♪ >> the one china's nominal roman allowed the president to rule last. no concessions, washington keeps the pressure on north korea ahead of top-level talks. australia wins exemption, the nine security. that deal. betty: mixed messages in the payroll account, rising jobs growth, flatlining wages putting fed policy in the spotlight. haidi: hello from sydney where

it is past 9:00. this is daybreak australia. we are in our from the open of asia's major markets. betty: it is just past 6:00 p.m. in new york. we are going to be looking at how all the action on wall street will play into the asia-pacific trading day. it seems that investors all ,round cheered this job report affecting the outlook on interest rates. we will talk more about the impact on the markets, but as you can see, this robust jobs report lifted the markets. the dow is up 440 points, the s&p higher 2%. the nasdaq rising as well, of 1.8%. -- up 1.8%. other factors into this gold run, the breakthrough it seems between the u.s. and north korea, the tariffs not looking draconian asd --

we have thought. that is all different from february. differentretty appetite. looks like we are taking a sigh of relief after the tenuous few days of the trade front. take a look at the set up in asia. we are expecting positivity to the new trading week. we have five out of six sessions in the green. new zealand we are seeing gains of half a percent, the kiwi dollar at 72.93. the u.s. dollar is weaker against all of these except the yen. futures in australia are going weaker. we have consumer business sentiment numbers out of australia as well. sydney futures showing 57 points into the sydney open. the aussie dollar 78.51 off the lows last week as we get possibility -- volatility subsiding. take a look at the big week

coming up. we have a struggle to maintain over $62 for wti, but the opec reports shortselling the issue. it is creeping back into the market with hedge funds adding the most in terms of short positions this year on falling wti prices. these concerns as we see projection surging to record levels. still a downside with the commodities complex. we are watching some of those related, going into the sydney open. let's get to first word news with ramy inocencio. ramy: good morning. "first up the trump administration says north korea will get no concession ahead of any potential talks. the cia director will relax any talks, and said kim jong-un must stand by his offer to hold it in his best a clear missile test before any meetings. no sitting president has ever met a north korean leader, though jimmy carter did greet grandfather.s

preparing the spring statement this week, he is expected to announce the country's smallest deficit in a decade and plans to loosen the purse strings on public spending. hammond is under pressure to relax austerity after eight years of public spending cuts have taken a toll on the health service and other bodies. sayrts from london meantime the saudi aramco ipo is unlikely to go ahead this year. the financial times say u.k. officials were told by their counterparts during the visit of crown prince mohammed. he said london remains in the race to host the international portion of that listing but riyadh have yet to make a decision. the timing of the ipo is unimportant they say. >> i don't believe we are heading any deadlines, and as far as i am concerned, between december 31 and january 1, there

is no value loss for the kingdom. line,on't see that pushing that line you referred to as being significant in the decision-making process. ramy: elon musk set a space exploration market aimed at mars could make short test flights as early as next year but admitted his forecast on project completion times are sometimes overly optimistic. last year he announced spacex was designing a market -- a rocket that could travel anywhere on earth in an hour which would be the basis of a mission to moon and mars. the debut of black panther in china has now pushed the worldwide ticket sales to more than $1 billion. sixthlso the studio's milestone. the movie has been setting records at home and abroad. it is a symbol for promoting diversity in the movie industry. it is expected to surpass $500

million in international sales alone this past weekend. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i am ramy inocencio. this is bloomberg. ♪ thanks for that. let's get to our top story, china has approved sweeping constitutional changes to repeal presidential term limits and allow xi jinping to rule in definitely. tom mackenzie joins us now. you know, we expected this to pass without much fanfare, but how significant is the move? did, such as the nature of chinese politics. we knew this would happen. it was announced by the central committee a couple weeks ago and put to the vote as it was sunday. the national people's congress, and we knew they would rubberstamp it. 3000 delegates approximately in the hall. two were voted against, three abstentions, and therefore we

see the change in constitution as you say removes the term limits on the presidency here in china. this upends three decades of concessions or a system i should say that was focused on the consensus building collective decision-making and smooth succession from one leader to the next. that has been scrapped by this decision. i spoke to the delegates as they left the great hall of the people. they said this show the development of china and the will of the people. of course the people have not been asked about this decision, but the thinking for the party is already president xi is head of the military. there are no term limits, and he has already got the most powerful position. there it makes sense for the party to remove limits on the presidency. others have said this allows president xi to give space and time to pursue his agenda, whether that is inserting the party throughout society or tackling issues like debt and pollution and giving him that

clout on the global stage. others say there are long-term risks to this strategy, having too much power in one man's hands is what the former paramount leader in china warned about in the 1980's. that is why he crafted this plan of collective decision-making that comes to an end. so as ever there is a question of stability in the time being, but at what cost? betty: the commerce minister also had something to stay about -- to say about trade over the weekend. tell us about that. tom: that is right. the trade minister, the commerce minister in beijing, he really underlined what china sees as a grave risk of a trade war short it materialize between china and the u.s. take a listen to what he had to say. >> there is no winner in a trade war. a trade war will only bring disaster to china, u.s., and the global economy.

china doesn't want a trade war and will not start a trade war first, but we can handle any challenge and will firmly defend the interests of our nation and our people. tom: so the minister also saying that the u.s. overestimated its deficit with china. clearly this is a big bump at president trump. debtinister saying that was overinflated by 20% because of statistical anomalies. he also said if the u.s. removed controls on a high-tech exports from the u.s. to china, that could reduce the deficit by 35%. he was asked about potential retaliatory measures, restricting purchases of boeing aircraft or restricting imports of agriculture. he was not drawn on that. he did say many sectors of the economy remain more closed like telecom but that is because china is in a developmental stage. he promised the commitment to

open the financial sector would be pushed through. betty: all right, tom. thank you so much. keeping tabs on the latest in china, tom mackenzie joining us. let's get back to how stocks rose on that big rally of payroll reports. there is continued strength in the economy. wages still lag. romain bostick joining us now. doesn't seem like there is still the goldilocks scenario, and that is why there is stocks going up? ,eporter: for friday we got it but no inflation is back on people's radar screens. sort of got bumped away by the trade tariffs and issues on the korean peninsula. this week we are getting that cpi data everyone has been asking for. this is the big report we get before the fed meets in a week and a half. last week was great for stocks. the nasdaq was up 3.5%, about four points on.

