>> inflation anticipation. investors gear up for the important reading later this morning. the last major piece of data ahead of next week's fed rate decision. pboc.ower for the china has its central bank's greater control as it looks to reduce risks. we will have details. as the white house prepares to welcome -- saudi's sovereign welfare fund hires for future

acquisitions in america. david solomon emerges as the favorite to succeed with the main rival quitting the bank. what will it mean for the future of the wall street titan? it is it :00 a.m. across the emirates. this is -- it is the :00 a.m. across the emirates. this is "bloomberg markets: middle east." i am tracy alloway. the usa inflation data is expected at 8:00 a.m. eastern time. you can take a look at what is going on. it is not much going on in markets, lots of green, lots of red. if you scroll down, it means lots of great which means things are doing much of anything. the biggest losers are indonesia and australia. the australian banks and headed of the government inquiry. if you page down a little bit,

you will find the nikkei. losses.lding on above that is in the midst of this growing political scandal that is developing with the japanese finance minister. the yen climbing. let's take a look at what oil is doing. we've got brent and wti both down. that is after the eia forecasting the shale production to rise by 131,000 barrels a day in april. we are expecting inventory data tomorrow. that is expected to show a build in stockpiles. the bloomberg dollar index is gaining for the first time in a couple of days. we've got 10 year u.s. treasury yields not doing much after yesterday's big auction of new debt. that might be moved later today once we get that inflation

reading. we will be discussing that later on. before we do that, let's head over to debra mao. debra: tracy, u.s. secretary of state rex tillerson says the president's cash and his daughter in your carry clearly came from russia. and it has warned that the event will trigger a response. earlier the british government explained bosco for the use of the nerve agent and president putin -- and gave president putin until midnight tuesday. >> russia's record of sponsoring ,tate-sponsored assassination the government has concluded that it is likely that russia was responsible for the act against sergei. ended alicans have

investigation into -- the move comes despite intense objectives from the democrats, however the probe by special counsel robert mueller continues with four people leave -- facing criminal charges. president trump has issued an order blocking broadcom's bid for qualcomm on the grounds of national security. his decision came after the quote -- in addition to address washington's concerns. the president said there is evidence that the takeover would undermine all comes lead in 5g threaten u.s. interests. for aarabia is hoping text list moves from the white house and has hired a top firm to lobby for approval for further acquisitions. the kingdom's office wealth fund .ill pay within half $1 million

minister carnce also has repeated his apology for altered documents but says he will not resign. the issue relates to a land sales scandal with the name of abe, his wife and being deleted from special papers. he says the blame lies with the subordinate that stepped down last week. >> i believe alterations were to implicate president abe or his wife. ministry the finance was involved in the scandal and i do not think this is the issue of finance ministry. debra: david solomon will six lead -- will -- by name and solomon seoul president, the

path is clear for him to take the helm when blankfein retires. sullivan ran part of the bank that grew the most in the last decade. goldman shares rose to a new high on the news. global news, 24 hours a day, powered by 2700 journalists and analysts in more than 120 countries. i am debra mao. this is bloomberg. of $21yesterday, sale billion worth of u.s. treasuries brought forth the yield of 2.80 percent. that was in line with expectation. ask just investors are looking to the u.s. cpi readings later today, the last piece of data before the federal reserve meeting next week. let's bring in the head of a specific equity research over at bnp paribas. in inresults are coming

line with expectations but those expectations are low. yields on the tenure auction, we have the u.s. treasury hang the highest's 2007 to sell three-year notes on monday. take a look at this chart. it shows speculative positioning on ten-year treasury futures. you can see those shorts are building. does it feel to you like the bond bears are we are weakening -- are reawakening? >> as far as the bond market is concerned, the pace of the bond yields rising is slightly earlier. it was a bit of a surprise. i think it is too late to conclude. it is clear that the way the bond yields rose is partly reflecting the markets expectation about monetary

