are being measured and deliberate about the process, perhaps also trying to camp down speculation that an announcement of formal trade talks is imminent. but certainly it is something we .re all watching exploratory talks have been going on for well over a year

now. if we get an announcement, it could come later today. justin trudeau is expected to sit down with chinese officials. david: i am guessing based on what you said, it is unclear where canada actually stance when it comes to formal talks were negotiations. to that point, how does not a factor into this complication? lily: a great question. governmentstrudeau first concern is that business community. they also released the results of consultations they did with business executives but also hundreds of numbers of civil society groups. hundreds of everyday canadians who wanted to take part in participating in the process to weigh in. what you get is a mixed bag. people say look at australia, which has a free-trade deal with china right now.

it is quite similar in many respects to canada. they have are free-trade deal, we don't, we're missing out. break other side of the coin, you have a lot of folks expressing concern about the human rights issue, about rule of law, and now after has certainly -- the conversation with respect to the need for can debt to diversify. the u.s. is canada's number one trading partner by far. lester, have a trillion dollars in trade. compare that to china, number two for canada, $70 billion in trade. it is a distant number, there is plenty of room to grow. but it is collocated. ramy: definitely compensated. ahead, if something happens with mr. trudeau in beijing, what with the timeline be? lily: generally free-trade deals like this take about a decade to fully negotiate.

don't think anyone thinks this will be your average, run-of-the-mill free-trade deal, for you were just talking about goods and services. it will be a lot more involved than that. trudeau, when he announced he china,ng to be going to the statement doesn't even mention the phrase free trade. what it does mention is "progressive trade agenda," as and that's what he wants to promote while he is there. talkingns human rights, about environmental regulation, rule of law, good governance. very touchy topics that this prime minister seems fully prepared to engage on, perhaps eager to engage on. i think that is for a much part of the agenda. a lot of those issues have already come up during exploratory talks, according to the international trade minister. i think the canadians already have a sense of how those topics are likely to be received.

david: thank you, lily. live out of toronto. studio.eric in the partt to pick up on this of the conversation, the reluctance from the canadians to say they will begin formal negotiations for a free-trade agreement. is that more political? is there a sense back home that it hurts the canadian economy? eric: i don't know if it is that, i would argue the canadian government has done a good job of being pro-trade, it has struck a deal with europe and south korea. there are reasonably honest efforts occurring in nafta right now. i think this is consistent from that perspective. i would say to the extent concerning fisk, it is because this is an asymmetric negotiation. the relative have of the countries come up your geography alsore geography, but

because it is clear candidate is not going to single-handedly get major concessions from canada in terms of intellectual property rights in the sorts of things. i think given the left-leaning stance of the canadian government, elected focus on things like labor laws into the environment and these sorts of things, which in fairness, there is some significant progress occurring in china, but it's probably no go in terms of a foreign country demanding these changes. ramy: i want to hop onto the bloomberg terminal, and show you and our audience, cop into this. biggestsee china is the trade partner, but by deficit in 2016, what is it -- what is in it for canada that could go over to china? walk is over those wins. eric: i would answer in two ways, the straightforward answer

to amply that canada, cliche, but it is a manufacturer of raw materials and china is a net importer of those. i think there is a naturally symbiotic relationship that exists in a sense similar to the relationship with australia, but a different basket of commodities, perhaps more on the oil and temper side, less on the coal and iron ore side. there are opportunities for canada from that perspective you'd maybe from a banking perspective, as well. keep in mind, trade relationships are also positive coming even if it is mostly on the importing side. this is an opportunity for canadians to enjoy cheaper products, because it is an opportunity to tear down barriers that exist along the way. ramy: david talk a little bit about the support in canada. what is the situation right now? is the majority for? eric: my suspicion is, i have

not seen official polls, my suspicion is probably not overwhelming support in the sense that trade deals are never the most popular thing and sometimes politicians just have to push them through for the greater good. i expect this might be even less popular. i would describe this as less being something that caters to more oftical base and an economic opportunity perhaps, although it might not necessarily come to fruition for some time. but almost in a symbolic since, from a chinese perspective, this will be a first deal with the g7 country, maybe there is value there, china demonstrating it is open for business at a time when the u.s. is looking increasingly close. i'm a canadian perspective, in the context of nafta perhaps, is a chance for canada to emphasize there are other deaf partners out there, they have an opportunity to enhance trade when the u.s. is restricting it.

