♪ >> uncertainty over tariffs and job driven gains and investors rating,the inflation the cost of immigration in the long-running economic expansion. produce with china

saying a trade war is no good for the world. hello from sydney, where an hour away from the markets. betty: and i am betty liu looking at the action in the asia-pacific trading come and we mentioned david solomon taking sole possession of goldman sachs. investors want to take pole possession of the inflation data coming out tomorrow. it is going to be important to determine whether or not the fed is going to raise rates three times or four times this year, that is why we saw sticks move today. we saw how the stocks ended a few hours ago and the snp is losing ground and the dow is down 157 points. someasdaq still holding on

of the gains we have seen the last couple of days, 4/10 of 1%. it is setting up asia for a mixed session there. haidi: certainly mixed when you look at the state of asian futures. it is looking positive in australia, but let's look at how trading is headed at new zealand. you have kiwi stocks trading up come with one dollar the rest dollar falling, to bloomberg index falling the most of its peers. setting up ahead of the citi open, a little positivity when it comes to sydney. just barely though, it looks it will have a flat open built on last days rally. we have a lot to think about with australian investors, not just inflation number that will inform how the fed goes, but also a key china domestic numbers and retail sales for the u.s. as well.

heading to commodities, a poor session across commodities broadly. crude falling below $62 amid concerns of being able to maintain momentum. also have opec reports coming through this week to determine the next move in that market. metals seeing declines in the overnight session. let's get you caught up with first world news. the british government's money moscow for the poisoning of a former russian spy and his daughter in southern england. there is a maple parliament that they were attacked he days ago with a military grade nerve agent that was developed by russia. she has given president putin a deadline to offer a credible explanation. >> russia's record of state-sponsored assassination --

and assessment that russia used detectives best the government concluded it is highly likely that russia was responsible for the acts against sergei and you ilya. the issue relates to a landfill scandal with the names of abe and his wife being deleted from official papers and aso is under pressure. he also says the alterations were not an attempt to show prime minister. >> i believe alterations were not intended to protect prime minister abe or his wife. there's a certain group of people but the finance ministry was involved in the scandal and i don't think this is the issue of the finance ministry. alisa: the white house is denied

president trump is backing away from gun safety proposals under pressure from the nra. earlier callsfrom to raise ages 21. the present tweeted that states will decide on age limit but there is not much political support. global news, 24 hours a day, powered by more than 2,700 journalists and analysts in more than 120 countries. i am alisa parenti. this is bloomberg. betty: uncertainty over president trump's tariffs rattled stocks, waiting inflation reports. roaming bostick is joining us now entree concerns. romaine: it is back. we had repeat for one day and came into this morning and look like we're going to have a good day. people remembered there is still concerns out there and we got reports tomorrow, and s&p uber up higher for most of the

day. it bumped up against some of the technical levels and began to fade down. industrial average is are significantly down, and we set a big selloff of boeing, caterpillar, j and j being sold off. want to talk about wanting helping the market, you mentioned the nasdaq. large-cap technology continues to dominate trade and we saw that today with the nasdaq closing at a record high, it did move up and apple at a record high, amazon at a record high, microsoft, and macron is up 9%. a big part of the story is the semi conductor story. it is for one reason, we look back at why so much movie is moving back to chip stocks and it is about earnings. this is the sector that had the best earnings picture of all earnings.

is about the plate of semi conductors. that is what is powering this market and macron is the best-performing stock in the s&p 500. four is seagate, up 40%. haidi: how long can we see tech keeping the market afloat? are there other sectors that have potential? romaine: keep in mind they have been one of the biggest lacquers as far as a sector basis since we rebounded from the bottom of the correction. oppenheimer is safe keep an eye out for capital banks. -- they areg that benefiting from rising interest rates and hopefully we are going to see clarity on that as we get into the rising great environment. we haverest margins seen over the past two quarters have been rising as the fed has lifted rates. keep in my financial stocks are

the second largest s&p sector by market cap. any signs of life could potentially provide some steam to that broader market as we move forward. fivetoday, three of the u.s. banks moving higher, goldman was the biggest winner because we got clarity about who will be that heir apparent of lloyd blankfein. haidi: the key at that succession, thank you so much romaine. will stay with the top story, goldman sachs making headlines. david solomon is the sole president and ceo, putting him andike to be the next coo lloyd blankfein dismissed reports he was playing test done by the end of the year and tweeted the wall street journals announcement, not mine. i feel like huck finn listening to his eulogy. -- david solomon is to

succeed lloyd blankfein, but there is no concern that his work to step down by the end of the year. when lloydcorrect, steps down david solomon is the guy at goldman. the question is when this lloyd step down? we have no more 30 on that, no more than friday. betty: tell us about shorts and solomon. -- schwartz and solomon. how did solomon secure this position? thisr the last 15 months has been a horse race between these two guys and the people i have talked to at goldman -- it has been a week by week accounting of their progress. who is up and who is down. david solomon and pressed the board quite a bit and has done a lot when he ran the investment bank on diversity issues on

bringing more women in. he make some presentations to the board that really impressed them. he has also been very much out, meeting clients and investors. role and it in type from it -- didn't hide from it. he rose to the occasion. betty: is he well-liked at goldman? >> he is. he rose to theboth have factions and harvey shorts -- harvey shorts have his supporters and people who liked him. he was the cfo from 2013 until be named copresident. if you talk to accountants or compliance people or legal people, they were all in harvey's cap, but david had his cap as well. betty: one of the top stories all day long.

the succession of lloyd blankfein -- and still ahead, a billionaire's warning to new zealand about international abdication. details later this hour. haidi: up next, the multibillion-dollar auction -- and how demand is shaping up in just a moment. this is bloomberg. ♪

haidi: we are counting down to the sydney open. better positioned with asian markets going to a lackluster day of trading. investors continue to pass implications of trade tariffs and looking ahead to other key data. i am haidi lun in sydney.

