>> 7 a.m. in hong kong, where live from bloomberg's asia had orders area on yvonne man. welcome to daybreak asia. tuesday,tories this asia-pacific markets extending gains after wall street shrugged off the worst week for equities in two years. the volatility index fell and the s&p saw the biggest two-day advance in 18 months. traders are still nervous about u.s. inflation. >> and from bloomberg's global headquarters, i'm remy where it is just past 6 p.m. on monday. president trump reposes widespread domestic cost cuts and congress is expected to all but ignored this budget plan. and rolling the dice, mgm opens

up in time for the lunar new year. we are live with ceo brenda lee. >> looking at the markets, another bit of surprise here. it markets up across the board, led by materials and information technology. with that said, there is still a lot of caution out there. g #btv 7589. the white line is the spx in terms of net positioning and you can see that falling. this is just a flip. a reversal with the vix futures spiking higher. volatility and bullishness surging to the highest level. we will see what happens in the

asia-pacific trading session though, to see what happens in terms of any possible positivity. yvonne: it has been quite remarkable, this turnaround we have seen and yet, we are seeing some of the speculators, sellers of volatility turning back the market. expect this kind of shock already. it will certainly be ahead of inflation numbers. raimi: let's take a closer look at the signs of recovery. gains came back on january 26 and the nasdaq is now positive for the year. the best two-day advance in the past year. we have to break this all down. su keenan has joined me here. walk me through the day today. we put together back-to-back

games and it looks like recovery . a lot of green on the screen and you have some major u.s. equity callegist, reversing a from last week. telling clients to buy the dips. let's go to the market snapshot because again, the markets decline for raw materials, that's the big story. it will turn to u.s. inflation outlook. the big to some of movers and the president's budget was a big factor in one of the big gains. because infrastructure and steal , ands and defense going you have stocks all doing well. apple chief among them. let's go to 7589 because market sentiment is the big question here. let's take a look at how it was in the positioning for the s&p 500. here is the big flip here. investing,ople

people dumping. the market calls have turned around and the question now is, does the stability have legs? talking aboute the cell is a coming back. why? lightning is not going to strike twice. we had a very big strike in volatility. let's go into the chart. it's really interesting when you look over here to the right. there is a chance that if it doesn't come back down, it could result in a vix super spike. that is why you have a lot of -- this is what we call smart money. there is a lot of big, out of the money calls on the vix that indicates they are likely emboldened.

it is 5%. meanwhile, hate it or love it. there is a traitor out there. some have been waiting for the vix to explode. the price is about $.50 apiece. hence this big trader that is known as $.50, like the wrapper. he made about 200 million on the trade. >> thank you. faring, this is when we see the bounce back and it comes to equities. .8% and the kiwi unchanged at 72

64. -- 7264. -- uput one third of 1%, about .33%. we have 288 at the moment. and turning back from the holiday. we did see the nikkei 225 as well as 6% to 7%. reports thateeing corona could be nominated and could be easing some of the yen strength there as well. as get to first word news now with selena. inflation offering policymakers and investors with the follow as the prime

minister's expansionary budget. it rose 5% in january and line with a bloomberg survey. sees that rising in government spending ticks and on april 1. emergency services move a bond rating from the second world war. or than 100 flights were canceled monday after the devices discovered in a nearby dock. bomb,lled him -- telegram and the docklands are heavily bombed. and the have been flooded with complaints. more thanreceive 10,000 messages from angry investors after the shanghai composite fell almost in percent. embassy said it deleted several messages a violated terms of use but it did not turn off the comment section for any post.

warned that are history may come back to hot them. the bubble indicates the cryptocurrency could plunge 90% in what is described as an environment of unsustainable expanding supply. says that looking at the spectacular rise of amazon and the nasdaq, bitcoin could plummet to just $900. global news powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. president trump has sent his latest budget proposal to capitol hill. it is $4.4 trillion to boost the military and cuts spending on the environment as well as social safety nets. the president called his proposal bipartisan as well as common sense. what will congress do gekko >>

congress has already rejected some of these budget cuts that trump made last year. and they are not likely to take them up again. in fact, they have increased spending for the better part of a two-year budget deal that they agreed to last week and the trump signed on friday. and it has overtaken the budget. most budgets are aspirational at best. moreone is really a lot dead in the water than some of the past budgets have been. >> in terms of the main takeaway, is there anything they could survive moving ahead or should we just push this aside? >> the defense spending increases in line with what congress passed. there may be some adjustments here on that. is going along with what the pentagon wants. there may be a few guidelines and programs that trump would like to cut and that republicans

