♪ yvonne: we are live from bloomberg's asian headquarters, welcome to "daybreak: asia." looks to have gains at the start of the new week as earnings season kicks off. president trump declares he is open to talks with north korea, saying tuesday's planned meeting with the south may be great for humanity. betty: and from new york, it is just after 6:00 on sunday. on the counter attack, the president allies flooded u.s. airways to defend him against claims he is not fit for office. and china's exchange reserve gains for the 11th straight

month amid tighter capital controls. stronger chinese currency and resilient economic growth. ♪ betty: looks like were starting the second week in january on a pretty strong note after the jobs report on friday. great story on the bloomberg talking about the early days in january, how that might indicate markets later in the year, about two thirds of the time the first few days in january are usually deposited -- pretty positive in the u.s. market. in 1987, we had the strongest january start to the markets, and you know what happened in 1987. dark days. i don't know if that is any indication. yvonne: and it's a big week when it comes to data from the jobs report, which was a bit of a dud

. inflation seems to be the new jobs report that all of the bond markets and traders are looking at. if we do see this pickup in inflation, what is that going to mean for equity markets? will we continue the goldilocks scenario as we have been talking about for 2017, that will be key. betty: that goldilocks scenario kept the market hitting records. it's quickly pull up where we ended up on friday, the s&p higher by about 7/10 of 1%, hitting records yet again. the dow adding over 200 points and the nasdaq, rising almost 1%. in asia, japan is not trading closer to that coming-of-age holiday, but other markets in asia are open and looking at green. yvonne: it certainly is, a positive flow but a slow start in new zealand so far on monday morning.

pretty flat on the fx 50. 71-59 for the kiwi. it is the longest losing streak since may after the jobs report. trading in australia just getting underway, we're seeing pretty slow on the asx 200. are eyeing the 79 handle for the aussie. the yield picked up. closedmentioned, japan today but we are seeing the yen holding well above 113, it could be a good come back once japanese markets reopen. let's get to the first word news. an iranian oil think around for south korea has collided with a cargo ship off shanghai, leaving at least 32 people missing. the tanker caught fire after the collision, and was carrying

about one million barrels of natural gas. the crash happened saturday according to iran's ministry. opposition has named 92-year-old mohammed mohammed as its candidate for prime minister. the premier will try to topple mohammed. china's foreign exchange 11th straightd monthly increase, capping a year of recovery. the reserves climbed by almost $21 billion to 3.14 trillion dollars in december. the world's largest foreign currency stockpile has been steadily rebounding since january, when it fell below $3 trillion for the first time in almost six years.

oril you government says and is in for a -- australia's government says iron or is in for a bumpy ride in 2018. us justice department of industry also views gold prices is dropping in the next two years as treasury yields rise on higher u.s. interest rates. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. ♪ rick getting some m&a news here, -- we are getting some m&a news here. cancerny focused on medication, reports over the weekend said the deal in its entirety would be valued at about $7 billion, that the first payment of $1.1 billion puts a stake in for the company pending approval of subsequent drugs

that are right now in the testing phase. buying impact biomedicine's from new jersey. more mergers in the health care space. we have seen that heat up in 2016. early part of 26 -- 2017. this is a big piece of news to hit the markets come monday morning. yvonne: could be a boost for ce stock has been down this past year, trying to beat copycats making cancer drugs. the ceos say they are looking for more opportunities and this might be one. meantime, president trump says the u.s. is open to joint talks with north and south korea at the appropriate time, saying it would be a win for humanity it's something comes out of tuesday's planned meeting. >> if we can come up with a very peaceful and good solution, we are working on it with wrecks --

rex in a lot of people. if something can happen and something can come out of those talks, it would be a great thing for all of humanity. yvonne: let's go straight to washington and ross krasny. we have gone from hamburger diplomacy to my nuclear button is bigger than yours to this. are we hearing a softening of tone from president trump toward pyongyang? ros: a could become a we don't know if he will follow through on this idea he had on saturday, but it's interesting how thoughts bring everybody in the world together at times. the talks expected between north and south korea are centered on the winter olympic games coming up in south korea and whether north korea could send a team. a little bit of a thawing in relation there. the south korean leader has made better relations with his northern neighbor.

i think it will be interesting to see if the talks go ahead and president trump can be made to feel he is part of it, that he was an instigator more than being left on the sidelines. i don't know that anything will happen imminently, and certainly nikki haley, the u.s. ambassador to the united nations cap to the same line she is had a while that the u.s. has had for a while, that there has to be progress by north korea to abandon its nuclear program, and most people think that is probably a nonstarter. betty: indeed. i want to get back to some of the mastic issues. we have heard -- domestic issues. we have heard president trump promise fire and fury against the north korean leader, but he is facing fire and fury as well book, andel wolff's we have seen a lot of his team members come out defending him on television, including nikki haley. i want to play for you part of her comments about the

president. >> i don't know if it was 200 interviews with steve bannon or 200 interviews with himself, but i can tell you i know these people, i work with these people, i work with the president and speak with him multiple times a week. this is a man, he did not become the president by accident. betty: so who believes who? who is more accurate? it definitely seems like the author have access to the west wing during the first months of the trump administration, was kind of in there, as he said himself, and try to stay as long as he could before potentially getting kicked out. and really, some of the aides may have been advised him to talk to him, that he was writing a book, and was somebody they could give used to. it has gone a bit haywire. trump's best and

most credible allies came out to defend him. we heard from mike pompeo, the cia director, and he is very rarely in public talking about the president or anything really. he talked about how president trump is very engaged in the daily security briefing, asks good questions. so i think maybe the white house thinks that by putting these kind of men and women out there, it can diffuse the situation a stall and, and maybe buy time to refocus on the agenda and the economy and the impact of the recent tax cuts. betty: thank you. ross krasny joining us from d.c.. we're also looking at the ego data queued -- data. 148,000 jobs added in december.