betty: i am betty liu in new york and you are watching "daybreak australia". bond sales will push the 10 year note further into bearish territory and the treasury sold nearly $50 billion in debt ahead of what could be a market moving inflation report on tuesday. kathleen hays is with us with a look, it is a tough time to sell bonds, right? kathleen: when you step back, you can say despite the number of bonds and the fact that the u.s. bond market has a double auction test, this doesn't happen very often. the refunding -- $49 billion worth. the three year note, the $20 billion sale to a yield of 2.436%. guess what? that was the highest since 2007, so that is quite a benchmark. banks are bidding for three

years notes and a shorter-term piece of paper. auctionok at the tenure -- let's get fancier with this and you can see the latest auction with the tenure note yield. it held up pretty well. it is not too much off the average. nothing is changing a lot. there's a few indirect bidders that is institutions and tensions. -- pensions. the yield was at its highest in nevertheless, in the range it has been in for a while. but what are the challenges? i call it a triple whammy. start with supply, the government will have to sell more bond. demand, the fed was a big buyer. and sentiment, investors are

cautious. ditto know what the hike is going to be and where they end. -- when the fed is on the warpath and raising rates because they want to ward off inflation, treasuries aren't usually the best thing to hold. in spite of all of this, yet the third year on auction tomorrow, $13 billion, the longest term u.s. government debt against this backdrop. you can probably have everyone embracing for higher yields and lower price. in the report could have a lot to do with that. even just a little high when it comes to that consumer report. tuesday -- high cpo drama. what is the cpi going to

show us? kathleen: it was at 0.5% in january, but outliers are supposed to reverse. it is a little bit higher than january and the court changed at 1.8%. what i want to show you is an interesting chart -- it shows what the cpi year-over-year has been doing. just over 2%, but look at how the 10 year treasury yield has shot higher and running ahead of that now. i think the cpi report could maybe help those two lines come back together and questioned further apart. thiser important thing, consumer price index is going to be the last a inflation or a report for the federal reserve before they meet next week to decide not just a march rate hike but signal if they are ready to go to four rate hikes

are than three. kathleen, so much for that. more on the bond markets and where volatility is just around the corner. sandy, theed by chief investment officer. overnight,s we saw rates close to four-year highs, as the drop off in interest suggest we are going to see the man's of your step going forward? >> people worry about the increased deficit and the fed retracting. a couplep in mind of of sources of demand. we have population in developed markets, especially in asia where there is a strong propensity to save. going to of savings is look for a home and they could be natural buyers of treasury bonds.

the same dynamic is causing some institutions to have very long duration liabilities. is a goodabilities offset of liabilities with long-duration assets. i hear so much concern and asked about rising interest rates. we feel it will go up but they will do so gradually. there is structural concerns about whether inflation is going to pick up as much as the inflation board is adjusting it will. you need not look further back in the last two points, one produced a decline in the dow of 600 points. of 400.r a value inflation can rise on a secular basis but not anytime soon.

we are not looking to go overnight from inflation going from absentee status -- missing in action for a long time -- to this giant monster threat. we want see runaway inflation. i daresay inflation will remain lower for longer and end up while the loath the peaks of previous cycles. and that are many forces causing inflation to be low. betty: why do you think there is this fascination with the possibility that we might see runaway inflation and the fed might be behind the curve? >> let's put this in context. lessgest that those are likely possibilities. let's spend a few minutes of where inflation has come from and where it is going. it was missing in action in the beginning, who are worried about deflation, then paying for

inflation, and finally we are getting it. what is keeping it well behaved is a number of things. in the last two decades, global inflation has averaged 3%, which is remarkably low. global central banks are providing forward guidance that has smoothed out the business cycle. globalization is lowering production costs, and the forces today is more powerful. the get technology and what production is doing to oil prices. look at the wage pressure from automation and artificial intelligence. look at what amazon is doing to traditional retailing, health care, and banking. betty: and prices are keeping a lid on runaway inflation. given your outlook, i want to pull up a chart, g #btv 822 shows you the benchmark in asia and emerging markets. they are recovering now despite

this concern about tariffs, a trade war. buthmarks are recovering, not quite to the level we saw of record ties back in january. whilehat mean you expect volatility may be here to state that these equity markets will get back to the levels we saw earlier this year? >> we are 3% lower than the highs in january and have made a comeback. what we haven't talked about so far that is the most important dynamic in the market -- we have positive economic and earnings growth. the biggest positive is the super nice global growth we are experiencing. strong economic growth is causing earnings to rise. wethe way, and the u.s., have more paul floor -- we have growth thatful

are consistent. andtility has picked up this focus on inflation and interest rates that we spoke us, the key remains growth. all of these other concerns -- let's not be too complacent. to us, they are distractions. betty: you would also categorize this fixation on tariffs a distraction for the markets or is there anything real behind that? >> there is always the possibility that we lose sight of all common sense and rationality and end up in the throes of a full-blown trade war. trade war's don't help anybody. this seems like a posturing tactic. i think the idea is to get some concession and fix the egregious balances and restore some parity where you have taxes.

or create anti-dumping provisions. while we can't rule it out, we think it is less likely this becomes a big issue. come back to the growth theme. focus must threat worry, on that growth story and look for a crack in growth before you go anywhere else. towardsger lurks growth, and it is not going to come from inflation or the fed, or interest rates. betty: thank you so much for joining us and giving us your perspective, joining us from l.a.. you can get a round of the stories and anything you cannot get your day going. bloomberg subscribers use the function dayb . you can also customize settings to get news on the industries that you care about. this is bloomberg. ♪

betty: a quick check of business flash headlines at this hour. amazon will offer credit cards for small business customers in the u.s., expanding its drive to offer the widest range of services and has been in talks with banks including jpmorgan about a cobranded card for business owners shop on the website. amazon has been looking for a way to replicate itself in the workplace and success that made it the goto shopping site for households. haidi: consumer lending has reached almost $100 billion, but a tougher environment. sources say that consumer effortshas doubled -- to back such loans and a powerhouse valued at $60 billion. coming up, who will stay with

china, and despite the ongoing trade tensions that came from the president in china, the world's largest food company. next. this is bloomberg. ♪

haidi: it is 9:30 a.m. here. markets open, just keeping their heads above water. futures looking pretty flat, albeit slightly positive. the rest of asia looks like it's setting up for an negative open. i am haidi lun in sydney. betty: i am betty liu in new york. you are watching "daybreak australia." first word news with alisa parenti. he is winning the approval of wall street. ,y manning solomon so president he can take the helm without co-ceos when blankfein retires. point out that he and

the part of the bank that grew the most before becoming coo six months ago. shares rose to new highs on that news. paid jeffreyic playe more than $8 million amid a tumultuous period in his 126 year history. he set down as chief executive in august and quit the board to month later. shares were under pressure but fell hard after he left. ge says john flannery will not receive any bonus for 2017 because of the companies poor overall performance. the fashion designer who dressed jackie kennedy and audrey hepburn has died at the age of 91. he founded a house of the company and turned it into an icon of french style and glamour during the prosperous decades following world war ii. the company paid tribute to a cheekman who glamorized

and elegance. powered by more than 2700 journalists and analysts in more than 120 countries, i am alisa parenti, and this is bloomberg. haidi: thank you so much for that. breaking news on the broadcom/ qualcomm takeover. trump issued an order to block the takeover of qualcomm by broadcom, looking at the white house statement, saying it could take action in terms of a threat to national security, betty. we know that this is sort of a takeover$170 million offer anyway, and we had been expecting authority to act on this. betty: we had indeed. it looked like fortunes were turning again. the broadcom chief executive on this hostile takeover of qualcomm. he and a delegation meeting with the treasury department to convince not just members of congress, but members of the white house, that this deal does not threaten national security. it looks like those efforts were

fruitless, according to this headline here about locking -- blocking qualcomm takeover of broadcom. haidi. haidi: definitely want to watch in terms of what the next step would be. of course, it probably continues to add to this narrative. we are watching that story. one of our top stories as we get into the asian trading session. let's get an up date in terms of stocks in new zealand already trading underway. a flat session when it comes to kiwi stocks. 72.93.rency at watching the aussie dollar this week in terms of quite a bit of news flow coming through from china. the retail sales, industrial production, investment data points coming through later on this week, but the big one to watch, inflation out of the u.s.

