>> 7:00 a.m. in hong kong. we are live from bloomberg's asian headquarters. i am yvonne man. welcome to "bloomberg daybreak: asia." stocks off to a mixed start after wall street sputters out. investors weighing u.s. job numbers. watching day two of trade talks in beijing. the white house sees a positive start to negotiations. from bloomberg's global headquarters, i am a betty liu. president trump changing his story on stormy daniels, admitting he did repay hush money but saying it was legal. why a spending spree is weighing on alibaba was bottom line.

betty: in the markets here, there was lots of digesting of the fed statement and watching out for inflation and whether that could spook markets. we will a clearer picture of inflation tomorrow with the jobs report. chartsto pull up the gtb charts to show this. the markets tanked on that. the fed may in fact be going on a tighter rate hiking cycle than anticipated. particularly after the fed's concerns, or these

perhaps interpretations, the fed will let interpretations run hotter. was march just a blip here? are we going to see that bounce back in april is a key question. thatntinue to see calls perhaps things will get better. the latest note said he concerns over monetary tightening are likely overdone. we heard from the statement that they mean not respond as aggressively even if inflation does overshoot. that was an overhang in the markets today. let's pull up where we closed here in the u.s.. we did bounce back from the lows in the session thanks to rallies in tech stocks. the s&p and nasdaq still struggling in the red. setting up a next friday in asia. yvonne: we're in a limbo between

the fed meeting and a jobs report. we are seeing a mixed picture. let's look at new zealand. flat, the qe at 7041. rally, thellar dollar squeeze almost over. take a look at australia. it bit of upside in a futures, 12 points up. the aussie holding at 7530. 2.76 for the aussie 10 year yield. japan closed for the holiday. at yen trades. we are seeing consolidation when it comes to dollars. caught up with the first word news. courtney collins joining from new york. first up, north korea has reportedly agreed in principle with the united states

to end its nuclear program by 2020, according to a south korean newspaper citing unidentified intelligence sources. it is says the north has accepted international atomic energy agency inspections of its facilities and his discussion verification measures. president trump has changed his account of the $130,000 payment made to point star stormy daniels -- porn star stormy daniels. he is telling his attorney to extortionistd claims. pushing back against allegations violatedents may have election finance laws. stated,yor giuliani this was information that the president did not know at the time. he has denied and continues to and the underlying claim

again, i have given the best information i have and i would refer you to the comments that you just mentioned a few minutes ago about the timeline. sources sayoomberg the top two u.s. market watchdogs have opened investigations into possible manipulation of the mixed benchmarks. we're told the securities and exchange commission and commodity futures trading commission are looking at the volatility gauge. the monthly auction which sets the price of mixed future contracts is one area of inquiry after wild price swings this year. and the argentine peso tumbles to a record low against the dollar after a second interest rate hike in a week. a recent downward drift is accelerating to an all out selloff as concern grows that disjointed policy is allowing runaway inflation and access

government spending. it is a disappointment to the 2015 who saw election as a turning point. global news 24 hours a day powered by more than 2700 journalists and analysts more than 2700 journalists and analysts in more than 120 countries. i am courtney collins. this is bloomberg. thank you so much. let's get more on the u.s. close today. kind of a struggle. >> we did come off about 1% off below. a strong technical move and it looks like the market was going to move higher. only the dow made it into the green. oil, gold, bonds all advanced. tesla's top of the list. it continued to slide in the regular session. other movers included young brands. we talked about spotify after

hours, that followed through with a big decline in the regular session. meal kit company that struggled in the past six months and suddenly it is out there with an upgrade. it beat the highest estimates. let's go into the bloomberg. let's talk about tesla. tesla's free cash flow it was the topic of the agitated conference call that made the headlines. this is where he can find these charts. tesla's free cash flow declining over here. let's go into another interesting chart. rarely does this happen, partial earnings were released in the middle of the day. they were supposed to release after the day. look what happened. to the left is a regular trading session, to the right is the latest session. earningsee when the

information cannot the stock plunged, then it was corrected. second quarter they trailed estimates but suddenly he saw the stock rebound and that was echoed throughout the gaming industry. pandora is very interesting. this is the online radio company . similar to spotify's streaming -- it increased subscribers. investors were happy. weight watchers is up today. they blow away numbers in terms of brand new clients and shake shack out with a positive report. yvonne: we mentioned about the big jobs numbers, we got weekly implement data. what was the reaction? >> the reaction was positive in that a lot of the data coming

out supported a stronger economy but as betty mentioned, inflation continues to spook the market. let's go to the bloomberg. this one is titled bucking expectations. filings for benefits are at the lowest in half a century. it's go to be video. some other data that was out is the trade deficit narrowing. yvonne: thank you. to another top story, the trump administration's top officials are set for another day of talks in beijing after what the white house called a positive start to negotiations. but go to beijing. tom mackenzie is joining us for more. it seems agree of avoided some of these nasty headlines in day one. how do you think these stocks

have been progressing so far? tom: so far we have avoided the nasty headlines but that is largely because we've not heard from u.s. delegates or their chinese counterparts. economistard from the for vice president mike pence who said that they feel the talks will start off fairly positively. they say the u.s. delegations came over with a list of asks, among them were demands to reduce tariffs, to be on equal footing with levies imposed by the u.s. so china would be pulling in the more u.s. imports. we know the u.s. delegation, we've heard from mnuchin, they and concerneded on the forced tech transfer that they say is happening here. potentially china may talk about. they will not agree to increase

their surplus by $100 billion, trust support for artificial intelligence and semiconductors but we made it announcements from the chinese side around market access and imports. likely in the context of policies we have already heard initiated by the chinese. washington,e in that economist saying it needs to be about implementation and delivery. yvonne: -- the trade gap widened again. is that a potential pressure? tom: it is because it seems to be significant for president trump. he has been consistent in hitting china. it increased again by $91 billion u.s. in the first quarter. back in 27, the trade surplus china had was around $340