it might make it tougher to reach the 3% growth target president trump has promised, but is it going to slow down the fed rate hike path? kathleen hays joins us. tell us the key points from the jobs report. kathleen: remember, the month leading up to the december report had a lot of volatility, way down and way up after the hurricane. that is a factor. retail jobs, they were lower than they had been. a lot because of online competition, not surprising. a lot of people are saying, we are reaching full employment, employment is 4.1%, it stayed there in december, workers are hard to find, 148,000 is not out of line with what we've seen in the pasture, definitely slower than the previous couple of months. i think if you look at it from the full employment for specter, the glass half-full people are looking at that. one thing for sure, if you look at the map, less jobs growth in

december, wider trade gap, that makes it tough to meet the 3% gdp growth as we get toward the end of the year. that spring in the president of the st. louis -- let's bring in the president of the st. louis fed. he was asked about the impact of tax cut, he said it could make a difference or change policy perspective. >> my baseline case is we are in the same regime. i think there is some possibility this could light a fire under investment and drive growth higher, and if that happens, we will surly take note of that and it just policy appropriately. let's remember, he is usually a more dovish official. interesting, the white house speaking, the head of economic advisor speaking on friday, he said wait a minute, we have run out economic models, these tax cuts will create supply-side led growth through the boost of

investment, more capacity, that's why it won't be inflationary or necessitate more rate hikes than the fed would have made otherwise. yvonne: let's zero in on the question of rate hikes. the consensus is that it is still three more this year. just the jobs report effect that in any way? start with the consensus on sunday, from john williams, president of the san francisco fed. he said in remarks in philadelphia that he thinks three rate hikes make sense. he sees inflation gradually rising and the fed gradually hiking rates. the president of philadelphia said he only sees to rate hikes now next year because of concerns about the yield curve, because i want to be slow and steady with additional rate increases and i don't think we should do anything to precipitate any inversion of the yield curve. let's take a look at 1353 to see what he and others are alluding to, which is the fact that when you have a yield curve that

fines, especially if it inverts, it could be followed by a recession. see how that happens over and over. we are far from a flat curve going into an inverted curve, but that concerns officials and many economists have expressed and those in the bond market. he is certainly in line with the bond market, the bond market is these two, the first and 2018 in march. one thing on the table, average hourly earnings of 2.5% year-over-year, up 1/10 of a percent. theyhe past 12 months, have been at 2.5%, sometimes higher and sometimes lower. there is a case to be made that what we saw on the december report wasn't a big move up in wages, they are on a flat trend, and that will be interesting to see if 2018 without faster gdp growth and the fed hiking rates, if wages can rake out -- can break out of the low but steady range. anythingnd if it needs

for inflation, which we are set to get on friday. kathleen, thank you. still ahead, were going to talk a coin and other crypto currencies with a bz fund focused on locking technology. cap our chat -- catch our chat later. they: first, find out why ubs chief economist says nothing will change this year but everything will be somehow different. we will talk global growth with paul donovan in shanghai. this is bloomberg. ♪

♪ the ubs greater china conferences getting underway in shanghai, executives for more than 200 leading companies across china and asia pacific are there to discuss investment trends and development. our china correspondent will be there throughout the morning. with our first guest, talking about chinese growth and how it will play into the global road

picture this year. yes, thank you very much. i am joined by paul donovan. yvonne was touching on the chinese growth picture. you are forecasting growth of around 6.4% for 2018, but you are pointing out the property sector is likely to slow. what are the elements that will kick in to play to ensure we get a relatively solid growth picture? paul: there's been a solid amount of them for structure spending going on in china. we have to recognize a lot of the infrastructure picture of the last 20 years has not been of good quality and its to be replaced. there is new infrastructure that chinato come through, as is doing the one belt, one road initiative. growth,, it global will help china as we see see a struggle external factor. tom: in terms of the focus now on clamping down on leverage, we

have seen new measures rolled out in the last few weeks. is a riskf there around the way that is managed and have -- and where can we look for canaries in the coal mine? paul: leverage is a risk but i think the chinese have been manipulating the domestic credit markets for a considerable time. they are not amateurs of this, they will not make obvious mistakes. there is a desire perhaps to slow leverage of it, but not that much. they don't want to collapse growth. if we see unexpected decline the growth, that would be a signal that perhaps the chinese authorities were losing control and there might be a negative growth consequence coming through from that. but they have a long track record of micromanaging this reasonably successfully. tom: given the fx returns ticking up, they seem in a

fairly temporal position. is there any sign you are getting the capital controls might start to ease this your next? paul: think that's relatively unlikely. we have to be careful about the month by month foreign-exchange data. assets ore chinese market to market, some are not, we don't know which are and aren't. some of it could be market fluctuation, some of it is a shift in terms of reserve pressure. i think it is unlikely the chinese will have to deal with substantial capital outflow pressures anytime soon. i think what we saw last year was the one-off affect mainly of companies paying down loans, don't think that will be enormous pressure, but i don't think they are in a rush to lose control, it's not a government that wants to give up control voluntarily over many aspects of the economy. tom: shifting to the u.s., what is your reading of the latest job numbers? is this the new normal, softening in terms of job numbers as we head toward full employment? paul: i think most economists

would argue we are at full employment and it is inevitable in that situation that it changes many aspects of employment reform. full employment, the unemployment rate struggles to fall further, the payroll numbers don't grow. there are -- not because there aren't jobs available but there are not people to put into the jobs. average hourly earnings will tend to be lower when you're at full employment because you are creating lower skilled jobs rather than higher skilled jobs. that tends to put down less pressure on the average earnings data. tom: what does it do in terms of changing the catalyst for the fed and expectations of three hikes? paul: i don't think it changes much, three hikes are extremely likely from the federal reserve. the economy just taking a snapshot of where we are today, it doesn't justify negative real interest rates in my view.

i think the fed is on course to continue to raise rates. and the fomc looking at a broad range of labor market indicators is probably going to be quite content with where the u.s. economy is. tom: how to the markets factor in the moves not just in the fed to some the ecb and boj extent in terms of normalization of monetary policy? how does that impact markets? paul: the markets panic, liquidity is being withdrawn, but that isn't necessarily true. what the federal reserve is trying to do is maintain a balance between liquidity supply, is balance sheet and liquidity demands. what we are seeing is as the economy develops, as risk appetite improved in the real world come liquidity demand, that has disappeared, or has been substantially reduced. liquidity demand, if it is

falling of the same time the fed a shrinking its balance sheets in the real economy, that doesn't change the amount of liquidity available for markets. i think have to be careful about this knee-jerk reaction, liquidity down, must be coming out of the markets, that is not automatically the case. tom: and not in the eurozone either. obviously we have had a stronger euro over the course of 2017. how much of a drag is that potentially going to be on the growth picture for europe this year? paul: i don't think it is a huge drag, to be honest. exporters complained about the strength of the euro, but they always complain about the currency, it doesn't matter where the currency is, it's always too high for them. realistically, the euro was substantially undervalued at the start of last year. our call we had lester that the euro was going to be strengthening was one of the most obvious calls i've had to make and 25 years. it was blindingly obvious we would have strength coming through. having recovered from that very

oversold position, the euro is still fundamentally weak relative to where economists think it should become an in that environment i don't think we should be looking for two big drag on the economy just because the euro perhaps strengthens more this year. much, toldyou very donovan, global chief economist at ubs speaking to us at the greater china conference here in shanghai held by ubs. giving the outlook for 2018. yvonne: we will come back to you in a little bit. that was tom mackenzie with paul baughman -- paul donovan in shanghai. we will be back at the conference a little later, including an exclusive interview with the bank's ceo, you don't want to miss that, 11:40 monday morning think on time -- hong kong time. betty: you can find in-depth analysis on bloomberg radio,

tune in to daybreak asia from 7:00 a.m. hong kong time. you can download the app, or access it at bloombergradio.com. this is bloomberg. ♪

