to "daybreak: asia." shery ahn: over the next two hours, we will bring you the news you need to know as markets open across asia. haidi: theresa may survived a no-confidence vote and says rivals must work in the national interest. apple telling bloomberg that hiring may be cut. huawei is said to be under

criminal investigation for stealing trade secrets in the u.s.. an indictment could be imminent. shery ahn: we saw the dow closing for -- the dow gaining for the second consecutive session. 2600&p 500 above the level, close to the 60 day moving average. we haven't seen the s&p 500 top that level since early december. financials were the big winners today. did pare some of its earlier gains and nasdaq rose 0.2%. that, on reports that huawei was being investigated by u.s. prosecutors. we could see some more positive sentiment developing from the chinese announcing new stimulus measures, not to mention the brexit no-confidence vote, the no-confidence vote against prime minister may.

let's turn to sophie with the markets in asia. ie: asian stocks are set to rise after faltering on wednesday. we have alumina gaining ground, up 2.1%. alcoa beating earnings estimates as well as projecting a wider aluminum deficit in 2019 as demand is seen holding up in the face of a trade war. we are seeing gains for stocks in new zealand. souls in tokyo as well as -- as well as seoul. we have reports that apple plans to reduce hiring. earnings due out later this afternoon. on the geopolitics front, north korea's top negotiator is expected to arrive in washington, d.c., thursday to meet with pompeo and trump. australia this morning, we will keep an eye on ozzie homeland --

on aussie home loans. we will see if electronic exports remain resilient or if shipments will bounce back as expected. backdonesia, that bounce 6% after hiking rates in 2018. haidi: let's get you the first word news with selina wang. lina: greek prime minister alexis tsipras winning a fourth vote of confidence. he got the backing of 151 lawmakers in a 300 member chamber. the government's coalition after thed pulled out decision to call the country the republic of northern macedonia. comments indicate the government

has abandoned him and all but assure he would lose his last grip on executive power. .rance owns 15% of renault cannoteaders say ghosn stay in charge. goldman sachs has apologized for the role that a banker played in the 1mdb scandal. they say he lied to all sides. the man has led guilty to a range of charges including conspiracy to launder money. role in that fraud, we apologize to the malaysian people. as you expect, we have looked back and continue to look back to see if there is anything that we, as a firm, could have done better. at the same time, i want you to transaction,each

considerable due diligence was conducted. the lifelong advocate of low-cost investing has died at 89. vanguard introduced its first funds in 1986. the index funds are represented in the s&p 500 index. $26617, it was worth million, with $5 trillion in assets under management. global news on air and at tictoc on twitter. i'm selina wang. this is bloomberg. haidi: what --shery ahn: what a week it has been for the prime minister who survived that confidence vote. thatcoming after humiliating defeat of her brexit deal. what is next is the big question. right now, the eu is said to be thinking of extending the brexit

deadline beyond july, so that could be a possibility. prime minister may, just an hour ago, coming out and saying that the mp's have made clear what they don't want. now, the issue is what they do want. haidi: she says she has to find a resolution that respects the results, which is to leave the european union, and she has to do that with parliamentary support that she has now failed a few times. corbynnow, jeremy rebuffed her invitation today. the pound has held steady following the hours that she survived that vote, but it had been faltering. -- it had been strengthening. it is not just the strengthening we had seen all this week. it beinglooking at higher by the end of 2019.

looking at this forecast, you would imagine there is some sort of certainty they are imagining by the time we get there. shery ahn: let's talk about this with our currency reporter. we are seeing the pound holding its ground. what is all this about? reporter: the pound is having a remarkably good week, even as the british government comes under extreme stress. given how humiliating that defeat was yesterday, as you mentioned, then to see her win the confidence vote by such a slim margin, she's going to be forced to softer margin deal terms than originally anticipated. >> what exactly are traders watching out for? eu extending their brexit deadline passed march 29, past july, we saw more support for the currency.

>> markets are looking for signs that that brexit deadline might be extended. that would speak again to how much of a process it has been to get this deal passed. may tried to make clear that she is trying to work across the aisle and work with the opposition party so traders will be watching how that discussion goes as well. >> a no deal relationship would really be bad for the brexiteers in her camp, but what about the chance of a second referendum? katherine: investors definitely aren't ruling out the possibility of a second referendum. in that scenario, you can see the pound revisit 136 against the dollar. you so much for that.

the latest on the british pound and brexit. here in the u.s., prosecutors are set to be -- are said to be pursuing a criminal case against huawei were allegedly stealing trade secrets from business partners. >> we saw a little bit of a pairing of the gains late today. strategic tensions between these two superpowers. this is a pretty significant escalation in the u.s. against huawei. >> this is another step the u.s. has taken with regards to huawei , which it regards as a security threat. huawei. contends that has the potential for spying on americans. froms effectively banned supplying equipment for the u.s. networks. this comes after the arrest of the wild way in canada on

charges related to iran sanctions as well as the arrest of another while way executive on spying charges. the trump administration has been trying to pressure allies as this was going on to keep huawei out of western networks for security reasons. this is another big step in that. >> was there anything in particular that sparked this investigation? >> it seemed to be stemming from a lawsuit brought against t-mobile -- brought by t-mobile against huawei. a jury found huawei liable for manipulating a technology. had said that technicians stolen technology for a device that was used for testing mobile phones, and the jury ruled in their favor. this same investigation seems to

be following along the leads that were brought in that civil trial. huawei, of course, has been under pressure not only in the u.s. but in europe and other countries as well. and a lot of pressure from many different fronts for this company. is coming at a time when the u.s. was engaged in many different investigations, and attempt to end the trade war between the two countries. the u.s. has insisted at several criminal charges are on a separate track from the trade, but this puts more pressure on the entire relationship going forward. the trade talks are continuing, moving forward at least at some level. we will see whether this is

something that triggers the chinese to respond. haidi: really appreciate your time with us. still ahead, we will be talking about how the latest huawei drama shakes up u.s.-china trade talks. shery ahn: next, markets are betting the chances of a market disaster are fading. this is bloomberg. ♪

is "daybreak: asia." shery ahn: it was all about the banks in the u.s. trading. how goldman sachs and bank of america gave stocks bulls a reason to run. >> the market has almost priced in the worst case scenario for global growth and we are running with that. it's almost as if the banks have given a relief rally. let's look at the market snapshots.

