♪ 7:00 a.m. in hong kong. asia." to "daybreak asia-pacific stocks are set to rally into a third week after a strong close on wall street and treasury yields dip. repealed term limit for allowing the president to rule indefinitely. his grip on power arose even stronger. betty: i am in new york where it is just after 6:00 p.m. on this sunday. north korea uses the winter talks.s to hint at fresh the white house says we will

see. workshop hathaway, warren buffett said he needs a quiet 2017. ♪ betty: it has been everything but quiet in the equity markets these days. out, but it to close want to point to you a chart. g #btv 9668, which is what we have seen for huge amounts of price swings in the equity market. if anybody doubted whether or not volatility was here to stay, just look at this chart here it it shows you the difference between the highs and lows on average on the s&p fearing -- s&p. right, butett is 2018 is a totally different story. you just saw on the right-hand side with how big those

differences are in the highs and the lows. you can see that even on friday, the s&p rising by 1.6%. the dow swinging back with these huge gains 350 points. the nasdaq also rising by 2%. it will be interesting to see, with all the news coming up this week, what price action we will get starting monday in the u.s. yvonne: it seems like we bucked that trend selling on friday. the relief are a lot of equity traders. a lot of buying into u.s. treasuries. we have to get used to these new bouts of volatility. we have that testimony this week or it we have inflation, europe inflation as well. we also have the be ok meeting meeting this week. let's look at how things are looking in asia. following the trend we saw on friday up 1/5 of 1%. bearish has seen some

pressure among the g10, just under $.73. we see more momentum building behind the greenback. trading underway in australia right now. asx 200 up 12 points right now. 7843, we had china property over the weekend, which did rise in fewer cities in january. perhaps those curves are taking a bigger bite right now. --ld, we are seeing byron buying at 281 for that tenure yield. be open inwn to japan and korea. we could be seeing a bounce back here for equities, continuing the gains we saw on friday on the nikkei 225. yen taking a breather for a second day above 107. here, the chinese communist party is set to repealed term limits in a move that would allow gigi ping to rule beyond 20 -- xi to rule beyond 2023. the timing of this is crucial

here ahead of the mpc. tom: absolutely. appetite and his appetite for continuing his leadership beyond his second term is becoming -- only got a signal of that in october. this is monumental, the decision that was announced, or at least the proposed decision that was announced on sunday is very likely to be signed off next week. to end the turn limits. is end or move to shift away from collective leadership toward centralized leadership. and the setting that we put in place. trying to do -- trying to avoid this chaos that we saw. three generations of leaders other.each these propositions have been shifted to one side. this is giving president xi

extended power. he is already the head of the power that is the most powerful position in china. he is the head of the military, now the boundaries around presidential terms have been moved. we got a sense of this from the party congress back in october in the central committee, and the standing committee at the top of the party, there were no potential successors nominated there. many chinese analysts alluded, but are not surprised by this decision, but they are surprised by the timing. just at the start of president xi's second term. it is seen as bold. betty: does this mean he can rule for life? affiliatedis a state newspaper that put out a story with an analyst being quoted as saying that president xi could hold onto power until 2030 five.

the state media here said there is a need for strong leadership and a need for continuity. it is certainly open for president xi. he has been in trying to as the core of the party. it has been baked into the party charter. the term limits for the presidency has been removed. that is something people are looking at. there are not many great examples of one man leadership that has been particularly beneficial for countries in the past. there are risks of all this power in one man's hand. some have said that the president may have looked north of the border for what happened to president putin as an example of what he is trying to emulate. you have a meeting of around 200 of china's most powerful men and women were meeting monday to wednesday here in beijing. xiis saying that president and his group will be choosing

people to take over the pboc and that insurance and banking regulators. china's parliament, the national people's congress meets next monday will go over those decisions. yvonne: tom mackenzie in beijing. at talksun has hinted saying -- what the white house saying we will see. we just talked about in the last hour, good feeling coming from the olympics, but is this a thaw in the relations? >> i think it is too early to tell. goinghave olympic fever on. analysts see this as the most substantial movement by north inea, by kim jong-un, several years towards talking to the united states and improving relations all around with the u.s. and with its neighbor, south korea. wanting to remember that both

donaldnorth korea, and have of the united states mercurial personalities. wheref we get on a path it looks like the two countries could meet or talk, things could become derailed. after the olympics and korea, the u.s. and south korea are supposed to restart military drills. those drills were postponed during the olympic period. northould antagonize korea, which could respond with a ballistic missile tests. a lot could be determined in terms of those talks. the white house responded pretty coolly today and said that denuclearize asian -- key toarization remain

starting talks. what we heard is that that is a nonstarter. strict. imposing pretty new economic sanctions on north korea. and north korea responded by calling that an act of war. things are running hot and cold. betty: a big question as to what can be achieved. potentiale latest on -- potential gun control measures? can president trump actually get backing from the nra on this legislation? question.good i hate to always say the jury is out, but it is uncertain if republican leadership will respond. not heard from mitch mcconnell or paul ryan on what they would like to see. congress will have a debate, but whether it there is enough votes

to move any gun-control measure forward is a little uncertain. we do note that tonight and tomorrow all, president trump is meeting with governors from around the country at the national governors association meeting in washington. most of those governors are republicans. there defies out of 50. -- 35ld hear some theory out of 50. he could hear some more out of supporting gun control. the governor has come out with the position that is not the same as the national rifle association, which he is a member. he would buy to see more measures passed. if legislators at the state toel, or governors talk president trump, that could create momentum on gun control. bottom line is, that it is an issue and it is really hard to get lawmakers and anyone else to move on where they stand on their positions.

especially returns coming up in november. lubricant editor joining us live -- bloomberg editor joining us live from d.c. >> he still thinks the transpacific partnership was not a good deal for america. he said the u.s. could return to better chances on the table. the president has been a harsh critic of the tpp. members are expected to sign that deal in chile. no indications with the u.s. under discussion. a proposal from mexican president to visit the white house in the coming days, or weeks, is said to have been postponed indefinitely. two officials close to the confirm adeclined to washington post report that during a phone call, trump would not agree to publicly confirm

mexico will not be paying for his border wall. calling the property market continues to work with home inces rising in u.s. cities january. prices climbed in 52 of 70 inies compared to 57 december. 13 cities in that previous month that were unchanged and five. the government is experimenting supply while fine-tuning existing control. samsung route the spotlight at the world congress in barcelona with the launch of the new galaxy x nine. they are banking on features such as reality-based emojis, camera update -- upgrade and speakers. they also want a possible slowdown of its components to hisge the company following -- global news, 24 hours a day

powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. still ahead, warren buffett a winner and the republican tax overhaul. a look at what other changes we can expect this year. jerome powell due to testify before congress. chris gives his take on how it might move the market. this is bloomberg. ♪

this is "daybreak asia." policyinvestors and makers will be focusing in washington on tuesday and the new fed chair will be making his report. a preview and they have already released the full text of the speech. >> they released his testimony

to congress, all 55 stages on tuesday, we will see what he says about it. this gives us a sense of what fed is thinking about. in fact, for one, there are further rate increases. just like the fed minutes. what is interesting is even though inflation is rising, they are not getting alarmed. they do see the economy near or above employment. at the same time, they no labor shortage is in the economy, but they are particularly concerned. this is typical of the language they use. although employers report having more difficulty finding qualified workers, it raises. which shortages, which brought up out wage increases that have been evident to date. they are downplaying wage inflation. i will just call up eight chart here. 899 is a chart i am sure they're looking at.

