anchor: good morning from bloomberg's global headquarters in new york. anchor: welcome to daybreak asia. ♪ our top stories this friday, asia-pacific markets look set for gains, on course for the strongest week since early november. anchor: the fed reinforces the feeling that a rate hike causes coming. jay powell says he can be flexible. claims president trump

he has every right to declare an emergency to fund his border wall. coming up in about 20 minutes, our exclusive interview with xiaomi ceo. started with get how markets closed. pretty. -- the markets resilient despite slowdowns in the retail sector and not to mention the partial government shutdown in the u.s., now on its 20th day. we sow the -- we saw the s&p 500 higher. not much strength and utilities and other sectors, but we saw some weakness coming from the retail sector during macy's with disappointing earnings and dragging down coals and target as well. kohl's andble's --

target as well. we have some more positive sentiment coming out for the u.s.-china trade talks and not to mention the fact that chairman powell talked about being more flexible. that did not go down well with the markets. we did see a brief decline in u.s. stocks. when it comes to be set up in asia, we are seeing potential after and [indiscernible] four-day gain. we are waiting from data from australia. we have retail sales figures , as wellut -- due out as singapore. we will not see much hope for strong numbers, given we are seeing more cautious spending and slow wage growth. numbers from japan and later in

the day, industrial average figures from malaysia and india. slow fromxpected to november. anchor: jay powell says the fed does not see any evidence of a slowdown, although financial x -- alex a more pessimistic outlook. submits hisvidual or her projections four times a year and we did that in december. two rate increases were the median and it was conditional. a good thing is, we are in a place where we can be patient and see what does of all. for the meantime, we are waiting and watching. by chrise are joined in washington. he seems to be repeating from his remarks last week, although

the markets did not like his comments on the balance sheet. >> he mostly did ok. he stuck to the patient and flexible method. he seems to be settling into this narrative of the u.s. and by has an a scenario. in a is a more optimistic view and b pessimistic. he is saying we don't have to decide which of these scenarios is the right one. it weaken weight and keep rates we can wait and keep toes where they are and wait see what happens. i think that was comforting to investors. tariffshe also said the did not have a visible market -- mark on china, yet he did mention that the biggest worry was global growth. surer: that stands out for

. i'm sure that is tied mostly to the outlook for china, although he said the base case for the was for another decent year, but he is acknowledging that the risk factors are rising and if the chinese economy slows substantially been currently, that will have an effect on the u.s. economy and the fed will have to respond to it. anchor: we have investors sifting through the semantics of his powell's. he mentioned the fed's balance sheet and why was this taken so badly? >> it speaks to the sensitivity of the markets right now. above where u.s. is they were going into the fed mending december 18, but still

very sensitive. even though they are hearing the message they want now, the runoff at the fed is tightening monetary policies and financial conditions. that it isconvinced going about this in such a gradual and predictable fashion, it really not ought to be a problem. is not buyingt that and it is insisting the fed be a little more sensitive and i think that is another lesson they are learning about how sensitive the market is to this issue and slowly, the fed is beginning to adjust to that and adjust their message. we will see if the message adjustment is enough or if they will be forced to slow down the roelofs. -- roll offs. is in: president trump texas to rally support for his

border wall. let's cross to washington. joe, is there in optimism of a breakthrough? reporter: right now, there is none. the last attempt, the white house threw cold water on it. senators are heading home and there was nothing right now that is being voted on. desperation on the parts of republicans who can the president needs to declare an emergency and use his executive power to ship some money to build the wall. a lot of republicans, lindsey graham in particular, said he should go and do it, but they don't necessary like it and they are not sure it would work. it will certainly be subject to

a court challenge. it is not agree and likely to be resolved anytime soon, but the thinking is that might allow sums ace for reopening the governor -- -- butent while that is the thinking is that might allow some space for reopening the government while that is battling out in court. -- vice president pence was in the thattoday, so he quashed deal. he said he would let the courts deal with that issue as well, going through the appellate court process. that was part of the reason

lindsey graham and other republicans are saying go ahead and use the emergency powers, so there is not some grand deal to be had. right now, both of the white house, democrats and congress are holding firm. firm.congress are holding democrats saying open the government and then we will talk, trump saying we have to have an agreement on the border money. that is where we sit and as of saturday, this will become the longest shutdown on record for the u.s. government and friday, about a hundred thousand federal employees will miss their first paychecks. anchor: we are on day 20 and we could get past the longest on day 21. let's not get the first word news.

reporter: selling weekend ahead of next week's brexit vote in the parliament. having lost control of the timetable, reports say she has met opposition leaders. thatscernible]told the bbc a no deal brexit would be unacceptable. lawyernt trump's former -- former fixer will be testifying on capitol hill next month. it may offer a germanic view of the president's political and private life. he has already pleaded guilty to campaign finance violations. say financialls compensation for the company's executive committee in 2017 and 2018 or fraud free.

arrested on finance misconduct charges. he remains the ceo and says he is innocent. japanese officials say he underreported his income for five years through 2015. construction and austria slows to the weakest pace for the first time -- the slowest in five years. fell 1.92 or 6.6. that is the lowest since december 2016 credit apartment buildings were there weakest -- since december 2016. apartment buildings were the weakest. global news 24 hours a day, powered by more than 2700 journalists and analysts in over 120 countries. anchor: thank you. turning now to sydney markets, we are seeing one stock in early trading and scenes treasury wine

up itss after lifting target for the 2019 forecast. we have morgan stanley come out and say that this suggest u.s. distribution charges are starting to drive the market. still ahead, we will have more on the shutdown and u.s. trade policy. guest: up next, our next has a bigger risk than the shutdown. we will discuss market strategy. this is bloomberg.

