choose by the gig or unlimited. xfinity mobile. a new kind of network designed to save you money. call, visit, or go to xfinitymobile.com. >> 7:00 a.m. here in hong kong, we are live from bloomberg's asian headquarters. i'm yvonne man. the bulls still running. asia-pacific markets extending gains on wall street.the snp topped 2700 for the first time . stocks were lifted by confirmation that the fed was only gradual hikes, optimism that u.s. manufacturing is speeding up. betty: from global headquarters, i'm betty liu in new york just after 6:00 p.m. on wednesday.

former friends fallout badly. steve bannon attacking his former boss. the president saying he lost his job and his money. -- his mind. ♪ betty: another day, another twitter fight, it seems. in the meantime, no fighting along the fed numbers -- members. we saw the minutes come out. continueeve they will on this gradual rate increase. now, the debate is how many times? several of the members said two, maybe less. others said at least four. that will be the crux of the debate around the fed in 2018. yvonne: what could be driving that is this continued debate on

inflation. there is still uncertainty on why we are seeing -- not seeing higher inflation. also, there wasn't a lot of concern about the flattening yield curve. betty: that's right. here in the equity markets in the u.s., continuing to rally forward and hitting records, as you can see here with the s&p 500. the dow is adding on almost 100 points. way,asdaq also leading the up almost 1%. the s&p 500 navigating above the 2700 point level. again, kicking off a green start to asia. good setupks to be a for us, particularly how things are faring in new zealand. we are seeing green, up about 1/5 of a percent. we did see a turning point in

the dollar shorts just to kick off the year. things playhow through. trading in australia also just getting underway. taking a look at how things are looking on the asx, up 2/10 of 1%. pretty steady for the currency at the moment.we are expecting the services pmi coming out from china later on this morning. yields on the aussie 10-year following what we saw through treasuries falling three basis points at 269. japan coming back from the holiday, expect a bit of a catch up here. we look set to break above the 23,000 mark, the threshold we've been struggling to break through in the later part of last year. 112.55 in dollar-yen this morning. let's get you caught up with the first word news with courtney collins in new york. reporter: thank you.

google says a vulnerability in chips from intel and advanced micro devices exposed its android chrome and cloud operating systems. earlier, intel admitted a design exploit in chips allows access to privileged information, making them vulnerable to hackers.intel says fixes are coming over the next few weeks, and it sees no material impact to its business. microsoft says it has already issued a security fix for the chips. president trump has denounced his former top strategist in a dramatic break from the man considered an architect of his populist campaign. he reacted to a new book in which steve bannon criticizes the president and his family. trump fired back saying that when he was fired he not only lost his job, but his mind. sources say bannon has lost access to the president since leaving the white house in august. the chairman of the european securities and markets authorities say he sees no

problems. he says the rules mean for the first time, they can see data from all financial instruments union.european investors have been sitting on her hands with trading volumes below average, although the first week of the year tends to be quiet anyway. in the interest of full disclosure, we should say that bloomberg lp, the parent of bloomberg news, competes to provide a range of services for firms complying to this new rule. thehead of the powerful new revolutionary guard in iran says the antiestablishment protest across the country are all but over. state news showed pro-government rallies" at the commander as saying this sedition has ended. it gave no evidence to support the claim. at least 20 people have been killed in protests over the last week, and almost 1000 arrested. global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries.

i'm courtney collins. this is bloomberg. you.e: thank let's take a closer look at the second straight day of record highs we saw here in u.s. stocks. goldntioned, we saw falling, the dollar extending gains on the release of the fed minutes showing continued talks of gradual rate hikes this year. su keenan is here with more on the trade. reporter: investors seem to like the gradualist message. they also liked very much the very strong manufacturing data. let's get into the close. manufacturing expanded at the fastest pace in three months. investors like the better than expected prices paid components, which was seen as bullish. also, strong sales data out from gm and ford. we talked about the s&p 500 index above 2700. projections rise above 2800 this year. let's go into the market snapshot. we talked about the fact that the fed minutes helped the

dollar expand on gains after it snapped a losing streak. crude heading toward 62 ahead of the weekly data showing a decline. let's go to the movers, intel. we talked about their chips being -- vulnerable to hackers. analysts say this is a black eye just -- not just for the data, but for the brand. overstock capitalizing on a ivot, the first retailer to do so, toward blockchain technology. let's take a look at volatility. the cost of hedging against a rebound in volatility is climbing. next of nervousness about year visible in the relative cost on wedding on an increase in volatility, which surged to a

peak. it certainly looks like somebody out there is betting on that increase. interesting to watch. meanwhile, it's the season for 2018 forecasts. it seems like most of the calls are pretty bullish here, kind of a sequel to last year. reporter: certainly the market exceeded many of the most list forecasts out there. some are calling for a lower performance. they were proven wrong. let's go into the bloomberg. what you see is the year in here.sts basically, the bottom-up analysis, which tends to be sees the s&p 500 index advancing 9% in the next 12 months. that is somewhat in line with a lot of forecasts, and slightly

above the b.i. equity strategy model. also, top-down forecasters are seeing a lot -- a bout 9% increase. byron came out with his top forecast of the year.he does see a correction for the market . he's very bullish on the economy. take a listen. >> we had 3% growth in the third quarter, which was besieged by two hurricanes. i think the underlying strength of the u.s. economy is very real. widelyr: he was followed, particularly his predictions. interesting to note he didn't make an official prediction on bitcoin, but he does believe regulators will have to step in at some point because he believes they will restrict trading because losses will be so great. stay tuned. yvonne: thank you. we were talking about the fomc minutes.

let's talk a little bit more about that. the dollar gaining as markets suggest a hawkish tilt. most fomc members are backing gradual rate increase despite low inflation. joining us is reporter steve matthews. good to see you. happy new year. what have we learned? reporter: happy new year. you are right. the minutes came across as universally hawkish, meaning that the odds for a march rate hike went up today. if you recall when the meeting happened in december, there were two fomc members who voted against the rate hike. charles evans of chicago, cash. minneapolis. there is a sense among the people in the market that maybe this was the tip of the iceberg. large numberere a of fomc participants who either didn't have a vote or who voted

for the increase but were reluctant about it. maybe there were deep divisions and that cast doubt about the outlook for further rate hikes. instead, when the minutes came out today, it showed these guys were very isolated. there is very much a strong consensus to continue gradual rate hikes. here we go, get ready for march. certainly. there was also a lack of concern when it came to the flattening yield curve. some economists out there say it could be a worrying sign, a sound of an economic downturn or recession. is the fed actually worried about raising rates and possibly inverting that yield curve? reporter: that is certainly interesting. if you go back to the last hadle of recessions, we 2001, 2007, there was an