it illustrates this perfectly. you have the earnings of production workers, this does not include bosses and supervisors. this number is flat around 2.4% for the last several quarters, even though it has unemployment so low. testimony the two day is tuesday in the u.s., wednesday in asia. dates you will be thursday in the u.s. and friday in asia. certainly on friday there are a lot of fed speakers. they seem on board with what the fed monetary policy is saying? kathleen: i think this big question about three or four rate hike is what people will be looking at when they listen to jay powell. the fed president, john williams, losing name has been floated to be the next fed vice chairman said it make sense to think about three or four this year. when asked about the rate hike, he said it will be relatively

soon. theays he sees a case in near future. i think he is leaning towards march. he also sees inflation rising once transitory factors stay. when you think about what will be on congress is mine, go to your bloomberg. it is what we are coming out of 2017, going into 2018 with. it is a consensus for three rate hikes in 2018. up here, this is the group that ins i see for rate hikes 2018. we will look later in the month, in march, to see if the fed changes. three rate hikes report. also the impact of tax cuts and what the fed chair thinks. probably try to avoid it. it is very political with the fed chair goes before congress. yvonne: they have not upgraded their growth outlooks yet when it comes to tax cuts. kathleen hays, our bloomberg economic and policy editor. that's bring in our next guest.

chris at weston, ig chief market strategist who joins us live this morning. what do you want to hear more from chair powell this week? chris: it is very much going to be a nuanced statement. the idea that we will get a new chairman and giving us some want to rock the vote, given that he has seen how tense markets are. there is rhetoric of the statements in the back end. the rates that we have been seeing across the curve. we saw the big drawdown in risk sentiment in february. i think it will -- he will be boat again rock the and care -- and come out with nuanced statements. ratenk the interest market, where on friday we saw the dollar to send -- the send come down three or four basis points. keeping on the rates market, but

how optimistic is he? given the ego data that we have seen, he could be on the hawkish said, but you are saying he will not do much to rock the boat. there, three questions for jay powell that she had. the third one, and attention. if we can bring that up for our audience. she said it is possible to find ourselves in an environment in which stocks, bonds and the dollar would go down all at once. we have seen that before. her question would be, which one would he choose? question would be, which one would he choose to support? the idea that it has been five-year,d on the five-year break even. they have seen to 19 at the

moment and that has been tracking. the reaction in the dollar will b.a.t. one. i think he will be keen -- will be a key one. i think that will be 18 move. we go into this week to look for flatness around the 91 basis points. the markets are short in the front end and more short in the back end of the curve. the treasury complex has an opportunity to apply those flatness. if he can move the dollar a little comment and add an optimistic level that are in the short front end, the idea of a he will lay the foundation for that march meeting and get a sense that will potentially continue with three rate hikes this year. there is the opportunity, should the data continue to improve, inflation re-expectation moves back up to 20.

we could have four. i say it is not choosing to be nuanced, but to lay foundations shoulde hikes this year the data continue to improve. betty: all that work about three rate hikes, for rate hikes, when and everything behind that has resulted in the chart that we have shown earlier in the hour. 966 eight, which shows you the price action we have seen over the last several weeks. thatig of a difference is highs and lows on the s&p and this chart, which i am sure you are quite familiar with, which shows you how flat this was or how tight the range was. this is an anomaly or a new normal now in the markets. is there anything jay powell can say that might bring back price differential down and bring the

volatility down? chris: i think the idea of allowing the economy to overheat in the market fails from the tone of his voice, they continue to be behind the curve and they allow the economy to achieve the philosophy. 16.5%, if heown to .ives you those calming words optimistic allowing him to be behind the curve. that future complex being a 41 basis points. i think volatility in the s&p can come down to 13, perhaps to 12% by the end of the week. then we could see the gradual climb again. if he does give a sensation that in the mark -- march meeting there will be for rate hikes, i think it will stay around 16% to

18%, perhaps 20% and the environment. i keep talking about rate structures and yield curves flattening and it's in pieces. i want to look at the euro dollar futures and what is .riced between december 2020 there are it he have 41 basis points. i think they could push up a little higher. yvonne: we will leave it there. we will see you at the market this week. ig chief market strategist. our interactive tv function, tv go. you can watch us live right now. catch up on past interviews and dive into securities or the bloomberg charts and functions. you can become part of the conversation. you can send us instant messages during our shows. this is for bloomberg subscribers only. check it out at tv , this is bloomberg. ♪

betty: this is "daybreak: asia." of the a quick check latest business headlines. germany says that there $9 theion stake is within regulations, and there is no need to invoke foreign trade and investment rules. it want to cooperate on electric vehicles and shift to battery-powered. thefounder and chairman is leading shareholder. also the largest investment by a chinese company in the overseas automaker. betty: building a new mercedes to meet rising demand for cars in the world's largest auto market. a filing to the hong kong stock exchange said they will invest $2 billion any plant to make a range of mercedes cars, including new energy vehicles. it does not specify where that is going to be built.

we will see how asia-pacific markets are shaping up after wall street's recent rally. this is bloomberg. ♪