in congress would also like to cut. but this is an election year. there's not a lot of the pain being felt anywhere. democrats arene: saying it is kind of a bait and switch and that this all heavily relies on stage funding now. is there any chance he info structure plan will survive? >> creating this mechanism the president would like is kind of big and complex. congress doesn't do big and complex. the other thing is it relies on states and private investment. that means states in many cases are strapped for funds and dealing with fiscal crises of their own will not be putting up money for infrastructure projects. and in terms of private ,nvestments, things like roads

it will require years of user fees. tolls,e just against extra fees. >> congress editor joining us in bc. my blackstone group may be in the running. >> grant ability gives us the first interview and prepares to open the new casino in macau. this is bloomberg. ♪

raimi: this is daybreak asia. newne: mgm china opened its $3 billion or on tuesday, just

in time for the lunar new year. among the last developed on the family-friendly strip. let's cross over and out the resort and say good morning to the ceo and executive director grant bowie. . for joining us congratulations on the big day, obviously. tell me how much of a boost this means for the market as well as the business. >> it is an exciting day for us and we are excited to be here. market is looking good. we are excited to be joining. the interesting group. extent, ita certain seems like he might've missed out on some of the revival that we have seen given the fact that you have delayed this four times already since 2016 and the rivals have been opening up resorts in the past year.

mgm sees is losing market share as well. >> as anybody would understand, the market is on the move. is almost like given us a good opportunity to come with the other openings taking on earlier in the year. we're very positive. we are reinvigorated and reinventing. we think the timing is perfect and we are very comfortable getting into it as we are just in time for the chinese new year. yvonne: has the delay impacted bookings at all for the holiday? there are solid and that is why we needed to get open. a lot of people want to visit us in code type. but also in our property in macau.

when i understand, the bookings in macau are very strong. raimi: we have seen that with a lot of casino operators. the gaming tables for this property, less than a streak of 150 which is what most operators have been allotted in the past. what does this mean for the number of vip tables that you will be phasing and? is there more pressure to really capture this market and a segment that is seeing a bit of a revival? >> we have exactly the same number of tables as the operators. they have been opening up two additional tables in the future. we'll be working with the government as we always will to try to ensure that we are in the best possible decision. we have primarily the mass table operation and will have the head of vip operations.

and withhold the junket operators, but the time we get through this year, we're very confident and very positive nomura on the at dictations that the market had for us. raimi: i wonder what investors are thinking. when the news dropped about coming in, the share price dropped by about 8% here. go. gp i have traced this in terms of the red line here. by 13 andally down the third percent. what are you telling investors in terms of strategy? opacity of 500 but only 125 gaming tables. everything else in life is about responding to what is available.

i think mgm had a great reputation in terms of their .xecution we are very clear about strategy and not trying to create a profit everybody. therefore, the number of tables is critical if you're going to the more general. we know what we have to do and we are aware of the tables. we have developed strategies. and we are positive. the critical point for us, clearly the results will be the market responding to the result. raimi: our -- i wish over there to take a couple games. there is some diversification that you guys have been talking about. and the advanced forms of entertainment. what does this really specifically entail?

thehat we recognize is digital platform. we are actually creating an environment where the experience. inside of whatre we call the spectacle. it is a combination of some of walls with digital content all over the world. content and opportunities for the guest to actively participate. and when you combine that with the natural environment, we are in asia. we have a fully air-conditioned area. non-gaming now, and that is what we're doing at mgm.

adding particularly for the chinese consumer. yvonne: talking about the fallout of steve when, and throwing to a soundbite yesterday, the potential impact that i could have. >> we find that it really does affect business. generally, from what i we advertise the gaming. is there more uncertainty now in

macau? >> it is actually part of us, delivering the undertakings. and as we build up our business, diversified business and we will carry on. live in a world with many business distractions. they had a resilient in the capacity. tryow the macau market does to overcome these challenges that they present themselves. fortunes, inina's december, roughly two thirds of from mainland china. with the economic factor coming in, i wonder what that's going to be. bloomberg terminal, it's going well right now in terms of the

purple line. any concern for that moving ahead? >> the really important issue here is that we don't really deal and the chinese macroeconomy. and particularly, since the correction we had, we are seeing sustainable and reasonable growth rates. and we're are continuing to grow in china. in the heart of the consumer marketplace. you see any country's economy, they are really targeted.