it is hardly a situation, china cannot replace the u.s. in terms of importance to canada. that argument is made clearly. but it is an opportunity for both countries to push back against the u.s. ramy: china possibly being plan b if nafta falls apart in north america. also, i want to get your thoughts on where the currencies are trading, the nafta currencies. this is 6383. the white line, we can see if the mexican peso. it has strengthened off of its high for the year, the canadian dollar also off of its highs for the year, strengthening here. what can we infer, if anything? when we first talked about nafta being ripped up like president trump, we saw be mexican peso going into a he'll spend. we are seeing it come off of that. do you think this is a fine nafta is not as dead as some people are thinking? eric: i think there has been a

number of interesting developments and nafta in the last several months. the summer was looking like a constructive negotiations might took place in early fall, it looked grim. some of that has been walked back. things are not looking as that. most important, some of the minor items getting agreement, even though the big ones out there suggest at least eight good faith willingness to negotiate in the u.s., but i think there is a 35% chance it gets torn up, that risk reward perspective, we are of the opinion that the peso and canadian dollar might have to lose ground. 6%,d: unemployment is below to be get a third rate hike this year? eric: itself like no rate hike this go round, but they would be justified. the signals are not there. it has been a strong labor market and economy. it seems to me they have plans for the future, there were budgeting for two hikes. 2018,nk canada slows in

that it has been a pretty good run as it stands now. david: thank you so much, eric. globalconomist, rbc asset management. don't forget, you can always find these in-depth analysis on bloomberg radio, tune in. you can get it on our out. app or website. stay with us, this is bloomberg. ♪

ramy: a quick check of the latest headlines. japanese developer morrie is betting on much apartments in tokyo -- luxury apartment in tokyo. billionending about 3.5 on three districts, home to many of the capital's office towers and embassies. is reportedly catching

london in terms of luxury pricing. exchanges are. racing to embrace bitcoin. skeptics call it a fad. 18, will debut on december and global markets has not announced a start date. it had been approved by the commodity trading futures commission. they're promising to help monitor the market. ramy: disney's latest pixar animation topped the global box office over the weekend, nearing $300 million and total worldwide takings. ," which tells the story of an aspiring young musician. league thisstice quote was second, with fox's "murder on the orient express" was third. david: were looking at the week

ahead on asian markets. a guest joining us in a little over 10 minutes. join us for that. this is bloomberg. ♪ ♪ retail.

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♪ collusion inquiry moves on against president trump. i am ramy inocencio in new york. miner rld's number two

takes the reins. simon thompson the incoming rio tinto chairman. ♪ david: a big week ahead. certainly lots to consider from the weekend. busy.oing to be very have a look at my bloomberg chart. we're going into this week with a lot of momentum. 6075 on your bloomberg, the rsi at the bottom, dipping below 40 once this year, and you have china trade data coming out, markets expecting a 50 basis point rate cut from the bank of brazil. africa, rateh

decisions, india as well. tour an ramy: some interesting stuff there. are all tryingts to realign here. looking back over the past few negativityy saw some , but some positive news from the gop tax plan in the senate. andight expect to see a pop risk on in u.s. trading. before that, let's get to first word news. haslinda: good morning. has named simon thompson as its new chairman. he has been a real director since 2014 and was previously senior executive. number two miner is

optimistic lin long-term in china. china is seen to be slowing x less than $4.5 billion. airlines sold a bond to yield 8.2% last week, the highest coupon rate ever for the operation. issued subsidiary similar maturity notes at the highest coupon rate in five years. honda and ford does prove the rule that black friday and cyber monday don't draw traffic. they reported sales ahead of expectations as sales and cut-rate financing drove buyers into the showroom. both said retail demand more