inverted yield curve. short-term rates went above you -- above long-term rates. that was the signal maybe things would get worse. quote could pull up the from the fomc minutes, it says that now that's going to be something the fomc is going to monitor. they are very much interested in what's happening and there are a few people who are concerned that's going to be signaling a recession. jim bullard, the st. louis fed president, raises this as an issue. he gave a speech about this in december. the entire fomc plans to monitor this closely. betty: you speak about monitoring. what about how tax reform will affect the u.s. economy in 2018? reporter: this is really interesting, because janet yellen and jay powell and all

the fomc members have carefully avoided talking about tax reform, because they don't want to be perceived to be political. now you have the first full discussion in this meeting about tax reform. they came up being very positive that it will boost the economy, boost consumer spending. it could raise investment andding and productivity, in fact, you could bring back some people into the workforce. veryn all, it was a positive reading on what tax reform could mean for the economy. betty: steve, thank you so much. steve matthews of bloomberg. much more ahead. spotify months -- wants to go public on the new york stock exchange, but it is not willing to raise money. let's take a look at an unusual pan -- planned that may pave the

way for companies like airbnb. yvonne: that will be later on. just ahead, the bank of singapore gives us its stake on the fomc december minutes and how asia could be affected. this is bloomberg. ♪

yvonne: this is "bloomberg daybreak: asia." i'm yvonne man in hong kong. betty: i'm betty liu in new york. the latest minutes showing members backing continued gradual rate increases, despite concerns about low inflation. bankhief economist at the of singapore sees the bank pushing through three more hikes this year. richard, if you were to make bets, which you say we were more on the upside in terms of the number of hikes or to the downside this year?

i would say the upside. clearly, there is a risk that growth overshoots and risk of inflation rebounds a little bit faster than they were expecting. to me, it makes sense they go in march so they leave their options open to do four or five, if necessary. you have to keep raising rates in this environment. betty: why do you think there is a risk? there is barely any wage growth still to be seen whether tax reform is really going to be that additive to the u.s. economy. why is there this upside risk? >> i think it's simple. the unemployment rate is down to 4%. you are adding stimulus to an economy that is regularly seeing an employment rate drop a lot faster than the fed expected. 4.1%., it ended at

and there's not much capacity left in the system. where youa situation would expect inflation to start rising. policy works with something of a lag, so it's crucial to see the monetization. sounds all certain right now hearing you, but there is still a bit of uncertainty. we are going to get the transition in february, which is just next month, jay powell heading to the fed. do you expect any disruption in that transition? >> it seems unlikely. you really have an ideal continuity candidate. they haven't. filled the board to fill vacancies, so you don't see a potential shift in the composition, but it's difficult to see how they could shift the general tone of it in a more dovish sense. the people they are talking about have a more hawkish attitude.

the fed is also -- always making policy in terms of uncertainty. the last tightening cycle is much, much faster than the present one. yvonne: it seems like there is still that uncertainty about the inflation picture, but it seems like fomc participants are upping the ante that perhaps the curve will materialize in some way, possibly this year.i have a chart to show the viewers. we are continuing to see breakevens heading higher. they broke above, if you take a look at the 10 year, breaking above 2% for the first time since february. how encouraging of a sign is that, that inflation might come back in a meaningful way this year? at this point, it hasn't quite translated higher yields. sign,t's an encouraging but i think the other encouraging sign is simply the data itself.

if you look at sequential inflation rate that has been coming out in the past few months, it's already pushing up towards 2%. they are very close to the target already. earlier inat blip 2017 which will drop out of the numbers around april. by that time, you are looking at year rates close to 2%. they are pretty much they are on the inflation target, and unemployment is below the estimate of long-term potential. why are you sitting there with interest rates at 1% below neutral? it doesn't make sense. it makes more sense for them to be steadily normalizing, because they are very close to hitting target. yvonne: and when it comes to the yield curve debate as well, you said before you are not worried about the flattening yield curve . at what point should we worry, as james bullard has said. we are sitting slightly north of

50 basis points right now. how flat with the yield curve need to be to derail the fed from hiking rates this year? put out a note on this yesterday. the point i'm making is you don't really have to worry until short rates go above neutral. below neutral policy is still stimulative. look at the economy. it is clear the policy is still stimulative. may be after another four or five rate hikes and policy shifting, maybe the yield curve is flat or slightly inverted, but that's really a 2019 story. the first half of 2020, that's possible, especially if there is this with thefor tax policy. too far away to worry about it. tonne: richard, we are going

leave it there. richard jerram, chief economist from bank of singapore. coming up next, intel confirms its chips are vulnerable to hacking. we ask how deep the problem goes. this is bloomberg. ♪

betty: this is "bloomberg daybreak: asia." i'm betty liu in new york. yvonne: i'm yvonne man in hong kong. google says a vulnerability in chips from intel exposes android chrome and cloud operating systems, after intel admitted a design exploit in its chips allows access to privileged information, making it vulnerable to hackers. used on the line coming through from amazon a couple minutes ago. also coming in with a response thisamazon will protect within the next few hours and

most of the crowd has already been protected from the flaw. this comes through from an emailed statement from an amazon spokesperson. joining us now from san francisco with more is mark gurman. we are seeing some of these companies responding to intel's admission. tell us more about the fallout here and how much this could actually spread throughout the tech sector. reporter: this is going to affect every computer manufacturer, everyone that develops a smart phone, anyone who does software. this is a widespread issue that exist because of the technology used in computer chips, basically the brains of computers, phones, and tablets for upwards of a decade, called speculative execution. it allows processors to work more quickly by anticipating with the computer user is going to do next. betty: how long did intel know about this security flaw? reporter: according to the

latest statements from intel's ceo, intel has been working on a fix for this or has known about this for months, after it was originally discovered by a google security researcher. problems security across operating systems all the time that are discovered by different researchers. they are then reported to the companies. what happened here is that information about this security flaw started coming out early and the holiday weekend, now all the tech companies are basically rushing to put out their statements and fixes. you are seeing a string of those. amazon just put those out. google about one hour ago. betty: ok, but intel is also ,aying that this is not unusual and a sense, that there are other chips that have security flaws. is that right? reporter: intel is pointing blame at basically everyone but itself here, which is odd.

they seem not to want to take full responsibility, rightfully so, because it is technology that exists across three of the major chip providers. you have intel, arm, which makes the basis for a lot of processors like an smartphones -- apple has not commented yet, so they haven't said if they are anz.ted or not -- plus, arm and intel are saying there is an issue and they have fixes going out to partners to prevent this from happening to the customers. arene: it seems like they pointing the finger's everywhere else, but it still was ended asian from intel -- an admission from intel. how quickly could we see the fix? reporter: the reason intel is getting the most heat is because they were the first name to come out as being part of the problem or being affected, but they are also the biggest name in the chips industry.

