>> in the evening from bloomberg esquibel global headquarters in new york. i'm shery ahn. welcome to daybreak asia. haidi: asia-pacific stocks set for a modest monday. strong u.s. jobs numbers and positive comments on trade talks. president trump is optimistic on deals with china and north korea. and a warning about brexit.

u.k. government says negotiations could go down to the wire. a bit of a mixed picture as we saw the s&p 500 barely making gains while the nasdaq fell 0.25%. amazon disappointing with their sales forecast. heavys pulling these tech agents down. the s&p 500 was led higher by energy companies which were the biggest winners. we saw wti get past that $55 per barrel. we had some concerns over venezuela. not to mention a more optimistic outlook given the strong u.s. jobs numbers and economic outlook for the world bit more positive.

let's see how we are setting up for trading in asia. it is lunar new year's eve. we are seeing a number of markets closed already across asia and a couple doing a half day. liquidity on the ground will be the same this week. offe seeing new zealand session lows. a tepid upside when it comes to australia. watching for a key week for the aussie and kiwi dollars. they were fighting for the wooden spoon last week. we see that rally so far this year. we are watching if we get any indication from the reserve bank of australia when they meet tuesday to give another leg up. no trading in south korea, china, taiwan, or the anon

today. -- or vietnam today. the first wordo news with su keenan. newspaper says that the u.k. may withdraw a support package for nissan after it decided not to build the new suv there. the company says the decision is partly down to uncertainty about brexit. move follows news that the u.k. auto industry has seen investment cut in half the next year. technology has pledged to never do any harm as it faces widening accusations of espionage. newspaperan told a that the chairman would never intentionally hurt the country

or individual. the u.s. want allies to stop using huawei equipment. the company cfo remains accused of fraud in vancouver. australia's bank faces the biggest -- in decades. report, to be released monday, the royal commission could postpone -- could propose banks be broken up, push for changes to compensation, and recommend charges against firms and senior executives. fleming and the australian city worsened afteras authorities were forced to release water from a damn. . around 500 homes are underwater. dumpedmoving monsoon has a week of heavy rain across

north queensland. the trump administration is sending extra troops to the mexican border to support customs and security operations. the pentagon plans to deploy 3000 additional personnel, bringing the total number of 4650. to the president sent many troops just before the midterm elections but withdrew many of them weeks later. i am su keenan. this is bloomberg. shery: president trump that he thinks north korea wants to make a deal. he confirmed an upcoming meeting with kim jong-un in a wide-ranging interview with cbs. pres. trump: you will find out state of the union or shortly before. the meeting is set.

he is looking forward to it. i'm looking forward to it. shery: our bloomberg news editor joining me now from washington. we have the president's own intelligence chief thing -- saying he doesn't think north korea will denuclearize. what can we expect from the second kim-trump summit? reporter: it is a good question and we are waiting with bated breath to find out where the summit will be. a would like to see commitment by the u.s. to easing economic sanctions and a koreanng of u.s.-south escalation of exercises. president trump was asked if he plans to take troops to south korea. ,e said i don't plan to do so they are expensive to maintain their. re. i don't think it is imminent.

what does the u.s. get out of the summit? it is unclear. nonetheless, it seems like it may go ahead later this month. itbloomberg has reported, will very likely be in vietnam. president trump mentioned in the same interview that a transition of power is underway in venezuela. what are you hearing from this top air force general who has called for the military to switch sides? reporter: kind of a showdown coming up between maduro and guaido to have control of the military. you would think that would be one of the major inflection points. we did have mr. guaido coming of with a three-tweet-ifesto what he thinks should happen in the next few weeks.

he is asking for the international coalition to send you minute kerry and aid, fo rth -- to send humanitarian aid to the cou7ntry, for the military to allow that aid in. president maduro pushing back, a civil war iny venezuela if we say it is. he says he will not caved to the pressure of european governments to hold early elections. the next week or two could be very critical. cbsident trump in the interview did not take military intervention off the table, but i think that's what you would expect him to say. s not going to take any of his potential interventions off the table. we just wrapped up the u.s.-china trade talks in bc. d.c.ems policy -- in

-- to buyolicy makers more u.s. goods. reporter: i think china buying more u.s. soybeans is low hanging fruit. there are a lot of sticking points before a comprehensive trade agreement can be struck. one thing that president trump did say is he doesn't want a stopgap agreement, but a final agreement. 1,en the deadline of march that seems like a tight timeframe to get something as comprehensive as the u.s. would like to see. there are always conflicting forces within the trump administration between the china trade hawks and doves. we had that report over the weekend that president trump may meet with president xi at the end of february.

is a comprehensive agreement before? that's unclear, but they are going to try. haidi: ros with the latest on those trade talks. our next guest says china is the most watched by investors. he says people are just now getting to adjust to the new normal and what that means for future growth. he is the cio at state global investors. great to have you here. we hope you are coping with the hot weather in sydney. the low hanging fruit has been picked. ais is a goodwill gesture couple days after the trade negotiations. in the longer term, this is the great strategic competitive relationship of our time. toit has moved on from trade

other issues, to military, strategic come petition and containment. in the trade area, as investors we feel nervous, but it is an area we understand well. if you look at the pattern that this administration has set, it seems likely you will get to a better point on trade. where that leaves other issues is an open question. we have covered -- after the horrible 2018, we talk about the fact that em's and asia stocks fell the pain that spread to these developed markets toward the end of the year. jpmorgan saying this could be the market bounce. is trade still tantamount? are we more likely to get the positive effect of a dovish fed, a weaker dollar? >> i don't think the put would

solve this problem. this is a fundamental problem that has rattled business confidence in china and along the border. it is hard to revive the spirits without a change in fundamental improvement in trade relations between the u.s. and china. when that comes, i think you will see a turn in the dollar. you will see a revival of risk-taking. it's too early now. shery: when we look at the chinese economy, we are starting to see clear signs that the economy is slowing down. we haven't seen big moves from the pboc in terms of monetary policy. this chart showing with a have not done. it hasn't moved on this key rate as compared to other central banks. will existing measures be enough to lower the financing cost of the real economy for china? but whereittle helps,

you have a problem is business confidence. monetary policy can help. it's a problem for demand for credit as opposed to supply. it is not so easily sold by that policy move. which reinforce confidence when needed can be from the central bank. china is not really in that spot. whether it is the chinese market or the winter impact on global investors, will we see more chinese investors included in international indices. what sort of impact will that have in 2019? >> in the long run, very healthy. the amount that foreign investors may put in as a result of index inclusion may be modest because it is the pathway to full inclusion and equities. i think the early stages will be

growing awareness at the size of those capital markets. that's ang term, healthy investment -- development. chinese issuers and others will benefit from the scrutiny that some investors will put those securities under which will potentially prevent more bubbles. haidi: you have so many bearish forecasts that have been tinged on the structural -- impinged on the structural economy. one says -- is that a view that you take? >> i would be very wary of that. this idea of a strong leader that can solve all problems. there is a reason why we like power to be more dispersed.