billion. chart thaterminal illustrates this over a longer time frame. the chinese would say this is about structural issues and about a low savings rate. u.s. toe asked the lower barriers to u.s. technology. they said that would help reduce the surplus. that is unlikely given the increased concerns in washington about competition in china and its tech sector. that has put out potentially and thestigations into huawei, smartphone manufacturer. are they speaking with a unified voice, are they going to come back with deliverables that will assuage trump? it is sohy significant. potentially the most positive

outcome of these talks will be a timetable, a framework for continued negotiations in the dialing down of tensions. thank you. our china correspondent in beijing. preparingd, alibaba to report fourth-quarter earnings. we go through what you need to watch later this hour. our next guest sees a silver lining to rising bond yields. this is bloomberg. ♪

yvonne: this is "bloomberg daybreak: asia." i am yvonne man in hong kong. betty: i am betty lou. investors are turning their attention to friday's payroll report and what it means for the economy. our next guest says there is good news for rising bond yields.

are we going to close the week above or below 3%? you say there's a silver lining here. >> 3% is a nice round number. the good news is the reason rates are going up is the economy is going pretty well. needtors that need income higher yields. we are trained to think that yields going up is bad for trade prices. new areas at in higher yields. from have been taught fixed income courses that rising rates are bad for bonds. it is a perplexing thing. bad in the short-term, good in the long term. if yields were rising and

economy was rolling over, that's would not be great. betty: it would not be. but i want to show you a gtv chart. it chose the flattening yield curve which we have been watching closely. it ishows you that getting flatter and flatter. it is represented by the white line. as the bloomberg economics surprise index is coming down a bit. it is losing steam. what is your interpretation? >> it is important to recognize -- people associate flat yield curves with recessions. this does not cause the recession, the factors that lead to recession are what show up in flat yield curves. the quiddity is taken out of the session at the same time that long-term growth rates are coming down. if you look at history. it is all over the map once a curve flattens to when a recession happens. betty: you do not see that here?

>> we do not see that. we are 10 years into a recovery, at some point you will get a slowdown. a lot of the factors that led to the deep drop last time we do not see it now. we do not see the m and a that we saw. some point,ack at it will be more modest than what we are used to. from what we saw from the fomc statement, it seems like the market interpreted that statement that the fed would not respond as aggressively even if it overshoot. you have reports coming from the rest of the world, it was quite a sore point suggesting that things could go the other way. how much more upside could we see in inflation if the rest of the world's seeing deflationary forces? >> it is important to stick

which between different types of inflation. you have disinflation, service inflation and asset price inflation which we are seeing everywhere. a growthsense even rate that the u.s. is experiencing more inflation. we are paying way too much attention to some of these short-term numbers. we will hold our breath for the employment number. the fed has said they are on a path. the next sixth for to nine months then they will it be a pilot. short-term and data matters a lot less. yvonne: what you think the bond market is concerned about? a risk that the fed to be tightening too much or too little? >> certainly that is part of what the yield curve is telling us. inter-day gaps in equity markets, we are not

seeing bonds follow-through. in some respects, everyone feels nervous but the market itself because of volatility not being as high as it is in the equity market, the market is not that concerned. yvonne: where you find value then? is the short end over with now? >> it is hard to say something is very cheap in today's market. our best advice for investors is to balance the type of risk you have. it is not the time to get out of duration. we seewant to ration if movement in the stock market. credit markets, high yield --kets, alan throws in a balance those in a portfolio. think: how sensitive do markets will be tomorrow? >> usually the market does react.

what a met before was, we thinking the fed is much more likely to change policy based on , it is unlikely to change trajectory. betty:why? >> they have said in the past, they are being deliberate. they're removing liquidity, shrinking the balance sheet and then they will assess where we are. yvonne: you mentioned, i think one of the big game changers we have seen is not just rising yield but now that the dollar is tracking does rising yields as well. is that going to continue to be a headwind or is this a short squeeze on the dollar that is over? >> there is so much going on it is hard to isolate one factor. rhetoric out of washington, how much of a trade were ever going to have? relative interest rates are different, we are hiking a lot in the u.s. and that is not on the agenda on places like europe

and japan. it has been weaker than we thought until recently. very hard to predict but certainly what happens going forward will have an impact on the dollar. joining us from new york. you can see the charts we talked about on your bloomberg to tv , our new function. browse our recent charts and catch up on key analysis. presidentew york fed joining bloomberg editor in chief emeritus for an exclusive .ne-on-one interview early saturday morning out of hong kong, 12:30 friday afternoon in new york. do not want to miss that. institutionr monetary policy conference. we will talk to top business

leaders including former fed governor and economics professor , former fed president. this is bloomberg. ♪

betty: this is "bloomberg daybreak: asia." i am betty liu in new york. yvonne: i am yvonne man. earnings of $1.9 billion u.s. just ahead of the median analyst estimate. now total $374 billion u.s. within in august return on equity of 16.8%. the plan to redeem capital notes bring financial results in line with this year. betty: acquisition of energy assets, it seeks more u.s. shale.