500urprise, the s&p financials up in a very big way. of a bid later in the session on some saudi oil output cut confirmation. let's go into the charts because the banks really sold the show. bank of america and goldman crushing it on earnings. a strong outlook on trading revenue. we've talked about how analyst work particularly pessimistic going into this earnings season. take a look at the size of the gains as well, particularly for goldman, where they had had concerns over the legal issues. take a look also at some of the other issues within the market, going into bloomberg real quick. we talked about how the s&p 500 finally broke above 2600. very important technically, but eart also set off a bull-b

battle once again, so holding that line will be important. we have winners and losers. notice we have first data acquisition from finserv, big move up. ual riding a strong tide for some of the airlines. a pharmaceutical -- ligand pharmaceuticals getting a price cut from citrus. the departure of the cfo from snap eight months after getting the job is a big negative. gained back ao lot of those gains on some of the huawei news. the down trend does remain in effect technically for the nasdaq. that will be interesting to watch going forward. after hours, alcoa earnings again.

alcoa actually down. earnings, gave some outlook on some of the pressures in production that is affecting some of the sentiment in the after hours trades. >> the rally early in the year continues. our next guest mains slightly positive. haidi: joining us from hong kong is allie oz global -- allianz global investor. i want to start off with this, which pours a little cold water over the confidence we have started to see an equity markets. the big banks were the big stories today with the first $100 billion profit year for wall street banks. the chart is essentially baker, bloom, and davis economic power -- economic uncertainty index.

goes, thee trade war structural slowdown in china as well as the feeling of almost synergy -- like a synergistic slowdown. >> the market is rebounding from a weak selloff at the end of last year. expecting aare not great year for returns. we are expecting volatility to remain quite high because of that uncertainty. we are coming off a year where earnings were complete -- were extremely strong in the u.s. because of the tax impact, which is no longer going to be there. a more moderate year for earnings. valuations have started at a more attractive level than they were. in the background, you have still got a big sort of withdrawal of liquidity as qed turns into with -- as qe turns into withdrawal of that.

what we are seeing at the beginning of this year is the yield curve going very flat to opening up again, and that certainly helped the banks. shery ahn: we have seen a bit of a change or a shift when it comes to central bank, i guess, messaging, from december fed moves to now, everyone turns into a dove on the fed. in china, the pboc doing rate cuts by any other name. does that change things enough that we continue to see a reasonable level of opportunistic buying in global markets? are: i think there opportunities there because the valuations are attractive again. i think what is happening in china now, to stimulate growth again, will be important as we get to the second part of the year because that slowdown has affected companies all over the world.

that will certainly help support any better confidence. as we go into the earnings season in the u.s., that is what we will be looking for, statements about impact about trade, impact with china. and, confidence about spending and investor intentions. the confidence levels have come off very high levels in the u.s. in particular. we need to see that confidence continuing to keep the cycle going. at what level of the stock markets in the u.s. could we see the fed re-tightening the level? katherine: i think, if we -- lucy: i think, if we get more exuberant, they could move again. there is not a huge amount of inflation in the system. that gives them a little bit more scope.

there is a lot of uncertainty around. they can take their time. uncertainty really around briggs of course. we can't rule that out. chart showing the fallout of that uncertainty. we are showing -- we are seeing cheaper and cheaper stocks. they really have slumped to an eight year low that we haven't seen really since 2018. how much support does this offer to the u.k. markets despite all of the chaos surrounding brexit? lucy: i think, for u.k.-only investors, certainly putting more money to work in terms of valuations. opportunities. i think global investors will still stay on the side and just

watch and wait and see what happens. that is what we are going to be doing. idea of have a clear the path, it is a bit of speculative trading. a return of strength when it comes to tech? lucy: i think you get a lot more divergence between the different areas of tech. the difference in regulatory issues, the trade tensions, tariffs affecting different areas. i think we are seeing more then we have seen over the past few years. with social media, that will affect

those companies. shery ahn: that seems to be affecting the health care sector a lot these days. regulatory risk. lucy: always focused on pricing. since the midterm elections, that has come back into the discussion again. that is one thing that republicans and democrats agree about. wanting to focus on drug pricing again. morenk where we are interested is in the healthcare services and those areas which are working to get the overall costs down. also, some areas of equipment and health care products which are benefiting from demographics and data. shery ahn: lucy, thank you so much for joining us. globalcdonald, allianz

investors global equities cio. all of the charts that we call up during our interviews are right there, gtv go on the bloomberg. this is bloomberg. ♪

haidi: this is "daybreak: asia." shery ahn: a quick check of the latest headlines. deutsche bank are considering a merger with local competitor commerzbank. that is at odds with the merkel government which is keen on and all german outcome. it favors and all german solution. an eu regulators want deal because deutsche and commerzbank benefit. haidi: promising that the

improvement in earnings has plenty of room left to run. -- americansates have warned about the difficulties of pushing higher. new performance would extend into 2019 but a host of initiatives are in the pipeline. shery ahn: airways working with creditors to revamp debt that may lead to changes on the board. one option is for lenders to seek investment from the founder and partner etihad. has had more losses than any other publicly traded customer in asia. haidi: let's take a look at how asian markets are setting up for the trading day. strength, boosted by across goldman sachs and the big wall street banks. it is a $100 billion profit year for the first time ever. when it comes to trading in cindy, about 0.25% higher.

wi in new zealand is also extending gains. we could see more action as tokyo and seoul come online as well.

watching "daybreak: asia." talk,a may is ready to she fought off the election to remain in charge in brexit. she was supported by 325 votes-306. jeremy corbyn declined her invitation to talk. >> i am disappointed the leader of the labour party has not chosen to take part. our door remains open. it will not be an easy task. have a duty to

act in the national interest, reach a consensus, and get this done. lina: jpmorgan boss is a hard brexit is unlikely but would be a disaster if it happened. says a hard split would be bad for europe as well. theays he understands desire to leave the eu but voters are only now realizing how messier divorce can be. reports from washington say federal prosecutors are pursuing a criminal investigation against huawei. it alleges stealing trade secrets. quoted saying the inquiry is advanced and could see an indictment soon. the justice department declined to comment. chief economist says the dollar. he told bloomberg the central

bank would be powerless to stop a move with the currency but eight negative lending rate could slow it down. the forecast for the end of this year is 108. the inflation rate remaining low in japan, the yen is a on course to strengthen further. currently it is 10 yen lower than indicated. there is a possibility it could go ¥10 higher. i don't think it will hit the 70's but the 80's is quite likely. powered by more than 2700 journalists and analysts in more than 120 countries, i am selina wang, this is bloomberg. check with sophie kamaruddin in hong kong. the aussie market seems to be in positive territory. sophie: we have aussie shares ascending for a third day. the asx 200 gaining led by tech and research players.

aussie yields rising ahead of isember home loan data which expected to show a decline in three months. quarterly data is on tap for postingminers, despite a 20% drop in sales revenue as product pricing fell due to soft market conditions in china. increase of 65% while cash costs fell 14%. it added 1.2% this morning after nearly doubling output. south32 making its first change to management since a new cfo.ting whitehaven was under pressure this morning and woodside is on the upside.