♪ yvonne: a quick check on the latest headlines, airbus is discussing a large plane orders from china during the french president's state visit this week. our sources say talks are models,on various although the sides of the order is not final. china purchases jets collectively before distributing them to various airlines. it accounts for a quarter of airbus deliveries. betty: bloomberg has been told that china's hna group has approach brokers about the possible sale of two office buildings in london's canary wharf district as they seek to shed assets and cut their debt burden.

hna missed payments to several chinese banks in recent weeks, prompting three lenders to freeze some of their unused credit lines. much more ahead on "daybreak: asia." this is bloomberg. ♪

♪ it is; 30 a.m. in hong kong, expecting the cold front to come and possibly tuesday. we are hearing at temperatures of about nine or 10 degrees, not nearly what we are seeing in new york and the rest of the u.s., that big chill still hovering over you guys. seeing negative nine and 10 degrees here in new york. 6:30 p.m. sunday evening in the big apple. markets on friday trading much higher, the dow adding over 200 points, you can see the record-setting pace again for the s&p. i am betty liu in new york. yvonne: i'm yvonne mann in hong kong. let's get to the first word

news. ros: the two koreas were hold talks for the first time since 2016, signaling a possible break in the tensions under the trump presidency. discussions will include whether the north will send a delegation to the winter olympics. president trump says the u.s. is open to speak directly to kim jong-un under the right conditions. steve bannon has issued a lengthy apology to donald trump and his family over comments in the book "fire and fury." he told a political website that donald trump, jr. is a patriot and a good man. the presence allies have been speaking out against the book, which raises doubts against his fitness for office. mock -- mike pompeo says the president understands complex issues before him. the u.k. prime minister has told the bbc a cabinet reshuffle is coming soon. there was a resignation last

month of her first secretary of state good a minister will be appointed to effectively lead the eu without trade deal. people are likely to remain in their jobs. and angela merkel says germany needs stable government as she begins make a break talk to renew her alliance with the social democrats and open the door to a fourth term. her current democratically led onc begin exploratory talks sunday. they've had three months of postelection stalemate after she failed to win an outright majority. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. ♪ thank you. were coming down to the market open in asia. let's get the latest with sophie. japan has closed. were talking about the earnings

season ramping up this week. talks between north and south korea starting on tuesday. what is the set up like? aside, it islitics kim jong-un's birthday along with the talks to focus on, but we have momentum. we are waiting on the earnings season to ramp up. we are expecting a big come through with that. you can see profit estimates for all asian equity sectors were raised in the last quarter. with the outlook's for cyclicals looking especially strong. south korea will also be front and center not because of geopolitics but also samsung has an update on tuesday, forecasted to report a 20% increase. head of that, we have futures pointing higher as we count down to these events. betty: you know the rally in sydney stocks, that is

continuing along with what we saw on friday. what are the earnings outlook for a study of? sophie: sydney stocks higher for a fourth day. ahead of the february earnings season. looking fairly good, especially for the resort sector, trouncing expectations. it to grow about 57% for the resource sector, 11% for the broader asx 200. when you look at the breakdown in terms of equity movers, mining stocks, some are under pressure in sydney. evolutionold miner down after being downgraded. investors may be souring on gold-mining after a forecast that prices will drop in the next several years. iron ore is looking next this morning. 2018. a bumpy ride in

what we ares to watching on the australia different, we are waiting on december data. betty: think is so much. sophie keeping tabs on the market today. let's keep tabs on china, the foreign-exchange reserve capping a europe recovery, hosting an 11th straight monthly increase under capital controls. i want to bring in our chief asia correspondent with more. in the first breakdown -- at first, break down the numbers for us, what did we learn in the 11th month of foreign-exchange reserves increasing? >> it's quite a remarkable turnaround. around two years, the run down and burn rate for 10 it was one of the biggest destabilizing forces for markets anywhere. if thought china was heading toward classic emerging markets currency. we are well back over the magic 3 trillion mark, 11 consecutive

gains in the latest figures. officially and among analysts, things have been pretty stable and at least holding onto the gains. some of the gains have been due to a bit of good month -- good luck, the weakening dollar has inflated china's overall reserve, good growth has also helped. also a tight capital control. china came down so hard on those big-ticket deals going offshore. all of these factors coming together has seemed to put -- china's reserves. betty: what could reverse those gains? i guess if you look domestically, you would have to say the deleveraging campaign we hear some much about, the campaign to the risk the system, if that were just feel -- to spill over into real estate, it would have a much wider effect on the economy itself, undermining the economy in

encouraging people to take money out of china, but it is hard to get past the fed and washington, d.c. if they are to move faster with rate hikes this year because of the tax package into the u.s. economy, that would erode the yield it's a -- the yield advantage. i think those are some of the biggest risks facing china's reserves this year. we've been yvonne: talking about these battles for china, trying to reduce debt levels, pollution and poverty. enda: they don't want to let growth go below what they had. the authorities in beijing our cognizance of the risks with high debt levels. yes, they want to take series measures to tackle it, but it will be nuanced, step-by-step approaches. they will probably tackle it

outside the sector first, were not talking about mass, wholesale shutdowns of zombie companies, putting people out of work. it will be a step-by-step approach to curbing the debt problem. whatever they do, they ensure the water economy stays on track, the 6.5% level. they won't want to let growth slip below that. yvonne: we were just talking to paul donovan, saying china has no rush to give up control on any aspects of the economy. thank you, our chief asia economics correspondent. plenty of big stories coming up this week we are covering them all on "daybreak: asia." on thursday, those earnings estimates and what we are expecting out of asia, as well as the u.s.. niqlo is a bigu one. double-digit growth in sales and operating profit after an accelerated pushing the faster growing markets outside of japan. if you look at the bloomberg

see the change, the shift and change coming out of the company itself. historically, the mystic sales have outpaced overseas market. to change for the fiscal year of 2018 as they continue to expand in places like china, southeast asia, brands are making some big waves in this part of the world. hopefully that will give a boost to revenue on revenue -- a biggest revenue in this part of the world. betty: staying with the retail data from the u.s., friday we are expected to show that sales rose for a fourth straight month in december, capping a solid start to the holiday shopping season. let's ring at the chart that retail sales, the consumer

group versus real pc. you can see how high and accelerating retail sales are, he consumers are very healthy, the driver of the economic engine. that core pce, the measure of inflation, that continues to lag . as we heard from many economists, just a matter of time. watch this year, it is likely going to change things. yvonne: entering the week ahead on wall street, fridays lackluster payroll report. play out.y to u.s. investors will also be focused on the fresh round of eco-data, including inflation, retail sales and at least one deal in the works, but get to su keenan. let's start with market direction. can the stock bulls continue to lead things higher? let's take a look at the