7:30 a.m. in hong kong. we are a few minutes away from asia's first market open. >> markets closing much higher on friday. closing up a top of the session as you could see they are up 1.6%, setting up for a stronger session back here on monday. i am betty liu in new york. yvonne: you are watching "daybreak: asia." word newsto the first with haslinda. set to repeala is term limits allowing xi jinping

to rule beyond 2020 three. the central committee said it wants to remove the constitutional position barring the head of the state for more than two consecutive terms. that would remove the only formal barrier for him staying in power indefinitely. it was at a party meeting last october. north korea is set to hint at talks with the united states after a high level delegation watch the end of the winter olympics in pyeongchang. he stood near president trump's daughter ivanka the two did not appear to talk. the north did say that it should develop along with the relationship with washington. oil experts from libya's terminal are to be reviewed after it was hit by guards protesting pay and benefits. the disruption has the decline after -- after the recovery from

the country's internal violence. opec allows the increase and their independent outlook. be next deputyo prime minister. he has been elected next leader of national party and will be mark and -- will be his number two. news gives the government 40% -- 46% in the labour party has 54%. >> i want to thank each and every one of the national party members. i have a huge challenge ahead of me. we have a huge challenge ahead of us. global news, 24 hours

a day powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. yvonne: we are counting down to the market open in tokyo. guess we are trying to lick our wounds for what we saw in the month of february. of a the pain of more relief of equity on friday. we look to be pretty bullish here today. is the hopefully that case following what we saw on wall street. we could be setting up for a busy week ahead. we are trying to lick our wounds. g #btv check out lines -- check 968 two.v putting a stop to a record monthly winning streak for asian stocks. we have had 13 month of advances for the asian benchmark. put it up to an all-time high in generate. we are seeing the drop in

february and we are covering the losses we saw february 9. we do have a busy week ahead, pulling out to highlight key data points very from japan we have factored outputs, retail sales and hyatt -- and housing data. the devices came out over the weekend. pmi time from china. in indonesia, malaysia and thailand. for india the focus will be on -- and in korea it will be to the central bank. expected to hold on for the last scheduled meetings. what is on your radar? sophie: i will be watching for reactions to reports that trump is set to want to increase 24% on fuel imports. that is the most severe of three options from back in generate from the u.s. commerce department. that is benefiting u.s. steel

producers and will hurt china the most. they say it is not as bad as it may seem. in 2017 10 other countries other than china exported more of steel to the u.s.. are waiting for a reaction that china's top steelmaking city may expose further curves at the end of the winter season, which could see moves. it is a few of the things you're watching in tokyo and seoul. let's check in to gauge their reaction. moves ofeing heavyweights edging slightly higher. we are seeing a jump in steel after delivering an earnings beat underlying earnings. we have the interview with the ceo later today. on the markets. back here in the u.s., that we can warning we talked about. goldman sachs economists saying

that stocks may punch 25% with yields on a 10 -- it foreign half percent. -- 4.5 percent. that will grab wall street's attention. that is the top story on the bloomberg. economic reports to watch out for. that goldman know, pretty clear. it will definitely grab attention. they're out where forecast is with this 4.5%. 3.25 percentasting at the end of the year for the tenure. that wasg to note issued saturday for a top a con a mess. rising rates to 4.5% by year and would cause a 20-25% decline in equity prices. that would be a significant tumble in stocks. this will reignite rate hike jitters, which is what fell off a couple weeks ago. the economy will probably suffer a sharp slowdown but not a recession. that's go to the markets. you know we close on session highs friday, which is strong

going into the monday session for stocks. off some ofs coming its weakness. the focus is going to continue to be on the bonds. if we go into the bloomberg, g #btv 3418 just to give perspective to the selloff and at how the market has recovered. this is the s&p 500 index one that we have price gauged. look at the rebound. but we had last week was a 4.2%r than 4% jump, or rise in the s&p 500. that is the best weekly gain in over five years. that is a cautionary tale as well. when you act on panic you tend to lose out. they are trading up a highest price and almost three weeks. what is going on there? >> very interesting factors

there in terms of supply and demand. around 64 asght you mentioned. that is a three-week high. second weekly gain for west texas intermediate. we have had protesters disrupting output that is one of the factors impacting, also venezuela output exacerbating oil prices. 9674,go to g #btv venezuelan oil has plunged amidst the trump administration and announcing a short-term bullish price. action-packedan week for ego data, what are we watching out for the most? >> housing data expected to come in strong. growth.a 2.6% pace what you are looking at is home

buildings optimism. it underscores the housing data, even though it has lagged behind. we also have some interesting data coming out on manufacturing orders. at 2.6% annual pace, which is matching the estimates. that provides strong under putting in the u.s. economy, which could be good news as we kick off trading on monday? a lot to watch this week. plenty of big stories we will be covering here on "daybreak: asia." jay powell, the new fed chair's testimony. he delivers his annual report in washington. he will discuss the state of the economy, and it will be his first appearance the for congress after being sworn in. he takes over an economy that is

going to heat up. they are expecting three to four rate hikes. the bank normalizes monetary policy. goldman sachs coming out with a report talking about what seems to be unheard of. even just a month ago, four point 5% yield on the 10 year. which shows you how the inflation has behaved under different fed chairs. despite how janet yellen the economy, inflation is continuing to miss that 2% target. we are closed. i think that is why investors are quite nervous that mabel we want -- may be we might overshoot it and the fed might come to the table too late. yvonne: it will be huge implications for here in asia and central banks in this region. be the bankt will deciding on their rate decision. this is the last meeting for the governor.

to keep theecting benchmark rate at one point 5% after it decelerated in the fourth quarter. they will stay cautious and keep any hikes gradual. the big question is, is the next rate hike going to be ok, that depends on who the next successor will be or will it be on jay powell? 3865, we see inflation and consumption in korea. we are seeing real rates liming very similar to what we saw in the u.s. as well. -- can the bok tolerate a wider spread? perhaps for rate hikes this year for the fed. be more inclined to hike more than one hike for the market. betty: it will put that upward pressure on the bank of korea and on other central banks as asia.n

the bank of japan has continued to withstand any of those upward pressures. much more ahead on "daybreak: asia." buffet says he wants a big deal after a quiet 2017. be careful what you wish for. a look at his annual record. this is bloomberg. ♪

betty: this is "daybreak: asia." i am betty lou in new york. yvonne: burke xiao hathaway reported record-breaking fourth quarter over the weekend. let's go to the bloomberg charts. it was not just the numbers, ,arren buffett had an annual much anticipated shareholder letter, which was shorter than usual. it often overshadows the numbers. investors looking to see and getting into the mind of warren buffett.

it is the shortest letter in the past 20 years. warren buffett has been writing these over the past 50 years or so. he talked about those record profits and also about the first and histing loss frustrations in m&a. more of that later, but first of those record numbers for profit. g #btv 9681, here in the fourth quarter. $32.5 billion is what they got. look at how king busters it was. are in here, profit is just half of the story. on other half of the story the order of 29 billion dollars came from u.s. tax reform. that is coming in at 65 alien dollars. hold on to this. you will remember this bike if they send it to my next bloomberg terminal chart, g #btv 9680. they only ordered 400% year on year. 417 to be exact.