a 42% year on year rise in sales revenue for the fourth quarter. australia's top oil and gas player will cut back with its latest project in motion. shery: thank you so much. u.s. of financials are reporting standout earnings with both bank of america and goldman sachs crushing estimates. that push the bank index to its highs level since early december. it is a $100 billion year for the big banks. seeing in we are terms of the knock on effect is pretty apparent when we talk about bank of america as well as goldman sachs. we are seeing the adjusted report was a clear be. the actual was $.70 per share, the estimates were $.63. we can see the shares reacting, up by more than 7%.

this is the biggest jump since 2012. everything that could have gone right went right except for the fixed income trading. we know that narrative talking about jpmorgan and citibank. fourth quarter avenue -- revenue beat, the equities of were also above, that was an 11% pop. the tax rate, that was also helping. iat is just a 16% -- mentioned it was down by 15% but still in the range of the midteens that we talked about all week. one other bright spot for the bank -- flip the screen and i want to show you what is happening in terms of consumer banking. this was one of these standouts that offset. this is pushing even higher up above the $3 billion mark. this was record profits. 5%are talking about a pop of in loan growth. people taking out loans thanks

to retailers. reporting,man investment banking was one of the bright spots we saw. ramy: follow me to the side of the screen. itdman sachs, in terms of was pretty sizable. ae actual came in at $4.83, $.30 beat. shares also reacting, up 9.5%. that was the biggest jump ever since 2009. is 10 years ago that we saw this jump. similar positives in terms of equities trading. was 19%, theere worst in a decade. you know what was the best in a decade? the best the goldman sachs m&a revenue up more than $3 billion. this is the biggest jump ever

since 2015 when it was almost that high. let's look at the screen one more time. that knock on effect in the bloomberg terminal helped to push global m&a to a high we have not seen since 20 15 as. tipping the $3.1 trillion number. issues is of the big the scandal over the 1mdb in malaysia. have we heard anything? ramy: david solomon basically apologized to the country of malaysia. let me show you the quote we have. he said it is clear the people of malaysia work defrauded by many individuals. one of them we know to be tim mr. solomon also saying they are working together with the department of justice and the investigation is ongoing. the cfo said the ongoing litigation cost will amount to

$2 billion on top of the $5 billion that is one lump sum. bloomberg sources say apple was planning to cut back on hiring for some divisions. shery: bloomberg technology reporter mark gurman covers this story and broke the scope. apple trying to put a positive spin on this saying the iphone sales declining would actually help them innovate. what did they say exactly? mark: this is sources inside apple. employees earlier in the month, tim cook was asked if there would be a hiring freeze to offset the slower sales and reduce revenue. he said i hiring freeze would not be the solution to the current problem. instead, they would reduce hiring in some division,

excluding some of the hotter markets like artificial intelligence. on,y: what are they working are there other aspects a you are optimistic about as we look beyond iphones? the most optimistic area for them right now is augmented reality probably. the proved to be ahead of the competition the us far. we are waiting for them to come out with some sort of ar headset, a hardware aspect they would be making money on. it would be hard to see anything coming close to the revenues that the iphone drives. i always think the iphone will be there. the need to continue to with other devices. if they find they were able to come out with something for the living room or the kitchen, whether that is a new tv or siri speaker, or things like more mobile like air pods that are driving success. away from hardware, how

is the shift towards services going? mark: everyone likes to talk about it being a shift, including apple. the truth of the matter is you need hardware devices to run these services. apple prefers the hardware devices to be their own devices. they work hand in hand rather than this being a different category. i think they all work together. at least that is what steve jobs used to say. the reality is, it is all tied together. shery: thank you so much mark. over in the u.k., uncertainty over brexit and a slide in inflation means of the bank of england may delay more rate and be forced to adopt jay powell's new patients. kathleen hays is here with the policy signal for the u.k. economists are marking down a rate hike forecasts? kathleen: they certainly are.

i love how our bloomberg eco-team is talking about the over theg hanging economy. investors, uncertainty, and the bank of england of course. the bank of england saw some weaker yet again inflation numbers. mark carney was testifying before the country committee of and he was talking about the fact that the pound surged and stabilized. he did not sound too reassured. he said basically what is happening is the markets were figuring if theresa may is built got crushed and it is uncertain what happens to brexit, maybe -- maybe you don't leave at all. >> that rebound would appear to thatct some expectation the process of resolution would

outcomeded and that the -- the prospect of no deal may have been diminished. bloomberg economics also saying eight further brexit delay could add to a bruised economy. that is exactly what you see in the u.k. what is interesting today is the numbers on inflation. the u.k. december cpi slowed to 2.1%. according to bloomberg talk elation's, cheaper fuel prices are probably going to take u.k. inflation below the 2% target this month, the month of january. let's look at the terminal chart. the blue line is the year rate of inflation down to 2.1%. the core picked up a little bit. you can see are trend tends to

be lower. why would the bank of england think about raising rates, typically if the pound stabilizes that eliminates the weakening that cause the surge in inflation. february 7, the bank of england will be coming out with the latest inflation report. we will be seeing the response to list and do they revised their forecast lower? some people were looking for eight february hike, others are saying maybe may and maybe a lot later. , rate hikehe u.s. patients from its own survey of the u.s. economy. the districts, they survey all kinds of people, put it together and it comes out two or three weeks before the meeting. the end of january we are looking for the fed to meet again. it talks about emerging weak spots. outlooks, generally remain positive but any districts reported that it has become less

optimistic because of rising short-term interest rates, falling energy prices, elevated trade and political uncertainty, and increased volatility. expansion was slowed in most districts, sounds like maybe a trade war impact. the fed's optimism on the economy supported by the wages gaining, tight labor markets, shortage of skilled labor. kashkari speaking on the 10th anniversary of the financial crisis, we don't need anymore rate hikes right now. we will be watching carefully. we will see if he makes remarks about the economy. to theowed in regards shutdown, one key example coming from chicago district saying the the of information on markets that the government puts out regularly, because it is not

there during a shutdown, it is creating uncertainty. thank you so much for that kathleen hays kathleen is in chicago for an inclusive -- exclusive interview, catch that 8:00 a.m. in sydney and 4:00 p.m. in new york. the huawei drama throwing a wrench into the u.s., china relationship. tenuous as it is. besides trying to reach a deal on trade. does this jeopardize negotiations? this is coming up next on bloomberg. ♪