anchor: welcome back. stocks shrugged off jay comments.

let's discuss this. does this mean we could see more resilience for u.s. stocks despite all of the fears of a retail slowdown, not to mention the ongoing government shutdown? is interesting, every three years the market drops 20% on average. we had that 20% correction in december, so you really kind of price and the negative impact of the government shutdown, tariffs and the powell comments. we don'tll you that expect him to raise rates, maybe one time, but probably not at all this year. anchor: the chart on the bloomberg showing exactly what .as been happening it has been contracting about 5% on a year on year basis.

sense have will this to change sooner rather than later? >> we think there is still room for them to downsize maybe another $300 billion. if the economy weakens at all in the first quarter, the other issue we face is the budget deficit. we will in up with a $1.2 trillion deficit. that may be the big story in the second half. backdrop fromthis markets, this chart illustrates the tightening of the conditions of this company. you jump in the library here, this is the blue line i'm looking out. we can see with the uptick here in the blue line, just barely less than zero and that is

bringing up the average. in your view, what could derail what we are seeing? whole tariffs situation, if they don't come to an agreement in the next 60 days, i think that will begin to put an impact on the global economy. so far, the u.s. economy is strong enough. you have tremendous cash flow. we have the ability to power through it. believe it or not, we think china has the ability to power through it, but if they don't reach an agreement, we think that will be a big issue that will rock the markets in the second quarter. on severalis pulling in the monetary front and we are seeing fiscal measures as well, but how much will go from does china actually have? we think they still have some

arrows left. they have some areas where they could really stimulate. -- they still have some efforts they can pull off and economy is still growing. you still have the second or third largest still growing. or 5.25it was 5.5% percent, that is still tremendous growth, so we still think there is opportunity to jumpstart the economy. anchor: we have the latest lines from secretary mnuchin talking for her totial plans come to the u.s. later. we know that president trump is getting his meeting and davos -- in davos./ we know that mnuchin will be heading there later this month.

what will be the biggest [indiscernible]in 2019? becomehink the fed will much less of an issue the second half of the year. the balance sheet, they could always turn that off. we think it is more tariffs and actually the third concept not being talked about is the release of the mueller report, which we think more and more will come out in the next 90 days and we are not sure it will be very friendly to the president, so we think that may be what folks are not focused on right now. anchor: the markets have been pretty resilient and not so much in the latter half, but when we saw this huge rally continue despite all of these headlines, will this be -- will this year be different? beyes, we think this will

where the attention gets focused. -- it seems like there is a lot of turmoil coming out of washington whether it is the border wall, mexico and it has diverted attention from the mueller investigation. we think that will come front and center in the second quarter. if you end up in a constitutional crisis, that would really shake the u.s. anchor: where do you stand around the debate around treasuries? do you see yields higher? term,sibly in the near but we think the move from 255 back up 22 73, maybe up to 290, but we are in the back cycle of this. -- isd is done, if not

almost done, if not done already. anchor: thank you for sharing your insights with us, wayne wilbanks and thomas cio. next, working off billions of justalue of the company in days. this is bloomberg. f theping off billions of value of the company in just days. this is bloomberg.

♪ anchor: this is daybreak asia. anchor: a quick check of the latest business flash headlines. fiat-chrysler is being named a bad actor after settling and omissions suit in the united states. the parts supplier has agreed to million and$27

another $150 million in multiple u.s. sisters. -- district. s. anchor: --a shareholder claims that the direct your failed by allowing the conduct to occur and covering up the behavior. anchor: the world's most valuable ai startup is said to be ready for a new financing round. we are told they aim to raise about $2 billion and already advisors.th july,erg reported in softbank was also seeking to take a stake. anchor: chinese cofounder is shrugging off a selloff that has wiped off $6 billion off the

company's value in just three days. flee, with investors goldman among analysts that trim their forecast and price target. told us in june he is betting on a smart phone revival. 5g is coming very soon. at this point, the demand for smartphones is declining am a comes, weeve when 5g should expect to see a peak in demand for smartphones. it is understandable that in chinarands affect as local brands are competitive. growthtalk about the xiaomi has seen in india and

countries like spain. what are your priorities and have they changed given the current environment? new priority for overseas expansion will be european markets. we hope to choose two or three putets to prove xiaomi can its foot in developed countries. claim xiaomi is an internet service company more than a hardware company. what specifically are you doing to address those concerns and when do you think the steps you are putting in place will start to have an impact? is a very innovative company that includes e-commerce, hardware and the internet. over 9had revenues of

billion in 2017 and it is growing very fast. is activists -- active users around 229 people which is a large number. onhor: a quick check now trading in asia. seen, now picking up looking to maintain ahead of retail. we could see some gains coming .hrough we could see volatility when it comes to the tokyo trading session. up next, we will ask what the u.s. shutdown means for the north american trade deal and prospects of a breakthrough with china. comesis plenty when it from that front with little in

trade details and we hear from mnuchin with the march 1 deadline very much in the spotlight. this is bloomberg.