-- 4%. the s&p was up 3.5% gain. most of that was tied to the jobs report but when we saw the consensus for now, the price growth is not going to be as fearful as some people thought. we could take a look at inflation expectations built into the market. we can look at the 10 year breakeven rate which shows you on the white line input market expectations for annual inflation of the next decade at one percentage point. for cpi data we are looking for a reading of 2.2%. that is from economists. betty: that will be very critical. and how will that impact the treasury market, that will be closely watched for your we have $62 billion of notes being auctioned. .omaine: that is a behemoth that includes three-year, 10 year and 30 year bonds. these were the same authorities we had a month ago where we saw lagging demand, so there will be a lot of interest going into this one whether or not

investors are willing to embrace some of these issues they did last month. we saw treasury sold off on friday but the 10-year yield pushing back to the 2.9% level that caused notable rotation and equities. this is the last treasury auction between -- before the fed meets in a week and a half. we have seen that trend rising a little bit more, so we will see what happens with the inflation report coming out tuesday morning and having the big treasury options straddling monday and tuesday how the market reacts to it. haidi: so inflation back in play the week before the fed. does that mean the trade risk, the trade war concern is off the table now or in the background? romaine: it is minimized. we came into the week with fears about how the tariffs would look. we got a peek and so how many exemptions there were, the tariffs seem to be comfortable that it wasn't much of a threat. upwardsee rotation of

repricing of the stocks that had been sold off because of those tariff fears like heavy machinery makers, even nasa plays are back in focus. this is the most sensitive for the trade talk. friday, outpacing the gains of all the major sectors. that was the best performance for that index in eight weeks, and it shows you how the fears are feeding. on the flipside there is concern in the russell 2000 index. a lot of people piling back into domestically focused small-cap stocks. that index was up 4% last week, up 8% since the bottom of the correction february 8. the reason is simple. if you are trying to get exposure to the international trade risk, all the about 80% of that index, revenue from the index is coming from domestic customers. haidi: thank you so much for that, our news editor remain

week.k wrapping up the washington and north korea, discussing the risks -- and rewards. next, surging payrolls, sagging wages, the jew -- the jobs report seems like a double-edged sword. what it means that the fed. this is bloomberg. ♪

♪ haidi: i am haidi lun in sydney. betty: i am betty lou, you are watching daybreak australia. there was a dramatic divergence in the february jobs report. we saw wages sack, and that was casting doubt on whether the fed would accelerate rate hikes when it meets at the end of this month. we are waiting for inflation data that will come out this week. the policy editor kathleen hays here with more, but equity

markets responded positively. kathleen: jobs, that is part of payroll, up the most since the middle of 2016. in gain was 313,000 february. it dwarfed the gain of 200,000 in january which was already healthy. you can see, boom, look how that got bigger. here is the rub. wages. the equity market, the bond market got straight data in january, then they saw wages jumping year-over-year, ..9% from 2.6% look at 189. rest assured, inflation is not accelerating on this basis. there is the average early -- earnings. they are back to 2.6 year-over-year. you can see the six-month moving average pretty flat now, even at a point with the yellow line , 4.1%.fo -- 4% i spoke to the chicago bank president. he said this shows the labor

market but listen to this. concerned with inflation getting out of hand. i don't think we are behind the curve, but there is a scope for us to be careful and patients. we are assessing the situation, and still by the end of the year, we can produce as many as is necessary. that can be consistent with the gradual approach, even if there was some delay. kathleen: march 20 and 21. this is one of the meetings were they revise their projections. they can change their consensus on the dot, three or four this year. charlie evans waiting to see if he would be on board for the march rate hike. that is almost a done deal. i think a lot of people are saying look at the trajectory. they don't hike a lot. maybe in 2018. they can speed it up in 2019. haidi: let's get some thoughts from the advisors capital management cio, joining us from florida. great to have you on daybreak

australia. to her point, march is a done deal. what happens from there? do we have an easier path, a quicker path now the trade war's are on the back burner? wars are on the back burner? >> it could be a minor issue. donald trump laid a pivotal -- a pop pistol. it further byuce exempting the number of countries from the tariffs, so i don't think that is significant. i suspect some of the foreign companies will scream bloody murder and invoke retribution publicly, but in fact they will get little in return. so it will blow over. i think that issue is the performance of the economy, job growth kathleen talked about, and in particular the behavior of wages. the wheel question is -- real

question is how much of that growth is because of unusual factors. there is a very major unusual factor i think that is driving it, which is a lot of people from puerto rico have left puerto rico and moved to the u.s. because puerto rico is in bad shape because of that storm, it knocked out power. still not back to the entire island. a lot of people have come over here for jobs, employment. we are hungry for work. there is the unemployment rate in the u.s. is so low that people find jobs pretty quickly. that is what is driving the number of people being hired. it probably is also artificially lowering wage rates because those people on average are less skilled, so they are taking lower wage jobs. well you know, the average wage earnings, when you take supervisory workers out, 2.5.is around 2.4,

is that going to hurt the federal reserve as charlie evans argued? do they really need to signal right now, we know we are getting four hikes? should we see what happens? charles: i think that depends on the cpi report. i don't think they will rush ahead to tell everyone they are going to do four. , and a boat -- a vote there are a number of people that really are not in charlie evans' camp. he is perhaps the biggest at the federal reserve, so that is the view that you got from him. there are other people who are more extreme that would rather .aise rates sooner and by more somehow they will have to work out a deal and come to a conclusion. there is nothing that forces them to commit to four rate hikes at this point in time. it is only march, and there is a lot of things they will get over the year.

betty: we don't want to get ahead of our skis. into the is a lot made inflation reports, particularly cpi in particular, whether or not this will affirm yes, will we see faster rate hikes or not, and the impact on the bond market. i know you wrote a recent piece where you said, seems like the markets are concerned whether we get a steeper yield curve or a flatter yield curve. which is the safe one? charles: it is interesting. i don't think either one is particularly safe. if the yield curve were flat, that would reflect tightening by the fled -- the fed. if it were to steepen, the market would be worried about inflation. the fed is not acting quickly enough and long-term lines are selling off. that is the interesting thing onut the markets' reaction friday. the stock market did well. they saw the large gain in jobs.

economy is doing well in growing, but the bond market sold off. if inflation really is moderating, if inflation is not a concern, the bond market should have rallied, not sold off. so the bond market and the stock market are not seeing data in the same way. time for one quick question and answer. tax cuts, how much of a stimulating the economy this year? how much do you want from that? charles: very little because they are just begun to hit people's paychecks, but i would expect them to be quite significant. -- $150 million meaningful for the economy. haidi: we will have to leave it there. capital advisors, charles lieberman joining us. current -- our kathleen hays. you can get a round up of the stories you need to know in this

edition of daybreak. go toerg subscribers can dayb . it is also available on the mobile in the bloomberg anywhere app. you can customize settings so you only get the news and assets you care about. this is bloomberg. ♪

♪ haidi: i am haidi lun in sydney. betty: i am betty liu, you are watching daybreak australia. isna is being warned it among the economy's most at risk of a banking crisis. the bank for international settlements keenly enter -- analyzes data and is friday the prices and high debt levels. canada and hong kong are also marked at risk, although italy is seen as less of a problem despite their slow growth and debt ridden banks. haidi: deutsche bank is planning next 6000 job cuts in the

five years. the final tally will be negotiated by the board and the unions and may end up being lower. the ceo has promised a couple billion dollars in costs after completing the merger from the old retail arm and the bank subsidiary. betty: and they plan to raise $3 billion in a ipo management. $44 apiece, and the sale of another 10 million later. flagged thiscryan a year ago as part of turnaround. they will take 5% of dws in the ipo at the issue price. haidi: coming up, sydney's expansion to take the tri-city approach. what troubles for planning for the future. what your about this blueprint from the government. this is bloomberg. ♪ mom you called?