we have seen retractions over the past three quarters. it all of the good things coming thisrom berkshire hathaway is something investors are going to be very, very happy about. , not aas one black eye big one, but a medium one. 9679. look at g #btv 10 .8% as the operating margin for the last year, 2017. the last time it was that year was in 2008, the financial crisis. we are looking at some of the weight from the underlining dutch underwriting losses. $2.2 billion from hurricanes. mexican earthquake as well as the california wildfires that we were talking about. welcome to this side of the charts. i want to show you some of the bigger takeaways here from everything that we have been digesting. the 2017 network gain for pointire hathaway was 65

$3 billion. i tucked about the 35 billion and 29 billion coming in. this is something that warren buffett likes to talk about every year. of 23%. over the past 50 years or so, they gain has been 19%. outstripping it in the past year. there is a couple of negatives. one warning and one frustration. thererning, it is that will be a new rule coming out that will be distorting net income moving ahead. investors will have to take everything with a grain of salt. the frustration is that there is thatible purchase price" he is looking for. not that there is one right now in terms of m&a. i love this quote. while other ceos are looking to m&a, and they have done m&a, they are saying the less the prudence, he is saying a lot of people are right, the greater prudence you must conduct your

own. isren buffett attaches important to funds and indexes. he says that has been the foundation for all of the positivity. he will go ahead with that in the future. he will be looking for m&a's, he just is not targeted one yet. usey: he does not tend to leverage for that, but if he wants to capitalize on low rates, now is the time. y on a warren buffett and his letter. someone else who read his annual letter is the managing director. before we go into some of the comments we heard on tax policy and others, i want your reaction over the last fears about president trump and how it looks like he is moving ahead with the pretty punitive tariffs of up to 24%. we have heard free trade groups coming in and writing letters. metal stocks will be

moving on the back of this news. -- whatyou make of his appears to be the president's move to moving closer to these protection policies? to investors to understand two things. the first is that the news that was heard a week or so ago was it -- released recommendations from commerce secretary. the president had gone those reports in generate. he has had them for some time. he will move quickly along the , hes that ross proposed would have already done that. he will not do that. that we have long thought is what they will be interested in is doing things that are much more surgical. that is where a lot of the free trade reports are in the cabinet and around it. secretary mnuchin, and gary cohen, things like that. secondly, a lot of people in congress are there as well.

the president heard from the bipartisan delegation a couple of weeks ago. --y gave him that exactly exactly that sort of advice. they will be more surgical. betty: describe what that would look like? terry: i think what they want is to -- what a lot of folks are proposed to the administration, including members of congress you don'tsed that throw blunder bust tariffs. what you end up doing is pointing it on areas that are affected by national security, which is the purpose of these tariffs to begin with. you go with electrical steel, a special steel a variety of ways that makes sure both the united states has the continued ability to manufacture those sorts of

products. as ross said, the real focus thes to be to make sure domestic steel industry, and the domestic aluminum industry produce at a certain capacity to ensure the united states continues to have those -- that capacity domestically. that can be done without throwing out these massive tariffs. its own psyche are seeing a trade war is unlikely. we heard peter navarro has been promoted to an assistant to the president. one of the many has on his side. this is one of the many hawkish trade officials and the trump administration. could this elevate a move of impact policy in any way? terry: there will always be a tension in this administration between the free traders who propose the policies that i

, and people on 232 like navarro l want stronger trade action. that is not going to abate. what we do think and what we have said, myself and my colleagues who runs our china research is that, we don't see trade war or treat piece -- peace. series ofet a tit-for-tat between the united states and china. we think both countries realize there is so much at stake that they will not elevate. yvonne: the midst of all that is the geopolitical tension. we also heard that south korea is ready to talk with the u.s. do you think that there is a these meetings actually happening, and what could actually be achieved? think those i meetings have a good likelihood of being achieved. it may well be that they end up

leading to something. what you have seen over the past couple of weeks is not just what went on with the olympics, and a g of tensions between north and south korea. you also saw the united states focus on tariffs, secretary mnuchin just talked about this before the end of the week -- or on sanctions and lucian talked about on friday. what you will see is a combination of continued squeezing. i cannot claim that it will be magically leading to a positive combinedut, the efforts of these countries through the united states, china and elsewhere have combined to really put some serious pressure on north korea. i am moderately optimistic right now. betty: how do you think it will

go over that warren buffett revealed that its company, the gained third richest man $29 million. the rich getting richer. political and policy washington, this will be taken as proof and possibly definitive proof of the claims of republicans about the effects of the tax law as against the claims of democrats about the tax law. i think he will end up seeing mr. buffett's face and words on quite a lot of campaign advertising this fall. yvonne: i would think so, whether he likes it or not. managing director. you can get that story and many more to get your day going in today's addition of daybreak. it is also available on mobile in the bloomberg anywhere app. you can customize your settings

so you only get news on the industries in the assets you care about. this is bloomberg. ♪

yvonne: i'm yvonne man in hong kong. betty: i'm betty liu in new york. a quick check of the latest business flash headlines. higher tv and movie spending by netflix and amazon have forced youtube depressed cause on its ambitions. googles holding you to read expenditure at holding levels for next two years, causing people to criticize the strategy. google often makes multiple investments in the same injury and waits -- the same industry and waits to see which one works out best. yvonne: black panther has joined an exclusive group, and becoming one of the only horror films to earn $100 million its second weekend in theaters. it took $108 million at the north american box office and

takes the two-week amount to a neat $400 million. i am probably the only one who has not watched it yet. coming up, more about china's future. this is bloomberg. ♪ we use our phones and computers the same way these days.

