♪ haidi: stocks rallied on wall street with the s&p 500 poised for its best to gain in five weeks. liftingresident trump the moment, saying he sees great progress with relations with china. haidi: hong kong steps in to defend the dollar and makes its first currency intervention since 2005. betty: and bitcoin is back, at least for a day, its biggest surge since december.

haidi: hello from sydney where a.m.e just asked 8:00 6:00: and is just after p.m. in new york and will look at how that action here will play in the asia-pacific. was it mean or nice mr. trump who woke up this morning? the nice like it was on trade mr. trump who woke up. you make more conciliatory remarks on tpp, and also relieve pressure on china sank if the u.s. wasn't the tpp, it is a big counterweight to china's market.e in the trade that could put further pressure on beijing. haidi: we heard that from more than one key trait market. expert, that

the best way for the u.s. but the treasure on china is to get involved in tbp. maybe someone presented this as a strategy to the president. we know that larry could know and robert lighthizer look at how the u.s. could potentially look at the transpacific partnership. it will be interesting to see the reaction of the tpp 11 who got the deal done with the absence of the u.s.. a big day ahead when it comes to the dollar calendar. up, the china trade coming and we keep an i on the trade surplus that is expected to narrow. let's take a quick look at how the market in the u.s. ended. it has ricocheted from a couple of days of losses, and we saw it rally again. betty: we did indeed with the s&p up and the dow rising over 300 points, and the nasdaq also higher by 1%. we arenote to viewers,

awaiting from words from president trump on action against syria, that may or may not, depending on what action is taken -- spoil the risk on move we saw in the u.s. haidi: and some of that as you say, tensions relaxing the market has to with his tweet on syria, saint it could come soon -- saying forall russia to watch out for missiles heading to serie a, will watch out for that in the next couple of hours. broad-based selloff, kiwi stocks trading at 610's of 1% in the early part of the day. the kiwi dollar -- the gains in the u.s. dollar. the first positive session for the bloomberg dollar index in the week. inures in australia,

addition to the china trade numbers come it will bp key for the aussie dollar, and also the financial report from the reserve bank of australia expected to touch on things like leverage and rising interest rates. positive.ures looking down, asfutures a bit you can see the risk off sentiment washing away. at 67.14, and opec monthly report saying output fell at the lowest in a year. we had reduced supply-side of venezuela and saudi arabia markets may sharply tighten. gains as you mentioned, in the stock market, and we also and gold prices retreat.

su keenan has more on the markets. it is almost bipolar with trump sank and aggressive message about tariffs, but let's go to the snapshot of the market. treasuries retreated while stocks were up. so in easing of the safe haven demand, and crude reversed earlier losses again, closing above a three-year high. let's look at some of the big movers, because industrials were strong and financials were strong. boeing.g d in terms of the size of the gauge, wynn resorts also a big mover. this is a company really from allegations of sexual misconduct

on its founder. --'s go into the bloomberg gtv is where you can find these amazing charts. talks about how profit margins are posing a greater risk. index,e this white line and the blue line is the index margin. what the concern is that are going to see a bigger focus on these profit margins as we get into the earnings season. haidi: financials are some of the biggest gainers. blackrock kicking off the earnings season, and citigroup and jpmorgan our next, are they expected to deliver? let's look at blackrock stock, because it got a pop and

exceeded expectations. jpmorgan, at citigroup, and wells fargo on friday, and the following week we have goldman sachs, morgan stanley, bank of america. a lot of analysts are saying struck reports are expected. is the increase in yields and the fact that there is in easing up on regulation going to helps companies? bitcoin ismentioned back in the ball run. you had been interesting move a gain of almost 17% in less than an hour in the second test weekly performance since january. the wild swings we saw earlier in the year are back. piercing wild swings both levels in less than an hour. that.mes taking note of

coasternother roller ride when it comes to market sentiment. three days after his integration, president trump abandoned a signature trade deal with the transpacific, but now he is reconsidering joining it. joe, this whole trait story is quite an emotional roller coaster. what is the latest u-turn from the president? joe: what happened is the president got an earful from farm state republicans who complained that the tariffs and other trade moves he has -- and the senators words, tend to favor the rust belt over the farm belt. and the farm belt is a major supporter of the president and delivered many electoral votes across the country. here is responding to some of that.