♪ you're watching daybreak asia. president trump is visiting the border with mexico. he goes to texas as the partial government shutdown gets into a 20th day with federal workers working without pay. declaring the emergency would allow the president to bypass congress. >> i have the right to declare a national emergency. to do thatepared yet. if i have to, i will. i have no doubt about it, i will. >> president trump is scrapping

because of theos shutdown. he tweeted he is canceling his appearance at the event. the u.s. delegation will include secretary of state mike pompeo and treasury secretary steve mnuchin. fed chairman jay powell has indicated a rate hike cause, saying the fed can be both patient and taxable. inflationvers say does not merit further increases. president trump has yet to ask for a meeting despite months of criticism. the president has publicly criticized the fed. senator bernie sanders has apologized to women who say they were subjected to sexual harassment or misconduct while working on his 2016 presidential campaign. he is confronting allegation against some senior staff as he

weighs a second run for the in 2020.c nomination he says his safeguards were clearly inadequate. is to maintain strict sanctions on the russian billionaire and any companies he owns. secretary steven mnuchin was asked by democrats to explain why the administration decided to ease restrictions on three companies linked to him amidst crewmate -- scrutiny of president trump's links to russia. news 24 hours a day on air and on tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. sophie: let's get a quick check on australian markets as a sydney shares have been trading. higherseeing it looking after a four day band adding about a 10th of a percent.

we are seeing the aussie dollar hold a two day gain, sales are due in an hour, we do have aussie bonds falling ahead of that data. let's get a check on some stocks of note. asxbest performer on the two morning adding as much as 8.1% earlier. costa group gaining ground after seeking 38% on thursday. the stock was raided by goldman although was cut to neutral by jp morgan. westpac is under pressure after being cut to neutral by goldman sachs. shery: volatility, and headwinds are the words of concern we are hearing. more from global fronts as we continue through 2019. in the u.s., more than half a dozen corporate giants reacting with cuts to jobs, profits, or

plans. ramy inocencio has the plans. financiallly not just it was automakers in the mix. ramy: it was pretty much across the board as long as your company is exposed to global markets or global businesses, the more likely you are to get buffeted by the volatility. first off, bloomberg has this great article with an overview of all of the sectors that have been involved. biggestck is one of the companies right now terms of getting hit. american airlines parroted for pricing power. following something similar with delta airlines, cars as well and how can we forget apple from last week. theing about blackrock, biggest asset manager in the world announced it is cutting 3% of its global workforce. sinces the biggest cuts

2016 when we saw market volatility back then. that amounts to about 500 employees of its 15,000 people. did not specify which departments would be impacted but the president did say there was a bit of a silver lining. he said even though there was a 3% cut, the headcount will still year.higher year on the growth will be focused on higher opportunities, growth opportunities, opportunities. the general downturn of things is that there is still reductions to be had. a lot of people are fearful. this goes right after state street earlier this week saying they are cutting about 15% of senior management. shery: it is not just financial seeing cuts, ford and jaguar trimming staff numbers. earlier this week i was reporting about china's first sales contraction for automobiles in the country.

first time since 20 years ago or so. ford and jaguar, i guess no surprise really, not just because of china but because of what is happening with brexit, issues there as well as exporting and currency volatility. not to mention of course what is happening between the u.s. and china. with ford, they say they are cutting thousands of jobs in europe. they may close production plants in various countries. for example, a transmission factory in france, a minivan factory in germany. they are talking about consolidation in britain off of the heels of what is happening with brexit as we hurtle towards the vote. the company says they are .inding it hard to cut costs with jaguar, a similar story, a little bit more because of brexit. they say they are cutting 4500 people from their workforce, mostly of the united kingdom.

they have about 44,000 people in total on payrolls. this is more insult to injury from last year when they cut 1500 people that year. they are hoping this will happen through buyouts and not through anything forced. ceo'so, similar to other saying listen, we need to look at growth opportunities and cut away anything holding us back. a painful start for some of these players and 2019. trade tensions show some signs of easing with beijing welcoming these talks. however, it is not over yet. us now is christine mcdaniel. christine, how would you assess what happened this week echo we have had steve mnuchin say there is a plan to come later in the month. is this where the optimism is? christine: i think there is always room for optimism.

i am cautiously optimistic. the fact that we have such high level engagements with both president xi and president trump at the table. with president trump talking about how well he thinks things are going, president xi engaged and now we are seeing the next level. in many ways, the working level at the table. that is a real sign that both sides are committed to at least working out a framework for moving forward. sophie: when it comes back to dialing back tariffs on china, whether it is evidence that china is holding up their and of the deal, our colleague says that could be a long time coming. do you share that view? that could be a long time coming. these issues with trade tensions

that are driving the tensions timealso been a long coming. it is not like nobody was talking about trade issues before trump got to the white house. really lit these issues and threatening to burn everything down unless they can get rebuilt. now that he has everyone's attention and people are at the table and that all working levels that they can get something done. that said, this administration does seem to have an obsession with the trade deficit and as trade policy in the trade deficit are not related. while china could promise some big-ticket items like buying u.s. goods and maybe on ai and energy and other big-ticket items, that will not in the long run have any affect on the trade

downs. that said, there are a lot of other structural issues that you need to be dealt with. to the chinese economy , chinese experts that follow the economy and they agreed that these issues need to be dealt with for the sake of china and the global economy. state owned enterprises and commercial property and more privatization and liberalization. shery: how far apart are the u.s. and china on those issues? christine: it depends on who you talk to and at what level. in the long run, i think after 2001 ceded to the wto in they went more towards privatization. around 2008 after the financial crisis and really when president xi took office they did a u-turn.