the london-based company is working with morgan stanley to advise on the plan. selling three packages in a highly prized permian basin worth $10 million. yvonne: shares jumped after it said it is converting from a partnership to an administration. effect structure takes pay $.50kr expects to per common share. betty: four deputies have been valeoyears after didier left the bank. he was an 18 year veteran at the bank and widely seen as a potential successor. sources told bloomberg his departure was related to a u.s. justice department investigation

into alleged manipulation of benchmarks. we will be watching banks later on today. turn to your bloomberg for more on this. tv is where you will have to go to get commentary in the throughr to talk you those earnings. investors will have a close eye on the latest jobs numbers out of the u.s. friday. we look at what to watch next. eak can see a couple of w wage growth numbers. will we see a bounce back in april? this will be crucial on the back of fomc statements which said they will not respond aggressively even if inflation overshoots. still this markets are adjusting. that had an impact on the dollar as well. thecan see weakness against

yen. the aussie dollar slightly ticking lower, the kiwi ticking lower. much more ahead on daybreak asia. this is bloomberg. ♪

yvonne: 7:30 a.m. friday in hong kong. but someoudy still drops in the morning. be sure to stay drive this morning. inty: warm, dry, sunny today new york. 7:30 p.m. thursday. markets closed index session ahead of a jobs report friday. i am eddie liu in new york. hong kong.nne man in here's first word news with courtney collins. tom: a white house -- courtney: a white house

economist has described trade talk as fairly positive. is the first public update on closed-door discussions between president trump's economic team and chinese officials that are scheduled to run through friday. -- dust and at rainstorm has swept through northern india. this severe weather brought down trees and houses. injuring around 300 people. the storm caught people by surprise because monsoon's season is still more than six weeks away. more thunderstorms our forecast for the weekend. the u.s. has charged former volkswagen ceo with conspiracy and wire fraud. over the carmakers diesel emissions scandal. vw admitted that it outfitted

about 11 million vehicles worldwide with a cheat device. in theped down as ceo days after the scandal was revealed. he is the highest-ranking face charges. u.k. brexit secretary says he is 100% convinced britain will leave the european union customs union after the transition. in 2020. he said it new ideas submitted on the issue are untested and have both merit and drawbacks which is why the u.k. is taking his time with discussions. >> almost 60% of our future exports are going to the rest of the world. surprising. the ims and the european commission have said the vast majority of growth in the trade will come from outside the european union. it is our aim to make the most of that.

betty: global global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. thank you. we are coming down to some of the major market opens. in sophielet's bring kamaruddin. have the jobs report to look at you, what is the mood in asia? >> happy friday. we're not entirely sure how we'll get a grasp of the narrative because trade talks are still in focus. we did not have any nasty headlines emanating from talks so that has kept investors call him. that might be the slogan for this week. we have markets remaining. this is pushing toward the 109

handle. that has stalled. we get manufacturing data overnight not looking too hot. merrill lynch is still looking bullish on the dollar. that remains a theme for the week. checking in on futures, we are set for a next start. see how it trade tensions are taking effect. i want to look at data showing canceling imports. yvonne: perhaps in avoiding tariffs we are seeing more bite. talk about these trade woes and other factors that rattled markets. we still have some bulls out there. sophie: some folks are maintaining their stance but when you look at how asian stocks have fared, that benchmark has turned negative.

are in theal indices red but that has not changed morgan stanley's global opportunities fund. it remains steadfast on asia. for the past five years, that fund has more than doubled. when it comes to asia opportunity fund, 70% of assets are in the chinese companies including alibaba. we are waiting on those earnings. the fund says the chinese stock market is rife with opportunity for bottom-up stock picking. china yet again the main theme. today, underourse relevant of economic data we have pmi for hong kong inflation. trade figures from malaysia. a lot of data ahead of

the jobs report. thank you. betty. betty: job gains first wages are proving steady even in the face of a tighter market. what will that mean. global economics editor kathleen hays here. what can move the market? probably what could move the market is numbers even stronger than expected or if they were weaker but i think it is a sign of strength and more strength in its forecast than many investors are leaning toward. as for payrolls, bloomberg survey for the month of april's gain -- april shows a net around 200,000 plus. his newg we focus on claims for unappointed benefits. take a look at this gtv chart.

jobless claims instead of rising stayed very near the lowest since 1973. people have been on those job rolls longer.s does this mean unappointed rate falls and we get higher wages? -- let's takethe a look at this chart and see unemployment down 4.1, expected to go to 4.0. two-putt 7%, not so much acceleration. as this jobs report comes two days after the fed signaled a willingness to let inflation overshoot 2% by a little, another question here is could this shift market expectations? a weaker number on any of these may cool expectations.

betty: it would be interesting to see what they are watching. not just the numbers that talks going on in china. kathleen: who could not be watching the talks in china? it is so critical to so many people. officials in the past have downplayed metal shares. they are concerned. so far, the talks are positive. how do you make china stick with an agreement? let's put up one more bloomberg chart. the trade deficit shrank a bit, and 11% drop. when you look in perspective, u.s. exports to china $150 china, aimports towhen you loon frigid billion dollar difference. these trade talks are very important.

kathleen hays coming from the hoover institution in the stanford. for more, we go to washington. partner at law firm, a deputy trade representative under barack obama. thank you for joining us. we have been talking about how we are avoiding nasty headlines. have you read into where negotiations are going? it is good that parties are meeting face-to-face. whetherry unclear negotiations will yield a in what is the impending trade dispute. it is good that parties are talking face to face. i have some optimism, i think it considerably more than discussions happening this week

of any lasting resolution significant trait differences between the u.s. and china. yvonne: what are some potential smaller wins? market access, china buying more u.s. goods? what would be a credible promise? robert: the u.s. is trying to get trade deficit down. that maybe something that can be accomplished in part. that is largely driven by macroeconomic factorswhat woulde promise? , high savings rate in china, low savings rates in the u.s.. there are things that can be done to reduce the deficit. the tougher things are the cause of the potential hundred $50 billion of u.s. tariffs and that is the result of section three that i want to report. that takes aim at china's practices that are trying to promote china's technology of theat the expense

u.s. and other countries in that is much harder to resolve in the short-term. yvonne: that hammers down the fact that this goes beyond trade. it goes down to how this rivalry between china and the u.s. becoming super bowl -- superpowers, the u.s. is saying it cannot be tolerated. do you think president trump is the right candidate to get their way? is he the right person to confront china? robert: he is certainly confronting china. these are issues we have known about for a long time, we have tried to work and a number of ways to address. taxes on american consumers to get china's attention is a big threat.