ity met with him today, and was after that he came out of the statement saying, will look into it. tradeed his representative to look at negotiating to become a part of it once again. it was unclear if they would want changes in the existing pact. the rest of the countries involved are making a deal. to united states seems to want to come back into the game. betty: how serious are they about re-engaging tpp? joe: that is the big question because we have seen this before where trump meets with lawmakers are members of the public, and they plead their case, and he is quickly responsive. we saw that with a number of things like immigration and gun control and domestic issues. but then he dow spec and wants more than what people are willing to give.

promise, but a promise to look at if the u.s. can negotiate terms that would make it acceptable. i think any reentry is a long way off and we'll see how serious the white house is about doing so. on this syria situation, how close are we to seeing a u.s. strike against syria? when will we hear from president trump? within 48id earlier hours, that has come and pass, and he has given conflicting signals from his twitter account that they may come soon or not so soon. the secretary of defense was in congress today testifying to the defense budget. he said we need to move cautiously because this could escalate into a wider conflict. there are a lot of armies in --re, russia, iran, turkey

so he seems to be dialing back some movement. on the other hand, you defense signaled a are ready to go along with something. i think that is a critical step. joe, thank you so much. note, president trump the theresa may have spoken about syria and both agreed that chemical weapons used cannot go unchallenged, according to the spokesman there. trump and the reason may work together on an international response. has come and gone in terms of hearing a response, but we should hear something soon. in the meantime, let's get to first world news courtney collins. courtney: first up, a new survey said the mood is darkening with u.s. we tell investors.

the gap between those claiming to be positive and those with a bearish outlook is that it is at the widest since february of last year. it is blamed on trade war concerns escalated tensions in the middle east, and the political landscape in washington. was kong's central bank imposed in 2005 after the exchange rate fell to the weak after it fellge on thursday. the hkma has records for the reserve and a strong position to defend the local dollar. teslas strength relationship with highway regulators has bought over with each side accusing the other over last month's deadly crash in california. after tesla said the ntsb is interested in has headlines that

boarding auto safety, the board bank the company from the investigation, saying the field to abide by an agreement to present information while the inquiry is underway. and china has emphasized it's going military strength with a massive naval review. the state media says the fleet consisted of 48 ships, including the aircraft carrier along with 46 helicopters, fighter planes, and more than 10,000 personnel. naval reviewgest since the founding of the people's republic in 1949. global news, 24 hours a day, powered by more than 2,700 journalists and analysts in more than 120 countries. am courtney collins. this is bloomberg. up, corporate andralia has had enough, they talk about pulling

sponsorship dollars. with: and market outlook chad morganlander. this is bloomberg. ♪

♪ haidi: we are counting down to the sydney open, and futures looking brighter to end up has been a topsy-turvy trading week. after remarks from president trump on tape, and on syria delineating tensions. u.s. stocks having a risk on session, with futures up at three tents of 1% in sydney. betty: and a risk on sentiment, you are watching "daybreak australia". on, presidentsk trump is saying is considering and investors say tensions are not going to escalate too far. we await word on what that

action will be on syria. us, is it healthy that markets go up and down on any kind of headline? it is so headline driven these days. chad: and you have it coming via tweet based on erratic information. but come up with that said, you do have economic predictability. not only in the u.s., but the eurozone and emerging markets. betty: what do you mean by economic predictability? you have credit growth that is predictable, as well as the european union and within china and the emerging markets. we do believe that predictability may hit a snag, potentially over the next three quarters or so.