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8:00 a.m. in hong kong, live from bloomberg's asian headquarters. i'm yvonne man, welcome to "daybreak: asia." asia-pacific stocks in a third week after friday's strong close and treasury yields dipped. investors turned to central-bank policy as jay powell prepares to speak on capitol hill. the pace of rate hikes is all-important. betty: absolutely. from bloomberg's global headquarters, i am betty liu in new york. president xi jinping wins a power game in china. party is to change the constitution to let him rule indefinitely.

a chairman embarks on a goodwill tour of germany. he is now the biggest shareholder in dime where. -- daimler. we have got some positive tailwinds on this monday morning in asia. friday, yields heading lower, stops bouncing back. we did not see late day selling. #btv 938. i don't know if it is all clear for japanese stocks yet. ,his is a gauge on the topics which measures the selling strength to buying strength. we have been below zero for 17 straight days now, the most bearish we have seen in two years. the last time we hit that negative sentiment, we were stuck in the 200 point range for some nine months. we could still be seeing some downside when it comes to japanese equities, especially if

we see more trade tensions from the u.s. betty: i think some of that fear is from rising trade tension, particularly with the u.s., and of course the rising yen not helping sentiments either. -nomics has so far worked, but can that shield the japanese economy from possible shots? yvonne: that is certainly going to be the case given the new era under jay powell. can they decouple from the fed? also chinese leadership, could we see a leader for life under president xi? let's get your market check with sophie kamaruddin. we are seeing a pretty good start to monday. sophie: this fear being doused. gains in tokyo extend for a second straight session, the kospi having .5% and all these stocks rising for a fourth day, building on their best week since october.

about 70% of the 130 companies that have reported this season in australia have at least met market expectations. we are keeping a close eye on steel players in asia today following a report that trump is on steel andariffs aluminum that were provided to him in january by the u.s. commerce department. when it comes to steal, potentially a 24% tariff on global shipments. we are seeing a response now in steel stocks in tokyo and keeping an eye on blue stock and the like in sydney. another jumping on its earnings report. check it out on the board right now. also seeing a move in posco in seoul, one of the bigger boosts to the kospi this morning. trump has until april 11 to make a decision on steel, until april 19 for aluminum.

this could exacerbate the gap between lme and shanghai aluminum prices. 8865, steelon #btv prices in blue, a low. we are seeing them the and inventories for aluminum and shanghai while lme prices are not far from a six-year high. this gap could further boost chinese aluminum shipments. back in january, experts were 14% higher for aluminum. .etty: thank you so much now let's get to first word news with haslinda amin. said to: north korea is hint at talks with the united states. a high-level delegation watched the end of the winter olympics. the group included the head of kim jong-un's nuclear negotiators, and although he stood near president trump's daughter, the two did not appear to talk. the north did say ties on the korean peninsula should develop

along with pyongyang's relationship with washington. president trump says he still thinks the trans-pacific partnership was not a good deal for america, although he reiterated the possibility the u.s. good return is better terms are on the table. the president has been a harsh critic of the tpp and withdrew a year ago. the remaining 11 members are expected to sign in chile next week. new terms for the u.s. are under discussion. former businessman michael mcconaughey is to be australia's next deputy prime minister. he has been elected leader of the national party and will succeed as turnbull's number two. the scandal that led to the previous deputy prime minister's resignation -- the opposition labor party has 54%. >> [indiscernible] we are all going to work closely together because that is what

the national party needs to do. i want to thank the national party members. i want to make sure people know [indiscernible] i have a huge challenge ahead of me. we have a huge challenge ahead of us. haslinda: oil exports from libya are to be reviewed after production was hit by people protesting about pay and benefits. the disruption could see libya's overall output decline after his recovery from the country's violence. opec allowed libya to increase oil production while other nations in the cartel and independent allies cut to drain the oil glut. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i'm haslinda amin. this is bloomberg. betty: thank you so much. the chinese communist party is set to repeal term limits and a move that would allow xi jinping to roll beyond 2023.

tom mackenzie joining us from beijing with the latest. what do we know so far about this? it is a stark reminder, if we needed one, that there is only one man who counts in china. what we have seen is the dismantling of a collective leadership system that was put in place in the late 1970's, almost four decades, towards a centralized system of leadership, towards a one-man style of leadership and away from the succession plan they had, again towards the end of the late 1970's that saw three generations of leaders peacefully succeed each other. that has all been unwritten. that is why it is significant. what we saw is the terms these presidential limits -- two terms -- recommended to be scrapped. likely to get that signed off this weekend confirmed by parliament next week, the

national people's congress. president xi is already head of the party, the most powerful position. head of the military. now he is the head of the presidency and that term limit has been removed and he can continue, should he choose. we got a sense of this. it was flagged in october when we had the party congress and there was no successor anointed. it is not a great surprise, but many chinese are surprise it has happened now. the timing, as one analyst has been quoted to say, "president xi has shown his hand and he has got a straight flush." yvonne: what does this mean when it comes to how xi has directed the economy and country? do you think everyone is on board with the direction for china? has anyone that has criticized him that sidelined -- criticized him been sidelined? tom: many in the state media are talking about the need for

continuity and stability and saying that is why there is a need for president xi potentially to extend beyond his two terms. we are going to get a sense of where the economic and financial direction for china goes from here when the central committee meets in beijing, where president xi and his team with a point in of the pboc and regulators of the banking center and -- banking sector and concerns sector. those will be announced to the public on march 5, china's parliamentary meeting that will effectively rubberstamp these decisions. that is when we will get more clarity in terms of the economic direction that president xi expects to take. yvonne: we are to bring in our next guest, head of global markets. we knew this was not a big surprise after the party congress, the repealing of the presidential limits. how does it change the clinical trajectory in china? is a long-term story and

it is hard to comment at this stage. short-term,e on the [indiscernible] and howrnment and party they change under the current regulatory framework of the financial system. yvonne: we have a chart that highlights what we have seen from president xi the past five years. bear with me as we go through some of these lines. the yellow bar is when president xi became president in 2013. we did see stocks start to rise, the yen also start to we can just a bit -- strengthen, i should say. we saw a boom or bust in the red after the launch of the shanghai hong kong connect. we saw six rate cuts that follow the blue band, the reintroduction of those capital controls after the devaluation of the end. -- of the yen. do you think the policy continuity, xi's leader for

life, is good for the economy and markets? >> we have seen some bad in the financial markets. i think it highlights the current problems in the current ,inancial regulatory framework [indiscernible] different regulatory bodies. it is a priority for this year's financial deleveraging. on the other hand, in the past five years [indiscernible] also the local government and corporate sector also deleveraging the real economy the focus. andink the upcoming planning, also the people's congress, will decide how they going to go this year. tom: what are the risks for investors longer-term, business investors in china and outside china when they are looking at the political changes here? >> i think from the economic

side, in the longer term, one thing is the coming slowdown of investment, especially the infrastructure investment. if we look at the history, 10 grew, now it is growing at the low single digits. five years ago, property investments grew 20%, now low single-digit. infrastructure growth at 15% or 20%. in the next three to five years, slowing to low single-digit as well. what has offset that for the economy, this is one major risk. betty: just getting back to xi thatng and this news essentially means he could roll -- could rule indefinitely, not limited to two terms. what do you make of the timing of this? --lly sort of flatly stating

there really was not a lot of color -- what do you make of the timing? >> i think probably we need more clarification from the party or the government. in the near term, for the party congress for the upcoming session they will look at the institutional change. and i would look at the growth package for this year. betty: do you think it risks -- indeed think there is a risk that if there is just one leader, that reform, no matter how much we have seen and heard from party leadership about reform, that that may slow down? >> yeah, i think of in the past five years in china the growth has been quite stable. each year at that china leverages up quickly, also in the private sector we see rates rising.