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♪ haidi: it is 9:30 a.m. on monday morning in sydney. markets open in 30 minutes time. six to the out of upside on wall street. trade war's fears starting to subside. the fed coming up. betty: we think that will be the focus. it is 6:30 in new york. you are watching daybreak australia. let's get to first word news with ramy inocencio. ramy: "first up china's nominal parliament has voted to allow insident xi jinping to stay power debt -- indefinitely. -- allow him to

remain in office beyond two terms. other constitutional changes including a more conservative foreign-policy and bragging rights. australia's government has denied striking a security deal with the u.s. to get exemptions from the steel and aluminum. malcolm turnbull will be getting that in place. they should have a relationship based on a quality. >> trade relations with the president acknowledges is a fair and reciprocal. the u.s. has a large trade surplus with australia. ramy: the russian military has released a video to show the successful test of a hypersonic

missile that can fly up to 10 times the speed of sound. vladimir putin has described this as an ideal weapon and said it is too fast to be intercepted by current air defense systems. the rocket is one of a range of new generation weapons. last -- now catapulted australian cofounders on to the bloomberg billionaires index. the have risen more than $1 billion to $4.1 billion apiece near that makes him the 499th and 500th richest people on the planet. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i am ramy inocencio. this is bloomberg. ♪ haidi: thank you so much for that. let's get a quick update. look ahead at the asian markets

set to open this monday morning. trading new zealand, trade is underway. up 6/10 of a percent. some weakness in the u.s. dollar against really most of its peers except the yen. australia looking to open positively given the some -- the strong hand over from wall street. new zealandth futures, the aussie at 78.53. the kiwi is that 107.65. the biggest option is the treasury demand for the 10 year and three-year and 30 year being sold off this week. 106.87.is trading at just a reminder at how we closed out the week, the s&p 500 seeing a fifth straight session of gains out of six. jobs numbers and expectations

for now, this week, the trade wars seem to be subsiding. let's get a look at what we should be watching with trading in asia. adam haigh is here. looking like a pretty strong start of the week for asian equities. they have strong payrolls report and the earnings upgrades. adam: we have gotten earnings to orextent over the last week so. the market narratives have been driven by the macro events with geopolitics and inflation and growth. it is a useful exercise to go back to the earnings picture and remember where the growth is coming from. one interesting note over the last few days, they have been upgrading their estimates for the remaining market earnings over the next 12 and 24 months. if we have a look at the chart this showsl 62443, how the asian market equities have been lagging behind the

rest of the world. one interesting note from the ubs report was have a see thailand, china, taiwan, those markets dominating the revisions they are seeing. it is all premised around the consumer -- the continuation of a weaker dollar here that could be tricky with dollar strength coming back and also a well flagged and telegraphed trajectory for higher rates in the u.s. that certainly plays into their understanding it is still a fairly smooth upward trajectory for earnings in asia. they have given the performance of asian emerging markets, seems like a bit of catch-up to be had. betty: the folks at amd capital went to 30% cash recently amid the volatility turmoil. they are now putting that money to work, so what is driving the renewed appetite for risk? adam: so these are the folks that run the dynamic markets fund, and when you spoke to us at the end of last year, the

leader was talking about cash flow 30% or so, which seems fairly extreme. a lot of people were not just as worried as he was about some of ultimately did unfold and put him in a very good position to take advantage of the pullback. as we have seen now, if we dive into the terminal, 6460, this shows us here there has been underperformance year, that we have had that -- here. that we have had the selloff of the highs from the january peaks and february selloff. he has trimmed that back to 5% and said the weighting fears around the korean peninsula tensions, also of trade wars, he of certainly putting a lot of that money back to work where he's finding kind of incremental pockets of value. whether or not this is a sustained old back and whether

we can push on from here, it is still a bit of a moot point, but many managers are taking advantage of this. haidi: global markets editor adam haigh here with us. sydney's rapid expansion means it is increasingly becoming a tale of three cities according to the greater sydney missions chief commissioner. i spoke with lindsay turnbull and asked how difficult it is to encourage businesses and individuals to look beyond the traditional city borders. >> a lot of businesses are starting to relocate to the central city. if you walk the streets of paramount a, there is a booming drops -- jobs and boom in new housing and boom in general. it is such a loud part, and there is a boom underway in the western city which will be great excellent -- greeley accelerated by sydney airport. so we have to make sure it is our job like in health and education in the private sector of world history to the cross

greater sydney. we do that by providing connectivity and a well-educated population. the infrastructure -- >> having been in asia, witnessed the trains, places like beijing, there is a lag in australian cities. >> sydney and new south wales is undergoing a infrastructure boom. $50 million or $60 million of investment in systems, in the metro, and highways and hospitals, right across the spectrum of hard and soft infrastructure. there was a huge amount of investment which is really good because any city experiencing population growth has to have infrastructure delivered together with that population growth. it is fundamental. >> extraordinary sensitivity

when it comes to foreign investment in australia. that is one of the things that dominates headlines. there like an appetizer for the foreign investment? >> there has always been a lot of foreign investment in sydney, so nothing is changing. the investment will come from all are in australia. that is being clearly played out. >> sensitivity with chinese investment? >> i think there is a lot of huge chinese population in -- chinese growth in population of chinese background in sydney like there is a very strongly growing population from south asia. sydney is one of the great multicultural cities of the world. we have a very tolerant and open invitation to people from all over the world. betty: commissioner lucy turnbull at the wharton forum. haidi: a special meeting between ,resident trump and kim jong-un

korean history. the risks and rewards inherent in such an investment. this is bloomberg. ♪