it will be the continued growth in the consumer marketplace. they want to strengthen gaming rules. oversight, what does it mean for the industry? >> in what is really important in any gaming market is consumers have confidence, the priority and integrity of the gaming. and as standards change and evolve, we see that opportunity. is a multinational gaming operator, we really operate at the highest standards. in some ways, we see that as a competitive advantage because it brings that in line with the standards and performance that we have already adhered to.

more oversight, maybe not more regulation, but more oversight. think so much for the time. >> you can watch us live and bloombergany of the functions.

raimi: looking at a possible reversal here, buying back asset . tom mackenzie has more. >> another chinese conglomerate that overextended itself with the m&a acquisitions and that strategy is back.

we'll remember that back in june of last year, the chairman was detained by authorities. and have been pressuring the conglomerate to selloff assets overseas. in many cases, it was bought from blackstone. 9.5 billion u.s. dollars. 6.5 billion. now backs -- blackstone is looking and re-buying these assets as the government tries to pressure it to sell down some of these acquisitions to steady the ship and pay off credit. you can imagine it will be a hard bargain. it to hanging for out. more possibleng divestitures.

still ahead, president trump lays out his vision for making america's roads and bridges great again. we will ask if you'll be able to get congress on board, next. bloomberg. ♪ we use our phones and computers the same way these days.

so why do we pay to have a phone connected when we're already paying for internet? shouldn't it all just be one thing? that's why xfinity mobile comes with your internet. you can get 5 lines of talk and text included at no extra cost. so all you pay for is data. choose by the gig or unlimited. and now, get a $200 prepaid card when you buy an iphone. it's a new kind of network designed to save you money. call, visit, or go to xfnitymobile.com.

yvonne: 7:30 a.m. tuesday morning in hong kong. a couple days away in the countdown beginning on the markets which is half an hour from those opening. also chinese new year, the holiday kicking in pretty soon. over here, 6:30 p.m. to an empire state building in orange. markets close higher, the first back-to-back rise ever since the slump. can this continue? yvonne, a lot of skepticism. you are watching

daybreak asia. >> to propose deeper cuts in favor of higher military and immigration reform's -- enforcement. and 44% of the environment protection agency as well as cuts to medicare and other safety net programs. unilever has reportedly threatened to withhold advertising from facebook, google, and social media over fake and offensive content. they say consumers are increasingly concerned about the impact additional content on well-being, democracy, and truth itself. unilever will not invest in platforms that promote hate or fail to protect children.

and when the court injunction against pictures showing the deputy prime minister on me out with a woman described as an escort. the paper says the sites may be blocked unless they remove the images by next week. havean emergency services found flight data recorders from the plane that crashed on sunday outside of moscow. everyone on board was killed when it came down to seven minutes into the flight. investigators have ruled out terrorism. it has a patchy record with at least one previous crash in a series of other safety incidents. the list when for hours a day powered by 2700 and analyst more than 120 countries. i'm selina wang, this is bloomberg. counting down to the major market opens.

and we are seeing this kind of rebound. it's kind of a calm before the storm before inflation comes out. >> depending on what comes out, it will determine two distinct paths for markets. we at positioning around the 10 year, markets are continuing to have bearish positions that i imagine, since we're talking about it, it may actually lead to yields moving back down. but when you look at markets right now, i was about to say that there is strong momentum coming through. and then i did a quick look at the futures and today is all going to be about japan. japan boardt my right here on bloomberg and give you a sense that we close at 21,400, just under that level. the nikkei 225 is 21,700 which

would suggest a 1.5% gain there. south korea caught a big yesterday and it is looking like japan is going to carry everything on their shoulders, but not by a lot. >> you look at australia. did look at the rba. ellis speaking about wage growth. positive table numbers here. this really reflects the sentiment across the asia-pacific, what is happening with this market. we are basically split in between here between gainers and losers at the moment. see that we are at session lows here. just to show you how deep this one really got.

