♪ 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 biggest cryptocurrency

remains near $8,000 in its biggest surge since december. ♪ betty: you know, we have been concerned over the last several weeks on geopolitical risk on trade risk. if you look at this chart, it makes it seem we may not even have to worry about downside inflation risks. this line chart shows how the fomc officials are looking at core inflation and now see pretty much zero downside risk to inflation, which then begs the question whether it is now all upside business to inflation instead of three interest rate hikes. they could see four this year. yvonne: that could be a bit of a headway when it comes to the equity rally. the risks we have seen in the

last 24 hours, because his invite from that, there are not a lot of does. they are more just talks. betty: absolutely, -- hawks. betty: we got a memo on that earlier this week. it was risk on today in the markets. the u.s. markets close as you can see all in the green. the s&p adding almost a present. the dow also rising 300 points and the nasdaq. tech stocks coming back up 1%. setting up for a pretty good friday in asia. yvonne: we have geopolitical tensions easing. we are going to hear some announcement from the administration soon. trade concerns easing today as we talk about trump reconsidering joining the tpp possibly. that anz 50, the kiwi is up. ofdid see paring off some the gains from overnight but

trading in australia under an hour away. the big key data launcher today will be china cherry data we have singapore authorities. gdp numbers on the pipeline. 272 for the aussie 10-year yield. that is picking up by five basis points, 77 on aussie. the open in japan and korea, checking futures in japan, a good balance for the nikkei 225. the dollar-yen back well above 107. betty: let's get to first word news with courtney collins. courtney: president trump said the u.s. may rejoin the transpacific partnership. in the light of progress and what he calls unfair trade deals . a week after threatening $100 billion with additional tariffs on china, he said the two sides may end up level you note new new dutiesevying no on each other. approved bynever

congress. mr. trump: china has said negotiating with us very hard, very long in we have made a lot of progress for opening it up and for getting rid of those terrorists, and you will see -- tariffs and you will see tremendous business openings. courtney: the mood is darkening among u.s. retail investors and the american association of individual investors as a gap between those claiming to be positive and those with a bearish outlook is at the widest since last year. they turned from a bullish peak in january and it is blamed on trade war concerns, escalate intentions in the middle east and the fractious political landscape in washington. tesla's strained relationship with the u.s. highway regulators as boiled over with each side deadlyg the other of the crash in california. after tesla said the ntsb is more interested in press headline than promoting auto

safety. the board banned the company from the investigation, saying it had failed to abide by an agreement not to leak information while the inquiry is under way. china has exercises growing military strength with a massive naval review off the coast of this island. state media say that fleet consisted of 48 ships including along witht carrier 76 helicopters, fighter planes and 10,000 personnel. it is the largest naval review since the founding of the people's republic in 1949. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i am courtney collins. this is bloomberg. ♪ betty: thank you. stocks gained. treasuries and gold retreated today. the geopolitical noise as as loud as it gets -- he is as loud as it gets. su: the market has either been

wanting one way with its selloff or walking that with the rebound. this was a risk on day. let's go in. stocks higher, treasuries lower. also reduced need for a safe haven. we saw gold lower and oil selling off or a bit retraced in extended trading during the regular session. it reversed early rock losses and close above a three-year high. you are looking at the big swings in the green. intel, macron, a lot of the biotech stocks, tech and biotech that have been the momentum players early in the year have been taken big hits again in very big ways. companyources like that is really from allegations by sexual misconduct from the founder. a person close to the founder said there are discussions of a possible sale of their $2.5 billion casino in boston.

that would alleviate concern for the company which is in danger of losing its casino license if the allegations prove true. let's go to the bloomberg. this is where the charts are found. this one is called look out below and focuses on profit margins posting greater risk than usual. index, 12he msci month profit margin. this is the index. here is you have one of the big pavilion global markets saying this is in focus because recessions are what killed profit margins. they believe it is reasonable to expect one will take place in the next seven years. the fact profit margins are posing a risk is something being looked at. there are financial stocks that led the way higher with like rock kicking off the earnings season. do you think city and j.p. morgan can deliver? su: there are reports from the analysts saying j.p. morgan will come in with a solid quarter and

citigroup as well. the question for wells fargo, can they balance the, you know, their balance sheet? blackrock is above expectations. that gave a big push higher to ' financials. big banksoking at the reporting on friday. j.p. morgan, citigroup and wells fargo. then look at the next panel. look at next week. whether are looking for these banks are benefiting from the fed december rate hike and that super curve, whether they are also increasing loan growth and regulation questions, what they have to say on that will be in focus. been there is bitcoin. let's going to bloomberg, g tv is where you can find these charts. this is another weak on the mend. -- another week on the mend. the point is up above 8000, almost 17% move, came within one

hour intraday i'm a very big move since the big selloff in december, and is coming up on the biggest weekly move for bitcoin since the data -- the beginning of the year were volatility started to hurt some of the earlier gains in this. call it a currency or commodity in the crypto crypto currency. yvonne: certainly a great day for bitcoin. thank you. su keenan in new york. president trump met with security advisers to discuss the u.s. response to the alleged chemical weapons attack on civilians in syria and said any retaliation will come fairly soon. let's bring up our washington correspondent who joins us now. tell us about what we are expecting. in the last 24 hours we had saw they could do nothing or something. when is the final decision? >> trump has been all over the map when the decision could

come. he said fairly soon, then walked that back on twitter saying the response could come soon or not so soon. didn't meet trump with his national security team today. the white house said no assistant -- no decision has been made on response to the apparent chemical weapons attack in syria. they are still assessing intelligence and options and talking to allies. president trump did talk to the u.k. prime minister theresa may today, and both leaders said or agreed that they have to hold assad accountable and deter him from using these weapons. we know there is movement towards response, but we are not sure when exactly that will be. betty: james mattis was on the hill today. what did he tell lawmakers? reporter: that was interesting. secretary mattis was in front of a house panel talking and was asked about syria. he said there is risk to any

strike that escalates out of control. alsobeing said, he emphasized the u.s. is not looking to engage in serious to civil war.syria's the measures to combat the islamic state. the use of chemical weapons is beyond the pale and something that requires a response, so that was interesting. betty: it is. moving on to another matter, which is tpp, sounds like trump is willing to reversed course on tpp, perhaps even rejoining it again. tell us more. reporter: today trump seemed to make somewhat a surprising move, telling lawmakers in a meeting he had deputized his economic advisor larry kudlow and robert lighthizer to re-examine the transpacific perdition -- transpacific trade agreement. u.s. shortly withdrew the from that agreement under obama,

but congress never approved it. the remaining countries did end up signing an agreement. it was slightly different, so it is unclear how the u.s. would be able to renegotiate it, how they would be able to enter it. what trump said today, which the white house confirmed he did direct his advisers to look at the agreement, he said before he is open to renegotiating u.s. entry, but there is no detail what kind of renegotiations will look like. betty: greg sullivan, our bloomberg washington correspondent. still ahead we are going to be joined by the s&p dow jones leader to discuss the spike in volatility what it means for global equity markets. yvonne: that is right, but up next the equity -- outlook for the fx market. this is bloomberg. ♪

♪ we are counting down to asia's first major market open this morning. japanese futures looking like this. nice rest on move in japan. gorgeous day shaping up this friday. this is daybreak asia. i embedded a in new york. -- i am betty liu anin new york. abated trade and syria here and a lot of news here in hong kong, intervening in the first time in 13 years. trying to defend that dollar peg of course. we turn to our asia fx strategist joining us from singapore this friday morning. thank you for joining us. a quick look at the current levels on some of these safety rubrics ass, dollar

well. we are seeing stability on around 96, 173, also at the dollar-ruble is seeing decent rebound and following the gains from brent and crude, holding around 72. out of these four, what will be the most crucial the next couple hours and what levels should we be watching for if we hear anything from the u.s. administration on syria? past few weeks, the geopolitical risk have increased as you mentioned on syria. this adds on to the broadly risk aversion telling that the markets have been playing, given the rising escalation of tensions with u.s. and china. so a lot of these em currencies have been hit badly over the past few weeks. the ruble is a good example of that. as we see some of these themes starting to fade, clearly

trump's words overnight seem to be more positive, even on geopolitics. it seems that they are not really committing to a strike, but this market risk premium will get priced out over the next few weeks. we could see em assets and yet fx perform better than they have been over the past couple of months. dollar-yen clearly again, the yen as a safe haven had been a thing, a lot of influence into the yen as broader risk aversion. sentiment, we were expected to entire as well. reboundsooking at the in the ruble, some are saying it is the time to buy, given how dramatic these weights have been, but given the fact there is uncertainty about the u.s. administration on any military action or what the russian response is going to be, would you rather by or sell at these

rallies this moment? divya: i think they are staying away from rubel for now. clearly the rise in oil prices is a big bolster for the russian economy and the ruble, but given some of these tensions are still lingering in the background and given the sanctions as well, we are not sure if investors will be willing to bet new money into russia yet. it is a bit early. probably like to see things stabilize over the next two weeks before getting into russia, but at the meantime still favored quality em currencies, which benefit from a strong current surplus for we don't have a similar to -- geopolitical situation. a lot of that is in asia, so for the korean won or the singapore dollar or the thai baht, much better positions compared to the russian ruble at this juncture. betty: will you be adding on to those positions now and those currencies?

divya: yes, certainly. in our trade portfolio, we are a short yen versus a long korea. that is something that we are seeing risk aversion that should fade out over the next few weeks. we long singapore dollar. the meeting is coming up here we think that ems will normalize. we do like em currency but on a more selective basis. it is not a broad-based by everything em at this point. just hang on one second for your will take a commercial break. need to fix the break -- need to fix the noise. this is bloomberg. ♪

♪ asia.: this is daybreak

i am yvonne man in hong kong. betty: i think we fixed the problem. we are back with the standard asian strategist. so i want to turn now to the greenback, the dollar. you mentioned in your notes your a medium-term bear on the dollar. i am curious in light of what we heard from the fed minutes this week, there is a more hawkish tone to the fed. why are you medium-term? -- medium-term bear? divya: the market is pricing in about two hikes for this year now and seven basis points higher for next year. that is fair at this point. we don't think the markets are going to price anything more at this stage, even though the fed has been sounding hawkish and rightly so because it will pick up. three or four hikes in the next year seem to be quite fair and not going to be the additional

driver for the dollar at this point. what our markets focusing on? the more -- the focus is on medium-term fundamentals which is the widening of deficits for the u.s. more fiscal deficit and current account deficit are set to widen and a long-term basis, the twin -- 20 visits are stronger in the medium to longer term. we could be quite bearish on the dollar. it is not just the fundamental story. we look at valuation for example , the u.s. dollar continues to look quite overvalued. we think there is more weakness to come for the dollar this year. betty: overvalued to the fundamentals. what about the euro? where you see that value? the euro looks cheap to us especially as we head towards a policy normalization with the ecb likely to hike rates early next year.

we still do think the euro is cheap at current levels. it will consolidate as it is quite typical with the euro. you could get a few months where you consolidate in a very tight range. we saw something similar happened last year, but in the medium-term for us, it is still quite clear which is a euro higher. targeting euro-dollar at 172 by the end of this year. yvonne: we are going to talk about the hong kong dollar and what we have seen the last 24 hours or so. they bought the local currency for the first time since 2005. we have a chart from gb go, which shows how they will defend this. they are awash in money, but if you look at the high -- the hibor libor spread, we have seen the u.s. gave libor, the whitest in about a decade or so.

given how much liquidity there thatw, how much more does company have to intervene? towardse saw the move 785. i don't think it was markets trying to scare, whether it would sustain or not. it was a power play. liquidity has been flush between forward points, so being long on the dollar gives a positive carry. i think there are quite a few things which the central bank can do and bag. one is intervention. they can do dollars as a result of that, train out liquidity. they can also do something similar to what we saw last year when the dollar -- when it helpt 73, and that will train up some of this liquidity and push up points.

i still think the central bank it quite a few options, and will continue to back at 785. yvonne: thank you so much, the fx strategist joining us from singapore. happy friday to you. for bloomberg users, you can interact with the charts we just showed you. you can browse recent charts featured on bloomberg television and catch up with key analysis and save those charts for future references as well. there are links to jump back to interviews on tv , so check that out. betty: a quick check of the business flash headlines at this hour. noble groups and creditor support for its restructuring path to keep fresh for removing one source of uncertainty. 75% of the senior lenders have signed on to the deal which would see the commodity trader's debt halved as creditors take control. the singapore exchange boosted

-- yvonne: the ousted chairman of qualcomm is set to be making progress trying to take the chipmaker private. the son of the company's founder is talking to strategic investors, wealthy individuals to raise money. he took over the company following a hostile acquisition attempt. betty: the value of spacex keeps rocketing to new heights. the company authorize a $507 million funding round last month which valued spacex at $25 billion here the bloomberg billionaires index said that toes elon musk's fortune $21.3 billion. they say spacex is set to become the most valuable venture backed startup in america after uber and ambient d. yvonne: the people -- tpp turnaround. what it could mean. different words

from the trump administration and the new york times reporting they were considering talking to peter navarro and robert lighthizer to see if we can strike a deal with the rest of the tpp members. plenty to talk about. this is bloomberg. ♪

♪ yvonne: 7:30 friday the 13th here in hong kong. we are minutes away from the first major market open. fingers crossed, we will see some rallies from the session we saw on wall street on friday. betty: nothing to spook the investors. 7:30 in new york, feeling like spring. the markets closing also buoyant for the bulls, up 0.8%. i am betty liu. yvonne man. let's get to first word news with courtney collins. courtney: first up, hong kong's defective central bank bought

local dollars for the first time since the correct trading ban was imposed in 2005. after the exchange rate fell to the weekend of the range, the monetary authority bought more than 100 million u.s. dollars worth of the currency after a sell on thursday to 785. the bank has record forex reserves and is in a long position to defend the local dollar. bond is first selling it -- selling its response in two years after they talked about the possible prospect of a strike in syria. the exporter is offering $12 billion of debt in three parts, less than 48 hours after saudi arabia raised $11 billion in what was the largest offering this year. sources say qatar is offering sources -- offering up more than $32 billion. the syrian president bashar al-assad said the military action is based on lies in an attempt to weaken his forces's

recent gains around damascus. meeting a senior iranian aid, he attacke terrorist -- the from washington would only destabilize the region. he is suspected of gas attacks in a town. president trump has indicated airstrikes. and facebook is reportedly not anticipating major changes to its overall revenue and business model after ceo mark zuckerberg's testimony to congress. the wall street journal is the marketing president said most users have not changed privacy settings in the past four weeks. after the grilling, and zuckerberg has been invited to face three e.u. committees. >> a wake-up call to facebook and other tech companies that consumer privacy matters, consumer empowerment is important. consumer first, you might not have suspended 10 hours in a senate.in the

we want to protect the consumer. we want them to be able to better manage the tools and access the tools so they can make decisions. and is a lot better if the companies that are such an incredible part of participation fix their problems, and the wake-up call is they should have acted sooner. they know that. courtney: global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. collins.tney this is bloomberg. yvonne: thanks. we are counting down to some major market opens in the asia-pacific. let's get to sophie kamaruddin. we talked about asian markets probably not going to welcome what we are seeing, a u-turn from trumps trade policy, but we cannot take it for granted. sophie: especially on friday the 13th. investors are ready to take this news at face value. with the futures report we see gains at the open, and japan's foreign minister said japan

would be very happy if the u.s. does come back to the tpp. aside from trump, we have enough economic data to keep investors on their toes. first up, singapore's first quarter gdp and later today some policy. we have trade updates from china and india over the number of times -- india. but trump could give us another zag after this latest zig. he has essentially thrown a deck of cards in the air and we don't know where each will land area people are getting wary of the uncertainty, jumping into the bloomberg now to show you this chart here on the g tv function. we have open interest, the comics falling to a december low as terrorist talks spook the -- tariffs spook the markets. producers are not even directly affected by the tariffs are hurt

. volatility makes traders happy prices,rs see long-term and they wished public actors in a global level were more responsible for the signs that they give. yvonne: this is an interesting story. i know we need to talk about this. the south korea stock which has been surrounding security. it was a bit of a blunder here with a fat finger, but this is wide implications. sophie: we had the error on friday, and we look at the share price, it has plunged the most since 2011 after 60 employees sold $105 billion in paper value of the shares. since then there has been public west against shortselling here more than 200,000 people have signed a petition to the blue house which will prompt a response, and the government will overhaul the rates and brokerages to stop that trade. and other stocks are reviewing how they do business with

samsung security, so wider consequences. stocks to watch in japan to widen the net year, watching for owner raisingl the outlook. in the chairman addressed the issue of his successor. and we have several companies lacking consensus the buyback is happening for we are looking at i was lucky heavy and its peers with japanese and australian copies teaming up for a project. and pharma on the radar, reports that is approaching banks and potentially financing plans to acquire shire. betty: thank you so much, some of the movers. japan of course very keen on tpp, president trump reopening the door, the free trade pact. he said the u.s. has made progress in resolving trade conflicts with china. mr. trump: china is negotiating

with us very hard, very long, and we have made a lot of progress for opening it up and getting rid of those tariffs. you will see tremendous is miss openings. betty: a short time ago we heard from japan's foreign minister saying they would be very happy to see the u.s. coming back to the tpp. the economic policy editor kathleen hays here with more. so the tpp is not dead for the u.s. kathleen: certainly not. and top japanese officials saying what many people would say is obvious, many asian nations would love to have the u.s.-backed, but donald trump did, when he first took office, say that is it your the deal is not working. it is interesting what he said today came as part of a meeting in the white house with republican governors, republican lawmakers from agricultural states. how about that? donald trump saying, we are

really negotiating with china, they are treating is fairly, i think they want to. this afternoon he said the u.s. and china may not end up levying tariffs on each other. the gop leaders are very concerned that if china retaliate, particularly against united states farm exports, that could be a big deal for farmers themselves, and after the ben safed heard from from nebraska, a big farm state, and he had this to say about the deal. >> i think it is really good news the president has been listening to a number of his advisers and to those of us who are here today. he say he will deputize again larry kudlow and ambassador lighthizer. that is good news for america and for the rule of law and economic security in the pacific. kathleen: shortly after this came out, democratic senator elizabeth warren had a tweet

saying what is going on here? this is a bad deal. let's look at what she said. donald trump has sworn up and down he will not support bad trade deals. he pulled out after he was elected, but now he wants back in. ridiculous reversal and a slap in the face to the hard-working americans trump promised to fight for. tpp is a lousy deal. it is true donald trump that american workers have been hurt badly by these trade deals, and is also true that elizabeth warren has been a vociferous critic of donald trump. ,he is a democratic senator expected to run for president in a couple of years but she says no way. it is not on her radar screen. yvonne: so is this a ridiculous reversal? there are still a lot of questions about if the u.s. does rejoin tpp, can trump actually strike a better deal? kathleen: there has been a lot going on with tpp i don't think has been front and center on the

radar screen. in january, donald trump said he would do tpp if the u.s. could make a better deal. in february he said he could be open to rejoining. he said this over in switzerland. it is interesting asian leaders have been pushing to put together a new tpp, and they have succeeded. it is the comprehensive and progressive transpacific partnership deal, a lot of words. rate, abe, turnbull, japan, australia worked hard to get rid of this is with business in this deal and to forge a new deal very malcolm turnbull said cptpp is to remit a member that polls out. how interesting that they put that in there. the japanese prime minister was credited with keeping the deal a live, holding meetings, getting people together to hammer

something out. also interesting that the white house, president trump making this announcement one week before minister avi is coming to that's eight to meet with donald trump at mar-a-lago. a white house official told bloomberg after the meeting although trump favors bilateral deals, a multilateral trade deal could counter chinese competition. also interesting the wall street journal is reporting in the last hour that as trump opened the door to rejoining to pp the white house is planning to escalate trade pressure on china. .hey will push on these tariffs in a short time, they will be announcing the details of the latest $100 billion trump has suggested. yvonne: all right, we will see what china says in response to all of this. we have not heard about that acronym about china-led trade pact. let's talk about that with you in a bit. you can catch all of this and the other headlines on this edition of bloomberg daybreak.

the primers go to -- subscribers can go to dayb and available in the anywhere app. it can look at the industries and assets that you care about. check it out at dayb . in one area china could retaliate against the trump trade threat is by limiting the number of chinese to or groups that visit this u.s. groups that visit the u.s. cfo sydney way tells us international expansion is a top priority for 2018. brand future is very good will list in the mid to hire end of the market. to more andto move more customers, they are now choosing group -- they are choosing like i.t. products, frequent independent -- individual travelers include of that instead of the group travel. from the history you saw like

korea or like any -- you didn't have a meaningful impact on future business as a whole. reporter: you seeing any decline in numbers or bookings to the united states? >> not yet. largee we have a pretty market share in china especially in the mid to high-end, in the last couple years, our travel has already become the key driving horse of our business growth. what we found is the product that we placed outside of china not only conserve the chinese domestic travelers but also asianve -- can serve the countries for example. so from three or four years ago we started to test the market outside of china. we already got some initial success for example in the hong kong market were that great china market. and international business going

forward will become our, one of our key driving forces area reporter: is there more m&a on the horizon? >> not necessarily just m&a. -- we got our own brand for the international market trip. we will grow this rant together. tripy: that was c international's ceo. what does the volatility mean for the equity markets? hours -- we have a guest next. this is bloomberg. ♪

♪ yvonne: this is daybreak asia. i am yvonne man in hong kong. betty: i am betty liu in new york. bloomberg intelligence said the return of volatility has caused

less cash to go to etf and move into lower-cost products. joining us for more is alex from the s&p dow jones indices ceo in tokyo at our conference there, focused on the etf market. first off, i am curious what you make of the volatility we have .een here in the equity markets what does that mean for your business and for the local markets at large in increased volatility? i think the volatility pattern we have had comes on the heels of a long time of very low volatility, so it has made it look worse. volatility in general is not necessarily good, but when investors take a long-term view, something they can ride out, certainly there are a lot of products available for investors that allow them to take advantage of dampening the volatility in the markets while maintaining there is order.

yvonne: do you think it will have a significant -- their exposure. yvonne: you think it will have a significant impact on their investing? alex: not really because i think this trend we have seen, the megatrend of active assets moving into the index assets whether they be etf or index runs is really driven by a lot of other factors, the underperformance of active managers, the desire to see more transparent products, things like etf, a lower cost products. the short-term volatility i think is negative from an investor perception standpoint, but long-term it will not change these trends. betty: what does it mean for the ecf are get, because you have warned there could be volatility especially amongst smaller players, particularly etf markets that are focused on european markets?

what do you think the impact of the volatility will be on the etf market? alex: i don't think it changes the economics of the business. you're seeing larger etf providers that have the scale. they are becoming more global players, but i don't think that is a function of what is going on in terms of volatility. i think that is a natural evolution of the industry. but we have seen in a couple weeks or the month of march that active funds are standing -- staging a comeback. bank of america had two thirds of the growth their benchmarks last month. what investment strategies are going to be in favor this year? forecast specific investment strategies, and i wouldn't necessarily create a trend at this point for two months. the academic data, the research we have published with our

report shows over long times to out is hard for us to perform the benchmarks. of me there are managers in particular market segment that can't outperform it. that is natural. for the average investor, it is hard to find those managers. when you look at it over the long-term, which is i think the way most people look at investing in things like etf's and index funds, i think the advantages are so clear. yvonne: have you seen a pickup in investment with appetite with smart data or traditional? what categories or themes are you looking out for? yvonne: i think in terms of launch of new products am of the big hundred index product have been out there for many years and will attract flows. in terms of new product launches, we have seen interest in what people call smart beta or fact is indices, new ways of

dicing the market up in smaller ways and capturing different types of exposure to the marketplace. trend. a growing it is relatively small compared to the big large benchmarks, but turns something of interest and we have lots of interest for our customers in developing these products. yvonne: i want to talk about china in particular. we have seen a lot of talk from beijing and the form about china ready to open up. they are ready to open the financial sector, allow access into the economy as well. what does the s&p down -- and out jones indices need for in the chinese market? been in china for quite a while and we have u.s. based products like the s&p 500 listed locally. there is china -- has a great opportunity in terms of the status of the market, the way

consumers are starting to save, but there is a lot of frictions in terms of the quotas that still need to be worked out before you have free flow of funds across the borders. as those barriers come down, the opportunities are going to increase for firms like ourselves. yvonne: i know you are big when it comes to eng as well. you are seeing the signs of that, but corporate governance is a thorny issue for many the bond, as well with market where we see a flood of junk issuance recently. how challenging is it to apply these principles to a market opening up that is already so big? bsg is a global phenomenon, not just in china. one of the challenges of bsg -- esg is there are not standards. different government, different things to different investors

area more and more we are seeing investors incorporate these here in japan. tgif is taking the lead in incorporating esg factors into their portfolio, and we see it from the largest ones globally trying to do that. over time i think this trend will continue. china clearly i think wants to be viewed as being more environmentally friendly, so looking at the green bond insurance is -- issuance is, things like that will be paramount to them. yvonne: and before we go, we want to ask about india. there has been a bit of controversy i guess when it comes to the exchanges. they have cut off licensing deals on equity derivatives with overseas counterparts. some suggest that could jeopardize the country's ratings. what is your view? don't take a particular view. india is important for us are this is something between the exchanges and their licensing

patterns. we have a joint venture with the pboc for the local indices, but it is something that i think we are all watching, but it is a question for you to ask of the exchanges. yvonne: alex, the snp dow jones indices ceo joining us from tokyo. we are watching japanese retailers at the open after fast retailers from the year. joining us now is the consumer staples analyst in hong kong. this company.h they are moving overseas. seems like this is a decent set of earnings when it comes to fast retailing. reporter: you are right. there push overseas is starting to pay dividends for them. if we look at both cake pocket with moody and that fast retailing, those companies are

the -- they are doing this in a number of ways. it is not just about inventing their networks and adding more stores, but it is also introducing sales. we are seeing them accomplish this in a number of ways. isdy for example as -- muji trying to increase the market. in china they have more skincare .roducts, their own space sales in that space are doing better than in japan. where they are not as well-known, they are leveraging celebrity endorsers to build their brand equity. that is making them more approachable and allowing them to dispose the local competitors entrenched for years area betty: japanese consumer spending is still choppy. what are they doing to keep that growth strong domestically? alex: a couple of things that are happening here.

one thing that had got unit low in trouble in the past is they had been aggressive with discounts towards the end of the quarters and so basically consumers are waiting until they had those high discount, and they have changed to an everyday the pricing model to drive market is that traffic throughout the entire quarter. that helped a lot. they have done a better job of managing their inventory, and have done a better job of getting seasonal merchandise, making sure the levels are correct, monitoring the weather so they are not, if we have a bad month or two, they are not getting killed on that run. with these two, they are going in and doing selective foot driving, then educating their sales associates to upsell consumers to higher-margin parliamentary products. they are working with family march. you need to have muji products in the convenience stores, reminding consumers they are

there. yvonne: it was so cold. i was there and it was pretty chilly. stores,at convenience lawson, i saw lawson was labor cost. however they responded to the labor shortage and how will that hurt their bottom line? alex: you are thinking about this in two ways. we expect a pressure. declining for the first time in a decade. they will be more aggressive developing unmanned convenience stores. we are seeing more smart vending machines where you have dynamic pricing based on whether they can tie that to customer loyalty cards. we are seeing other efficiency producing technologies in terms of being able to do automatic change of the convenience stores . also using ai to better manage the inventory. taking a look at the weather forecast and figuring out how many types of umbrellas you need. that hurts them in short-term

but longer term that could help when you think about japan's senior population. the seniors that run stores, they are closing those stores as they get older, and that will give them a chance. yvonne: certainly one to watch. thank you. the market open. the market open. retail.

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>> it is it :00 a.m. in hong kong. we are live in bloomberg's asian headquarters. i'm yvonne man. the top story this friday, optimism returns as geopolitical fears subside. a big day of data. we keep traders on their toes. president trump lifted the mode, saying the u.s. may join the tpp and opportunities in china. >> i'm betty liu in at new york, it is just past 3:00 a.m. bitcoin is back for a day. the biggest cryptocurrency remains near $8,000 in its biggest surge since december.

craft beers are blooming in china. we talk sales and strategy. ♪ yvonne: we have breaking news coming through. we talked about how heavy day today it is. numbers in singapore really seeing a big upside from what we saw in the previous session. 4.3% for the first quarter. from the 3.6%t growth we saw toward the end of the year. this is going to show a lot of strength when it comes to industrial production. some of these industries are on a rebound. manufacturers are seeing some of the breakdowns. year.rom the 2017

we continue to see continued strength and manufacturing in trade. there is a lot of uncertainty in the trade front. perhaps we see cautiousness. we are seeing that they are increasing the currency than from the euro. you see tightening in their policy. maintain theg to width and center of the currency band. those numbers are solid growth outlook for singapore. the singapore dollar is strengthening on the back of this news. it has been tightening by the monetary authority of singapore. it certainly seems like inflationary pressure at the upper end of the band in singapore. inflationary pressures. are rising there. yvonne: certainly seemed policy

tightening -- certainly seeing policy tightening. our top live blog is following this on the bloomberg. go to team live go to get analysis from expert editors. let's get the latest on markets. those moves we are seeing. >> taking a look at the dollar, we have it heading below the one 3090 handle against the dollar. this is after they came out saying -- to see a gradual of the currency. this could drag -- lift asian currencies for the ride, given what we saw from the mas. our live blog notes, it has been getting more difficult for them to ignore broadening recovery in the economy. alongside strong factory output, there has been a property upturn.

home prices have been on the rise, despite attempts to close the section. the market opens at 9:00 a.m.. they have risen about 9%. they are headed for a third weekly advance. as far as taking a look at the 6%lar, it has gained over against the greenback. taking a look at the wider market. let's look at how asian stocks are faring. acrossseeing an advance the region as trade concerns diminish after trump's latest policy u-turns. how long will this last? the u.s. is looking for action, not words from china over trade. u.s. futures are pointing lower this friday. some focus will be turning to the fundamentals to earnings. jpmorgan and city report on wall street and asia, highlights includes fast retailing.

have it under we pressure, down about a 10th of a percent. markets assess the likelihood of a u.s. military tally asian in -- retaliation. in ae: i want to bring market life strategist. a tightening in singapore based >> for one thing, the singapore dollar is going to strengthen. it is already at about the highest in three years. that is the mechanism the central bank uses to implement

monetary policy as the currency. we can look for strengthening. everything seems to be firing on all cylinders in the economy. steps to to be taking make sure there is not overheating. betty: they have some proper responses to what seems like inflation, at least on the upper edge. speaking of inflation and rates, what about treasury tenure yells renewing their push to 3%? of the pastcourse syria,he tensions over the tensions between the u.s. and china over trade, these have supported trade. now these things are going away. that fed officials are more optimistic on the economy. they may be leaning towards faster pace of rate hikes. we also saw current cpi rose, some of the things keeping yields down are going away. the economy is still seeming to

be in good shape. i think the 10 year yield can renew its push toward 3% again. yvonne: we have seen oil rising on the tension we have seen. we have brent climbing above 72. can it reached $80 that saudi arabia wants? reach $80 that saudi arabia wants? >> now that it is going away. there are still reasons to be optimistic. the middle east is still volatile. there are questions over the iran nuclear pact. venezuela is cutting out. there are a lot of reasons to be optimistic on oil. i spoke to my colleague, she said it seems like an aggressive target. the highest in more than three years.

the path still looks likely to go higher. yvonne: thank you, wes goodman joining us from singapore. --ch our market life blog markets live blog. the first story that popped up there. you can go and get a market rundown. there is also a lot more commentary and analysis from limerick expert editors. you can find out -- bloomberg expert editors. we will hear from singapore. we saw the gdp upset of 4.6% for the first quarter. central bank tightening on a policy for the first time in two years. solid economic growth. we have seen firing on all cylinders. the profits for 2018 looking positive. imported inflation is rising on global demand. they are also seeing that when it comes to cpi, singapore inflation could be in the upper range. the 02 1%

the core inflation will be one to 2%. we are seeing hawkish is coming through from the fact that central banks, after the increased the currency band. still maintain the center of that currency ban. coming from singapore, let's get you caught up with the first word news. says thesident trump u.s. may rejoin the transpacific partnership in the light of progress on what he calls unfair trade deals. one week after threatening additional tariffs on china, he says they may end up levying new duties on each other. it was negotiated under his predecessor, but never approved by congress. >> china is negotiating with us very hard, very long. we have made a lot of progress.

we are opening it up and getting rid of the tariffs. i think you will see tremendous business openings. paul: a new survey says the mood is darkening amongst u.s. retail. individual investors say the gap between those claiming to be positive and with a bearish outlook is at its widest since february of last year. a bullish peak in january is blamed on trade war concerns and tensions in the middle east and the political landscape in washington. hong kong's defector central-bank brought dollars \ince the pairing trading ban after the exchange rate fell. you the hkma has record for reserves. it is in a strong position to thin the local dollar.

rise at security risks the prospect of the u.s. strike in syria. oil's biggest exporter is offering $12 billion, less than 48 after -- hours after saudi arabia raised $11 billion in the largest emerging market offering this year. global news 24 hours a day powered by over 2700 journalists and analysts in over 120 betty: some breaking news out on indonesia. raised to be aa to from be aa three. the outlook has been changed to stable from positive. indonesia sovereign debt has baa3.pgraded fro the credit agency saying the outlook for the economy is

increasingly credible. they have an effective policy framework that is inducing to macroeconomic stability, despite other nations have come out saying there are risks with the fed possibly increasing or hiking rates after that some might expect. coming up on daybreak asia we have much more ahead on the markets. we speak to the cofounder and ceo of denmark's bank, ask about expansion plans in asia and stake sales of chinese carmaker jili. don't miss the exclusive interview. yvonne: up next, we speak to capital investors in sydney and find out white it is close to dumping -- why it is close to dumping all its u.s. holdings. this is bloomberg. ♪

♪ this is "daybreak asia," i'm betty liu in new york.

yvonne: i'm yvonne man in hong kong. geopolitical bearishness as stand into commodity bullishness. missiles in the middle east and new sanctions against russia. let's get a roundup. ramy inocencio is on the wall with the charts we need to know. ramy: this is the bloomberg commodities index. over the past 1.5 years, it has been trending upward. now with the last week or so, we see a jump by about 13%. take a look at this little red dot. it is the golden cross. the blue line, the 50 day moving average, has risen above 200 dma. this implies bullishness, and global sinking has been pushing this. i'm not sure if it takes into account the tensions. this generally is also helping

push commodities index higher. one of the biggest members of it is oil, wti and brent. looking at the volatility of both commodities, for wti in white, this spike up in volatility. both seeing highs not seen in the past few years. for brent it is hitting a high not last seen since february. for the wti, that is highest since 2014. we will be watching that, especially when we expect news regarding syria. another commodity we are looking ands the aluminum price premium. my third chart looking at the premium for the metal going into the united states. this has risen by about three dollars per pound.

to $21.5 onising up the sanctions the united states put on the russian aluminum giant. it will be interesting to see where that goes, whether the sanctions remain in place. the u.s. is not the only country that is affected by this. my last chart is looking not just that the u.s., it is also looking at the u.k., in blue, and china, in white. the premiums for all of these rising recently. in terms of the hurt countries are seeing, it is spread fairly well across the major economies. generally looking ahead with the tension we are seeing commodities rise across the board, as evidenced by the bloomberg commodities index. betty: ramy inocencio there. bloomberg users can interact with those charts you just saw

using g tv . charts featured on bloomberg television and catch up on key analysis. save charts for your future reference, you can also use them. yvonne: our next guest says political risk is becoming too much. he may consider selling all of his u.s. assets. p capitals is the a& investors head of dynamic markets. they are worth more than $445 billion. you are so frustrated by the u.s. china tit for tat, you may dump all of your u.s. holdings. from what you heard today, you may need to step that back? >> first and foremost, our responsibility as fund managers is to protect client money. you look at the cycle, that u.s.

assets, valuations are not cheap. u.s. markets are relatively expensive. fundamentals have been good. if the normal cycles play out, usually what happens is inflation, it pressures the fed to hike too much and causes the next recession. typically that is two years away. ande day today tweets volatility can short-circuit the cycle and lead to a tighter financial condition that recession can be expected sooner than two years. we are not there yet. if those continue intraday volatility, and conditions tightened, that would be something we will consider. what would be the point where you would exit? i am gathering you haven't exited the u.s. market yet. you are almost there.

what would make you pull the trigger? it is tighter financial conditions and more volatility. maybe more inconsistent -- at some point, yeah. betty: would you really go to the extreme to dump all of your u.s. holdings? >> why not? allocation, just look at it from a fundamental point of view. bubble.. equity takes a getting out of u.s. equities is not a loss. we like to have access to current sectors of the u.s. but if political risk becomes too much, why not? if u.s. -- if you get a downturn in u.s. equities, every other market goes down with it.

it will be more of a defensive stance as opposed to a principal. betty: i think you are right. , pendinge markets tank recession around the corner. you can imagine that will have a contagion effect. just to bring this further, if you were to leave the u.s. markets, you must be looking at where you can park that money? where could you hide? when you look at commodities, they are a great place to be. we talked about on the supply side, the increased protectionist policies and sanctions on russia. commodityply side, supplies is at a risk of destruction. on the demand side, we have synchronized double growth. typically commodity prices

respond to strong economic conditions. 2007, equityt market peaked in october. commodities peaked in mid-2008. commodities is one area where we have allocation. gold, for example, if trade tensions pick up. they lead to stagflation concerns, rising inflation without the upsetting factor of growth. gold is an area to the. we will add to it if trade tensions intensify. betty: you talk about how bias, buts are b energy company stocks really have lagged behind. we have a chart that highlights this. why do you think we continue to see diversions. is there any chance for a catch

up? often there is an increased possibility of catch-up. energyre two reasons, prices are training at levels, oil at 16. oil is a lot higher. up,er one is oil price goes shell companies, and flood the market. that is not the case. they cannot big for oil and sell it in the forward market. the structure of those companies has changed. shareholders demand more buybacks, more capital returns, as opposed to more production. we are seeing increasing pressure on ceos to deliver that. i don't think -- it gets going soon. energy companies are at the forefront of increased by that potential. all the possibilities that will

see a great catch-up but energy companies over the next few months. we talk about oil prices. you are saying there is a lag between what we are seeing when equity markets lose the top and commodities come true, are we rallying for the wrong reasons? do you see fundamentals behind them? or is it all geopolitics where we are talking $80 oil? >> it really is both. overall the inventory levels, the oil market is balanced. we are not in the position we were in in 2016. oil was coming out of tankers. right now, the market is balanced. you look at the global growth, it is the most synchronized that we have had. on the demand side, when you

global the expectations, oil demand is on the rise. that accelerates why the thoseitical -- geopolitics tensions. when there is a geopolitical flareup and oil price rally, i would not chase it. it can reverse the next day. if you look at commodity prices, the trend has been up. every now and then, the process goes parabolic or geopolitics, then goes back down to the trend. when they come back to the levels, it is time to go after them. i look at copper coming back to those levels now. betty: thank you amc capital investors head of market. plenty more to come on "daybreak asia." this is bloomberg. ♪

♪ betty: let's get straight to the

markets in the asia-pacific, looking pretty. take a look at how markets are responding to trade tensions that have been easing. this is bloomberg. ♪

♪ betty: the dollar on the move after the central banks tightened monetary policy. first time in two years after the growth we saw in 4.3%. we are half an hour away from the opening of trading. i'm yvonne man in hong kong. betty: i'm betty liu in new york. you're watching "daybreak asia." let's get to the first word news with paul allen. paul: singapore tightened monetary policy today, changing its stance for the first time in two years amidst solid growth prospects. the monetary authority increased the slope of the band from zero, signaling policymakers would seek a stronger local dollar.

the trade ministry says early data shows ddp group -- gdp grew 4% from the first quarter. u.s. commerce secretary wilbur ross said the summit of the americans that they will not give their leadership away in the region. he also said corruption cannot be tolerated. countries must create enforcements mechanisms. he said trade barriers are unnecessarily severe. the u.s. contends to work with other nations to semper fi the nation. facebook is reportedly not reporting -- making any changes to its overall business model after mark zuckerberg's testimony to congress. wall street journal cites carolyn everson, saying most users have not changed their privacy settings in the past four weeks. after his grilling, zuckerberg has been invited to face three eu committees. says tradessad

ministry are based on lies and meant to weaken his forces. meeting a senior ukrainian eight, he said threats from washington, london, and paris, seek to stabilize the nation. a suspecting gas attack. president trump has indicated the u.s. may order airstrikes. global news 24 hours a day powered by over 2700 journalists and analysts in over 120 countries. i'm paul allen, this is bloomberg. ♪ yvonne: time to see how the asian markets are shaping up. we got through some of this trade de-escalation, as well as geopolitical risk. certainly a lot of eco-data to digest. >> asian stocks are looking lucky as volatility is waning. a positive growth outlook from china from the governor could be adding to this sentiment. the nikkei adding 8/10 of a

percent for a third weekly gain. they yen is down for the third week, the longest run since november as trade tensions ease. pressure him on trade when he visits the state next week. the aussie dollar is up 1/10 of 1%, set up for the biggest weekly gain in over one month, staying above 77 ahead of chinese data. rising after moody's upgraded the outlook to stable and raises the credit rating to baa2. easing earlier jumped after the central bank tightened its currency policy. stories we areon keeping on the reader. fletcher building jumping the most since 2002. seven west rising. it was named the bigger best bidder for ardor -- him join forces with volkswagen

truck and text for eb and self driving vehicles. betty: president trump is reopening the door to the free trade pact, tpp. he also says the u.s. has made progress in resolving trade conflicts with china. uschina is negotiating with very hard, very long. we have made a lot of progress. we are opening out up and getting rid of the tariffs. you will see tremendous business openings. betty: japan's foreign minister said they would be very happy to see the u.s. coming back to the tpp. bloomberg global economics and policy editor kathleen hays here with more. kathleen: they have wanted it. it is interesting to see how this is unfolding. donald trump says one thing, the japanese say another.

let's just start with what happened today. there was a meeting at the white house the republican governors and lawmakers from farm belt states. this is where donald trump reopened the door to being part of the tpp, saying negotiations are moving ahead. i think chinese want to retaliate -- to cooperate. levy tariffswant on each other after all. gop leaders concerned that if the chinese do retaliate, they will do it against exports like soybeans, that are important to farmers. another farm belt state, alaska cash nebraska, had this to say. it is really good news the president has been listening. he said he is going to deputize larry kudlow and ambassador

white house or to look at the tpp negotiations. that is really good news for the rule of law and economic security. yvonne: pretty significant the u.s. trade route and one who has become one of the president's top trade advisor, larry kudlow are going to spearhead the effort. the democratic senator from matches to sits -- massachusetts called out from his previous position of leaving the pp. >> donald trump in support track -- bed trade deals, nokia wants back in. it is ridiculous. to americans.face trump promised to fight for tpp, it is a lousy deal. betty: how ridiculous is this reversal? is it really how senator warren describes it? kathleen: when you look at the

progression of events, he did breakout of the deal, soon almost as he was sitting in the white house. he also said we can get a better deal, go ahead. he is open to rejoining the tpp. asian leaders, led by prime , have been working hard to negotiate a new deal. going through things under dispute. they forged what they called a comprehensive and progressive agreement on the transpacific partnership. malcolm turnbull in february said this is designed to readmit a member that pulls out. that is good for donald trump to hear. the japanese led the deal. prime minister of a needs with donald trump next week. our bloomberg economics team in tokyo says there is no doubt that a deal that includes the u.s. is the best for everybody,

including japan. for now, to complicate finishing the deal, contouring the stronger yen, they are stressing they think the japanese have pushed to get the deal fully in place and then work on getting the u.s. back into the fold. hays, globaleen economics and policy editor. next story headlines edition of daybreak for bloomberg describe it -- subscribers. it is also available on your bloomberg app. in less than half an hour, we speak to the obama administration's top trade representative who was responsible for negotiating the tpp. to get our interview on bloomberg markets asia at 9:00 a.m. in hong kong, 9:00 p.m. in new york with my grumman. -- mike roman. yvonne: we are going to bring you the latest readings on

china's exports. they are continuing trade tensions with the u.s. this is the latest from tom mackenzie joining us from beijing. what are we expecting? a differentpecting picture from what we saw in february. 44.5 percent increase in exports for the month of february. march is forecasted for an increase, in terms of exports of 11.8%. the early indicators have been mixed. the export component within the pmi data we got came in slightly stronger than expert components -- export components. south korea, always something of a bill winner. china's exports ticked up more than 6% for the month of march, versus 4% for february. the imports are expected to almost more than doubled to 12%. we have a chart that shows the

trade surplus between the u.s. and china over a longer time. it is expected to moderate. about 27 billion for the month of february. it is still pretty strong. if it continues to moderate, that may take some pressure off of this trade relationship. trump is somewhat obsessed with the trade surplus china has with the u.s. yvonne: are we likely to see impact? >> we may get some early shipments. companies and individuals stocking up on exports, products from china in expectation that the tariffs are going to be limited. the u.s. is still mulling exactly which products are going of $50n the list billion. he wants to increase it by another $100 billion. they have already imposed $300 billion worth on u.s. port for,

nuts. that is not expected to show in the month of march. we expect to see the data feed in. that is certainly one to watch. for what the bloomberg economics exports, theyut expect to see a number of around 5% in terms of export growth with china. that's if we don't see a blowout in the trade war. looking ahead, we are going to get the gdp number on tuesday. the forecast to expand by about 6.8%. the governor saying he expects it to be stronger than expected. betty: tom mackenzie in beijing, our china correspondent. coming up, we have the inside track on bank plans to sell a stake. our exclusive interview with the cofounder and ceo. that is next. this is bloomberg. ♪

♪ this is "daybreak asia," i'm betty liu in new york. yvonne: i'm your yvonne man in hong kong. a chinese automaker is looking to pick up a majority stake in brokerage of akzo bank. they are still waiting for a thumbs-up from beijing. joining us for an exclusive interview is the cofounder and ceo, kim. interesting, the development we have seen of geely. ,ell us why you chose geely beyond the connection with the purchase of volvo. it is an important thing. geely is a successful chinese company that has been able to successfully abstain outside of china.

is under headlights quite a bit. is the marketsen are slowly opening up. we have global shares of platforms. . i him in singapore to launch our newest version. is quitee to trade interesting. as we see the markets open up, it can be very helpful there. it is a successful business, professional people, i am proud of it. yvonne: what do you expect the regulatory approval? scrutiny on these investments from beijing. >> we got the regulators approval a couple of days ago. the chinese had approved already. right now, it is a few other regulators.

that is a geographical footprint. normally, that shouldn't be a problem. especially when the key regulator has approved it. yvonne: how much is geely paying for the stake? >> i'm not sure that is completely public information. it is fair to say they are paying way before the term was invented. unicorn, at least it gives you an idea of the valuation. it is a fair evaluation. the potential going forward is a lot to make up. the markets are becoming more and more internationalized. important for investors and traders to be able to access global markets at their fingertips. andously working with geely

expanding the business continuously. it is quite important and has a lot of potential. are optimistic but the times we are in now. yvonne: you mentioned they have been one of the pioneers. what do you think about the new companies coming out of china, like alibaba and tencent? they have facial recognition technology and bells and whistles. they are spending $1 billion purely on r&d. how are you going to compete in that environment now that these new conglomerates are spending heavily on tech? clear there are big tech companies in the world. many of them have almost monopoly like status. when you talk about alibaba and tencent, they are mastodons within the chinese community.

they do not have traditional security banking license. much a play ofry partnerships between different parties. in the east, everyone tried to do for everyone, those days are over. it is a collaborative. we have very advanced technology. to be supers going interesting to see how the regulatory landscape develops, not least of course how these big internet companies with huge penetration into the markets, what are they allowed to do? what partnerships do we see develop? i think technology is a good thing. internet penetration is clearly here to stay. in the end, it is about a product that provides them with everything and to be able to distribute. we already have very interesting partnerships in china.

we will have many more in the future. i think we can be a valuable creating the ability with anyone to distribute. betty: do you feel in order for you to expand it had to be controlling stake to be sold to this chinese partner? i founded the company more than 25 years ago, we had private equity for many years. unfortunately, it was not possible for me to become the majority shareholder. i amreally happy that majority shareholder, they are long-term. they also have an ambition to a greater ecosystem. i think we have an important part to play there. it is really about having long-term shareholders that are as keen as i am to develop the

business. --was itat is also also because they had to pay a premium? the speculation they paid under $1 billion for that stake. in european perspective, it is one billion euros. i think it was a fair price. instill 25 point 7% shareholder of this business. also to finish the samples. very professional people. i don't think they will pay for anything. too much to make a transaction, they need to meet. this is long-term shareholders who have our vision and passion.

also someone that can benefit and help us grow the business in many aspects. we are really looking forward to the next 25 years to expand the business, but also having strong support . bank cofoundero .nd ceo has not sold a share clicks -- of his company. plenty more ahead on "daybreak asia." how drinks giant is carving out a slice of china's small but fast-growing craft beer market. this is bloomberg. ♪

♪ yvonne: this is "daybreak asia. betty: china holds one of the world's largest craft breweries. the attempt to carve out market shares is small but fast-growing sector. we visited the brewery and spoke exclusively to the man trying to push it. >> we stuck out from a small base. market was around 250 million barrels. for us it is a fraction. although the beer market in china has been quite fabulous,

the different beers are taking a lot of space. it feels like we are not even 1% of the market. when you are a small base, it is going over 100%. >> you have a target of where you want to be 5-10 years down the line, in terms of amount of market share you have? >> we created the challenge of having 10,000 venues in china. locations consistently pouring 10 different beers. >> when do you expect to turn a decent profit? >> when you are a small craft brewer, price points are compact. you have lagers available for 3/10. when you see a cost, because they are operated in lower batches, you are losing more space and expensive components of beer.

margins get much lower. how do you balance the equation? you have to sell more beer. they have sufficient scale with the bonds. acquire itn able to that allows us to charge between 12 to 18 in a market. 4250 -- 40o charge to 50. at these price levels, it works. >> how competitive is the landscape in china for craft beer? >> it is big. there is room for everyone. one end, probably one of the most competitive markets i have seen for mainstream beer. cmg, super, contacted market. growing as it used

to. on the other side, wheat beers are growing a lot, pale ales are growing a lot. >> would you say to independent brewers who say the likes operating in this space are a threat to craft beer? >> we are not bringing a fighting spirit. there is much more room for us to work together, fostering beer in china, showing how great it can be. it is not about anyone threatening anyone, it is more how can you work together to make this market vibrant? there is so much space, so many outlets. it is so much space. i am having a hard time understanding. pedro adar, head of

craft and specialty beers, speaking to our china correspondent tom mackenzie. a quick look at markets. we are seeing plenty of green on the screen when it comes to equities. we did hear from president trump possibly looking at reconsidering rejoining the team tpp.-- the also political tensions with syria seem to be deescalate. we are expecting announcement in the next couple of hours. we have any of data in the pipeline. trade numbers cominggh next coue

♪ fearsd: geopolitical subside, optimism returning to the markets, a big day of data to keep traders on their toes. president trump saying the united states may rejoin tpp and sees great opportunities in china. tighten authorities policy for the first time in two years. in hong kong, i am rishaad salamat. haidi: also, a boost for indonesia. moody's lifting its rating. the agency says the outlook is stable. this is "bloomberg markets: asia." ♪