and retail sales as well. the aussie dollar -- 107.91, is where we see the aussie/kiwi pair. continued pressure on the finance ministry. aso in the scandal involving altered documents relating to the land sale. we will be watching that story again in the tokyo session. sittinghere the dollar at the moment. sterling pretty much unchanged. the u.s. 10 year yield hardly moving. 227% overnight after we had the $21 billion auction of the 10 year note seeing lackluster demand. stocks off the highs and mapping that winning streak. we have seen recently on the back of the weaker wage growth concernsast week, some returning to investors minds when it comes to terrace as well as what this inflation report is going to do for the fed. trading underway in asia.

adam haigh is with us in sydney. been samsung,s which is interesting, given the blockbuster results we have seen recently. bellwether for the south korean market, haidi, as we know. if we bring up the chart, we can see the underperformance of samsung. #btv 5263. the yellow dotted line is a downgrade by morgan stanley. it triggered more of a pullback. obviously, samsung under a lot of pressure where they have a global backdrop of slowing smart phone sales. samsung does a lot more than just phones. some of the bulls are entrenching down now and say we have been speaking to lewis grant at her meds. he points to the idea of the table structure in samsung, which is part of why it has had

a tough time of late through the scandal that has engulfed the whole of south korea. the structure is good for it in the long run, a dominant player in the market, continues to be a the dominant player in global marketplace. that is one reason he is sticking out and holding his long-term bullish views. he thinks samsung is primed for a rebound. >> looking at how rising interest rates will impact this, we should not forget big companies with those pension shortfalls. adam: we have heard the argument a lot, having only, recently, about how high rates could the a bit of a problem for equities in the bull market that is going into its 10th year. of course, it's really down to the magnitude of that move. people were that a field move up to quickly into short a space of too, -- up too quickly in

short a space of time -- companies the of likes of ford and ge with their pension liabilities, you know. basically, we will see an uptick in performance given the incremental rise in yields from the lows we have seen in recent years, and it's improving those balance sheets of those rate corporate. there are a lot of companies in that space that could benefit from this environment. it's really a question now of looking more detailed at specific stocks and sectors with those kind of attributes that can help. , which isan have done very interesting, we bring it up on the chart here. g #btv 793. a 50 year period, an increase in yields tends to hit the equity market. what's clear is stocks have a negative reaction when yields

rise at a rapid rate, and if there rises more gradual and incremental, and stocks can weather that performance for sometime. the debate around rising yields and how much it impacts equities and where it impacts the market still goes on. there are certain parts of the market that can do well. betty. betty: thank you so much. adam haigh, our editor. food companyiggest weighing in on a mounting trade tension, saying it would need bad for all sides of agricultural products use as targeting chips. tom mackenzie joining us from beijing. does this suggest china is no longer looking at restricting imports of american soybeans? be the keyould question as trade tensions between the u.s. and china continue to rise. plans to retaliate. of course, we have been reporting that china was indeed

looking potentially at reducing the imports of soybeans and sorghum from the u.s., but when reporter sat down with the president of cosco, he made it clear that so far, there has been no notice from the chinese government for his company, the largest food company in china, to restrict their imports of u.s. soybeans. take a listen. >> for china right now, i think the china government very much buyurages commercials to u.s. soybeans. i don't see that they do normalg to affect the u.s. and china agricultural trade. u.s. soybeans are seen as a potential pressure point that china can use against ffe u.s. in this trade ti should they choose to.

it is a $14 billion or your business, and china imports the vast majority of soybeans exported from the u.s., and it could affect those midwestern states and have an impact on midterm elections in 2018. there is a flipside to that, which is if china starts to reduce those imports of soybeans, it does not have many other supplies. it has been picking up supplies from brazil, but there are difficulties. as patrick was saying, both sides likely to get hurt should that measure be taken. patrick saying he was concerned trump's policies would make it more difficult for companies like his, agricultural companies, to invest in u.s. agriculture as well. again, the concerns about trade been undermined by china's corporate leaders as well as their policymakers, because of course, we heard the commerce minister had set a trade were between the two countries would be disastrous.

haidi: thank you so much for that, tom mackenzie, our china correspondent in beijing. breaking news. president trump issue in that order to block broadcom's takeover of qualcomm. joining us from san francisco is ian king. we know these conversations about concerns over national security have been taking place. it has its investigation going. is it decision to move by the president largely expected? >> know, this happened really quickly. were in washington, talking to the treasury department, trying to explain themselves, trying to explain why they were in the security risk this afternoon, so this pronouncement coming out of the white house feels like it is very sudden. it does not feel like there has been a very deep or long-running investigation going on here. it feels like a decision was

made and acted upon very quickly. betty: so is it over? read what came out of the white house, absolutely, it's over. it says both sides have to stop and he talks about a negotiation . that broadcom have to withdraw its nominations for qualcomm. qualcomm has to just go ahead with the shareholder meeting it was going to hold regularly. this really is just stone dead. if there is no appeal process, there is no way for broadcom to seek redress to try to persuade the white house to go back on this, and it is absolutely over. betty: where does this leave qualcomm and broadcom? know, ahas been, as we very acrimonious process. both sides have not really come close to negotiating. what we were into report was that broadcom had made significant progress at convincing qualcomm shareholders and that it was not doing a good a betterb, that it was

option for running the company. the management have got to live with that regardless of what happens with broadcom. they have got to go back to their investor base that has shown a lack of faith in them, and they have got to convince them that you can trust us going forward. that's going to be difficult for them. betty: thank you so much, ian king. onare going to keep our eye this story. looks like it's over, broadcom's takeover of qualcomm. up next, the pressure on australia's population growth. why economist disagree on the benefits. this is bloomberg. ♪

betty: good morning. i am betty liu in new york. haidi: i am haidi lun in sydney. you are watching "daybreak australia." australia has a secret to avoiding recession may lie in mass immigration. the population has swelled over 50%. a rising chorus of populists are

calling for a cut to new arrivals. across to our bloomberg government reporter, jason scott, with us in canberra. that it could have a problem with too many people, is there something behind it? who would have thought australia of course is a massive country? it's not a continent. it's 50% larger than europe. 25 million people seems pretty small by comparison. most of australia up on land is uninhabitable, not very good for large cities, and most people are concentrated in the southeast corner sydney and melbourne. those cities in particular have been having problems with soaring house prices, traffic, and congestion. mounting been a large, voices of concern about those