this sand of where we go here. so there are head and are nine points over and estoril you. yvonne: a lot of data coming out from japan as well, david. will that be important? the market is focused on these reports about kuroda getting nominated for another term. david: what it will show is what china showed. together,e two things and japan in about 20 minutes from now, we have a chart, and we put those side-by-side. 4.3%. 2.8%, andet to report what we are expecting out of japan in about 15 minutes from now. we will look forward to that in break those numbers when they come. in the meantime, donald trump sent a $4.4 trillion budget to congress. it would cut entitlements and other domestic programs in favor

of military and immigration and or smit spending. bloomberg policy editor kathleen hays is here with a deeper dive. what is key in this budget? hope,ng: red ink in the the forecast if you are a supporter of this kind of budget that it will boost growth. numbers already passed the two-year budget, so this is really, as mick mulvaney who is the office of management and budget says, this is a messaging document. it always is. hasmessage is that trump abandoned the gop goal of balancing the budget, but someone argue that in their own budget, they have stepped away from that goal as well. thes run through some of cuts and some of the spending. rex tillerson has been overseeing what he would call a streamlining of the state department, others call it a cutting. trump considers a lot of this wasteful spending.

cuts to medicare and other parts of the safety net. we'll see how popular this is with voters, but they say you have to rein in entitlement spending. he would like to hold some of this money that he thinks will be saved to build that wall with mexico and boost defense spending. he was to give military workers a 2.7% pay raise. i think a lot of people would be fine with that. the trump budget would total $1.7 trillion and boost the national debt to $30 trillion. what you're going to see, no stranger to deficits. is aovernment deficit percentage of gdp has been in the red for a long time. crisisse, the financial is brief and we were in the green. a lot of people are concerned about this. what is the possible impact of the economy and being --

that issuance this year was the result of what the congress passed and it has already hit bond yields. this is a big jump. this could raise the cost of borrowing the corporations, and maybe it will be a bit of a drag. the fed wants to make sure the economy doesn't overheat. they have warned of a day of fiscal reckoning. a fiscal cliff. ,e did raise his own forecast two thirds of that because of tax cuts. if you support this, many republicans think that we're going to get growth. we will get wage increases in productivity. a lot of people are thinking this is too optimistic, but we will see how it goes. global economics and policy editor looking at those numbers. let's dig deeper into the president's budget proposal now with senior political analyst james joining us from washington.

this is a big number, $3 trillion. , or doesn't seem possible anything less than la la land. >> kathleen got it exactly right. she stole the lines i had in my mind, this is a messaging document. it takes a couple cycles before a couple cycles before document like this has revealed impact on policy. but i do think that over time, this is sending important signals. they have also moved republicans away from the balanced budget goal. it is something that has made it impossible to have a rational conversation. raimi: it won't balance the budget in 10 years, what do you think about that?

>> i think it is admitting reality. we criticize presidential budgets for being nothing more havesuggestions, but we been calling presidential budgets dead on arrival since the reagan administration. we can't meet our domestic spending objectives. yvonne: the site first $16 billion, we have been talking telegraph here that the debt pressures have been facing and

have been divesting some of their assets. this is going to be a big one here, involving the hong kong former airport. there were reports about how they were seeking loan extensions. watch the headlines coming through. let's look about the budget concern. we have been talking about infrastructure as well and this plan, we see a lot of naysayers from democrats as well as republicans. does this level of investment from the federal government need a match? roads, infrastructure, and airports? >> donald is famous for building gigantic opulent hotels without a single nickel of his own money involved and that is the approach he takes to infrastructure as well.

that we can make the peanut butter go a lot further if we spread it tenor and spread it in the right places. trump thomases with deregulation and assistance from the federal government that we can make important projects happen that would've been frozen otherwise. i think the infrastructure program is extremely elegant and extremely well thought out. the problem of course is that he doesn't have a revenue source designated for it. renewing the highway trust fund or getting other revenue to pay for this. >> this relies heavily on state governments as well as reducing the process in order to get muchts approved and it's less than what the democrats were expecting when it comes to the federal side of things so you these local municipalities can come up with the money somehow? >> there is a market clearing

price and where supply meets demand, things happen. we can't expect the federal government to finance 80% of everything. but there may be stuff the federal government can finance for 20%. let's focus on that and try to take steps where both state and private sector funds might be leveraged in order to get a few top priority things done. it is like the pensacola burrito optimization. you get 80% of the benefit from the top 20% of the project. president trump's thing that we've got to whittle things out and use money in a more rational basis and setting the table for better use of those funds when they become available. and i think the funds might become available, for instance, with congress that is willing to spend more money and make a deal with president trump. taxes. raise

the infrastructure plan is important. it's a long-term play. and it may be one of the things investors should look for. we may have a democratic congress at the end of the cycle. raimi: james, one thing you were talking about, the rational use of spending. $23 billion for border security and immigration sounds fine, but $18 billion of that for the wall. it got this far. does this have legs to continue on? james: the reality is that this is a messaging document. he's also signaling the priority. 1/10 of that, $1.8 billion or even $1.5 billion, that is enough to make an important start.