."idi: this is "daybreak: asia shery: u.s. china trade tensions are back in the headlines amid reports that prosecutors are

searching a criminal prosecution against wall way. no joining us the cold -- the cofounder of the consulting firm. continue to see this broad consensus that it is time to push back against china. do these moves against wall way -- huawei, have they become part of a strategic vision against china -- do we have one? >> they certainly are part of a strategic move. in the u.s. business community seem to think that in president trump -- who has been very tough on china, the chinese have gotten the u.s. president they deserve. u.s. ceos used to be the biggest advocates for positive relations with china and they no longer are. case, they allegations stem back to 2009. their activities regarding iraning sanctions with th

that go way back. there are the trade negotiations that are going on right now. one round the just ended and another round is about to start next week. do these latest moves complicate what happens on the trade front? whene facing the deadline the u.s. could potentially really impose more tariffs on chinese goods at? i think they complicate them a little bit but this is part of what the u.s. is negotiating for. fact really welcoming the that all issues are on the table. forcednda includes transfer of intellectual property. subsidiesnt ventures, on enterprises as well as of course the trade balance which is what president trump has been focused on. that was the one thing that

trade negotiations cannot resolve. i think all of those issues are up for negotiation. will we reach a negotiation by march 1? difficult.t will be these are thorny issues and china. a lot of give by i think so far you have seen a willingness on the chinese side to discuss them but no compromise yet that anyone has told us about. haidi: that is the problem is in it? fruitof the lower hanging with trade deals and volumes of shipments have already been picked. you are left with the thorny issues that require institutional, structural change to abandon some of this ambition. that will not happen, is it? some of those things help the reformers in china who are arguing for more opening up. for example, if you got an agreement that would have china , it some of the subsidies

is very hard for china to give on that. that would help the chinese economy. lots of people in the innovative part of the chinese economy, they're saying we are innovative enough that we want our own intellectual property protection. it helps china to give on some of these things. whether those voices will win is unclear. haidi: that was my next question, do the reformers still have a voice in china? might beof ways it returning to the old playbook of growth? anja: it is anyone's guess. i have heard from a well-placed of folks within china that , just likei jinping u.s. president donald trump really takes his own counsel and does not necessarily listen to advisors no matter how well-meaning. i think all of those factors make it harder to reach agreement. really difficult to reach

an agreement when it comes to the brexit deal. we just heard from prime minister theresa may that they made clear what they did not want, the issue is finding what they do want. how realistic is what is being discussed within parliament, where are we headed with this brexit drama? it is really anyone's guess. both the conservative skeptic mps and the labour mps are being hopelessly unrealistic if they will renegotiate a deal with the eu that does not require them to pay the 40 billion pound exit fee. that does not deal with the border between northern ireland and ireland. they have another thing coming. there's not much room for renegotiation. one thing that does not get talked about very much was the agreement that theresa may negotiated with the eu. it covers the withdrawal piece. it does not cover what the

relationship between the u.k. and the eu will be after brexit. that is what is causing the uncertainty. not helping the markets. there was a no-confidence vote that she won. we seem to be moving towards a hard brexit. upside, weto the doom and gloom or is there a chance that we could see a resolution to the or an understanding of kicking the can down the road if you will? anja: i am cautiously optimistic both ofedium-term on those things. the u.s.-china trade relation is so important. the trade war is hurting both of our economies enough that i

think eventually we will find a deal. is it a deal where america will get everything it wants? probably not. will we come up with something that looks alright and manageable? think chances are fairly high that we get there at some point in the summer. on brexit, there are all these doom and gloom scenarios on march 29, a be some of those come true. the business leaders i speak to are already making contingency plans for all of those things. they are not sitting idly by. i think while there may be chaos in and a negotiated brexit, it will help out eventually. on that one, every economic study i have seen says brexit's the u.k. economy has reduced its growth between 2% and 10%. wide estimates there but none of them think it is positive. haidi: really appreciate your time with us.

more to come on "daybreak: asia ." ♪

we are coming down to the opening in tokyo. the yen is back above 109. an alarm grows over brexit when it comes to japanese companies. hitacthi in- a meeting will hold

on thursday. we have had several companies say they are monitoring the scenarios to limit the impact on operations. that is the set up as we had to the market open. this is bloomberg. ♪

haidi: welcome to "daybreak: asia." shery: we are live from new york. sophie: and good morning from hong kong. over the next hour we will bring you market news from across asia. ♪ haidi: our top story, huawei said to be under criminal investigation for stealing trade secrets in the u.s.. sterling remains a steady after theresa may survives. more problems for carlos

ghosn as two powerful supporters abandoned him in france. kicking off the market open in japan and south korea with the stocks in asia probably positive at the moment. let's go to sophie kamaruddin in hong kong. sophie: stocks pushing higher in tokyo and seeoul. perhaps inheriting some that we saw from wall street on the back of better earnings from the likes of goldman sachs. the tech space might see some pressure on reports of u.s. investigation into huawei and apple hiring productions, this could be an achilles heel. we are seeing shares for now and stocks in new zealand in sydney on the up for the third straight day. let's check in on currencies. the yen holding a two day loss, back above 109 against the dollar. this as annexed boj official

says the 80 zone is likely to come as soon as this year. the aussie dollar holding steady. the pound just a holding firm here at 128. we have cnh gaining some ground as traders dismiss the pboc's latest fund injection. but see the news with selina wang. selina: french finance minister calls for the dismiss of carlos ghosn as ceo. they indicate the government has abandoned him and assures he will lose his last grip on executive power. france owns 15 prinercents and union leaders say carlos ghosn cannot remain in charge. chief economist says the yen could reach 80 against the dollar, its strongest level in more than six years.

he told bloomberg the central bank would be powerless to stop the move in the current state. a negative lending rate could slow down. analysts forecast the yen for the end of the year at 108. the inflation rate remaining low in japan, the yen is on course to strengthen further. currently it is ¥10 lower than the amount indicated. there is a possibility it could go ¥10 higher. i don't pick it will hit 70's but the 80's is quite likely. goldman sachs has apologized to the role in a senior official played in the 1mdb scandal. they said it was defrauded by many people while the bank did it to do diligence. tim leistner lied to all sides. leistner pleaded guilty to a range of charges. selina: john vanguard has died at age 89.