policy that the fed is likely to -- our own expectation about that policy has changed. earlier this year we changed our expectation to for rate hikes: by one in 2018. what we are seeing the market is coming to terms with that kind of expectation while earlier the expectation might of been three. it is clear that the extent of volatility in the equity markets was a reflection of that change in mood. possibly that the market will come to terms with that kind of a change. manishi let me pressure on this point, what is the effect to equities from higher rates we have been talking about the great location out of bonds at the stoxx and it never seems

to materialize. the one year t-bill rate reaching up to 2%, that suggests you could put your money in a cash like testament and finally earned a little bit of a return. manishi: rather than that, what tends to happen here is a switch between markets. wen the bond yields spike, have seen in the earlier part of this year, the expectation is to see the market currencies, particularly the u.s. dollar to appreciate. usually that leads to money flowing into the safe markets. we saw that partly this year. that is why we have seen some degree of flows moving out of emerging markets. investors have been selling some of the key emerging markets, particularly the asian once.

a fallout of this bond yields spike. by having said this i must point out that over the longer term, we are not concerned about flows going out of the asian markets, because if you look at the currency precision particularly the dxy, they are doing more against the currencies and not so much against emerging markets are asian currencies. asian currencies have been relatively stable. the fundamentals remain strong in asia. the return on equity still continued to improve. flows would eventually return. tracy: we are going to be discussing some asian market just a second. you are staying with us. still ahead we have that broadcom blocked by president trump, trump putting the brakes on the takeover of qualcomm.

could more takeovers of u.s. companies be under threat? we are heading over to china. china shakes up its financial sector. this time it is the central bank getting more power over financial regulators. what does it mean for financial oversights in the world's second-biggest economy. we are live in beijing next. this is bloomberg. ♪

tracy: this is "bloomberg markets: middle east." i am tracy alloway in dubai. let's get you a check of where middle east markets trade on monday. we have the dubai index taking losses after the game we saw on sunday. abu dhabi, little changed on monday but some big gains in the possible -- in the kind i will -- tadawul

i think we might be discussing more of that later but first let's get a quick check of the latest business flash headlines. the wall street journal says the saudi government has taken veto power. decisions in both the investment company and prince hollande now in thewaleed is saudi kingdom. his shares in the company are unchanged since his release from detention from the ritz-carlton last month. general election paying out more than -- the company even has its stumble through one of the most tumultuous stretches in his history. he will step down as chief executive in august and quit the board to months later. shares were already under pressure but fell hard after he left. will notits new ceo

receive any bonus for 2017 because of the company's poor performance. amazon is said to be planning to offer a credit card for small business customers in the u.s. expanding its drive to deliver the widest range of -- range of services. it has been in talks with jpmorgan about a cobranded car for business owners to shop on this site -- card for business owners to shop on their website. -- the rules richest man spoke as he received the buzz aldrin spacex the reason award just space exploration award in new york. his comments suggested commitment to space will only grow. that is your bloomberg business flash headlines. let's head over to china where the government has planned to merge it taking insurance regulators as part of a wide

overhaul of its agencies. tom mackenzie joins me from beijing. take us through the proposals? described as an revolutionary restructuring of the regulators. the main points are we are going to see the bank and insurance regulators merge. some of the powers are going to move up to the pboc. some context, this will oversee assets worth about 43 trillion u.s. dollars. it is the biggest shakeup for the regulators since 2003. what analysts have said is it will help out to makers have greater oversight and reduce some of the regulatory arbitrage that we have seen it take place here in china. it underscored policymakers keep focus on dialing back some of

the financial risks. they have rescued it some plan to tiend they up the regulators. better correlation to drain some this amateur risk from the system here. that chinesee arbitrage. we are seeing the reaction to tariff -- rippling through the chinese government and corporate world. tim: -- tom: it is been a major topic of conversation here in beijing. interviewexclusive with the president of costco. she asked him one of the key questions which is china preparing to retaliate against imports by cutting off