get a little bit of border security done whether it is a wall or not, and it makes all the difference between something and nothing. to get offrump needs the dime, break inertia, do something, however small. something a lot less than $18 billion will be a victory. but he keeps pushing for it which is what he's famous for doing. how does it impact midterm elections or the political calculus? onthink it has an impact midterm elections because the president's budget tends to be a one-week story. it sends signals in washington but the public at large doesn't look at these things. the public at large is more focused on results. they want to see the tax cuts working. they want to see evidence of a government that is working at a relatively stable and productive away. they like teleprompter trumpian not the twitter trump.

just the shared momentum that we have seen may be the one chance republicans have to hold on to that congressional majority which is in danger right now. raimi: think you very much for your time, terrific discussion. that corn is edging closer to $9,000. our next guest is get ready for it to crash $900. we're told why in a moment. this is bloomberg. ♪

raimi: welcome back. bitcoin has extended its rebound for now, bouncing back almost 50%. a dipping below six as dollars last week. life: also rose against renewed optimism. we are joined now for a quick look at the charts. this rebound, is it going to

stick? su: the answer is no. supporters will stay that we have -- will say that we have stability. we can see,m, what bitcoin range breaking it down. this is a new lower low. if you look at the right hand side. the average a slipping down. we cannot go below $1000. and you get in even better picture of where we can go. and a lot ofthis other technical indicators basically saying that this is confirmed for a huge move lower s sellers take control. remember just a week or two ago,

forbes had a list of all the bitcoin billionaires. by the time they published it, a lot of people were no longer worth that much money. these charts mean that it could be a much rockier ride in the rebound is telling us. justtcoin could crash to $900? joining us here. what were the primary drivers of >> thek bitcoin price? fed. the frenzy, and the futures. finds been difficult to what bitcoin is correlated to or not correlated to. it allowed people to short the market. look at bitcoin compared to some of the other crypto's, they are out to beat bitcoin, most of them are better. it is still the benchmark, but it is diminishing. it is a key thing that signals

the peak and at the increase for supply. the whole thing adds up in a market that should go back to the base. : when you look at the parabolic rise, did you make any comparisons to the dot com boom? >> less just use the best one there is. amazon. 02, itn 1999 and 20 cratered 95%. it looks like it is doing the same thing. most internet companies, three quarters of them fail. amazon became very successful. they are trying to do better than it is. verycombination is negative.

took a long time for the internet stocks to come down. they kept going higher and higher. how do you marry those two? >> look for a base. >> amazon came to a base. bitcoin was at 900 13 months ago. not very profound. yvonne: you mentioned these corrections here, mike. it why is there that level of >> based on the history markets breaking out. guess how much bitcoin rally last year? markets breaking out. it came down to that base.

it is likely bitcoin should do that. i look for a neutral level and it is one thing that markets build a base to break out. look for the indications to go there and it is massive supply and decreasing demand. he said it will not be bitcoin in the future. fill in the blank. >> picking the winners is a tough one. it is tempted to read the white paper this weekend and it is impressive. see things like like coin and ripple. you have to be careful to pick winners because there are so many of them. it's only one thing that will make it stop and that is oil prices. >> you might see the lower prices come through soon.

terrific chat. even noise find in-depth analysis and newsmakers on bloomberg radio. tune into daybreak: asia for 7:00 a.m. hong kong and you can download the app. this is bloomberg. ♪

yvonne: recording for your income of just over 200 million u.s. dollars, and analyst full-year profit to $1.1 billion. at 3.5 billion u.s. dollars, the stock has 18 buys and four holes and those. raimi: no debt will be added to danish telco as part of the $6.7

billion takeover. they were partnering with the suns in the bid for the former government monopoly. it is completed and own 50% of the carrier. shares soared 13% in copenhagen. ofnne: the head of sales snapchat parent is leaving, the 13 your executive to quit in four months. jeff lucas joins us now from viacom and 2016 and works on building ties with advertisers, spending money on an app that messages it was here. causing shares to surge. it will not be working for a direct replacement for lucas. has launched national security review of chinese bid for the local construction company. based and the timeline of the proposed unit of china's communication construction company. it expects the deal to come through and close at 19 canadian

dollars. , the daywest tries before the deal was announced. >> cutting down to the open in japan, back from holiday on twitter. ♪