strong. industry is facing its first year of shrinking sales since the financial crisis. north korea said monday's aerial are a by southern forces grave provocation that pushes the peninsula closer to nuclear war. news agency said the north could consider hardline countermeasures in response and said washington would have to accept responsibility for any outbreak of violence. said theh, pyongyang u.s. once an excuse to declare war. global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. david: thank you. the markets in tokyo and seoul, korea just getting underway. the dollar is catching a substantial bid early. let's get it over to sophie with the open. the dollar popping .3%,

dragging on currencies. the dollar yen at 112.80. we are seeing risk on. u.s. futures pointing higher. whene seeing slight gains you look at trade in tokyo. pulling up the board to take a look at what trading is looking like in japan, the yen close to 113. japanese stocks extending gains for a fourth day. set to approve a policy package that could techde tax cuts for investment and lower drug prices. flipping the board to show you the kospi gaining. small caps under pressure. the parliament set to discuss the 2018 budget.

north korean risks on the radar as south korea holds joint military drills with the u.s. this week. focus on what is going on when it comes to industry groups in seoul, korea. cosmetic stocks propping up consumer staples. korean banks still looking decent. we do have consumer discretionary under pressure, down following double-digit declines in u.s. car sales for november. in sydney, morning gains pretty much the race for the asx 200 while the aussie dollar is slipping further. ga education having a painful morning, slipping the most after its earnings update.

i last word on tlstra rising after being upgraded to outperform. you. thank the markets in asia as we look ahead to that open. in washington, d.c., diane ainstein of california said potential case of of structure and of justice is now developing aftert president trump his former national security adviser michael flynn pleaded guilty to lying to the ei. flynn, sayingnd there was nothing. i'm wondering on this obstruction of justice issue, the foundations, senator saying this is unfolding before our eyes in real-time, obstruction of justice. feinstein, the top

democrat on the senate judiciary committee, she said it was obstruction of justice. the tweet the came from the that he thought he was supporting mr. flynn, but said he knew that he had lied. your mic outl sort in a moment. we are having some technical issues. stay with us. this is bloomberg. ♪

♪ welcome back. we continue with the developments out of washington. we are joined by jodi schneider. we were talking about obstruction of justice brought .o the surface

help us understand where we are and whether or not this holds up. >> senator dianne feinstein said this weekend, she said she thought there was something to the of structure and of justice because president trump in a tweet this weekend while trying to support mr. plan -- mr. flynn said he had to fire him because he lied to the vice president. this is the first time he said that he knew that before firing him, and obviously that raises all kinds of questions. the other comment, the other was that the firing of james comey raises questions about what mr. trump's intentions were there. she is putting that together as a case of obstruction of

justice. it might be interesting to see whether that holds. what is interesting is will congress look at this beyond the robert mueller probe. there has been talk about hearings, but she is the top democrat on the senate judiciary committee, so maybe congress will look into this as well. ofcinating weekend, one donald trump's lawyers said he sent that tweet and it was due to him and the wording was not well thought out, but it raises all kinds of interesting questions that we have this all happening in washington at the same time. expectingwere republicans to respond as well. there is a contempt of congress resolution that may come out of the house. is them saying they did not get all the documents from the fbi relating to the probe,

the mueller probe, things they had asked for back in august, so they are now raising the havingn of them not enough documents, and therefore they could not cite them in contempt of congress, which means they would get holton in before a committee and have to testify, and so both sides turning up the heat a little bit as this program also heats up. a lot of people are scratching their heads over what president trump said on the the housetax rate, and senate version put that a 20%. on saturday he threw out that maybe it could be 22%. what is the context and potential impact of this remark? >> as the president was taking senate, the vote in the ," but a win for tax reform, he threw out this 22% number, which is perplexing because everybody has been talking 20%.