particular problems. i guess the australian government's lack of action in seeming to address this, so it started about a decade ago that australia started rapidly ramping up its immigration numbers. nowadays, it's around 200,000 new arrivals, new immigration arrivals coming in that puts australia's population growth around about 1.6% per year, which is quite large compared to other developed nations. the average is around 0.7%. that has placed a lot of pressure on infrastructure in these major cities, and there seems to be more noise that something should be done. the government itself, relies on march immigration numbers to pop up the economy. philip lowe lowe, the rba governor, said recently, the rba

chief, said population growth flatters australia's economic data. 26 yearsboasts of its of consecutive economic growth, there is no doubt that a large proportion of that growth is propped up by these immigration numbers. betty: they need large immigration to boost the economy. he is a to reduce the intake, right? jason: at the moment, no. have largearties immigration numbers to boost the economic figures. in 2009, the then prime minister said he supported the idea of the bigger australia. australian voters did not like that for a much, and it was probably one of the contributing factors to his unpopularity and the reason he was gone about a

year later. since then, the major parties have not really talked about population growth. they have been wedded on to these large immigration intakes. mentioned,ts, as you the populist lawmakers are starting to make noise, including tony abbott, a former prime minister himself, who is still in the government and making noise on the back bench. anti-muslimnson, an campaigner. it is getting noisy down there. betty: noisier down under. indeed. the government reporter. across the over ditch. new zealand feeling the investors who are angry that the country -- at the country ban one -- country's house sales. what is the situation here? one of the promises the new

government made when it came to power last october is to crack down on foreign speculation in new zealand's housing market, and what these wealthy investors as saying is that the change it is drafted will have unintended consequences. rickxample, mccain, -- cain is saying that he needs to be able to sell the accommodation units around their course into an international purchase. and if he cannot do that, that puts the economic viability of the project at risk and indeed puts future projects at risk. what the people are saying is the law change could end up foreign investment in new zealand. betty: what is the impotent -- haidi: what is the impetus behind the government's ban? could it changes mind? >> this is one of a range of

measures the government is implementing to try and tackle a housing crisis in new zealand. house prices have surged over the last decade. the average house costs more than one million new zealand dollars. it is locking a lot of first-time buyers out of the market, and has led to increased homelessness. it's a hot political topic. it's unlikely the government is going to back away from this law change. legislation is going through the normal parliamentary process of examination, and it's possible some changes will be made to minimize these unintended consequences. there really lots of wealthy foreigners buying out both holes in new zealand? or is that the headlines you are seeing? >> it's a bit of both. you mentioned peter teal, if a miscarriage last year, when it was revealed that there was

citizenship. several properties in new zealand. there are other stories, too. it feeds into the public sense of unease that the ultrarich are buying up large tracts of the country. rick are doing that they are building tourism assets, employing people. their investment is good for the country. betty: thank you so much for that. matthew brock, always contentious -- on any pasth up interviews on our interactive tv function. tv . you can dive into any of these securities or bloomberg functions we talk about. in on the conversation by sending instant messages during the shows. this is for bloomberg subscribers going. check it out at tv .

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haidi: i am haidi lun in sydney. i am betty liu in new york. you are watching "daybreak australia." the number of women getting board seats at the country's biggest company is growing at a faster pace than the year prior. 74 companies reached the target of at least 30% female directors. that is the aim of these board seats is that 30% of all the boards on the s&p asx 200 will be filled with women. it's interesting. 47% of the people appointed in january and february, almost half, were women. that compared with 36% for the whole of 2017. it's not just a trend over there in australia, haidi, but here is the u.s. as well. a lot of shareholders are making fuss about not enough women on

the board. that helped increase the number of women boards in the s&p. haidi: it has been one of the conversations that comes up every year around international women's day. representation when it comes to boards. let's have conversations about whether there should the penalties for companies that don't reach the quota. it's interesting that we are seeing the spike in january and february of this year. company directors that track this were saying let's hope that it is not just the trend, not just the spike. we need to see this continuation series certainly, this is the highest rate of female appointment the asx 200 boys since -- boards since they started tracking statistics. let's see if we can keep that going. betty, lots more to talk about after daybreak asia wraps up this morning. asia is next. what are you watching for us? yvonne: we'lll --

continue to watch this political stan scandal. documents were they took out abe, and hisnzo wife, advancing the land sale. this cronyism scandal once again rearing its ugly head. we will talk to a professor from the university to talk about more about the implications of this because this continues to threaten and derail the abe administration and abenomics as well. betty: that's right. another destruction at the very minimum in japan. the center for economic policy research cofounder dean baker will be joining us, where he says there is a lot of much ado about nothing on the tariff fears, but also noting there is perhaps much ado about nothing on inflation, saying if you take out housing inflation, you are

seeing only a 1% pace in prices. we will be speaking with him later, haidi. haidi: inflation will be the theme of our discussions out of the u.s.. that is it for taro aso." -- that is it for "daybreak australia." yvonne and betty up next for "daybreak asia." ♪

yvonne: 7:00 a.m. here in hong kong. i am yvonne man. welcome to "daybreak asia." the top story this tuesday, a asia-pacificor the after u.s. stocks declined ahead of inflation data. the dollar fell, treasuries rose, and is it the end of the road? president trump blocks broadcom's bid for qualcomm on national security grounds. betty: i am betty liu here in new york, where it is after 7:00 p.m. on this monday. david solomon taking positions in the race to leave goldman sachs.

the world's biggest food company is buying american. a trade war is no good for the world, they say. we certainly saw a mixed session here in the u.s.. though some concerns about tariffs. if you look at this chart, g #btv 822, it shows you how close we are again to those record highs set by the equity markets. not just the equity markets in the u.s., but around the world, in asia, in emerging markets, all trading higher from the lows we saw earlier this month. perhaps there is still volatility, yvonne, but a lot more confident that the trade war will not be as big as and also ofrhaps,

course, these upcoming talks between the u.s. and north korea. that lending itself to a little bit more calm. we might be at record highs before we know it again. yvonne: especially for the u.s., given that it has taken the lead from what we are seeing. be the darling hear much of last year. all about ahead to. not just the trade tariff concerns, but inflation on tuesday as well. betty: indeed. those tear of talks did rattle leavenvestors today to the u.s. markets mixed. i want to bring in the bloomberg editor joins us now. how seriously do we take these new trade concerns here? >> it depends on how seriously. we did see a retrenchment of these stocks that have gotten sold off when we first learned about these tariffs. you know, the average still good ok today. the dow did down. they bounced pretty high. the s&p 500 was back above the 2800 level and could not hold on to it.