of soybeans to china. he said he has heard nothing about that. take a listen. now, chinaa, right government is still very much encouraged to buy u.s. soybean. the chinese government is doing the normal affect u.s. and china agricultural trade. tom: the context is the soybean trade is with about 14 billion u.s. dollars. china is the largest buyer of u.s. soybeans. it is an essential pressure point for them. -- there cane some be some inflationary pressures. that could be problematic for the chinese. certainly it seems this is

something that is not going to be imminent. said he is concerned about the environment and whether or not it is going to be a more difficult environment in which chinese companies can invest in u.s. agriculture. corporate leaders here about the concerns on both sides of this as we have heard from policymakers. we heard from the commerce minister saying that the trade were between the two countries would be disastrous. tracy: lots of interesting fee through from the agricultural supply chain. many she raychaudhuri -- manishi raychaudhuri is still with us. i want to get your reaction to the regulatory shakeup that we were discussing. in china, what does it mean for the broader chinese market because at a minimum you might imagine that we will see more a slowdown in credit growth.

manishi: as far as china is concerned, policy has recently concentrated on for directions, for major plans, first, improving quality of life. second, improving the quality of conception. third, continue to generate employment and reduce and mitigate financial presence. i think it is improving quality of life and reducing financial risks which pertains to these recent regulatory checkups. -- shakeups. there is a degree of confidence that the regulators at the, that this financial risks gradually being mitigated. if you look back about a week relaxation inal the -- this also points in the same direction. what is important to

investment implications, some of the banks could benefit. and thesure on npl's violation camp that you have could be a risk. that this is something investors would like to watch for. tracy: what do you think about china overall? are you still bullish? we have seen them push and pull. it feels like one step forward and one step back. with the president possibly in power for a long time now. manishi: we have been overweight in china in our portfolio. the policies that we are open to pursuing is getting in line with the kind of sectors the most investors are interested in. -- new them "you china

there --ich means discretionary, technology, internet. also some parts of financials like insurance and so on. i would also include indication, health care in that bracket. majority of our portfolio in china is concentrated in these sectors. we think be policy measures is adopting. it is furthering the cause of these sectors and helping to keep the investment teams alive. raychaudhuri, walking us through. thank you so much. we are going to be discussing broadcom and the protectionist u.s. president. broadcom courted donald trump cannot convince the government about the merits of its qualcomm takeover. more on that just ahead. this is bloomberg.

♪

tracy: welcome back. president trump has blocked broadcom's pursuit of qualcomm on national security grounds. and ordered a hostile bid comes hours after broadcom intended to ease washington's concerns. bloomberg's asia tax managing editor joins us now from tokyo. broadcom, some of them for somewhatgly -- unsurprisingly disagrees with the order. peter: it was just in november when it ceo of broadcom went to the oval office and met with trump. there was a photo op where they were smiling and shaking hands as they announce that broadcom was going to move its office back to the united states.

it looks like trump is jumping into this very hostile. broadcom had gone up the qualcomm -- had gone after qualcomm. it looked like broadcom some progress. the trump administration jumped in and shut it down. they said it national security concerns. it is not clear where broadcom is going to go from here. tracy: i have this vague recollection trump was friends with the broadcom ceo. why did he decide to jump in on this takeover deal? peter: excited national security concerns. just they cited national security concerns. they laid out areas. broadcom has been rolling up the chip industry. they have been buying company after company. they cut costs there and they try to make things more efficient. in the case of all,, that raises

concerns about u.s. leadership. qualcomm has been at the front of the building some of these technologies for many decades. in the case of the next generation, qualcomm was going to be one of the key companies developing those technologies. if qualcomm is not able to develop that with the broadcom, they just there is more influence that would come from technologies in china. they would gain more ip and be able to get some of their equipment and telecom networks around the world. there was a real concern for the u.s. administration. that's probably why they step into this deal. tracy: peter elstrom, thank you so much for joining us. coming up, we are going to be talking saudi arabia. the crown prince is heading to washington next week. the aramco listing might behind on the agenda it comes after we've had reports after the ipo

might be delayed until 2019. one that next. -- more on that next. this is bloomberg. ♪ mom, dad, can we talk?