see.ll i don't think giving of state capitol is on the menu. that said, i think other things that could be done that could and tradeshington whether it isrs state-owned enterprises, nonmarket economy practices, technology transfer, cyber theft, direct investment, there is a number of things that could be done and could still fit in to the rubric of president xi's framework. shery: all of this happening while we have a partial government shutdown. i spoke to the head of the u.s. chamber of commerce earlier this morning, he talked about how the shutdown is impacting american farms. >> we have a company that we know well that makes beer in

barrels and sells it. it has to get a tax before it moves out of the plant. there is nobody to give it the tax stamp. there are four or five other examples with products being made but can't be sold. we are also talking about effects on the usmca, what the commerce department does on trade. christine: absolutely. even the international trade commission, people are waiting to hear what they have to say on economic effects. that whole thing is on hold. they are not taking any more requests for the 232 tariffs. the ustr said they will be closing their doors next week if the government continues it shut down. this is where the rubber hits the road pretty soon. things see more and more

start to slowdown, if not stop. simply because the government without thesen ground-level people who work they and night to keep everything moving. sophie: with the report on the usmca is delayed with the business community backing the pact. do you see a vote happening in congress this year? i have always been cautiously optimistic but now i am really optimistic after hearing tom donahue's talk. he said that might sound ambitious and that might sound crazy but we don't care, we will get it done. i think now that we have a real signal from the business community that they are going to thengaged, a signal from top that the business community will be engaged. newsnk that is very good

and i think that is what a lot of people have been waiting for. we have been waiting to hear them say they are ready to engage and to do what it takes to get this done. tom donahue says we will get it done, i am quite optimistic. thank you so much, christina mcdaniel. the japanese prime minister offer support as theresa may fights against day no deal brexit. this is bloomberg. ♪

shery: this is "daybreak: asia." japan is backing theresa may's efforts to avoid a no deal brexit. shinzo abe offered his support after a day of meetings in london. >> a no deal brexit will be

avoided. in fact, that is the whole wish of the whole world. support of theal deal with the eu and prime minister may. let's go to our japan reporter, isabel reynolds. what did abe achieved by visiting the you can't this point? >> this came at the request of the u.k.. from the u.k. point of view it was important to have a big trading partner come in and help dispel the impression that the u.k. is becoming increasingly isolated as it separates itself from the eu. abe that was important. i think on the domestic front, it coming up for election,

was important for him to go in and be seen publicly and to go for japaneseo bat companies. when you think about brexit you don't think about japan. one are the risks for japan of a deal divorce? surprisingly, from the other side of the world, japan suffers quite a bit if brexit goes ahead. abe was a very strong that remain are before the referendum took place. them thatt and told he wanted the u.k. to remain in the eu. that is because there are 1000 japanese companies in the u.k. half theduces about cars manufactured in the u.k.

it is seen as a foothold in europe for japanese companies since the 1980's. japanese companies are now trying to shift their headquarters to other countries but it is difficult and expensive. honda announced it would be closing one of its factories for six days around the time of brexit. that is one example of how damaging this could be. shery: thank you so much for that, our japan government reporter. the nissan board is expanding its powers in the wake of the arrest of carlos ghosn for financial wrongdoing. our chief north asia correspondent stephen engle is in tokyo. where do things stand now? today is another extension day if you will. the third extension expires today. we are expecting something from

the prosecutors appealing to the court to either have that extension or that detention extended yet again. or they could indict carlos ghosn on the latest charges, aggravated brief of justice tied to some of these losses that have been passed on to nissan. this of course, carlos ghosn said it was untrue, the case was made against him on all charges. the other thing that could happen, he could be re-arrested on other charges. either way, the likelihood that carlos ghosn will continue to stand to stand attention is highly likely. he had the motion to have his detention ended on wednesday, it was quickly rejected. defense attorneys haven't resubmitted that application if you will to the higher court. no word on that yet. it looks as though again, if he is indicted the defense attorneys will apply for bail.

the lawyer on tuesday evening at a press conference, he even said it is highly -- it is unlikely cases like this, especially an individual like carlos ghosn who has been steadfast in his innocence to receive bail. last night we had a board meeting of nissan and they did expand their powers. the nissan board did to have more oversight into decisions including compensation to board members and executives. nissan is not out of the woods here as well. they have been charged as well with certain allegations of wrongdoing. they are a bit culpable as well. the interrogation was stopped due to his ill health, do we know anything more about his status? with a: he came down

high fever. we do not know his whereabouts right now. his wife carol said she is fearful of his health and is pleading for any information at all from japanese authorities. she said she has heard nothing from japanese authorities about his health conditions or whether he has been sent to an i infirmary or even a hospital. she said she learned about his health through the media and she has had no contact with her husband since his arrest on november 19. sophie: that is our chief north asia correspondent, stephen engle in tokyo. looking across the bloomberg universe, on bloomberg.com, it may be the year of the pig but is not looking for to it if for hog porkrs in the top consuming country. on the terminal, get a rundown getting cut at

mid market turmoil. many economists looking at a slowdown or even a recession. on tictoc, some good news for movie lovers out there. ticket sales for captain marvel, the marvel universe's first film with a female lead is off to a strong start. check out the stories trending on bloomberg online or on the terminal. this is bloomberg. ♪

latestwe have the numbers out of japan. we have seen the trade deficit has shrunk. this is a smaller deficit than what was expected of 612, that would be the november preliminary numbers. the current account is also 757.2, coming in at billion yen.

the surplus is still less than the previous month. also thexpectations, deficit smaller than what was anticipated. the japanese yen right now gaining a little bit of ground against the u.s. dollar at that 108 level. sophie: let's take a look at how we are setting up for trade in japan. we could see the nikkei gained ground. this comes after president moon said the economy faces severe it is taken very seriously. we saw employment data failed to meet expectations this week while economic policies took a hit. the aggressive minimum wage hike partly affecting weak jobs growth. but theeeing some moves

yen weekly gain could be cap by risk appetite as we head into a three-day weekend in japan. the yen up about .2%. we are keeping an eye on honda. this from a sky news report that the company told workers it will shut down production for six days in april in the u.k. due to brexit and border disruption. this, as japanese carmakers urge abe to warn theresa may about a hard brexit. keeping an eye on the aussie dollar, holding a two day gain. shery: the japanese yen trading at 108 as you said. reacting to those numbers, at the same time we are hearing that the yen could feel renewed strength and move towards that ¥107 level given the treasury yields decline. when it comes to the aussie dollar holding steady after

three sessions, the korean yuan strengthening 3/10 of 1%. the dollar has been near a three-month low. 20 more to come. this is bloomberg. ♪ ♪

♪ comcast business built the nation's largest gig-speed network. then went beyond. beyond chasing down network problems. to knowing when and where there's an issue. beyond network complexity. to a zero-touch, one-box world. optimizing performance and budget. beyond having questions. to getting answers. "activecore, how's my network?" "all sites are green." all of which helps you do more than your customers thought possible. comcast business. beyond fast.

shery: good morning from bloomberg's mobile headquarters in new york. sophie: welcome to "daybreak: asia." ♪ shery: our top stories this friday, asia-pacific markets set for gains in the strongest week since early of ember. november. sophie: the fed chairman enforces the feeling that a rate hike pause is coming.