that is because there is uncertainty about the role of policy in solving short and long-term problems but sometimes decisive action is needed. china was very decisive in acting quickly. trade is at the heart of this issue. haidi: we will be back with more in just a moment. we are seeing some stock movement in the early part of the trading in sydney. released its earnings update, not just in australia but also in north america. rainfall on the east coast allayed some major infrastructure projects. 2019, american

operations up 15% in dollar terms. we are seeing some impact when keyomes to the weather in u.s. states. been heavilyas impacted by the market decline as well as increasing competition. we are looking at numbers are quite a bit lower than the average analyst estimate. that stock down about 7%. we are having a conference call in sydney underway at the moment . we will give you more details as they become available. it's a big week for the central bank here. india, australia, thailand and the philippines -- more onxt we'll have the fed and what is in store for europe.

this is bloomberg.

♪

shery: this is daybreak: asia. i'm shery ahn in new york. haidi: i am haidi stroud-watts in sydney. investors showing nerves of steel when it comes to brexit. you canst showing negotiation's could go right down to the wire in march. the whole situation with brexit, and kicking the can down the road, is that inevitable, an extension of article 50? are u.k. investments practical? >> i think it is a bit inevitable. and might be a good thing. for brexit on march 29 and it is possible that is what we will get. when: this comes at a time

brussels is seeing these european growth powerhouses seeing a slowdown. this is not something that europe wants to contend with. >> but the political urgency is more of an imperative. they will play hard with the u.k. right to the end. shery: so much bad news has been invented in european stocks. could we see any surprises in the positive? >> emerging-market stocks and european stocks are like twins. they are cheap and have damaged fundamentals. we expect things will get better and we will have a catalyst for value creation. we have been looking for better signs of growth, either through structural reform, and end to brexit woes or something out of italy. yet.e not ready to go away

shery: we had some stronger jobs numbers in the u.s. but wages are still disappointing. thatis backing the idea the fed is right in taking a more patient approach to rate hikes? we had a synchronized acceleration. in 2018 it began to fall apart. you have to be a little bit cautious. the jobs data and other indicators would suggest the fed needs to be careful about easing off too much. >> it is extraordinary to see the changing tone between december and a few weeks after that. returns of investment come a in terms of having seen , thetellar earnings season tax effect this year was probably not likely to see a repeat to that extent. priced it in?ts

>> we should rely on earnings. and think markets are looking for that and i think markets will move on earnings in the next couple of quarters. that's a moment to there is a mess in the u.s. economy and the only thing holding it back is sentiment and for global investors that is dominated by the trade issue. picking your top asset class and the top geographic market, what are you liking? u.s. andll like the that was contrary and in the past but from a certain perspective it looks better. the u.s. over some of the more troubled regions. they offer the kind of interesting value.

later in the year the catalyst might allow leaders to reverse that position. haidi: not compelled by asia? thisia is tied up with china story. the fact that china affects all of these industries to the back door of market sentiment. your tripd luck with in australia. state streetle, global advisors cio. on youro to day b go bloomberg terminal. you can customize your settings so you only get the news on the assets and earnings you care about. this is bloomberg. ♪

shery: this is daybreak asia.

haidi: i am haidi stroud-watts in new york. -- technology will go ahead with in wisconsin. the announcement is a reversal of last week's news. ater they plans to abandon project. foxconn secured massive incentives to build the plant. >> this group is selling its -- hong on hike on kong's airport ending plans for an enormous residential project. otheral follows three sales. they raised 3 billion u.s. dollars to help reduce one of china's corporate debt piles.

>> a company has filed for insolvency. the decision after failing to break -- to pay creditors for 18 months. they went to fend off initial bankruptcy moves. -- theia has a quiet trading day down 0.2%. we are waiting for that final report. the aussie dollar closed -- ahead of that trading decision. moment, wen just a will be talking more trade. president trump seeing progress moreina pledges to buy

u.s. products including the soybean purchase. all the details coming up next. this is bloomberg. ♪ the latest innovation from xfinity

isn't just a store. it's a save more with a new kind of wireless network store. it's a look what your wifi can do now store. a get your questions answered by awesome experts store. it's a now there's one store that connects your life like never before store. the xfinity store is here. and it's simple, easy, awesome.

su: president trump is reported to be ready to meet his chinese counterpart, xi jinping in vietnam at the end of the month. the south china morning post says they may have a two-day summit at the end of the month and the idea was floated last week. brexit is seen as one reason why nissan will not be making the suv in the u.k.. the company says it is a business decision but that

uncertainty about britain's relationship with the eu makes it difficult to plan. makesant currently various models. has pledgedologies never to do any harm as it faces widening accusations of espionage. huawei's chairman told a newspaper that the company would never intentionally hurt a country, organization, or individual. the u.s. would like allies to stop using huawei equipment ofle the cfo remains accused fraud and sanctions-busting in vancouver. -- ers of the huawei members of this man's legal team will meet.