with global growth expectations that are somewhat more elevated. and it is based off of credit growth. in particular the impulse of credit growth with china will be one of the critical drivers of perhaps alleviating some of that euphoria. betty: i am trying to understand economic predictability. what does the flattening yield curve say to you about that? chad: you have the short and going higher, but there is a lot of noise. consider in the eurozone you have negative interest rates. when you have happening here is global just rate environment that is distorted. woulde past 50 years, you like at the inversion of the yield curve and that would be the best predictor of a recession. your 100% correct about that. we don't have a higher mobility for a recession at this point in time. if he did see the 10-year potentially plunge below 2% as the federal reserve goes above 2% i need fed funds rate, that

may be somewhat of an alarming carbon monoxide detector telling you to risk off. but there is no is going off in the sovereign debt market that has people confused. haidi: i want to get your views on the jump we have seen in short-term borrowing costs. what implications do see for smaller cap companies as we get normalization entering the environment that is perhaps a lot more hostile for borrowing? chad: without a doubt that is a critical driver of concern if you continue to see the --rt-term arland costs rise borrowing costs rise. need to see that bleed into financial stress, as well as credit indicators where you have high-yield spread start to really widen.

we are not seeing a great stampede from the perspective, so at this point we are more tempered with our concern about that. that said, i would like you to know that we have taken some equity risks off over the course of the last two to three months because of deceleration of global indicators that we look at, chris's high-frequency indicators. overall, we are not seeing a tremendous concern within the financial stress indexes that we observed. the cusp of the evil earnings season. i want to throw up this gtv chart. if you look at the gauge by citigroup, the number of estimates when it comes to profitability outnumber upgrades for the first time since september of last year. what are you expecting to see in this round of earnings and what are the questions and issues that will be raised given we have got this environment and

uncertainty? do you expect a lack of confidence, particularly when it comes to spending? chad: we think the earnings will be robust in the u.s., and revenue growth will be more tempered. the reason why we say that is you will start to see the full effect of tax code change. revenue growth is where you have to focus your intention. on s&p earnings we see roughly five or 6%. wek about capital spending, are not that euphoric on capital spending over the course of the next four quarters or six quarters. i know wall street has actually lifted their capital spending assumptions a great deal. and that has pushed up to gdp expectations. we are more muted on that. the reason is because you have low borrowing costs rout the last decade that overall -- if

any investment great company investment, they would have readily available capital from that perspective. theme of borrowing costs, i want to pull up a chart that shows you that it seems like any sort of concern that we have had in the past of downside risks to inflation -- who were talking about this months ago. if you look at this chart in the thatine, it represents none of the fed officials, zero are worried about downside risk to inflation anymore. does that lend itself to the four interest rate hikes might be in the card? chad: you are going to see a

steady drumbeat of four rate hikes. if it is three months out or four month's out -- it is where the trend will go in 2019 and into 2020. our expectation is they will have a tough time getting to 3% on fed funds rate over the course of the next 36 months. we think the terminal rate is more or less 2.5%. what is interesting about this is that you are right, no one is concerned about inflation, to pce numbers are coming up, wage inflation -- wonderful. the reality is nonfinancial credit, which drives global growth -- a majority is on the em side. if you start to see that temper and that actually starts to decelerate -- let me tell you, you will see deflationary concerns pop back up within the fed minutes. much: chad, thank you so

and always good to see you. bloomberg users can interact with any charts we just showed you using gtv . browse recent charts featured on bloomberg and safe charts for future reference. this is bloomberg. ♪

♪ i am haidi lun in sydney. betty: and i am betty lou in new york. a quick check of the business flash. uncertaintyrce of from a controversial deal, more than 75% of senior lenders have signed on to a doubt that would see the mighty traders debt take control, and they opposed

the deal. 2016: the ftc says uber's data breach exposed the names and phone numbers and the mother dresses of more than 20 million users. the ride hailing company and uber disclosed to disclose the information and have a similar bridge in 2014. that the css after misleading consumers, uber compounded its misconduct. had its biggest intraday surge, climbing as much as 17% piercing the 7000 and $8,000 level. possible reasons include the end of tax season selling and short investors being squeezed out. with soros said that coming in, we will see the start of the real bubble. up next, the tpp

turnaround, the president a take the rest back into the free trade deal that he wants exited as a key campaign promise. this is bloomberg. ♪

haidi: is 8:30 a.m. in sydney. we are looking more positive than yesterday, as we had a wholesale selloff in asia. and some toned down remarks on trade, and we await the white house with work on syria and the coming hours. it is 6:30 p.m. in new york, and let's get to first world news with courtney collins. andrew forrest says he is studying the feasibility of a plan to build a natural gas pipeline across australia. as part of his ambition to diversify away from iron ore.