they are known as being the king of the chips world. yvonne: we'll leave it there. bloomberg tech reporter mark gurman joining us from san francisco. coming up, president trump a scathing attack on a former ally. ♪

betty: 7:30 a.m. thursday. yvonne: 30 minutes away from asia's first major market open. betty: it is nothing like the bomb cyclone we are about to be hit with in less than 24 hours here in new york. 6:30 p.m., where markets close considerably warmer for the bulls. records again in u.s. stocks. i'm betty liu here in new york. yvonne: i'm yvonne man in hong kong. you are watching "bloomberg daybreak: asia." this is first word news with courtney collins. reporter: thank you. the dollar gained after december fed minutes showed most policymakers continuing gradual hikes.

the fomc expects tax cuts to boost consumer spending and business investment, but members continue to russell over the outlook for inflation, and also noted concerns about a flattening yield curve. futures traders put the chance of a march rate rise at 81%. the malaysian transport minister says an announcement will be made next week on resuming the search for mh 370. the government says it's in final negotiations and media reports say a u.s. company has area. ship to the search the malaysia airlines boeing triple seven banished in march of 2014 with 239 people on board. a three-year surge led by australia was called off last january. didi isride-hailer putting more pressure on uber in brazil but picking up local operator 99 taxis. dd is a $100 million investor in the firm a year ago but has now outright.t

terms have not been disclosed, but the deal is an indication that the ride hailing industry is dominated by global companies. and sports watching is making a comeback. espn was the most viewed u.s. cable network in primetime during the fourth quarter, having lost the title a year earlier as people watched the presidential election. the channel averaged just over 3 million total viewers and across regular tv and streaming, a rise of 13% from the year before. it had taken the top spot every fourth quarter from 1999 through 2015. global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. i'm courtney collins. this is bloomberg. yvonne: thank you. we are counting down to the market opens in seoul and tokyo. best start to a year since 2013 when it comes to asian stocks. is japan going to jump in? sophie: we could be welcoming

them to the party as they kickoff 2018. the fundamentals that drove the tokyo stock rallies last year changed. you can see that 2017 was a good run for the nikkei 225, adding 19% over the kos -- course of the year. while 2018 marks the year of the there arean, suggestions it will not bite. 80% expect the nikkei to reach 24,000 this year on an improving economic outlook. manufacturing pmi do this morning will give us some data. we will see that investors may be sharing optimism. we have to keep in mind that the yen's recent strength may be a headwind. we did see tech coming

back with a bang, which fueled gains we did see in asia to start the year. but what we are hearing from intel, what effect could that have? sophie: intel stocks falling over 3% on the news. they're in mind that intel said that other companies may also be susceptible to this. we are also keeping an eye on apple suppliers with sales expected to be dented, following apple's admission of slowing down phones. barclays predicts 16 million new iphones will be sold as some customers hold off on an upgrade. checking on the tech heavy cost kospi and opening in seoul, we are anticipating a positive opening. j.p. morgan has looked at improving corporate governance. betty: when we talk about commodities, how is that playing out in the sydney trade? sophie: we saw a pullback in

gold. we will see how gold is faring after the fed minutes. we are seeing crude at a two and a half year high. checking in on the asx 200, oil producers climbing. gold miners are lagging. aussie shares are climbing for a second day, led higher by health care. on that point, we have marijuana stocks in sydney flying high. we can show you those players, this after the government said it will allow exports of medical cannabis products. thank you. sophie kamaruddin taking a look at some of those stocks. president trump denouncing his former chief strategist steve bannon ahead of the release of a new unflattering book. he says that when steve bannon was fired he not only lost his job,, but "he lost his mind." earlier, press secretary sarah huckabee sanders was asked if this could hurt the president's support base.

>> i don't think it does anything to the president's base. the base and the people who supported this president supported the president and his agenda. those things haven't changed. the president is still exactly who he was yesterday and as he was two years ago when he started on the campaign trail. his agenda hasn't changed and he is continuing to fight for that agenda and i think the base is excited and happy with the job this president has done in his first year in office. our bloomberg stocks editor is joining us now with the latest coming out from the white house. is this going to hurt president trump space? -- president trump's base? >> it's not really going to hurt. they voted for the candidate, not the ceo of the campaign. when it does is fractures the message somewhat, and it's unclear whether banning will be about to continue his assault on establishment republicans. alice was part of his whole reason for leaving the white

getting candidates who would oppose mitch mcconnell and some of the other republicans already in washington. there's nobody who is more pleased than perhaps mitch mcconnell to see this spat corrupting today. so, plenty ofne republicans happy to see the spirit what are the chances that steve bannon retaliates, and what damage could he do? >> he can considerably do damage to the republican party in congress by putting up candidates and backing candidates who will run his primary opponents to some of the incumbent republicans, but already leads seen a few of those he had backed, kelly ward in arizona, republican candidate for senate or to replace jeff candidate innate wisconsin, distancing themselves from steve bannon. there will be a lot of candidates who would rather go --trumps line then banning

steve bannon, even though they generally agree with steve bannon's objectives. onto the war of words between washington and pyongyang, trump taunting kim jong-un yesterday with the size of the nuclear buttons. this is a time when north korea over theireoul hotline as well. where does this lead to the u.s. and south korean relationship? >> this has the potential to drive a little bit of a wedge between south korea and the u.s. trump had been critical of the south korean government for first wanting to negotiate with the north, and he criticized them over trade, and how much they were spending on their own defense. south korea may be looking to cut its own deal with the north .orean government

regardless of what the u.s. thinks and how trump wants to , they are in the danger zone and may be getting a little nervous by the rhetoric between washington and pyongyang. we haven't even talked about what china's thoughts on all of this can be. thank you, our bloomberg congress editor joining us from washington dc. moving along now, spotify said to be prepared to test an unconventional stock listing. sources say it filed go public on the new york stock exchange through a direct listing instead of a public offering because it doesn't need any more cash. let's go to lucas shaw, tracking all the developments from l.a. good to see you. direct listing, so no money being raised, but what would an ipo like this first spotify signify when it comes to the streaming music business? if iner: it signifies,

fact investors buy into this, that there's confidence that the music industry, which has grown for the past three years, is on the path to recovery and will continue to grow for years ahead. most people left the music industry for dead a few years ago. first it was hit by piracy, then people traded in cds for buying songs on amazon and itunes. sales declined nonstop for 15 years. then, with spotify and apple music, it bounced back. investors are excited. there is a sign they believe the recovery will be long-lasting and not just a blip. thoroughly seeing some optimism they are, but what's the response from wall street so far? we have seen snap and other tech companies with less than stellar debuts. and airbnb delaying. is this the right timing for spotify? reporter: there will be reason for caution because of snap, the

