nejra: good morning from the european hecklers in london. i am nejra cehic. syria alert, equity futures fall as investors break -- brace. manus: facing congress, mark to correctpledges errors. investors like what they hear, shares rise. governore new pboc provides details to ease investor concern over trade. ♪

nejra: good morning. warm welcome to the program. so much we are watching on the risk radar. let's start with asian equities. global equities gained yesterday. asian equities looking for direction. you are seeing weakness in japan, strength in china. the msci asia pacific is treading water. we have positive signals in the market on trade. pboc governor talking about opening china's economy so investors are seeing easing of trade tensions. ,eanwhile, safe havens dollar-yen down 0.2%. this on the concerns of ramping up of risk in the middle east with possible airstrikes by the

u.s. on syria imminent. that seems to be driving the dollar-yen. we will talk futures in a second. so much going on in commodity markets. laterd to talk aluminum in the show. i've accrued oil up there. a little softness coming through perhaps because of the api data. we were seeing gains yesterday. we saw oil gain with the easing of trade tensions. we have a report on the bloomberg, saudi arabia has an ambition for oil. we are keeping an eye on u.s. cpi data. you've got to mind the gap in terms of what the indians want. they want stability in the market. you mentioned cpi data, it will be incredibly important.

you are looking for a core figure of 2.1%. it is all about cell phone prices. they have dropped out of this month measurement. mov, and it needs to move. this is the one year average of the index. this is a record low in november. this is markets explained 101 literally. we are not seeing aggressive moves. , theillion worth of paper highest since 2007. there are different things out there, data, we will get the cpi. they will be the protagonists of the next move in volatility in this market. you can expect 4%, in yields. it comes with a huge if, if u.s.

and chinese tensions do not escalate. if you take what came from donald trump yesterday, the utter flattery in terms of the rhetoric used, maybe we are stepping back from the brink. that is in play on the mov index. china isme are saying not exporting inflation to the rest of the world. to the u.s. in terms of the equity market open, we saw u.s. stocks gain more than 1% yesterday. that is 27 days of moves in 1% in either direction. we could see a little bit of the lower open. geopolitical risks seem to be weighing with the possible threat of u.s. airstrikes over syria. we are looking ahead to programming later on.

get the bloomberg first word news with juliette saly. juliette: u.s. equity futures have dropped after air-traffic agencies asked the airlines for caution on the eastern mediterranean region for possible airstrikes in syria over the next 72 hours. al jazeera has reported coalition aircraft have been seeing over the area. president trump has warned the u.s. will respond to the chemical weapons attack. russia has vetoed a u.s. resolution at the united nations to create a new expert body to determine responsibility for chemical weapons attacks in syria. it would've been tasked with finding out who was responsible for attacking douma last week. it is the 12th time russia has used its veto to block action

targeting syria. u.s. president donald trump has been advised he has authority to fire special counsel robert mueller. said themabee sanders attitude towards mueller after the president's response to the raid on office of his longtime lawyer. that comes despite top republicans in congress warning that doing so may put his presidency at risk. wall street banks could face higher capital hurdles under a federal reserve proposal that would mark the most significant rewrite for requirements put in place after the 2008 financial crisis. the capital buffer announced it meant to streamline online knitters -- on lenders. the central bank's proposal would relax parts of its annual stress test. global news, 24 hours a day, powered by 2700 journalists and analysts in more than 120 countries.

you can find more stories on the bloomberg at top . that drop in equity futures in the u.s. has taken a shine off the asian session. we were up about 0.2% on the regional index. now, nearly flat. the nikkei is set to close lower, with one more hour to go. we have seen yen strength and save haven action. positive movement in the hang seng in china. we heard from the pboc governor talking about opening china's economy. to the downside, the australian market and south korea weaker by 0.25% each. big movers, softbank shares jumped in tokyo on reports according to people familiar that t-mobile is in talks with a possible deal five months after those talks collapsed.

with noting in response, on potential tariffs on chinese companies. to the downside, sino farm -- sinopharm profits could fall by 30% in response to changes that drugmakers have to operate. thank you very much, juliette saly latest on the markets. the pboc governor to ease trade tensions with the u.s. this morning. additional measures to open the .conomy, speaking at a panel he said china would implement an open door policy on its financial markets. this new open door policy, i confident chinese markets will be more competitive, better regulated, and serve the real economy better.