8:00 a.m. in hong kong. i am yvonne man. welcome to "daybreak asia." amid signs markets are beginning to stabilize after the biggest weekly route in two years. the volatility index fell as the s&p saw its best to day advance in months. ramy: from bloomberg global headquarters, i am ramy inocencio from new york. says the risks are rising. he expects a u.s. respects and -- u.s. recession sometimes in

the next two years. president trump proposed spending and cuts. congress is expected to ignore his plan. yvonne: it seems like risk is back on the table. you're seeing more of these banks saying it is time to buy buy this dip. 8176 on your bloomberg is the chart i'm looking at because we continue to see speculators in tad short continuing positions when it comes to the 10 year yield, expecting those two further climb. the big question for the equity traders is if those yields climb above 3%, was going to happen? ramy: 2.85% is where the u.s.

10-year is. people are wondering if this is something that is a temporary blip until we move higher. closed in the green for the second time in two days. this happened before the selloff. we will see some of the green trickle into the asia-pacific trading day. they reading glass in japan. david: we are getting that all right. [laughter] futures down about .1% following the close. momentum coming off. that is the story across the asia-pacific. is this going to be a buy thedip or the blip. ppi data out from japan. we are looking ahead to taiwan gdp.

inflation out of india as well with new credit numbers out of china. that tells it all. the korean won is catching a bit. on forlooking at risk tuesday. earningst goes back to for japan. how is this season looking? earnings for japan. how is this season looking? david: finally, we can talk about earnings, you know? at the moment, this is how things look for the nikkei index. ea . the two to out of five companies on the index. we have a few more coming up later on. as you can see, overwhelming majority have reported a beat on top lines and when you look at earnings, the price is also coming in slightly less in the majority is reporting earnings. , japan is this route

much cheaper. we are looking at -- we came from about just under 20 times forward earnings, not trading closer to 17, almost like we had an upgrade cycle. before all of this happened, we were talking about japan being one of the most, how'd do you put this, strongest in terms of the earnings season. that will make it more palatable. a lot of people will jump back in and by this dip in japan. ramy: in terms of yield, the market is putting applause on where they should be. what are the latest views? >> you mentioned 2.85%. they actually came out and said on severalble factors. you look at four rate hikes out of the u.s.. they are moving it to four. we are getting the supply rates coming in and that will push up deals. the asset management forecast to

be specific, 3.5%. the blue line is the top, the high-end of the recent survey we did. your median survey is 2.95%. the lows at 2.3. forecast, we are looking at 2.5% to 3.3% by the third quarter of this year. ramy: david ingles looking ahead to the trading day. green on the board for joining us now from sydney -- joining us chief market strategist. thank you for joining us. i want to get your first reaction to japan ppi, which came out in the past 15 minutes or so, coming in at 2.7%. definitely slowing down in terms of growth from the 3.1. reaction? rick: pretty neutral, i think. i don't think realistically many people have got much prospect of

japan getting anywhere near the cpi target of 2%, given aging populations, headwinds for capacity globally, and, you know, technology and so forth. i do not think the market will be too phased at this stage. ramy: hop into the bloomberg terminal. g #btv 8079. 2.7% where it is off. as you digest that, i want to go back to you in terms of japanese investors getting the chance to digest haruhiko kuroda and other outlets saying it is probably going to happen. your thoughts on this? well, look, i think it is a positive, but a fairly neutral result in terms of market

reaction. otherk i and many investors would be primed for the alternative result if there was not going to be an appointment outside of mr. kuroda. that is important. not much risk premium being built into the market for anybody outside mr. kuroda, but on a day that should be positive for the stock market, it will not do any harm or it may add positive stimulus. can recall this correction in japanese stocks done with now? the worst is over? the safest assumption i think has got to be that volatility is going to be with us for a while now. in atainly think japan is better place, as you were saying before i came on in terms of valuation and given their earnings reports. it does seem cheap relative to ther places, but in view of