last date consumer tech company to go public. however, spotify is really under the gun. they made a deal when they raised money with convertible debt about a couple years ago that the terms got worse and worse the longer they went without going public, so they needed to get some liquidity and get out of the public market to get out from underneath that deal. i think the company is so confident that people will respond well. we really don't know. the downsides for a lot of people in not having a more traditional ipo is that we won't have this period of people , and howne another out potentials feel about spotify, where they value it. we could wake up one day and all of the sudden the shares will be trading. betty: for investors for spotify, don't they still have to worry about massive copyright lawsuits? reporter: they have to worry

about the cost of copyrights and about the lawsuits that are hanging over their head. as much cash as spotify generates from getting people to pay for its service, it still loses money because most of the money it generates goes out the door to the right holders, the record labels, and song publishers. there are some levels that it has not reached deals because music contracts are complicated. there are legal proceedings that are still ongoing in which people are suing them for a lot of money. there was one yesterday were the number was $1.6 billion. most people think that is way more than anyone can get from spotify, however, it is a sign of a lot of headaches to come. betty: absolutely. not an easy path. lucas shaw, thank you, bloomberg news entertainment reporter. just ahead, hong kong aiming to reclaim the crown for a global ipo fundraising, particularly from the new economy companies.

we will ask where that money might come from. this is bloomberg. ♪ is bloomberg. ♪

betty: we are counting down to asia's first major market opening this morning. japan just about to go online for the first time in 2018. looks like we will see quite a today. nikkei futures pointing to a higher open at one point up, almost 2% following gains here in the u.s. that is a live shot right now at what is happening in the tokyo stock exchange. g,ey will hit the gon perhaps, to mark the start of trading in 2018. this is "bloomberg daybreak: asia." i'm betty liu in new york. yvonne: looks like they are about to send off some fireworks. [laughter] i'm yvonne man in hong kong. we will get to the market opening in a bit.

let's take a look at business flash headlines. bhp is in talks with the future of their iron ore joint venture in brazil. sources say said the possibilities include valet taking full ownership. it was once the number two iron ore pellet operation, used to generate about $700 million in annual profit. and has been closed for two years after a collapse killing at least 19 people. betty: blackberry jumping to the highest level in almost four years on news of a deal to work with driverless cars. the chinese internet giant baidu will bundle blackberries to a , a set operating system of tools to assist driverless design. the partnership includes integrating blackberry established in car entertainment software. >> with that, they should be rather complete in going after the car industry, the auto

industry. i assume the auto industry will go beyond just the auto that you and i know of today. they will provide maps, digital information, also. i think this is a great partnership. let's talk a little bit more about ipos, particularly in hong kong. a disappointing year for 2017. if you take a look at this chart comparing the listings we did see in 2017, on the right side you can see shanghai and shenzhen, which actually raised about 280.1 billion hong kong dollars. the new york stock exchange also, which was number one in 2017, a far cry from what we saw in hong kong. that translates to just about $16.4 billion u.s. for 2017. our next guest thinks that will change. he sees hong kong reclaiming the

global ipo fundraising crown in 2018 with total offerings worth up to $32 billion. happy new year. thank you for joining us. kong the fact that hong was the best-performing market in 2017, but we still lost out to new york and shanghai. 2017,you take a look at the early part of it, we had a very slow market. in q2 and q3, the stock markets had to pick up. hong kong from 2017 had 174 new listings. however, most of them are medium-sized enterprises. for the mega sized ipos, we know because of the market conditions they postponed their ipo timetable to 2018. we are optimistic about the market performance in this year. yvonne: does the momentum on

what we are seeing in the hang seng index overall health -- help, or is this contingent on the new rules we are expect to see from hong kong exchanges when it comes to dual clash shares and full convertibility? >> for the month of december, there were 23 listings. there were originally 15 companies listed. we expanded momentum continuing in 2018. the main reason is hong kong has -- at the end of last year, there would hundred -- there were 116 companies. proposedthe upcoming consultation, which hong kong has been helping to attract these companies, we predict there will be 150 ipos in hong kong this year. onof which will be listed

the main board for fundraising between -- route to $32 billion u.s., almost a 100% increase from last year. yvonne: what was most notable last year where the new economy tech stocks that started listing, which were on average, more than 300 times oversubscribed. a different story when it comes to financial services ipos, which getting get that much attention, and some had to price their offers lower as well. do you think this trend continues? >> we believe the trend will continue. it depends on the quality of the company itself. if you take a look back a few years ago, like 2016, this type innew economy companies terms of fundraising only contribute around 3% of the fundraising in hong kong ipos. last year, it started to increase come all the way around 29%. still, we have not seen a make us -- mega sized one coming to

hong kong. but in 2018, we believe the percentage will increase to around 40%. two toct there will be form that the sized ipos coming to hong kong with fundraising around $4 billion u.s. for the ipo. betty: speaking about these mega ipos, there is the mega of the mega, the saudi aramco ipo. what would you say is the chances that hong kong might get a piece of that action this year? will course, we hope they take hong kong as one of their destinations, but it is still hard to say because we still don't know exactly about the timetable, and which stock exchange they will go for. in our forecast, we exclude this company in 2018. i feel they would have a huge impact to the ipo ranking globally in 2018. they: yvonne was mentioning

dual clash share proposal, allowing those kinds of companies on to the exchange. is it really going to be the magic fix that's going to propel hong kong exchange, particularly against its rival here in new york? >> this is part of the market reform in hong kong. we believe this is a major sign for hong kong markets to continue to develop. a lot of the mega sized they have this listing. if hong kong does not have this structure, we will no longer be these companies. for 2018, we do not believe there will be much of an impact. the main reason is because the final rules still haven't come out. we expect to see them in the first half of the year.

although we know that, there are still companies they are considering to use for listings in hong kong, but we don't expect to see the first class ipo until closer to the end of this year. yvonne: mainland listings have been quite strong. what is going to be the biggest threat for hong kong this year? more shanghai shenzhen, or more new york? >> i think both. a-shares, if you go back a-sharesyears ago, the ipo markets, we opened at the end of 2015 and slowly started to recover.in 2016 there were only around 200 ipos . last year, the first half of last year, the momentum was there. and we noticed in the fourth quarter, the approval rates, the pace started to degrees. -- decreased. ipos.e around 350 a share