what is unclear is that if china sibley agrees to -- simply agrees to take steps to address the deficit, that is not responsive to the heart of the section 301 report which is about intellectual property protection, state sponsored efforts in china to secure sensitive u.s. technology and other methods which force foreign companies to enter into yieldventures that intellectual property going to china. those will be harder to accomplish and it seems highly unlikely to be resolved in two days of meetings. yvonne: one of our guests islier pointed out how this a situation that is not normal. on the one hand you have mnuchin

who is a warmer relationship. ,et the hardliners like navarro it is a split delegation almost going into these talks. i wonder what kind of progress could come out. could there be progress on one side but none on the other? what do end up with? >> hopefully we'll get some progress. talking is better than not talking. delegation will suggest to china that there is only one participant who only -- who matters is that is the president. i hope they will make progress. i know they are committed to it. it is important. the size of the delegation will

reinforce there is only one person who calls the shots and that person is in washington. betty: i know you're not overly optimistic. when we talk about protracted negotiations, how long do you think this will last? >> the u.s. is moving ahead to get the authority to impose tariffs. that process will continue even with the progress coming out of beijing. the question is does the u.s. impose those as soon as they have the authority? it is highly likely they will. then china will retaliate. does the u.s. go ahead with another $100 billion in tariffs? i hope not but i think we are more likely to see the u.s. put in place some tariffs than china

making enough assurances for the u.s. to back off. it is serious and legitimate. i said that as somebody who does not like tariffs. i do not think they should be used. i think that is the path we are on. betty: thank you. crowell and morning -- moring partner. feel thetarting to effects of a spending spree. what to expect from the fourth quarter earnings. ♪ ♪

betty: this is daybreak asia, i am betty lou in new york. honge: i am yvonne man in kong. china's biggest online retailer could see profits fall for the first time in a year and a half. joining us with what to watch

and what you need to know. reporter: the equation is simple. if you're seeing it revenue, growth is falling. rising sales, you'll get a hit in terms of earnings. i will walk you through my charts here. you are taking a look at revenue growth in the purple bars. we are expecting growth of 53% thathe next quarter, if comes to fruition, it will be the slowest pace of growth in eight quarters. there were expecting $9.3 billion, that is about 59 billion yuan there. falling frommargin about 75%.high 62.42% in 2017. we expect this to fall.

analyst jerry leo says to expect this through 2019. the last chart, let's take a look at expense. i am comparing this relative to amazon. alibaba is in the red. up at the 52 mark. look at amazon. 250 is where is at. we're talking relative. it is clear which one is cheaper. if you're looking at analyst recommendations, it is 48 buys, one halt and zero sales. hold and zero one sells. analysts are bullish. betty: thank you so much. for more on what to expect from alibaba, i will bring in the ceo of activated technology. he is the former president and

ceo of of mtv networks and a former yahoo! board member. anyone who is a shareholder should be not worried? >> to hit over eight straight quarters a 50% revenue growth, especially with a company this size, yes. they have made investments. if you look at this strategically, they are buying smaller companies so they are technology new instead of trying to do it themselves. investing in bricks and mortar resale. putting more money into e-commerce businesses. technology instead of trying to do it themselves. starting a home furnishing a business. a lot of the hit to earnings will come from their duration of financial. alibaba is a massive presence. a week ago i was in japan. you cannot escape the

billboards. alipayget in new york, is your third option. they will duke it out with tencent. this is a fundamentally strong massivethat has a presence in an incredible market. betty: should jeff bezos look over his shoulder? >> people forget they are in different businesses. alibaba is more of a marketplace business and ultimately they are not holding inventory. inventory in these companies is a cruel master. amazon is different. this is a market where it has been difficult for other technology companies to have a presence. the real place we will see competition is tencent. the place they will compete the most is around entertainment services. there are 140 million

video streamers paying. that is more than netflix is number of subscribers. we will see this company has a especially as it expands into these businesses. yvonne: it seems in terms of these businesses that tencent and alibaba go into, each time a company pursues something the other seems to follow. think is winning despite -- winning this fight? did you need to do more consolidation? analogy is what is happening in the u.s. with the largest technology platforms. microsoft,lphabet, they are all doing the same thing. their roadmaps look similar.

we'll see that between tencent and alibaba. they will continue to follow each other and it will be hard to see who ends up winning. for anybody else who gets in it isway, in the same way hard for anybody to compete against facebook or google, it will be difficult for other companies to compete against these two giants. i can't let you go without asking about the ipo announced yesterday. up until last year, this company dropped off our radar. what will be the pitch during this ipo tour? michael: historically, they were high and that sold phones for low prices. they are trying to convince investors that they are more of a service company.

it is a little less than 9% of the revenue. 21% connecteds, devices like rice cookers and air-conditioning. notproblem is they are making that transition into smart services and other things used on the phone like games and movies. it will be interesting to see how this plays out. they are investing for international growth. they are the leader in india, going into western europe. there are questions about whether their phones will be in the u.s. partially because of regulatory concerns and partially because of intellectual property challenges against other software and device companies. huawei under investigation as well. thank you so much for joining

us. you can check out those charts at gtv go. catch up with some of the key analysis and save them for your reference. this is bloomberg. ♪ ♪

betty: a quick check on the latest headlines. aig shares tumble to the lowest in two years after earnings fell short of estimates. dropped 10 and hundred 38 -- $938 billion. the ceo is reorganizing the company. they looking to enter new businesses. tesla shares stumbled -- yvonne: tesla shares stumbled more than 5%.

he called questions about cash flow to dry and boring to answer. snubbeder who was speculated that the numbers did not tell a good story.