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tracy: it is 8:30 a.m. in sunny dubai. we are minutes away from the market open here in the emirates. bloomberg index up by one point this morning but markets not doing much of anything. he was futures are really flat, up 0.01% this morning head of that u.s. inflation data. let's head over to debra mao in hong kong. she is the first word headlines. debra: tracy, u.s. secretary of state rex tillerson says the substance used to poison a russian -- the british

government blamed moscow for the use of the nerve agent and gave putin until midnight tuesday to explain. of conductingcord state-sponsored assassinations and our assessment that russia use defectors for targets of assassination, the government concluded that it is likely the russian government is like -- is responsible. debra: republicans have ended investigations into the 2016 election saying they found no evidence of collusion between the trump campaign and russia. the move comes despite intense objectives -- objections from the democrats. the probe from robert mueller continues. president trump has issued an order blocking broadcom's bid for qualcomm on the grounds of national security.

his decision came hours after broadcom's ceo met pentagon officials in an attempt to address washington's concerns. the president statement says there is evidence that a takeover would undermine qualcomm's lead in 5g and threaten best interest. japanese finance minister has repeated his apology for altered documents linked to shinzo abe. he insists he will not resign. issue relates to a land sale scandal with the names of they, be and his- names of a wife. he insists alterations were not an attempt to shield the prime minister. >> i do not believe the alterations were used to shield the prime minister or his wife. think this is the issue of the finance ministry.

goldman sachs choice of david sullivan is winning the approval of wall street. by naming him sole president, the path is clear for him to take the helm without co-ceos when blankfein retires. solomon ran the part of the bank that grew the most in more than a decade. global news, 24 hours a day, powered by 2700 journalists and analysts in more than 120 countries. mao.debra this is bloomberg. let's get over to juliette saly for a look at asian markets. deborah, it is a little bit of a class session. we are seeing a tone of caution ahead of that u.s. cpi report come through. the blue-chip stocks under pressure. a rally in tech players which is similar to what you are seeing

asian sector. shops trade tariffs are looking to have little to no effect according to two thirds of the 35 economists we surveyed. we see aluminum continue its downward trend and yesterday market hitting hard by that -- australian market hit hard by that. i mentioned the uptick you have seen in tech players. that is boosting the taiex. a little bit of by coming through in india. interesting to watch the move in gold as we await these reports from the u.s.. not moving too much, down by .2%. let's switch it out. we have been focusing on the japanese yen as we continue to see these developments. the yen has come under pressure, .2%..2% percent -- down

this a picture of the regional index, down by .8%. to the downside, it is the imzy players that are coming under pressure -- it is the energy players that are coming under pressure. these are some of the stocks we have been watching. jumping the most since october 24 -- since october 2014. in india, phone the most, down by 5%. it has been a swap -- share swap equity sale. i mentioned the yen, and this is an interesting shot. see somewe could further upward pressure coming through on the yen which can see it push toward 100 for the first time since 2016. they are seeing stars aligning for the yen to cross that point do to the fact that this convergence between the boj -- the boj in the fed.

-- and the fed. one to watch as we continue to see these japanese political developments way into the japanese currency. tracy: markets really in weight and see mode ahead of the u.s. inflation data. something else we are waiting for, president trump is going to welcome the crown prince next week as international a petition continues to build head of the saudi aramco listing. we also have some reports saying the ipo might now be delayed until 2019. mills.urn to robin thank you so much for coming on. nice to see you. we talk about saudi arabia losing face if it doesn't go through with the listing. i have to ask at this point -- i am you remember, this would not be the first time that saudi arabia has shelved a big