market snapshot as of right's close, it shows the s&p 500 not only hitting new records but it had its best week in more than a year. you will see dollar weakness going forward, we will get to that a minute. 5096. go to allave talked about how three major indexes continue to hit records, these white lines. they hit records simultaneously. come all the way over here, we've seen that several times in the past week. withe kicking off 2018 these simultaneous records, very bullish sign for now. let's also take a look at, again, some of the earnings ahead for the coming week. thank earnings in the spotlight, pretty major banks, financial institutions reporting on the 12. there -- they may be off to a messy week, it includes charges

and gains from the tax overhaul. this is the first time we are starting to see that. finally, celgene. and according to acquire -- nearing and according to acquire a company. it could be delayed or fall apart, the wall street journal reporting that celgene could pay as much as $7 billion over time for the asset, which will allow them to expand into oncology, the cancer market, it is very lucrative and could help them competitively. yvonne: and diversify as well. a big thing to watch come monday. we just mentioned retail sales, friday, that something investors are watching, but also inflation numbers. bigof course cpi will be a data point to watch, and in terms of numbers coming out, we

are expecting that we will see a moderating of the gains we have seen in recent months. one of the things that play is the december oil prices, energy prices were a bit lower, the gains were somewhat lower, that will help moderate prices. cpi is a core number we have looked out -- looked at. behrens pointing out that fedex, an indicator of the economy in terms of their ability to transport packages come that stock could rise as much as 20% due in part to their expansion of different hubs and move to automation. again, that fits in limbo some of the retail sales strength we are likely to see. let's go back into the 51.mberg, q a the s&p 500 like a pullbacks, or focused on market direction. we've got an enormous amount of days without a 5% drawdown, 292 trading days to be exact.

we have not gone that long without a major pullback or 5% pullback since the 1990's, the longest streak of this measure, it goes all the way back to the 1920's, in the 1960's, it was 386 trading days. that is something the market is paying attention to. yvonne: just before we go, let's talk about the pain expected ahead for the u.s. dollar according to analysts. su: one more chart really quick. 4236,is interesting -- there with me. we are seeing a lot of analysts change their expectations for the dollar. fort more pain had expected the greenback, even as the federal reserve is planning to lift rates further and we have this big tax overhaul. what we are seeing is a lot of the analysts cutting back their projections and predicting, some are predicting a dollar rebound.

there is across current of projections of what way the dollar could go from here. yvonne: thanks so much, su keenan there on the markets and a look ahead. we are joined next by the ceo of , about the currency -- the cryptocurrency frenzy. this is bloomberg. ♪

♪ this is "daybreak: asia ." betty: a list -- a u.s. regulator defending how it polices cryptocurrency. southeast asia correspondent is standing by with more on that coin and crypto currency, still a hot topic for 2018. still a hot topic.

regulating the crypto space is good, but to what extent should be done? a ceo of a vc is that invest in blockchain startups. controltrying to cryptocurrencies will be difficult to do. good to have you with us. it is good to regulate, but you can't quite control it, why? alex: there's no point in trying to control or ban these things, the technology will move from one area to another, we have seen this in different jurisdictions. in china, a ban on exchanges and later on ipos, we saw a lot of innovations moving to different areas like korea and japan. regulation is not a bad thing, controlling and banning something you don't fully understand is a bad thing. i think the best approach is to examine each of these new technologies on the facts. the facts are the blockchain

the second error of the internet, it will change every industry in the economy, and governments have a lifetime -- once-in-a-lifetime opportunity. that's the goal they should be looking at when thinking of crafting regulation. haslinda: blockchain-based apps are emerging everywhere, including emerging markets. are you concerned? is that a good thing? does it level the playing field or pose risks? alex: think it's amazing, it has made easier for an entrepreneur anywhere in the world to access growth capital, the start of people, buildoy value and wealth. that's a very good thing. it's made possible by the technology itself. sure your viewers are familiar with initial coin offering, it's a bit of a misnomer, these things are not going, really what they are is tokens that represent value.

we have seen innovation happening in a more distributed way. it used to be you had to be a silicon valley to access capital and top talent. to be sure, it's still one of the most important areas in the world for innovation, but now we are seeing innovation everywhere, in israel, pakistan, india, singapore, hong kong, home stand we -- most anywhere in the world that there are smart people with ideas, we are seeing the creation of new comedy spirit haslinda: is a potential the blockchain has moved the on bitcoin? can transform commodity trading? alex: absolutely. bitcoin was the first killer application for the technology the same way email was the first four internet technology. nursing the creation for new platforms -- we are seeing the creation of new platforms. there have been dozens created since bitcoin that allow you to

use the technology to program business logic and assets in any part of the economy. it can be applied to commodities, stocks, bonds, supply chains, casinos, production markets, you name it. we are seeing the creation of office of companies and projects to achieve that. talk about want to the projection you made at the beginning of 2017, that the coin would get two 2000, every thought you were crazy, it not only went to 2000, it went to 20,000. can i get you to predict where it will go in 2018? alex: only in the space can you target your three times higher than the value it is today. that's what happened last year. it is a good thing. what has all of the value than created? at the beginning of 2017, it was $18 billion and change. aroundend of the year, $650 billion. lots of excitement, exuberance, lots of speculators in the market, but what we are seeing in why we are seeing value

creation is there is a huge transformation going on. today, the market for crypto assets dance at about $800 billion, which is a significant number, roughly the same size of apple computers. relative to the global economy, it is very small. i'm going to answer your question. i believe if you look at the top 50 or top hundred of these digital assets, many of them will fail, but emerging from this new coterie of technology will be the next apple or google and i think it will be disruptive. setting a price target, i like to say the future is not something to be predicted but achieved, but higher, can i just say that? i think will be exiting 2018 with the marketplace greater in value. but with a lot of fleshing out of lesser quality. haslinda: saved by time. alex, thank you for your assessment, bitcoin will go higher, but we know that already. yvonne: we certainly have seen it given the volatility.

we're safe with that forecast. alex prescott there. interactive tvr function, tv go, what just live and catch up on past interviews well dive into anything we talk about. plus, become part of the conversation, send us instant messages during the shows, like asking questions about the price of bitcoin. this is for bloomberg subscribers only, check it out at tv . this is bloomberg. ♪

♪ yvonne: this is "daybreak: asia ." betty: a quick check of the latest business flash headlines. the sunday times says tencent has held talks with my square, social network listed in london, about commercial partnerships in investment.