it is a fair competition and level playing field. chinese companies and foreign firms can compete equally. pboc governor talking to our own editor who was there at the forum. we are fully manned up on this forum. almost -- thiso is day two. this was about opening ownership. this was about big bang for finance. yes, that was the term used on that panel. i have to admit, he said, i do not want to follow the big bang. we in china like gradualism. they like it slow and steady. he went on using that analogy, saying we do not want any big or little bang. he said they are going to move forward on these opening of

pledges made yesterday by president xi jinping in his keynote address to the forum. i will admit i was skeptical yesterday when i heard the speech from president xi jinping , because we have heard a lot about opening up financial service sector, we've heard about opening automobiles. we heard about intellectual property right violation protections. but we haven't got details. less than 24 hours later we are getting a lot more details, saying the caps on brokerages and security firms are going to be scrapped within three years. the insurance companies are going to get foreign ownership cap. we will get new measures on may 1 for the quadrupling of outbound and inbound on the shanghai hong kong stock. and more opening deadlines coming june 30. there was quite a bit of news

today. news, andte a bit of as you point out, more detail. is that enough to defuse trade tensions? now, xiems to be right jinping took a conciliatory town toward the trade friction. he did not name donald trump or the united states, but said there were challenges and headwinds, and he was going to be the champion of mobilization while there are protectionist headwinds out there. he was conciliatory and said they would open the market, including reducing and eliminating -- reducing the tariffs on automobile imports, which even elon musk tweeted overnight saying there was big news coming from china. then we had donald trump saying kind words about xi jinping, and the white house followed that up saying, we welcome this, it is great news, but we want details.

they are starting to lay it out today. nejra: thank you so much, stephen engle. joining us on set, portfolio manager for pine ridge investors. we have back and forth on trade. we have seen markets react. given where we are now, is this looking more positive for negotiations, or is it a pause before we get more attention? >> i think so far, so good. last week, i said we expect this to be resolved in a positive light. we think we will end up with more trade rather than less. this is moving in that direction. we will see positive direction. both sides want this to work out. we have to be realistic that the u.s. will not accept words as proof of actions. we need to see china step up and move more quickly than they have done in the past. manus: very good morning to you.

if you go to the blog you will , xi jinping's appeasement opens the trap door for the dollar. up a freshy sets legged that should be a welcome thing for the administration. do you agree with that? it is so if yousef. so effusive. a weaker dollar for many reasons. this would be one of the factors that contribute to that. the dollar has been benefiting from slightly stronger u.s. data for the rest of the world. .hat is likely to be temporary on the trade side any diffusion

of pressures will move it in that direction. i agree, not as emphatically as you describe it, or is colorfully, but the direction i am on the same page. nejra: we will talk about all things u.s. later. we have china data coming in a little soft when it came to the cpi there. is china not exporting inflation to the rest of the world? hani: we think the end of deflation is a positive development. a lot of that has to do with what china has been doing on the supply-side. that initial push that took it from negative territory for over seven years into positive positive for very the whole world in terms of taking out excess supply. it is natural for that push to start to fade. we do not think the one back into the deflationary zone, but it is natural that it will trend

a lower overtime. question. quick there are colorful people involved, but is he the linchpin in this trade? hani: yes and no. he is a critical player, but there is a faction within the u.s. administration that feels strongly about trade, and china in particular. trump himself has felt strongly about this for decades. i think it is more than any single individual, and what that person is going to push towards. -- it isut a trade about the trade warriors within the u.s. administration that will keep persistent pressure in this direction. we will not have a war, we believe, but this faction is not

going to allow trade piece to resume either. manus: thank you so much, hani redha, milti-asset portfolio manager, pinebridge investments. work, are on your way to we are ubiquitous. we are live on your mobile device. coming up, defending the social network, they spoke ceo mark zuckerberg apologizes on capitol hill. indian prime minister speaks at the international energy forum, as opec and non-opec ministers gather. we are live in new delhi. this is bloomberg. ♪

♪ manus: live shot of singapore there. asia-pacific still holding

the green. 174.51 on msci asia-pacific. no further gains to come. one lady who always has the right call, juliette saly with the business flash. office onthe london fox networks have been rated i investigators from the european commission. his -- it is part of a wide range probe. the unannounced inspections were carried out in several european countries at companies active in sports, according to the commission, which is concerned they may have breached competition rules. softbank shares have risen the most in three months in tokyo amid new prospects for another attempt at a deal between it american units sprint and t-mobile. the companies have restarted

negotiations five months after efforts to combined two of the biggest providers fell apart. t-mobile rose in wall street trading. that is your bloomberg business flash. nejra: juliette saly, thank you so much. facebook ceo mark zuckerberg has defended the social network before congress, pledging to correct its mistakes. facebook shares jumped as he spoke. >> we do not take a broad enough view of our responsibility, and that was a big mistake to read it was my mistake. there is a common misperception about facebook that we sell data to advertisers. we do not sell data to advertisers. >> you clearly rent it. >> we allow advertisers to tell us who they want to reach, and then we do the placement. we think that supported service is the most aligned with our mission to connect everyone in the world to read we want to offer a free service that everyone can afford.