initiative. you remember the gas initiative from 1998. that was quietly canceled for his later. -- four years later. robin: those two cases are similar and different. the massive gas initiative, aramco never wanted to do that. they bitterly fought against it. initiative is also driven by the top but it concerns aramco very much. the senior leadership is on board with it. the problems and the challenge of doing so have become apparent delays.e these it is unlikely to happen this year. tracy: what are the challenges? and what -- and why the delays. delay? robin: the major problem is not

having the listing been you out there. until that, they cannot decide on reserves, ordering and coming up with a list of possible investors. that decision has to be made but it has become apparent that london is tricky. theresa may has been pushing for the less -- has been pushing for the listing to be done in london. knowledge --nister acknowledged but until that decision is made they cannot go ahead. another time this year. tracy: what was the rationale for selling a stake in saudi aramco? now it is two years on from when india's announced this was coming. we forgotten what the purpose of it was supposed to be. robin: the purpose was the big bang on reforms.

saudi reform program was really serious and a stake in what was intended to be the world's most bible company. now, that's most valuable company. -- most valuable company. there is a money-losing issue. that for me was never the critical thing given the oil price has recovered somewhat. tracy: two years ago when this was announced, oil was at $28 a barrel which is very different from where it is now, trading in the lows $60. it is been interesting to see the meetings with local leaders. it would not be the first time that saudi aramco has been used for geopolitical --

robin: it is a character that is being dangled. that's it is a carrot that is being dangled. course, it is being used in a political way at times to influence markets. tracy: robin mills, please hold that thought. we are going to stick with somebody geopolitical things we have been discussing and turnover to trade. companyd's biggest food is raising alarm over tension with the u.s. tit-for-tat moves will not be good for the global economy in there will be issues for both the u.s. and china if agriculture is used as a bargaining chip. china-u.s. trade has grown at 60%. last year, the agriculture trade between the two countries raise

31.7 billion u.s. dollars. hugethe u.s., we are surplus. when you think about u.s. expert to china, i don't think any government when to take any reaction to block the agriculture trade. not only is it bad for china's consumers it would benefit more u.s. farmers. >> president trump has made a lot about the trade surplus that china has with the u.s. what costco consider buying more u.s. agricultural food or other products as a way of redressing that in balance? cocco has been trying very hard.

-- cough cold has been trying very hard. -- >> is that something your counseling the chinese government against, using the soybean trade? >> i don't think president trump will do anything ridiculous to really make the whole world very collocated for china. the china government is encouraged to buy u.s. soybean. i don't see anything that the chinese government is doing anything to affect the normal u.s. and china agricultural trade. >> do the assets that you acquire to the purchases of need cofco ifhey insulate these trade tensions were to escalate?

america,ut in south argentina, brazil, black see, australia and different parts of the world, especially the major agricultural production areas between the u.s.. with donald trump, the current policy, maybe it will be very hard for chinese companies, especially companies like cocco to facilitate a chinese investment in the u.s. but i will say that u.s. is very important agricultural resources for china markets. we like to find ways to work together local commercials. we are in close discussions and dialogue. status long term trade russian ships. secure a supply from the u.s..

tracy: that was after you speaking to just that was patrick you speaking to m o'brien. conversationhe with robin mills. this is bloomberg. ♪

tracy: this is "bloomberg markets: middle east." i am tracy alloway in dubai. let's get a check of the business flash headlines. the wall street journal says the saudi government has taking be no power. -- has taken veto power. -- are now in the hands of the government. the saudi prince will remain as chairman and his shares are unchanged since his release from

detention in the ritz-carlton last month. paid out moreon than $1 million even as a stumble through one of its most ultra stretches in this one is 26 year history. he stepped down in august and put the board two months later. shares already under pressure but fell hard after he left. ge says its new ceo will not receive any bonus for 2017 because of the companies for performance. and amazon is said to be planning an offer for a credit card for small business customers in the u.s. expanding its drive to deliver the widest range of services. talks with banks including jpmorgan a medical branded card for business owners who shop on this website. meanwhile jeff bezos says he will spend his amazon lottery winnings on making space travel