woodlake gas with western hungryia with energy east coast cities which is estimates put the cost of a transcontinental pipeline at 5 billion aussie dollars. >> that is a project which i believe will be done within two years. it is a huge new source of energy in the markets which are desperate for huge resources of energy. regional security risks rise with the process of a u.s. strike in syria, the world's biggest lng exporter is offering $12 billion of debt less than 48 hours after saudi arabia raised $11 billion in the largest sovereign offering this year. sources say the offering is more than $32 billion.

ofsident assad says threats military action are based on lies and an attempt to weaken his forces around damascus. said the threats from washington, london, and paris, served only to stabilize the region -- to destabilize the region. president as indicated the u.s. may order airstrikes. global news, 24 hours a day, powered by more than 2,700 journalists and analysts in more than 120 countries. i am courtney collins. this is bloomberg. betty: thank you so much, courtney. that's a get markets right now and how trading is at this moment. 7/10 of 1%,is up at and the kiwi unchanged at the moment. futures in australia are looking to open.

risk onutures -- that feeling than the into the australian markets, update hands of 1%. and also the dollar weakness filtering through into a stronger aussie dollar. that is happening as well with treasury yields coming down just slightly at this point after the risk on trade. let's get more on what is going on in asia. haidi: still a lot of uncertainty as we get the trade numbers out. expectations of a white house statement on syria, strategy there, as well as perhaps more about the tpp story. is get what we are watching from adam haigh. sentiment maybe not so strong. >> bear in mind we are coming

off of a reasonable week of equities. some of the worst of the trade fears we have been the custom to over the last few weeks. it is worth noting on the great that we tell investors in the u.s. and how the massive swing from the positivity we got in mid-january to the reasonably extreme as ms. him we are seeing. to the reasonably extreme swings we are seeing. the spreadshows you indicator, and where at levels we haven't seen since february of 2016. you generally do not tend to see levels of the spread very often. it can be a sign, if you are a contrarian, now is the time to get back in. or if you take the data at face

value, it shows you how extreme the pessimism is becoming. we shouldn't lose sight of that, especially for retail investors. there are still a lot of words -- clouding their thought process. are awaiting to jpmorgan and citigroup results and what it could mean for corporate profits, right? adam: there is not a huge amount of data in asia today, so what happens in europe and the u.s. later with these big bank earnings is key. let's remind ourselves of the terminal chart here what this yield curve flattening is meaning. what we should get from these banks is some indication of how this is affecting not just the financial sector -- but what remains for lending to companies across the economy, and how that

is playing out over the next six to 12 months. of course ficc trading will be in focus as well. we will be looking to see if there's any pickup capital market activity even the elevated levels of equity volatility. and we are seeing volatility returning in some areas of currency and bottom markets as well. they'll be the real key think we will look out for later in the day. thank you soaigh, much. president trump is reopening the door to tpp, the pact he spurred shortly after taking office, and now he says the u.s. is making headway with complex with china. >> china is negotiating with us. long,very hard and very but they are opening up, and you will see tremendous business openings. betty: bloomberg economics

policy editor kathleen hays is with us with more. now we are scratching our heads, what is with the turnaround? kathleen: there is a lot more to this than meets the eye. let's start with where this happened and how it happened. president trump was holding a meeting with republican governors and lawmakers. he made the statement during a meeting with republican governors and lawmakers that their negotiating a fair trade. echoing like what we heard him sing after the meeting, that he thinks also that the u.s. and china will not levy tariffs on each other. publicemember these are and leaders from cultural states, and are concerned that putting tariffs and china retaliating can hit u.s. farmers hard. let's listen to the republican center from nebraska, a big farm state. it is good news the president