-- we have an exclusive interview with the xiaomi ceo. breaking on the bloomberg right sheridan speaking at nyu at the moment. he is a saying the fed can afford to be patient and see how 2019 data of all. he is saying the crosswinds are sustained. that policy should sustain them. also saying that financial market developments are the some of the crosswinds. decisions on the balance sheet must be consistent with the fed goals. it is not clear that it has moved sustainably back to 2%, the fed will not hesitate to change the balance sheet runoff if necessary. he is also saying the initial conditions for the economy are favorable as 2019 begins. the reason he has been talking so much is because we have

chairman powell who just made comments earlier today. the balance sheet runoff being on autopilot, we saw the market's take a dive. also, chair powell had talks about the fed continuing to watch and wait and be patient and flexible. suggests thatman the fed can afford to be patient and see how 2019 data evolves. weekso have the fed this talking about being a little bit more cautious, a cautious tone being set right now. you are looking at richard clarida making those remarks in new york. he is saying the fed can afford to be patient and see how 2019 data evolves. we have seen chairman powell's remarks make an impression on the markets. let's see how the markets in asia is looking now. reinforcing clarida

what we heard from powell when it comes to balance sheet runoff along with global growth conditions, we are seeing the drop off in u.s. futures ease somewhat. women look at stocks in asia, we are seeing the nikkei pickup at the start of the session up 9/10 of a percent. while we are seeing some moves for the aussie share market to the upside for the fifth straight day and the aussie dollar holding onto recent gains. we do have quite a busy morning so far this friday. let's get the first word news. ed: president is visiting the border with mexico. visited texas as the partial government shutdown reached its 20th day.

declaring an emergency would allow the administration to bypass congress and use military money to start building the barrier. >> i have the absolute right to declare a national emergency. themselves advise me. i'm not prepared to do that yet. if i have to, i will. i have no doubt about it. trump is scrapping his trip to the world economic forum because of the government shutdown in washington. he tweeted that because of democrats he is canceling his appearance at the events. the u.s. delegation will include secretary of state mike pompeo, and treasury secretary steve mnuchin. ahead of next week's brexit vote, theresa may openly talking about a plan if the vote is defeated. reports say she has met opposition leaders to appeal for their support. and no deal brexit would be

unacceptable according to one source. ethics officials say financial compensation for members of the company's executive committee in 2017 and 2018 were fraud free. the review was initiated after carlos ghosn was arrested on financial misconduct and fired as nissan chairman. he remains the ceo and says he is innocent. underreported his income for five years. global news 24 hours a day on air and on tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. fed life chairman richard clarida speaking right now about money markets at nyu. we you can watch the comments live.

the chairman talking about the global growth and financial market development being crosswinds for the fed through the fed can afford to be patient and see how 2019 data evolves if the crosswinds are sustained, fed policy should upset them. he is also talking about decisions on the balance sheet that they must be consistent with fed goals. we have had lots of fed talk recently including from the fed chair, jerome powell, who says global growth is his main worry. ratherooking at a optimistic view on china. growththis adding to concerns. take a listen to what chairman powell had to say earlier. >> the chinese authorities are doing repeated rounds of things to support the economy. the baseline case for china is going to be another

year of solid growth. itre is no reason to think will be something worse than that. we are joined by our asian economy editor. even vice chair clarida had to make it clear that the fed will not hesitate to change the balance sheet runoff if necessary. of course, those comments earlier today by powell were not taken well by the markets. his comments on china are pretty instructive and they are pretty much in line with what the majority of economists say. say 6.2%asts still growth for the full year. a hard landing scenario in china is probably more like 4% or 5%. the majority of the mainstream is still see that growth holding above 6%. pretty decenta number if you compare that to

what most economies would be happy with. even the drop off we have seen in consumer spending, which has many people worried. apple's numbers also fitting into those concerns. the moderation we have seen in inail spending is working 8.1% year on year gains. any other economy pretty much in the world would be happy with that. used tod has been so these incredible numbers out of china for a generation that it is now coming back to more moderate levels, people start to worry. because china's economy is bigger, it is $12 trillion, growth is still probably enough to power about a third of the global growth outlook. jay powell seems to be on the money with what the consensus view is. although in the moment, these do have theof china bears singing a little more vocally. shery: no wonder we are not only hearing from powell talk about andal growth, also clarida

rosengren mentioned global growth concerns. .hey seemed pretty optimistic clarida he said the policy should upset them, the 50's challenges are sustained. what can they do? what is up their banks leave? the fed's helps global markets. it helps china's economy. one of the key concerns that some of the bears were looking at in china and the mainstream view as well was the shaky economic numbers we are seeing. we will hit sentiment to the around 2015-2016 were we saw the capital outflow problem become manifest in china. another headache and