200an go all the way up to billion renminbi. yvonne: ok. we will limit -- leave it there. coming up next, disappointment when it comes to those deliveries coming out from tesla. more on that. this is bloomberg. ♪

today, teslaory pushing back the production target for its important model three after shipping fewer cars than expected in the last quarter, delivering 1550 model threes in the final three months of the year. that trailed analyst estimates. joining us from san francisco is an a hall, who covers all things tesla. what happened? reporter: really interesting report today. they delivered model threes, but far less than analysts had estimated. they are pushing back there

production target for another quarter. they were supposed to hit 5000 units a week by the end of september -- december, and that pushed it back to march. now they are pushing it back to june. they are ramping up to the high volumes that yuan must has always wanted. yvonne: we talk about the tesla enthusiasts who have been waiting for two years already. does delaying it i another three months really shift investors mindsets? reporter: most of the customers i spoke to are willing to wait. they had been waiting for two years. but the longer you wait, the more competition there is in terms of other compelling electric vehicles coming on to the market. today, teslae thanked in the model three customers for their patients. we will see how strong that patience is. clearly, there's no way tesla will make the volume of cars they were expecting to in 2018. on the upside, sales in the model s where really strong, and

he preferred production targets topping the x. yvonne: danone halle joining us from san francisco. coming up in the next hour, we speak to a chief economist two things growth will be good for the economy. ♪ retail.

under pressure like never before. and it's connected technology that's moving companies forward fast. e-commerce. real time inventory. virtual changing rooms. that's why retailers rely on comcast business to deliver consistent network speed across multiple locations. every corporate office, warehouse and store near or far covered. leaving every competitor, threat and challenge outmaneuvered. comcast business outmaneuver.

yvonne: 8:00 a.m. here in hong kong, live from bloomberg's asian headquarters. welcome to "daybreak asia." still running, asia-pacific markets set for gains on wall street. the s&p fell -- hit 1700 for the first time. confirmation the fed only wants roger will hikes. optimism u.s. manufacturing is speeding up. betty: from bloomberg's global headquarters i am betty liu. it is just after 7:00 p.m. wednesday. a pr nightmare. they insist the problem is industrywide and not unique. they say it is all going

smoothly so far, however, japanese investors are worried. we will be live in tokyo to get the reaction. ♪ yvonne: we are awaiting that japan open, making waves right now. what a year it has been for japanese stocks. a chart that highlights how we ended things in 2017, g #btv 4471. we are looking at live pictures of that open. having a big ceremony to kick off the 2018 year. let's go to the quick chart, g #btv 4471. we ended the year at a 25 year high on the nikkei as well as the topics -- topix. it gained 44%.

perhaps what performed better for 2018 is that the nikkei, given how heavy it is on japanese attack. we saw the japanese tech index jumping 36% in 2017. perhaps a given the techie gains we have seen in 2018, perhaps we see more room to run. betty: judging by this tech gains in just the first gains, setting the tone. japanese markets continue to get the friendly face from the boj. does not seem like we will see stepping back of stimulus from the central bank in japan. yvonne: that is true. let's check out the market open and get the latest from sophie kamaruddin. playing checkup this year. sophie: ketchup is underway. is underway. jumpingei and topix

over 1%. the outlook for equities remains at rosie. pmi do later this morning. due later this morning. we do have the yen easing. exporters selling expected back for japan. with gains, gaining 0.5%. wednesday'sdding to over 1% gain. the won with speculation the government may intervene. let's take a closer look at japanese carmakers. this after posting u.s. sales for december, falling 8.3%, in line with estimates. despite nissan and honda posting weaker numbers, we seeing these stocks on the up.

industry sales in 2018 forecasted to drop, thanks to higher interest rates in the u.s. leading gains. energy rising over 3%. ip shares on the up. 2%.tech sector rising over semiconductor players also gaining ground. focus, given what is happening with intel, we do have the likes of advantis looking mixed. intel overnight dropping 3% on news its processing chip may be vulnerable to hacking. a last look at what is going on market.ider aussie stocks gaining ground, 0.4% higher. new york crude trading at a 2.5 year high. anticipating u.s. stockpiles will fall for a seventh straight week. we do have gold under pressure,

extending losses, after halting and a day rally. the dollar is a sustaining its rise after the hawkish fed minutes. we do have weakness coming through in currencies. equity markets are still maintaining those gains as we continue the new year, betty. betty: markets definitely holding onto those gains. thank you. the dollar gaining as markets digested the hawkish tilt. december fed minutes showing the members with gradual rate increases. despite concerns about gradual low inflation. where is the inflation? joining me now, steve matthews. where exactly are we? steve: what we learned is that the fed is 100% behind gradual rate hikes. march is not a done deal, but very likely, for the next rate hike.

if you remember back in december, there were two dis sents against the november fed hike. there was a sense among people in the market and economists that maybe that was the tip of the iceberg. dissentose two represent a proportion reluctant to go through with a rate hike. even though some seem to be for more hikes. minutes, theyhese showed those two are very isolated and very much the bulk of the committee is full speed ahead for more rate hikes. that was the way it was read by the markets. you seere also details, the labor market heating up. beliefe very much of the inflation is going to rise, even

though it has been under target for a number of years. they are pretty hawkish, overall. betty: plenty hawkish, indeed. maybe perhaps rightly so, because they are worried about an inverted yield curve? that is never a good sign, something that could portend a recession. steve: you hear fed people talk about inverted yield curve and a brush it off. but in this meeting, there was a lot of concern. if you can pull up the quote from the minutes, they said, several members of the committee were worried about an inverted yield curve. and that it deserved to be monitored. some were worried it would be a signal of economic weakness ahead. you have people like jim bullard, the head of the st. louis fed give a speech about the inverted yield curve. if you look at the plot of rates

t,jected in the fed's dotplo the summary of economic projections that came out in december, that suggest we could get an inversion the late in the year. there is definitely concern about that. it is not pushing what is happening with rates right now, it is something on the agenda the rest of the year. yvonne: what does the fed feel about tax reform? what effect could that have on the u.s. economy in 2018? steve: that is interesting. it has been a big debate among economists. and basicallyack is of the view that it will be pretty positive. most people are getting tax cuts. not everyone, but most people are getting cuts. that could stimulate consumer spending. corporations are getting tax cuts to 21%.