♪ betty: good morning, i am betty liu in new york. haidi: i am haidi lun in sydney. washington said there will be no lessening of sanctions or pressure on north korea ahead of potential talks with kim jong-un and president trump. in a meeting would be a first. no sitting president has ever met kim, his father or grandfather. let's take a look at risks and rewards outcomes with our editor ros krasny. did we get any developments after that bombshell? we have not had too much over the weekend. the white house really was trying to walk back president trump's acceptance of these

talks. it seemed in the end of that they are moving ahead, and get things set up. there is so much we don't know. we don't know whether talks will take place. that is very fraught with controversy in and of itself. would you go to pyongyang, would kim leave north korea to come to the united states, or would there be a neutral venue, so a lot to still be decided. and there is some concern among sort of the poetic experts, foreign-policy experts on the united states -- in the united states that comes at a time when the u.s. is a weak bench terms of korean experts. they don't have a permanent investor -- ambassador to south korea, and the most senior north korean expert recently retired. so whether that will slow the trump train down on this, it'd

be determined. betty: i am curious about what this is about president trump's style. we have heard him come out strong against his rivals like china, for instance. then they hold a big parade, he then theythere, and are fast friends. is it kind of a strategy here with north korea? be, and as you say, it is a head snapping change of view. last august we had a president talking saying this was not the answer. he tried -- he chided his secretary of state in october saying, don't waste your time talking. certainly, that -- it is believed that the u.s. and north korea could have talked through channels, maybe there has been some kind of breakthrough in that. maybe there was something that

happened at the winter olympics, and certainly when the south korean diplomats came to the united states, came to washington on thursday with a proposal, maybe they had some thing up their sleeve we do know is the president almost crashed the meeting that was taking .lace at the white house really accept that pretty much on the spot, so it is really beyond improvise a shuttle, onal, whichprovisati is disturbing to those who consider them time -- themselves longtime diplomats. but we know that president trump likes to do things his own way. betty: it did sound like there was a suggestion mother and he jumped right on it and confirmed he-- a suggestion, then jumped right on and confirmed it. joining us for more analysis on the upcoming u.s.-north korean talks, the senior vice president

acting strategies. he has been a learning -- longtime observer between the u.s. and north korea and the involvement of china. do you think these talks will happen? >> i do. this is something he has publicly committed and wanted to do. betty: do you think kim is committed? >> absolutely. north korea has always wanted direct talks. they refused to engage south korea because they see that as an illegitimate puppet state. so the fact he had to go through south korea to get the talks shows weakness on tim's part, part.is why -- kim's trump has seen himself the master dealmaker, talking in the and pain how he might have a hamburger or coke with cam, so given the cover of south korea delivering the message, i think it was obvious he would accept the invitation. betty: he might get to do this chance to do that. a lot of members of the white house on the media this morning,

in the sunday morning shows. mike pompeo joining as well. i want us to play for you when you said about the upcoming talk. >> never before have we had north koreans and a position where their economy was in risk and a leadership under pressure that they would begin conversations with us on the tim -- the terms that kim jong-un has conceded with. betty: i think the argument is, are these concessions or perceived concessions? i don't think north korea has absolutely conceded anything? sean: optically they have. the economy is stronger at kim jong-un has released the market forces. north korea is much more engaged and active than people realize. these are the most serious sanctions they have ever faced here in the maximum pressure campaign, which i think is moderate pressure because we have sanctions with the chinese. the truth is they are under pressure like never before.

for me the major concession was not denuclearization beer because again -- grandfather talked about that, but it was contingent on u.s. leaving south korea, leaving the south vulnerable to a second north korean invasion. the fact they engaged south korea to carry the 8 -- the message, that shows a concession on their part. i think that is one of the reasons trump jumped on it. haidi: so we know that president trump is not necessarily a leader that likes to do a great deal of research or preparation going into any kind of state level meeting. we know bill clinton after five years of trying to negotiate a framework was looking at this. after gears they did not manage to get there, so is this a recipe for disaster we are going to this after one year of this presidency, or is it a secret genius. sean: i am nervous because there is so little consultation. he did talk to rex tillerson earlier in the day but did not give him a heads up.

he talked to mcmaster, he did not even give shinzo abe. shinzo abe has been our most on this., loyal ally they are in the direct firing line. hopefully he is a quick study, and he gets people from the outside to advise him even though there are not a lot of people in the administration with the expertise. but as for us going to north korea i hope that is not going to happen because that would be seen as a tributary pilgrimage to kim jong-un, and i don't to gokim jong-un deserves to the white house. if we met them in the dnc, that would play into propaganda because that is where they claim we surrendered piece in 1953. a neutral country like sweden that happens to represent interests and north korea would be fitting, but i don't know if kim jong-un is safe enough to leave because he hears a coup if you were ever to leave.

-- he were ever to leave. haidi: what about giving china too much credit? i think it does. we are back in six party talks territory, giving china the upper hand. it should be a neutral territory, not in beijing. betty: i wanted to -- haidi: i wanted to go back to what betty said, north korea must be feeling happy because they have not had to give up anything. you talked about the optics. do you think the u.s. conceded to quickly? -- too quickly? sean: no because they did engage the south. testsffered to suspend while a technology we will carry ahead with our military exercises, which shows a prelude for invasion. if they thought it was, why would they be so comfortable with it now? they are feeling the sanctions, and i would urge the president,

until the talks and after not to let up on the sanctions what bit -- one bit, whether it is oil, cigarettes and alcohol, you have got to keep the pressure up. betty: we are all observers here, but just curious, do you think they would get along? sean: probably. they are colorful characters. they both fancy themselves great leaders and great dealmakers. kim would probably be less relaxed because he actually has -- betty: has more at stake in a way. king,you so much, shawn strategy senior vice president. that would make one big reality show. can hear more on the interactive tv function. you can also dive into any of the securities and bloomberg functions we talk about and become part of the conversation by sending us instant messages during our shows. this is for bloomberg subscribers only this is bloomberg.

♪ .

♪ haidi: i am haidi low in sydney. betty: i am betty liu in new york. check the business last headlines, imd said oil could fly back below $60, with surging u.s. shares to asia's undermining the opec cuts. american crude gained a greater slice of the asian market last year, and that could prompt producers to raise output. img said the crude rates could go down again, forecasting at $57 in the second half of this year. acquireon is set to from its local rival, changing the game when it comes to german energy. the complex $27 billion deal would see a on merge with the , rwe wouldle both

end up with a larger stake in e.on. they are the largest with 10 billion euros in wind and solar storage. betty: consortium of jet airways, delta is set to be understood in india. the modi government wants to break up the carrier into four separate companies and selloff 51% in each of them. air india has $8 billion of debt , five subsidiary companies and a combined workforce of 27,000 people. that is just about it for daybreak australia, but yvonne and betty are back. what are you watching? yvonne: we are speaking to sadiq khan of london. he will be joining us out of austin, texas with the sxsw festival.