the end of the day, not too bad. the industrial average sold off getting full off because some of the trade concerns reemerging. we want to talk about the large-cap technology stocks. the nasdaq is back at a record high. it has been driving the records and february low and gave back some of its gains today, but it still finished higher. today.record highs you see macron, not quite at a record high, but i want to point it out because it's part of this semiconductor chip story that has been underlying the tech story and this larger chart. the reason is pretty simple. the chip stocks as a whole posted some of their best earnings. it is better than almost any sector except energy and insurance. if driving the market. macron is the third best performer in the s&p 500 this year. the fourth best performer, another chip stock, a hard disk maker stock.

up about 40% so far this year. yvonne: we have been talking about how tech really has become the leader, but financials are not too far behind at the moment. >> we are seeing interest in the financials here. oppenheimer over the weekend. monday adams at bloomberg intelligence beating the drum. financials have lagged the tech rally that we have showed, giving people some optimism, believe it or not, for the broader market to continue higher. the sense is once we start to see a little bit of increased at these things, the financial companies, that will give a lift to financial and give a lift to the broader market. keep in mind financials make up about a quarter of the market cap of the s&p 500. it will have a big push from the broader market. as of today, we did the three of the five biggest u.s. banks did manage to end higher today. goldman sachs was the biggest gainer of that bunch, so that

was largely related to the fact that we finally got them clarity on who the heir apparent will be to lloyd blankfein. yvonne: some clarity when it comes to that succession. thank you. look at how asia is set up right now. treading water as well ahead of the inflation data coming out in the u.s. on tuesday. stocks in new zealand flat. spencer to give a speech later on today. lines to look out for. trading in australia getting underway as well. we are seeing a sideways market. the asx 200 opening, pretty much flat. you'll the also heading a little bit lower here, catching a bit of a bit when it comes to fixed income ahead of the cpi numbers. the opens in japan and korea. japan might overlook this inflation risk and focus on the developments in the japanese school scandal.

caution seems to be the theme in tokyo. we are expecting a backtrack when it comes to equities. dollar-yen catching a bit of a haven bid. 106.37. to quit forefusing now. more developments coming out from japan here today. let's get you caught up with the first word means. alisa parenti joining us from washington. alisa: president trump issued an order blocking broadcom's bid for qualcomm. his decision came hours after broadcom's ceo met entered on officials in an attempt to address washington's concerned. the president ought statement says there is credible evidence that the takeover with the broadcom undermine qualcomm's lead in 5g and threatened u.s. interest. the british government is blaming moscow to the poisoning of a former russians buy and his daughter in southern england. theresa may told parliament that

they were attacked eight days ago with a military-grade nerve agent. that was developed by russia. putin agiven president deadline of midnight on tuesday to offer a credible explanation for what happened. >> russia's record of conducting state-sponsored assassinations and our assessment that russia the government has concluded it is highly likely that russia was responsible for the act against the father and his daughter. alisa: japanese finance minister taro aso says he will not resign over altered documents linked to shinzo abe. names were deleted from official papers. aso is under pressure to resign but says the blame lies with a subordinate who stepped down last week. he says the alterations were not

an attempt to shield the prime minister. >> i believe alterations were not intended to protect shinzo abe or his wife. my understanding is that only a certain group of people at the tax office and finance ministry was involved in the scandal. i do not think this is the issue of the finance ministry. alisa: the white house denying that president trump's backing away from the nra. measures fell short of trump's earlier calls to raise the age for buying some guns to 21 and removing guns from people deemed a threat. the president tweeted that states will decide age limits, but there is not much political support. powered by more than 2700 journalists and analysts in more than 120 20 countries, i am countries,ed -- 120 i am alisa parenti. yvonne: david solomon is in and harvey schwartz is out.

but go to ramy inocencio with the latest on the goldman succession plan, and of course, a lot of missions on one lloyd blankfein will be making the handoff. we know who the successor is. after thelly we know, past 1.5 years, yvonne, of who will it be? whether it be david solomon or harvey schwartz? it is david solomon. you mentioned this palace intrigue for goldman sachs that for lloyd blankfein, he named him on february 21, so he is known for the past -- he has known for the past three or four years that this news is going to drop. off of that, you can harvey schwartz, earlier today, said he was going to resign. that will be affect did april 20. 20th.ected he has been co-lead for 10 years, ever since 2006 to 2016. mr. schwartz was the ex-cfo for nearly four years.

some people were supporters for both of them, but when it came down to it, it was mr. solomon who did lead here. with that said, the question now is, as you say, when will mr. down?ein down? -- step he might stay on through 2019, when the bank celebrates its 150th anniversary. as for mr. solomon, a lot of people are wondering what he will do now that he is the full president and sole co-ceo. -- co-ceo. things might stay status quo. solomonwhat did david have as an advantage against harvey schwartz? >> it looks like it is risk aversion on behalf of harvey schwartz, and it is the risk-taking or the business expansion when it comes to mr. solomon. harbinger the bloomberg terminal here because i want to show you what is happening in terms of the a's banking function -- i-banking function.

i am going to put this up very quickly because in terms of trading, we know how this has been happening over the past few years with volatility falling, which of course means less opportunities. the back and forth of this is that mr. blankfein liked the fact that mr. solomon doubled down on risk-taking as well as -- versus other banks, but as for mr. schwartz, he was a less averse to that. we spoke to mike mayo and he had a bit more to say in terms of why mr. solomon was a pick. take a listen. >> his strength is on the investment banking side. the revenues of goldman sachs were down 20%, but the revenues for his area in banking were up 10%. so he is heading the area with

good growth. one of the best corporate rolodex is around. ramy: it basically seems like it comes down to kindred spirits. what do investors want? they want profit. that is why mr. solomon in part was likely chosen. >> thank you so much. a big story for us here today. you can get a roundup of that story and many more you need to know. bloomberg subscribers can go to dayb . available on mobile in the bloomberg anywhere app and you can customize your settings so you only get news on the industries and assets that you care about. more ahead. a look at a deepening political scandal rallied markets and threatening to derail shinzo abe's economic strategy, later this hour. yvonne: our next guest will have

a negative effect on american manufacturing. why he thinks the recession is on the way. this is bloomberg. ♪

betty: this is "daybreak asia." i am betty liu in new york. in hongi am yvonne man kong. the u.s. treasury is selling notes and bonds over two bays while investors brace for the february cpi report. let it over to kathleen hays. she is here with a look right now pass. kathleen, a tricky look at bonds and what bond investors are going to do. kathleen: it is a big one. 30 year bonds being sold. i would say, on a day when there , it was a double auction. a little bit unusual. the bond market past tests. the $20 billion sold at 2.436%.