that could bring about investment spending. some buybacks and dividends, as well. finally, there is a sense that may some people in the fed said this could bring people into the labor force. that would be very positive for the workforce. all right, we will leave it there. as steve matthews, joining us live from atlanta. fed minutes.se a first word news with courtney collins in new york. >> google says phone in chips from intel advanced micro devices exposed its android, chrome it and other operating systems. there is access to privileged information, making them vulnerable to hackers. intel says fixes are coming over the next few weeks. it sees no material impact to its business. microsoft said it issued a

security fix for intel and other chips. president trump announced his former top strategist -- denounced his former top strategist, considered a pop -- architect of the populist campaign. he reacted to a book in which steve bannon could assizes the president and his family. trump fired back saying, when he was fired, he not only lost his job, but his mind. been in has lost access to the president since leaving the white house in august. china said to be planning to curb the power supply to some bitcoin miners. we are told the pboc outlined the plan in a closed-door meeting wednesday, but offered few details. they are concerned miners are benefiting from low prices and could affect electricity supply to other users. bitcoin surged 15 fold last year, but was little changed wednesday. the chairman of the european securities says he sees no

kickeds after mifid ii in wednesday. it means for the first time they can see data from all financial interest -- instruments. investors had been sitting on their hands, trading volumes below average. although the first week of the year tends to be quiet, anyway. in the interest of full disclosure, bloomberg lp, competes to provide a range of services for firms complying with mifid ii rules. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i am courtney collins, this is bloomberg. soty: courtney, thank you much. still ahead, the u.k. says, don't rule us out of a future tpp. we will hear what liam fox have to say about the nations future commerce it deals in about half an hour. and a look at china's economic outlook for 2018 with

our chief china economist. he is predicting a slowdown for growth. this is bloomberg. ♪ this is bloomberg. ♪

♪ ."onne: this is "daybreak asia i am yvonne man in hong kong. betty: and i am betty liu in new york. tesla hitting the brakes on model 3 production, shipping fewer of the cars expected than in the last quarter. modelo delivered 1550 estimates by half. they now hope to reach the target of 5000 cars a week by the end of the second quarter, having already pushed that date back by three months. yvonne: bhp in talks over there iron ore joint venture with brazil. another company could take full ownership. they were once the company's production.ron ore

it has been closed for two years dam collapsed, killing 19 people. boeing offering brazil safeguards for the company's defense unit. australiahey have in and the u.k. show it can operate said businesses without compromising military plans. brazil was opposed to the deal last month. there is now flexibility. aer rose 4%, giving it a market value of $5 billion. yvonne: the consensus among economists is that china's economic growth is split to 6.5% , from last year's 6.8%. the official manufacturing gauge remains robust and offshore shares had their best start to a year since 2009. let's bring in yang zhao, chief economist at nomura.

bearish when it comes to growth this year. what you think will be the biggest fault line for the chinese economy this year? yang: we need to understand when we are looking to 2018 that the housing price in china has almost doubled over the past few years come across country. they have two immediate implications. markets could start to moderate. secondly, the positive interest in china will be more cautious about the potential bubble, and the property market and associated financial risk. that means the gross might be slow a little bit this year. affected by a cooling property market. part of the macro policy in general will be more cautious. yvonne: what you think it is

definitely a good sign, the quality of growth coming through as china tackles debt, pollution and poverty. the question is, what will be the pain threshold for beijing? at what pace is china willing to curb the risks of overcapacity and financial deleveraging? there is still an assumption they will not be as assertive, if the growth starts to tremor or we start to see a slowdown. china'sslowdown for growth is not necessarily a bad thing. it is still at 6%. if we look around the world, [indiscernible] in major economies. in the long-term, china's growth .ill follow a down trend the economy is balance from consumption driven. we don't need to worry much

about the growth number. we do face a lot of problems like debt, overcapacity, and associated financial risks. i think they have realized that. last year we had a pretty ofkish policy, in terms financial delivers a should -- financial deleveraging. yvonne: let's look at the domestic economy. we are shifting towards more advanced, rapidly upgrading manufacturing bases. the internet industry some are saying could be a better aid for growth and could offset the growth we see in real estate and infrastructure investment. for new a chance economy can take off faster than expected? yang: the new economy has been doing pretty well. [indiscernible]

but it is pretty small compared to the old economy, which is mostly driven by manufacturing and infrastructure building. i don't think it can fully offset the old economy. but it definitely can contribute more and more. betty: i am curious. we are talking about deleveraging and some of the risks, particularly corporate deleveraging is a huge concern on china. how much is that picture, the risk of that picture being destabilized by rising interest rates, particularly here in the u.s.? we keep hearing from economists and analysts saying there are upside risks in the u.s. could that spoil the party for china? first, i do think china could be slightly affected by the u.s. rate hikes. on one hand, china's economic

growth [indiscernible] which means it might have to interbank rates slightly. meanwhile, i'm still thinking china [indiscernible] the key is that china still has control, particularly for the outflow. basically a tightening of conditions in the u.s. not necessarily to be transmitting to china. china's monetary policy still has independence. betty: what about the increase in rates, substantially changes the trajectory of the u.s. dollar? we have seen as puzzling decline in the greenback in the face of rising interest rates. what if that reverses this year? r&b -- for the

renminbi, aces pressures. flow, there is still that outflow. it is structural net outflow. the private sector wants to go more dollars. sense, the currency faces downward pressures. the control, what would we have experienced two years ago? , thank you foro joining us, china chief economist for nomura. you can get around above that in today'sany more edition of daybreak. bloomberg subscribers can go to

dayb . also available on mobile in the bloomberg anywhere app. you can customize settings to get news on industries and assets you want. this is bloomberg. ♪ this is bloomberg. ♪

>> i think we have strengthened financial markets, stabilized them. therefore, i think they can create benefit for everyone who has a good approach and access point to financial products. it is significant. we will see this was really functioning. >> i would be surprised if every single firm is ready, as of today. there is implicit assumption by regulators that system changes will take time. but actions will be pursued on day one. betty: a consensus, by all

accounts, a smooth start to the introduction of mifid ii regulations from yesterday. those were voices we heard on bloomberg on mifid ii. europe's biggest regulatory shakeup is causing ripples of concern in japan. they say the new roles have gone through without any glitches so far. but some japanese investors are concerned they will have a negative effect on rising equities. our bloomberg stocks reporter joins us from tokyo. mifid ii is not being applied in places other than europe. how exactly is this affecting japan? why are they worried? >> like you said, it is not being applied to japan, but how that will affect marketing activities by brokerages that want to sell japanese equities to europe and e.u. clients. some of the sales folks are finding it difficult to approach european clients because of the

new rules apply to japan, for example. longer want to receive it free research females from japan, just as a precautionary step, because they do not know what will happen in the future. foreigners are big part of japanese equity markets. not specifically the e.u. client base. 1/3they account for roughly of the japanese market. it could be a little bit of a headwind for japan going forward. but things are still early and people are watching very closely. yvonne: what are the expectations, and these rules be applied to japan? min: right now, not a lot of people expecting it to be applied to japan anytime soon. they are watching what happened the responsest

are from european clients. one of the things people are watching is how the u.s. responds to this move. if the u.s. takes steps to apply similar rules, people in japan are saying it is very likely japan will eventually take the same approach regarding these rules. some analysts are saying the u.s. is not really in the process of tightening regulations in the financial sector. people have a lot of mixed views about what will happen going forward. people are watching very closely. it is still pretty early days. thank you, our bloomberg stock reporter in tokyo. let's take a look at markets trading in asia this effect. nikkei 225 coming back with a bang. shares up 2% in the nikkei 225. on track for a new 1992 high for the nikkei. gaininge, the kospi