there will always be a version of facebook that will be free. it is our mission to bring everyone in the world closer together. we need to offer service everyone can afford. we are committed to do that. >> you do not think you have a monopoly? >> it does not feel like that to me. nejra: bloomberg's reed stevenson joins us from tokyo. like whats seem to zuckerberg said. will lawmakers and regulators see it the same way? reed: yes, indeed. mark zuckerberg went to lossing 10 -- went to washington and got the likes he needed. the message as you saw was a bit of explaining, and contrition, along with a nice suit. to have kept the

lawmakers from pressing him too hard. this is only the end of the first day. he has another marathon session tomorrow in front of 34 u.s. senators. so far, it seems to be he is doing a good job explaining facebook and its business model. what remains to be seen is as a result of this we will see more restrictions or regulations placed on the social network. i just opened it on my bloomberg, zuckerberg needs to emulate america's least hated banker. what does this mean for tech overall? cheryl stamford -- cheryl isandberg -- the reality there will be significant cost lines coming into businesses like facebook that create or

rather than value. at iswhat you are hinting the bigger and wider debateface over global tech in society. thisn experienced some of about two weeks ago. they came under rusher from donald trump. is out there advertising their take. we have four titans trying to be the center of everyone's digital lives. there are questions about the role that they play. i would not say this is facebook's turn, because there are real issues. there is the breach of user data. in the 2016e election. it does not look like there will be concrete steps toward regulation or restrictions to

the business model. the debate is started, and that is something to watch out for. manus: thank you for joining us this morning. that is reed stevenson with the latest on facebook. hani redha, milti-asset portfolio manager, pinebridge investments. world, 19% of the the population in the world log on to facebook every single day. in terms of tech, you cannot abandon facebook. you have to hope they get it right, and that the rancor goes away. 19% of the world. i am shocked. hani: we like technology as a sector, however we think there are better ideas then looking at these stocks. did as well as he could have done under the

circumstances. we will see how today plays out. this issue is not going away. we think the extremes we are reaching in a world where it is winter takes most, it creates -- winner takes most, the risk premium has to be built in. some erosion of profitability has to be built in. it does not look as attractive to us as other parts of technology. nejra: i know you are looking at tech stocks. is facebook's business model that? hani: -- is facebook's business model dead? hani: i don't think so. the likes of microsoft are still operating on every pc in the world. it does not seem like a major threat. nejra: not dead but struggling for resuscitation. hani redha, milti-asset

portfolio manager, pinebridge investments stays with us. powersays he has the for to fire mueller, but republicans say to put his presidency at risk. this is bloomberg. ♪

♪ shot of tokyo there this morning. the dollar-yen is on the move. a little bit of risk off sentiment. let's see what happens in syria. you've got equities moving led by retailers. softbank is more interesting. , the dollar-yen and everything. we are waiting for a break in that direction. nejra: what the dollar-yen is representing is these concerns about geopolitical tensions in the middle east. the possibility of u.s. airstrikes on syria. we are treading water at the moment. we saw yen strength earlier.

we are closely watching the ruble, continuing its decline. it has had two days of significant decline. this after the u.s. ramped up sanctions on russia. reports from the ecb signaling the deposit rate could be the first thing to move in terms of tightening. the ecb is punching back, saying that does not represent the views of the governing council. we did see the euro higher yesterday. 9 today. at 1.236 this is the state of play on the wti. -- that isinum comes why you are seeing a fever is hitch and aluminum. we have ratcheted it the past few days.

oil is down by 0.4%. we still want a stable market. the saudi's to bring investment supplies into the refineries. $80.audi's want the indians are happy with $50. we have had a nice run in those energy markets. it was as if the oil markets were getting swept up on the risk on sentiment. not quite as much today. it is not broad-based across asset classes. s&p and nasdaq futures pointing lower. the s&p gained more than 1% yesterday. geopolitical tensions seem to be weighing on u.s. futures. to one of's get back

our main stories, president trump has been advised that he to fireauthority special counsel robert mueller. press secretary sarah huckabee warned thatublicans it may put his presidency at risk. we have our bloomberg team on this. sarahght, we've got huckabee sanders saying trump has the authority to fire robert mueller. i was talking to our producer this morning, she said this is a u.s.al moment in terms of does he have the legal authority to do so? is sarah huckabee sanders correct? >> not exactly. trump has been threatening to fire mueller for some time. he tried to do it last year, but his own white house counsel refused to carry out the order. trump, because of the special

and within the department of justice has quite a degree of independence and jeffomy, and because sessions recused himself, the person with direct authority to fire mueller would be rod deputy attorney general. he has said publicly he would not do so unless there was a very clear reason to do that. theoretically, trump could order andnstein to fire mueller, if rosenstein did not comply, he could fire rosenstein and order his successor to do so. that raises the specter of another saturday night massacre which is what happened in 1973 when richard nixon ordered the watergate prosecutor to be fired , and both the attorney general and deputy attorney general resigned rather than carry out that order. to congress charging

nixon with obstruction of justice, which led to him to resign. can you describe the reaction of congress, and ultimately could this lead to the president's impeachment? both parties of congress have said clearly that mueller should not be fired. what is critical is the republican senators have been vocal about this. charles grassley from iowa said this would be suicide. tom tillis from north carolina joined a bipartisan bill to protect mueller. you have other republican senators, mitch mcconnell the leader of the republicans in the senate, said mueller should be protected. the democrats have been united in their defensive mueller, and said this is a redline that would end trumps presidency. as to whether he would be

impeached or not, that is a difficult question to answer. bear in mind, impeachment does not mean removal from office. we've had two presidents were impeached but stayed in office. impeachment happens in the house /3 majority to 2 remove a president. , milti-assetedha portfolio manager, pinebridge investments is still with us. let's get back to the data. comingot the fed minutes up in a second. in terms of the cpi, what are you expecting? cpi would be nudging higher going forward, and it is part of what we think of a regime shift which takes us away from this unhealthy inflation environment towards what we call reflation. it is not overheating.

it is not inflationary imbalances, the healthier pricing power environment. i expected to be rising gradually in the months to come. it is not a problem. we see higher cpi at this stage as being in a sweet spot that is a positive indicator that growth is broadening and strengthening. the bloomberg profits piece britain this morning identifies three asset classes, debt, demand for u.s. debt, the lowest since 2009. the share of global fx reserves. the dollar has dropped the most since 2002. our markets becoming suspicious of trump? that is three major u.s. asset classes which are all lower after the 10 year that he has put in. hani: i think the recent policy

reaction does take away some confidence in the administration in the direction it is taking, but i think it is also because of how strong growth is outside of the u.s. it is not necessarily an indictment or a negative view on the u.s. so much as a assetstion that non-us have become more attractive, and have valuations that make them more appealing to investors. that trust capital flows away from the u.s. it is not necessarily all negative. you have to see the other side of the coin as well. nejra: back to the inflation story, i want your sense of the lead indicators. i have a chart that shows u.s. aall business sentiment is at five-month low amid trade threats perhaps. it ifree to talk about

you like. i have heard from some people that among small and medium businesses, they are seeing signs of job growth and wage growth. does that mean that wage growth is going to come, and markets are mispricing the fed hiking to the downside? hani: i think the indicators from small businesses show that not only they have high optimism ofels, there is a bit leveling right now, but in the longer-term chart, you will see we are at the highest levels since the crisis. confidence levels are very high. capital expenditure planning of these companies is also near an all-time high. demandseeing a stronger environment. it is giving confidence to invest in their businesses. to do so in productivity enhancing types of technology, which allows them to offset the wage pressure. it is a sweet spot were demand is strong enough for them to

invest in their businesses, but at the same time we are not seeing inflationary pressures that will squeeze their margins. waysnies today have many to take out costs out of their businesses. offset wage pressures by improving productivity. that ends up with strong margins still, and topline growth because the growth environment is broadening. the growth environment, the inflation environment will be critical. , the liborarkets spread. we had a break in trend recently. it is the highest since november, 2008. do you think this is because of the short end supply you are seeing from the u.s.? rollover,d, does this

or is there something more surreptitious with libor os spread? factorsere are several contributing to this, but we do not see it as problematic. part of this is to do with repatriation flows, and this is going to be something that does roll over in the months to come. as the feare it indicator that a lot of folks to looking at it as compared what we went through in the financial crisis. i would not read that into it. nejra: we might hear something about trade tensions. is the market pricing the fed right? hani: i think the market has come a lot closer than what it should be for the fed. i think you will see them persist because the fed's policy is prioritize asian of normalization.