♪ yvonne: 8:00 a.m. here in hong kong. welcome to "bloomberg daybreak: asia". the next start after a rally on wall street spotters out. markets also watching day to from beijing. trade cap close-out by 16%. from bloomberg's global headquarters i am -- betty: futures trading to foreigners offering a new way to bet on the economic expansion. a billion-dollar hong kong ipo.

♪ >> it is hard to home down one story that is really driving markets here on this friday morning. seems like we are pretty much stuck between the two big events that are happening. yvonne: whether it is the fed meeting or these u.s. china trade talks. pretty much in limbo. betty: absolutely in limbo. as we heard from earlier guess, we did not think we would get what we got on the wage front. it seems like the fed, particularly from that statement stuck on itsretty rate hiking path. let's get more within the first word news with paul allen.

>> north korea has reportedly agreed in principle with the united states to end its nuclear programs by 2020. paul: that is according to a south korean newspaper. has accepted inspections at its nuclear facilities. topmberg sources say the two u.s. market watchdogs have opened investigations into possible manipulations at benchmark. the commissions are looking at the volatility gauge. contracts isthe one area of inquiry after wild price swings. president trump has changed his account of a $130,000 payment paid to stormy daniels. he now admits to reimbursing his

attorney. post, trump says the money has nothing to do with the campaign pushing back against allegations. as mayor giuliani stated, this was information that the president did not know at the time but eventually learned. the president continues to deny the underlying claim and again, i have given the best information i have at the time and i will refer you back to the commissary you yourself just mentioned about the timeline. has chargeds. former volkswagen ceo, with conspiracy and while fraud -- wire fraud. vw admitted in 2015 that it developed 11,000 diesel cars that could she test.

-- cheap tests. he is the heaviest ranking employee to face charges. global news 24 hours a day, powered by more than 2,700 journalists and analysts in more than 120 countries, i'm paul allen. this is bloomberg. >> japan is still close. let's get an update with sophie. sophie: it is a mixed start or the session this friday morning. samsungs is on sol and which is resuming trade. it jumped after resuming trade after a three-day trading halt. seoul, we are seeing the back about. utilities, energies, and financials dragging the most. inare seeing slight gains sydney and the aussie dollar is

looking study. expectedsays there surplus may cause some hesitation for the aussie dollar. taking a closer look at currency markets as a u.s. dollars holds losses. you have the yen trading near its lowest level in a week. the korean won continues to stay below the 1080 level. it is the key level that can proof that sentiment is changing. indicating the dollars rally may rapid about-face is signaling the same message. the combo of overextended points to a short-term dollar. the short squeeze helps drive the dollar near 2% gains in april is nearly compete --

complete. there is a hole in the heart of the arguments for the greenback. that is at a record. it raises the aspects of a parallel short squeeze. that is not stopping merrill lynch from being incredibly bullish on the dollar. betty: thank you. checking the markets. chinese president announcing big plans to develop an island in the country south. beijing wants to turn the province into a tourism hub and has designated a special economics on. it is expected to encourage it wave of construction. we asked about opportunities and a. one road initiative . >> it is a very exciting opportunity. it is not an opportunity we are

looking at at this time. we are in beijing, where we are very active. about one year ago, we signed and mo you. those are really the places we have been focusing on. >> a lot of people find excitement and the initiative. of course, it's man's 65 countries and a lot of infrastructure and railways. what plans do you have two capitalize? initiative is a fabulous opportunity. it spans 65 countries. 30% of global gdp. >> are there other projects you are interested in? >> our strategy for the road really focuses more on the software. the software focuses on

academy. schoolil trading established in hong kong 18 months ago. we have been having discussions with a number of rail companies along the belgium -- beijing road. we have been having conversations with indonesia and the philippines. we have been having discussions and vietnam and thailand. this is just to see how to leverage the academy. we share ideas with the fabulous infrastructure. reporter: what are the challenges? it a result of the infrastructure needs globally? are seeing and some of the countries that we are operating and is the requirement or more people to join the industry. be that on the construction

side, the corporation side, the engineering side. the industry overall is being driven by urbanization. industry is driving urbanization. that drive for urban infrastructure, that drive for the metro really drives the need for a lot of talent as we go into the future. as these infrastructures are planned, built and operated. noses ceo speaking at the summit in beverly hills. ahead on bloomberg markets, do not miss our interview with the ceo and prospects in hong kong. clashl talk about dual shares. ahead, plenty of questions

for the new ceo as the bank prepares to report earnings. what to expect and the results of a little later on. betty: a lot of talk in the ipo space. this is bloomberg. ♪

betty: this is daybreak asia i am in new york. yvonne: i'm in hong kong with the trump administration set for a second day of talks in beijing. it is what the white house calls a positive start to negotiations. it seems like things are going well for day one but they too -- gaptwo, america's trade with china widened 16% and there is also soybean data showing

that china may already be in sight u.s. shipments. things about to get complicated? >> certainly, it is very complicated. we are seeing the effects already of these trade tensions. weather, it is the soybeans are the more needed effects on china's exports. looking atists are posted state of points suggesting that it is largely part of the trade tensions. these impacts are starting to play out for both sides. that is why these talks are so crucial. bothurse, overhanging sides of talks are these threats of delays of dollars of tariffs. the chinese are saying that they will tell you. -- retaliate. we heard from an economist in washington say they were followed -- fairly positive. the administration gave a list of asks to their chinese

counterparts in one of the asks was for china to reduce its tariffs on imports from the u.s.. the u.s. also saying, back in washington that they want to see some of these policies and announcements being made in the last few months being implemented. china may start a conversation with their u.s. counterparts about tariffs. they are likely to reinforce that message. we are waiting for more details on that. propertyg intellectual , china has drawn a line in the sand. it has also said, it is not going to be pressured to reduce the trade surplus by 100 billion u.s. dollars. the trade imbalance is a point of friction. in the first quarter, it grew