it cites asian bankers saying tencent has not tabled a formal bid. my square sent in an exchange filing last year that it received an approach from another organization that may or may not lead to a takeover offer. latest starey's wars movie direction almost $29 million in its opening weekend in china. coming in below its two predecessors in the world's fastest-growing market. that brings in a global whole -- haul to $1.2 billion. disney has been struggling to build an audience for the star wars franchise in china, where moviegoers to not grow up with the original trilogy. betty: i am sure president ,rump, we've heard many names in any case kim jong-un is celebrating his birthday today. about to turn 34, according to

sources. we've never confirmed what his birthday actually is. what is interesting, as i read deeper into what -- into help might celebrate, it doesn't look like you will have iraq's, keeps a low profile on his birthday. it comes and goes. yvonne: just another day in north korea, as he presumably turns 34 today. the only example they have reported on any cut of celebration is when it dennis rodman went to pyongyang. we have a video, not of him singing, but the two of them sitting at an exhibition basketball game in 2014. that perhaps is the time when we saw some singing, where dennis rodman saying happy birthday. they: it was interesting, north korean press said it was more of a revelatory song then a birthday tribute. there you go, you're in north korea. hour, up in the next

chief investment strategist steve bryson joining us in about 15 minutes with why he thinks the market will rally. this is bloomberg. ♪

♪ kong.0 a.m. in hong we are live from bloomberg's asian headquarters. monday,stories this asian stocks looking to extend highs with earnings season to provide an extra boost. president trump declares he is open to talks with north korea come in saying this week's meeting may be "great for humanity." >> i am betty liu in new york. on the counter attack, the president's allies flood u.s. airwaves to defend him against claims that he is mentally unfit for august. -- for office.

♪ >> we ended the 2017 with asian stocks near record highs. we are seeing whether earnings in the first quarter will be key in keeping things going ever higher. here, 4481.rt we have seen cyclical gains here andost sectors have largely outperformed the market. analysts stillut think they have further to go. -- seen theng biggest profit estimates coming through when it comes to those two sectors. >> despite headwinds,

geopolitical headwinds or perhaps higher interest rates, it seems like consumers continue to spend, driving the cyclical stock earnings, and that tech momentum, so we will be watching for that. quite a few headwinds to keep your eye on. let's get to first word news with paul allen. >> thanks. china's foreign exchange reserves posted an 11th straight monthly increased. the reserves climbed by $21 trillion, the14 stockpile has been been rebounding since january when it fell below $3 trillion for the first time in six years. iranian oil tanker bound for south korea has collided with a cargo ship off shanghai, 32 missing. the tanker caught fire and is carrying one million barrels of

natural gas concentrate. the crash happened 160 nautical miles off the coast according to iran's oil ministry news agency and says the missing sailors are from the ship. is inlia says iron ore for a bumpy ride. the world's largest exporter said prices will average just over $52 a ton, though they may be higher in the first half as china relaxes curbs on steel output. it also sees gold prices dropping as treasury yields rise on higher u.s. interest rates. has named opposition at 92-year-old as its candidate for prime minister in an election that must be held by august. malaysia's longest-serving -- the opposition says if he wins, he will remain prime minister leader is able to

take over. global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. i am paul allen. let's look at how markets are trading in the asia-pacific. for a holiday, but extending gains. let's get the latest with sophie kamaruddin. sophie: we are seeing enthusiasm in 2018 continue, the cme above 2500 mark. now higher by .6%. we do have samsung as it is due to announce its profit upgrade tuesday. it is the earnings the season in focus this week. we have aussie stocks rising, trading at a decade high, while the aussie dollar is looking steady after a fourth weekly advance friday, but funds have

turned bearish on the dollar -- aussie dollar for the first time since june. the malaysian ringgit rising for an eighth straight day as we have speculation around elections in malaysia. , not much ine yuan the way of hitting a new high. the hunt is still on for a reason as to why the andan won may not breach 1000 market, while the yen is softer for a fourth session. the offshore yuan at the strongest level since april 2016. is good for broader asian currency appreciation. lg electronics ahead of its earnings report, the stock jumped almost 30% on expectations earnings will improve, but today under

pressure. what is moving the kospi, materials leading the charge along with financials. telcos the worst performers today, along with energy stocks. keep an eye on financials in seoul, korea, the industry will inspect crypto currency accounts at six banks. >> thank you so much. an early look as the markets are just opening. president trump says the u.s. is open to joining talks with north and south korea at the appropriate time, saying it would be a win for humanity if something came out of the meeting. >> if we can come up with a peaceful and good solution, we ae working on it with rex, lot of people, if something can come out of those talks, that would be a great thing for all of humanity. >> jodi schneider has more.

this is a change in position for difficultent after a year for him and the north korean president. >> he has been back and forth on his comments, president trump, about north korea. there was the famous fire and , commentsh in august about the larger button, larger it isr capability, so hard to know how serious this somewhat more accommodating language is, although he has used accommodating language before, saying he would be willing to sit down and talk with kim over a hamburger, so it seems he is back and forth. everyone is focused on the olympics and south korea next is one of thet reasons the u.s. is being more accommodating. no talk about joint talks them up but this is softer -- talks,

but this is softer language then we have heard in recent weeks and months. >> nothing like sports to bring all parties together. for south korea, this is a difficult stance they have to make. they have to engage with north korea while not undermining the u.s. >> that's right. president moon in south korea is in a difficult position. campaigned on and have said since he started his presidency that he wants to engage with north korea, that he wants to have talks, but at the same time, that relationship with the u.s. is important. ofone expects a lot out these initial talks, but they are very symbolic. >> signs of some progress at least at the moment, but everybody has been focusing on this book that came out friday,

"fire and fury." it has prompted trump's supporters to come to the president's defense. i want to put up one soundbite from stephen miller. >> the president's tweets absolutely reaffirmed the plane's poking truth, a self-made billionaire revolutionized reality tv and has tapped into something magical in the heart of this country. >> trump tweeting he is a stable genius. the likely fallout from this book in particular? could we see more shakeup in the administration? it is possible. this administration has had a lot of shakeups. it is more of a distraction at this point. the president should have been having a victory lap on the major tax bill passed after a lot of hard work. they could dowhat

going forward, so-called welfare reform. they havea budget pass by january 19. everybody is talking about this book, so it is a distraction and raises questions that the administration does not want raised about the president's fitness, and that is why you are seeing this cavalcade go to the talk shows in his defense. >> thank you. jodi schneider joining us in hong kong. still has come at the ubs greater china congress. up next, the outlook for markets with standard chartered's chief a mess and -- chief investment strategist. this is bloomberg. ♪

this is "daybreak asia." >> momentum in u.s. growth

slowed as 2017 drew to a close, just 148,000 jobs added in december, making it tougher to reach the president's we percent growth target, but will it slow down the rate hiking path? kathleen hays here with more. we were still above 100,000 jobs. >> which many say is sufficient to keep that rate steady. growthreason that jobs is losing momentum because the economy slowed or because labor markets have gotten so tight with that unemployment rate of 4.1%? let's take a look at how this looks in terms of a chart, 148,000 at the far right. the hurricane was an anomaly. as you rebound in october and november, that was probably an