was the highest yield since 2007, however, demands seem fairly average to most of the people bloomberg news talked to. yield that was the highest since 2014. a triple ramey going on -- whammy going on right now. you have a bigger deficit, bigger auctions. you have sentiment. getting ready for the fed to tell us how many times it will hike rates in 2018 and 2019. investor, youond have a lot to balance. $13 billion and 30 year bond for. tuesday afternoon. ahead of that, the cpi, tuesday morning, in the u.s., we know from the jobs report that we are not in the midst of a wage spiral. bloomberg economics is looking for the monthly cpi in february to be up to 0.1%. it was up 0.5% in january.

there is outlier price increases expected to receive year-over-year cpi's, rising 2.2% on the headline, up from 2.1%. not such a big rise. the core cpi unchanged at 1.8%. very important. this is the last thing inflation report before the feds meeting next week. it's going to be very closely watched. ready for bed on this fine -- to bid on this. betty: thank you very much, kathleen hays. but talk more about this for dean baker,ow is th joining us from washington. are we making too much out of this inflation report? that if you look at inflation, take out housing inflation, we are running at a 1% pace here? dean: that's right.

for years, people have been looking for an uptick in inflation, and we still do not see it. overpi is a little bit this. the fed looks at the consumer deflatorex, corsi pe -- core cpe deflator. you are seeing any inflation at all, it is largely in housing. that is a different dynamic. you are looking at house prices going up in seattle, in san francisco, in some of the desirable market that is not the inflation story. idea it wills an clamp down on inflation's, the immediate effect is the slow construction and if anything, make rent increases higher. there's not a lot to worry about in terms of the wage price spiral stored people always fear.

>> everyone is focused on wage inflation then, dean. dean: that is the conventional story, and obviously, we look to it. it shows no acceleration whatsoever in which growth. i would like to see that, frankly. i would like to see workers with larger shares from the economic growth. we are not seeing that. people have been looking for something that is not there. we have to calm down and there is some views from the fed, kashkari, the minneapolis fed, saying we should hold off on rate hikes, let the economy continues to grow, let the unemployment rate fall further, and presumably, at some point, we will get wage pressure and the fed will raise rates. yvonne: you highlighted something we have been hearing as a theme in 2018 from a lot of companies, where they are seeing more import prices rise, but

they are not exactly raising prices when it comes to consumers. what do you attribute to that week pricing power in corporate america? is it a symptom of the fed and doubting the fed will allow the economy to overheat? dean: they say they don't have pricing power and we are not seeing that. the gap between prices and costs. they are extraordinarily high. we have seen a shift. as we have gotten into the recovery, only a little bit of that has been gotten back. workers have gotten a bit of their share back. firms would like to charge higher prices just like workers would like to get higher wages. profits are extraordinarily high, and they have been throughout this recovery. i don't think firms have much to complain about that way.

yvonne: it sounds like you are saying there is reason to pause when the fed meets next week. we continue to hear more hawkish language as well. what do you think the message that jay powell is going to send next week here as the market starts to price in four rate hikes next year? dean: that is the big question. i wish i could tell you what he's going to do. i would like to see inside with the doves here. let's stand back until we see more evidence of accelerating wage growth or prices. fed's grant to react to it, trying to ensure inflation doesn't get out of hand. we are so far from that right now. it seems like there's very little risk. what's going on as they have gotten in their heads that the unemployment rate is too low or getting very low, and historically, this is low. 4.1%. no doubt about it. that's a relatively low rate. there is a lot of slack in the labor market see my a number of measures. the fact that we do not see any

acceleration in which growth indicates it's not overly tight. yvonne: another subject of great interest in washington is who is going to take over from gary cohn's job, and we heard about the changes here with goldman sachs former employer. there are changes on the economics from. is there any risk to the economy? dean: i don't know that there is great rest. everyone, obviously, the factor in the resignation was trump tariffs. i have to agree with the general view that it is hard to understand what trump thought he was doing. excuse me for being cynical here, but there is a big election in pennsylvania tomorrow, and needless to say, tariffs play very well there. that is the main motivation. ok, what exactly did he hope to a conference economically or nearly -- we can look at the

tariffs trump imposed earlier in solar panels and washing machine exports in china, and i was following a ruling that china is subsidizing the export of those products. goal.was a clear get them to stop subsidizing the exports. what is the goal here? i have no idea. i am saying that in all seriousness. politicalule out the explanation. pretty crass, i realize. that may make more sense than anything else i can think of. yvonne: appreciate your insight on all of this. economicr, center for policy research, the founder, and joining us from d.c. our interactive tv function, tv , you can watch us live, dive into the securities or bloomberg functions we talk about. this is for bloomberg subscribers only. make sure to check it out at tv . this is bloomberg. ♪

betty: let's return to news that broke one hour ago. president trump blocking broadcom's bid for qualcomm. you can see broadcom shares up one point 5%, and joining us now from san francisco is matt larson. matt, this is truly over? >> it looks to be over. there was a note out. we can go from the committee on foreign investment in the u.s., that they were looking at potential security implications for the deal, and the president front ran a lot of those talks and banned the deal. it looks like it's over for broadcom and qualcomm. betty: does it seem like this was a well thought out decision? or was it a -- more of a hasty reaction to national security threats? it certainly is a quick

decision. there is not a whole lot of transparency as to what goes into determinations. there were a lot of behind closed doors security council meetings and for investments and 5g that has been an express priority of the trump administration. understandably a swift decision and protects u.s. interests it's understandable. it's a bit of a surprise to see this quick of a decision from the trump administration. yvonne: what is this all going comes to theit board nominations and broadcom trying to take seats on that board? matt: i think shareholders were looking forward to some discussion about the broadcom qualcomm's technology licensing business has been struggling recently. owl has been underpaying royalties to the tune of about $4 billion per year. certainly some interest in shifting away. it kind of brings that dispute front and center. matt larson. you,

giving a little bit of context in the fallout of this deal. coming up next, looking at the details behind scandal surrounding japan's prime minister, his wife, and his finance ministers. this is bloomberg. ♪ mom, dad, can we talk?

sure. what's up, son? i can't be your it guy anymore. what? you guys have xfinity. you can do this. what's a good wifi password, mom? you still have to visit us. i will. no. make that the password: "you_stillóhave_toóvisit_us."