again by $91 billion. it does make it a more convex picture. we will see those delegates from the u.s. side, leaving the hotels and heading home. the disputes over technology, it is a long term concern for the u.s. right? >> yes, there is a view that while you may get some agreement around measures to open up the markets there, potential tariff maybeions, beecher -- china will make some announcements around the. that is potentially the best case scenario. you are right to say that longer-term, you have this intractable clash between the u.s. and china when it comes to technology. china has been very clear about its maiden -- made in china

policy. there are 10 key sectors including, aia, chips, and robotics. the u.s. sees us as a major security concerns but also a competitive concern. we have seen that play out with the likes of the china mobile maker. almost as a result, we saw last week the chinese president on a visit to a semiconductor factory in central china thing that china needs to double down on its efforts to develop its own indigenous technology. and should not be dependent on foreign imports of tech. clearly, this is a dispute that will take a long time to resolve. tois about china's design become a tech superpower and u.s. concerns around security and competition. we are unlikely to get that result in the next 24 hours. it will be a longer source of tension. that is what many sources believe.

what we may get from the back of the stocks that wrapup later on today is a timeframe for future discussions and conversations between these two sides. that will be seen as something that will dial down the tensions between the two sides. betty: thank you. hsbc is getting set to result the results for midday. the bulk of questions for the new ceo will center on capital management plans and the timing of further buybacks. let's take a look at what is expected. what might we learned here from these results? focus on the timing of the buybacks. hsbc's ratio will reach 14.6% more room to buy

buybacks. they will appropriate more capital from their u.s. of -- operations. at the same time, they really focus on the potential and expansion of the margins. theye, -- leslie, i think will continue to outpace cost growth by two percentage points for 2018 and there could be the key driver for hsbc. margin how big of a boost could that be for hsbc? >> we have reviewed that the hsbc group could expand globally by 1.7%. be aurse, there could

boost from their operations. as everyoneder, combines and the city, there will be more and more hong kong dollars converted to u.s. dollars. the city's currency has been weakening for the past few weeks. -- drag tobe a drug the potential boost this year. . we count down to the hsbc earnings later on today. do not miss our interview with the hsbc cfo at 3:00 p.m. if you are watching out of sydney today good this is bloomberg. ♪

betty: this is daybreak asia, i am betty and new york. yvonne: health care and technology, also known as good doctor, has a 24% gain in trading today. $1 online media raised over billion in hong kong ipo this year so far. the cio is joining us here in hong kong. really great to see you. we have the good doctor here. everybody is calling this the big bank coming back to hong kong. it is at a time when the hang seng is trading sideways. what is your take on what all of this will mean for the hang seng overall. >> think it is great for the hang seng.

it will reach people a little bit outside of the exposure of tencent. there is enormous demand for tech and i think this is great to rod and the breadth of the tech investments in hong kong. yvonne: probably a little bit more diversification. i want to bring up a chart to highlight what we have seen as far as the earnings estimates we have seen in em. -- lastr's blessing year's blessing his sister's curse. that is steadily rising again. if you look at tech, the yellow tech.s both of those are just flat right now. they have been way down by some of these korean names in taiwan. is is a warning for the sector? >> i think the ipo will be coming up. we call them 3.0s. they are really. innovative

. we have a lot of hardware tech out there but we do not have a lot of shopping tech. we have web 2.0 in terms of social media but we have some web 3.0oming apps in which is a combination of social media and shopping combined. it is an enormous market. and good doctor, i think it is very interesting as well. you have a very different type of tech than what tech has historically been in china. yvonne: things are getting a little expensive. tencent has 34 times earnings. that is more than 50% more expensive than facebook. you talk about evaluations like 100 billion for xiaomi, is it getting harder to justify the skyhigh evaluations? >> i think xiaomi and tencent are very different products.

i think tencent actually, is going to be very hard to root the. -- to repeat. tencent has enormous earnings. in some ways, it is further ahead than facebook. xiaomi does seem a little ahead of itself. it is a great debate. --y had those massive rice rises last year but we are going to have to have them convince all of us that this is really an internet company and not just a hardware company. yvonne: certainly they will have a lot of -- to prove those numbers. it seems when we talk about chinese tech, we are really talking about a handful of names. tencent, alibaba. is a really much room in investors portfolios for other tech names? betty: are we just going to be

trading on those names for quite some time? garnering ahis is lot of interest. i think there are a lot of dollars to invest. to some degree, this is a big resurgence in ginseng -- hang seng. now, you can actually go ahead and list these companies that will be coming to market listings. the change in the biotech market will add diversity. think there is a lot of pent-up demand for a diversified tech portfolio. i think these companies are very interesting. in our office every day, we see the last round of the opl

offers. roaches. -- the road shows. betty: what about the u.s. tech ipos and how some of these companies have performed? snap is not that great. spotify is coming out with disappointing numbers. how does that affect some of the ideas in asia were doing? -- or do they? >> unfortunately, it is the same phenomenon in hong kong. some great first days and then a steady incline overtime. we have had some truly poor performance recently. i hope that they crises reasonably so that reverses.

a think there was a lot of initial assignment -- excitement but it has been reduced. betty: much more ahead on daybreak asia. this is bloomberg. ♪