at one point he said it could be as lewis 15%, so it is perplexing why that number. there does not seem to be a real reason for that number. perhaps what he is alluding to is that there will have to be negotiations about the house and senate bill and reconciling them and that some things will shift, but nobody really knows where the 22% number came from in that remark here it -- remark. ramy: looking ahead towards reconciliation and the president's likely signature, what is the timeline? >> now it gets interesting. the house and senate passed a different bills. they have to send the same exact legislation to the president's desk. it seems like he's going to get what he wants. there are significant differences. the senate bill contains a

repeal of the individual mandate. that is not in the house bill. differences on things like the exemption for state and local taxes. thesenate gets rid of that, house bill limits it, which could be a problem for some house members who come from states where there are high tax rates and they wanted to limit that deduction. again, one would presume that the senate bill, the final bill comes closer to the senate bill because that was the tougher vote. they could afford to only lose a few republicans in the senate because they don't expect any democrats. tothe house, they can afford lose more members, so one could assume it would be closer to the house bill. this is very complicated legislation. had a lot ofey last-minute legislative changes to make, so this won't be easy,

and they want to do it quickly. ramy: hand written even some of those last-minute changes. kongdition under in hong -- jodi schneider in hong kong making heads and tails of washington. still to come, we are at the international forum in tokyo. we have an interview at 11:40 monday morning hong kong time. investorsnext, global joining the conversation. stay with us. this is bloomberg. ♪

♪ i am remy innocence you in new york. this is "daybreak asia." david: what are we doing? nothing much there.

japan not doing anything as well. washington offering a lift when it comes to the dollar at least. our next guest remains optimistic for asian equities. there was a lack of risk appetite last week. i guess it didn't help when you had samsung, tencent come all falling for various reasons. does this continue into the end of the year? >> i think we will see volatility. expectingeople were this year to be average. it ended up being a pretty good year. a lot of people taking profit, setting up for the end of the year. we have seen a few people jump on the bandwagon about downgrading high-performing sectors like semiconductors. if we get through this and look into next year, we have

potential good news on tax cuts in the u.s. which it be supportive for that market, which is a quite fully valued market. i think people are right to be less optimistic about that market. asia,bring that back to by ua shinzo still relatively areactive -- valuations still relatively attractive and the economy is doing quite strongly. david: i want to bring up a chart -- let me tinker with it for bit. you've alluded to this cap between asia and the united chart 6067 on the bloomberg. which you mentioned to me about a month or so back was you see this closing. do we get to a premium here? take a stepather

back. if we get premium, were talking phenomenal performance from the asian market. then, sars,sia back the coup in thailand, indonesia, and people were negative in the u.s. was at full valuation. despite that heighten and americanasian markets outperform. get 40% of the cap close come and that still pretty attractive for asia. rba, looking ahead, the , lookingthen the fed at the most sensitive countries and economies with central-bank policy, which ones are you looking at over the next few weeks? >> i think this is one of the

ones, particularly some of the inflation data that people have concerns about. interest ratesut picking up, the discount rate is going up. that means highly valued assets will be discounted more because the future earnings will come under pressure. the flip side is why we will see that rate environment. , if webal economy is look at where rates are sitting come growth will be better. the company's that benefit from , -- there are companies that benefit from that, so that is the backdrop we should look for. ramy: looking ahead to india as it comes online, bloomberg economics is bucking the consensus that expects a hold, bloomberg economics saying there

could be a cut. trying to make heads or tails of this, what do you think? >> i think this is a great question. the reality is to issues. the first issue is rates are higher than the rest of the world. that's one key reason to dismiss it as structural inflation, the lack of fixed asset investment means bottlenecks in the economy that create natural inflation. primee are seeing from and mr. modi's policies is that is being broken down, gst a line goods and services to move and that's something we would hope to see over the next decade. the flipside is the economy is weakened as the structural changes have been put through and we are seeing that cyclical upturn coming through, so you have that balance. thinks the rbi