i think in the next five years, we going to see -- hopefully, more reforms in the land sector, also sle sector. this is the focus for the next five years. betty: larry, stay with us. we are going to talk more about china. we are going to take a look at the upcoming chinese economic numbers and the news on on bank --a nbagn yvonne: hong kong's property sector is in for a busy week. this is bloomberg. ♪

yvonne: i'm yvonne man in hong kong. betty: i'm betty liu in new york. china is continuing his drive against debt and risk. on friday, beijing seized control of the inquisitive anbang insurance, removing -- removing its chairman and saying he is to be prosecuted. let's discuss this with larry

hu. what did you make of this next move by china? what kind of signal are they trying to send by seizing this insurance company? >> i think this is one step toward financial deleveraging. two years ago, a lot of small insurance companies worked like hedge funds. they sold high-yield products and use the money to finance the deals in the stock market. it is quite risky. it is also related to the regulatory charge, because their regulator at that time encouraged them to do that. this creates a huge risk in the system and the backing from later 2016, they started to find in -- started to tighten the financial system and deleverage the whole system. anbang's case is one step toward that. betty: it seems that way,

sending a strong signal they are going to tackle the debt problem in china. you mentioned the regulators. not only regulators in china, but i'm curious what kind of impact you think this will have on regulators in other countries that are pending approval on many deals that companies have made between their home country's companies and china? what kind of impact do you think that is going to have? >> for china, for the financial system in the year term, they will continue to overhaul the financial system and preventing further regulatory change. [indiscernible] -- local government debt and household debt. yvonne: you could say the crackdown so far has been low hanging fruit. the real test will be rules implemented on asset management

products in the coming weeks. >> exactly. this will create some short-term turbulence for the market, and i , i don'ticymakers think they want to create huge shocks. they want to make the system safer longer-term. yvonne: what does this mean for property developers that have leveraged up and relied on off-balance-sheet financing to fund their projects? could we see any defaults? >> in the longer term, the next 2-3 years, definitely more default. the so-calledans implicit guarantee in the system. that creates a huge moral hazard. plus in the regulatory change, that is why we see the system has become more risky in the past years. the deleveraging will be the forecast for this year. yvonne: we had a story from

thomas reed church -- thomas research, she called the deleveraging chinese medicine. she was flagging the rebound in wealth management products in the second half of last year as a sign that things were faltering already, because they are going to talk to us but have a soft approach in light of if it affects the growth targets or growth impact for china as well. do you think the narrative really has changed? >> i think on one hand, in the sense of chinese medicine, i don't think they want to give it a big shock, which means we are going to see a wider spread of defaults. congress,ing people's i think there is still a growth target for this year, likely around 6.5%. on the other hand, the debt .evel is alarming

the policymakers have made it very clear they want to deleverage, reduce the risk and make the growth more sustainable long-term. together and goals i think there are some trade-offs, but they will push these two goals of the same time. betty: certainly hearing a lot of tough talk from the regulators and chinese leadership on tackling this debt problem. this has certainly been something within china that has been a hot topic among chinese citizens, looking at companies like this, like anbang. do you think the regulators should have acted more aggressively, that they are coming late to the party here on companies like anbang? >> yeah, overall i think the regulators should tighten the regulations compared past 3-4 years.

in 2014, china had a period of so-called financial level is levelization. of central banking and the financial system has become more liberalized. on the other hand, it has also had some impact, especially on risk-taking and a small insurance companies working like hedge funds deleverage up. this is why they want to tighten the regulation. yvonne: it is interesting, because what exactly does government ownership mean when it comes to these companies? their overseas properties, if they are selling down these assets, does it actually lend itself to the theory that we are sending money to the u.s., converting remedy to usd and keeping those dollars offshore and it does lead to more capital outflows? >> i think it also relates to the concern, the pressure. that is why two years ago when the rmb was facing downward,

policymakers starting to tighten the flows, especially outward direct investments. think thement, i capital outflow pressure is much easier. i think in the near term, this is still a concern for the government, whether they going to continue to expand and loosen those restrictions out toward the direct investment. yvonne: do you think we could see more of a clean flow or more liberalization of the renminbi? >> even the capital outflow pressure, we are going to see more push for the rmb internationalization, also seeing the u.s. more determined by market forces year. yvonne: quickly, is anbang an anomaly?

we see this government takeover, but we are seeing reports the banks should support hna. we see this stake in the french could tour fashion brand. is there a pattern to have the government is cracking down? >> there is a difference in different companies because they are in different industries. the general direction for the government i think is the same, and want to reduce the risk especially the financial system, because they clearly see past the three or four years, the system has become more risky. yvonne: always appreciate the time, larry hu from mccoury joining us to talk about china. you can find a roundup of the stories you need in today's edition of daybreak. just go to dayb on your terminals, your mobile, and the bloomberg anywhere app. you can customize your settings so you get news you care about. this is bloomberg.

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yvonne: a quick check of the latest business flash headlines. germany says the $9 billion stake in daimler has been in the regulations since there is no need to invoke foreign trade investment roles. they want to cooperate on electric vehicles and shift to battery power. the deal makes the chairman dimers leading shareholder. it is also the largest investment by chinese company in an overseas automaker. daimler is involved in a second deal with china to build a new mercedes factory to meet rising demand for its cars. a filing by ba i see to the hong kong stock exchange says the pair will invest $2 billion to make a range of mercedes cars, including new energy vehicles. it does not specify where it will be built.

coming up, jay powell prepares to testify to congress. what he might say about the pace of rate hikes and state of the economy. this is bloomberg. ♪

yvonne: 8:30 in hong kong. taking a look at pictures from victoria harbour, kind of gloomy. plenty of green in the markets after the strong finish on wall street haslinda: asian equities -- wall street. asian equities all in the green. if they can re-exert themselves above the 13,000 level, that could be positive moving forward for the week. from bloomberg's asian headquarters, i'm yvonne man. taking a look at the markets, the latest from sophie kamaruddin. before that, first word news with haslinda amin. haslinda: china is set to repeal existing term limits on the presidency to allow xi jinping to rule beyond 2023.