teamaper says ghosn's will confirm his denial of all charges linked to alleged financial misconduct. reports from london say malaysia has launched an international roadshow to sell a luxury super yacht it seized. has a price tag of uctionillion after an a failed to attract realistic bids. it was seized as part of malaysia's investigation into missing billions at an investment fund. for news 24 hours a day powered by 2700 journalists and analysts in more than 120 countries. i'm su keenan. this is bloomberg. haidi: president trump is

confident that a deal can be struck with china after two days of trade talks. post ish china morning reporting a meeting between the leaders could take place as soon as february 27. soybeanalking about purchases taking place a couple days after the meetings, low hanging fruit. this meeting would be significant. expectations? >> the expectations are better than they were a couple months ago. we talk about the good vibe. the president is quite the beat. we have u.s. representative lightheiser talking about the sticking points. they center around technology and the economy. let's say that there isn't a deal both sides agree to, what about the enforcement

mechanisms? no one is talking about that. china will have to agree to sending they don't want to. president trump -- will he sign enforcer? as the that is a key sticking point. it is interesting that we are talking about enforcement at this stage. it does suggest that there may be prospects for a deal. at least we are at that stage. at least we're talking realistically. kaiserambassador like really seems -- lightheiser really seems focused on that. but when you talk what the sticking points like i.t. theft or state subsidies, have we seen any progress and could we expect ?rogress on the deal itself

are we counting on some thing within the chinese economy to bring progress? >> it is a bit of both. there are think the chinese have said they are going to do. they have been talking about better protection for intellectual property rights for quite a while. they're are starting to introduce legislation that would do that. whether that is because of the u.s. pressure because they would do that anyway, who could know? there are enough positive steps to suggest that china is trying to make a deal. many of these things are in china's best interest. china is the longer the low-cost sweatshop that punches out cheap stuff anymore. they want innovation. chinese businesses know that to have innovation, you need r&d and you need to be a lot to protect the intellectual property that domestic chinese businesses have. this is in china's interest as well. the real sticking point is to

what agree will china agree to the enforcement mechanisms that would see u.s. companies monitor elements of chinese business, or the way that capital is allocated. those are the sticky issues that remain to be seen. shery: you make an interesting point. we know that china has led in those patent filings. they have a lot to lose in the ip theft issue. that was our asia economics managing editor malcolm scott. the spotlight is on federal banks this week, with the dovish fed, and the prospect of a rate cut -- the prospect across emerging markets. our next guest joins us from singapore. dan, how dramatically has the landscape been rest by the fed -- reset by the fed's last week?

>> it has been reset dramatically. when you listen to the candid comments that people from bank indonesia or the bank of korea have made, they specifically cited the federal reserve stance at the last few meetings. if you are going to cite the fed on the way up, now that the fed has shifted, why can't you? rate cuts have got to be on the agenda for some of these banks. shery: the 20th anniversary of -rateank of japan's euro=ra policy. what is the verdict? >> the verdict is it is not just japan's anniversary. there are many people invited to this commemoration. this was seen as a radical step taken for unique japanese circumstances.

the same applied to things that japan subsequently tried like quantitative easing. they are now the global norm. these things that were seen as far out are thoroughly legit. thething that betgsgs question, is japan not an outlier, but a laboratory for the rest of the world? some of the things that japan has done, such as negative interest rates, europe has done first. has interest rates that are deeper into negative territory than japan. shery: we just saw the prime minister unveiling a populist budget. one of the things -- what are the things we should be watching for in india? >> firstly, an overarching point, for a government elected

with a huge majority five years ago on an unabashedly pro-business platform, they can't seem to hold on to something as basic as a central banker. modi is now on to his third r.b.i. governor. while conditions may be sympathetic to a cut, there will be a question in the back of people's minds. how much is politics motivating it? they have burned through the previous two governors because d -- did not do their bidedi bidding. we will see what happens. oraclecoming up next, will be telling us how they plan to whether the unscheduled outlook for its cloud business. this is bloomberg. ♪

shery: we are counting down to asia desk of the first major market opening this morning. ground.and losing other markets are closed celebrating the start of the year of the paid. keep an eye -- of the pig. keep an eye on this. japanese shares now trading at around -- check let's get a quick of the latest business flash headlines. [inaudible] rules forlaxation of shares listed in china. citigroup and morgan stanley are also pushing for the changes. inry: taking a stake

bristol-myers squibb. an -- might have is unclear. none of the parties are prepared to comment. the company will give them -- administration may attempt to sell the cash-strapped india bonds once again. the process would require a shareholders meeting. last year, they failed to .ttract a single bid shery: oracle is looking to the cloud to drive growth and it -- evennumber of trends amid a sharper than normal slowdown.

let's get started with what trends you are seeing out there when it comes to private cloud's adoption by these traditional enterprises in asia. >> hi, nice to have me on the show. the cloud is a major trend that we are seeing in the market. i put into three bullet points saying that abcd is the key trend we are seeing in the market. a for artificial intelligence. b for blockchain. c for cloud computing. d for -- shery: when you talk about artificial intelligence, that will potentially erase productivity. is there any implication for the labor market? >> we don't see a lot of implication for the labor market. what we are seeing is a lot of

automation which will help enhance and accentuate the performance. taking seen the business a big leap forward from that perspective. haidi: we have heard from the likes of sap and other operators in the same space releasing the impact of these trade wars and uncertainties. are you seeing an impact on your business? will you see them going forward? >> at this point in time, it is early. we have not seen an actual impact on the market, but the customers are varied. they are waiting and watching. they want to see how it pans out. we have a huge business interest in our part of the world. the investors rent china and other parts of this region. we are waiting for the trends

and we are hoping things will settle down. haidi: what are the biggest risks you see to the upside of the cloud and a.i.? speed current risk is the at which some organizations might be able to go forward, some might not. what we're predicting in the oft few years, by 2025, 80% customers, globally, in every industry, are expected to get onto the cloud. the risks are expected to be from the security framework. we believe organizations have a huge concern on security. we have to be ready to allay that fear. we need a stable ecosystem. we have to make sure the cloud

data is protected and that the customer has enough confidence to get onto the cloud computing world. this is the most important fear which we feel, and the risk which customers have in their mind. it is a matter of time. it will pan out. betterud is showing much trendability in terms of the fears customers have. shery: what about the macroeconomic challenges? some experts inside bloomberg warned of a slowdown. pausing brexit likely spending in europe. is asia a concern at all at this point? >> i don't think so. i think asia is a key factor for us. the dynamics and macroeconomics in this part of the world are outstanding. if you look on the globe, some

of the countries -- from indonesia to bangladesh, and most of the countries within the region are at the cusp of growth. they have seen tremendous traction on the ground. customers are truly excited. of theer volume economics going on in some of --se countries gives a huge software industries are very optimistic. we think that immediately there is no slowdown. just starting to take off in our region so we believe in the next few years is when all of these trends and key technologies will take off. haidi: if you work to pick one market you are most bullish on, which would it be?