structural changes were thing down rates, but they are worried they create too much inflation expectation in the market. david: you are looking at india positive, china still. vietnam, thate -- market is up 45%. help me understand what the bull case is here. >> that is something we have been bullish on and it has had a phenomenal move recently. 2007 was everybody's favorite market and it had a lot of overheating. ago, a singleso digit multiple, one of the highest graded economies in the world and does not have issues around high debt level that

other places have. highly educated workforce, lots of natural resources, so are our strong, long-term reasons to like it. the simple reason now is it is a cheap market. after a 45% raise, it can still be cheap. after theould imagine , some ofs, rates go up these by ua shall is won't hold at these levels. what market do i avoid? are veryof people focused in these high growth, high quality, certainly in tech parts of the market. if the economy is doing better, those stocks do well, but they wouldn't do that much better as the economy improves. on top of that you have high discount rates in earnings

because if interest rates are low, $10 today and $10 in the future has the same value. you put high discount rates on it and that will come under more duress. if we look at the wider u.s. market, that is fully valued and will make people think about taking money off the table in that market and redeploying it in other parts of the world that are cyclical and have upside, and asia is a great example of that. david: thank you for coming into the studio. old mutual global investors, head of equities there. your business flash headlines. in talks with hyundai about developing hydrogen engines. carsews comes as electric established himself. hyundai initially led the drive and has fallen the hind the likes of toyota in terms of sales.

fiat backing away from hydrogen earlier come up it says there is potential in the new technology. cvs is buying aetna, creating a giant with insurance to your corner pharmacy. pay $207 a share, two thirds in cash, the rest in stock, a 29% premium to aetna share price. david: let's have a look at japan. negotiations on jera has yet to 'scide the cost of buying edf operations. last year it agreed to buy edf 's coal trade to expand

overseas. coming up, the year ahead. can chinese insurers continue their strong run? certainly if you look at the way the stoxx have performed, they have blown -- stocks, they have blown them away. this is bloomberg. ♪ is this a phone?

or a little internet machine? [ phone rings ] it makes you wonder. shouldn't we get our phones and internet from the same company? that's why xfinity mobile comes with your internet. you get up to 5 lines of talk and text at no extra cost. so all you pay for is data. choose by the gig or unlimited. and ask how to get a $200 prepaid card when you buy any new samsung device with xfinity mobile. a new kind of network designed to save you money. click, call or visit today.

♪ david: it is 8:30 in the lion city. we are half an hour of trade from the last open of trade there. i don't have to look at the weather forecast to know the situation, but it is slightly humid and hot. a lot of people are making the way out of the train into the office, they are soaked in sweat in the monday morning office clothes. i am david ingles. >> that would freeze very quickly here in new york, david. it is pretty freezing here. that christmas tree in the headquarters is pretty, so it is making me warm and very and bright. -- merry and bright.

let's get to first word news. record, it isthe quite comfortable in the lion city. the top democrat in the senate judiciary committee said the link into the trump campaign and russia suggests obstructing theice in developing president. senator dianne feinstein said she is talking about the indictment and pleas involving former trump trade including the short-lived security advisor michael flynn. president trump celebrated a tight vote in the senate saying it makes him unbeatable for reelection in 2020. he said the corporate tax rate could be 22% in the end, having previously said 20% was the level he would support. every percentage point change in the corporate range is $100 billion in revenue. internet conference in china

calling for future technology to ,e fused with privacy security and humanity. he spoke in the event designed to prevent china's vision of a more censored and controlled internet. apple has been criticized for cooperating with china by removing apps that give you the uncensored communication. singapore prides itself on law and order, but is being called a haven for piracy instead. people can buy legitimate top boxes that allow unauthorized streaming of movies, tv shows, and sporting events. estimated $32 billion in global revenue this year, topping $50 billion by 2020 according to a london-based research company. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. amin.aslinda

this is bloomberg. you for the update. the asian benchmark gets whacked as we get started for the new trading day and week. let's go to sophie who is watching not the equity markets because not much happening there, look at the forex markets. investors have asian focusing on the senate tax bill's passage, so we are seeing a pop on the dollar weighing on asian currencies and the trading on the decline, so 10-year yield has climbed further above 2.4% level so far this morning as that tax bill weighs concerns on the flynn drama -- outweighs concerns on the flynn drama. tokyo has been a raise, telco weighing heavily on the nikkei 225 as well as the topics, -- the topix. korea, we havet consumer staples and energy shares leading gains in seoul.