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i am yvonne man in hong kong. yvonne: first word news with paul allen. betty: paul? paul: a white house economists as described the first day as fairly positive. however, the real test will be china's ability to deliver. it is the first public update on closed door discussions between president trump's economic team and chinese officials. powerful dust and rainstorms have killed more than 100 people as it swept through parts of

northern india. the strong storm brought down trees and buildings injuring about 300 people. the storm caught evil by surprise because the monsoon season is still with an six weeks away. however, more thunderstorms are forecast to the weekend. treasure is 100% convinced that the eu -- he told parliament that new ideas on the issue were untested and has both merits and drawbacks which is why the u.k. is taking its time. percenthe moment, city of our exports are going to the rest of the world. this is not surprising because both the eye nine f and the european commission have said that the best majority of growth will come from outside the union.

paul: the argentine peso tumbled to a new record low against the dollar after the second interest hike rick failed. that is concern growing policy is allowing for runway inflation and excess. government spending it is a difficult -- disappointment to investors. global news 24 hours a day, powered by more than 2,700 journalists and analysts in more i am paulountries, allen. this is bloomberg. betty: tech to see how the asian markets are shaping up this morning. u.s.a day away from the jobs report and waiting for those negotiations out of beijing to play out. yvonne, it feels like we are always -- sophie: looks like we are always counting down to something. shares are set for the sixth day

of gains. seoul, creating equities -- korean equities are headed south for a third straight session. the yen is hovering above that 109 handle and the aussie dollar is study. steady.. -- samsung is serving trade. 1.7% ands much as swung almost the same magnitude in the other direction to the stock is trading after opening one.base price of 51,001 checking in on some other movers, rising bets reporting a fourth-quarter loss. investors may be focusing instead on a company winning the order for four container ships.

prices are expected to rise. the us trillion software maker -- australian software maker is cutting -- plunging the most in 15 years. macquarie is at a fresh all-time high after posting a record profit. the bank has reinvented itself as the world biggest manager of infrastructure assets. risethan 2% of an income outside of a stronger. betty: china is offering global investors a new way to bet on the world's second-biggest economy. foreigners will be allowed to thee in the futures on asian metals. crystal, how big of a development is is? what is expected with this new trade? firstly, on the broader of

it wants has said that to use this futures market to set prices. for china, it is the largest importer so in order to feel its giant steel industries, they have seen the largest volumes. on the for opening futures to foreign precipitation -- participation is to increase price, credibility, and boost its profile as a global benchmark. house at -- betty: how is that going to affect prices? ifsome analysts think that the pool of investors increase, volatility should fall. however, some analysts think that if there are foreign participants, they may be trading on information that is different. that could lead to increase in

price volatility. betty: is it a big threat than to the singapore exchange? something that the deep liquidity will drive investors away. it is important to keep in mind that the contracts on average are held for less than a day. this means that contracts are must more speculative. investors could choose to trade. they have already seen as a established platform. betty: certainly, we are seeing a lot of volatility when it comes to what we are saying. this comes after six weeks after crude oil investors. what can we expect more from china now in terms of opening up other markets? futures on theup

exchange is definitely a step towards china opening up its other markets. the exchange has said that it plans to open futures sometime in the future. it will be interesting to see how it can affect the timing. it is also interesting to see what happens after it opens for foreign participation. for crude oil futures, while we have seen interest, trading fairly newe stayed since his debut. betty: thank you. joining us from singapore. the high-stakes meeting over the future of u.s., china trade. yvonne: is either side raided a bunch? -- ready to budge? this is bloomberg.

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yvonne: this is daybreak asia. betty: equipped quick check of the latest business flash headlines. 1.9-year net earnings of billion u.s. dollars just ahead of the median analysts estimate. macquarrie says it tends to regain millions of dollars in capital notes in june. broadly in line with the shares. yvonne: tesla shares tumbled more than 5% one day after elon musk investors worried about volatility. ceosrop follows the comments. potentially, the ceo does not cover -- care about financial

metrics. betty: shares jumped after it said it is converting from a partnership to a corporation. seeking to capitalize on a trump tax reform, the new structure takes effect july 1. they expect to pay and analyze dividend for commenters in the third quarter and immediately increased its share buyback program to have a billion dollars. yvonne: in acquisition of some of the energy assets. our sources say the london-based company is working with morgan stanley to revise the plan. they are selling more than a hundred thousand net acres. they said they are worth more than $10 billion. to forget, you can always find in-depth analysis on bloomberg radio. tune into daybreak asia at 6:00 hong kong time. -- download the app as well.

this is bloomberg. ♪

yvonne: this is daybreak asia. here in new york, a quick

check of the latest business headlines at this hour. sweater coming another late trade after advising users to change its password. the non-encrypted passwords have been removed from its system and in eternal investigation shows no reason to believe the information ever relieved -- left the twitter systems. aig has shared some of its lowest earnings in the last year. yvonne: net income struck to 900 million dollars the last quarter. report an expects to underlying profit by the end of the year. aig has shared some of its lowestthe company is being d replacing senior execs. betty: weeks after he left the bank, as part of the effort to leave issues.

widely seen as a potential successor, sources told bloomberg his departure was related to a u.s. justice department investigation into alleged manipulation of interest rate and sharks -- benchmarks. yvonne: the white house economist describes the first trade key u.s., china talks as fairly positive but says the real test will be china's double -- ability to deliver on promises of economic change. betty: underscoring that surgede, china stocks over night $1 billion in the first quarter of this year. our next guest says the u.s. peppers a -- operation has been scattershot at best. joining us now is the bloomberg opinion columnists and associate professor at picking university. i do not think we have met any guess so far who has been

optimistic about the stoxx. -- these talks. any chance we may be surprised? >> i think there is always room for surprise. it is interesting to note that they were actually trying to clamp down expectations and they seem to be remaining on message relatively clearly. that is a change from what the -- how the administration has handled issues historically. fundamentally, a lot of it will come down to how they can work around thorny issues with beijing and primarily, get that are market access for u.s. markets -- x. -- products. betty: with a making progress on that in the next few days? lack ofnow, i share the optimism and i think it is interesting to note that up