policymakers did not want that happening. with the fed taking apposite, it gives china and the central bank a little bit more room to not have to worry about any form of tightening. the outflow of pressure can moderate a little bit because of the differential in the yield spread should be up for a little while. d couldsitive the fe help the pboc as well. jay powell mentioned about the repeated steps. no big bank stimulus, they're not pouring money into the economy as they have in the past. they are taking incremental steps. bloomberg broke news on this earlier in the week with fiscal deficit targets looking like it will be 2.8% this year. that will be slightly wide of the 2.6% of last year. shery: we do have the chinese economy looking to be on the back foot that the yuan has looking to of done quite the

opposite? malcolm: towards the second half of last year all of the thatlation was that will launch us towards the capital outflow pressure that i was beating about earlier? as the numbers have gotten a little bit worse towards the latter part of this year, the you want has gone a little bit better. it is around the 6.8 level. a couple of factors playing in here. the fact that the yuan never broke through that seven suggests there is probably confidence among market players that china will defend the level and has the capacity to do so. the u.s. dollar and the fed pause play in here as well. a small stability of the u.s. dollar, a little bit of weakness helps the you want stabilize. sophie: thank you so much for

joining us. untileven weeks to go additional u.s. tariffs, economic damage from the trade war is becoming clear. correspondent tom mackenzie has the story in a beijing. is very glowing -- growing reside -- growing desire to resolve this? tom: that seems to be from both sides. bloomberg is doing the reporting on trump's desire to see the stop on any deal. in china, the trade tensions are wash. coming out of the you pointed to the data points we have seen in terms of exports from china to the u.s.. they held up pretty well in the first half of 2018. if you look at the last quarter of 2018 you see a pretty significant slowdown in exports of goods from china to the u.s. market.

of china's imports of goods from the u.s., they felt pretty quickly earlier on early part of 2018. that will continue, even if used see a step up in things like soybeans. that was well below the expectations that we got yesterday. again, fueling concerns about the inflation here, what that means for profits which will be squeezed in all likelihood. of course, the concerns that this will be exported if we do get into deflationary talk, it will be exported. it will put downward pressure on prices globally as well. there was an optimistic note when both sides had three days of talks earlier in the week in beijing. more recently, we had steve mnuchin's lines saying there are

plans for him to go to washington some point this month to continue talks. there are issues around structural changes that need to be resolved. what kind of deal might we get come the end of those 90 days? if we get an interim deal that keeps tariffs on hold or if we get a more substantial steel. the interim deal is more likely given the issues be ironed out. the timing is important. the time is running down. of course, the u.s. corporations as well. we are seeing some of smartphonets ion companies, notably apple. how is this affecting china's phone makers? you are absolutely right. we got that surprise cut to

forecast from apple. they blamed the slowdown in china and the trade war is a large reason. samsung as well saying it is seeing a fall off in chip sales. it is important to talk to the chinese smartphone makers as well. we managed to get an ex clusive interview with the ceo of xiaomi. we asked him what he was seeing about the demand for smart phones for his brand. forwhat he has lined up overseas expansion. listen to what you to say for the market environment. 5g is coming very soon. the demand for smart phones is declining. i believe one 5g finally comes we should expect to see a peak in the demand for smart phones. will believehat he that there will be a tick up when we get to 5g. in the interim, xiaomi's listing

is down around 40% and in the last three days they have lost about $6 billion in market value. he says he thinks his company has the assets to weather the storm and move ahead with that 5g innovation that he talks about. he is actively trying to grow the internet services part of the business and he believes they will be well positioned. for the moment, it is a tough time for xiaomi. it was interesting that he did not mention the u.s. when i asked him about his priority markets. they have made some progress in and countriesries like spain. he wants to move beyond the success in countries that have had success in like india. nothing right now to try and penetrate the u.s. market, no supplies given the trade concerns. much forank you so

that, our china correspondent. still ahead, we will dig into earnings with japan's largest retailers. there was some good news and some bad. j.p. morgan private bank offers a view on the future for the fed. this is bloomberg. ♪

sun life chairman richard clarida now speaking at an event. he has been talking about how the central bank is ready to adjust monetary policy. some of the headwinds could be of otherh prospects economies. you can watch that on live go. some of the talk is been on the fed in monetary policy and how

that is affecting markets as well. says theur next guest fed is near the end of the hiking cycle. joining us is ben sy. we are seeing more signs that the fed will be more data dependent. is anticipation that they will's on rates in march or even longer. when do you see a shift in the tightening? ben: given the recent comment by powell and economic volatility in the financial market, we ause untilfed would positi the middle of this year. from a year ago more economic data dependent. i think right now it is near the neutral rate and the inflation is still quite low. they can afford to wait and see. sophie: how many rate hikes are

you penciling in and where are you seeing the trajectory for the u.s. economy and how that filters and? in? ben: it is pretty strong in the u.s. although the global economic growth is slowing down. will have to.s. hike rates one or two times in the second half of this year. that is highly data dependent. the u.s. economy continues to slowdown in 2020, i don't think it is a recession. we see it is more of a slowdown. shery: you are watching right now fed vice chairman richard clarida make remarks at an nyu event. you can watch that on go. we are talking about monetary policy and everything we got this week. at the same time, the other big

news is trade talks. the u.s. and china seeing some progress on their discussions. will this help give momentum to we have seeny that recently? will help with assets and for how long? if there is any resolution between the china and the u.s. we will see a short-term bounce of risky assets like stocks. , it will not last that long. maybe a couple of days or a week. people will shift the attention back to the economic backdrop in the u.s. and china. we are expecting to see economic data from china to be see thenting and volatility of the short-term bonds. shery: on this chart on the bloomberg we are already seeing

the economy in china seems to be transitioning lower. we are talking about industrial production, pmi as well. the chinese yuan depreciation inevitable despite the fact that we are seeing it at its strongest levels in months? ben: i think the recent rally is more on the potential trade deal. that would have short term support. between that and the u.s. is narrowing. people start to see the currency weaken a little bit and i think the weakening currency may be good for china. we think after the short-term more reason given what is going on right now. sophie: speaking of the juan

outlook, we are seeing perhaps this shift by the fed helping the you want a little bit -- yuan a little bit. we are seeing these calls coming in. the most favorable since 2011. lower been creeping ever showing more room. what risk reducing potentially for the yuan? i see china -- i see the key risk is the property sector. i think the price and volume will drop this year. up, it would be quite disappointing. currency a potential

devaluation to support the economy. that can be a key risk. have seen some people talk about value in asian high-yield. at the same time, what would be the impact of the credit cycle peaking? it was sold off a lot last year, much more than u.s. high-yield. it outperformed in the last quarter after underperforming in the first three quarters. i have become a little bit more constructive on the asian high-yield because the yield is increasingly attractive even relevant to our equity market. default rates may not raise as much as before. looks like ita may help those high-yield companies. they can reduce the spending costs.

they can access some things that may help them and reduce the risk. i am a little bit more constructive now, particularly the data around three-year asian high-yield's. i think those are pretty attractive even to equities. much, ben syyou so from jpmorgan. let's get a look at the business flash headlines. the board of google parent company is being sued over a $90 million payment and for protecting other executives accused of sexual misconduct. a shareholder claims the directors failed in their duty by allowing harassment to occur and covering up rubin's behavior. biggestthe world's

brewer's offering one of the biggest bond sales of the new year. it is planning a six part unsecured offering worth $15.5 billion to refinance some of the debt. the longest portion is a 40 year that may yield 2.9%. blackrock's cutting 3% of its global workforce. its largest headcount reduction since 2016. an internal memo seen by bloomberg says by hundred employees face dismissal. the note does not specify which units will be most affected. argue volatility has put asset managers under rising pressure. sophie: bloomberg television's live from the asian financial forum in hong kong on monday. we will speak to the big names throughout the morning. .on't miss our interviews

more.e will have many up next, japan's biggest retailers report earnings. this is bloomberg. ♪

anchor: you are watching daybreak asia. the chairman jay powell has indicated a rate hike pause, telling -- saying the fed can be patient and flexible. he also said president trump has yet to ask for a meeting despite criticism. -- bloomberg reported last month that president trump discuss firing powell. comments may's offer a look inside the

innerworkings of president trump's life. the u.s. has maintained strict sanctions over a russian billionaire. secretary-treasurer steve mnuchin was asked to explain why the administration decided to ease restrictions. this scrutiny links president trump to russia. leading a cheering for gold. analysts say the metal will hate $4025 next month. the recession will investors seeking defensive assets. instruction in australia has

slowed to the weakest in five years. despite windy conditions on the housing market. fell top's performance 42.6 in december, the lowest level since june 2013. apartment buildings were the weakest area. global news 24 hours a day, powered by more than 2700 journalists and analysts in over 120 countries. anchor: let's jump into the terminal to check on the market action. we are seeing gains across the board or asians talks. this, despite more signals of economic weakness, houses falling for a third straight month despite uptick in wage growth. the asx 200 headed for a fifth

day of gains. we did see a pickup in retail -- .4 -- four point .4%. the yen trading against the .arket we are seeing an uptick in offshore, given some of the for thens seen so far chinese market. taking a look at the stock sliding. note, metals market puttingl pressure on the company. we have best retail gaining ground. back up.ry

anchor: let's talk about thed retailers, japan's largest a mixed bag ofg results. in the book a copy buchu copy iasi -- how would you rate these lee taylor's -- retailers? >> overall, strong resorts for the three months -- results for the three months. november, march to a very good for months. in fact, 14 companies out of 20 total posted profit growth, some of them record high. that is sustained by the economy, but the overall outlook

is uncertain. no doubt, tax hikes in japan, they are shortage -- labor shortage in japan. anchor: when would those be felt , despite the fact we have seen slowdown in the ainese market, not to mention bit of uncertainty coming from the u.s. as well? think those are factored into the price, but i think the jury is still out for how the trade war impacts the u.s. and the economy. >> speaking of the exposure to the chinese market, you have a retail cfo saying it is

optimistic. given the results of the first quarter where the chinese business managed to offset the slump and domestic picture for japan, how are you accessing this -- assessing this? waiting? --rospects are growth prospects fading? offset by the overseas growth, notably china. it has not been impacting the performance so far, but i think we are only at the beginning of the journey, so how will it be affected because half of the prophet comes from overseas, notably china. anchor: we are seeing seven

ishares under pressure. mixproducts brought to the as the company is laying the foundation for earnings growth. what is your take ? >> they also have a diversified portfolio. on the convenience store side , theyically tapering down have been successful with private grants. also a big component and that is directly tied to the consumer spending in the u.s., so it could get worse from here. japanese yen and where it

is that, that is going to have a real big impact on the retailers. around onen it hold to 13 for the longest time and and getting 108 stronger. what does that mean for most japanese retailers? portion of anarge overseas component. thethe domestic players, stronger yen has a more negative of consumerse sentiment. the strongertor is yen is -- most notably asia and that could have a stronger impact. anchor: later in october, we are

expecting that tax hike in japan. how will that affect retailers while at the same time, we could expect some sort of fiscal package from the government to mitigate this? >> exactly. is set to offset reduction in tax rates, but it is really a big experiment because we have never really done it before. bags a little bit complex of policies around the tax rate difference, moving people into cashless payments and so forth. how that will play out, i think people are a little confused and made and may dampen the overall consumption, so it is still

october. stack: ahead of that cell , householdx hike spending has fallen for a third uptickt month despite an for three months. couldld a view that we see domestic consumption term positive. >> i think it is i think it is e bullish on the japanese consumption. that said, i see some bright spots focusing on regional violation. as strong and the growth is only at the national average rate which means there

are more localities on a microlevel that are fighting -- driving. thriving. >> golden week coming up, how much of a boost will this be for retailers? straight 10 days vacation which is phenomenal for japanese. i think we will have to see the impact overseas and that will be impacted i how strong the yen is think there will be a consumption boost, both for

japanese travelers and those coming in. those will not be affected by the currency rate. anchor: thank you for your time. coming up, xiaomi is building up and the chairman is shrugging off a selloff after losing $6 billion of market value in just three days up next. this is bloomberg.

asia.: this is daybreak i'm in hong kong. anchor: i'm in new york. isomi's billionaire founder shrugging off after a selloff took away $6 billion from market value in just three days. speaking exclusively to

bloomberg, he said he is betting revival. smartphone 5g is coming very soon. at this point, the demand for smartphones is declining, but when 5g comes, we should expect . peek for smartphones in general, chinese companies are getting more and more competitive. it is understand foreign brands are facing -- are more competitive as local brands are facing pressure. >> i know you talked about the --wth in india and country and countries like spain. what are your priorities and have those change given the current environment? thehe new priority will be

european market. we hope to choose two or three countries to break into to prove xiaomi is able to break into developed countries. xiaomi is anclaim internet services company than just a hardware company. what are you doing to address those concerns and when do you think the steps you are putting in place will start to have an impact? is an innovative company that includes the hardware business, e-commerce and the internet you iowa state xiaomi is a new creature. hadthe internet, xiaomi revenues of over $9 billion. in 2018, that increased over 80%. it is growing very fast. our active users are over 220

million people, which is a large number. anchor: that was the founder of xiaomi speaking to bloomberg. apple suppliers have reported sales figures and earnings. you reporter jb -- debbie reporting with us. the net incomes estimates. there was not any surprise. the company is suspending production. makers willhe parts outperform the smartphone industry as more will adopt this year. anchor: we also got december sales figures on thursday.

what do the numbers mean for the apple supply chain? saw that the fourth quarter revenue managed to stay in line with estimates. marketmay indicate the may not be as bad as previously feared, but we also saw a u.s. supplier to apple cut its forecast. it is not as severe as previously feared. the next bigis indicator we are looking for here? >> next week, we will have an earnings conference in december. investors are concerned whether they will be able to hold up to this year and i think investors

will also be interested for the next level. anchor: thank you, our bloomberg asian tech reporter. plenty more to come. on daybreak asia. this is bloomberg.

anchor: this is daybreak asia. anchor: a quick check of the latest business flash headlines.

air france has passed caroline airlines to become the biggest in europe. klm airlines to become the biggest in europe. it is in danger of being topped img.british airline anchor: boeing jumped at the takeover and one the approver -- approval in brazil. it is expected to be close by the end of 2019 after the draft final documents and seek antitrust approval. they have treated that brazil's national interest will be safeguarded. anchor: in ai start of said to about $2 billion and

already working with advisors. the firm attracted more than $1 billion last year, a value of billion that bloomberg reported in july. >> class path is pushing ahead with a run into asia this week. the move gives the company a foothold with 11 cities across the region. from to cap -- blue phuket.ho cap -- blue >> we raised almost $90 million in financing.

major investors in equinox we launched so kong,y in singapore, hong .uala lumpur in dubai -- and dubai. we have added six new cities in six countries in the past 12 months. expand our convergent to china, as well as india and the philippines. the strategy to shackle -- tackle the market space in china? it is just a technology utility. all of the customizing comes at the entrepreneurs themselves who are creating these experiences. it is actually -- we have yet to

find a market that we have not been able to come into and establish strong position. china is very different and will be more difficult. that is why we wanted to have local talent. successful -- how mature studio fitness is. in america and many southeast isan cities, studio fitness extremely popular. .hina is a little bit earlier i think will have to see if the marty -- the market is ready. we are not there yet, but certainly and a lot of innovation in china. than says it different from the u.s. when it comes to health classes? >> it is too general to care

about asia at that level. thee are two trends in space which are boxing and hyannis -- high intensity interval training are on the rise. everywhere.king off in a market like china, you see a strong presence of yoga which is an old form of working out. in are starting to see it boxing studios which is the latest trends in america emerging in china. anchor: are there more plans for fundraising? you have plans to launch in 15 u.s., so what the could be the -- in the u.s. and around the world.

anchor: in our last session, we $99 million. we have raised $1 billion to date. we are happy to pick up the glove the scene and bring them seen and bringva them on board. you can go to fast sometimes, so we look at other companies that have done rapid global scaling like uber and we are trying to on how fast you can grow without taking your bibles off the customers. at some point, we plan to ipo. the plan -- we want to build a generational company and that may require another investment round or maybe not. it will depend on china and other regions as well. ket.or: thank you, joining us pu

a quick look at how markets are trading right now. we have stocks in the region extending a weekly gain, the best week since early november. anchor: let's get a check on early futures. singapore has risen the past five sessions. taiwan recently, the cabinet approved of plans to bolster demand. futures also rising, so we will see if we can sustain momentum from wall street. that is daybreak asia. this is bloomberg.

♪ rishaad: 9:00 a.m. in hong kong and shanghai, this is "bloomberg markets: asia." yvonne: asia-pacific markets enjoy further gains in their strongest week since early november. brent crude rose for a ninth straight session. >> the fed chairman reinforcing speculation that a pause is coming. jay powell says he can see it. rishaad: a rocky road ahead. land rover among the big names determining to slash jobs. ♪