-- prioritize asian -- prioritization of normalization. mispricedecb that is more than the fed is. i wish we had more time on that particular one. thank you so much, hani redha, milti-asset portfolio manager, pinebridge investments. he stays with us. let's talk about the tech story this morning. softbank shares have risen the most in three months. they are looking at another deal with sprint and t-mobile. giantbirth of a potential . what is going on? sprint and t-mobile, can this deal get across the line? this is a deal that will not die. they have been talking about it for years. the founder of softbank raise this a few years ago when he was

going to take control of t-mobile with sprint. they talked a few months ago about the opposite of that were t-mobile would take over sprint. it was only bought a few months ago when they called off their merger talks. now they are discussing this again. it is not clear what this deal will look like, or how serious talks are at this point. we know from people familiar with the matter that they are talking again and trying to get something worked out. government did shoot down the last proposal to combine these two companies. what are the prospects for approval now? that is a very big question. administration -- the trump administration has been more pro-business in many of its policies. the issue is you would be taking the wireless market from four

major carriers down to three carriers. what would that mean for consumers and businesses that use the services? the difference from the past is that these carriers are ramping up to invest in new wireless networks, 5g wireless networks. it is very expensive, it takes a lot of money and energy to make those investments. the u.s. is very concerned about this because one of the primary providers in his 5g wireless equipment is a chinese company that would like the u.s. carriers not to use the equipment. if you combined sprint and t-mobile, there may be some advantage in making big investments if it two companies can do that together as that unified entity or some other alliance. it is not clear what that would look like. nejra: bloomberg's peter elstrom in tokyo. thank you for joining us. bloomberg users can interact with the charts shown. browse recent charts to catch up

on key analysis. you can also play around with them. you can take that small business gtv go. arabiacoming up, saudi is looking for $80 per barrel. pboc, on china, the governor pledged to open up markets. when will they? this is bloomberg. ♪

♪ futures on the back foot after we saw gains in u.s. equities yesterday. geopolitical risk seems to be weighing on u.s. futures with the threat of possible u.s. strikes on syria. we will keep an eye on those

markets. juliette saly is keep an eye on everything else. she is here with the business flash. juliette: facebook shares rose strongly as mark zuckerberg defended his company on capitol hill. he agreed the data sharing , the company is responsible for the content on its platforms. that it must take a broader view of its responsibilities. dubai'srman behind skyscraper talked about his plans to go into the e-commerce business. he made the comments in an interview. at the middleook east now, e-commerce is up to 2% , tiny compared to the rest of the world. there is room for all of us to grow. must --it will grow

much faster than the rest of the world. demographics of the region. juliette: you can watch that interview at full at 9:30 p.m. in united states tonight. and that 7:30 p.m. tomorrow night in the u.k.. manus: thank you very much. saudi aramco is to take 50% of his stake in an indian oil refinery and supply that he percent of its crude. 50% of its crude. you just left the room where they signed this deal. this brings two important strategic relationships together. the details question mark >> that is right. saudi arabia has been edged out for india. it is an important deal for

aramco. they are buying to shore up refineries in asia as part of their market share strategy. in aare taking a 50% stake refinery on india's west coast that produces 1.2 million barrels per day. part of the 50% stake saudi to bring othered investors internationally. it is a key deal that is on the sidelines of the iif. the --modi spoke, in india is a huge driver, consumption in india is going to be 4% over the next 25 years. india brings in 80%. the import 80%, so they are a huge player on the consumer side. nejra: one of the reasons you are there, you spoke to the indian oil minister about the saudi's probably wanting $80 oil

. what is the india target? he is looking for a price target $30 loader than 80. take a listen. >> it will be so high. i will be more than happy if the price is around 50 plus. will not i'm sure they talk about the price publicly, but it would not surprise me if the indian oil minister spoke to his counterpart about the fact that the opec deal has boosted global prices. what is next for that deal? when the price crash happened, this helped modi's administration, and an economy reliant on oil imports.

if it goes higher, it will hurt india's bottom line, especially as the administration, there is an election coming up in 2019 for india. nejra: thank you so much to annmarie hordern in new delhi. ,till with us, hani redha milti-asset portfolio manager, pinebridge investments. are you looking more at oil or industrial metals? hani: i think commodities are an asset class to focus on increasingly as we go from where we think we are in a midcycle phase of growth, slowly to the later phases of the cycle. commodities would be better. we prefer metals over energy right now. the primary reason is the supplier response. what shale has done in reducing the supply cycle, and the speed at which the supply can come back really caps the potential price for us in oil markets.

you do not have the equivalent of that in metals. the long supply takes seven years to bring it on stream in metals, so we are set up for deficits to arise in the metal space. it will be more supportive for our prices. we find the minors to be showing a lot of discipline. manus: one of the big stories in the marketplace is the aluminum dislocation up 10%, one of its biggest moves since 2009. as you say, when you look at commodities, is it hard, is it precious, is it soft? where do you want to be positioned? then you've got a bid in gold because of a haven. it is a dividend play or is there a risk element? hani: out of all of those

options, for us, industrial metals are the place to be. metalsply dynamics of looks far more attractive than other parts of commodities. i would look at a combination of both the actual metals themselves, the metals and miners are able to deliver strong and sustainable dividend yields, which makes the total return you can expect strong as well. you can dynamically allocate between the metals themselves and the miners. it would be more attractive to us in energy markets given where the price is at this stage, and how much further it can go before supply comes in quickly. manus: how does your view on commodities feed into your e.m. allocation, or is that link not obvious anymore? are absolutely right.