0.2%. the moment, we will look at -- look at pyongyang. this is bloomberg. ♪

♪ yvonne: 8:30 in singapore, pretty foggy in the lion city. half an hour from the open of trading. i am yvonne man in hong kong. betty: and i am betty liu in new york. you're watching "daybreak asia." let's get first word news with courtney collins. >> the dollar gained after december fed minutes showed most policymakers backing continued gradual rate hikes. tax cuts toects boost consumer spending and business investment. members continue to wrestle over the outlook for inflation and noted concerns about a flattening yield curve. futures traders but the chances of a march rate rise at 81%.

powerfulof iran's revolutionary guard says the antiestablishment protest across the country are all but over. estate news showed government , saying this edition has ended. they gave no evidence to support the claim at least 20 people have been killed in protests over the last week. and almost 1000 arrested. the malaysian transport minister said an announcement will be made next week on resuming the search. they say they are in final negotiations and media reports say a u.s. company sent a the search area. planelaysian airlines disappeared with 239 people on board. a three-year search led by australia was called off last january. chinese ride hail are didi chuxing putting more pressure on uber. picking up a local operator.

led a $100 million investment in the form, but has -- terms have not been disclosed. it is an invitation the ride hailing industry is increasingly dominated by global companies. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i am courtney collins. this is bloomberg. ♪ time to see how the asian markets are shaping up this morning. the big story remains a japan. let's get the latest with sophie kamaruddin. we have pmi data from japan. sophie: bring out the cheerleaders, the manufacturing numbers highest since february 2015. 54 in december. picked up again. the highest reading since february 2014. japanese stocks leading the region as the yen softer for a second day, given the firmer

dollar. the nikkei jumping over 2%. on course for a new 1992 high. the topix is not to be outdone, adding over 1.5%. a november 1990 one high. the biggest gain since september. exporters like toyota and sony adding the most in terms of interest points. and others are building on 2017 gains. we have i.t. stocks gaining 2%. along with energy shares. this is one of the suppliers to tesla in asia. checking on the board, rising with panasonic and you, rubber hamaanasonic and yoko rubber. a quick check on japanese auto climbers. honda and toyota jumping to the

highest level in two years, despite a drop in u.s. sales for december and the murky outlook for 2018. betty: thank you so much. taking a look at the first day of trade in japan for 2018. after months of saber rattling from north korea, we may see a thaw intentions. kim jong-un ordering the reopening of the cross-border hotline, paving the way for discussions about next month's winter olympics. its hotline with its neighbor to the south, south korea. let's discuss implications with our seoul reporter. this is an interesting development. has this lifted the mood in south korea? peter: definitely. the markets were acting positively to it. they see this as a big reversal intentions that have been with aing for months, north korea continuing to test their missiles and continuing to do their missile tests, to

develop a nuclear weapon that could reach the u.s. betty: you heard the u.s. will respond to this saying, they do not believe this. they have hideouts about the sincerity of kim jong-un's olive branch. this will create a wedge between seoul's approach and washington's approach? much ines, they said as a press conference yesterday. they are skeptical about this overture and field this may create a wedge between trump and moon. have been the bad cop-good cop scenario. moon has had a hard-line approach to north korea. northg, no conditions, korea needs to stop nuclear development. presidentuth korea's moon has taken a softer line and said, let's talk. -- one of the things

north korea has insisted on is for u.s. and south korea to stop their military drills, which of say is a prelude to war. the position that maybe we should delay it, scale it back. all this as an effort to bring north korea to the table. the first step in that was to olympics, 15he miles from the north korean border. betty: what can be achieved in talks? going to have to give a lot of concessions this year or more compromise? do you think the u.s. has to engage in these talks, as well? peter: there is a lot of speculation as to what is north korea's motive in trying to open up a this hotline. perhaps getting the talks. it ranges from that they want to

extort money from the u.s. and korea, ease tensions, is the sanctions levied against them. others have said they are just buying time to perfect their nuclear weapon. whatever the case is, the fact they are having this communication open is a big, big .ove to ease tensions in south korea they see this as a positive mood -- move. think they circled in january 9, tentatively, a date for the potential talks. peter, think you for joining us and seoul. this group denying it involvement in illicit transfers of fuel to north korea. they say the trader originally owned cargo ships to the north, in breach of yuan sanctions. we have more on this.

what is happening with this investigation now? did originally owned the cargo, they admitted that much. but they sold it to another trading company, hong kong global commodities consultants. they told us they sold the cargo to another company called oceanic enterprise. there is a chain of ownership the south korean government is trying to sort through to figure out who owns the cargo and ordered it to be transferred to be shipped illicit lead to north korea. right now, the south koreans are investigating. they don't know who pulled the trigger yet. ship toow do these it ship transfers of oil helped regimes like north korea get around the sanctions? dan: this is a really important part of this.

korea and countries before them like iran that are relying and have sanctions -- they had a trick. in the oil trading world, a lot of times people will send oil half way around the world on big ships. they make a ship to ship transfer to smaller ships to get to ports. what north korea tried to do is do this invisibly, by having shipped turn off their beacons, so ships coming from south korea could transport oil to another ship. and another ship would go to north korea and no one would know where the oil came from, to skirt the sanctions. they got caught this time. it is something that happens some i frequently for these countries. it is a really tough thing to police. the oceans are big, ships are small. there are not a lot of eyes that can be peering on this at all times. betty: i imagine. two of the world's biggest

miners talking about their joint venture in brazil. vale may take full control of bhp billiton. david stringer has been tracking the talks from melbourne. what else to we know about these discussions? relatess you said, it to the sum marco --samarco iron ore venture. it was the site of eight disastrous spill, several people killed and communities engulfed. since then, it has been suspended, been without licenses. those bhb and vale have been engaged in the legal ramifications. ony have also been focused winning those licenses, getting the thing restarted. the basis ofout

operation going forward. what we understand from people familiar with the discussion, they are talking through an option that would see bhp exit the 50-50 joint venture. and vale would assume full control of that operation. it is seen as a sensible course because it is likely it would be easier potentially to restart operation under vale's full control. in the long term it will be easier for vale. owns could be used by the joint venture in the future. hasne: that samarco mine been closed two years. what progress is being made on getting the mine back into production? dan: there are signs of progress. back in december the operation won one of the first licenses it needs to restart.