he introduced the first retail fund, the vanguard 500 is an unmanaged portfolio stock in the s&p 500 index. $266 -- it was worth billion. news 24 hours a day on air and on tictoc on twitter. powered by more than 2700 journalists and analysts in 120 countries. this is bloomberg. u.s. prosecutions are said to be pursuing a criminal case against huawei. with athis news comes cfo still out on bail in vancouver awaiting possible extradition. engle is following the developments. does this compensate the future u.s. china trade talk? stephen: it does in many different ways. daughter of eldest

the founder of huawei is out on bail. she is awaiting possible extradition to the united states , which accuses her and huawei of allegedly defrauding banks to avoid sanctions on iran. thelatest report saying federal prosecutors are indeed pursuing a criminal investigation as well for allegedly stealing trade secrets from u.s. business partners, allegedlytechnology from t-mobile. a robotic device that is used to smart phones. among other different reports loomber confirming this is in its in an advanced state. she is in legal limbo right now as the canadian justice authorities to decide the merits of the case. canadiansse want the

to pursue an extradition to the united states. she is out on bail in vancouver. the justice department spokesperson in the united states has declined to comment on the latest story. as the u.s. is firing back at china for the death sentence against the canadian citizen that was a reversed from an earlier 15 year sentence to a death sentence in a court earlier this week. you see the pictures here, the u.s. state department calling that politically motivated. something the chinese foreign ministry has slapped back at saying it wasn't malicious slander. the u.s. secretary of state and his counterpart in canada have reiterated their bank commitment to canada's conduct of a fair, unbiased, and transparent legal proceeding. your question it does complicate things. shery: already cop catered set of negotiations.

the u.s. and the wto, what is going on with them? this is a long-standing criticism to the trump administration. bigger ando seek a more substantial change at the world trade organization. , we are getting a paper out of the u.s. government which is likely to be brought up again by u.s. trade officials at up davos meeting coming soon. the u.s. questioning wto policies that allow china to benefit from rules meant to poor countries, including wto regulations that permit poor countries to claim special development rights including exemptions from wto disciplines such as farm subsidies. these are long-standing complaints for the united states being amplified at the trump white house. stephen engle with the latest on all facets of trade.

tradeng the odds of a breakthrough, he is also one of the biggest dollar bulls on the street. he is sticking to his guns. let's bring in david bloom, from hsbc. great to have you. on thetill go long dollar given there are so many calls out there saying we will see dollar weakness or perhaps more realistically, if you don't see a recession or growth in the u.s. you will see a really poor performance because investors will take money elsewhere for better yield? a good question. just because everybody says it does not mean it is right. we were dollar bullish last year. if you want to believe the throngs of people that follow each other like sheep, go ahead. i am not doing that. .he dollar is still the best you can say some horrible things

about the u.s., but you can say worst things about others. that puts me in the strong dollar cap. go through the pairs. we have been talking about brexit all day. rasta little bit surprisingly is the survival of sterling over the past couple of days, given that some of the uncertainty has been removed from the situation. this is the library, the analyst forecasts is pretty close to your forecast at 137. 136 is what we are seeing consensus. is that optimistic that we will see a reasonable solution that has longevity and not just kicking the can down the road? good question.a a lot of the consensus people have been bullish for a long time on sterling. it just looks like they are bullish now. a few hours ago from 130 21 37. we are saying you should by now. aat has happened is there is

possibility of a no brexit, referendum, delay. before the vote in parliament it was my way or the highway for theresa may. parliament said no. there could be a third way. we have to price in the that possibility. go 145 if it is a soft brexit, 155 if it is no brexit. you have to blend the probabilities together to come up with where the currency should be now. 136-130it should be seven. i think sterling right now is very positive. it is always the darkest before the dawn. shery: i want to get more into brexit but let me bring in another currency pair, the chinese you want against the u.s. dollar. is your thinking about the u.s. dollar remaining strong, i wonder what your actions are for the chinese yuan. the bloomberg is showing the

chinese yuan we are getting close to that six-month strength. analyst predictions not falling in line and the spread continuing to rise. are you expecting more weakness in the chinese you one then your dollar call? but we are expecting a bit more weakness, it is only really a little bit of weakness. last year was the big year with the trade wars breaking out where we had tariffs. of the pig, the market is expecting a deal to be done. if you look at the turkish lira, these high-yield current fees that are saying yes, something positive will happen. we will be creeping towards a seven and traversed that completely. the market is pricing in a deal and being optimistic. i know some of the stories you had a bit earlier were down beat. the market saying that is yesterday's news. tomorrow's news is a lot more upbeat. that is what the market is saying.

it is not big, it is not enormous. it is just part of the dollar watch. the dollar will go up and cause mb to fall. shery: i know you have a list of the fragile for that include the canadian dollar, british crown, region crown, and the swedish -- the switzerland frank. david: one of our top estimations is to sell the home currency. we are worried about the fiscal position there. we have a big selloff there in the rand. we suddenly like sterling. there is a lot going on. it is exciting in the currency world. much forank you so that david. he is staying with us as still ahead, france wants carlos ghosn out as renault chief.

we will say what the finance minister said about the jailed auto executive. next, theresa may narrowly survives the vote of no-confidence. calls from her political opponents to come to the table and work with her. by davide joined again bloom, staying on with us. this is bloomberg. ♪

haidi: this is "daybreak: asia." shery: theresa may has called on her political rivals to work with her for national interest after narrowly surviving a confidence vote. labor is refusing to talk. >> i am disappointed that the ther of -- the leader of labour party has chosen not to take part. our door remains open. .t will not be an easy task

mp's know they have a duty to act in the national interest. reach a consensus, and get this done. were going to jodi schneider, 10 weeks left until the deadline, hard to see at this point how they could avoid extending article 50, right? week,it has been quite a the crushing defeat for theresa may. she survives the vote of no-confidence and now there is the so-called cross party talks. she is trying to get members of other parties to come on board and come up with a new agreement that could get through parliament. they have to do it quickly because there is only 10 weeks until the march 29 deadline. she and everyone is trying to avoid that no deal brexit. as we have seen, her main opposition party, the labour party is refusing to go along at this point. wery: what reactions have seen from the european union so

far given the development of the week? could we expect more concessions? jodi: we have not really heard a lot from them yet. want toking is they too avoid a no deal brexit and they want to help her out. there is not a lot they could do. they're standing by the contention that they have to deal with this irish backstop. they may be able to delay the article, maybe this moves toward the summer. still, they have to get something, theresa may has to get something through parliament. a lot of the issues, a lot of the tough issues will still remain. is the real crux of this here. how do you get something through a parliament that is extremely divided and obviously had a resounding defeat on this particular agreement. shery: our senior international editor, jodi schneider, sterling hold onto gains as the worst case brexit fears fade.