it used to be much bigger as a component of em equities. we would disentangle the two together. in the em we prefer the consumption plays. in markets where there is it negative output gap that has yet to close, countries like is ill catch our attention. there is a commodity element to that story as well. we think domestic consumption is the real pillar of strength in the em. manus: thank you so much for being with us. hani redha, milti-asset portfolio manager, pinebridge investments. we are just getting started. we will talk about china. they are opening. to pboc governor pledges open the markets. our editor-in-chief had that conversation. keep an eye on u.s. equity

futures. they are dipping a little lower. the s&p down by 0.5%. we wait for geopolitics to prevail across these markets. this is bloomberg. ♪

manus: good morning from dubai. this is "bloomberg daybreak: europe." in thei am nejra cehic city of london. these are today's top stories. matt: serie a alert. futures fall as a basis brace for airstrikes from the aside regime. nejra: pledges to correct its privacy errors. investors like with their here -- what they hear and shares rise. manus: the new pboc governor offers details on china's financial sector which makes further easing over concerns over trade. ♪

manus: a warm welcome to daybreak, live from dubai and london. casca delivers their numbers, 1.4 6 billion pounds in terms of full-year adjusted profit margin. this what -- this is what the book is have been saying. you have a rise in price -- rise in prices. .he revenue, 57.4 billion this is the performance as you can see today up nearly 4%. in the back of everybody's mind is the john lewis profit warning. kingdom, like for ise sales, the booker deal what dave lewis is hoping to turn in transform the story

over. the guidance in this one. if you are shareholder you get a dividend of two pence per share. that was a big issue. increasing focus on returns to shareholders. youage to shareholders, might get two pence now, but the emphasis is on you. on track to deliver with the medium-term. those are the lines as we get more flavor through the morning. check in on your markets. this is the complexion. geopolitics and doubtfully is shopping -- undoubtedly is 1.75%.g -- we are waiting to hear what happens in syria. it was a get a response, one of the lines i heard, from trump 's speech.i

u.k. manufacturing numbers to come and the u.k. train bound. let's have a look at the bond market. options left the deal is with quite a bit of paper. 30 billion of for your notes. -- of freer notes. you are seeing a little bit of a bounce in u.s. at treasury. these bond markets, the volatility in the u.s. market is the lowest in three months. cpi today, core cpi expected to be 2.1%. says 4% chairman treasury yield could come. it is a huge if. u.s. and china trade tensions escalate.

nejra: i am not going to reveal that on tv. let's talk about it later. let's move to the shopping space. we have hammerson rejecting the revised pence per share proposal. this is another development in this shopping war. hammerson rejecting that proposal but open to discuss any klepierre. features in terms of the s&p and bonds. we look at the risk radar, msci asia pacific index struggling. we saw a rise from the concern of trade tensions. we had trump contract -- congratulating xi. more opening up in china. looking for more impetus in that trade debate. asian stocks trading water. -- treading water.

we are seeing those geopolitical risks expressed with the potential threat of u.s. airstrikes on syria. on dollar yen. -- we are down .1% on dollar yen. i don't have the room to put it all on the risk radar. we're talking about aluminum extending its gains. if we look at oil, we saw the bci -- wti gain the most eight months p.m. we saw brent at a three-year high. devon shire holding at 17. the easing of the trade tensions but that api data perhaps weeding in to the softness we are seeing. we are up by .3%. we also had saudi arabia indicating they could -- they could have ambitions for $18 oil. -- $80 oil.

we're looking ahead to conversations. christine lagarde joins us at 7:30 a.m. u.k. time. let's get to the bloomberg first word news with juliette saly. u.s. equityjra, futures have dropped after an air traffic agency asked airlines to apply cautions to the flights to the mediterranean region because of -- of 00 -- zero has reported -- president trump has warned the u.s. will respond forcefully to a chemical weapons attack by the assad regime. russia has the tune a u.s. resolution -- russia has vetoed a u.s. resolution. the body would have been tasked with finding out who was responsible for an attack in

douma last week that killed 70 people. it is the second time that russia has used the veto. u.s. president donald trump has been advised he has authority to fire robert mueller. white house press secretary shifted the administration's message on his attitude toward mueller after the president's angry response to a rate on the office of his longtime lawyer. becomes despite top republicans warning that doing so may put his presidency at risk. wall street banks could face hurdles under a federal reserve proposal could mark the most significant rehash of requirements put in place after the 2008 financial crisis. it announced that it is meant to streamline regulatory demands on lenders. couldntral banks proposal relax parts of its annual --

global news, 24 hours a day, powered by 2700 journalists and analysts in more than 120 countries. you can find more stories on the bloomberg at top . checking in on the markets here in asia, the regional index had been hired for third session. feeling flat as we respond to that drop in u.s. equity futures. the latest with syria. you have seen the yen rise on safe haven buying. 1%.ing lower by a half of australia's market tracked down closing lower by .5%. csi market up within hours trading go. we heard from the new pboc governor talking about opening up china's economy. in terms of stocks we have been watching, a lot of weakness and health care players, particularly hong kong.