anomaly. now economists say we are back to normal jobs growth, another to keep unemployment steady. what does it mean for the presidents pledge to make gdp growth 3%? economists saying less job growth and a wider trade deficit suggests it will be hard to hit 3% in the fourth quarter, which would have been three 3% quarters in a row. jim bullard on friday speaking to bloomberg was asked about the impact of tax cuts. he said they could light a fire under investment that could boost the economy and make him shift his view on policy. he has been dovish. sayingte house on friday , we have run our models and tax cuts will have a supply side boost come up investment, more weacity, so more growth and

won't have the inflationary impact that would cause the fed to hike rates more than otherwise. we or are we not on track for three hikes or more? on sundaylliams spoke in philadelphia and said they make sense to him, gradual rate hikes, gradual rise in inflation , but the philly fed is calling for to rate hikes next year. he is monitoring below target inflation and a flat u.s. yield curve. this is chart 1353. why is he concerned? look at this. the red bar is a recession. it has happened over and over. the yield curve has flattened and is a long way from invert he saysut that is why the fed should go slowly and steadily. they don't want to do anything to percent to take an inversion of the yield curve.

wage growth, average hourly earnings, 2.5% year-over-year. they are in a range. if you are worried about inflation, it does not look like you are getting it from wages. traders looking for two hikes this year. china, we sawo that positive report when it came to fx reserves, an 11th straight month of increases. a large part of the weaker dollar last year also with capital controls, can this scenario last? >> let's look at what you just said. foreign-exchange reserves were up in november, the 11th month in a row, and it comes out of a long string of declines back to , a4 with reserves going down lot of capital flight in 2016. you can see the weakness of the yuan.

the currency has gotten stronger and steady. that is a plus. is sending a strong signal to investors inside and outside of china about the conditions they are. an interesting question raised on sunday in our story was the potential negative is that if foreign exchange reserves keep rising, will that be seen by the ?.s. as a negative could it escalate trade tensions? trade war we did not see in 2017 between the u.s.-china, could it be triggered in 2018? so far there is more emphasis on the positive news than negative. >> thank you. our global economics and policy editor. joining us for no more -- for more is steve brice from

standard chartered. good to see you. we have the u.s. jobs report out of the way. the markets focusing on cpi and ppi this week. the key level everyone is watching is whether the 10 year treasury will break above 2.5%. what to do we need to see out of the inflation a true for it to break above and stay at those levels? see something that suggests a sustained increase is going forward. core inflation will be the key fundamental. 2.5% back to the 10 year, is a psychological level, but , andeed to see above 2.75% then it gets interesting. if you look at a 30 year chart on the 10 year, a long decline from 20% yields, kicks in around percent is so 2.5

important, but 2.75% is the key number for us. 2.75%, can equity market still rally? now that we see potential this goldilocks scenario could be shaken up, can this melt up in equities continue? >> the melt up scenario will continue in 2018. we have loose monetary policy settings. the key variable is the inflation number is the key risk. , butve geopolitical risks et weaknessark on those to be short-lived. , ifs, higher oil prices they rise sharply, that would lead the fed to slam on the brakes definitively, putting pressures on bond yields and

having contagion affect on equity markets, but we are a long way from that at this moment. we still see this melt up through the first 3-6 months of the year, but through the year as well, but the key for us is inflation. >> i want to pull up a chart on dollar, 4237. it is a chart that shows how the forecasts are coming closer to where the dollar index is, so they are converging. some analysts are saying essentially at this point we have seen this route in the dollar and it might be time for a reversal in 2018. could that spoil this rally we have seen in equities, global rally in equities? >> clearly a stronger dollar would be challenging, particularly emerging-market assets.

if you look at market positioning, speculators are short dollar at the moment. inhort-term temporary bounce the dollar is probably to be expected. it is surprising we have not seen it already. if you look at the fundamentals over 6-12 months, we think the dollar it will be on a weaker trend, not dramatically, that probably drifting gradually lower. the main reason is we don't see a major surprise coming out of the u.s., but we do see a strong recovery in europe, leading to higher inflation and potentially a move towards a rate hike in probably 2019, but that could still influence markets this year. >> i want to talk about geopolitical tensions. they hung over the markets in 2017, trade frictions, tensions with north korea. we have just had this news in the last week or so that it

seems like tensions are easing. they did not affect markets on the downside. my they affect the markets on the upside if we see easing of tensions on the north korean peninsula? >> i don't think it is the driving force. the driving force is this goldilocks economic scenario compounded with the positive earnings outlook. we are going into q1 earnings in the states, and that will be watched for the tax impact, initial and longer-term impacts. if you look at the geopolitical scenarios, if we see a softening of tensions between the u.s. and north korea, it is a positive, but as you said it did not react on the downside, so maybe it allows investors to focus on fundamentals even more rather than being a massive positive for the markets. >> you mentioned the earnings

season. how big of a catalyst will it be? you mentioned tax reform. this might be the quarter where we see some companies bring forward charges related to repatriation and earnings. how cloudy will this quarter look? does that make asia look more favorable? an incentive for companies not to make it to o cloudy. to they will try to be very clear about the net impact on a 2-3 year, or at least 6-12 months, forward-looking basis, and from that perspective it will be a significant positive. analysts therefore will probably look straight through any short-term dip in earnings and look for that more bullish outlook on a longer-term basis.

>> thank you so much. steve brice, standard chartered chief investment strategist. that story and more in today's edition of daybreak. bloomberg subscribers can go to dayb on their terminal. you can customize your settings so you only get news on the industries and assets you care about. this is bloomberg. ♪

>> this is "daybreak asia." i and yvonne man in hong kong. >> i am betty liu in new york. buying a company for $1.1 billion up front, and a payment contingent on regulatory approval for new medicines. impact is developing a drug for treating blood cancer and bone marrow disorders.

pressureas been under to replace revenue from its top-selling cancer treatment before copycat drugs eat into sales. airbus discussing a large plane order from china during the president's visit this week. our sources say it focuses on a a330 jets. china purchases its jets collectively before disturbing them to airlines. it counts now for a quarter of airbus deliveries. disney's latest star wars movie took in $29 million on its opening weekend in china, coming in below its two predecessors. it takes the global all to more to more thanaul one point $2 billion. china is struggling to build a franchise in china. it is a shame. next, another run

for the top job in malaysia as the nation's top opposition parties picked him for candidate as interim prime minister. this is bloomberg. ♪ is this a phone?