indonesia.say from a country perspective where bullish on that country. missing some great stability, huge innovations coming from that. new startups coming up. an ecosystem which is thriving. up indonesia as one of the key countries. appreciate you spending time with us today, the overcoat regional managing director. let's look at some of the stories trending across the bloomberg universe. you can readcom, how a dollar vortex is putting a chill on u.s. earnings. shouldn says investors not be driven by fears of a recession for now. on twitter, tictoc has a rundown of the do's and don't's.

look at the stories trending online or on the terminal. this is bloomberg. ♪

haidi: this is daybreak asia. shery: i am shery ahn in new york. the u.s. posted two important economic indicators on the first of the month. january jobs and auto sales. the difference is could hardly have been more stark. numbers, 304,000, a huge beat on estimates. every estimate and this is on top of a revision to 222,000 in december. let's hop into the bloomberg terminal. this is what i was telling you earlier in december.

shutdown,e government all of those furloughed workers. this is the 100 straight month for gains. that is terrific. let's go into the average hourly earnings. seeing growth, 0.1%. the expectation was for 0.3% the fact that this is not rising faster shows there isn't as much pressure on the job market. inflationary pressures is the phrase that has been bandied about. especially from what we're hearing from larry kudlow. kudlow: more people are working and prospering and it is not inflationary. productivity is rising.

policies of lower tax rates from deregulation, energy, and trade reform are working. we are sticking with our 3% economic growth rate. >> there is more. the practice it it -- the participation rate was at its highest since 2007. the job rate ticked up to 3.4% but that was with the partial government shutdown. the idea is that if the government stays open, that could possibly take down -- tick down. haidi: another labor market dollar. it appears to be strong. can we blame the weather this time? >> that is what some carmakers are saying. chrysler, honda. both claiming the weather. we have been talking about the deep freeze that much of the united states has been in and they said that is keeping people at home, is keeping workers at

home because they are operating on skeleton staff. all of them missing estimates, that is in the third column. the actual analyst estimates is on your right side there. one of the biggest surprises was ford. they delivered up 7%. demand for suv's clearly happening there, trumping the fall in sedans. to show you where we are in terms of the pulse of the annual sales race. right in the middle of your screen. we were expecting to be at 16.9 million. we are off that by about 300,000 vehicles. fiat chrysler is saying they are still bullish on the rest of the year due to the strength of the u.s. economy. time will tell.

shery: the week ahead on wall street brings a fresh round of earnings including google and president from delayed the state of the union speech on tuesday. su keenan has more. what are you watching now? su: what is interesting will be how google plays out which is kicking off the week -- one of the things is how amazon dragged down tech on friday. they are down some 20% from its september high on the disappointing outlook. on friday, the stoxx eeked out -- stocks eeked out a gain. trading lower has online is activated. look at the slew of earnings coming down the pike. not only alphabet, but twitter, softbank, disney. we have general motors, some of the oil. really key companies that will

be reporting. it will be interesting to see how the weaker dollar is impacting earnings. report. the strong jobs interesting to note the outlook by bond traders is that there might be an actual cut in interest rates ahead. now that we have strong jobs rates, that appears to be moving off the table. that could impact things going forward. haidi: thank you so much. su keenan in new york with the latest. let's look at how asian markets are faring this monday morning. we are seeing a tepid session. liquidity dominant this week. the large part of asian markets closed with the you -- lunar new year. let's look at how we're faring when it comes to the aussie and kiwi sessions.

the bank of australia meeting tomorrow with its decision. some speculation that a hawkish comment from the rba will drive the aussie dollar to rally higher. more to come on bloomberg -- daybreak asia. this is bloomberg. ♪

haidi: haidi stroud-watts in sydney. sherry: i'm shery on. welcome -- shery ahn. welcome to daybreak asia. ♪ shery: --haidi: asia-pacific stocks look for a modest monday, with strong u.s. data and positive comments on trade. trump is optimistic among reports he will be meeting with xi jinping at the end of the month. shery: big lenders brace for

impact as the royal commission finishes its report on financial misconduct. haidi: here's a su keenan with the first word news. su: president trump is reportedly ready to meet his chinese counterpart in vietnam. the south china morning post says they may host two days of talk on the 27th and 28th. the idea was floated that the trade talks would be in washington. the president said progress was being made, but no final deal what happened until he met with xi. the times says the u.k. may withdraw $78 million support for nissan after it decided not to build the new suv there. the company says it is due to uncertainty about brexit. nissan's move follows news the auto industry and involvement has been cut in half. the plant makes the duke, the kashkari, and the electric leash.

huawei pledged never to do harm as it faces widening accusations of espionage. the chairman told the newspaper the company would never intentionally hurt a country, organization, or individual. the u.s. wants its allies to stop using huawei equipment. and the chairman remains accused of fraud in vancouver. australian banks face their biggest of people in decades. after inquiry into misconduct, recommends how that industry should atone for wrongdoing. in its final report monday, they could propose banks be broken up. it may also push for changes to compensation, tighter lending standards, and recommend charges against firms and senior executives. worsened after authorities were forced to release water from a dam that

swelled to 250% capacity. 500 homes are underwater, with levels not expected to start receding until late monday. a slow-moving monsoon spent the week of heavy rain across north queensland. airports in schools remain closed. global news, 24 hours a day on air and at tictoc on twitter, powered by more than 2,700 journalists and analysts in more than 120 countries. i'm su keenan. this is bloomberg. let's take a look at how we are starting holiday, japanese markets coming online. when thetching sony, stock starts trading after company cut revenue forecasts, the latest big tech name to be scuffling from the global slowdown and the china trade war impact. we are seeing upstate to the nikkei 225, the yen trading at 109.55. australiat upside in

ahead of the rba decision and the after market close expected in banking and financial industry misconduct. rallied,e dollar, 7252 looking for any hawkish comments from the rba to give it the next like higher. -- leg higher. illiquidity is the trading theme if you are looking for one. we are looking at japanese markets to trade -- carry trading actions. we are not seeing any trade in taiwan or vietnam as lunar new year has kicked off in those markets. when it comes to hong kong and malaysia, it is a shortened half trading day for those countries. shery: the start of the year of the pig. for more, let's bring in mark cranfield in singapore. we have fed speak here in the u.s., not to mention trade

numbers. what will be driving investors? week, the u.s. will be in more focused than usual. people will be watching what happens in the united states. we have a lot of fed speakers. we've already had one reporter this morning from neel kashkari, a fed member, claiming jerome powell is coming to a dovish view of the world, which could be significant. he does speak later this week, as do others. the suggestion that powell is coming around to looking at wage growth and inflation, things is watching closely, willing to see more strength in those numbers before he responds with rate action. people are beginning to speculate maybe the fed is on despite the whole year relatively strong jobs numbers we saw last week. this would be a significant change. this would help to shape how people see the world this week.