also a profit warning of the retailer different -- retailer j front in tokyo. we have seen a big jump coming through in softbank, similar to what you saw from t-mobile in the u.s. this is on talks that saw on -- that softbank and t-mobile are back in talks at -- in talks about a potential deal. manus: sprinting to the finish on that one. juliette saly with the very latest. that's turn our attention to one of the big stories from china. yet the pboc check -- you have the pboc governor pledging measures to open the economy, speaking at a panel on the sideline. he said that china could implement an open door policy on financial markets. >> with this new open or policy, i am confident that china's financial markets will be more

competitive, better regulated and also serve the real economy much better. it is a fair competition and a level playing field so chinese companies and foreign firms can compete equally. manus: yi gang said fed cup edition. that will be music to the ears of donald trump. stephen engle, good to see you. you have warned us yesterday. i have it resonating in my year. -- in my ear. i don't believe an awful lot. are you any further along the events was road from the gang -- from yi gang. stephen: i am the babyface curmudgeon. i have heard a lot of things from these chinese leaders. 24 hours later, i am starting to be convinced a little more because yesterday, when xi jinping talked about a new phase

of openness, i go, here we go again. within 24 hours, we got some specifics including some dates so he gone -- so yi gang speaking on a panel with john micklethwait, giving dates as of may 1, the quotas of north and southbound on the shanghai-hong kong connect so the equity markets will be opening up. by june 30, we are going to get new rules on eliminating or reducing significantly the foreign ownership cap's in the financial services sector and insurance for fund managers and in banks within three years, many of those restrictions are going to be removed altogether. he also talked about the remedy exchange rate -- or maybe exchange rate. a lot of economists are saying that that points to the fact that the pboc has not consider

currency devaluation is a tool in its fight with united states. onra: trump congratulated xi his trade speech. does this diffuse trade tensions? stephen: it does diffuse it for the time being. the issues are still out there on various products. the tit-for-tat threats, and the ustr will continue to make its investigation. this sets a better tone. xi jinping, he set a more conciliatory tone and he played right into the hands of donald trump. out saying heack liked what he heard from xi jinping and he liked what he heard about the protection of intellectual property and the technology transfer. it seems there has been a bit of a reset. now comes the hard part, actually resetting.

much. thank you so asia reporter, stephen engle. the future of finance, you can follow all of this and all of our coverage on live go. fantastic coverage from stephen and our team. joining us now is diana amoa. diana, great to have you with us. think you for joining us. we have seen -- thank you for joining us. we have seen the concerns around trade tensions. space, hasd income it changed anything in the way that you might allocate, because as manus was showing, this sort of volatility, particularly in the treasury's market has been subdued? diana: that is very correct. one thing that has been interesting and the volatility we didn't see too much volatility because it seems like technicals have been a very for rallying in

fixed income space. when you look at u.s. treasuries, they were 298 fusco. -- 290 a few weeks ago. we didn't see a sustained rally in that market. i suspect now that the trade tension seems to be diminishing, we will see this technical factors the coming into play -- factors coming into play. the fiscal expansion kicks in and will become key again. the federal reserve reduction of its balance sheet. we're likely to see treasuries starting to drift higher. manus: diana, a good morning to you. they talk about the markets falling in love with the dollar -- falling in love with donald trump. sincebt demand is lowest 2009. have a look at this chart. that is the data point today.

how important is this? slumped fromrvices 12 months ago. are we -- it is my favorite phrase -- are we in the foothills of a renaissance of inflation? i like that term, the foothills, because that is where we are. the inflation profile in the u.s. continues. when you look at what is happening on the wages side in u.s., wages are increasing steadily. not accelerating but we expect is this current face of the economic expansion kicks in, we will start to see more of an impact on wages come through to the actual inflation numbers. today's number is going to be key for investors, although the market does not expect to see a month on month increase. we do expect some that affects from last year to drop out pushing the numbers higher. it will be key to how that