halts aee -- kospi three-day drop. hong kong signaling a negative start as investors are coming to onps with the deadlines investing in hong kong stocks, and the economic journal reports investors may depend -- may look for a trial to lift a ban on state owned enterprises. it has been a morning of swings. telco on the rise and health care and financial weighing the pros in sydney. when you look at the aussie dollar and the kiwi, they are sliding on the back of greenback strength. the aussie under pressure as we are seeing. it is lowering its weight against the vanishing yield premium against the u.s. that is pushing back expectations for the rba rate hike, but we are looking to it third-quarter gdp data out of australia to see whether or not that looks to hold. much.thank you very

in the united states, the government bond market upstaged a huge bond rally after news wrote michael flynn pled guilty to lying to the fbi. will that continue, or will signs point to a stronger economy? our policy editor kathleen hays is here. what is driving bonds this week? we saw on friday the big fall by 10 basis points, pulling back just a little bit. more roller coaster? kathleen: we shall see because there is a lot going on for the bond market march -- watch. let's look at this chart. you can see a bond yields on the benchmark 10 year last week starting off fairly low, 2.33, getting up to 2.43 as the tax cut got stronger. and friday night, all moving ahead from the republicans. this is where the news of michael flynn it, pleading guilty to the fbi, big move

down. 10 basis points, ramy. looks like the asian trading is opening up and we are seeing a move back to higher levels. rebounding, bonds regaining ground, giving it back , but there is more going on this week. will the michael flynn rally be a one-day wonder? we know that the resolution for the house and senate starts later today. headlines could hit the bond market. december payroll out friday. let's look at that. this is not the forecast. we will tell you what they have done on 2530. there was a big drop because of the hurricane, around $200,000 in the month of november, we are supposed to see about 199,000. easily enough for everybody to be on board, so sure of a federal rate hike in december,

then we talked about next year. jim bullard is often a top leader at the fed, the president of the st. louis fed. thursday and friday last week he warned the tracking rates will make the yield flatter. it could signal recession. it is something the fed and the markets have to be watching. j.p. morgan said because of the tax bill, it is inspected to go through and get tax cuts in place, they see not three as the -- suggests but for white four rate hikes in 2018, which is to say goodbye to any rallies we have seen lately. ramy: you will be busy because we have a lot of central-bank action in the next two years -- weeks with the rba, the boj soon. speaking at will be the international forum, and governor kuroda, if people want to get more, any hints about control, are you ready to back away?

and a month ago he said something about a reversal rate, just thinking about the fact that if you keep the 10 year yield down at zero for a long time, you hurt banks and also maybe are disrupting the japanese government bond market. he might be considering that, could be bullish or bearish depending on your position. the reserve bank of australia, no move, put them to one side. there is no reason for them to move, but the reserve bank of india later in the week will be the interesting want to watch, because right now the consensus is they will think about hiking rates, but that is about it. let's take a look at #btv 3618. after five straight quarters of volatile gdp, they are back over 9% in the first quarter of last -- butut demonetization a stronger than forecast a rebound on second-quarter gdp has them up and the consensus saying no move, maybe they will

lead to a rate hike in 2018. but the economic team in india is saying no, they may cut this week and that would get the markets going. that was not expected, a bull call. we will see what happens. david: absolutely, kathleen hays, the fed to the boj, r.b.i., rba. it is that time when we start looking what's ahead for 2018. analysts have published their outlook for that year. we have a reporter here in the studio with what to expect from the insurance sector. , i think we see a great rate of growth in china. do we see that continuing? steve: we do expect robust growth and pnc growth, but the momentum actually will be a little bit slower, just a little slower on the light side for