until, the lusty days, the thinking was that there was no way that tariffs would be implemented. to see the swing in opinion that it is going to be much more likely is very key. i would not be surprised if there was some kind of delay. you have started to see comments from the administration about how they are going to work through these issues over the coming year. it seems to indicate that maybe there will be some tariffs implementation or some punishment to china to make sure they understand how important resolving these issues are but i also think that you are going to see this play out over the next year or two. yvonne: is china really ready to fight? we just got these numbers out of the soybean data in the u.s.. they have been canceling u.s. shipments for the weeks now. these retaliatory tariffs we have seen have been a little

less aggressive than what the headlights suggest. are they really prefer to fight the u.s. does impose the tariffs? >> i think in china, the mood is very much that they are quite ready to fight. . you have seen this in a lot of different ways a lot of public statements that they will not negotiate under blackmail. i think one of the things that is slowly becoming a parent to beijing is the level of discontent not just with the united states but with countries around the world and the level of discontent they have with chinese protectionism and investment markets in good's markets. even with the soybean issue, it is interesting to note that the u.s. has not implemented the $15 billion tariff list. china decided not to purchase u.s. soybeans as a preemptive measure. that gets to the heart of some of the trump administration's complaints against china is not

a market-driven economy. this was clearly a decision that was handed down i beijing as to how their firm should behave and that clearly addresses the concerns. yvonne: it is interesting as well, we are hearing from foreign companies that they are very frustrated with market. access there are still a lot of companies out there that still want to do business. you hear all of these companies like some of these airlines or hotels that are skirting around and change the wording of their website just to align with china's view on some sensitive issues like taiwan. are foreign businesses also complicit in china's geopolitical clout? >> it is difficult to say. complicit is a strong word. some are probably complicit but some are probably just trying to

stay out of the news for lack of a better term. it is a very difficult position. if you are a hotel you have seen reports that they are putting xi jinping and the nightstand. most foreign businesses just want to go in and do their business and if they have to strike deals that they find unfavorable or distasteful, they are willing to do that but they just want to stay out of the news. china?what is in it for seems like so far, the u.s. is demanding this and that. are they getting anything out of the negotiations? >> their primary focus i think is this entire idea politically, you have seen this expressed economically and financially in different ways of the rejuvenation of china. china is becoming a great nation. this is no longer a chairman

negotiating as a second rate come -- economy. he is staring the trump administration and the eye. china 2025, we see the entire focus being on replacing all foreign technology areas. you are seeing this with the issues as they realize their dependence on international technology. they are going to create a tech industry that is going to serve all of their domestic needs. this is china taking it most definitely as a front and they will respond as a jew rejuvenated -- respond as a rejuvenated nation. the chinese side, it is just a very basic question here with trump. how do the chinese when a trade war? for is the strategy here dealing with a president who

essentially, has a final say. this is a president who shoots first and asks questions later. how do the chinese when a trade war on the? >> even if the chinese and u.s. negotiators can reach an agreement on the technical issues and what concessions on both sides will be made, one of the most difficult and thorny issues here is neither she nor president trump are known for bravado or ego. both are trying to find a way to ensure that each site comes out looking good. they need to be up to go home to their constituents and say look, we stared down the other guys and came out better. trump has invested too much in this to return with nothing and at the same time, if she -- xi gives up too much, he will be weakened. betty: before we go, we have not

talked to about the currency and what leverage the chinese may have with the currency. today have much leverage?? -- do they have much leverage? >> if you look at the rmb, it is the u.s. dollar index in inverse. there seems to be some indication that maybe they have changed the composition slightly but that has not been announced and we cannot say that with a high degree of certainty. it is basically the u.s. dollar and reverse. and reverse. -- the art and the has weakened. betty: we believe it there. -- will leave it there. good doctor is set to make its debut on the hong kong exchange and just a half hours time. i do believe we have some live

pictures of the exchange right now. yvonne: ready to ring the gauntlet. always a lot of hype heading into this ipo. 654 times times -- over subscribed. the insurance analyst is joining us now. tell us more about the evaluation of the doctor. -- good doctor. >> the about relations are quite high. it willically implies be six times the 2020 sales. the doctor probably needs to wrap up their revenue to $1 billion in u.s.. stablei want to bring in -- stephen here real quick. is joining us live from the stock exchange. tell us what is going on.

any excitement on the ground? -- successful has suspended? this been/ topt was priced at the very and it is raising about 1.1 billion u.s.. new tech companies want to go public. of course, we had the news yesterday that there will likely trade here in june. the ridesharing company could compare later this year. the payments are for alibaba of course but today it is about good doctor. health care and technology. we are about to get to the banking of the gunk -- banging of the g we haveo 30 millionng.

monthly active users right now isbloomberg intelligence saying that that will probably need to triple to of -- 100 million in order to quadruple sales by 2020. the key is getting those active monthly users up. yvonne: that is a very key metric there. certainly, a lot of excitement. a lot of appeal to investors on this ipo. what is the effect of this and why is it so appealing to investors? >> i think this story here is basically a health care story. the good thing about this company is set they are incubating a lot of these arms. basically, they are creating an ecosystem within the company.

by itself, it already has 160 million customers. feed on a for them to lot of the traffic to the doctor or other arms. investors want to my a piece in good doctor is jew, this is only the first one coming in the pipeline -- my view, this is only the first one coming in the public. yvonne: market coverage continues with david next. ♪

♪ haidi: it is 9:00 a.m. in hong kong, i'm haiti lynn. david: i'm david. i'm here in hong kong. happy friday. this is "bloomberg markets: asia." ♪ david: a big start for asian stocks after wall street's rallies sputtered out. investors awaiting the job numbers. haidi: watching day two of these u.s.-china talks. that trade gap is blowing out. we will be live in beijing. david: president trump changes his story on