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♪ yvonne: 8:30 in singapore, looking pretty miserable the start of this morning. we are half an hour from trading in the lion city. i am yvonne man. julie: not looking like i want to be there. you are watching daybreak asia. let's get to first word news with paul allen. paul: the two koreas will hold talks on tuesday for the first time since 2015, signaling a possible break in the crisis that has escalated under the trump presidency. have a delegation for the -- the north may send a delegation to the winter olympics. president trump is willing to

kim and want to talk to jong-un under the right conditions. steve bannon has length -- issued a lengthy apology to the trump and his family over the book fire and fury. he told a political website that trump's son is a patriot and a good man. the allies have not been speaking -- the president's allies have been speaking out against the book. cia director mike pompeo said the president engages with and understand the complex issues before him. -- chancellor angela merkel said germany needs a stable government as she tries to renew her alliance with social democrats and open the door to a fourth term. exploratorygan talks on sunday. the biggest economy in europe has based several months of political stalemate after merkel failed to win outright majority. u.k. prime minister theresa may has told the bbc a cabinet

reshuffle is coming soon. this was after the resignation of her third secretary of state. they will be prepared for leaving the e.u. without a trade deal. the times is reporting senior ministers boris johnson, philip johnson and david davis are all likely to remain in their posts global news 24 hours a day, powered by more than 2700. journalists and analysts in more than 120 countries. i am paul allen. this is bloomberg. betty: we are looking at how the event markets are showing -- earnings season taking off in the u.s. as well as asia. we have sophie kamaruddin. the data front we have chinese trade and inflation numbers and factory output later in the week. we are taking a look at what is going on with equity markets this monday. the kospi furthering their gains, sticking around 2500. shares in sydney are climbing,

though at letter -- lower volumes. the aussie dollar is strengthening as iron ore prices are looking grim. take a look at the ringgit which is below four dollars for a second straight session. it is trading at an august 2016 high, which paved the way for a rally in malaysian stocks, and is malaysia's best-performing currencies so far. it is climbing for an eighth consecutive session amid the election speculation. we will see how the stocks are at the open at 9:00 local time. the kospi is higher for a second straight day. you have one of the bankers leading gains. when it comes to the laggards today, we have ask a chemicals. that is sliding the worst. it needs to be included on the kospi 200 index today. and when it comes to the biggest drag, lg electronics falling over 3% this morning ahead of

fourth-quarter reporting. samsung also on the back today. betty: thank you so much. let's talk about oil. oil had its strongest opening week for any year since 2013. refiners and exporters whittled away at crude inventory. joining us now from singapore, will that continue? what does it signal for the rest of the year? we are definitely seeing a drawdown in inventories that started a year ago of january last year when opec and russia started working together to cut production and allow the world to eat away at inventory overhang. the u.s. inventories, which are the most accurately checked, have been falling for several weeks straight, now we are seeing oil jump into the 60's, flirting with $70 a barrel. what we are looking at this year is another year of tightening inventories, and there is going to be more pressure on shale

companies to start drilling more. there will be pressure on opec countries to maybe up production a little more. betty: what does it indicate for the opec cuts that are in place now? maybe for some degrees the people are surprised how much opec countries have adhered to these cuts. yvonne: is it going to continue or will it fall apart this year? dan: that is a great question. that is what everybody is talking about now. opec is known for historically cheating on their cuts. there are couple of reasons why they might not, but the big reason they might is because as prices get higher, the incentive to cheat is stronger. oil inventory overhang is mostly gone, so they are not worried about adding to it. the reasons they might not cheat is there is not a lot of excess production capacity anywhere outside of saudi arabia. iraq and iran are nearly maxed -- and we have

nigeria with major infrastructure problems. even if these countries want to cheat, there is not a lot they can do to really affect the market outside of saudi arabia. that seems to be very vigilant keeping its cuts to the letter of the law. beene: it certainly has surprising as betty has mentioned. it is interesting with the weather patterns we have seen at the start of 2018 and betty talking about how cold it has been in new york and the rest of the u.s. in australia we are seeing some of the hottest days since the 1930's in cities like sydney, australia. how much do we have to put whether caps on when it comes to any oil outlook? dan: the energy markets are really perceptible to the weather changes. all you have to do is look at natural gas prices to see, you know, in new york city, spot natural gas was at $175 million,

up from three dollars normally. china has seen skyrocketing costs this winter as well as cold weather as set in. there have been gas supply crunches. watching the weather affects reverberate around the world is going to have a lot of impact on coal, gas, heat producing fuels. all right, got to take a class on meteorology for this year area thank you. our bloomberg news reporter, energy news reporter from singapore. now moving to malaysia, mohammed has been named as the opposition candidate for prime minister in this year's election. the 92-year-old, who is the longest-serving premier, will be up against his own hand-picked air -- heir. we go to our reporter in kuala lumpur. more on this as well. thank you for joining us. give us the background of the

story so far. why has he turned against his protege? reporter: for the past couple of years, he has accused him of being someone that he is actually not. he says that mohammed is guilty of corruption, has lost billions of ringgit, is giving out handouts to the people. basically he is saying he is running the country to the ground, although he is denying. yvonne: why pick a 92-year-old man to become the next prime minister? choicer: their ideal would have been the defective head. he is still in prison -- de facto head. he is still in prison. he is kind of like the interim prime minister temporarily in

that place, and the reason they chose him is because it makes sense. he has the strongest track record, 52 years as prime minister. he knows how budget and the government works. he is a very holistic, charismatic and most importantly , he would have the support of the establishment, a majority of the voters, the rural molise and the civil servants. betty: what could be the impact? well, there are pros and cons, as i mentioned previously. he has that track record, the establishment, the majority of voters, but at the same time there would be younger voters who would be unhappy that they chose a 92-year-old instead of someone younger. there are opposition supporters who would not have forgotten

what he did during his 22 years as prime minister. it remains to be seen what exactly impact will be. at the same time, a survey conducted last month reported he is actually on track to winning the election and regaining two thirds majority. integrityrevealed the of the competitors. it is of the least concern. it remains to be seen what will happen, but we have to remember the election could be -- anything could happen in a month. yvonne: more to come. that was our kuala lumpur reporter. ubswe are back to the greater china conference in shanghai. university of chicago professor

lawrence p or hansen joining us with his economic outlook, and also the challenges facing china. this is bloomberg. ♪ ♪