we also have earnings data from wall street. definitely, the u.s. will be at the top of people's minds with not much coming from the asian side. haidi: not from the fed, but domestic politics will make headlines. we've got the delayed state of the union. mark: indeed. say,ver mr. trump has to particularly on the geopolitical side, will grab people's attention. as you said in the earlier broadcast, there could be a meeting in brisbane with xi, and the north korean leader coming up, as well. also what trump has to say about the middle east, russia, and potentially venezuela. all of these things could have some influence, especially on bond markets. treasuries are looking at a haven. people are dissecting what he has to say. they will want to know what he has to say on this potential border wall with mexico, and

whether that has impact on the fiscal situation in the united states. definitely geopolitics and never trump said in the state of the union could play on markets this week. we'll have to look at what happens in north america more than the rest of the world for direction on that. bloomberg mliv strategist mark cranfield with a look ahead at what we're watching in this holiday quieted weekend in asia. you can follow this story on our markets live blog on the bloomberg at mliv . you can get a market run down in one click, commentary and analysis from our team. you can get exactly what is affecting your investors. president trump is confident a deal can be struck with china after beijing pledged to buy more goods. they are reporting a meeting between the two may come as soon as february 27 in vietnam. in -- to bring

usually these meetings take place after details have been hashed out. we haven't had much in terms of details. guest: we are getting bits and pieces, 2 million tons of soybeans are just. there are -- purchased. the deals are hashed out. sticking points seem to remain. what will the chinese do in regards to protecting the intellectual property of overseas businesses? the chinese would be behind closed doors making commitments. we know the americans are being skeptical of mr. leigh heiser in particular, really wants to say enforceable -- see in forcible commitments made here. these talks have been ongoing for years in china, and he's very committed to having something that can be enforceable. of course, the other area is

around what sort of mechanism that enforcement will be. shery: and we are seeing the chinese economy starting to slow down. this gtv on the bloomberg showing not only manufacturing pmi, but also the shy seeing numbers. whichhe satellite index, it shows you the industrial facilities across china, seen from space, and also what sort of manufacturing activity you're seeing in contraction territory. how much did this pressure china to come to the negotiating table with goods concessions? malcolm: certainly seems to be the backdrop. mr. trump year said it was part of his cut chelation the chinese are feeling it, so they want to make a deal. they've got three main things happening, the export pressure. how much that is related to trade is hard to tell because it is hard to strip that away from the loss of momentum in the global economy and the tech

slowdown. anecdotes, lots of not many hard numbers, but anecdotes of frontloading. anyway, towards the end of the year, that picture looked murky and the numbers won't looking great. on top of that, you've got factory inflation story helping revive global inflation. that now seems to be over. we've got the level there on ppi inflation looking close to zero. and then you have this debt overhang, which is constraining policymakers hands. they can't do the big bang stimulus in the past, because they don't want to make the longer-term problem worse. they don't want more debt to pay off down the road. though this together, and you see growth moderate. it should be pointed out that growth numbers are not terrible. we are still around the 6.5% range. for a sizableible

economy that is china now. and the numbers seem more real than they were in the past. bloomberg economics have done study on that. they say the fourth quarter numbers will probably be in line with what happens. there's been skepticism over china's statistical rigor in the past. maybe if some of those are in the past, you see genuine growth around 6.5%. not too bad if they can be sustained. haidi: talk about the veracity or the questionable data that's been around for years. michael pettis had a great piece saying chinese are one of the only major economies where gdp is not a measure of output. it's a target that's set. we still having conversations about why they are setting gdp targets? malcolm: let's remember the system that's still being followed is a stalinist system of targets, big industrial

targets, how many jobs are generated. these targets are very specific. if you look at a month or so time at the work report in march, how many rail lines, all sorts of targets. of course, it is still a state directed economy. it means they can actually deliver the targets, which is a lot harder to do in western liberal democracies. getting 6'5" percent growth without huge leverage, that's not a bad thing for a large economy. shery: malcolm scott, thank you so much. we have breaking news, sony something in tokyo. we're seeing their shares fall the most since 2014, talking about a plunge of more than 8%, that after sony trimmed sales outlook on weaker demands for camera chips, mobile handsets, and financial services.

they did beat analyst animate estimates and -- analyst estimates and raise their for your income, but investors not liking cuts on sales outlook. we are seeing the stock fall the most since september, 2014. speakingad, we'll be to the charter head and find out which currency they see performing well as we enter the year of the pig. haidi: first, we are joined in sydney to cover what is a big week for australia. that's up next. this is bloomberg. ♪

shery: i'm shery on in new york. haidi: i'm haidi stroud-watts in sydney. global markets enjoyed a strong january. emerging markets on must 9%.

however, our next guest says we shouldn't get too excited. he's here with us in sydney. great to have you. happy lunar new year. are investors feeling too sanguine? maybe aot a dovish fed, resolution on the trade front. is there further upside? guest: yeah, look, happy new year to you too first. we do feel the market, in terms of fed comments, has gotten the market excited too quickly. we do feel the fed is being pragmatic. they talked about global uncertainties. equitythe result for the market was pretty weak in january and then there is trade uncertainty. some of those things are weighing on the mind and waiting to see the resolution of some of those things. view that the

second half of the calendar year, the could be on a trajectory to heighten again. in terms of market, with a price and everything, i think the market has become next -- less negative on the back of that. we argue they got so negative last year to worry about the recession, and we don't see that taking place. it's good we have a pause for some time and they provide much-needed relief for the emerging-market, as well. shery: i'm glad you bring up emerging markets. look at the rebound in asia stocks have done better than volatilities, a lot lower. saying this could be the end of the bear market bounce, if you will. but to be fair, e.m.'s and asia stocks were feeling the pain that spread through by the end of the year. cominge a sense we're

off that because investors priced in trade and the fed and the headaches? jun: absolutely. in our view, we believe e.m. is more interesting. one is the growth rate. even though it's slowing, it's still higher than the u.s., not to mention australia. what is interesting, e.m. asia, for the first time, it is trading on a dividend yield comparable to the likes of the dm markets, such as u.s. markets. caps are20% of market sitting in the cash. we see valuation support for the markets. we expect capital flowing back in. shery: what is your base case scenario for how the china trade war plays out? jun: our base case is we do believe there will be some sort of resolution, as we have been discussing for quite some time. the commentary from both sides seems to be reconciliatory, and

we expect china to come up with more concession, as well as the path to open up its market for foreign businesses. we do expect em markets to have a good rally on the back of that resolution. shery: what about chinese markets? will be see more stimulus measures from china until the trade resolution? what form will that take? will we see interest rate cut? jun: that's interesting because chinese government, more recently, has been very pro-stimulus and a lot of commentary even though heather announced substantial big stimulus package. they hinted there will be one coming. the market was looking for a one ahead of the chinese new year towards the consumer, thinking that could stimulate them to get the economy going again. but it does look like they will wait until the resolution, which is in march, before they announced that they package to get the market going. haidi: do you see any upside for

australia risk assets? the aussie dollar did well in january. maybe a resolution on the trade front could boost what is to be a mediocre earnings season? jun: absolutely i agree with you. we recently sanguine our market on the back of that. a lot of businesses that have international earnings will do reasonably well, just on the back of that risk rally. whether it be from the stimulus and the others. however, domestically focused businesses will be challenged and we believe the banks will be difficult to say earnings growth, especially when we see the commission report earlier today. we think it will be supported by offshore earners, as well as the quality. haidi: what is your topic for the region? jun: for the region, we like a few. we skew to the domestic markets at this point for growth names.

given the exposure to the u.s. market, and as we discussed before, believe the economy is doing quite well. we also like some of the chinese names. we highlight the educate chinese sector. recently, the government released a report, a review of the sector seems benign. it looks interesting. there's a lot of opportunity in the current market space. shery: any contrary and calls to your views right now? jun: yeah, look, it's interesting. we've been talking about this for some time, we are bullish the emerging markets in asia. and now that we're seeing more market participants following through, we still believe the market went through quite well given the u.s. dollar seems to have topped out. we don't expect that to strengthen. will emerging em markets

receive much-needed relief, as well as growth rate continuing to be pretty strong. 7.5%and japan, growth is relative to the other dm market. we do expect those markets to do relatively better. haidi: in terms of the australian election, is that playing into your forecasting? jun: that's actually very fascinating. that will be a wildcard for our investing thesis for 2019. there's a few large controversial issues, one is the banking credits, refund removal. and that should spark buyback. coming from companies with big retail shareholder base, as well as good balance sheet anti-banking credit. this reporting season, we could see companies announcing that. and of course, the other is potential changes for the housing market. that could have very meaningful impact, flow on impact, for the

economy that is not in most people's base case. if that does take place, it will be negative for the economy. haidi: always a pleasure. good to see you. sydney.liu in bloomberg subscribers can go to dayb on your terminal. it's on the bloomberg anywhere app. president trump confident of reaching a deal on china, and the meeting with north korea as well. you can customize your settings see could just get the news relevant to you. this is bloomberg. ♪

haidi: i'm haidi stroud-watts in sydney. shery: i'm shery ahn in new york.

wall street firms preparing to lobby china for changes that would make it easier to short stocks from hong kong. sophie says it's among the banks of seeking relegation of rules that lists china as a prerequisite for shortselling. citigroup and morgan stanley are pushing for the changes. star board value is taking a stake at bristol-myers following its acquisition. none of the parties have been prepared to comment. the president will give bristol control of one of the most successful drugs in recent years, the top-selling blood counts. shery: reports from new delhi say the modi administration may attempt to sell cash of air india later this year. they cite a top bureaucrat as saying the process would require a shareholders meeting and

auditor account. last year, the government failed to attract a bid one and offered 76% of air india, along with $5 billion of debt. for -- quickr check of major markets trading across asia at the moment. we are seeing japan's nikkei gaining .4%, despite the fact one of their biggest losers is losing 8% as we see them fall on their trends sales outlook. we're seeing australia again .5%, that would be after three sessions of losses. we have optimistic sentiment in the markets. we do have the celebration, the start of the year of the take across asia -- the pig across asia. india, andaustralia, japan carrying much of the weight for trading this week.

right, and coming up on daybreak asia, we will be speaking about chinese airlines for this lunar new year trading holiday. this is bloomberg. ♪

su:. this is daybreak asia. i'm su keenan. wasking to cbs, he said he not inclined to engage with president nicolas maduro unless the process of democracy is playing out. the u.s. and two dozen other countries recognize juan guaido as venezuela's rightful leader, and are stepping up pressure for maduro to step down. trump is also sending troops to the border to support customs and security operations. the pentagon will deploy about 3700 additional, taking the

total number of troops to 4350. they withdrew many of them weeks later. reports from tokyo say carlos ghosn's legals team will meet prosecutors and judges figure he 14th ahead of its first court appearance. they say the meeting will be held at tokyo district court with discretions based on initial procedures. the paper says his team will confirm denials of all charges linked to alleged financial misconduct. reports from london saying malaysia has launched an internal roadshow to sell a luxury super yacht from fugitive financier jolo. the telegraph said the vessel has a price tag of $130 million. after an auction failed to attract realistic bids. equanimity was seized last year

as the investigation into missing billions at the one mdd investment bond. global news, 24 hours a day on air and at tictoc on twitter, powered by more than 2,700 journalists and analysts in more than 120 countries. i'm su keenan. this is bloomberg. we'll say goodbye to the dog, the last animal in the chinese zodiac cycle is approaching fast. let's take a look at what analysts are looking ahead to for the year of the pig. ♪ >> lunar new year let down. that's the warning from bloomberg intelligence when it comes to china's annual travel rush. holiday air passenger traveled is likely to fall short with beijing's push to stimulate consumption, unlikely to benefit airlines in time. as for that, china's social credit system. any wrongdoers will be barred from boarding planes and trains. the first new years since the

policy's application to transport. still, more than 400 million rail trips will take place, with 10 new tracks being put to the test. and 7 million are seeing shopping off a broad. the short cord destinations will be the topic. south africa are some of the countries to lax the requirements. when it comes to red packets, the competition among tech giants remains fears. they expect to distribute $218 million among users of its bond line while it, while win chat is allowing customers to customize electronic envelopes. want to bring more bacon home? think again. the peng shuai index says investors should focus on limiting losses in the year of the pig. that could weigh on high-end brands. bloomberg intelligence says reds -- luxury retailers are unlikely

to replicate sales gains. show pot is among the retailers for hog themed items, this one with an eye watering price tag. for less expensive option, perhaps try flowers, a whopping 10 million pots are going on sale, meeting this new year may just come up roses, literally. ♪ shery: the lunar new year. is traditionally a friendly time, but weary consumers pull -- weakens.ding as where are chinese tourists heading this lunar new year? guest: good morning, shery. if you look at it, we're getting a mixed on consumers.

there's a longtime fear with hong kong and macau. southeast asia, looking at malaysia, shorter destinations. japan get into the mix, as well. what we are more conscious on is where the real challenge is. haidi: what's the outlook looking like when it comes to volume and traffic at chinese airports, as well as carriers this lunar new year? guest: sure. the international traffic, we had a good 2017, 2018. as well, i think consumer expending is likely to be on the weaker side. that's why we think europe and even australia, which have been popular, they won't get the same boost they've had in the past. the travelers are likely to go to shorter destinations and elastic demand remains -- shery: we have seen a correction in bulk shipping rates.

what's behind this? rahul: sure. i think consumers are holding up well. the face of correction, which ifve seen in shipping rates, you look at the manufacturing data, china ppi, industry signaling at's deeper slowdown in the industrial complex. i think that starts whipping through to the consumer side of the market. haidi: in terms of the manufacturing slowdown, have we seen any indication -- it's hard -- but have we seen any indication whether we are bottoming out or remaining in contractually territory? rahul: sure. if you look at the shipping sector, iron ore, chinese dependent, will we are seeing is a smaller segment.

slowdown is spreading beyond chinese shores. that's the concern for us. haidi: senior analyst rahul k appoor taking a look at the mixed picture with crucial for consumption, and of course logistics and travel. we're getting breaking news. another sharp contraction when it comes to building up evils in australia. novembers building approvals fell to the lowest in five years. these numbers coming to the bloomberg. we're seeing contracting 8.4%. we were looking at a number of a gain of 2% year on year, contraction of 22.2%, twice as bad as the 10.9% contractions expected. we are looking for a breakdown when it comes to how that fell across victoria, new south wales, and some of the other

states. the impact across many parts of australia playing in their, particularly in major capital cities, sydney and melbourne. we have seen the slowdown in the market. this will be something else that plays into the big banks, particularly as we have the life of the biggest lender. australia's long-running inquiry into banking misconduct also comes to a head later today. the royal commission finally revealing its findings. the financial industry is bracing for years of scandal and wrongdoing. we're joined by jackie edwards, who's covering this. more than 10,000 public submissions. it all comes down to a day of reckoning. how bad could it get for the lenders? what are we expecting? jackie: we are looking at the interim report released in september. commissioner cap angle was credit -- kenneth anger was critical of banks, and there

need to put ahead of the consumer. he was critical of banks' one stop shop structure, which financially, firms tended to provide a variety of service for what they said was the sake of efficiency. he said it created conflict of interest that didn't benefit the consumer. we're also looking for the possibility for tightening up lending standards, and the possibility that he suggests standards for pay and incentives. this was a big issue throughout the inquiry. it was found the problems that came up, that were uncovered during this inquiry, a lot of that led, was driven by staff putting their desire for profit and desire for getting bonuses and incentives ahead of really giving the consumer what they needed. shery: sewed to the interim

report and how the government responded give you more insight into what you should expect a resume -- recommendations, or what you expect them to take or reject at this point? jackie: that's right. the interim report really is very detailed and explains exactly what the problem commissioner haynes things are in the banking industry. we will be looking for the government once they receive the report on friday. they spent this weekend poring through thousands of pages of this report. we'll be looking for them to try to restore the community trust, to get regulators to enforce rules that are army in place. but there is a risk that prime minister scott mentioned on friday that there is a concern there's a call to tighten lending standards, this

could create a credit crunch in australia. he said this could be detrimental to the economy if this were to happen. seeing the bank. take measures what are we expecting? jackie: the banks have taken a number of measures. many banks have started selling off their wealth management units. they've also changed structures and pay. there's been shakeups on executive teams. the banks will be looking to restore their reputations. this has hit them hard. there are a number of scandals that have been unearthed in this year-long inquiry. so the banks will be looking at this report and recommendations very seriously, and trying to find ways to restore community trust. shery: thank you for that. bloomberg's jackie edwards there. coming up next, emerging-market currencies have been big winners.

are there catalysts for the rally to continue? we'll tell you which high-yield there's to watch. this is bloomberg. ♪

haidi: i'm haidi stroud-watts in sydney. shery: i'm shery ahn in new york. emergency market currencies. our next guest says the good times may continue. always great to have you with us. is this because you're banking on a weaker dollar this year? guest: well, yes it is hardly a weaker dollar. but it's also a story where they week,eat, over the past almost 20 basis points dropped. isthe same time, inflation benign globally everywhere.