he will be delivering the keynote speech and talking about the cost -- consequences of the howent tech revolution and these companies need to be held responsible or accountable when over abuse in some of the online platforms we have seen. he has called on facebook and twitter to act faster as well as more further when it comes to some of these reforms and responding to it. uber is under fire after they got their license revoked in london. how close are they to reaching an agreement? what else does london need to see for over to continue operating -- uber to continue operating? betty: he must be the first --th southwest politician assuming breaks or between the u.s. and north korea, upcoming talks. she will betudies, joining us. strong opinions from shaun king a few minutes ago.

we would get his take on how these talks are going to shape up. haidi. story, theother top rubberstamp approval, constitution changes, xi jinping in power indefinitely now. we will talk to the university of california san diego associate professor who has been bearish on china. he called the entire thing a ponzi scheme, and he has got even more bearish views saying the credibility of chinese institutions has called into question this constitutional revision. if they can do this, what else can they do? what does it mean to the international of treaties, anything governing international on activities since to be the table. it is a pretty broad ranging view, pretty negative. always a good conversation coming up. and the open at the start of brand-new trading week, we had a very am a very nice hand over from wall street. looks like positivity as we get

into australian and japanese markets getting under way. that is just about it, but all the action on daybreak asia with yvonne and betty opening. this is bloomberg. ♪

♪ >> them :00 a.m. here in hong kong. -- 7:00 a.m. here in hong kong. the top story, she is the one. repeals term limits allowing the president to will for life. no let up -- to rule for life. from bloomberg's global headquarters, i am betty liu here in new york just after 7:00 p.m.. rising jobs growth but flatlining wages put fed rate policy in the spotlight. charting opposed brexit force. london aims to maintain its

status as a global financial totor and we will speak mayor sadiq khan live from sxsw. ♪ >> volatility has seemed to rule the day these last months or so. we would all like to forget february. marches seems to be fighting up -- march seems to be better. shows you how different volatility indices are looking a bit more calm despite all this tariff talk and doomsday trade war discussions. the moveok at the vix, index which is basically the vix occurs in -- the version for the bond markets.

if you look at all of those, it looks like despite tough talk on trade, that will not be the major issue for the markets, at least when it comes to volatility. of course lots of that could change later this week when we get inflation data and what that means for the fed. is interesting how we have gone from concerns over rising yield to concerns of a trade war, now back to a jobs report which was not too hot and not too cold. we had a robust jobs number but the wage -- this goldilocks scenario can continue. betty: perhaps. we certainly saw that in u.s. market reaction on saturday. the s&p up 1.7%, the dow closing higher. up almost 450. 1.8%,asdaq also rising up setting up perhaps for a stronger asia session.

yvonne: we certainly are in the clear for now until that inflation report in the u.s. on tuesday. we have bond options to talk about as well. here how we are looking in new zealand. shares up 6/10 of 1%. kiwi dollar also seeing some strength. trading and australia just getting underway. second week of npc. we are expecting key data out of china this week as well including the likes of industrial production retail sales. and yields/10 of 1% just higher as the jobs report. opening in japan and korea. we are expecting some upside possibly about 300 points or so. 107ar-yen back closer to territory. let's get you caught up with the first word news with rami. : first up, the trump

administration's as north korea will get no concessions ahead of any potential talks. cia director mike pompeo ruled out any real actions of sanctions and said kim jong-un must stand by his offer before any meetings. no sitting u.s. president has ever met a north korean leader, although jimmy carter met his grandfather in 1994. australia's government has denied striking a deal with the u.s. to get exemptions from president trump's steel and aluminum tariffs. trump said friday he was working on a security agreement with canada, -- he says the two countries have a trading relationship based on equality. >> that trade relationship, as the president acknowledges, is a fair and reciprocal one. it is a level playing field.

the u.s. has a large trade surplus with australia. rami: u.k. chancellor philip hammond has hinted the beginning of the end of austerity policies as he makes his spring statement this week. is expected to announce the country's smallest deficit and -- in a decade. he is under pressure to relax as eight years of public spending cuts have taken a toll on the health service and public bodies. reports from london say the saudi aramco ipo is unlikely to go ahead this year. they quote u.k. officials who say they were told by their saudi counterparts during the visit of crown prince mohammed that the fp says london remains in the race to host the international portion of the listing but riyadh has yet to make a decision. saudi energy minister since the timing of the ipo is an important. -- is unimportant. >> i don't believe we have any

deadlines. as far as i am concerned between december 31 and january 1, there is no value loss for the kingdom. so i don't see this artificial deadline as being significant in our decision-making process. rami: global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i'm rami inocencio and this is bloomberg. yvonne: let's get to our top story. china has approved sweeping constitutional changes that repeal presidential term limits and allow xi jinping to rule indefinitely. let's go to our china correspondent joining us live from beijing. we have been talking about how this is a rubberstamp in parliament come expecting this. but it was a controversial debate as well -- by]nd

>> that was a very small amount of dissent. as you say, this is changing the course of history to some degree in china because it remoaners -- removes 30 years of collective decision-making and a system that allowed to successive leadership taking a over after a decade. that is all being scrapped. is a logicals this step given there are no term limits on the head of the military in which president xi is, and the party. others a say there is a narrowing field for debate here. andlty to president xi, unquestionable faith in his ability which could lead to missteps. i spoke to some delegates

yesterday and i said this was progress for china, it would strengthen leadership and it is the will of the people. frankly, the people have not been consulted on this issue. they are being quashed and censored. newspaperditor of a wrote an article putting forward his concerned about the issue but that was quickly taken off-line. there is concern here in china but the delegate coming out of here yesterday said this was something that would move the country forward. ministero become her's also had something to say about trade over the weekend. tell us more about those comments. it was a big weekend all in all in beijing. the commerce minister, who held his conference, very confident. he was asked by bloomberg about these exacerbating tensions between the u.s. and china as washington has left tariffs on

steel and potentially look stupid tariffs on a broader range of sectors. he really underlined china's concerns this would be hugely damaging not just for china, before the u.s. as well. take a listen. >> there is no winner in a trade war. a trade war will only bring disaster to china, u.s. and global economy. china does not want a trade war and will not start a trade war first, but we can handle any challenge able firmly defend the interests of our nation and people. tom: the chinese are aware that president trump is focused on this deficit. it picked up about 8% last year deficitaid in fact the is overstated by the u.s. by about 20%. you also said if the u.s. removes control on high-tech goods being shipped from the u.s. to china that that could reduce the deficit by about 35%. . knowledge that sectors he

remained closed off. acknowledged that sectors here remain closed off. he said that would happen, those changes would be executed of you did not give us a clear timeframe or more details. beijing as wem kick off the second week of nbc. to a formere speak member of south korea's national security council as what might realistically be accomplished if president trump meets kim jong-un. london mayor sadiq khan telling us how the city is going to navigate brexit. we are also going to talk about a convergence of politics and technology. this is bloomberg. ♪

♪ this is daybreak asia. the annual sxsw festival is in austin, texas attracting some top names in tech, film and music and also politics, including the mayor of london was warning of potential consequences of the social media revolution and online abuse we have seen on many of these platforms. he will be making his keynote speech tomorrow in austin, so let's cross over to austin and meet mayor said the town who joins us -- mayor sadik khan. before we talk about the convergence between technology and politics i have to ask you about news that broke about an hour ago according to reports that saudi aramco is going to delay their ipo two 2019.

i know this is such an important listing. what is your reaction to it? mayor khan: i think london is the best place for the listing. i was at the london stock exchange recently. there must be good reasons for the delay. london, isthat -- if i'm being frank, wins the business. businesses from around the world have confidence in london. before he most important words is london is open. london is open to business, to talent, to people, and to creativity. i'm looking forward to when the decision is taken from london to be the winner. betty: any mayor is going to say they want business is coming to the city, they want investment to come to their city. what you are down in austin right now.