is listening to advisors and those of us here today. he said he is going to deputize larry kudlow and ambassador lighthizer to reenter the tpp negotiations. that is good news for america and the rule of law and economic security in the pacific. kathleen: deputizing larry kudlow and robert lighthizer seems this has likes to it -- legs to it. not surprising that elizabeth warren but that a tweet safe, what is going on? this is a bad deal. she said don't trump has worn up and down he won't support bad trade deals, he pulled out of the tpp, and now he wants back in. it is a ridiculous reversal and they stop in the face to the hard-working americans trump promised to fight for. tpp is a lousy deal. is a bit worn denies that she

may be getting ready for her own run for the white house in a couple of years. is it a ridiculous reversal on trump's part? we know getting out of tpp was one of his key campaign promises. kathleen: if you look back, i think what happened is, we took our focus off of tpp because the united states left. but in january, donald trump said he would do a tpp deal if the u.s. could make a better deal. he could be open to rejoining to trade block. but then what is happening in the past two or three months is that asian leaders like prime minister abe and japan and turnbull in australia have been working through tpp disputes to cptppp with a partnership.

it brings in broader things like labor, and environmental concerns. it is interesting that malcolm turnbull in february said it is designed to readmit a member who might leave. it is also important here that prime minister abe took the initiative to keep this deal alive, holding meetings to discuss this revised deal. remember, prime minister abe is meeting with president trump next week and mar-a-lago. how interesting that this comes just before that week. a white house official bloomberg it could counter chinese competition, and it is faster than doing several one-on-one deals. one more thing we have to keep in mind. a lot of people are concerned about a global trade war. and in a town hall meeting in

minneapolis in our or so ago, he said he is sympathetic a pushing the chinese and we have to avoid a trade war and it will be in honestly bad for the u.s. and global economy. something you told me weeks ago, but nevertheless, it is a concern there. thank youleen, for that. president trump sending mixed messages with a u.s. response and syria. we await statements from the white house in the upcoming our. hour. this is bloomberg. ♪

♪ betty: morning, i am betty liu in new york. haidi: you are watching "daybreak australia". president of getting next juliens on syria st. options for four hours after telling russia on twitter to get

ready for missile attacks. is the us to discuss center for new america's security fellow, kilis harris -- nicolas harris. it seems the president has overpromised, and now yes to deliver on this. >> this is president trump's redline moment. put significant capital into this, and making this moment in syria a signature issue for his national security platform. what would a u.s. response the fact the next few hours? >> it will likely be multilateral, each meets france and the united kingdom will be involved and will likely seek cruise missile strikes from the mediterranean and also see strikes from aircraft in carriers in the region that are based in the persian gulf.

the approach for the strikes is to send a message to russia, more than assad. the trump administration believes russia is the main actor back can bring about a better resolution to the syrian civil war. what about the longer strategy in terms of knowing the willingness or appetite to be involved for the longer run? if you put through one of these attacks, it results in a significantly weaker regime. nicholas: the challenge for the united states -- and this carried over from the obama administration -- is that the u.s. is focused on countering isis and making sure isis does not come back eastern syria, which is far away from the civil war between a sock the rebels in western syria. and where the u.s. gets involved in syria seems to be for a

larger transnational issue which is preventing chemical weapons use. betty: what is the likelihood that this retaliation is going to go right to assad himself? nicholas: that was on the table, but all indications are the secretary of defense, mattis, does not want to target assad, because they don't know if russia can pick up the pieces again. on the the u.s. government believes assad is the biggest magnet of terrorist organizations in the middle east, they are cautious of killing him because the results can be more chaos. betty: what could the result be? what scenarios are we looking at? nicholas: a could trigger a war with iran and israel. from iran'stally,

perspective, its ability to use assad's control in western syria greatesters lebanon,'s deterrent against iran. betty: is it too late to walk back from the threats on striking syria forcefully? nicholas: there is an eerie parallel with this event and what barack obama faced in 2013. in both situations, do a demonstration turned to russia but assad in the doghouse. it is up to russia to throw the trump administration a lifeline. if president trump is not willing to show assad who is boss. significant with this next round of potential military action be in signifying a willingness or need for western powers to return to that region? nicholas: is a significant escalation for the trump administration.

as recently as a week ago, president trump signal in public was to get out of syria as soon as possible. for president trump to make this moment a signature national security issue is quite a 180 degree turn. what he be thinking about north korea at this point as we had closer to that key set of summits? will he be thinking that this behavior or redline is going to signify something? nicholas: yes, and you see that -- unt you and security security, and they're trying to send a signal to both north korea and iran. from a military perspective, the reason the u.s. military does in thet to be involved civil war in western syria is they want to wind down to effort in easton syria to counter isis and that the local partners there be able to stabilize the territory.

so the u.s. military can move assets to where it believes the greatest that to the u.s. is, which is north korea. nicholas, thank you so much. the center for new american security fellow there as we await the retaliation from the u.s.. now geopolitical bearishness has translated the bullishness, and androught headlines sanctions against russia. remy.g us is ramy: you can check this out at gtv . take a look over all at bloomberg commodities index. that is here in the white line. in the past week is risen i the order of 13.5 and almost 14%. this has been happening on the

back of reporting from missiles and the possible strike on syria, and also sanctions on russia. is thing that is interesting looking at the blue and he lines here. dayblue line is the 50 moving average and the yellow line is a 200 day. when this happens, it is called the golden cross. we can see the index has been rising relative, especially in the past half year prior. and we can see it is below the 50. two my second, let's hop specifically into oil. percent for half the bloomberg commodities index. has been rising on the order of the highest in the past three or four years or so. we also see volatility rising in the past week. and the white line representing

the steamboat volatility index, we see it rising to its highest since february, and it is the highest since 2014. and let's look at what is happening with aluminum. this is aluminum premium going into the u.s. -- it was apopping premium of $18 per pound, and 21.50 per pound, and that is because you saw 6% of the world supply of aluminum. and the price of aluminum is also jumping ever since then. we will look ahead to that, and last chart,with my you can see the u.s. is in yellow. it is paying the most and most premium for aluminum. and blue,ited kingdom

and china in white -- also paid premiums, and you can see those rising as well. general bullishness when it comes to these commodities with oil and aluminum, especially as we try to figure out what is happening in the middle east and those sanctions in russia. the cost ofg up, controversy as the australians feeling the pinch on their wallets over bad behavior. this is bloomberg. ♪

♪ australians may finally be getting sick of bad behavior by sporting stars. corporations are responded by pulling sponsorship dollars. point.ike an inflection ranging from domestic violence

to cheating scandals, and we're seeing it hit bank accounts. >> we are crazy about sport and australia, and we are used to indiscretions by players. and rousing corporate sponsors strike a light in the sand and sank enough is enough, we're going to leverage our influence over the sport and dictate detectable detestable behavior. try to get players to pay ay compensation, and you suck want this object to homophobic amments, and we see sponsorship torn up over tampering allegations. haidi: what is the reason behind it?

we have a tendency to put up with these indiscretions and turn a blind eye as long as they perform on the field or the pitch, so what is contributing? angus: i think a couple of things are flex to the power of social media. we know social media for a sponsor has more potential exposure than life television, because we replayed these clips over and over on social media. the flipside is when asked turn nasty and there's a controversy, back press is amplified. that is when corporate sponsors have to step in. the other thing that is thereular to australia -- is a huge surge in professional teams, and they all need funding, and enhance power to corporate sponsors in a greater way. ngus, very

interesting story. yvonne and betty are up next with daybreak asia. no bad behavior here, ladies. [laughter] yvonne: fingers crossed. what this all means for index investing, debt s&p and dow jones alex is joining us from tokyo, coming off of a conference in japan. we saw the light of earnings and we get hisand thoughts in terms of investing in a turbulent market. and will also be talking cofounder in the european fintech company and the news that taking a stake in a company

as it expands into asia. haidi: lots to come. daybreak asia is next. ♪

♪ yvonne: 7:00 in hong kong, live from the asian headquarters. i am yvonne man. welcome to daybreak asia. the top stories this friday, the returns to markets after the fears of a trade war and strike on syria abates. the best week in five. president trump mentioned the mood. he said the u.s. could rejoin the cbp. betty: and from the global headquarters i am betty liu in new york where it is after 7:00 p.m. thursday. hong kong stepped in to defend the dollar. the monetary authority makes its first currency intervention since 2005. bitcoin is back at least for a day. the