the communist party says it wants to remove the constitutional provision barring the head of state from more than two consecutive terms. that would remove the only formal barrier to xi staying in power indefinitely. the move was first proposed that a party meeting last october. china's drive to cool the property market continues to work with home prices rising in january. new home prices, including -- excluding state subsidized to 52 comparedd with 57 in december. they were unchanged in five cities. the government is experimenting with ramping up rental supply well fine tuning existing control. a proposal for mexican president enrique pena nieto to visit the white house is said to have been postponed indefinitely. two officials close to the president's diary declined to confirm a washington post report

that during a call last week, trump would not agree to publicly confirmed that mexico will not be paying for his border wall. the former italian prime minister matteo renzi is urging politicians on all sides to combat all forms of violence ahead of next weekend's elections, after battles between far left and far right activist. speaking to bloomberg in rome, he said the clashes cast a shadow over the campaign, sparking unhappy memories of the 1970's and 1980's, when italy was scarred by politically motivated extremists. >> i think it is important for to give a message against violence. all types of violence. i am really happy because today is a good day for roma, for all italy. haslinda: global news 24 hours a day, powered by more than 2700 journalists and analysts in more

than 120 countries. i'm haslinda amin. this is bloomberg. yvonne: thank you. let's get to your markets. we are seeing equity gains as rallies building leading up to before jay powell's testimony, also key data from japan. haslinda: ahead of jay powell's appearances this week, we're seeing bond yields rise, 10 year yields sticking below 2.9%. we are seeing the move lifted across equity markets in asia, the rally in asian stocks set to extend to a third week. we have the bank of korea to decide on its rates on tuesday. this is governor lee's last scheduled appearance. we do have the korean won climbing ahead of that for a second session. other currencies, the aussie and kiwi dollar under pressure, the aussie falling for a second day. there is little on australian

data that could influence the direction. likely more influence from china and u.s. when it comes to catalyst for the aussie dollar. -- the yen hovering around 107, providing support for japanese stocks. nikkei 225 adding over 1%. showing you one of the best performers in tokyo, ube industries, set to snap a decline. oncks did fall over 6% friday after the company revealed improper quality checks for products at a chemical plant. the company said defective products were shipped to 50 companies. over in seoul, posco climbing with others steel producers. the potential u.s. steel tariffs could have an impact on south korea, china, and india, but effects will be manageable due to small volumes. posco has moderate export to the u.s. with less than 5%. the last stock i want to highlight is reliance worldwide.

earlier jumping over 11%. it is set for a new record high after listing its earnings. yvonne: thank you so much, sophie kamaruddin watching the market action. the market action is going to also happen -- markets are going to be watching jay powell, the new fed chief, and his presentation to the semiannual monetary policy report to congress this week. kathleen hays with a preview. the fed releasing this 55 page text of his testimony. kathleen: the report, which he will be testifying about, so you have plenty of time to read through. [laughter] kathleen: he does have interesting stuff to say. you get the sense that the powell-led fed is going to follow the path janet yellen set. growth is picking up, inflation expected to rise, so they are supposed to have gradual rate increases.

further increases. we heard that in the policy statement and fed minutes. what we are also figuring is congress is going to focus on the question, does further mean faster? are you going to hike rates not three times but four? let's jump into dots on the bloomberg. you can see how the fed came into 2017 into 2018 with the consensus for three hikes. the question is after we have heard from some fed williams -- some fed officials, will jay powell give us the signal he is on board with that kind of thinking? also we learned in this report is that the fed sees the economy as near or above. climate. labor market getting tighter, but they don't seem concerned about it, even pending labor shortages. look at what they said in the policy statement about that, because what they seem to be although that employers report having more difficulty finding qualified workers, hiring continues at

hayes and serious labor shortage would have brought larger wage increases then have been evident. they don't seem concerned about wage inflation rising quickly haslinda: 2 -- quickly. tuesday is the first day of his testimony at the house financial services committee. 29, he will testify to the senate banking committee. yvonne: not just traders and economists who are wondering how many hikes we will see this year, also the central banks. a very interesting meeting for the bank of korea, because it is governor lee's last policy meeting and he is seen as leaving the key rate unchanged as he turns over the keys to the next had of the bank of korea. commenters are saying they're going to leave rates unchanged, but no matter who is the next be ok chief, the fed may determine what they have to do with interest rates.

into another bloomberg chart, #btv 2810. we can see the bank of korea under governor lee cut to the key rate five times to a record low of 1.25%. they raised the rate by .25 point in november. look how inflation has moved higher. inflation is back down to 1% year-over-year. that takes pressure off them to move down further. lookingso-team in seoul at a likely be ok scenario for policy this year. the fed hikes rates four times and the bok hikes two times. this could spur capital outflows. one -- weaker won will be tolerable with inflation low. it could help export growth. the economy is seeing growing 3% this year, slowing down in the second half.

whoever lee's successor is is expected to be cautious, avoid policy mistakes. the deadline is drawing closer. so much change in the central bank robbery now. the new chiefs -- the central bank world now. i'm getting excited to see who will be the successor. yvonne: we could be getting some announcement this week. kathleen hays, thank you, global economics and policy editor. next, china making a billion dollar bet in daimler. how the investment could shake up the auto industry. this is bloomberg. ♪

yvonne: i'm yvonne man in hong kong. betty: i'm betty liu in new york. a quick check of the latest business flash headlines. higher tvd movie -- and movie spending by netflix and amazon have forced you to

the pause its ambitions. google holding youtube red at current expenditures for the next two years, a plan causing producers to criticize the strategy. google often makes multiple investment in the same industry and wait to see which ones shakeout. yvonne: bte is hoping to get strategy back on track with a new smartphone in barcelona. is described as a midrange device that features high-end options such as dual cameras. the range will sell from $220 to $370 and follow a trend where some manufacturers adopted last year's top stacks as this year's midrange models. betty: black panther has joined an exclusive group, and becoming only one of only four films to earn at least $100 million in the second week in theaters. it took $108 million at the north american box office, beating disney's forecast of $83 million to $95 million and takes

the two week amount to $400 million. the founder of a chinese carmaker geely is reportedly on a goodwill tour in germany after becoming the biggest shareholder in mercedes parent daimler. china's biggest investment in an automaker today. ben is joining us. tell us more about what is happening between geely and daimler. ben: they have suddenly bought a $9 billion stake in daimler, hoping this can help tie the german technology that daimler has, especially in electric cars, economist driving, and bring it back to china, a gigantic car market growing faster than the rest of the world. betty: what does geely hope to get out of this? ben: what they want from daimler is better access.