-- but you are down in austin right now. be are certainly going to talking to these tech companies about how they need to better police their own networks. how are you going to toe this line between, come to my city, atablish headquarters, but the same time watch her own business so you are not spreading abuse and hate. mayor khan: it's great to be in austin at sxsw for the film and the music, but obviously the tech conference is really important. w is a placesxs where tech giants, startups are present. there is a number of things i am doing here in my short visit. firstly, banging the drum for investment in london, explaining why london is a place to come to if you are a disruptive to money, an innovator, a tech company. we have seen apples, googles,

amazons expanding into london, also startups and scale out. as we embark in this forced industrial -- this tech revolution, the pace is exponential. too longave seen for in the recent past is the pitchrs vacating and assuming tech companies will act responsibly and offensively. technology is fantastic. all of us use social media to meet friends, go on a date and fall in love with people, or to poor creativity on social media. we have to recognize that sometimes social media can be used negatively. terrorists, far right group radicalizing people to become extremists. politicians,s

policymakers and tech companies work together to grapple with these issues, don't be surprised if people start putting pressure on politicians and consumers put pressure on tech companies to take action. mayor, there are still people saying that brexit is just one year way that perhaps the city of london or the u.k. is more or less a less attractive place to hire these high-tech skilled workers coming into the city of london and the rest of the country. what do you have to say to that? mayor khan: there are a number of reasons why tech companies, startups, come to london. the main reason is access to talent. we have a talented population in london. we are investing into the next generation1 secon. is the capital -- next generation.

second is the capital. third, the proximity. 40% of the world's companies have european headquarters in london. number two is paris with 8%. so london is a great city to start a business. of course we have seen the likes of google and facebook investing in london as well. uber certainly has been the big -- in terms of being under fire under your administration. see from a need to company for them to continue to operate in london? mayor khan: uber is a very popular service around the world.

but my message to uber and the message to everyone the matter how many lawyers you employed or pr experts is you have to play by the rules. the rules are there for everyone. if you play by the rules, of course you can come to london. i want to be a place where tech companies come. but you have to play by the rules. -- isod news is that as ae newish ceo of uber has very different attitude in the previous ceo. the language from him goes well for the resolution of the differences the regulator has with uber. they've been making a lot of the sessions perhaps or a waste to appease concerns like putting in a 24/7 hotline. do you think this issue might be settled within the next year? i am not giving a

running commentary on bloomberg. there is a legal case taking place but we are also in constructive conversations. the message has to be heard loud and clear which is we want you to come to london if you are an innovator, if you are a tech company that plays by the rules. >> quickly i have to ask you, you talk about the hate comments that are out on social media and the abuse out there. is also been public feuding. i know you have publicly feuded with president trump as well. i am curious hearing what president trump is about to do with the north korean leader, to hold talks. you yourself had your own special relationship with president trump. how think this meeting is going

to go? think this meeting is going to go? mayor khan: first of all, it's good news. -- burden the president that something things north korea have been doing recently are a source of concern. the preparation of missile testing, concerns about the race towards nuclear technology. and i welcome president trump toting with kim jong-un discuss a resolution to this, if you like, modern-day arms race. this is the sort of role the president of the usa has to have in the relation to the world stage and i look forward to the discussion the meeting going well. i hope forward to hopefully this leading to a meal their ration of north korea increasing missile technology, increasing concerns we have around their nuclear program. >> thank you so much.

khan joining us from the sxsw. hope you enjoy the music and the films. also looking forward to your address. you can watch us live and other things. check it out at tv . this is bloomberg. ♪

♪ a quick check of the latest headlines. john is being warned that among the economy's most at risk of a banking crisis -- it is flagging property prices and high debt levels. canada and hong kong are also among places at risk although italy is seen as less of a problem despite slow growth.

deutsche bank is said to be planning up to 6000 job cuts in his retail unit in in a five years. the final tally will be negotiated by the board and units and may end up being lower. the ceo promised to cut more than $1 billion from the unit and the late before completing its merger. deutsche plans to raise more than $2 billion in an ipo of its asset management unit. debase offering will be 40 million shares and up to $44 apiece with the potential share of another 10 million later. the ceo fly the sale a year ago as part of his turnaround plan for the bank. life insurance has agreed to take 5% at the issue price. rose friday as payroll numbers show continuing strength in the economy. let's get to the bloomberg editor to talk about this.

it certainly was an impressive rally we saw on the market. what is likely to drive trading this week? >> inflation. it got bumped off the radar last week because of all the concerns geopolitical and issues but it will clearly be in play next week. we ended friday on a really impressive note. it was really one of the best weeks we have seen for the nasdaq, dow and s&p all getting pretty impressive numbers for the week. coming in on tuesday morning we're going to have to keep an eye on this report. it will be the last big inflation report we get before the fed meets later this month. economists see consumer prices having riven -- risen about 2.2% annual pace. inflation data tuesday will be the fastest pace since november. investors see little sign of this picking up. this is shows what traders are expecting.

they see an increase at about a 2.1% rate over the next decade. of a subdued expectation but if we come in higher than expectations we could see another selloff that rattled the markets like we saw about a month ago. it will be interesting to see what happens. in addition to the inflation numbers we're also going to get retail sales wednesday and housing later this week. how hot thisw us economy is running and if that plays into what the fed will be doing. >> there will also be an impact on the bond market. >> we have a day treasury auction coming up with about $62 billion spread out. three-year, 10 year bonds as well. a little bite us of attention about what the appetite is for this debt. we had lackluster demand less time but we will see what happens. >> thank you so much, romaine.

payrolls, sagging wages, u.s. job report. a look at what it means for the fed. this is bloomberg. ♪