leadership role currently being played by u.s. 10 year bonds and the stock market itself, it remains a source of risk to all markets including the japanese for a little while at the moment. whatave just got to see happens. ultimately, i think japanese markets have come back with neutral prices if you assume u.s. 10 year bonds settled down around these levels anyway. yes, i think this will look to be an opportunity. mention about how these reports on kuroda seem neutral in terms of where the market goes from here. what does this mean for yen? does this ease pressure for the currency? i have a chart here. when it comes to the correlation, it actually is a bit of demand for the currency at this moment. look, on balance, i

think mr. kuroda is probably a negative for the yen, looking on a medium-term point of view. it does represent a continuation of the general philosophy of abenomics. i suspect we can anticipate the bank of japan to be relatively cautious about beginning to taper its monetary policy. it will do it, though, i think. i think it is going to be able to start tapering without probably really without harming inflation expectations. they will be cautious. i say that as a force in favor of weakening the yen. yvonne: stay with us. ric spooner, chief market strategist, joining us in sydney. let's get to the first word news

with selina wang. hna is selling land in hong kong to henderson for over 2 billion u.s. dollars. in a statement to the hong kong stock exchange, they said -- $1.8 billion over one year ago. hna has been forced to push back repayments on loans it took out to finance the project. president trump has offered a $4.4 trillion budget for fiscal year 2019, posing deep domestic cuts. the president wants drastic programs. a cut to the state department and 34% at the environmental protection agency as well as cuts to medicare and other safety net programs. itsan inflation eased from fastest in 17 months, offering a brief respite to policymakers grappling with the

expansionary budget. consumer prices rose a fraction more in january, which was in line with the bloomberg survey. however, the r.b.i. seize seesrising -- oncesees -- that rising. in macau isrket looking good as it prepares to open its new $3.3 billion resort on the cotai strip. the ceo told us he is targeting more upper mass-market guests and hopes to introduce operations soon. the opening capitalizes on the lunar new year. major hotels are fully booked and increase rates. primarily, with the operation, very soon, we will be introducing operations and we are very pleased with the response we have had from all of the operators, so by the time we get through into this year,

balancing our inventory between ourselves and macau, we are positive we can deliver on the expectations that the market has for us. >> reports from russia say youtube and instagram could be blocked because of controversial post. a courtident won injunction against online pictures showing him and the deputy prime minister on a yacht with the women described as escorts. it is blocked unless they removed the image by midweek. global news, 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i am selina wang. this is bloomberg. ramy: thank you very much. opec says it is not afraid of shale, but should it be? clearing the global oil glut. hasne: why ray dalio changed his tune on the economy.

warning that a recession could be looming. this is bloomberg. ♪

yvonne: this is "daybreak asia." i am yvonne man in hong kong. iny: and i am ramy inocencio new york. it has been a volatile ride. ad ray dalio is warning of rising risk of recession. let's get more from our global markets editor, adam haigh. is this something investors need to start worrying about now, or is it still a ways off? adam: let's be clear. explicit on pretty the timeframe when he says people should be concerned about this, and it is not for at least 18 months to 24 months that you would expect a recession happening. what he is how adding in -- highlighting is that this is not a topic that interested us are discussing -- investors are

discussing enough, and they should be. the fact that we are that close to the next recession means portfolio allocations should the working towards planning for that eventuality, and he does not see that happening at the moment. i mean, there is a great chart. this idea that, you know, recession risk expectations have been so low for so long as this bull market has run on, and that is the crux of his point. we are very far away from an understanding or conversation within markets, and we should be having that now about the fact that recession risk is alive and well, something that will be us and we should be planning for it now. yvonne: adam, stay with us. we will bring that ric spooner, chief market strategist joining us in sydney as well. does ray dalio have a point that we are overlooking this recession risk? ric: look, two points. i think investors should always have a plan about adjusting the

cyclelios in the business and we should have a clear idea that when you do think we are getting close to a recession of doing the standard thing, going more defensive into these stocks, i have got to say, the prospect of a recession is still well beyond the purview of my crucible at this stage. one of the things i think that really has sort of impressed me at thise experience time. this business cycle has been a very slow-moving one. taken a long time to play out. that's understandable. we have had very big overcapacity around the world, and whilst we have come to the end of that, it is a case of height unemployment -- high unemployment in europe and other places. i think that unless we see

interest rates going up quickly for some reason, which i doubt will happen, i think central bank's are going to be still very measured and what they do. i see it, in the foreseeable future, we have got a couple of years of goldilocks ahead of us, really. yvonne: how important is the inflation data out of the u.s. going to be this week? people are saying that what we saw from the friday wage numbers, it there was quite a reaction when it comes to where yields went and where equities went as well. i mean, is there a chance there that these inflation concerns could also be overblown, too? ric: -- yeah, there is. i think it is potentially very important, particularly if it shows it has picked up by more than the market expected. the basic situation is looking .t core energy inflation settled down after the hurricane, running back at about 1.8%.