develops. nejra: simply because we are going to talk about the new u.s. shortly, i want to pivot what you said to the em space and how it affects how you're looking at the different areas of the yen. in terms of what you expect, the dollar, what does that mean for the em asset allocation? diana: for investors, it has been an interesting time because we knew the fed would be hiking. the market has been pricing that in, so the last few months, as the fed was hiking, we saw em assets being very resilient. within emerging markets, we do not see the inflationary pressures that we see coming out of some of the other developed markets. there is calls for central banks to be behind. decouple.ly to nejra: we just at the inflation

data out of china which came in a little soft. would you are not expect the pboc to follow the fed. -- follow the fed? diana: the pboc has been keeping up with the fed. we have been seeing them hiking. given where these trade talks are going in the willingness to entertain this trend, the incentive for them to be in lockstep with the fed is diminished. nejra: diana amoa stays with us. manus? manus: up next, the white house says trump has got the power to fire robert mueller. republicans warned it could put his presidency at risk. -- warned it could put his presidency at risk. this is bloomberg. ♪

manus: it has gone 7:30 a.m. in london. tokyo, it is 15:20 in the afternoon. -- atroda is speaking on a financial association. japan's economy is expanding moderately. the inflation target is at 2%. they are trading at about .5%. they will continue powerful monetary easing. this is the key from kuroda. this is his new term and new tenure. -- yenhening strengthening, more so to do with the fact you have geopolitical risks in syria. those of the lines from kuroda. -- those are the lines from kuroda. juliette saly is standing by. juliette: facebook shares rose strongly as mark zuckerberg's defended his company on capitol

hill. he agreed the datasharing scandal is facebook's fault and the company is responsible for the content. the social network's ceo says the company must take a broader view of its responsibility. the chairman of the company behind the skyscraper has told bloomberg about his plans to go into the e-commerce business. he made the comments an interview for leaders. >> when i look at the middle 2%t, e-commerce is 1.4% to -- tiny to the rest of the world. it is room for all of us to grow. where will this be? much faster than the rest of the world and it will get into the 10% to 50% quite fast. -- 15% quite fast. juliette: you can watch atncine's interview in full

7:30 p.m. tomorrow in the u.k. that is your bloomberg business flash. manus: juliette, i will pick it up from here. we are seeing some of these classes coming in. various risks, economic policy. japan's inflation will tick up. these are the lines -- will pick . these are the lines that are coming in from kuroda. cranfield -- diana amoa. , the bank ofround japan is going to say. . -- say for throttle. diana: the data does support the statement. we expect the bank of japan to maintain a sustainable monetary policy stance. that should provide an anchor for somebody broader bond

markets. you see japanese investors are big investors in european government bonds, so expect those to continue to see inflows coming from that space. if we did start to see a pickup in inflation and the market was to start to price in a shift from the boj, then we would be talking about very different numbers in terms of where treasury would be, in terms where european bonds woodhead as well. nejra: your colleague has been writing about the fact that investors should be playing more attention to the boj rather than the fed. that what the boj is doing is keeping these global bond yields suppressed. with that in mind, how much impact is the fed going to have this year on whether 10 year treasury yield goes? diana: and as much as the fed stays to the three or four hikes this year -- we expect them to hike once every quarter.

the market has come around to expecting that. if we stay in the current monetary policy trajectory for the fed, we don't expect to see the fed as being the predominant driver. other things from the u.s. point of view are going to be key. what the balance sheet is doing and increases in the u.s. treasury cause. japan and ecb are going to be the marginal movers in terms of normalization. it is key to keep an eye on that. if we did see a concerted renormalization from the boj and ecb, that would be a much digger driver for risk assets -- a much bigger driver for risk assets. manus: it is a daily ritual in terms of where the current goes next, i asked our guest yesterday about whether they were bothered by the curve. invert? that is the question for markets. inyou think we will invert

the u.s. curve? diana: i don't expect us to invert. i think the factors we are seeing on the long end of the curve, in terms of the supply demand at -- supply dynamics and the increasing demand for places such as japan, means the curve isn't likely to invert. we could see more flattening, but our best guess is the problem start to re-normalize. i know people assume that a flight curve has dire consequences, but in our view, that is very much technically driven and not fundamentally german. it is something to keep an eye out -- fundamentally driven. it is something to keep an eye on. nejra: thank you so much for diana amoa. european equity futures ahead of the open. let's take a look because u.s. futures have been pointing lower

on concerns around geopolitical risks. europe might open lower. this is bloomberg. ♪

guy: wednesday morning. welcome to "bloomberg markets: european open." i am guy johnson at our london headquarters alongside matt miller. castrate open less than 30 minutes away. -- cash trade open, less than 30 minutes away. ♪ as the trade war clouds clear come equity pictures -- futures dip. attention turns to a western response to a chemical attack in syria. china's big bang. in his first appearance, pboc governor yi gang poi