♪ rishaad: yvonne: happy monday, sunny.m. on a sunday -- morning. ,etty: it is sunday in new york but the evening, 7:30 p.m. after that storm last week. , not chilly at all, quite warm and sunny for the bulls on that friday now. the s&p higher almost 2%. i am betty liu in new york. yvonne: i am yvonne man in hong kong. let's get to first word news with ramy inocencio. ramy: china's nominal parliament has footage of the president xi jinping stay in power indefinitely. all but five of the 3000

delegates of the national people's congress supported the proposal to allow him to remain in office beyond the normal two terms. other changes include a more assertive foreign policy and bracketing his name alongside previous leaders. the russian military has released video said this -- and said to show the test of a hypersonic missile that can fly up to 10 times the speed of sound. the russian president has claimed this as an ideal weapon and said it is too fast to be intercepted by current air defense systems. it is one of a range of new generation weapons putin revealed in a speech earlier this month. halteds confirming the model of reproduction, in a planned pause to improve automation and interest. -- teslaks output the also makes the model s and x at

this plant. it is a must in the drive to make electric cars affordable and popular, but ramping up production has proved a challenge. a rise in new york that catapulted the australian cofounders on to the bloomberg billionaires index. the fortunes of co-ceo's mike hanna brooks and scott have risen to $4.1 billion apiece. that makes them the 499th and 500th richest people there they own hip chat entry-level. -- and trello. the debut of black panther in china has improved the takings to more than $1 billion there. reached a new milestone. it is setting sales records at home and abroad and is a symbol for promoting diversity across the movie industry. it is expected to surpass $500 million in international sales. global news 24 hours a day, powered by more than 2700

journalists and analysts in more than 120 countries. i am ramy inocencio. this is bloomberg. ♪ yvonne: counting down to the market open in tokyo, we have the latest with sophie kamaruddin. as we talked about the jobs report, the risk asset is set up. will that continue? sophie: with the job report looking like a mix of just right data, we could see positive opens here in asia. the tailwinds are coming together. on the geopolitical side we are getting trump's administration saying sessions will be made ahead of the potential summit with kim. that is easing concerns, and tariffs notace -- looking so bad. japan and south korea looking set to open at least 1% higher, seeing riskis appetite returned. we have to consider headwinds returning on wednesday.

we could see chinese data that could signal moderating growth. we have to consider how to handle xi jinping being made president for life. betty: also on the terrorist fronts, canada and -- the terrace front, -- tariffs fronts, australia joining canada and mexico. sophie: checking in on material stocks. among the top performers in sydney, rising 3.4%. this morning turnbull called this a win-win. australia will not make a complaint to the deputy n.o.i. wto tariffs, and -- to the on u.s. tariffs. now the legal paperwork is being put together for the exemptions three put into effect. australia on that side of the equation, south korea and japan

also seeking exclusion from those tariffs. trump tweeted he is talking about opening up japan trade withrather -- better trade the u.s., calling it not fair or sustainable. we will see if progress will be made for japan and south korea on this front. betty: thank you so much. there was a dramatic divergence in the february payroll report. casting some doubt whether the fed will be able to accelerate those rate hikes when it needs to the end of this month. the head of global economics and policy editor kathleen hays joins us with more. interesting.is i love what chris ruddy out roads. he said there are plenty of jobs out there as long as you don't mind getting paid to do them. that is one way it is summing up. really strong jobs growth, 313,000 in the month of february. look at that, much stronger than

january where we were up from 200,000. and the 313,000 is the strongest since the middle of 2016. february can be a funky month statistically, so maybe that can be revised. that is the headline we saw that was so important. the other headlines was wages because as you recall in january, it was a sudden move from average hourly earnings, 2.6% year-over-year that really hit upon market, 2.9%. jump into this chart with me, because you will see this white line, average roi earnings. it is going down. the six month moving average looking pretty tame in there, even as unemployment stays around 4.1%. that is low unemployment. when i spoke to the chicago fed president charlie evans, what of treat that was. he had seen the numbers, said it was a good report, but doesn't it push him to supporting another rate hike anytime soon? >> i am not concerned with

inflation getting out of hand. i don't think we are behind the curve. i don't think there is a skilled for us to be careful and patients. -- a scope for us to be careful and patient. we can produce as many rate increases as necessary, and that would be consistent with the gradual approach -- approach if that was an efficient. some are more willing to debate when they meet in two weeks what happened with rate hikes, and this will be the first -- the first meeting with jay powell as fed chair. it will be interesting to see how his mark comes through this march meeting. it is interesting, the markets kind of agree with what charlie evans had told you, that they are convinced perhaps this is three or four not even just yet. what can we hear from jay powell? kathleen: i think first of all if they will hike rates are not, and that is, i cannot help it if

it is march madness. the ncaa -- a slamdunk. publishing of show you the projections, because it is 100% this will happen. what happens over the course of the year and next? let's go into another chart. go, and you can see this selloff over the next couple of weeks. here is 2018. the consensus is for three hikes. will it move up to four? as you say, no, it could stay here for now, but that his wife it will be more focused on 2019. what does that consensus change at all? that is where charlie evans is pointing out, you can get in three hikes easily even if not in march. numeral -- four, you would have to go between meetings. he said it could be done if not the fed has done until now. another thing he said i thought was interesting was he is

waiting to see the incoming data especially inflation. it is important because the key inflation gauge is the core and slater. we don't see that until the end of the month. we have cpi this week. this will be possibly the biggest number, not just for the federal reserve when it meets, but also for the markets this week. betty: thank you so much, kathleen hays. plenty of big stories coming up this week, covering them all here on daybreak asia, and as kathleen had mentioned, on tuesday we will have the latest inflation data. it could increase at a gradual pace. leaving one measure of an equation close to the fed's target. i want to bring up this chart #btv 8692 would shows you how the cpi, which we are going to be getting on

tuesday, how it measures up to core, not just for cpi but also pce, a measure of the fed. both of those numbers continue to take up. the numbers are both creeping higher. so what that means only get the inflation numbers out on tuesday, what it means for the fed, is going to be very important. but the other chart 7253, also shoes -- shows you how important it will be on the debt market, the treasury market. the treasury options that are going to be happening on monday and tuesday. you will see it pickup in the guilds on the shorter end -- the yield on the shorter and. the yield curve could continue to flatten, and if that is the case, does that portend darker days for the economy? yvonne: it is interesting how this is all coming at the same time as bond options as we were

talking to remaine -- romaine about. it is not a clear signal about sell signals, but it is coming at a time when the fed is raising rates and borrowing is increasing, which is potentially a double when he when it comes to the bond markets and one to watch. wednesday we have plenty of china data coming through here as well. taking a look at the retail sales, fixed asset investment, the key data point will be industrial production as well. look at my chart 3441. all three will its down -- will edge down slightly. incourse you have to factor some of the seasonal distortions given the fact that china's new year was occurring during this month, but of course we have seen and the output growth edged from both 6.4% in 2017. we saw the early signals from the pmi data with that you are

looking at official or the tightening private gauge. although there are mixed signals, and pointed to one direction which was continued tepid growth. the pace is want to watch. retail sales, slowing to 8.9% from 10.3% in 2017. fixed asset investment, putting it at the edge lower here. we had some interesting highlights from the npc where this guy highlighted programs like the three-year slump clearance prospect. we are talking about funding from the central government itself. perhaps they swore to support growth. betty: perhaps, and watching that data and that outlook on china. just ahead the cia chief said north korea will get no concession ahead of the plan between trump and kim, announcing live from seoul. this is bloomberg. ♪