more affordable. he spoke as he received the buzz aldrin space exploration award in new york. he has already announced he is funding a rocket company to the tune of $1 billion a year through the sale of amazon stocks. his commitment to space will only grow, he promises. that is your bloomberg business flash. one thing that isn't rocketing this morning, oil is continuing its light on concerns that may be facing on rebounding american stockpiles and booming american production. it becomes -- he comes after the ie said last week it is ready to dominate markets for the next two years. still with us, robin mills. i'll to start off with a chart. you can pull it up on your bloomberg. it shows speculative positioning in oil beginning to turn ever so

slightly more bearish. you can see the positions beginning to build there. oil prices have been fairly range bound, we have it price under 65 dollars a barrel. where is it going? robin: uighurs seeing the strong u.s. -- we are seeing strong u.s. production. they broke into the 70's earlier in the year. we are seeing has been expected that these high prices would lead to very strong rebound in u.s. shale. tracy: is that happening? we did see the rig count fall just a little bit on friday even though it was done wanted to rigs. the eia said it is forecasting another big monthly increase in u.s. shale output. forecast happens to be

correct it is going to let north korea -- north dakota's production to an all-time record. robin: the activity has been relatively subdued. tracy: are you saying the forecast is wrong? robin: no. i think is incredible. we're seeing the surgeon some the other shale players. rig counth the remains subdued. is a long way down. the efficiency has gone up so much. .hat is more than compensating tracy: what do you think of the forecast in general? ie and opec has its own forecast. everyone seems to have different numbers for u.s. shale production. robin: it is uncertain.

it is hard to were cast all the way through. we have continental casting some aspersions. saying they were overestimating and it is bad news to u.s. prices. i think the eia forecast is a little conservative. it is very difficult to forecast . partly because it is a moving target. also because it is so price dependent and if production goes up and price falls come activity falls off, it is a very dynamic process. like trying to forecast traditional oil production. tracy: what about overall sentiment in the markets? we used to talk about on the lawns were at record that meant we were vulnerable to a pullback . we have seen those longs deteriorated.

the think the market is probable -- do you think the market is horrible -- is vulnerable? i think it will take some significant news to change market sentiment. this year, we had venezuela which is been very supportive, the collapse in venezuela production. compliance toc's his production cuts very good. complying andver voluntarily. oil -- i guess oil bulls can think venezuela for that one. up next, as we are counting down to the middle east market open, we are going to take a look at which stocks to watch.

i have a feeling one of them is going to be in qatar. this is bloomberg. ♪

tracy: welcome back. shares of two of the middle east biggest lenders surged. qatar national bank jumped 10% on monday, that is the most in more than 12 years while --rates gained 4.5% after for more on this let's ring in believe it which echo. -- he comes equipped with a chart. what are we looking at? >> we are seeing the performance of qatar national bank. the was up 10% yesterday -- it was up 10% yesterday. it is the best performance since 2005. the performance yesterday was better than -- it was not the only stock that has such a good

performance. tracy: this is all because of the news around foreign ownership. >> national carter bank is sustaining to increase -- national qatar bank is sustaining to increase. there is speculation, there is expectation within the qatari market that more companies could fall in one of them would be industries qatar as well. if we hear anything similar or if there are indications that companies within the uae market are going to take the same steps, you see more and steps to more markets. tracy: i'm sure that is sorely needed given the embargo.

do you think the bullish trend we have seen this week is going to continue in doha? >> we could see the index was down quite a bit in february. there is room to recover. some strong names could still go up. this could pull of the whole market going forward. tracy: what about dubai? we saw the index fall yesterday. >> emirates is not as heavy to the index. even though the stoxx were up yesterday, the market is coming back to more of its natural dynamics. tracy: our middle east equities reporter, thank you for coming on. i'm afraid that is it for this edition of "bloomberg markets: middle east." we will have all the top stories from around the world coming up.

will be discussing that u.s. inflation data as it comes out later today. "bloomberg technology" is next. ♪ retail.

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