how much is brexit really affecting sentiment and direction in other g10 currencies? david: i think obviously the is affected. we have seen some terrible numbers out of the european economy. know, hardpeans brexit is no good for europe as well. that plays into my stronger dollar view is that were to happen. it is bad for the euro and obviously bad for the pound. the probability of having a hard brexit we think has gone down. is it the return to base scenario we see boosting it against other currencies? economy is doing ok. the fed may or may not raise rates. deterioration has been quite marked. the one exception for us now,

that was only produced a few hours ago, sterling. it is always darkest before the down. the plane and financial markets where the point -- were the money is to be made is in chaos you keep your head, look clearly, and look through situations. job as thegood of a bank of england doing and looking through the situation with the u.k. inflation numbers slowing a little bit. you must your expectations for the boe. rates.i don't care about i don't care about the boe. i only care about one thing, that is the only thing that is driving sterling. there are three things that drive a currency, cyclical, structural, political. cyclical, we about don't care about structural, all we care about is politics in the u.k. that is the driver. forget the break of england -- bank of england, what do you think the political outcome will be? that is were you put your money.

really hard to trade sterling at this moment if that is the case? there are so many scenarios out there. only threee are likely scenarios. one we fallout with no deal, 110. two we get some deal, three there is no breaks it at all. if you play an equally weighted , the fair guy you sterling is 137. it is a buy. markets are a blend of probabilities. the blend of probabilities are sterling should be higher. we are now pricing the possibility of no brexit. it was not the case a week ago. it is not binary though. there are investors who cannot completely avoid exposure to sterling, isn't that the best case scenario? i think it just has been. i would agree with it having

been when it was deal or no deal, it sounded like a game show. as you said, there are more options on the table. most of those are positive. there is one negative option and nobody wants it. not betting on something that nobody wants. accidents happen and we are still in quite a big probability on that happening. the other probabilities are now creeping in which are much more positive for sterling. so bearish for 2.5 years, i have been one of the people banging the drum, hitting that drum every day that sterling is going down when the referendum happened, i slashed my numbers. i have been massively bearish. now is not the time to be bearish. that time was for the last 2.5 years. shery: what about the euro? are euro rates market still a

little conservative in pricing in tightening this year? everyone is going on with the fed and rising rates, what about the ecb? we have a meeting next week. people are talking about loosening as well in europe. look at those numbers. show hr of your bloomberg industrial production for germany year on year. you would not want to ski down that slope it is so steep. europe is in serious trouble for the moment. whatever you want that is horrible that the dollar, it is worse elsewhere. haidi: minimum away from brexit. the long dollar, how does that affect your view of emerging markets? emerging-market assets will have a good year because of a weaker dollar because of the fed fading. are you not in that camp? david: no, not particularly.

we were bearish on em last year donet has particularly well. if you look at the data, you can see that. it is january, it is the year of the take, it is the new year. everyone is optimistic and full of the joys of spring. as soon as the reality of life comes in, it is different. we are pricing in a deal between china and the u.s.. as the year wears on, you get worn down. show me the growth and i will be bullish. there is not any growth. without growth these economies and currencies cannot perform particularly well. this is still the year of the dollar. it is the year of the dollar because the others are so poor. landing witham a

the dollar because i cannot find anything to buy. yes quick they are buying and they have no response. the dollar,to sell tell me what you are buying. it is not the euro, maybe it is the yen. we heard from one of your clips why it could do well and i would not disagree with that too much. shery: something else has been rattling the asx market, these flash crashes happening more often. are we expecting more of those, would they be classified as the new normal in preparing investors -- how can they prepare for these? david: you really cannot. i was shocked with the dollar yen move. second-biggest currency pair in the world. it has happened during a low liquidity times that are unusual but we have seen them before. he saw one with sterling as you know before the conservative party conference after the brexit vote. we have seen some in the rand.

we have to watch this. we have seen the equity market be very volatile in december and now bouncing back in january. the markets cannot make up their mind. when the market swings one way and the other way, you get these enormous moves. maybe it is just down to people cannot make up their mind at the moment. haidi: always a pleasure david. sticking with his long dollar call. let's get more details about this story in the tech world, resignation of the snap cfo. that news rolling the company's share price down 14%. that spring and technology reporter in san francisco. do we know more about the circumstances of why he left? brand-new details from my sources this afternoon. it thing that happened here,

stone went around and personally asked snap's board for a major raise and was rebuffed. the tension of the company which led to his departure. a lot of tension at the top. it was precipitated by this .equest snap's board is controlled by evan spiegel anyway, does not seem like a strategic move to make. shery: this coming as we see turmoil in snap's management level. we have more information on succession plans? do not yet have a replacement for the cfo. wanted wasn the cfo the chief strategy officer position. he wanted the job that imran khan vacated at the end of last year. that turmoil over what his led to hisd be

departure. increasing turmoil at the top, use one of many executives who have left snap in the last few months. most of snap's executives have left since the ipo. that is sarah frier there in san francisco. thank you so much for that. it has been a torrid time when it comes to snapchat. they have gone in one direction since the ipo. it is hard to see that sentiment being shored up after the exit us of these top levels. shares tumbling 14% on wednesday. the steepest drop since may. really bringing the decline in the stock price over 50% for the past year. haidi: speaking of companies in crisis. we will get the latest on the nissan saga and carlos ghosn losing powerful supporters in france. we get the latest turn on the deepening drama in the auto

sector. this is bloomberg. ♪

selena: you're watching "daybreak: asia." i'm selina wang. theresa may as ready to talk to her opponents after surviving a confidence vote in parliament. she fought the threat of a snap election to remain in charge of brexit. may will seek consensus among other parties who want a close relationship with the european union. jeremy corbyn declined for her invitation to talk. >> i am disappointed the leader of the labour party has not so far chosen to take part. but our door remains open. task, butt be an easy mps know they have a duty to act in the national interest.

reach a consensus, and get this done. jpmorgan boss jamie dimon says a hard brexit is unlikely but would be a disaster for the u.k. the bank has spent hundreds of millions of dollars in preparation of brexit and diamonds is the hardest bit -- split would be hard for your. he understands the desire for the eu, but they realize how messy a divorce can be. tsipras has seen off the latest challenge to his role winning a fourth vote of confidence and he got the backing of 150 one lawmakers in the chamber in a vote triggered by the landmark accord. the government coalition partner had pulled out in protest to allow the country to call itself the republican -- the republic of northern macedonia. the fed's latest survey of the u.s. economy says most regions are showing modest to moderate growth some signs of slowing. generallyk is positive but many districts are

becoming less optimistic amid rising volatility, interest rates, and uncertainty. many economists and central bankers are positive on the outlook while investors have been pessimistic. global news, 24 hours a day, on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. i'm selina wang. this is bloomberg. breaking coming out of singapore, crossing the bloomberg. december ares for really horrible mess. this is the latest puzzle piece in looking at the slowdown when it comes to the trade picture. coming off its high base, a contraction of 18.5%. we are expecting a breakdown of 2% after the contraction in november. contractiona state of 5.7% against expectations of a rebound. wectronics also decelerated, were expecting that to pick up. it is not just electronics.