♪ yvonne: this is daybreak asia. betty: washington says there will be no let up on sanctions and pressure on north korea ahead of the talks between president trump and kim jong-un. any meeting would be a first of a sitting u.s. president. his fathermet kim, or grandfather. talk about the possible risks for war. ros krasny in washington. do we have any new developments over the weekend, because you know we have heard a lot more for president trump, white house officials talking about this upcoming meeting. -- meeting? ros: we don't know the details of when this meeting will take place. we've heard it could be the end of may, which is a tight deadline. we don't know where it will take place. there could be possibilities that mongolia has put itself out

as a possibility, neutral sweden and switzerland. it seems unlikely that president trump would travel to pyongyang, but interesting with this unconventional president. one of the things that was discussed this morning on the sunday talk shows with cia ,irector month -- mike pompeo and he was taking the lead on this state department taking the lead. he said president trump is taking the lead. exactly itow how presidentwn, but trump is the showman of the administration and is taking it straight to kim jong-un. yvonne: we have talked about on friday how they u.s. has nachoes and ambassador to south korea. perhaps president trump is driving all this as well. what is the decision to aim for talks? tell us about the president's

style. ros: it shows he is mercurial because as you know back in august, he said talking to north korea is not the answer. he tried -- he chided his secretary of state, don't waste your time going through talks. we know about all the tweets and the fire and the fury and the speech at the united nations, but he has had a change of heart. there was possibly talks in the background of the olympics we don't know about. something that is making him think this is the right time, and with president trump could even be you know, to deflect from some of the other things going on in his administration, making morey he is of these policy decisions himself on the fly. we saw that with tariffs, and we saw that with the north korea talks. it is upsetting to some people in washington, but it is what we

have got to deal with at this point. yvonne: thank you. lots of stuff to look ahead. these talks happen in may. let's talk about this with our guest. joining us is a president from the seoul-based institute for policy studies. thank you for joining us. we talked about how big a gamble this is for president trump. is he the man to do the job? he was think so because really totally unexpected even from our side actually here actually, accepted kim jong-un's invitation. we don't know whether this is going to be realized or maybe delayed. but it shock to most of us. thattill we have heard feeling pressure will remain until the conclusion of the meeting, so we will see.

it is interesting we have gone from the fire and fury rhetoric from both the leaders to now both saying let's talk. what do you think has materially changed? choi: because actually i don't know the kinds of messages -- i haven't heard any detailed messages from kim jong-un or mr. trump. ,he only word we have not heard kim jong-un is committed to denuclearization, and they have a summit with mr. trump, that is the fact on the ground. but the others maybe we have to work out what kind of signs we would like to have before the realization of summit between kim jong-un and trump. so maybe u.s. officials are arguing we need more concrete of northcommitment korea to not bulk up its weapons. but could be surveillance over the facilities. and i am going to bring

the mante we had from who was going to become the u.s. ambassador to south korea but he was scrapped after warning about this north korea strike. it was wondered what would give up -- what what trump give up for peace with north korea. in years of dealing with north korea, i have learned the regime never gives anyway as anything away for free. this dramatic act of diplomacy by these two unusual leaders who love flair and drama may take us closer to war. what is a tangible trade-off if in fact there is a freeze on pyongyang? start thee we could normalizations between the united states and -- that was a deal made in 1994 with the framework of agreement to normalize relations. maybe that is a starting point, and then they can begin the

talks of a normalization process. but actually to go into that process, we need a clear sign. so that can be the thing, and if that goes well, we can think about lifting some sanctions, and then having people to people exchange or all kinds of things we can think of. at this time the u.s. doesn't want anything on the table unless north korea convinces the u.s. and south korea it will give up nuclear weapons. mark: how unusual is it that both sides are going into this meeting not really -- it seems -- at least we don't know, seemingly to have negotiated much ahead of time? they are both going into it i don't want to say blind but certainly cold it seems. choi: maybe the words i like to say, high risk, high return. each side wants to probe the other. at this time, the message kim jong-un delivered to president

trump and the south korean envoy there have a relation and is a big harvest they can make at the end of the day. --be they would like to have the u.s. wants to stabilize relations because actually if we ran on the previous track, we would see the rise of tensions around the end of march and april, since we have scheduled a military exercise, going into the attention side. stable siteant on on the area peninsula. both sides -- they could get pressure and also militant wiseure from their own how . china is not helping north korea at all. they could have found assistance to break out of isolation, to break up this kind of trajectory. betty: they seem like they are

in pain and need some help now. where do you think would be the best place to hold this meeting? choi: i have no idea because people argue that the neutral , pyongyang or washington, i have no idea. maybe -- personally i would like to have in pyongyang. that could be a kind of way to show the kinds of military might the united states has an example for preparation of a summit to other country, the u.s. brings loss of asset materials, and that takes a long time and preparation. ask north korea to do that and this. that could be the best way to show some kinds of the might. [speaking simultaneously] betty: that would be north korea showing the might to the note -- to the u.s.

is that a good idea? choi: actually the u.s., not north korea. some kind of military parade or so there might. maybe they can what they did, coming to pyongyang, showing this is going to be our last missile test. so they can show that kinds of things. the u.s. might have a chance to show the kinds of capability and power it has. and actually it could show that the u.s. has in -- good intention to have normal relations with north korea. that could be another diplomatic interpretation we can see. it takes place in pyongyang. yvonne: certainly there is lots of locations including the mar-a-lago resort as well. don't forget that one. thank you. don't forget you can always find in-depth analysis of the day's big newsmakers on bloomberg

radio. tune into daybreak asia from 70 4 a.m. hong kong time. -- 7:00 a.m. hong kong time. this is bloomberg. ♪

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♪ we live on bloomberg's asian headquarters. welcome to daybreak asia. the top story, asia-pacific start andok start to positive fashion. the president's power play. china repeals term limits allowing xi jinping to rule for life. betty: it's just after 8:00 p.m. on sunday in new york. exemptionallies seek for terrorists. reports from london say the aramco listing is being delayed.