♪ 7:00 a.m. here in hong kong. asiae live from bloomberg headquarters. i am yvonne man, welcome to daybreak asia. u.s. sanctionsw for links to chemical weapons in syria. trump says the attacks were mission accomplished. nikki haley says washington is sending a strong message and this time, everyone will feel it. york, ity live in new is just after 7:00 p.m. on the sunday. asia-pacific markets face a pretty muted start to the week. the yen is weakening as traders take the missile strikes in stride. the boston fed president is

worried about interest rates. low inflation economies will not last. we are watching a lot of events and earnings. political risks but it is really quite busy on the fed speaking circuit. we have be the busiest seen in weeks, we will kickoff monday with atlanta fed president and robert kaplan will both be kicking off on monday as well as neel kashkari. incomingiams is the fed president. lots of eyes will be on him and then we have bill dudley and actuallylie evans will be speaking twice this week. i only just mentioned this to

say that investors have enough going on. now they will really have to pay attention to all of the speeches will bel be -- that happening by these fed speakers to say that what be heard from the minutes is that you will be -- will they be reflected by these comments? what does that mean for the yield curve? yvonne: it continues to flatten. we saw it was the finest in 10 years on friday. we heard the like of eric rosengren and he said the fed is still too slow and comes to raising rates and that this low unemployment, low inflation scenario we have been seeing will not last too long. he is fearing that the fed is going to overheat an event. speakers this week will have to be in line with that given this parade we will say with some of the speakers. is onknow that kashkari the opposite end. very quickly, let's look at how the markets traded on friday,

setting us up for the asian trading session. thecan see we ended weaker, s&p and dow lower by 2300 points. yvonne, as we just mentioned earlier, it seems like these missile strikes against targeted -- these surgical strikes against targets in syria are not looking contained. they are looking as if there will be another one coming. that is why the markets appear to be a little bit, then what it seemed on friday. >> it doesn't seem might there were any slights at quality. we could be seeing a bit of a relief rally but it seems pretty muted so far. we are seeing s&p futures jumping quite a bit. new zealand is flat. the kiwi is seeing a bit of weakness here at 7350. australia is just getting underway.

futures assent to be pointing to couldodest gains if we split the boards here and see how things are looking over in sydney. of course, we have china gdp, japan inflation in the pipeline as well. we are seeing a bit of strength year in the aussie, .7 774. looking at japan futures, we are getting a bit of balance when it comes to the nikkei 225. we are seeing risk on when it comes to the dollar-yen. 100 757. but here's the first word news with ramy inocencio. trumpt up, the administration is stepping up its criticism of china's trade imbalance with the u.s. but it has yet to brand it or any other nation of currency minute here. they had ended to a watchlist and indicate washington may spend the number of countries being monitored. the u.s.'sy includes

12 largest trading partners plus switzerland. meantime, the president has released a barrage of tweets criticizing the former fbi director ahead of a new book that paints him in a dim light. donald trump paints james comey as slippery and a self-confessed leader. boss, him as a mafia prompting the republican party to launch a website to discredit comey. the white house as firing him will be one of the president's finest achievements. to asia and japan and china, they say they will work together to encourage north korea to abandon its nuclear program. this is a sign of improving relations between the two largest economies. this was the first of its kind in over eight years and came ahead of a soria -- korea summit and president trump's potential meeting with kim jong-un. thewhile, support for

shinzo abe government has fallen to a record low according to a whole conducted over the past three days. this cabin has the backing of just 26.7% of eligible voters. the first time it has dropped below 30% ever since shinzo abe came to power in 2012. his supportrline after a series of scandals linked to the prime minister. news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i am ramy inocencio and this is bloomberg. yvonne: the trump in this vision is imposing new sanctions on russia related to syria's alleged use of chemical weapons. this is after friday's airstrikes carried out by the u.s., france and the u.k.. let's go to our bloomberg editor , she is following all from d.c. for us. so of course, the president's: this airstrike a success over the weekend. have we learned anything more on the next step? that is sanctions against

russia. >> the only thing we know is what nikki haley told us today in one of her son that show interviews. she said that they would announce sanctions on monday, sanctions religious russian firms that have some involvement in the chemical weapons program there would be no more details forthcoming from the treasury and state department. can look for those in the morning but there seems to be some sense that it may not happen on monday. i think we will have to wait and see. as you know, president donald declared that the u.s. was done in syria, mission accomplished his said on saturday morning. he repeated that in another 20 message today. at least on the military side it seems like nothing is coming but the u.s. is always quite keen on

getting to the source of funding with sanctions. whether they come monday or later in the week, it could be something quite notable. yvonne: what are we looking likely when it comes to new sanctions on russia? we have seen a series of retaliated efforts. when it comes to moscow and affecting these russian oligarch, are we willing out were looking into any sanctions on oil companies in russia? >> i think that is a little bit the on my knowledge, specifically looking at some new companies or a second round of sanctions on companies that have already been sanctions. one thing haley did say was that she tied this to the chemical production so it could be the oil energy chemical companies are really in the targets of the u.s. government. that'll be when the sanctions come about.

>> let's talk a bit on trade. like michael pence and thatn trudeau are saying they are near some sort of an agreement. we seem to be a step closer here on after? >> exactly. we that they are heard that line of talm mike pence and justin trudeau yesterday at the summit of the americas. it could be that there's tried to project more optimism than they really feel but that is based on some of the sources that we talked to, there is still some pretty serious speaking points over the content of u.s. cars and light trucks sold in the country and how much a u.s. car has to be made in u.s. factories. it doesn't like the u.s. is given to much ground on that. there are some hard deadlines coming up for the u.s. and for

mexico. mexico has a presidential election this year which would ensure a new president coming in. of course, there are the u.s. midterm elections and should democrats take over congress, it is possible they would take another look at a trade deal struck by the trump administration and say we like this. that is a motivating factor for the trump administration and the three parties to hurry up and get a deal done, possibly within weeks. essentially, the trade negotiations are working in washington full-time trying to push this through. yvonne: thank you so much. we will keep our eye on net to end trade. the latest round of earnings, that is likely influencing the direction of stocks. investors are focused on fresh economic numbers. and of course this meeting between president trump and shinzo abe. let's talk about earnings and

retail sales numbers tomorrow. >> earnings will be big and we would hear more on that from rainy. we also have a whole slow of earnings but a broken record in terms of the winning streak. let's go to the bloomberg to show what i mean. these charts can be found on gtb. the title broken is of this and what we mean is that the s&p 500 has ended 20 straight quarters climbing during earnings season. if you go back to 2013, 80% of gains have come during the and stocks had a perfect straight of rising whenever results were -- reported but it came to an end in february with that huge selloff. the biggest equity meltdown since 2011. we are going into this earnings. with a broken record and theories volatile ground. let's go into the chart right now, some other earnings that will be front and center this week here in netlist, ibm, johnson & johnson. are the cash flow issues

still important according to analysts. johnson and johnson could expand its debt capacity to 20 billion. analysts are focusing on whether that means big m&a ahead. retail data will be front and center. retail sales will likely increase for the first time in four months. that will be a bright spot in an otherwise tepid quarter for consumer demand and finally, just check out the snapshot for the market as we mentioned, stocks and on a low note. much a risk off. we heard was that president trump's admission of us, investors on wall street are saying that the mission was not accomplished and gold and crude have been heading higher and expected to do so going into this week. >> the president will be welcoming shinzo abe on tuesday. but can we expect out of that meeting?

>> it is the second meeting, the first one went well. it will be revisiting prior ground. what is excited to be the topic of discussion will be the tariffs among other issues and likely, korea. what will also be on the radar in terms of events this week internationally will be cuba which is ending 60 years of rain under the castro brothers. fidel castro for many decades and more recently his brother i will upon the duck castro's castro will be stepping down and it is expected that the communist party will remain in control and appoint successor. here in the u.s. we have possible legislation having to do with a bill that puts limits on banks as part of the dodd frank act. that will be revisited as well. qwest light ahead here this week to look ahead. we will assess the ball up from the syrian attacks. how rising tensions could

actually affect m&a. lb later on this hour. president trump says the missile strikes were mission accomplished. our next guest says he should think twice before he tweets that. this is bloomberg. ♪

♪ >> this is daybreak asia. i'm yvonne man in hong kong. betty: i am betty live in new york. president trump says that the syrian leader will pay a big price for his alleged chemical weapons attack. our next guest says the president thinks he should think before he tweets that. this is how brand. he is a column is traditionally published his book american grand strategy in the age of trump. so you said the u.s. will pay a bigger price. how?

the u.s. has only unpalatable options in dealing with the syrian civil war and with chemical weapons strikes more specifically. we can do symbolic one of strikes of the type that we did back in 2017 and again, just this past weekend which will be emotionally satisfying and my temporarily restrained assad but it won't have any impact on the civil war. we could take a more serious intervention to try to shift the tide of the civil war but that comes with much higher costs and risks. >> allies, the french and the british had joined in on these military strikes on friday. no appetite for another one? this is really one and done? >> that is how it appears. >> i think the president was trapped between his rhetoric and the sense that he had gone out very early in the crisis and promised a military response. the reality that advisors like

mattis are conveyed to him is that if the united states undertook more significant military response, there was some significant danger of escalation with russia and iran in syria or elsewhere. >> speaking of russia, how effective will these new sanctions against russia be? there are excited to be announced tomorrow by treasury secretary mnuchin. >> still have the effect of further isolating russia both economically and dashed depomed they from the international community. they have some marginal impact in terms of height and russia's pariah status in the world, if we're expecting them to have a significant near-term impact on russian behavior and getting russia to walk back and support for instance, we're probably going to be disappointed. place limits to the train on that? when it comes to determining russia's support for assad? is there any way to work things out? i know there might be some back

channels where the u.s. and are having some tebow conversation about a possible type of negotiation on that front. discussionsngoing in what is called the decompression channel. make sure theo u.s. and russian forces are operating in syria and upcoming to contact -- comfort with one another. it is hard to imagine what a u.s. and russia deal over syria would look at this point just because u.s. and russian aims with respect to that country are so different. the russians are in very deep in terms of their support for the assad regime. the united states have staked out a position that it ultimately wants to see a transition to a pluralistic syria in a post assad days. it is hard to see how you would square those things. given how tense things have been, even in recent weeks. yvonne: i want to switch to trade here.

we have this meeting between president trump and shinzo abe. we had talking about the u.s. reconsidering joining ttip -- tpp. how serious should we take this? >> we should take it as seriously as we would take most of trump's office -- off-the-cuff comments or tweets. not very seriously until there is action that companies it. we have to remember that president made getting out of tpp one of the fundamental pillars of his campaign rhetoric. a argued that this was terrible economic two for the united states. i think it is safe to assume that if he were to try to get united states back into the deal, he would demand there significant changes in the deal. as whetherto be seen those would be palatable to the tpp 11, the countries that have gone on with the deal without the united states. >> what does this mean for north korea?

it seems like japan as well as china are actually quite credit on that front as well. do you see it or possibility of trumpeading up to this kim summit? >> we don't know what is happening within that regime. it is incredible he secretive. i think a good operating assumption is that the north for moreidn't work than a quarter-century to get nuclear weapons and the capabilities to give all that up when they were just months away from crossing the finish line. i think the north koreans very much see this as a tactical maneuver to decreased -- decreased the international pressure on them. >> the chinese and japanese have met as well on north korea. where do they need to position themselves ahead of this new medium between trump and or three meters? >> china is the key player from our perspective. what united states would like to see is for china to bring far

more economic and diplomatic pressure on north korea to move complete and verifiable denuclearization. china has different interests and they worry about destabilization far more than we do. they are willing to push the regime a little bit but they were never able to push enough to actually get it over the finish line with respect to a verifiable arms-control agreement. >> thank you so much for joining us. be sure to check out his latest book, american grand strategy in the age of trump. get that story and many more units know to get your day going in this addition of daybreak. bloomberg subscribers can get going on the terminals. it is loud on mobile and you can customize your settings so you only get news on the industries and assets you care about. this is bloomberg.

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♪ >> this is daybreak asia. i'm yvonne man in hong kong. i am betty liu in new york. this close on the spot a lower. ramy inocencio explains what we saw from those banks. >> you can be the top line, the bottom line but getting into the details here, it is focusing on the rate hikes that we have been seeing. that has been helping some of the divisions but one division that was actually heard was the mortgage division for both of these banks. go ahead and bring my first chart. i will show you what has been happening in terms of j.p. morgan and wells fargo for their mortgage originations. the rate hikes hurt them more than expected. in or as you can see the jp

morgan origination growth which is contracting. it is at its worst ever since 2014. wells fargo and blue, it is not positive. we are calling that flat. higher rates mean more expensive home loans. wells fargo's cfo said the margins was because a more competition in the mortgage market. the worst is not yet over. applications are following about $5 billion for wells fargo. $6 billion were j.p. morgan here. hop into the bloomberg. i want to show you that there is not just negativity everywhere. we did say that there were some beat and you can take a look here at the idea can dashboard on your own bloomberg. sales and trading revenue in white. you can see that has arisen in the past quarter. the same thing in blue, equity trading levels. also, they trading and orange. i will not stay too much on the positive. there is more negativity and jamie dimon said that basically negativity in

terms of the environment. lending was flat for the quarter. bloomberg,into the we can see the reaction on the shares was not great at all. looking at citigroup for example. that the only 1.5% but that was the least of the concerns here. j.p. morgan and wells fargo are only falling about 2%. there is the kbw bank index falling in all of the day as members down by about 1.6%. >> isn't all bad news to the banks? we have goldman sachs, morgan stanley and bank of america reporting that as well. >> bloomberg intelligence says it is likely to be positive here. hop back into the bloomberg one more time. i will show you what we will be looking at. bank of america comes in on monday, that is here in blue. we are expecting this to possibly rise. andman sachs comes in

morgan stanley with higher targets set that. willank you, coming up how sanctions on syria and russia affect global m&a. this is bloomberg. ♪

♪ 7 a.m. monday morning in hong kong. happy monday, 30 minutes away from the major market open. we have seen a bit of a rally but pretty muted here after it seems like the military response to syria over the weekend, investors are assessing that as a one-time deal. betty: indeed, one and done as we have been talking about. kind of a rainy, gloomy sunday evening in new york. 7:30 p.m., market closing gloomy on friday on the anticipation for the u.s. led military strikes against syria. i am betty lou in new york. yvonne: i am yvonne man. you are watching daybreak asia. let's get to first word news. the u.s. is to

announce new sanctions against russia on monday. that is washington and its assessing their missile strikes on syria. it is aimed at companies deemed to have been working with residents on and his u.n. -- president assad. nikki haley said everyone will feel it. president trump said mission accomplished after the attacks. the fed president said he does not i the argument that the u.s. economy is a benign mix of low unemployment and low inflation that will continue, and that has eric rosenkranz worried the central bank may be too slow in raising interest rates. he said the fed have to be vigilant to ensure wage or price increases become faster than what is needed in the long run. >> i would say policy mistakes are what causes recession. fiscal policy, monetary policy,

geopolitical concerns. those are not easy to predict. they are no more -- it is hard to predict now as it has been in the past. ramy: a new report says tougher lending standards threaten to further cooled australia's once red-hot property market. inquiry into financial industry's conduct is likely to lead to greater regulation of the $1 trillion mortgage market. pincus have relied on an unrealistically low estimate of homebuyers' living experiences and a more genuine assessment could reduce borrowing power by as much as 35%. china is to raise the profile of this island by encouraging the horse racing and sports events in a move that sources say may even to the casinos on the mainland for the first time. aging bans all forms of gambling that allows two types of lottery and some racing, although betting is not allowed. any shift in gambling policy could threaten the $33 billion

casino industry in macau. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i am ramy inocencio, and this is bloomberg. betty: let's get more on what we should be watching as trading gets underway over there in asia. the global markets editor adam haigh has more. looks like traders as mentioned earlier are taking the syrian strikes in stride here, not letting it affect the sentiment too much. does that mean there will be more important factors to watch out for? adam: indeed. i think the sentiment this morning is really this situation is contained. clearly there will be sanctions towards russia coming from the u.s. and the u.k. and maybe some of the other allies, but from a risk sentiment, market point of view, we are getting a tick higher in u.s. futures. the nikkei futures in tokyo have picked up higher as well.

it is not a broad-based risk on move, but it is not any kind of shift or a safe haven position. the yen is weakening, fitting the pattern of people wanting to take more risk here. we had a decent run up in equities last week, so the question is whether we can keep that momentum going further on this week, and some the things going on including key data out of china tomorrow, we will have a report on gdp and get a sense of what is going on in the retail and the industrial side of things. u.s. earnings really ramping up another notch this week. not just a corporate fundamentals themselves but also what that means for the broader u.s. and global economy. we have got some fed speakers this week which will be interesting because since jay powell spoke a couple weeks ago, we have not really heard from too many of those policy officials in the u.s., and we have john williams, the incoming u.s. fed president talking.

it will be interesting what he says about the economy. the yield curve inversion was very much in play on friday. we got down to the narrow level again between two-year and 10 year treasury, levels we have not seen for more than 10 years, so that key focus remains there and anything that the fed speakers can say this week to kind of delay the fears of -- allay the fears might help things. we will see how that plays out, the parade of fed speakers. but despite worries of trade tensions and growth concerns, we have seen a decent revival on equities this week. will that last? one, butis a tough make no mistake about it, there has been a significant shift back into mutual funds especially in the u.s.. this chart shows you hear on the gtb library, it shows us about $5.6 trillion worth of money did

flow into mutual funds in the early part of april. we haven't kind of seen those levels and inflows for some time which does show you people are wanting to take a bit more risk after coming through the shocks they saw in the first quarter and little in the way to suggest that this mentality is losing any kind of mutton -- momentum. typically with risk assets dialback and pulled back is an incremental buyer, corporate or people with global asset allocation preferences for equities who still want to be very present in equities despite lots of talk about how light we are in this cycle. as these get box, equities seeing a little rally. this kind of momentum slows the releasing mutual funds just shows us that. this week earnings is the big test. many others across industry groups, that will give us the real key kind of next momentum phase, whether we can get higher

in equities. yvonne: can we focus on fundamentals? thank you, our global markets editor joining us from sydney. the trump administration set to announce sanctions on russia with the syrian weapons program. they are expected to talk more monday. we have the trade issues as well theiscuss all this on geopolitical and trade front. to talk about the impact that has on crossroad m&a, let's bring in our next guest, the head of global investment banking joining us in hong kong. great to see you one day not trade, the other day it is geopolitics. i wonder what your clients are saying and the companies you consult with their biggest concerns now. is there a appetite for dealmaking? >> there is a lot of appetite in the market, no question about that. many of our plans including in china often looking at expansion

and acquisitions, so no big changes in sight of a very difficult political environment. yvonne: we discussed the wall street journal that was reporting china is prolonging some of these deals reviews whether it is with toshiba and selling its chip units, qualcomm and an xp. doesn't look like these approvals are based on data or market-based decisions or factors anymore, but there is a political element in place in all of this as well. the vet have a chilling effect on how you see risk and how people do m&a this year? marc: i think there is a political element in those reviews, the question about that. nevertheless i think that those are looking at new acquisitions in the u.s. i have been talking to my colleagues. there is still appetite.

it is clear it will slow down probably in the next few months, but there is a lot of appetite. three: you have acquired advisory firms in china, certainly preparing for a surge of chinese investment. where do you think the money is going to go? the u.s., the main market or other regions? just one. there are others one in france and one in the u.k., but in china we have been acquiring them, taking the matter, which is [indiscernible] ofwill continue a number chinese expansions, probably more in europe today. they are looking at acquisitions . we have been very helpful with some of the recently we have been assisting in the acquisitions at the beginning of the year, and there is a lot of appetite from those chinese groups into europe.

betty: has there been any change in sentiment for relations even the heated exchange of words between the u.s. and china on trade and the increased tension between the two? marc: there is obviously more interest today in europe as we can see because of what we have been discussing just before. i think a number of our chinese clients are really looking at continental europe where we can definitely help them to acquire strategic companies. i think this is what we can see at this point in time. betty: what is the biggest challenge? we mentioned geopolitical risk, but what do you think is the biggest challenge to m&a activity around the world? is it looking at monetary policy, is it looking at rates? what is it? marc: we have obviously a

significant impact on the political environment. no question about that. they are still financing which is available in the market, so no big question about that. to get back to what was before, the political environment is clearly the most serious element at this point, but the economic situation is good. the financing is available, and i think we are back to the political constraints at the elements today. betty: your confident with the way rates are heading because there is some concerns as we have heard from the boston fed president eric rosenkranz that maybe we might be too relaxed on interest rate hikes. is there any concern that perhaps rates might get out of hand if in fact we find central bankers are behind the inflation curve? not ourthink this is biggest worry at this point in

time. i think we see a trend, no question about that, in the u.s. in europe we are concerned by the significant increase in rate. i think there will be probably some tensions on the press, but the increase in rates in europe should be contained and should remain within reasonable analysis. there is so much optimism with the one built, one one road.ilt -- belt, how much success could there be the five type? many countries have high debt low credit ratings. will it be difficult for fundraising? marc: yeah but the market has been open on those initiatives, and i am optimistic about the prospects in that area. yvonne: we will leave it there, the head of corporate investment banking joining us in hong kong.

president trump declares mission accomplished in syria, so what comes next? we will discuss that. this is bloomberg. ♪

yvonne: we are counting down to asia's first major market open. japan futures pretty much flat, expecting a decent open after these jew political tensions have eased a bit in the middle east where this is daybreak asia. -- middle east. this is daybreak asia. betty: let's get back on the subject of the u.s. and following on attacks on syria with a fresh round of sanctions related to president assad's reported use of chemical weapons. steven mnuchin is going to be making an announcement later on monday, new sanctions against russia. i want to bring and emily hawthorne from stratford. someonere talking with

from johns hopkins, he thinks this is only going to be, that the u.s. will only be even more in trouble here after these strikes against syria, what is your position here? >> when you look at what the united states is trying to achieve in syria, it is clear there is not a coherent holistic strategy the u.s. is following beyond trying to combat and the grade violent extremist organizations like the islamic state. the use of, and i agree with what he said, there is this effort by that you united states to try and put down some sort of line on chemical weapons use, but it is a difficult road the united states is following because it is difficult to deter unless we see the united states being willing to strike again and again because the regime will be able to use chemical weapons in the future if they want to. betty: i hate to bring back the past, but when you think about

what this serious situation in the obama administration, you would imagine president trump would blame the mess that had happened from the obama administration of being brought forward to his and dealing with syria. >> i think it is fair to say that president trump has been very vocal about this, that he views the obama administration as having declared a redline that they did not adhere to about chemical weapons use. tos administration is trying set a firmer redline, and i think when you look at the pattern and the target and what was struck on these early saturday morning strikes this weekend, they are very clearly trying to keep it focused, targeted on chemical weapons linked sites and not branching out to anything related to iran were trying their best to avoid conflicts with russia, but at the same time this is difficult for a number of reasons. they are not going to be able to deter the assad regime from

pursuing its military operations against rebel and allied forces. betty: but now president trump has aligned himself or surrounded himself with hardliners including john bolton. with john bolton now as part of the national security team, what do you think is going to be the next natural step for the president and for his cabinet members? >> we have to look forward to what does the united states going to do in terms of its iran policy, and that was one reason why we were watching closely last week to see if any of the strikes from in syria had anything to do with iran. they don't appear to have had any sort of link to iran beyond the fact that the personnel are located all across syria right now. but we are watching to see what is the u.s. issue in terms of sanctions? do they try to issue sanctions

linked to militia activity? that will be difficult to enforce, but we know with bolton in the administration, that you will see more hardline policies and efforts to contain iran having out of the white house. yvonne: the clock is ticking on that front. we have until may 12 with that deadline to decide what to do with iran. this recent attack, does it strengthen the u.s. position on striking a nuclear deal? attack, the recent united states is trying to, i think the pentagon and secretary mattis, they are trying to a bit limited. they are trying to keep it contained and not linked to things like the nuclear deal with iran. dealoncern for the nuclear is this administration is going to try and link everything iran is doing, even things outside of the written text of the nuclear deal and start trying to layer back certain sanctions that are currently protected and not

allowed under the deal. they will start trying to use those sanctions to limit all of iran's activity including some of the activity in syria. i don't think this most recent, these attacks on -- the missile strikes on saturday are going to tonge iran's determination really continue to deepen its alliance with the syrian government, so it does make the road ahead harder for the united states. yvonne: taking a look at the united -- the next days, what comes out of these attacks? it was a month ago when the president said he wanted to withdraw from syria, and he said let the other people take care of it. what will be the strategy moving forward? >> this is a really interesting question because with the pattern and targets and strikes on saturday morning, it was very clear the united states was trying to keep it contained to just focusing on chemical weapons.

the concern is the next time we see chemical weapons used by the assad government, chlorine gas is easy to obtain and difficult to make illegal, so it is likely we see another attempt by the government. we will start seeing, how is the united states going to act this time? there is only a limited number of times it can continue to use the same sort of response. they will have to get bigger and bigger, and that will risk trying to the united states into the civil conflict in a way we know president trump does not want to see happen. thene: could this prolonged war that we see in syria, the u.s. involvement in all of this? do you see that happening? >> i think it depends on the players that have more power on the ground. it is russia, iran, and the syrian government or the united it does not have a lot of leverage in terms of actually

pushing the civil conflict in one way or the other. they are choosing not to, not trying to get involved in the way. the u.k. does not want to intervene in the civil conflict. they want to punish chemical weapons use. the u.s. military action is aligned with trying to punish chemical weapons use. the concern is the more we see russia and iran dig into their support for the syrian government and not relinquish that, the concern is it could escalate into the future, and that would force a stronger reaction by the u.k. and the united states, and that could escalate. yvonne: we have got to leave it there. emily hawthorne, middle east and north africa analyst for stratford in austin. you can always find analysis for the big newsmakers on bloomberg radio. tune into daybreak asia 6:00 hong kong time, 8:00 in sydney. you can download the app, bloomberg radio plus or access via bloombergradio.com. this is bloomberg. ♪

♪ yvonne: this is daybreak asia. i'm yvonne man in hong kong. betty: i am betty liu. stepping down as wpp ceo as he raises allegations of personal misconduct and misuse of company assets. he denies any wrongdoing but leaves with immediate effect days before the wpp board is to publish the findings of an inquiry. he spent three decades making the company a powerhouse in advertising, earning a fortune along the way. yvonne: a quarter of the boeing dreamliner's in-service face restrictions on long-range flights, problems with their engines. the faa respected to limit the time that they are powered by the variant away from the nearest airport. european regulators require closer inspections of the engine

after rolls-royce admitted durability issues. betty: the leading smartphone and chipmaker may use blockchain to manage its network. looking at shipments worth tens of billions of dollars a year. the information and tech arms says lockett -- blockchaining could cut costs by 20%. it is a breakthrough that will transform the way transactions are recorded and verified. and you know, we were just talking about syria and these upcoming sanctions against russia. they will be announced by the treasury secretary. we know that the missile strikes were aimed at syria, but really in trump's sites are assets in russia and iran. we are talking about oil as perhaps. -- assets perhaps. this shows you why iran is key here in the middle east

tensions. you can see as represented by the white line, iranian oil production has continued to increase even more and more wild saudi production owing to the opec content comes down. any type of spike in oil prices is likely going to come if we see harsh sanctions against furthernd also tightening around iran. yvonne: we continue to talk about the lead we have seen, quite contained in equity markets but at one point it will spread into other asset classes like commodities. we have seen a bit of a pickup when it comes to oil volatility already. a lot of questions about what the fed will do, seeing inflation expectations a little bit more heading higher here area jay powell will have to be more hawkish to respond to that. betty: we want your a lot of fed speak this week, which will give us further clues on where the

fed is heading. coming up, we will talk about , unpacking theup political situation. this is bloomberg. ♪ this wi-fi is fast.

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♪ >> 8:00 a.m. in hong kong. welcome to "daybreak asia." russia faces new u.s. sanctions for links to chemical weapons in syria. trump says the attacks where mission accomplished. you and ambassador nikki haley said washington is sending a strong message, and this time, everyone will feel it. from bloomberg's global headquarters, just after 8:00 p.m. on the sunday evening. asia-pacific markets are new to start to the week. the yen weakening. military strike in syria and tried.

north korea's new program all on the agenda. shinzo abe heads to my login to me -- mar-a-lago to meet president trump. ♪ yvonne: now that we see the geopolitical tension and trade tensions are d escalating. we have to wonder what we will be focusing on this week. it seems like the parade of fed speakers will be one big issue to watch. take a look at the chart on the gtb library. going to be one for the fed speakers. the flattening yield curve. we are seeing the u.s. treasury thed spread to two tends to five 30's. those spreads are now the latest -- the lowest since 2007. more than a decade low here.

they are still quite reluctant when it comes to fully pricing in. more rate hikes as much as what we have heard from the fed speakers as well as the fomc minutes. the good -- the big question is whether the fomc or fed will allow that to further flat and. -- flatten. betty: it is a great chart. it shows you how confused and what a mess it is. they are concerned about inflationary expectations, they are worried about geopolitical concerns, trade, all of that is represented here in flattening yield curve. it has been interesting to see a economists who come on our program to say, despite history, this yield curve does not represent our -- represent a recession. if it continues further it needs a rethink. but get to the first word news. say: first, japan and china they will work together to encourage north korea to abandon

its nuclear program. the latest sign of improving asia's twoetween largest economies. foreign ministers trip to tokyo was the first of its kind in more than eight years. it came ahead of a korea summit and president trump potential meeting with kim jong-un. next month.it japan meanwhile, the trump administration is stepping up its criticism of china's trade imbalance with the u.s., but has yet to bring any other nation a currency manipulator. the treasuries semi annual fx report adds india to a watchlist and indicates washington may expand a number of countries being monitored. the currently include the u.s. 12 largest trading partners, plus switzerland. -- president has at least a unleashed a barrage of tweets criticizing the fbi director ahead of a new book. trump describes james comey as " a self-confessed leaker." as aook for trays him

mafia boss, prompting the republican party to launch a website. the white house is firing him will be one of the president's finest achievements. the boston fed president says he does not buy the argument that the u.s. economies the nine mix of low unemployment and low inflation will contain. that has eric worried that the central bank may be too slow in raising interest rates. he says the fed has to be pricent to ensure increases become faster than what is needed in the long run. policyuld say that mistakes or what causes a recession of what can cause from fiscal policy, monetary policy, geopolitical consumers, what other foreign countries are doing. it is not that easy to predict. to predictas hard now as a has been in the past. global news, 24 hours a day powered by more than 2700 journalists and analysts in more

than 120 countries. this is bloomberg. betty: let's take a look at how your market open is shaping up. it is pretty positive so far with risk asset coming back into the markets to start your trading week after geopolitical tensions seemed to simmer down a little bit. david: it is not over yet. as far as markets go you could see whether or not they should affect markets. that is another conversation. a bitnow we are getting across dollar yen and dollar suisse. dollar swiss is up give or take 15 hips. dollar yen, 107 point 33 was the starting point of the day. we will close to 107.60 at the moment. pop on friday. there is the u.s. session. we are at 1003 hundred 44. have a look at the benchmark. japan, australia and south korea all up. we are up about give or take 100

points over in japan. fairly clear gap. you could see on the asx 200. earnings are very much in focus in japan. 40 companies have come out with earnings. you look at the latest political polls released this morning, not exactly good news for shinzo abe. long story short, the take there, approval ratings are down. are nowhis camp cabinet over 50%. we will see how that plays out. he is meeting donald trump this week, whether or not that is an those in, i guess japan. equities on the way up. have a look at oil prices while we are coming up the highs -- coming off the highs on friday. 67.11. is a 530 curve, 35 basis points.

lots of fed speakers this week. we will talk about that later on. the other thing i want to mention is on the chart. you can have a look at here. what you are seeing here is oil prices on the way up, but you are seeing a divergent when it comes to break even. at least for the two-year. is that a short-term trading opportunity? they could possibly be co-related. they do tend to track one another, there has been a divergence recently. whether or not geopolitics is keeping the first one down, and whether or not the v is paring down of tensions to politically. 'it snaps the correlation back that has yet to be seen. have a look at your chart in g #btv library. lots to consider as we get underway. david checking on the markets on this monday. the trump administration are imposing new sanctions on russia

related to syria's alleged east of chemical weapons. an announcement is expected monday following p.m. strike by the u.s., the u.k. and france. the senior international editor jodie snyder is joining us. talk to us more about u.n. ambassador nikki haley said about the possible sanctions and how they are connected to syria. jodie: nikki haley said that the u.s. will be imposing new sanctions, fresh sanctions on russia related to the reported use of chemical weapons by syria. interestingly, the treasury department did not back this up. this of the could not comment so it is unclear what kind of sanctions we are talking about, and when they will occur. she did come out the day after the airstrikes in syria. this looks like it is a continuation of a policy to try to pressure syria and to

somewhat pressure russia as well. it also comes as the trump administration realizes that the robert mueller investigation is heating up. there certainly does appear to be an element of distraction in this as well from that investigation and talking about it, trying to focus on andrating president trump, separating his administration from russia. was talked about the strikes themselves. the pentagon pampered the assad's regime to use chemical weapons again. have a? -- have they? jodi: that is a question that remains to be seen. they don't appear to have had much reaction from syria or russia. the u.s., who is working with france and the u.k. in this calling it ake, is

success. president trump said mission accomplished. a bit of an echo of a famously premature statement that george w. bush had made as president just two months into the iraq war. of course the u.s. was there for years and back again now. it was an interesting use of a statement. that this was successful, at least, initially. the question is, what comes next? the president, according to one poll, is doing better in the polls. he had a 40% rating which is highest for him but is still historically low. yvonne: can we get a nafta agreement. jodi: vice president pence said a are getting closer. a few weeks ago the u.s. and canada and mexico said maybe we will be able to announce the outline of agreements. president trump was not even

there because of the syria action. they are saying that they are getting closer. with nafta we always hear different things. on the one hand they said they want to have an agreement and this would be something good to have, especially as parrots and trade actions of china heat up. at the same time they are still far from hampering out those actual points of agreement. the president himself said if we cannot agree soon this can go on indefinitely. the vice president is now , butng optimism about it various things about whether it will actually happen. , hours senior international editor joining us. the asia-pacific managing director for global markets who joins us this morning from singapore. rate to see you. we are seeing a little bit of a relief for asian markets.

it seems like markets are taking this attack on syria over the weekend as a one-off thing. can we move past this now? theertainly, that is markets hope. as you said, the markets initial reaction to this has been relatively positive. we are seeing markets open up stronger in asia. not just because this missile alleged chemical operations in syria seen as a one up. so far there has been no reaction by russia. there were high intentions last week on the perceived risks of if the u.s./military -- u.s. military attacks and chemical aggressions that russia would respond in some kind. .here was a significant fear that has not happened so far. it remains to be seen in terms of how long the market rally

last on the back of those specific factor. whether or not, or when russia retaliates. yvonne: how much further upside will we see in crude as we are waiting for it sanctions in the u.s. and russia? pointre was an excellent that said the two-year inflation break even is oil. oil has been supported by geopolitical tensions. that may continue in the immediate term. to background fundamentals growth are still relatively positive. the market expects some degree of moderations in chinese growth in the first half of this year. fundamentals remain relatively would take still, we the view of what you are seeing in the u.s. curb is a warning

sign. the rate market has given a message of yield spread frightening. while there are people of the market who say this is different, one should always be weary of the words as one should be weary of the words "mission accomplished." yvonne: how much higher do oil prices need to go before the starts to upset bond as well as fx markets or stock markets in general? we have been talking about how the volatility -- volatility has been contained. i know we spoke of the two-year, but the 10 year rates are breaking out of their recent ranges. will we see more volatility -- volatility spread to asset classes? is a great point. while equity volatility in the past couple of months has dipped off sharply, rate volatility has similar tovely

foreign exchange volatility. the market there is saying that the move up in inflation expectations is going to be temporary. have structural factors, which are weighing on long-term inflation. you could argue that the front end of the u.s. curve should move up further because of tax cuts, because of short-term inflation, and potentially because of oil. the back end is giving an unequivocal message. betty: the markets being a little bit too -- about the syrian situation, given the relative call me you could say at this point. we have not yet seen what the response is going to be for syria. callum: that is right. you have not seen the response from russia either. certainly, it is not over. the degreest, given

of tensions and concerns that themarkets have last week, market response is being, the -- forhing to happen instance, the military response and military retaliation. therefore, this will be seen from a market perspective as irrelevant compared to global bouts ofwill not cause volatility and markets can go back to focusing on fundamentals. and a markets are focused on trade. staying with us after the break. we will assess president trump's later shift on trade policy. tpp and nafta. on, as cobalt prices power ahead, we look at the impact it could have on the electric vehicle market. this is bloomberg. ♪

yvonne: this is "daybreak asia."

betty: i am betty liu here in new york. mike pence and canada's prime minister said over the weekend that the nafta agreement negotiation could be completed in the next few weeks. do you believe that? we might actually have some breakthrough hereinafter. markets have treated more positively. if you look at mark -- if you look at mexican markets they are breakthroughhat a will come through. we still have some way to go. of course, the nafta markettions are in it perspective. also the upcoming election. still some ways to go, but markets are being more positive in the past weeks. were talking trade, there are two different negotiations going on, or

pending negotiations. you have nafta going on right now, but now it looks at the president is open to going back into the tpp. is that even more important for the markets callum? where you depends on sit. certainly from an asian perspective the latter is probably more important. there is a big question mark over whether the tpp will allow the u.s. to come back into it. you all remember president trump scrap the u.s. membership of that. the tpp went ahead and signed that agreement. a number of members of that agreement have said they will not renegotiated for any country, certainly not a country that said that it did not want to be a part of the original one. certainly, asian markets are much more focused on that. did hear the

australian say they do not have the stomach right now to try to go back to the table to change tpp again. have shinzo abe who will be arriving in sunny florida on tuesday to meet with the president. trade will be on top of the agenda. i just want to point out a gtv to illustrate tensions between the u.s. and japan on trade. see at theers can bottom part of this graph, it just shows you how big the trade deficit is with japan. although, just one no, it is substantial, but not growing by meeks and bounds. it is what it is right now. abe,m, what he think taking this position, being a forcing getting tpp done, what do you think you will say, or what should he come away from this meeting with trump on tpp? more --it will probably

it will probably be more interesting than most from a market perspective. time, has been the perceived center of u.s./asian strategy. as they it has been seen sideline. /northards with the u.s. korea summit and u.s./china talks and trade tensions. goes to thato abe summit with, certainly, from a japanese perspective, lots to prove in terms of japan's status with the u.s. i think the general expectation is that the u.s. will push for some sort of free trade agreement with japan and japan will push back against that idea because of the amount of political capital that is spent in promoting tpp, which the u.s. been pulled out of. how muchs to be seen

will actually be agreed, but this is important from the japanese market perspective. yvonne: what is this mean for dollar? i have a chart in our gtv library. the most bearish on the greenback in more than five years. do we get any kind of breakthrough when it comes to tpp or nafta? could we see a bounce back in the dollar, or is it just a downtrend when it comes to greenback from here on forward? well, i think the key question is, against what? the dollar seems to have some degree -- if you look at a dollar on a trade weighted basis in the last few weeks. that has also happen against the backdrop of president trump's approval rating, also bouncing to some degree. dollar-yen seems to have found an important for around 105.

the overall trend seems to still be in place. henderson,lum joining us from singapore. remember, if you use gtv and browse the charts, they will be featured on television in can catch up on key analysis, you can also save those charge for future references. it is pretty cool, make sure to check it out on gtv . this is bloomberg. ♪

yvonne: this is "daybreak asia." click check of the latest business flash headlines at this hour. demonstrators gathered in were two black men were arrested while waiting for a friend in starbucks. kevin johnson said the arrests

were opened quote -- were "reprehensible." starbucks says the pair were denied use of the restroom as they had not bought anything. the company has launched an internal investigation. yvonne: yes that down as executive as he faces allegations of personal misconduct and misuse of company assets. he denies any round -- any wrongdoing. he set -- he spent three decades making the company a powerhouse in advertising, earning a fortune and a knighthood along the way. betty: struggling noble group said to be sweetening its deal to shareholders after pressure from investors and the founder and we are told creditors are willing to increase the equity share in the company. shareholders would have from 10% under the current proposal. share could increase to about a% with him offered nonexecutive director position. coming up, you look at

how north korea is set to dominate this week's summit with president donald trump and shinzo abe. be intrade is going to the discussions as well. we will be live in tokyo, next. this is bloomberg. ♪

8:30 in singapore. have fought -- half an hour away from trading in singapore. betty: i embed here in new york, you are watching "daybreak asia." let's get to the first word news. ramy: u.s. to announce new sanctions on russia on monday as they assess missile strikes on syria. the measures will be aimed at company deemed to have been working with president assad and his president -- and his chemical weapons program. america has sent a strong message and everyone is going to feel it. president trump the cleared "mission accomplished" after those attacks. in support for the abe

government has fallen to a record low according to a poll conducted over the past three days. his cabinet has the backing of the 26.7% of eligible voters. the first time it has dropped below 30% ever sense abe came to power in 2012. the end went his falling support after a series of scandals linked to the prime minister. in china, the country is going to raise the profile of the sportsby encouraging lotteries. this in a move that sources say main eventually see casinos on the mainland for the first time. beijing bans all forms of gambling but does allow two types of lottery and some racing, but betting is not allowed. any shift in gambling policy could threaten the $33 billion casino industry in macau. are continuingn to fall. prolonging a slump that has seen

the average property in the capital lose almost 2% of its value over the past year. they say prices fell for a third consecutive month in february, but are rising outside the selfies. they agree saying the average london property is the equivalent of $14,000 cheaper now than when you're ago. says tougher lending standards threatened to further quashed really is once a red-hot property market. in inquiry into financial misconduct is likely to lead to greater regulation for the trillion dollar plus sector. it relied on an unrealistically low estimate of homebuyers. they have a more generous assessment that says it could reduce borrowing power by as much as 35%. local news, 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. see how the to

asian markets are going so far this morning. let's get an update with david ingles. david: three out of the four markets that are open are losing steam. they are down for 10th of 1%. only australia is moving towards -- i am not sure if you could see it, but you run the chart and you can see it. nikkei 225, i will show you why in a moment. there is a reason on the nikkei 225. there is a macro backdrop when you're looking at the volumes across the asia-pacific. on the japanese and korean benchmark, currencies is a bit of a stretch, but i am going to say you're getting a slight bit here on resource related currencies. you could see the aussie dollar attempt of 1%. malaysian ringgit, the other side of the equation, have a look at the kiwi dollar. mentioned, fast

retailing. have a look at how this divvies up across the third groups -- groups.ectored 1.5%. i will get into this. we are down 2% on the benchmark. no specific reason so far. perhaps it is just money being taken off the table. the other thing i want to mention, i alluded to this. you have volumes at the bottom, you have your moving averages at the top. let me go in on this bit here. we are losing momentum. getting a lot of volume coming true. it takes you all the way back to march. let's take this all the way back every of last year. we are way below that. what would it take is anyone's guess. volumeslso approaching on the lighter side of things. if someone does ask you if risk aversion is prevailing, it does

not mean that it has gone away when you look at volumes. oil, very much in focus as well, paring back the rally that we saw. brent is back to 72 bucks. dollar loonie still catching a bit. that is the bloomberg asia energy index. the big ones coming online in about 60 minutes or so here in hong kong. the airlines will having a really bad time with oil prices despite the drop at these levels. problemfairly a big across the region. yvonne: david ingles there on the market. staying in asia, china and japan have agreed to work together to push north korea to abandon its nuclear program. foreign minister's in both countries met for their first bilateral summit in more than eight years. pretty big deal here. the latest sign that relations are improving. i want to bring in our asia

government reporter, isabel reynolds from tokyo. certainly important here between china and japan. a lot of this is in reaction, wanting to be aligned and prepared ahead of the summit between president trump in the north korean leader. right, yes. there is a host and series of summits which i think the president wants to be prepared to ensure the thinking on. i think the main point of this particular meeting between the foreign ministers was to try to get their own ties back on track. five or six years ago, ties were so bad between the two countries over these -- over the east china sea, they were worried there could be a military clash. gradually prime minister abe has fought hard to get things back on track and have the diplomacy that they have had for years. was before the clashing over the islands. this was a big step towards doing that. we can expect them visiting

japan next month and possibly we will see prime minister abe going to china and president xi going back to japan. what have they achieved in their meeting and what do you think we should expect that the bilateral meeting today? isabel: they have touched on the , also, at the meeting yesterday. on the chinese side, the greatest deal of uncertainty by u.s. policy is particularly on trade. we have seen the thought that china will press japan to work together with it as the two major asian economies to try to persuade the u.s. to see the trade system differently. today, we got this high-level data which is taking

place again for the first time in eight years. i think what we need to see there is some sort of agreement. perhaps we will see japan, with more concrete plans on what it could do to help with china's project. which is obviously xi's signature policy and it wants to see japan stepping in to help out. there will be a bilateral summit between president trump and shinzo abe kicking off on tuesday in mar-a-lago. what are we expecting, what did the japanese want to come away with? think: in that case, a north korea is top of the agenda for japan. obviously, in terms of prime minister abe wanting president trump keep up the pressure on north korea, without getting something concrete in return. on the other hand we have seen president trump say he is interested in rejoining the tpp, the trade agreement. trait is clearly coming from the top of the agenda.

those will 2 -- those will be the two competing topics they will have to discuss. reynolds there in governmentasia reporter. we have plenty of stories coming up and we are watching the summit. we will also cover a lot of other issues here on "daybreak asia." sales herech retail that kickoff the week of economic data on monday. sales likely increase for the first time in four months, getting a boost from auto self. a bright spot for an otherwise tepid quarter for consumer demand. i want to show you this g #btv chart on retail sales. spending,ike consumer or overall retail sales are p hear going to get a bum from the auto sales numbers, which appears to be ticking up over the last month and a half or so. -- on theing to have

economy and the condition of the consumer, and whether that may go. of course, we heard last week in the minutes of the fed meeting, it seemed that there was still a among fedlt officials. we see stronger we tell sales number and that feeling that the economy is robust and will handle more rate hikes. yvonne: in asia the big focus will be china gdp. tuesday we will be looking for it. forget about these trade wars, these regularly crackdown's happening in china because it looks like the economy turned out really robust growth for the first quarter. i'm looking at my bloomberg library.e on gtv this is the white line the gdp estimate. most economists are saying we could be hitting 6.8% for the first quarter. that is well ahead of the 6.5%

target that we see in the blue line. the question is going to be how sustainable is this. there are tougher times ahead for xi jinping as he tries to that'll tightening and pollution. these u.s. trade tensions intensify. i think most people are saying pledges,ivers on these perhaps we could still see a marginal deceleration. they are still thinking 2018 we could see 6.5% growth for china, which is the pretty robust. betty: it is robust. you nailed it on the head. a essentially what happens between the u.s. and china, particularly on trade? -- orr the sanctions tariffs are put into effect that will have a significant impact on the future of those numbers, on the gdp numbers. up next, the rising kobold price onll put it

lithium batteries. we will speak with the chairman and ceo of global 27. anthony joins us next. this is bloomberg. ♪

yvonne: this is "daybreak asia." i am betty liu in new york. cobalt on lithium prices has been rising as electric vehicles growing popularity. regulators look to seize all car polluting cars. there are essential to the lithium ion batteries that power electric cars. cobalt has soared more than 250% in five years on the london metals exchange. is held by the company held by our next guest. he is with our china correspondent, tom mackenzie there in beijing. tom: such an interesting set

happening here in china around electric vehicles. i am joined by the ceo of cobalt 27, anthony. you are here in china and our regular visitor. you are a major supplier of cobalt for electric vehicles. what are you seeing, what are your forecast in terms of demand globally push towards electric vehicles? give us a forecast for the next 2-5 years. anthony: we at 1.8% penetration elite -- penetration globally. most people talk about six pretend -- 6%, i think we will see 35%. from what we are seeing, the adoption of the vehicle is happening at a much more rapid pace than the market understands or anticipates. china has made an economic and political decision to support the electric vehicle, and they will be world leaders. they have an environmental

policy that supports cleaning up the air and urban environments. theyologically speaking are putting the money into the process is to build the batteries and the automobiles. for our business you have to be in china and it is an exciting time to be here. tom: prices are up significantly in the first quarter in the last 12 months. there are pretty strongly. i know you do not want to be nailed down on the price. the forecast of the price of cobalt. give us a sense of how much more prices have to go? anthony: the 20 year averages 24 bucks or $42 today. it is seen as high as $58 in the past. where therspective price discovery stands right now, the market is driven completely by consumer demand. i will remind you that jet engines are booming. what i see happening is the markets looking for an incentive price. a price to bring on additional production. i think that this year will be important.

i will my give you a price forecast, but demand is very strong. a pointl there come where the prices are so high that electric vehicle battery makers are incentivized to look for alternatives because cobalt is not cost-effective? anthony: i think that is a false narrative. when i look at the lithium ion automobile is in the for the next decade. the primary chemistry is the nmc chemistry. evolving from a five-to 28-1 and on. the overall percentage of the you'rethat is cobalt, talking about a few hundred dollars on the $30,000 car. i think it is a false narrative. lowballed is a narrative like any other. the market is looking for an incentive price to bring units on line to meet the demands. tom: most of it is coming from

the democratic republic of the congo. your supply does not come from there. you have one of the biggest supplies outside of it. overall, what is it look like? today, 55% of cobalt comes out of the congo. over the next two years we will 62% go to 75%. we have gone out and are supplant -- and are supplying the chain with arch is no mining. what i would say is that, if you're going to have additional cobalt units outside of the congo, you are going to need more minds. there is one primary cobalt mine in morocco run by management, but the balance globally outside of the congo's nickel mine. you have projects like dumont minesthere are nickel

have substantial cobalt credits. additional supply outside of the congo comes from nickel. in important point is as the battery chemistry transfer, moving from a 5-3, to the 6-2 to the 8-1-1, you have cobalt units going into the nickel units. it will be very interesting. it mike bmw, like apple as well, trying to secure their own supply of cobalt. is that a threat to your business model? areony: the opposite, they potential customers. we welcome their automobiles because that means there is another future customer for us. tom: you are seeing discussions with ongoing clients here in china. who are you talking to? where are you seeing the greatest demand? always open to partnerships. i would think we would be remiss to not have everyone.

this is early days. this is a structural transformation of the energy business. it -- it is at -- complete construction of the automobile service and mobility service. for us it is finding partners that helped bring us through the next decade of the business transformed. i see multiple partnerships across china and i think we are meeting with almost everyone in talking with all of the companies. tom: what is the shot at the business when it comes to stop piling -- stockpiling? anthony: we are focused on streaming and royalties. the stockpile was something we did at a moment in time when the market was there, but i don't bequeath can do that again. now the business going forward is about securing units to flow throughout business. when i look at the next 12 months, our objective is really to secure the large streaming transactions because that is where we could scale liquidity

for the business. it is also where we get units for decades to come so that we can work with automobile makers. you pretty openly said that you are a potential acquisition target. anthony: if you are a customer, you are late to the game. you see within the last month, they did a deal with jim for offtake. which western customer has done a deal on cobalt? you are late to the game and we are building a supply chain that you will want. we see it as recycling progresses it will be interesting for everyone, but in particular for those that do not have exposure to supply chains. tom: a lot of this is overshadowed a trade tensions that are developing between beijing and washington. how does that play out for your business? anthony: i'm not a politician i am a businessman. when i look at 30 million cars being sold in china, china alone

can start a revolution. i think it will happen everywhere, but the straight talk do not matter because vehicles are being built in china, vehicles are being built in the u.s. i can ship michael belt -- i can ship might cobalt anywhere. it creates difficulty as a markets closed. ceo of cobalt 27. outlook for, ian the demand of cobalt in china. mackenzie, our china correspondent. you can watch us live on tv and dive into any of the bloomberg functions that we talk about. you can follow the conversation and send us instant messages during our shows. this is for bloomberg subscribers only. check it out at tv . this is bloomberg. ♪

betty: a quick check of the latest business flash headlines. they are expending -- extending a range of its business for more than 12,300, motors, toppling gulfstream is the long distance champion as the private aircraft industry. the company says the 480 kilometer improvement can fly from new york to hong kong, or from singapore to san francisco. the barnier says the plane is

sold out from -- until 2021. his restrictions on long-range flights with rolls-royce engines. the faa is expected to sweep to limit a time that 787's power by trend when thousand variants can be away from the nearest airports. european regulators now require inspections of the engines after durability issues. smartphone and chipmaker may use it to track shipments for tens of billion dollars a year. the groups logistical information and tech says blockchain could cut shipping costs by as much as 20%. the technology is touted as a breakthrough that will transform the way transactions are recorded and verified. now for a look at what's coming up on bloomberg television. let's bring in rish.

rishaad: you have been over what's happening in the geopolitical issues happening around the world. looking at markets, are there any, that is the point at the moment. we are looking at what's happening with the oil price, very little movement. things could change with russia. jeff will be on in about 15 minutes time from now. talking to the victor, he is from the middle east institute and will be joining us from singapore. getting their takes on how they look at it from the academics point of view and beyond. it's also look at markets for our stock in trade. who better than him? is joining us in about one hour and five minutes. we will be looking at the implications of those strikes, on top of that, where are we in the economic cycle?

that is something we will talk bank --om the old tg lgt bank. that is the look at the next couple of hours. betty: looks like you have quite a few -- quite a few provocative voices. a quick look at how the markets are trading right now. we have been talking about the last few hours taking the syrian missile strikes in stride. the nikkei up .5%. also the s&p asx 200 in the green. u.s. future still holding pretty firm. that is it for -- from us in "daybreak asia." markets continues. ♪

here's a start to a new trading week but at least we are positive starting. russia is facing new sanctions for links to chemical weapons. an announcement is expected from the treasury. and nikki haley is saying washington is sending a strong message, and this time everyone will feel it. also coming up, japan and china aiming to persuade north korea to abandon nuclear weapons.