there are expectations that will win the remaining approvals it needs, probably by midyear. competitors, we have heard from other suppliers. part of theniche market. they expect the operation back up and running in the second half of this year. that would restore what was the world's second-largest provider. a significant chunk of that market supplying about 20 countries and 20% of the market. could be back online at a reduced rate from the second half. , thank david stringer you for joining us from melbourne. the u.k. looks to the pacific countries for trade deals after it leaves the e.u. we will hear from the international trade secretary. this is bloomberg. ♪ this is bloomberg. ♪

>> to this day, the most

complicating and trying case has in 2004.tsunami the reason was, it was unprecedented. personal level, how do you view risk in your personal life? >> to sleep well. >> to you sleep well? >> i do sleep well. ♪ the u.k. says it is exploring the chance of a tie up with the transpacific partnership company -- countries after leaving the european union. liam fox told bloomberg there is no physical need to be in the asia-pacific. the u.k. will examine its options around the world. tpp has not yet been negotiated or a successor to tpp has not been negotiated. we do not know what it will look

like. for the u.k. we have said that as we leave the european union, we want to create a genuinely global britain. we want to see opportunities in areas expanding fastest. the imf is somewhere where 90% of global growth in the next 10 to 15 years will be outside the european continent. we want to explore all the opportunities. i would say we have been foolish not to look at all the potential. >> joining a deal like that would involve dismantling the tariff apparatus you have built up as an e.u. member. is that something you would be ok with? >> it is not something at the top of our agenda at the present time. uswould be quite wrong for to rule anything out in terms of future relationships with the united kingdom. >> what about nafta? are there any talks or discussions about joining that? >> the priority would be the

-- canada has already agreed with the european union. we said we wanted to ensure we would get continuity with the e.u. trading agreement. as we leave the e.u., where the u.s. sits is that we have working groups with the united states, on a whole range of issues, including scoping a potential future agreement. we are looking at all our options. what you can say in the totality of that is that britain is expanding and widening its global horizons. some people view our vote to leave the european union as a vote for inhumanity. it is the opposite. it is a genuinely outward looking britain, from that referendum. >> first on the agenda, i know there are a lot of what ifs, would be heading toward an

agreement with the u.s.? >> we want to get our trading schedules done in geneva at the wto. then to get continuity of the e.u.'s free trade agreements. there are around 40 of those. towant continued access korea, switzerland, canada. once we have done that, we can look at other trade agreements. remember, we are not allowed to negotiate new agreements while we're still in the european union. we need to do a lot of ground work. we have a 14 trade working groups with 21 countries at the present time. as we look to see how we can improve our trading positions. britain had stayed in the european union or not, we had to include our trading position. gdp,se a proportion of our we are well behind countries like a germany that are exporting.

one of the aims of my department is to boost of that trade and exports. last year we saw that rise by 13%. it was a great performance in terms of global trade. we need to ensure that continues. betty: a wide-ranging conversation with u.k. international trade secretary liam fox speaking to bloomberg's o'brien in- emma beijing. don't forget about dayb . dive into any securities we talk about. conversationf the by sending us instant messages during our program. this is for bloomberg subscribers only. this is bloomberg. ♪

♪ betty: this is "daybreak asia." i am betty liu in new york. yvonne: and i am yvonne man in hong kong. us but if i said to have filed to go public on the new york stock exchange. the highest profile test yet, without raising money through a traditional stock offering. the steady cash of 15 million paying subscribers, the largest paid music service did not need more funding. spotify will be the most prominent company to attempt a direct listing. plans american express

new u.s. tax changes to cut the new quarter earnings, meaning net loss. it comes from earnings facing new taxation and adjustments to liabilities. 2017's full-year earnings will $580 to the forecast of $590 a share. yvonne: mercedes topped the u.s. car -- luxury car lists. of the crossovers surged 53% last month, carrying mercedes to a record december in the u.s. overso padded its lead lexus. jumpinge saw blackberry to the highest level in almost four years, on news of a deal to work with baidu on driverless cars. they will bundle blackberry's

operating system into their apollo car system. bloomberg, john chen says blackberry has been gaining ground in safety and security. >> in all cases we are providing the safety operating systems, safety and security, for autonomous vehicles, and the platform. well when we talked about me taking this job, was to create a new category for us to dominate and. the wereot use dominate, but we are certainly doing well right now in a category. >> how will blackberry help baidu become a dominant player in the car industry, which is their goal? john: as you pointed out it is quite ambitious in creating the autonomous platform or the

autonomous vehicle platform. they are pulling together some code and partnership. they pulled us in. they picked us because of the safety and security certification we have. they should be rather complete. industry -- i assume the auto industry will go just beyond the auto that you and i know of today. they are going to provide maps and information also. i think it is a good partnership , very good things together. emily: talk about the impact you see of this partnership on blackberry's business. give us hard numbers, if you can. john: i can't give you any hard

numbers, you know that. but i know you have to ask that. it is going to be our growth platform. as you know today, my hope is that the enterprise software, especially with cybersecurity, the next leg of our growth is with auto. is sos why the design important. it will go beyond the auto into the investment world. world. it is a huge market and it is growing. we are very fortunate we could play well in it. are there any other partnerships with other automakers in the works, and how do you plan to pursue more partnerships? you should expect us to continue to expand those partnerships. our attention the last two to three years has been designed, joining up with new partnerships, creating new platforms, like the one we just

announced with human machine interface. all the really good new stuff. some of those are little sci-fi-ish. that it will happen. like barry ceos john chen speaking to bloomberg technology's emily chang. it is remarkable how much a company like blackberry has really evolved from phones to now driverless cars. it really goes to show where we are going in the industry. it is interesting. we have a story in the bloomberg talking about how many people are driving these easy cars at the moment, let alone driverless cars. it is quite a small number. only 1% of the market has gone electric. in fact, most people decide not to buy, but least. u.s. drivers lease almost 80% of the battery ev cars. it is interesting. betty: it makes perfect sense

already in the markets. some of these electric vehicles, the older models come are going for 1/3 of the price. nobody but -- nobody wants to cars.d ev they want the latest technology, just like they want the latest iphone. it is a different kind of car market for electric vehicles. my headll trying to get around driverless car's. not sure i can do that yet. that is it from "daybreak asia." our market coverage continues with rish and haidi. this is bloomberg. ♪

rishaad: japan during the 2018 party leading the asia-pacific. the topics has its levels not seen since the early 1990's. until one of the big losers admitting its chips are vulnerable to hackers. the problem is industrywide and is not unique. bitcoin under new pressure in china with some facing power cuts and enormous demand simply draining the system. in hong kong. haidi: in sydney, also coming up, falling out badly. steve bannon attacks his former boss. the president hit back saying ban and not only lost his mind. this is bloomberg ma