next year because of regulation changes. so to give a quick example, the short-term products will no ,onger be allowed to be sold and the impact is that will hurt smaller life insurers rather than the big guys because they are prepared and have other ,roducts to benefit into long-term production products. disruption,rms of as we see every new year, what would that be? steve: there are two things that come to my mind. technology definitely, that will disrupt the pnc side like the companies like joe law. but would be regulation less on the investment side, but mostly in terms of calculation, or some other controls in terms of the products. ramy: if you are an investor going long, which two or three insurance stocks do you expect people saying will have strong

results next year and for that matter, why? steve: in terms of fundamentals, we still believe multiple chinese insurers will perform well next year. the problem is rebound, but the next year will be more sustainable for entries in the long-term bond yields. aia is morenies -- regionally focused, but they have decent sized chinese business. china'sso in terms of capital outflow controls, how are they impacting chinese in the long-term? we know that has been pulling back. steve: yes, and the data is speaking to that matter as well. we have just seen the data published by the regulator in hong kong showing there is a huge tumble in terms of the premiums growth, actually

contraction -- pardon me on that one. a lot of that is just noise. if you peel all of the onions, a lot of the construction is coming from short-term savings products. those are not long-term. if you look at higher margin products like some of the companies like aia are potentially selling, there are more favorable product sentiment, and we see steady and robust growth in that segment. ramy: and in terms of the m&a action for insurers in asia, where does your forecast in terms of heating up or cooling down in the next year? steve: a good question. i think it will be very active, and the way to think about is one from the target side. we still expect a lot of activities in markets like hong asg, china, southeast asia being the target of countries. various companies have

investment in those areas, and regulators, some by the market access. in terms of the buyers, we are seeing companies in japan where they are still awash with a lot of cash and big regional players like aia, they are still looking for growth in the markets. ramy: we will have to leave it there, but thank you for your intersite -- are your insight. looking into the very data-driven crystal ball. we will see what we can expect in 2018 during our special coverage coming up this wednesday on bloomberg television. you will not want to miss that. david: before that we will talk about new borrowing by one of .hina's biggest conglomerates raising new concerns about company debt. we will ask what is really going on at hna group. this is bloomberg. ♪

♪

this is daybreak asia. i am david ingles in hong kong. ramy: i am ramy inocencio in new york. rio tinto is naming a new chairman after shareholders were said to reject the earlier candidate. the commodities editor joins us now with details. thompson.out simon who is he and what does he bring? reporter: hello. , he is anpson experienced mining executive and also, he has got a lot of banking experience. he has worked at companies including newmont, anglo-american. he is 58 and a senior director at rio tinto where he is part of the remuneration committee. essentially he is a continuity pick is what i would say. ramy: all right. it is interesting because he actually was not their first pick.

there was an attempt to name the other person, but what is the expectation for thompson? any opposition? andrew: mick davis was a far more polarizing figure, just a far more polarizing figure in mining. his hallmark when he was at extra was acquisitions, and those of taken a nosedive because of really significant failures, some of them in fact at rio tinto. this is not the case for thompson at all. he is about capital discipline with investors who wrote to rio's board about their , theyions to make davis said the next chairman should be about capital discipline, and that is what thompson promises. when the appointment was announced today, rio's shares

were up 7.1%, which is a good endorsement. david: it really was considering he was there planned be. -- plan b. thank you for joining us. let's look at hna right now. this high-profile company, conglomerate, they are stepping up for fundraising in a local bond market. you can see the debt burden which is fairly massive as we move into next year. they were selling high-yield bonds, even a sturdy increase for other companies to cancel their offerings. let's bring in and montana. -- let's bring in our reporter. when you have to raise money, it screams desperation. reporter: it is creating , theirs, so hna subsidiaries and the others,

high airlines, they have sold bond in the chinese john -- bond market that have yields that are record highs, the highest amount of years, and they are doing this in november which was a month that was very hard for the chinese bond market overall. it depends on how you measure it, they are skilled at this, but the chinese bond market slumped the most in several years by some measures, which means costs shut up over all kinds of companies. despite that even in a month when there were a lot of cancellations for flights that for like they could wait until prices come down to reasonable levels, you saw a flurry of activity from hna that had not been issuing in the local bond market for months. in the background there is back in the summer, the banking regulator was reported to have started scrutinizing the number of private conglomerates like hna. them, we aree of

looking at a 270 day renminbi by. .- buy get this and other activities, what can we sort of -- you look at this and other activities, what can we surmise? andrew: the hna group ceo last week made some comments saying the group was considering selling assets, which could be seen as an indication it is trying to rein in the debt fueled shopping in heaven going on, perhaps to grow the debt levels. we also said that each of the units had their own financing channels. we also reached out to hunan airlines and did not hear back. what some people are saying in the bond market is when the yields have been shooting up, precisely at that moment coming haved issuing notes, you

not been doing that for several months, that indicates a need for cash. when you look at the group level in the most recent stats at the end of june, hna group's interest expenses rose to a record. and its short-term debt exceeded the cash mile. the numbers that they could face difficulties refinancing. ramy: that is a cause for .oncern, andrew i am curious, have any credit rating industries weighed in, and if so, what have they said? if not, what can we expect when they do? andrew: snp which does not have a credit rating on hna group, but does have what they call a profile, lowered or said last week that it was lowering that profile by once that. lowered it to level b, which is

the equivalent of five steps below investment grade. so that gives an indication of where some of the rating agencies see its creditworthiness. another indication is from the yields themselves like we were discussing. month.irlines sold last while the company itself is rated by the local rating agencies in china at the top rating, instant grade ratings, the yields are the equivalent of junk yields in the domestic chinese market. concerns, indicate and i think it is something we will have to closely watch. the bond market develops, there was a bounce market -- belt in the bond market, but if the yields stay relatively high, it is a concern for companies with large amounts of debt like hna does. watch,efinitely want to thank you very much.

and don't forget our interactive tv function that is tv . you can watch us live and catch up on past interviews as well as dive into any of the securities or bloomberg functions we talk about. you can be part of the conversation by sending us instant messages. this is for bloomberg subscribers only though. check it out at tv . this is bloomberg. ♪

♪

this is bloomberg daybreak: asia. i also for opening of our show. ramy: i am ramy inocencio in new york. you cannot forget that. developer morning is betting on untapped demand for luxury parks in tokyo that includes units from $9 million. it is spending $3.5 billion in the central district home to many of the capital office towers and embassies. they say tokyo is catching london in terms of luxury pricing. huge exchanges are raising with bitcoin, dragging federal regulators into this calling it either a fad or fraud. elite, global markets announcing reports that it has been approved by the cftc. there is a moment where it was

higher. it will help the cftc monitor the market. ramy: disney's latest pixar animation cooktop the global box office, $95 million and nearing $300 million in total worldwide takings. it unfolds on day of the dead and told the story of a musician on the -- musician. -- ordercond with the -- murder on the orient express was second. david: that was almost in for us. looking at the next two hours. rishaad: looking into what is going on with brexit, all of these concerns, what does it ,ean for europe, the currencies how shall they be regulated in europe? i will talk to the head of the regulator there, talking to him about 45 minutes or thereabouts

talking to him about euro clearing. he has -- do they really want to have euro clearing? that is something people are pushing up against as london does all of that currently. and then moving on in half an hour from that, our strategist from the bank of australia. just seeing what is going on with the currency markets and the u.s. dollar. and last but not least looking at real yield and where to get it from invesco. ramy: busy morning i had. but is it, market coverage does continue with rishaad next. this is bloomberg. ♪

rishaad: indictments and admissions, michael flynn moves the russian inquiry closer to the white house. embracing privacy and humanity. theresa may heads for lunch in brussels. it could be the most expensive meal in history. i am rishaad salamat. this is "bloomberg markets: asia." ♪ rishaad: