>> it is 7:00 a.m. here in hong kong. i am yvonne man and welcome to daybreak asia. u.s. rallies rallied for a second day on the back of industry heavyweight. trade on aloser in narrower first quarter profit margin and revenue was flat without the dollars help. 7:00 p.m. in past new york. the imf sees two years of growth. seeds of already been sown. the historic meeting moves one step closer.

president trump says the u.s. is already talking directly to north korea. a very good morning to you. yvonne, taking a look at the two, especially with the syria airstrikes there is a focus on earnings. let me look in the bloomberg terminal and get you up on the health of the specter of the snp. it was basically a broad rally. laggard -- the single but people will say it will be a blowout quarter.

s&p companies have already been coming out there. 1% and is nowby at the highest in about a month. it seems like we are able to focus more on earnings as we see the trade side of the syrian tensions. in the last 24 hours we have been talking about u.s. sanctions on russia are still possibly on the table. certainly we could see some uncertainty flareup again. ramy: that's right. and we did see a little bit of that in some of the treasuries as well as gold, inching up just a little bit. a quick recap in terms of the s&p 500, up by about 1% area yvonne: -- up by 1%.

yvonne: in asia, we are seeing some green as well. in china, we saw a triple are cut to help the beleaguered banks. look at the index. we are up 1/5 of 1%. the kiwi is holding at 7344. the aussie futures, we could be seeing a decent bounceback today. we are counting down the opening of japan and korea. we could be seeing decent rallies today as well as the summit in mar-a-lago is underway. what could the prime minister of , domestically he is facing a danger zone. the dollar is pretty steady. let's check in with jessica for the first word news.

jessica: the internet shery -- the international monetary fund expects expansion for two years. leaving the cap unchanged at 3.9% but projects global growth. china's gradual slowdown continues. china is adopting a carrot and stick approach to trade tensions with the u.s.. their opening -- they're promising to open the world's biggest auto market. china has repeatedly made clear that it does not want a trade war but has promised to fight president trump's policy and defend their own interests. downplaying the chance of the u.s. reentering the trends pacific partnership. he said washington is in

pre-polemic harry stages of any discussions and officials are more interested in a separate deal with japan. new zealand said the u.s. would not be simply welcome back, anyway. >> if the u.s. wanted to follow through on their interests, that would trigger a renegotiation to see if others were interested in a joining -- in joining the agreement as well. so we will see what happens. but it is not just simply a matter of putting their hand up and coming straight back into the agreement. jessica: larry- kudlow says the u.s. is now considering new sanctions against russia. sanctions, they said, were coming and steven mnuchin and would announce them on monday. kudlow said there could be some confusion about the issue but that sanctions are being discussed. global news 24 hours a day, powered by more than 2700

and analysts in more than 120 countries. this is bloomberg. yvonne: president trump said the u.s. and north korea are speaking directly at extremely high levels ahead of the potential meeting with kim jong-un. the president spoke in florida with a meeting with japanese prime minister. let's go to the white house reporter who joins us by phone. thank you for joining us. we talk about the high-stakes of this meeting. what are they hoping to accomplish during this summit? reporter: they have two major points of discussion to talk about during the summit. the first is north korea. there are going to try to get on the same page. the president says he is planning to meet with kim president abe wants

to make sure that president trump is on the same page before he meets with north korea. talkedinister abe has about making sure that president trump does not allow kim jong-un to keep his nuclear program, but that he follows through on complete denuclearization. that is a good point of discussion. the second is trade. they will be talking about whether or not it is a bilateral trade deal or if the u.s. is going to get back. the u.s. and japan have had a number of disagreements on trade in the last few and they are trying to really try to smooth although -- smooth over these differences in the next few days. trump was blunt in saying he believes the u.s. is basically getting ripped off by a number of our allies, including japan. he wants a bilateral trade deal with japan and japan wants the u.s. to get back into tdp.

they will be talking about what the best path forward right b. forward-- the best path might be. japan really has been left out in these talks so far. reporter: president trump it some announcements today. he said he still plans to have the meeting. he said they are looking at five potential sites for the meeting. none in the u.s.. he said that direct talks are already happening at a very high level between the u.s. government and kim jong-un's government. one of our bloomberg reports indicate they're not only between the governments but between kim jong-un himself and high officials in the u.s. the meeting that is happening now between japan and the u.s. thatsigned to make sure they are on the same page. prime minister of a wants to make sure that he knows what

is going to say when he sits down at the table with kim jong-un and they are not taken by surprise. because when president trump originally announced he was going to happen meeting, it came as a surprise to the japanese government. that is part of the reason the prime minister abe is here, to make sure he knows exactly what is going to be put on the table and what negotiations will look like, and how japan could be impacted. hese are the things that wants president trump to put on the table during these discussions. ramy: there is also the issue about politics. the survivability for mr. abe. a lot is riding on whether either side wins. what happens if he does not come home with any perceived kind of win? do we see abe leave at sometime this year? reporter: he is suffering from

low poll numbers, just like president trump. the domestic scandal abe is facing is more detrimental to his political future than what president trump has gone through. that is part of the reason he is here. he wants to make sure he can go ,ome with some kind of win either on trade or north korea. he got a little bit that earlier today when president trump brought up the issue of abduction us during his meeting. it is a big issue for japanese citizens who have been abducted on are being held in north korea. he has promised to bring up this issue with his meeting with jim on an. -- with kim jong-un. they are looking for wins in significant areas but that is one area where president trump was able to provide a little bit earlier today.

ramy: we're on pins and needles. they are gathering a pace as we speak. think you very much. let's get back -- thank you very much. let's take a look at the market. the s&p had a high. stock not doing well is ibm, thanks to some disappointing results. su keenan can walk us through. the margins are much narrower than expected. let's go to the chart. and if you factor out the currency adjustments, ibm is flat. but you go into the full-year chart, you can see ibm has had a bumpy road. beat therter sales average.

but really flat when the u.s. dollar is factored in. growth in strategic areas and cloud analysts were up. this is the market snapshot. cappedlar rebound was because of the russian sanctions. the house and start would say men stronger-than-expected. moverso to the market and a lot of it is influenced by the earnings at the top of the chart. a big win after hours yesterday. the fact that they have been able to raise prices and increase subscribers really embraced. united health care, they beat the estimate. investors loving that. amazon potential he benefiting

from a favorable decision on internet sales tax. let's go to the bloomberg. this chart has to go -- has to do with investors preparing for a downside. u.s. markets are priced for the best case scenario. the warning is that the increase in potential downsides at the end of the cycle is now upon us because the market has been priced for perfection. yvonne: we followed with the banks,als, because the --dman reported bond traded bond training and the stock still fell. reporter: they fell on a combination of things. is this sustainable? and they are cutting back

short-term on their buyback. this chart has to do with the fixed income revenue versus the stock price. goldman now has be all their rivals in terms of higher credit commodity trading results. there is a question as to whether a larger job would have proved it was back. it is a high-class problem to have. we are seeing goldman flat today but it has been set to perform better as it will be restoring these buybacks going forward. yvonne: thank you. still ahead, trouble looming. signs of the next global downturn. the latest mobile economic outlook.

boostand an earnings tensions.opolitical this is bloomberg. ♪

yvonne: we are cached down to asia's first market open this morning. -- we are counting down to asia's first market opening this morning. here's some pictures of mar-a-lago. abe is speaking with the president as well as the first lady. we see some lines from japanese

officials saying the prime minister had told president trump that chemical weapons during the syrian airstrike was unforgivable. they discussed syria during this summit and it will be interesting to see how japan plays into this after these airstrikes played out during the u.k.,d between the u.s., and france. whether japan could offer some support for the war in syria. we could be seeing some confront shenzhen -- confrontation with russia. in hong kong.n u.s. stocks rallied for the second day, thanks to those better it acted earnings overshadowing geopolitical tensions. is jim tierney.

jim, thank you for being here. i want to look at the bloomberg and look up the earnings and analysis function. there is some earnings surprise happening. financials up 4%. talk to me about sentiment. >> we think this will be a great earnings season. but when i think is most exciting is the huge dispersion all of a sudden. stocks going up a lot and down a lot. that gives active managers a chance to outperform nicely. ramy: in terms of what you are expecting on the s&p and the 20% rise, last time you were there at the end of the year, we are seeing a little bit less than not. about the same, records on that. >> i think we are close. i had talked about 50% to 20% and 20 at the high-end. at the end of the year, i think we will get there.

i am not hearing a lot of companies bringing down expectations for the second quarter. a very positive outlook. ramy: we were talking about geopolitical issues they ago. syria, russia, and the summit at mar-a-lago. what are your looking at in terms of taking those into account when you are bringing up your strategy? >> you have to look at the overall geopolitical landscape. stocks will be driven by earnings growth so that is what we can control and focus on, in terms of buying great companies that can grow. i cannot control the geopolitical outlook. my guess is four years for now we will not be even talking about the same issues. so as an investor, i am looking for great companies that can grow. yvonne: and the earnings expectations, they have been set so high.

we are seeing multiples have come down a bit. wherems this is a market earnings are the big rescue. >> netflix had a great reaction. if you look at unh, great collection. schwab, great collection. -- great reaction. people are somewhat disappointed with the reaction of the banks. i think that has to do more with the flattening of the yield curve. yvonne: you mentioned a little bit about valuations. them, we have shaved off a bit since january but this is still elevated to levels we saw in 2000. even if we get these robust profits, how we cheapen it enough to offset some of the political risks we're seeing. >> this is one of my favorite

charts. from 2008s earnings and 2009, the great recession, that i do not believe have much to do with today's market. if you take those years out of the calculation, all of a sudden the pe will come down meeting in 2018 nineningly 2019. we were a lot higher three or four months ago. schwab, abbott, facebook. you say facebook will continue to grow. regulatory concerns in the future. but you seem to be positive on this. , how bad could it get if it gets really bad. the ceo talks about increasing the staff to make sure security

is where it needs to be. he talked about a 20,000 person increase. if that was not contemplated in the budget at all, and each of those people make $100,000 all in, that would be a $2 billion expense. that is 50 census share. $.50 at -- that is share. that is 7% of earnings. the stock has gone down more than twice that. up 13% ever since it hit its most recent low. thank you very much, jim. remember bloomberg users can interact with the charts we show .gtd go -- g tv this is bloomberg.

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ramy: this is "bloomberg daybreak: asia." we just want to recap some lines we are seeing out of mar-a-lago. met beforemp have the stakes are high this time. president trump says he is meeting directly with kim jong-un in the next couple of weeks or so. question for japan is, can they get a voice in some of these talks? they have been left behind a bit given as how china has met with kim jong-un and we will have this may meeting.

we will continue to watch the lines this morning. let's look at the latest business headlines. one person died when an engine exploded on a southwest plane. plane made an emergency landing in philadelphia after the explosion, which shattered a window in the cabin, killing a passenger. ramy: rio tinto has reported first-quarter of a 3 million tons. aluminum output was 846,000 tons. a little short of the estimate.

rio might have to mop ball some of its suppliers because of sanctions. revenue boost for gold mine. we will run through those results, next. this is bloomberg. ♪ welcome to the xfinity store.

i can tell you about... streaming the most free tv shows and movies on the go. yeah, and... xfinity internet. it's so fast! and you can save by... by getting up to 5 mobile lines included. whoa, you're good. i'm just getting started. ♪ simple. easy. awesome. come see how you could save $400 or more a year with xfinity mobile. plus ask how to keep your current phone. visit your local xfinity store today.

minuteswe are now 30 away from asia's first major market open. financials are dragging a bit here. ramy: it is 7:30 p.m. here in new york and markets have closed up more than 1%. internet a one-month high after all the volatility we had over the last 30 days. yvonne: you are watching "bloomberg daybreak: asia." let's get to the first word news.

jessica: president says the u.s. has begun direct talks with north korea and head of the potential meeting with kim jong-un. he said officials have had discussions at very high levels and five locations are under consideration for the talk. he has given south korea the go-ahead to negotiate a peace deal with the north. president trump: north korea is coming along, south korea is meeting and has plans to meet with north korea to see if they can and the war and they have my blessing on that. china has cut 1% off the reserve ratio requirement or sunbaked, bringing up $207 billion. most of the funds will be used , adding a net 64 billion dollars for financial systems. the central bank cost reduced funding costs for lenders and will anchor conditions for businesses and individuals.

underlining its growing status in asia by overtaking america as the main export market for vietnam in the last year. the u.s. was the top buyer. they relied on washington to counter balance influence of the dominant neighbor. but shipments to china jumped more than 33% in the first quarter compared to a year ago. u.s. airlines face multiple disruptions as negotiated flights over russia are expiring. carriersatives of trade associations and unions are looking for help in the state department after moscow pulled out of talks this week. planes passover eastern russia every day. global news 24 hours a day, powered by more than 2700 and analysts in more than 120 countries. this is bloomberg.

yvonne: we are counting down to some major market opens in the asia-pacific. let's get to sophie. toare getting a green light the rally after a disappointing day on china. it seems we need a catalyst. sophie: we need a little juice. to reconsiderps how they approach the mark a -- market. we have solid u.s. earnings provide some catalyst here. on the eco-front, we are waiting on japanese trade that will be out later. summit, we have the yen holding steady against the backdrop.

we have yet to hear if there will be any concessions on trade had of the trump abe meeting -- ahead of the trump abe meeting. aluminum tariffs would be on the table but there are no details yet. there is the possibility that the u.s. would rejoin the tdp and make a bilateral deal with tokyo. yvonne: for all of the talk about the trade tensions, we are seeing new developments when it comes to vt. on the other side, they are opening up the car market. who tends to benefit from this? reporter: a little bit of an olive branch that china and the u.s. are taking towards each other.

china are scrapping the 50-50 role. japanese carmakers may also move. toyota and honda have an alliance and watch for stocks to move in tokyo. with this, foreign players, the landscape is not going to change overnight. alone would cost billions in investment. bmw has said they will not make a decision in less there is a census with local partners. so there is a little bit of a sensitivity when it comes to the road ahead here. ramy: thank you very much.

let's continue to look at equities. goldman sachs bond trading division helped generate the highest run of the new in the last three years but it seems -- the highest revenue in the last three years. how did goldman stand out from its peers? >> they reported strong results across the board. trading revenue was off the charts, 38%. fixed income revenue was up about 21%. .hat was driven by commodities commodities business bounced back from an awful 2017. income division surged in the last quarter. not: the share price did react. investors pulled it down by 1.6%

, the most since nearly the start of the month. what is happening there? , the stock seems to fall 1.6% by the time trading ended tuesday in new york. -- strong fixed income number, perhaps investors were looking for a bigger number to see if the results were sustainable. and operating expenses were up significantly. to bank said they are going continue at that level as the -- the bank invest in technology and their online bank. they suspended buybacks for the quarter, so investors could have been reacting to that. take a look at what we have seen the bank so far. have as last quarter's volatility played out for the bank? >> equity is up.

equity trading a strong across the board. banks are seeing a lot more client activity. volatility was down last year. trading was subdued. but it bounced back in a big way in the quarter and banks are reacting to that stock trading and benefiting from it. yvonne: dan, thank you. you can get a roundup of the stories you need to know to get your day going. just go to tv on your turmoil -- terminal. the ims says the global economy will see expanding for the next two years but warns to see trouble down the line. downtown of the next

-- downturn have already been sown. you have been covering these ims meetings for years. what is the mood going to be like this year around? trade tensions will definitely hang over all of the proceedings. it will be interesting to see how it goes. will tensions worsen when officials are in the same room? will the imf ministers bicker among themselves, some backing china, and some backing the u.s.? or will there be a meeting of minds where they try to find a middle ground and reach an agreement? gathering.portant you're talking about finance ministers and central bankers from around the world meeting in washington at a critical time area ramy: -- at a critical

time. there is this carrot and stick approach. are autos.this case thatina has made it clear they do not want a trade war. and yet they say they will fight it to the end to defend their interests. so with the move on cars, china saying, we welcome foreign mark -- foreign carmakers coming , that is a good thing on paper, regardless of what has been announced before. it suggests and all of branch. on the other hand, they were , saying we will retaliate. --

good market here, but on our terms, or we will fight back. currency tensions. we are seeing donald trump saying that china and russia are manipulating the current the --a is that the truth manipulating the currency. is that the truth. >> of course it is manipulated. line.r, it is a serious is, the yuan has been appreciating. there's no indication that china has been weakening it. it is curious that the u.s. administration has resurrected it. perhaps they fear china will use the u.n. as a weapon.

-- china will use the yuan as a weapon. ramy: especially because it is up 6%. to be continued. thank you, great to have you there. we are counting down to the latest trade data from japan. we will bring you those numbers as they are released. this is bloomberg. ♪

ramy: we have breaking news. barbara bush has died at the age of 92. she had been through a series of hospitalizations and just this past sunday she said she would not seek additional medical care. there is a statement from george h w bush on his passing. proponent ofs

literacy, barbara bush, passed away at the age of 92. she is survived by her husband of 73 years, along with five children and their spouses. the official funeral schedule will be announced as soon as possible. bush, dead at the age of 92. yvonne: thank you. president trump is playing host to prime minister abe in florida. ahead of the meeting, larry kudlow has been downplaying the chances of the u.s. rejoining the tdp packed. ct.a it seems like the mood this time in mar-a-lago is different. both are facing their own political dramas at home. either going to be any easy

wins? know, but both have to present something. there are focusing on the topics were something can be done. trade is a hard deal, particularly in what we were .alking about there is little that can be offered immediately. security will be a big issue, probably japan buying more weapons system. mr. abe already got something. we are getting conflicting reports from the white house and president on whether he has had direct talks with kim jong-un. white house seems to be saying he has not. what is at stake here for japan? given the political crisis at home, abe is not going to be able to do anything when it

comes to concessions on the straight front -- trade front. to politically, what can he offered to get a voice in these --th korean talks geopolitically, what can he offer to get a voice in these north korean talks? >> on the chinese side it is obvious. exports to the u.s.. japan is clearly on china side on that. the u.s. needs japan to pressure china on property rights and .pening up the marks it japan is not in a bad situation here here it the problem is, what can japan offer? probably, on the currency side, can something be done when the yen is getting stronger? option.that is an

larry couple mentioned that the u.s. rejoining tdp, they prefer identical trade deal -- bilateral trade deals with japan. do you think there is an appetite for a bilateral deal with the u.s.? tojapan absolutely wants avoid that but there might be a way out. the trump government is moving in that direction. tdp is a bilateral deal from their perspective. trump is moving towards tdp, that would be something very important for japan because it is the core issue of abe in terms of moving the markets. sellrump might be able to

the move on the japanese side to accept more imports in the deep i lateral movea so what might be better than it looks right now. ramy: with japan being stuck between a rock and a hard place, china and the u.s., how will it impact the yen? waso far the bank of japan very careful. interest rate.ed so it was very careful when the yen was weaker than 105. situation where japan is putting something on the table, excepting a yen that would go higher than the dollar.

the bank of japan on this issue would shift a lot in the currency market. ramy: from the ¥100 marks, can industries handle that? what is the threshold we should be looking out for? >> let's look at the trade data that will be out in a little bit. what we are seeing exporters doing well this year, this is not the biggest issue. asset races,s on this is where the stock market is tied to the yen dollar rate. the bank of japan is saying the economy is moving in the right direction. that would be basically a extension of self tightening in japan and would shift the market. yvonne: we just got some

breaking numbers coming through from japan. the trade balance adjusted atbers swinging to a surplus ¥119.2 billion. this is a big jump from what we previouse deficit the month. exports seem to be driving it. economistss on what were expecting. they were expecting double that. economists were thinking the domestic demand would be stronger and were expecting the 6.3%. not a big movement in dollar-yen right now, still around 107. this will not be good news when

it comes to president trump and how he will look at this trade deficit with japan. >> on the bilateral side, this is creating a problem. japan is half on the china side. it will be a tricky issue for now. yvonne: this contraction of imports, many were saying the domestic story in japan was looking to be much better than what we have seen from a year ago. is that sustainable? japanese economy domestically is at a peak level. we see indicators going down and as much as is economy could be pushed by monetary policy and fiscal policy, it is now gradually slowing down and we seem to be seeing that in the

figures already. you go,before we let talking about what to expect out of the summit. if abe comes out of this losing face, what happens politically for him? can he survive when it comes to june and these elections in the later part of the year? abe's position in japan is not decided by talks with mr. trump. offering something, showing something, is very important. i think mr. abe is not safe right now but not as vulnerable as the president in the current situation. yvonne: martin schulz, thank you for joining us from tokyo. remember users can interact with the charts using tv .

catch up on the key and analysis and save the charts for future reference as well. make sure to save them. this is bloomberg. ♪

yvonne: this is "bloomberg daybreak: asia." ramy: a quick check on the latest business headlines. becutives at bbb are said to evaluating software options for cell phones. google's android probably falls under monday's government order, company's access to american technology for seven years. beatingers have been google officials for that issue. apple says they want to

integrate their recently acquired app into phones. and upgraded apple news app with the subscription come in -- offer will the next year. ramy: ibm fell in late trade with narrower first-quarter margins that was flat without currency adjustments. there was a 5% gain but only when factoring in the week dollar. revenue growth was unchanged. yvonne: united continental is pushing had with the aggressive fares and offer more seats. the airline says revenue for each seat will rise from 1% to 3%, it will be the third

straight increase. united is betting they can ramp up seating capacity without starting a airfare war. this is bloomberg. ♪

from bloomberg's headquarters. welcome to divert asia. a positive start after strong earnings lifted u.s. markets. rebound toready to improve funding at the bank. it is just past 8:00 p.m. on a tuesday. slowdown have already been sown and a historic meeting moves one step closer.

>> still some question marks -- the white house seems to be downplaying the threat, but in letdown when it comes to president trump and how he will be negotiating with japan on trade. we have seen the trade balance here back to a surplus. see a pretty big miss. couldnly, president trump be increasing or intensifying some of the discussions.

when heust thinking heard the numbers. meantime, let's get the first word news. >> the internationaux monetary funds expects the global economy to continue to expand. the prospects of the next of five can be seen. fade. growth will and fiscal stimulus aside china's slowdown continues. a carrot andting stick approach with united states and promising to open up the world's biggest auto market. china has made clear it doesn't want a trade were come about

promises to defend its own interest. >> larry kudlow is downplaying the chances of the u.s. reentering the transfer senate partnership. the idea is more of a thought than a policy. officials are more interested in a separate deal with japan. the u.s. would not be welcome back anyway. >> if the united states wanted to follow through, it would .rigger a renegotiation we will continue with the --cess and see what it comes >> larry kudlow also says the trump administration is

considering new sanctions on russia, but u.s. ambassador nikki haley was ahead of the curve in discussing it with the public. stephen mnuchin said he would announce the changes monday. global news, 24 hours a day on air and on twitter powered by more than 2600 journalists and analysts. this is bloomberg. >> let's take a look at the market open. we are seeing some decent gains when it comes to south korea. it seems like the political intentions a little bit of a back burner now. go, has the green light to checking out what happened. up 4/10 of 1%. japanese investors have the

latest trade figures to digest. ahead of the summit, larry kudlow has said exceptions would be on the table and said the u.s. preferred a bilateral trade deal. have china, we do watchers hoping they will spark a turnaround. take a look at the dollar-yen. dow,g a look at the utilities leading the charge.

saidberg intelligence has utilities are not steady on stable input. highlight to see what the reaction is to the lead -- latest update from china. we have a mixed bag so far. pressureonda under along with saguaro.

-- the president spoke in hostingwhere he is now shinzo abe. >> we started talking to north korea directly. we've had direct talks at extremely high levels. i believe there is a lot of goodwill, a lot of good things are happening. we will see what happens. >> with bring in isabel reynolds now. mar-a-lago. from >> today has been all about north korea. straight, they had a -- slightly longer session.

what they have agreed is something prime minister abe wanted is to keep up the maximum pressure. also, president trump said he issue.e for japan on the it is a big issue for the japanese public. >> we are getting some fuzzy lines on whether the president did talk with kim jong on. think what prime minister he has beens to do through several rounds of talks

through north korea. i think prime minister abe wanted to make the point clear confession must have something verifiable with a return. >> what about trade? is this going to be an easier for harder battle. -- we have seen the u.s. side backtracking, but japan has sent and chiefister negotiator. intentionsre will be there whether that will make an

unpleasant atmosphere is hard to tell. they are very much keeping up this friendly atmosphere that they have established. -- nice to see you in hong kong. how confident we are going to see any kind of breakthrough? it seems like the relationship between these two countries has been fraught. >> it has been quite fraught. i suspect trump is going to realize it is suffolk -- difficult to separate and he probably recognizes it is costly.

also recognizing when he imposes tariffs, some countries might feel bought out. hopefully, he is learning by what we have seen. of lyricar the likes of the saying we are not thinking about joining. what stands to benefit japan more? the fact they enter into a bilateral trade deal or without america. >> there are probably two options at the moment. japan will look for a bilateral agreement. u.s. seems a bit more skeptical about trade.

>> do we look at the japan issue differently with china? with china, we obviously have a much bigger trade deficit. they seem to have had their commonalities in the past. do is look at it differently as to how president trump will go at japan? >> i think we have to look at it differently. the numbers in china are large. -- u.s. imports are no #that for japan's i think the issue are quite separate.

>> we just got the most recent japanese trade numbers there. clearly not good news when it comes to mr. abe trying to negotiate. to what degree does this make it more difficult? >> i don't know if it enters into this discussion, but i agree that the global economy looks fine and what we are seeing in trade is yes, we had a 2006 come at 2007, the best you could probably say is it is stabilizing. i think for economies like japan , trade has been such a big part of recoveries, even though in japan the recovery has not been still by any means. i think it is making them nervous. asia, inapart for

terms of looking at the economies come up what do you think the driver would be moving ahead? >> i think trade is a major issue. all eyes are through explicit government policy because the banks are dealing with nonperformance asset issues. that means the big economies are really a source. i think asia -- i think anything that occurs in that --le east, i think quit, henzo abe has to

comes back to the political they have ae, do little bit more flexibility? the don't think the boj is policy focus. structural the reform side. the number of foreign workers in japan have quintupled. see themy difficult to with the main focus. >> what happens to economics then? >> it is hard to see the government shifting away from that policy approach given the economy is kind of fine. they're not doing spectacularly by any means. still had, we will examine

china's property sector ahead of the march price data. >> up next, a tighter central-bank policy and a slowing central china. this is bloomberg. >> on the does it have left?

u.s. basis fiscal challenges, in particular from entitlement programs and government are relation -- obligations. from that standpoint, the increase in the deficit is not going in the right direction. imf chief economist with warning.

after twos softening years of upswing. highlightchart to what the imf was signaling. heard, it we have seems like the picture is very different. indices like this one have limited. china's growth has already talk to. other risks on the downside? >> i think absolutely. grew in 2016onomy and kind of somewhere around there. it is amazing how many clients have started using the word normal again.

i think this is kind of the peak. i think we are not going back to 5% growth. >> you mentioned the high debt levels. we have seen japan, china, much of asia has been doing is money. at., at a time and we are eight year expansion. at what point does it become a problem? you look at it and it seems to be saying something is going .n already credit spreads have started to widen. year, three months libel, anduper easy money policy we are back in two a more normal world trade >> do think that is

the biggest way? we are talking about the hikes expected globally. the fiscal stimulus subsiding and china expected to slow down. the u.s.s. national on is at full employment. it will boost u.s. imports and normally, we would say that is a good thing, but this time it is coming with political baggage. >> in the sense, trump has this policy, so i cannot see how you can reconcile that.

specifically with china, in terms of the forecast, coming down to about .4%. how does it line with your view? >> it is a good number. let's think about where we are in china. china has taken structural reform. to actually have this, domestically. this is the u.s. demand below the story and as we get to that, if china is committed, unless am surprised by the strength of the tobal, it will be difficult maintain the monetary policy.

hard to see how exports keep generating additional growth. bit of that.ing a nearer to us, very easy monetary policy for quite a number of years. when that starts to look a bit less stable, it causes problems. that can work for while. >> good to have you here. remember, you can interact with the chart. you can also save the charts for

future reference as well. this is bloomberg.

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wi-fi fast enough for the whole family is simple, easy, awesome. in many cultures, young men would stay with their families until their 40's. away -- halfa mile an hour away from the open. you're watching daybreak asia. >> present trump says the u.s. has begun direct talks with north korea ahead of the meeting with kim jong-un. also, it was responsible for the success of the recent olympics.

>> north korea is coming along. south korea is planning to meet with north korea to see if they can in the war. exports expensive despite continuing trade tensions. the increase was less than expected. 6/10, a rise of .ore than 6% cut 1% off with some banks bring up about $7 billion. most of the funds will be used to pay financing. will useal banks conditions for individuals.

overtaking america as the main export for the enemies products. the shipments to china jump more than 33% the first quarter from a year ago compared to a 20% rise from the u.s. and u.s. tolines possible disruption russia is expiring. foresentatives are looking help from the state department -- global news, -- global news 24 hours a day, powered by more than 2700 journalists and analysts in over 120 countries.

>> let's get an update. bystocks moving higher, led ,orea this morning and in japan this is the yen moves a bit of ground. overall, keeping steady. theserse, we have underlying economic growth. , we also have the imf saying is a fewof demise things to consider.

ubs reckons the likes from the press things -- price schemes driven. 650 bucks of metric tons, gaining 1.5%. >> let's dig a little deeper now into the results. sources tell us you actually have to mothball because a key supplier. how big of an impact on talking about here? been talking .ublicly this morning

revise the to guidance. rio one of the biggest producers in china. it is clearly going to benefit from higher prices. it is really surging off the back of the sanctions, but this is a pretty complicated market. it also receives some of the input materials, including third parties. if you complexities to work with. about bringexpects a half in 2018. ofwill take in the impact the assets.

makeso says it may need to -- let's get a little bit more detail between the operations in terms of the aluminum. >> it is a little complex and a bit of a web across the industry. roussell has a 20% stake. also, it is a refinery and in turn, immaterial is then used in planned in france. web. a complex

overriding to make sure it is complying and currently in discussions about managing any disruptions in it is still in the process of breaking contracts. >> pretty much as steady as she goes. looking further out, the company buying a forecast for 20 seen. of an line with the

producers. they are moderating the supply growth. i guess china's demand is starting to cool off. >> thank you. running us from melbourne. have longmarket displaced worthy fundamentals don't matter. >> it is quite a shift. join us here in our hong kong said, it is a sign that the market is really maturing, but how significant is it? >> you cannot just follow an index to china. that does not work. index has note

really done much. -- anything that shows a company is doing well. if you compare it to companies that don't pay dividends, it does show a shift in china markets and perhaps is surprising. the past year has been a year where momentum has stretched. popular in the west. >> it is a way to show that if you take the right stocks, you can actually do well in china. it is not just speculating. >> i just pulled up the chart.

what risks are still there? obviously, the market completely changes in three years. he still have quite a bit of speculation. we do have evidence once in a while. we might be seeing that actually, so the criticism is that it is not really a free market. it is a shift for sure, but it is not by any means over.

>> especially with the intended liberalization. thank you very much. the next hour or so, the latest reading of the property sector with the latest data out from beijing. tom, what are the numbers we are expecting here? another. expecting we've had early indicators saying that sales fell two and a , saying that prices in the first two weeks fell as well, so you have indications of a reduction when those come through. curbs.ll have these

no sign from the government. have a slightly environment around mortgage lending. lending the mortgage and property investment or priodng over a five-year -- period. then it starts to of down in 2017. that to continue as a credit environment. -- we have seen the markets here. it is the financial developers

that have really hit and may be concerned it is hurting the margin of the kind -- the company's. >> the developers had such a good year. we saw some pretty incredible place there. it was interesting to see the investment pickup or for the markets a pickup. a concern there is about the curves that continue and we have 17.5 alien u.s. dollars of u.s. dollars maturing. that is a record amount. you have got companies that did

a report on how some of their senior managers are putting the pressure on the sales. that is an example of some of the questions. that is something the developers are looking for. course, it is one of those areas economists say it could something -- be something that is a drag. >> thank you. >> president trump meets with shinzo abe.

asia.s is daybreak sanctionsf new russia after of the u.s. corporations boosted the risk appetite out there. running us from sydney, senior currency strategist of australia. how could i not start with the u.s. dollar? currency manipulation going to china.

talk to us about where you think it is headed. think trump has gone into more inflammatory words than inflammatory actions. it essentially concluded that no major trading partner of the u.s. met the criteria to be a currency manipulator, so i think the big theme means that it appears to have eased. when mobile growth gain some in him, it tends to lead further down. that is one of the reasons we still see the u.s. dollar trending this year. >> the rest of this year. >> is there a point, it is down 14%. is there a point where there --

there being shooting the u.s. in the proverbial foot here? >> you could probably reach a point in intensification in trade tension. it certainly remains a clearing -- clear and present danger. the chinese government is the more open to liberalize or open for an investment into key chinese industries. matt also more encouraging chinese or tele-tory measures or the u.s. plans to increase china has also been relatively inflammatory.not >> this is encouraging for the global growth outlook. thes quite consistent for mobile growth.

i still expect a selfish trend. -- this beyond the hedging

reason isanother big the japanese yen is the risk of more has eased. significantly reducing which is positive for the japanese current the. -- japanese currency. >> are we getting closer to 100 now. >> it is interesting. we talk about the u.s. trade deficit with japan. still the third-largest after japan. it seems like japan is on president trump radar and it comes to trade. if we hear anymore fiery rhetoric coming from the president, are we going to see more?

is it driven by fundamentals or politics? by fundamentals. negative trade policies are focused mostly in japan, they are mostly focused in china instead of japan. -- the highest levels, we are hovering around 142, how much further outside is there.

-- you have some related to development and could potentially see a trade deal by october this year, so it all is all well for the british pound. toexpect the bank of england , soe rates at the meeting this is another big pillar of support here, especially versus the u.s. dollar. news, were breaking have teamed up with twitter. it is the first global news network designed for social media. if you're on twitter, make sure you follow tick-tock by

bloomberg. this is bloomberg.

fell and first quarter revenue was flat without currency adjustments. at $19.1 billion. .hat is a 5% gain

without the help, revenue growth was unchanged. >> apple has said to the trying to integrate its recently acquired magazine. are told that an updated apple news app should launch next year. >> united continental is pushing ahead with its aggressive growth plan. the airline says revenue for each seat will rise 1% to 3%. it can wrap up seating capacity without sparking a fair war.

>> a quick look at how markets are trading right now. pretty much green across the board. quarter of at a percent. the s&p rising more than 1%. >> take a look at futures as well. we are pretty flat when it comes to singapore futures. up onith heidi coming bloomberg markets.

♪ it is 9:00 a.m. in hong kong, 11:00 a.m. in sydney. i am haidi lun. this is "bloomberg markets: asia." ♪ haidi: korea leading the asia-pacific higher, earnings underscoring resilience. chinese stocks expecting to pboc cut the the reserve requirement ratio to improve funding at ranks.