pharmaceuticals declining almost 27%. shery: what is interesting is we could have expected a rebound of about 2% year on year, given the orders from china ahead of the lunar you -- lunar new year. we have not seen that. for the november numbers, they have been revised down. time wehis is usually a see more positive numbers going into chinese new year. even that could not fly at the dart we saw from singapore. let's look at the asian markets. action wel of this are seeing in the trade number. we do have asian stocks looking next as tepid gains being seen in new zealand and the marketsth gaining a quarter of percent. rising for a third day. the aussie dollar, little changed. we did get figures for november from australia coming in slightly better than forecasted. we were anticipating a 1.5%

month on month a drop for the data point. we did see .9% decline. a softer than forecasted contraction when it comes to home loans for australia for november. elsewhere, we are seeing the nikkei 225 adding 2/10 of 1%. the cosby now edging -- the cost be edging higher. seeing moves across currency markets. you have the offshore yuan trading at 625 against the dollar. earlier, david bloom told us he expects weakness after that fight we saw in 2018 for the yuan. he does see 695 by year-end. this is part of the dollars overall watch, he is anticipating the dollar set for 2019. also want to highlight the british pound. holding firm. around 128. david bloom saying it is the time to think positive on the pound, seeing fair value for sterling. -- let's checkn in on a stock movers. we are seeing geodon falling as much as eight a .3% in tokyo.

erasing a climate of 2.2%. nikkei btv is seeking ¥100 billion and financial aid. in japan, consumer stocks are mixed with retailers under pressure. is amongis a him -- the names, fighting support from the latest data. i want to give a shout out to eric lam on this a be shark mover. samsung publishing and jumping after surging by the 30% daily limit to a record high on wednesday. the company owns a 25% stake in smart study. that is the maker of the viral baby shark video that is on youtube and moving to expand its business with a cartoon series, musical in the u.s., and content on netflix. it is a stock that can do today. shery: thank you so much. sophie with the markets. france abandoning it support over no chairman and ceo carlos ghosn. the finance minister is calling for his dismissal, saying he

needs new unreliable governance. the union agrees, ghosn should be removed. haidi: let's bring in our editor p requires the french government chosen this moment to signal it wants ghosn out of renault? dave: he called this a new phase debacle. obviously, there is a lot of pressure on renault to get its leadership in order. he said they want new durable leadership. permanent ineone place. this is a very fast-moving industry where decisions need to be face -- made on an ongoing basis. lamere did not specifically say why it was the new phase. he did not link it to a single event. if we could see what has unfolded most recently, you certainly have the denial of 's bail on the 15th. that signaled he could be in jail for months. without any resolution to this crisis for renault. they need to get some durable leadership in place so they can

move forward with this alliance. of also have a steady drip allegations, fresh allegations, including this week. another allegation that this is something that is unsourced, but the allegation is that ghosn was paid $8 million from a duchess subsidiary that is involved with the carmaking alliance between renault and mitsubishi and mean some -- and nissan. this is a case where the government's support for him has been undermined on a couple fronts. one, the practical side. the other, the political dimension where they might not want to be seen as supporting portrayedo is easily as a global elitist who is making tons of money that people do not even know about. and he is doing it partly on the back of carmaker that is run by the government. haidi: does that mean, this shift, does that suggest to us that the alliance, the

renault-nissan alliance is back on track? back on the same page come if you will? they it does suggest that are very focused on maintaining that alliance. they are taking what steps are necessary to make sure that it continues to go ahead. wase was a narrative that getting a lot of support when the debacle initially unfolded, that nissan wanted to end this relationship and getting rid of ghosn was part of that. the carmaking alliances simply too important, both to renault and two nissan. to just let it dissolve and let it decay in any way. they are taking steps to write the ship and move forward. shery: thank you so much for that. dave mccombs. let's turn to u.s. earnings. it was a very good day for financials. goldman sachs and bank of america beat estimates in a big way. index rallied to

its highest level in five weeks. ramy inocencio is at the wall to take a look at what the big drivers were behind the bonanza reaction we had in wall street banks this week. ramy: in particular today because citibank fell after they did their earnings. in negative territory only to be higher on the markets. here, definitive optimism when it comes to goldman sachs as well as bank of america. walking you through the big number that you want to know, the actual eps came in at 483. -- $4.83. up 9.5%. the last time this actually happened was 10 years ago. in march of 2009. a lot of the things we have been talking about this week have been some of the biggest drivers. equity trading was one of the big things. revenueion, i.b. investment bank revenue came in a little over $2 billion. that was helped by m&a.

i want to show you what is happening with mergers and acquisitions that goldman sachs. this is for 2018. in total. than $3ling higher billion. what happened to the fourth quarter of 2018 is not exactly on this. what is that about? that was a 56% jump. that was the best performance for that quarter, also in 10 years. some amazing stuff there. in addition, off of what happened at goldman sachs here. hop into the bloomberg terminal. i want to show you the gtv terminal library. what happened there happened here for the fourth quarter. we see this petering out a little bit in blue. in total sum, for 2018 for mergers and acquisitions, it was at its highest in the past three years. goldman sachs would not be complete without word about one mbd. solomon weighing in on this scandal. ramy: clearly this was probably uninvestable -- unavoidable. you can bet analysts were going

to. listen, he did say that malaysia, i apologize. flip up the screen. i want to show you what the quote was. what he said was committed is clear the people of malaysia were defrauded by many individuals. including the highest members of the prior government. the individuals he is talking ex partnerincludes tim weiser who did plead guilty to money laundering and other charges. , david solomon said listen, we have done our duty village and the fact of the manager -- of the matter is tim lied to us. he's putting the blame there. he said the probe is ongoing. also mentioning one thing in terms of costs, $2 billion with regards to the litigation that continues. haidi: ramy inocencio -- shery: ramy inocencio, thank you for that. the investing world has lost one of its pioneers. john vogel, the founder of the championp and

of low-cost index funds has died at the age of 89. haidi: joining us on the line is eric balchunas. bloomberg intelligence senior etf analyst and cohost of bloomberg tv's etf iq. you have interviewed and set down with him a number of times. what does his legacy look like? eric: i think he is just revered almost like a saint. people and money management who are really good, they are really smart, they are impressive, vogel played a completely different game. ien i think about vogel, think he is most associated with bringing the index fund to the forefront. and popularizing passive is really taking in almost all of the closes these days. contribution,gger the more powerful contribution and what speaks to his personality and sacrifice is his decision in 1975 to set up vanguard as a mutual ownership structure. which in turn really -- before