that's a good one. seems a bit long, but okay... set a memorable wifi password with xfinity my account. one more way comcast is working to fit into your life, not the other way around. yvonne: 7:30 a.m. tuesday morning here in hong kong. temperatures are rising a little bit here. feels more like spring these days. 30 minutes away from asia's first major market open. betty: we are ready for another snowstorm, so completely the opposite. seven: 30 p.m. monday evening here in new york. market closing mixed. tech shares leading the momentum. i am betty lou in new york. yvonne: i am yvonne man in hong kong and you are watching "daybreak asia." let's get to the first word news with ramy inocencio. solomon to eventually succeed lloyd

blankfein. that is winning the approval of wall street, by naming solomon full president. le president. solomon ran the part of the bank that grew the most for a decade before becoming coo 15 month ago. goldman shares rose to a new high on the news. general electric paid more than $8 million in his final month even as the company faced a tumult was period and it's one of the 26 year history. he stepped down and put the board. shares were already under pressure but fell hard after he left. new ceo john flannery flashed the dividend and replaced top managers and launched deep cost cuts. the fashion designer who dressed jackie kennedy and audrey hepburn has died at the age of 91. he did found the house in 1952 and turned it into an icon or french style and glamour during

the prosperous decades are in world war ii. the company has paid tribute to "a gentleman who symbolized parisian chic and elegance for more than half a century." powered by more than 2700 journalists and analysts in more than 120 countries, i am ramy inocencio. this is bloomberg. yvonne: we are counting down to the market open in tokyo and seoul. the latest with sophie kamaruddin right now. even ahead of the cpi numbers coming out from the u.s., it's a political scandal that's going to be the big worry in japan. sophie: political clouds gathering over abe. japanese stocks staying surprisingly calm. taro aso affirmed he would not be -- thes take a look at ho terminal right here. we did see a rebound in the last hour of trade. perhaps investors are coming to realize that economics are more

important than politics. investors might proceed with caution as the investigation has yet to be completed and there might be a question over the future of abenomics should the scandal hurt the government. his ratings did take a hit on monday. what impact might be felt among foreign investors? g #btv 9642. they have been investors for eight straight weeks and political stability has been a key factor for them. we have the stronger yen keeping runners away, which has been a drag on the topix to make it asia's worst-performing major market this year. betty: the political scandal .ould still stir the yen bulls we might see more of an impetus to move towards $100-yen? the scandal adding to that combo that is laying the groundwork for the yen to move towards that 100 level from the boj slowing its bond purchases to japan's rising current account surplus.

g #btv 6836, leverage funds. have been gradually cutting their bearish bets on the yen since around january 9, but we have net short on the table, so further unwinding could nudge -- we do have the yen trading before we get producer prices in less than half an hour. betty: sophie kamaruddin, let's stay on that story. the names were deleted from documents related to this land scandal. so apologized but refused to resign. >> we understand we are under serious public scrutiny with regards to how something like this could have happened.

matter is being investigated. tara also should take responsibility. betty: bloomberg news managing editor brian fowler joining us now from tokyo. the are the key concerns of scandal raised by the prime minister and his wife and are we going to see some heads roll here? brian: it is a very complicated scandal here are you just to sum up quickly, we know that the sale of public land was made through the school at 1/7 of the market value, so that looks strange. we know prime minister abe's wife has been affiliated with the school. honorarycome the principal of the school. it as we see see no evidence directly suggesting that there was political pressure from the abe camp to

sell the land at a discounted price. that is the smoking gun that we do not have right now. we know the names of aso and abe were removed from the documents, but we don't know what the context was or certainly what little we do know. context does not point to anything much more than the them in theween school. the big question is if the scandal continues and deepens, does it start to force resignation from the abe cabinet, and does that undermine our abenomics? that is what -- undermine abenomics? that is what we're waiting to see. yvonne: tell us about the fallout. we have heard from the opposition parties saying mr. aso needs to step down. given what we have heard in the last years now, is this likely to resonate in any way? good point.

so first of all, remember that this whole thing started one year ago, and we had the scandal and an impact. hugeed his party to a electoral success in the autumn. it onceed back from before. support is starting to fall just this morning. support rating has fallen to 44%. historically, that is still a pretty high level. for now, the party is standing by abe. we have the secretary-general last night saying that he did not see the need for finance minister aso to resign or any change like that whatsoever. the party is standing firm and is going to try to rides this out. we have finance minister also speaking in a couple of minutes postn his regular tuesday

meeting. he is in charge of leading this investigation to what's going on, but for now, abe and his cabinet are still standing pretty solid. fowler,thank you, brian bloomberg's managing editor for japan and korea. let's bring about next guest. former director at mizuho. how messy can this get for the abe government now and does this threat threaten abenomics in any way? >> the importance here is the economics, and unfortunately, if tos political glut continues get serious, the implication is that there could be an effect to the cabinet members, and that would affect abenomics.

that would be the negative implication of this whole issue. the last time we had a scandal in ministry finance, they did resign. there is an implication that mr. so may have to go. i think many people are starting to implicate that. certainly the opposition. if that happens, obviously, the political instability would affect definitely the progress of abenomics, which certainly would be bad news for the japanese economy as a whole. brian fowler was saying we have been here before. this cronyism scandal has been going on for the past year now. there was a cover-up that makes this latest revelation of little bit more serious than what we have had in the past? seijiro: that is one of the reasons why i think it may the current formation of cabinet members. i can clearly see the opposition, after mr. as

will go from a himself cured we have a lot of agendas that has to be used strained out. increasing pay amongst corporations, all of this progress. the third arrow of abenomics, where the trajectory is much longer than the first two, needs to be conducted and continued. this political issue is going to be on its way. certainly, it will be basically a thorn in the throat at this point. >> do you think that this is good to be just a distraction for a little while? or could this in turn become, you know, a major piece of news that could actually derail abe's economic stimulus program? seijiro: i would like to thank former, but i don't think the opposition would like to let go in this one. one of the biggest weakness -- the weakest link in japan is opposition. they should come up with a lot politicalas and

issues, which is connected or correlated with the economy. they don't have that. they always bite into these scandal type of issues. unfortunately, we don't have populism in japan. it could negatively affect the cabinet members as we speak right now. >> could it have a major impact on the markets in the end? seijiro: obviously. instability as we are trying to conduct the third arrow is going to be negative. , thands to resignation the market could react negatively on this issue. >> what does it mean for our they then -- for abe then? tensions abe seek a new mandate? seijiro: it is different from the case of's emotive indicate shimoto in that his wife

is allegedly involved. we don't know what will happen from here onwards. it depends on how deeply she is associated or allegedly associated at this point. how far the opposition is going to go. factor in fact is very negative for the market sentiment, i think. yvonne: and should be pure raises a lot of questions about the boj. a lot of people saying at the lost opportunity to reduce stimulus last year when markets were doing very well, but now, there seems to be a higher hurdle not just with the trade pigeons but also -- trade tensions but also the bigger political scandal as well. seijiro: i think that the ball is in the court of the corporations. the boj has used up most of its cards really. they have a deep pocket.