♪ betty: this is daybreak asia. let's get back to the ubs greater china conference in shanghai where our correspondent tom mackenzie is standing by with our next guest. tom. a nobel laureate, who is also professor at university of chicago and professor of economics. a lot of your work is focused on the relationship between the macro economic data and the markets. how is that informing what you are seeing today in terms of the current environment? >> i have been very interested in the interplay between

long-term uncertainty, in terms of where the macro economy is growing. are we going to see stagnation or will we grow our way out of it? when that induces caution and when that induces boldness. when it makes them firm or more fragile, asset values. we see a stock run-up price, which is driven in part by changes in the tax code and other temporary optimism, but these are quite gradual and will take a not that's a lot to knock them down. -- take a lot to knock them down. tom: what about the environment in terms of trade and volume? lars: my interest in research is all about uncertainty. i cannot tell you if they are firm, but there is some fragility attached. tom: something you wanted to do in the past is talking about systemic risk, saying it is

difficult to define, almost impossible to measure. this is front and center in terms of priorities through the chinese government. is it a full ever for them to cut down on what they call systemic risk? you cannot define it. that in academics and have a lot to learn. there has been a lot of progress done recently and we have more to learn about it. given our knowledge base and systemic risk, i think it drives the uncertainty and focus on more civil type of policy responses, one loaded with complexity. in terms of china, the biggest concern is the follow-up. if you want to look at investments and enterprises with no business, a lot of that is through the shadow banking sector and the state owned banks. set of financial

stability board, you run the risk of closing down some potential sources for growth in the future. that is a challenge china is facing. tom: that is a risk that markets are underpricing at the moment? lars: they could be underpriced. think if you want to see where the growth in china is going to occur over the long haul, it is how do we get financing to the innovative ideas coming through china, and i think state owned banking sectors, channeling through that is not the right way to do it. here, what dore you think would be the priority for the government in china? lars: the more that we could allow for financing and financial opportunities and investment to take life outside the state owned sector, that would be bad that's better. it has a more promising track

record moving forward. tom: and then looking at the bond markets, and the moves to liberalize the financial services? lars: votes like that are valuable. tom: more should be done? lars: i'm a strong advocate of opening financial markets, generally globally, and that could be very productive. broadly a key focus is being the monetary policy normalization that we may start to see from the fed, from the boj and the ecb. how is that likely to feed through into the markets? is there anything in your research that tells you what we might expect to see? lars: there is a lot of focus on ,onetary policy in isolation and a lot of the key challenges with uncertainty have to come with how the monetary policy has a big influence by the fiscal

challenges going forward. the u.s. continues to have long-term fiscal challenges. monetaryd to have policy be soft when the physical just fiscal challenges are more important and we oversee the regulatory side. thinking about monetary policy and isolation, and i personally think that the more attention diverted to stuff like fiscal challenges and that natural market oversight, that is very productive. view there has been an overreliance on monetary policy in recent years? lars: a lot of makers understand the limits to what they can do. to putstand they need these challenges out there. they don't have the ability to address those problems. the press unfortunately finds monetary policy easier to understand that some of the fiscal challenges, so there is

tending to be more about that. -- our markets able to price in geopolitical risk? how can they? lars: they have no choice but to price them in. it is challenging to do. if you think about quantifying the uncertainty, it is quite challenging. i think markets are probably struggling. economists,demic how to quantify the attachment of that is challenging. markets have to do it. it is a real risk going forward. i am hopeful the north korean risk are safe, but more generally kind of overall policy and political uncertainty is very important. it is a potential drag on the economy. tom: do you think markets are

underpricing that? lars: i will not give a firm statement on that. i do think in terms of the overall macro economy, it is important source for that. tom: there has been a lot of discussion about the tax overhaul just in the last few days. we have heard from james bullard saying he thinks he can avoid the economy where others disable have a negligible effect. what kind of stimulative effect do you think it is likely to have? lars: i can believe in the short run the tax cut can have a stimulative effect. i am concerned about the policy. there is an opportunity to simple five the tax code, and they have not done that. it looks as complicated if not more complicated than the previous one. there is an opportunity that has been missed here. it does not address long-term fiscal challenges.

it is a promise that down the road we will increase taxes on the middle class sometime in the future. that will not happen. it is a political ploy. the real challenge i see is how will we address the fiscal shortfalls over the long haul, bech i personally did could -- believe could be substantial. tom: are there measures you would like to see in an ideal world the trump administration initiate? lars: i would like to see them roll up their sleeves, congress, as well as the president and say, how will we address the long-term fiscal challenges, public provision of health care and the like fodor how will we address the potential shortfalls when it comes to hunting taxes versus the program? likebelieve things infrastructure development in the u.s. could be quite important for productivity down

in the future, but how will we finance that? tom: thank you very much, nobel laureate, chicago professor of economics joining us from the ubs china conference. we will have plenty more in the next two hours including exclusive interview with the ceo of ubs, so stay tuned, yvonne. yvonne: great conversation. that was tom mackenzie. thanks to lars peter hanson. as tom mentioned, catch the exclusive interview with the bank's ceo. that will be 11:40 hong kong and 2:40 this afternoon if you are watching out of sydney. our interactive tv function as well, you can watch us live and catch up on past interviews and dive into series or bloomberg functions we talk about. become part of the conversation by sending us instant messages during our shows. it is for bloomberg subscribers only. make sure to check it out. this is bloomberg. ♪ this is bloomberg. ♪

♪ this is daybreak asia. betty: a quick check of the business flash headlines, u.s. justice department lawyers have sought out farmers, a vote that is a $66 billion takeover of monsanto, creating stumbling blocks to the biggest merger everywhere in the global feed and crop chemicals industry.

farmers who attended three separate meetings were interviewed about concerns over the deal. the buyers say they are confident in closing the deal this year. yvonne: tencent has held talks of getting a myanmar-based social group in london about commercial partnerships as investment. it cites unidentified asia-based bankers, saying tencent has not been able to formal bid. it has received an approach to another organization which may or may not lead to a takeover offer. betty: bloomberg has been told that the chinese group has been approaching sales about the canary wharf financial district deathdon as it seems to 62 shed assets. hna missed payments from several banks, talking three lenders to freeze some of the unused credit lines. we are just about to

wrap things up on daybreak asia. we will have markets in the asian trading taking off monday morning. we are seeing the kospi pretty much flat at the moment, but we have seen tensions ease a bit now we look ahead to those talks between the north and south on january 9. we are seeing the asx 200 seeing gains of 1/5 of 1%. we are seeing quite a lot of milestones in the markets, korea a big one. also tyler nase stocks, 27 last week. -- taiwanese stocks. check in on commodities. we mentioned oil prices rallying, gold futures up, pretty much going nowhere. copper and silver both mixed. it will be a big week for commodities. we have got sawyer trade data out of china and certainly china has been a big figure and not

just oil prices but also palladium and other metals. or expects a lot of volatility. they start using on those curves as well. let's check in on currencies across the world. the dollar weakening for a fourth straight week, the longest since may. the dollar-yen breaking well above that 113 handle right now. we are seeing some strength in the asian fx here. we have more coming up. market coverage continues with rishaad and heidi. this is bloomberg. ♪ this is bloomberg. ♪

♪ rishaad: asian markets edging higher ahead of earnings season with investors betting growth and profits will support high stock prices. china's growing foreign-exchange reserves pointing to appreciation in the slipstream of a strong yuan. tradingance company like a tech stock, blurring the lines between china's old and new economies. i am rishaad salamat in hong kong. haidi: also coming up, the french president called for greater market access as he begins his first china visit.