down, i am show the markets would love that. it would give it false confidence. generally, if we are seeing wage -- pick up ap of bit, it would take time. the cpi data and inflation data is going to be a risk factor for markets big time for several months to come now. adam: given the shakeout that we saw and markets over the last week, where has that left you in terms of the valuation debate about -- with this correction that all of us or many of us have been inspecting for some time. does that mean the selling is pretty much done now? are we in a position now where we can jump on board some of calls or is itip a little bit too early? in ai think it leaves us

difficult situation still. looking at markets like the u.s., i think that comes back to neutral or possibly even a little bit expensive. in terms of valuations, if you assume bond yields are going to stay below 3%. if you think they are going to go over 3% fairly quickly, they are still quite expensive, so i think that is a recipe for ongoing volatility, i suspect. an ongoing sensitivity as we were just discussing to the wage and cpi data for the next few months. and so, a lot of volatility, and not yet at a really obviously cheap level where you can look through the volatility and buy it with real confidence. ramy: i want to play some sound the universityom professor of economics about the price. let's take a quick listen. has been thatnge

people think it's overpriced. that's almost the definition of a bubble. if you think that the market is overpriced but still has some time to go and you are hanging in for that, that is a bubble. is, is then now bubble over? is the bursting over? >> is the bursting over, ric? ric: i think, tattoo that question, probably. you have to have a view on where interest rates are going. uphink they are going to go gradually. it you have got to remember also that the natural direction of the stock markets is up. if my goldilocks scenario for the next two years remains in place, earnings growth will be strong. thatt in rates offset earnings growth. that is a study is a good scenario. i do not think we are in a bubble.

think markets are priced yet for the 4% bond scenario, and that means they could fall 10% or 15% if that looks like it's happening quickly from these levels. given the sense that a lot of markets are caught up in the turmoil of late, are there any pockets that you see are worthy of buying at the moment? relatively, the japanese markets, i think, seem to be quite cheap, really, at the moment, given that if we get mr. kuroda reappointed, you have seen they are going to be very cautious about leaving the rates low for quite a long time. in ank, if you are sort of position where you have in a position where you have got some cash and you're looking to take advantage of what these possibly neutral -- is about 15.8.

topix, 17. given the averages of last year, that is a fairly neutral sort of place to be. and valuations have shaped up a bit as well. before you go, you are saying it is time to buy the dollar. why? yeah, you know, i must say, this is a brave call of mine, something i have been consistently wrong about the last year or so. thever, you know, i think basic position remains in place. made a the market has reasonable adjustment for the catch-up of europe in japan. rate --the dollar recent dollar weakness in recent months has been about a reassessment of just how strong those economies are. they have done better than generally anticipated. but i think that's pretty well played out now, and i think we are getting back to a scenario where the fed is going to lead

other central banks up in terms amount for a little while anyway. ramy: interesting. we will have to leave it there. ric spooner, cmc markets, asia-pacific chief market strategist. bloomberg adam haigh. thank you all very much. you can get a roundup of the stories you need to know to get your day going in today's edition of "daybreak." bloomberg subscribers go to dayb on your terminal. it's also available on mobile in the bloomberg anywhere app. you can customize your settings so you only get news on the industries and assets you care about. this is bloomberg. ♪

asia." this is "daybreak i am yvonne man in hong kong. ramy: i am ramy inocencio in new

york. google is said to be working on an android upgrade for a new generation of smart phones to take on the iphone x. the overall is -- overhaul is due later this year. it will more tightly integrate google's digital assistant and improved battery performance. google aims to lure users from apple by updating the look of it software. yvonne: canada has launched a of anal security review construction company. it extended the timeline of its proposed sale. it said to still expect a deal to go through in the second quarter. they closed at 19 canadian dollars, 56% below the bid price, the lowest since october 25, the day before the deal was announced. ramy: up next, indian prime efforts narendra modi's

to tame inflation may be working, but some say it could only be a temporary reprieve. we are going to discuss that, next. this is bloomberg. ♪