the biggest market keeps asking for more and more in the financial stimulus side. i think it's about time the corporations that starts enacting ---that's exactly what mr. abe was trying to induce. if the scandal dwelled on, there is that pressure that mr. abe can impose on many of the japanese companies to start taking risks. it's going to go back peddling. that would be a negative issue for the japanese economy as a whole in the long run. yvonne: it's going to be tough for these corporations. plenty of these exporters here now increasingly concerned about trade war's as well. thevulnerable is japan to escalating trade tensions between the u.s. and china at the moment? seijiro: certainly at the end of the day, what mr. trump is suggesting is it will not benefit anyone. maybe his buddies in the 2018 election. it would regress into the protectionism all around the world. that would be a negative issue

for everyone including japan. japan,larly for particularly under the security of her love the united states, it would be a negative issue not only in economic terms, but political and social and geopolitical terms as well. >> do you think we will get an exception in these tariffs at all? seijiro: i don't think so. the aim of mr. trump certainly is not the economic means, but political means. hetainly, i don't think would change that. i think it would be a continuous negative issue for japanese/u.s. trade as far as the chair is concerned. yvonne: a lot of moving parts. ,vonne:seijiro takeshita professor. coming up next, the world biggest food company says a trade war produces no wonders. an update in beijing, next. this is bloomberg. ♪

betty: this is "daybreak asia." i am betty liu in new york. yvonne: i am yvonne man in hong kong. the world's biggest food company has weighed in on the mounting trade tensions, saying it would be bad if all agricultural products were argued as bargaining chips. tom mackenzie joining us from beijing this morning. what does that say about china potentially blocking u.s. soybean imports now? does that seem less likely? tom: it does seem a little bit less likely because patrick, the president of cofco, said he had received no orders from the government to reduce or stop importing u.s. soybeans. that was something that clearly he welcomed. take a listen. >> for china right now, i think much encouraged the

commercials to buy u.s. soybeans. i don't see anything the chinese government is doing anything to affect the normal u.s. and china agriculture trade. headso the cofcotom: saying that he was concerned that any exacerbated trade tensions between the two countries would damage both sides. soybeans has been front and center in the question as to how and if china responds with its own countermeasures. should washington take further steps to impose broader tariffs. whether or not china restricts its import of soybeans and sorghum is a $14 billion trade. there's two sides to this. in the u.s.west would be impacted if that step was taken. it had an inflationary impact on import prices. the quite difficult for

company to diversified away. it would be interesting to hear his thoughts on that. he was concerned trump's policies would make it more difficult to invest in u.s. agriculture. the u.s. weighing in on the trade debate. yvonne: another big issue, but covering the been national people's congress in hong kong. what will people be looking for out of the nbc today -- npc today? tom: the focus is on potential news around the regulatory changes. they had been reporting on the potential merger between the regulator and the banking regulator to create a super regulator to oversee the financial systems trying to close at some of the loopholes that have been in place for financial risk in the system. pboc, theyrom the have heard about the role the central bank was going to play

and a more important role in that oversight as well. we may get more details on that. in focus is what the top economic advisor to president xi described as fundamental changes. that is what we want more details on. essentially what you are looking at is the communist party taking over. more government functions. government entities being subsumed by the party. a fundamental shift. it's something deng xiaoping warned against in the 1980's. a couple of deng xiaoping's legacies being underwritten. control of the company over government departments. we are hoping to get more details throughout this morning and later today in beijing. yvonne: all right, tom, thank you. our china correspondent joining us from beijing. lines coming through from the japanese prime minister, taro aso, speaking this morning,

apologizing once again involved in this land sale scandal. he repeats his apology over the document falsification. he will cooperate with the investigation of these documents. there is a lot of speculation as to whether he would be attending g20. it depends on the parliament situation as to whether he will go to g20 or not. my responsibility as minister is to find out what happened and to prevent a repeat. once again, he is keeping his ground here, not stepping down despite what we have been hearing from the opposition and pressure as we get more developments surrounding this political scandal. betty: i doubt that will be the last time he is asked that question. you can see the dollar continuing to fall. really, the yen surging on this news. we are getting some inflationary data coming out from japan. this is february. ppi coming in vain on in line with economists estimates for a

rise of 2.5%. economists expected a rise of 2.5%. not or ppi,th ppi, but month on month, coming in pretty much unchanged, so that is a little bit softer than what investors had thought. .2%. both of the numbers year on year show ath on month slowdown from the month before. as we are looking at abenomics an economic stimulus programs, just not following through right now the inflationary front in japan. yvonne: we have been talking about the prices that have held up. the yen appreciation is certainly one to watch. we are seeing the yen continues to strengthen on the back of some of those comments coming from aso as well. strengthening about .1%. continue to watch the lines coming through from japan and

when markets do open in a couple of minutes. find in-depth analysis of today's big newsmakers on bloomberg radio. tune in to daybreak asia. you can access it via bloombergradio.com. this is bloomberg. ♪

>> we have been talking about china tackling its enormous debt problems. the country looks to be rejiggering some of its regulators. china proposing to give the pboc function, proposing to merge the banking and insurance regulators and also going to reform tax departments. i'm assuming much of it is related to the npc, national people's congress, going on right now, and some of the changes expected out of this. all of that, yvonne, underscoring how the pboc

continues to get more and more regulatory power, becoming really the big central bank regulator of the world come essentially, especially as the pboc governor prepares to hand off the rains to his successor. yvonne: it's certainly going to be a lot on the plate of the next pboc governor as well. we have been talking about reports leading up to this decision about a super regulator. how effective that can really be when it comes to tackling the financial risks. we have seen a lot of overlap with the banking and securities regulators. we put it all under one roof. we have seen that in the system as well. that chinang a line plans to unveil or has unveiled a cabinet reshuffle plan. we have not heard too much yet when it comes to the details of that. we will continue to follow those lines coming up here in the next hour of daybreak asia. we have the market open coming up and a lot of lines coming through in the japanese data as

well and plenty more on cheney. betty. -- on china. betty. betty: plenty more indeed. we will be talking about these headlines. certainly a lot going on right now, both in china and in japan. both of those with those governments, but let's quickly check on how the markets are shaping up. for theetting ready markets to open. in new zealand, as you can see, we are continuing some of those gains, up .3%. in australia, also looking like this. let's pull it up. the s&p just a touch softer. , a slight dollar softer bid, slight softness in the aussie dollar. yvonne: certainly going to be one to watch. expecting things to back track when it comes to equities. dollar-yen continues to see strength heading back into the yen. 106.28. closer to 100 as the political scandal involving the finance

ministry gets further deep and further involving around shinzo abe and his life as well. plenty more to come in the next hour of "daybreak asia." theill talk on trade with silk road associates ceo. this is bloomberg. ♪

yvonne: we are live from bloomberg's headquarters in hong kong. welcome to "bloomberg markets: asia." shinzo abe saying that the finest chief should accept responsibility and quit. onid for qualcomm blocked national security grounds. betty: i am betty liu in new york where it is just after eight p.m. on this monday. the race to beat goldman sachs, kno no news yet on when lloyd blankfein might resign. china says, a trade war is