what they are hoping they can do a share technology and expertise on batteries, overall electrification of cars, things where daimler has been leading the way. what kind of overseas deals has geely embarked on? they don't have a foreign carmaker as a partner. what have we seen in the past? ben: they have bought volvo cars in sweden, which has turned out well. they are probably hoping that experience will assuage fears in germany about the deal. they kept management in place, they say they respect european laws and labor unions. they recently bought a stake in volvos truck arm and also bought a lotus supercar maker in britain. they have experience doing these deals. yvonne: they don't have a foreign partner, but daimler has several in china. is not going to be a problem? unusual forot

companies to have more than one partner in china in the automotive space or a company to have multiple foreign partners. this does happen. now they are going to start working on the details. how is it going to be different from daimler's other partners? that is part of the reason they are embarking on this goodwill tour to meet the executives and merkel's economic advisers. yvonne: thank you, ben sent, our asia deals editor. speaking of hong kong, talk about the property market. the sector is in a busy week with earnings from leading developers. ands bring in patrick long run through the outlooks for prices. is there any risk of these skyrocketing prices being dampened from the fed raising rates? patrick: [indiscernible] the interest rate keep going up and up. so far this year, we see the

high boy is coming down a little bit. the end of last year, 1.2% -- yvonne: lagging from what we see from the fed. patrick: that's true. you see the bands also doing more in terms of getting high. the mortgage rate last year, we see a keep going up. this year, we also see again. they are all offering interesting first year 60%. it is quite favorable for the buyers here. the market, you see the liquidity is there. yvonne: why do you think hong kong developers in terms of equities or stock prices have largely underperformed? patrick: if you look at the rates [indiscernible]

they are all trading below values. is for the main reason the market, concern about interest-rate risks. also we see [indiscernible] at least i think the upcoming results, we could see some doing pretty well. they are more or less beating 70% of the -- for hong kong sales. it could be beating the target. they have the fiscal year and june to go. what should we look for in this week's earnings? what kind of surprises might we expect? patrick: first of all, we see the margin in terms of development expanding.

the main reason is last year going up 13% and year to date, another 4%. there is still an uptrend. possiblesee more earnings growth. , i thinkof the ramco the hong kong office is doing really well. we are also seeing a tough recovery. we also see this is a catalyst for overall markets. that's why i think for the earnings, a couple of developments, hung kai or even sunflower land, could be a catalyst for a price movement. overall, i would say for the sales target this year, they raised further [indiscernible]

also even for investment, receding in terms of office and retail on south market. betty: what is the outlook for hong kong reads? patrick: you see the transfer of bond year moving up, basically the legacy of impact on performance of major risk in hong kong. they move in tandem in terms of dividend yield and shares of bond yield. you see the physical market in hong kong is still resilient and lots of fiscal yield in hong kong, the office or retail trading similar. yield, is the lowest trading at about 3.7%. rate moving upst a little bit, there may also be

demand coming back to the fiscal markets. yvonne: patrick wong, property and list for bloomberg intelligence. you can always find analysis of the days newsmakers on bloomberg radio. tune into "daybreak: asia" from 7:00 p.m. hong kong time. also download the app or access it by bloombergradio.com. betty: next, samsung taking the fight to apple with a new handset. we will tell you more. this is bloomberg. ♪

betty: i'm betty liu in new york. yvonne: i'm yvonne man in hong kong. a quick check of the latest business flash headlines. reports from japan say hong kong and sharp are striking out in a new direction using their tie up to launch a joint venture in the car world. they are putting together a $30 million plan for auto-parts, including an operation to produce and sell vehicle cameras. it is not clear when the venture might start. says stocksan sachs could plunged by 20% if the 10 year treasury yield hits 4.5% by the end of the year. thatonomist also warned the economy would likely suffer a sharp slowdown, although probably not a recession. the recent market decline was

fueled by concerns tied to the yield approaching 3%. almost there, not quite. samsung has launched its answer to the iphone x, a flagship handset called the galaxy s nine. our chief north asia correspondent stephen engle has been looking at the specs. is this a game changer? stephen: it is a similar form factor to the s8. there is more performance and a much better camera. they have augmented reality emojis, stereo speakers, a number of different steps. is it a game changer? tohaps not, but they do need roll out something after apple came out with the x, which was a bit of a game changer for them, the first major change in quite a while for apple. they needed to keep pace. the one thing that maybe samsung has going for it is cheaper, as much as $200 cheaper for the s9

on t-mobile, about $930 for the verizon, $720 on for the normal on t-mobile. $999 starting price for the iphone x. it is a critical launch for samsung because they are another step beyond the note 7 fiasco, the exploding handsets, the many phablets of 2017, and the jay y lee scandal that had a more positive outcome with his release from jail, but still a black mark on the company. yvonne: now that he was freed on a suspended sentence, how bit of a test is the project for j wiley? stephen: after the third quarter, samsung put in a new ceo and heads of divisions. they had a record full year of profit. they have been doing well on the back of chips, smartphones also doing well.

latest numbers have 22% of the global smartphone market. apple's 15%, so they have a lead. how are they going to keep this lead in the android phones against the competition from huawei wereher ru others that are cheaper and offering the same features? samsung under jay y lee -- that is what they are going to be saying. he is back, he cannot have any missteps. yvonne: at least calm some concerns that perhaps he is able to manage the company and perhaps we won't see a slowdown in the handset division. stephen: no missteps, keep pace. keep in mind as well, it looks like they might be handing a lot of their firepower for the next found because they have been working on a foldable screen. maybe the next one, the 10 if they call it that, the s10, would be the big next up for them.

this one just keeping pace for them. yvonne: interesting they kept it nine when iphone went from eight to 10. stephen: there is probably more difference between iphone 8 and and iphones news9 x. yvonne: stephen engle, chief north asia correspondent. time for a quick look at what is coming up on bloomberg markets. ceo will beescope on in 10-15 minutes, talking about the lift in the first half earnings. the big question is, what happens next? what we areresting hearing from president trump considering tariffs on steel imports. rishaad: and will they be affected? malcolm turnbull, the australian prime minister, has been lobbying washington. all that to discuss. then we have house prices in china out on saturday, fewer

rises than the months before. how are things changing when it comes to government action with regard to these prices? yvonne: they want people to rent more than buy. rishaad: they are giving young graduates help with renting, trying to manipulate second and third tier cities and have the democratic looks with people wanting to get on the housing ladder. and anbang insurance in focus once more as well. betty: a lot ahead. that is it from "daybreak: asia ." markets coverage continues next. yvonne: stand by for a bloomberg markets. this is bloomberg. ♪

rishaad: asia-pacific markets are extending a two-week global rally. investors turning to central-bank policies. jay powell prepares his speech on capitol hill. winning the party, allowing him to stay in office indefinitely. haidi: blue skirts on fire today is earnings come in ahead of targets. we sp