we are going into 2019 were monetary policy is quite tight. not just in the u.s. but the rest of the world. monetary policy tightening did happen last year. whereink about indonesia, it heightened by 25 basis points. now dollar is probably weaker, u.s. treasury yield caps, it creates a environment for yields broadly, but high-yield currencies in asia. about i have to ask you the dollar yen because you're short the yen. and they are on the rampage right now, trading net long positioning hitting the highest in two and a half years. is this a safe haven play? divya: well, not particularly. for us, the reason why we like dollar-yen lower is mainly our view on real -- between u.s. and

japan. you have a situation where inflation and inflation expectation in japan are actually moving lower, which means japanese are amongst the highest in this era. at the same time, what we've seen about u.s. rally are really moving lower. from the bangles, it is really weighing on dollar-yen. we think one of five is a very reasonable target, given the evolution of it the next few months. but i would not rule out a more aggressive. you can see a sharp move lower in dollar-yen. also because the first quarter tends to be fostered for the japanese yen. haidi: what about the yuan? do you see it strengthening as a continues this year? think.well, yes, we do we have a target of 6165 by the

end of the year. it's really -- not really a story where we see fundamentals are solid. growth is slowing down. current account is likely going from a surplus to a deficit. interest rate differentials with the u.s. have converged to zero. it's not really a fundamentally driven story. we see the intent from the authorities to keep them stable, exceptionally strong, especially with them still on the table. high likelihood of a trade deal the next few weeks. we are focused on keeping see ny stable, maybe a slight bias he. the other thing to note, portfolio slows into china are likely to be quite strong. even though we focus on current accounts going from surplus to deficit, we do miss the portfolio influence with china opening up bond markets, and chinese bonds being in bloomberg please index.

we -- barclays index. that should be supported for the see ny. shery: one of the other currencies we're watching that has rallied so strongly, a complete turnaround from the 10% decline, has been the aussie. the kiwi has been stronger, as well. notwithstanding that we might be further dollar weakness and the fed dovishness as being a backdrop, do you expect fundamentals to be a fertile leg up for strength in the dollar? divya: looks unlikely at this point. i think what we really need to see from a fundamental perspective for the oil to rally is a sort of growth expectation in china to find a floor. if we start seeing fixed asset investment improve a cousin of the fiscal and monetary measures that the pboc and the government in china has been announcing,

then you might see the aussie rally for fundamental reasons. but for now, i think it's mainly a dollar weakness story. it not a very fundamentally driven aussie strength for now. shery: and the india needs -- indonesian rupiah, you're positive about the currency. why? divya: well, we still like indonesian rupiah. we have a target of 3800 on dollar for the first quarter. i think even last year, when it was under so much pressure, it wasn't because of domestic fundamentals. it was because of a stronger dollar and higher u.s. yields. both of these factors now have gone away. indonesia, that in is quite attractive. if you compared to the u.s., you have 500 basis points of pickup, which makes it extremely attractive for investors. that is why we like the idr here. haidi: appreciate your time and

your views. joining us there in singapore. the forget about our interactive tv function on tv at the bloomberg. you can watch us live, catch up on past interviews, and do a deep dive into securities and the bloomberg function. you can also join the conversation and send us instant messages for bloomberg subscribers only. it's at tv . this is bloomberg. ♪

shery: i'm shery ahn in new york. haidi: i'm haidi stroud-watts in sydney. a quick check of business flash headlines. sony is the latest a tech company to suffer from slowdown, the worst in 2.5 years on weak demand for the playstation 4 and lower for your revenue forecast. operating income in games fell 14% to $650 million for the holiday period as the company sold just 8 million consoles, compared with 9 million a year earlier. shery: hna group is selling his last plot at the airport, ending plans for an enormous residential project. they will buy the land for about 500 million u.s. dollars. the deal follows three other failed where they raised almost $3 billion to raise one of

china's biggest corporate debt piles. it was late 2016 in the middle of a global spending spree. haidi: a new reliance communications fight for insolvency after a legal battle stymied -- hong kong made the decision after failing to take credit for 18 months, and agreed to sell the wireless towers to his brother in 2017 to fend off initial bankruptcy moves. shery: u.s. auto sales disappointed in january, making the chronic demand turn -- chronic downturn worse. they are blaming the bitter weather for keeping people away. remy inocencio has more on this. either the weather or the daughter -- dollar, always something to blame. ramy: also the lack of interest when it comes to sedan. but of course when it's

freezing, the last thing you want to do is go out and buy a car and drive around. that's what's happening. fiat chrysler and honda blaming the cold for this, but really it's disappointments across the board when it comes to what's happening. let's show those numbers and i'll walk you through them. miss, miss, miss, and miss. fiat chrysler, analysts estimate were at 5%. same narrative were with toyota, honda, and nissan, honda not only blaming the cold weather, but the shutdown, saying things slow down a bit. pledge -- plunge of its sedan. stores not only were shot, but they were working on skeleton staff if they were open. let's look at the screen. i can show you where we are in terms of sales forecast, sales growth for the u.s. 60.60, that's in millions, 60.6 million cars sold the past year

-- 16.6 million cars sold the past year. we were expecting 16.9 million. this is against 2018, 17.1 million. even last year talking about this, we were expecting even as low as 16.5 million. hold onto your horses. we might get there. fiat chrysler still trying to be optimistic, saying they think 2019 could still be bullish because of the strength of the u.s. economy. brexit seems to be playing into our auto coverage, nissan dumping plans. what is this all about? ramy: what really strikes me as interesting is that the town of sunderland basically said that two years ago, won a vote for brexit, it was 61% versus 39%. what popped into my head was, be careful what you vote for because are going to get it.

nissan is saying they are going to make the u-turn on the x trail suv of production. the biggestd to be auto factory in sunderland and supposed to sustain 7000 jobs. all of this is now up in the air. let's show you this quote from the sans european chairman. he says listen, we understand this will be disappointing for our u.k. team and partners. we're saying we've taken this decision for business reasons. they don't exactly say brexit, but they say the uncertainty around the u.k. futures link not helping plans for the future. one liberal democratic party says it's a massive psychological blow, not to mention an economic one. the fact this region voted for brexit, they got it. yep, remy inocencio there with us.

we take a look at how markets are trading at the moment. you see gains when it comes to trading in japan, one of the few major markets remaining open during the new year holiday. we are seeing gains of about .5% from the nikkei 225, despite the major sony falling the most since june 2016 on the lower forecast. australia holding up gains about .5% despite what we thought was a hard set of building approvals numbers -- horrid set of holding approvals numbers. that is it for daybreak: asia. market coverage does continue. we get the start of trading in hong kong. ♪

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.

>> 9:00 a.m. in shanghai. welcome to the china open. >> here are the top stories. asia-pacific equities erased early declines. several markets are closed for lunar new year. >> sony falls the most in more than two years on weak demand for the way station for an lower for your revenue forecast -- the playstation 4 and a lower year for revenue forecast. >> president trump is optimistic on china and north korea. he will meet president xi jinping at the end of the month. ♪