went a lot of possible riches for himself in order to set up a company where the mutual fund investors owned the company. like a co-op, in a way. over 30 years, every time they had extra profits, they would vote to lower the fees on the fund. now you are looking at a company that has an asset weighted exchange rate of 11 basis points. the world turned and now everybody wants cheaper, low cost products. it is nice for him. he got to see his vision play out to the extent that it did. haidi: we obviously talk about vanguard is being a global force. is the vanguard affect people talk about. what is that when we speak about that and why is irrelevant? eric: because vanguard takes in basically $1 billion a day at this point. what they have done is they have made everyone basically change their game. look at blackrock. you saw the etf's, they are the

biggest -- taking in the most money for them. what is happening is everyone is acting like vanguard, in order to appeal to investors. for example, even going back to sp1, the first etf, the reason sp1 was priced at 20 basis points is because it wanted to match the vanguard 500 index fund. even the etf industry was built on trying to keep up and compete with vanguard. allthe etf industry sees it the time, there are categories like smart beta or somatic etf's where someone will come in, and this is an area of vanguard he is not in, and they will come in and undercut the competition. i call that the vanguard affect. in other words, everyone else slowing their fees to act like them or compete with them. math,ded up and i did the you could argue that vanguard saved investors roughly $1 trillion in fees, and also transaction costs through

turnover given the index funds do not really trade much. one comment coming through, saying, everyone really thought he was crazy. but he was tough enough not to care what everyone thought. when it comes to the lower fees. thank you so much for your time, eric balchunas, bloomberg intelligence etf and cohost of etf iq. they are next, bringing up a plan to overtake starbucks on the mainland. we will be hearing exclusively from the company's chief strategy officer next. this is bloomberg. ♪ ext. this is bloomberg. ♪

haidi: this is "daybreak: asia." i'm haidi stroud-watts in new york. shery: i'm shery ahn. chinese startup spending heavily to take the coffee challenge to starbucks. haidi: certainly ambitious. they launched a year ago and has set its sights on numbering starbucks stores.

the cfo explains the grand plan. product, look at the it is a premium product. if you look at the price, it is a mass-market price. that is where our motto is unique. we can do both. that is one of our successes. i would probably invest in luckin. the digital side of the business, help you grow as quickly as you have. i am wondering, how much of a threat the alliance between starbucks and alibaba is given they are ramping up their deliveries as well? delivery, it only helps educate consumers about drinking coffee and having it more available. that is also why it is important to realize this market is really in growth. there is more than enough room for two players. beingre the market is educated on consuming coffee, it helps all of us. >> butter your growth plans for 2019 in terms of stores and revenue growth as well?

the opportunity in china, if you look at china, coffee consumption is maybe around 45 cups per capita. if you look at u.s. and what available markets, around 300, 700 and we have opened 2000 stores in the first year. which is an amazing achievement by any standards. what we see from there is we acceptance amount of by customers of our products. if you look at loyalty, cross earning, etc., it is going very well. we feel also linking back to what i said earlier about the penetration of coffee, that we have room to grow. it feels like we are at the start of our undeveloped -- of our development. the two and a half thousand stores is demand driven. 200 500 -- 2500 by the end of

this year. reporter: when you say you want to be number one in china, how are you do find that? is the number one in terms of stores, in terms of customers, revenues? reinout: for now, we have set our target to be number one in terms of number of stores and number of cups sold. that is what we're focused on. this is more a demand driven achievement. reporter: this bit is -- business strategy or asset like? stores,it be small cheap to assemble stores, but rapidly opening them up across china, is that the model that china is looking at that will be successful versus the experience starbucks andto a you spend a longer, you said there, you spend time with friends? is the asset like model the one that will win out? reinout: when you are in an office and you want to have a quick cup of coffee, maybe lunch, snack, you don't want to go too far. that is the thing that is

addressing. chinese consumers more than anyone i have seen in asia convenience, quality, and affordability. if you are not close to them, it is difficult to deliver that. reporter: can you give us an update on your evaluation? reinout: the valuation and our impressive.s 2.2 is a number that has been floating around. i do not think there is an update on that. shery: chief strategy officer luckin ceo speaking with tom mackenzie. haidi: more ahead on "daybreak: asia." we will look at earnings given the bearish story on the apple iphone. we are looking at the stock potentially seeing worst days ahead even after there were escorted they have had in a decade. that is coming up on "daybreak: asia." this is bloomberg. ♪ k: asia." this is bloomberg. ♪

shery: this is "daybreak: asia." i'm shery ahn. haidi: i'm haidi stroud-watts.

the world's biggest chipmaker is set to report earnings. shery: investors will look for clues to whether it is in for another ugly quarter with top customer apple under pressure from weak iphone sales. haidi: let's get it over to our tech reporter. you talk about the connections between that and apple. it is a strong relationship. it is the exclusive supplier of iphones. according to some estimates, tsmc thought apple accounts for tsmc's5% of tm -- revenue. market watchers will try to find iphone isy how performing in a traditionally tsmceason by looking to guidance for the current quarter. shery: a downturn is expected

given the news from apple pay are what will be the key indicators we should be watching as we listen to the earnings conference call? we are watching tsmc's guidance for the revenue in the current quarter. some analysts expecting that to slide 50% to 20% quarter over quarter. at the same time, we will be watching its level which is expected to be at about $10 billion to $12 billion. that will have an impact on semiconductor equipment including american companies. ceoarly december, tsmc reaffirmed at company's goals to to 10%s revenue at 5% over the next five years. investors will want to find out whether the company will uphold

that target in the earnings conference today. haidi: given the heavy reliance on apple, apple's strength today's it -- it diversify into other services and products. what can tsmc do in terms of plugging the whole that is left? -- hole that is left? debby: quite interestingly, china smartphone market also counts for a large part of tsmc 's revenue. people will try to find out whether tsmc can try to rely on some of its chinese customers to uplift its revenue and performances this year. shery: right. this a gtv chart on the bloomberg showing really, tsmc one of the worst stocks, and headed for another bad quarter. will the high valuations for tsmc spooked investors? think the market is betweenat differences

analysts and investors right now. people will try to find a gauge for how they are going to -- whether it is still worth their money to be investing in tsmc from today's numbers. let's say -- that is something we will be watching closely for. haidi: are asia tech reporter debby wu there. bracing for a bad result. on the back to -- active equity portfolios globally. we do have more markets coverage coming up as we get the opening in hong kong, shanghai, and shenzhen. this is bloomberg. ♪

>> this is "bloomberg markets: china open." >> here the top stories. be under criminal investigation for stealing trade secrets in the u.s.. an indictment could be imminent. >> sterling remains steady after theresa may survives and reaches out to rivals. china's bond market in the spotlight after the latest default in the mainland. we are live with jpmorgan's china ceo. ♪ yvonne: