haidi: a very good morning. i am haidi stroud-watts in sydney. shery: good evening from bloomberg's global headquarters in new york. i am shery ahn. sophie: i am sophie kamaruddin in hong kong. welcome to "daybreak asia." haidi: our top stories this tuesday, markets look set for a muted start in a week that has been pivotal for global growth. treasuries fall. trade talks resume in beijing with cautious optimism of a deal. china may offer enough to put me tariffs on hold. an online storm is

building about recent investments from tencent. to sophie straight kamaruddin in hong kong for a check on the markets in asia. investors have a lot to digest this morning. sophie: that is the case. checking in on the yen, we have it holding losses, trading near the year-to-date low after the dollar's resurgent strength. japanese markets return to the fray after the long weekend. let's switch out the board to check out the open in tokyo. the nikkei 225 adding .6% after losing 2.2% last week. we are seeing some slight upside for the kospi as well. could be looking to add .1%, extending the gain we saw on monday. aussie shares, we have seen them fluctuating throughout the morning. adding .2% after a two-day decline.

if i could pull up nissan, this stock in focus, as it is to host its first post crisis results. gaining ground, up .7%. of course, there are some headwinds to contend with the carmaker from brexit woes to sluggish car sales. the results come out later today. in hongophie kamaruddin kong. let's get more on what we are watching as markets get underway today. mark cranfield in singapore joining us. we have the story about the bond falls. at what point do they become a risk factor? it is a pretty good sign that chinese markets are becoming more market-oriented. morning.d it probably needs to move across to the dollar sector. as we know, some of these china companies which have been defaulting -- it was a record year for defaults last year in china. a lot of it is on domestic bonds, so although it looks

pretty significant and the numbers are quite large, the china onshore domestic yuan market is massive so it is still not a very big percentage of that market, although it is worrying of course that these companies are defaulting, but some people see it as a necessary cleanup to get this think onto a stronger footing. what would be more consenting for international investors would be if the chinese companies issue in the asian dollar market, if they start to defaults, that would unnerve a lot of people. of thatwe see signs would depend on a general slowing of growth across asia if we see growth declining to an extent where it really affects corporate earnings on a big scale that we need to be worried about, companies starting to do serious downgrades, that could lead to companies beginning to miss pay months on the dollar bonds. that is not happening on a scale which is really significant, but

it is definitely something which international investors will be looking at closely if they are worried about a slowing of global growth, which the imf has been predicting for a while. it could be something for the second half of this year, but it is not an immediate concern. it is worrying that chinese domestic companies are missing payments on quite large amounts, but that so far is a localized issue for now. shery: we are seeing the dollar seeing the longest winning streak in two years. could the strength here continue given that it's not just a fed that has turned dovish but every other central bank seems to be going that way as well? mark: exactly. as you say, that is quite a contrast to last year. several central banks raising rates last year, which offset some of the impact of the dollar moves, but of course, that is not happening now. we are seeing india's central bank is the first to cut rates and the noises coming from other central banks is that they are

at least on hold and possibly looking for an excuse to lower rates later this year. you can see the chart which is being shown, number 5653 shows how many days we have had the dollar rising. now, we are getting to an interesting stage because the euro against the dollar is getting a bit close to this 112 mine which will be quite a significant move. if the euro drops below that point, it would give a signal that dollar strength has become very widespread and could easily move to all currencies across the globe. it is have been fairly resilient. if you look at some of the countries like korea and taiwan, their central banks would be reluctant to fight against the strong dollar. we could see some widespread weakness for asian currencies. if it goes weaker from here, it could spark the next move. we are at the point where the dollar may have moved enough for the short-term but it is all eyes on the euro.

that could trigger the next wave of dollar buying if it will come in in your future. -- near future. haidi: mark cranfield in singapore. you can follow more on this story or the day's on our markets live blog at mliv . there's commentary and analysis som bloomberg expert editors you can get exactly what is affecting your investments at any given point. shery: let's turn to the first word news with jessica summers. jessica: thanks. the u.s. is keeping up the pressure on china, hinting at an us were then -- or them ultimatum. withpompeo says contracts huawei could harm links with washington and limit the availability of american equipment. the trump administration has accused the company of espionage and working for china's government. >> we see that around the world. it also makes it more difficult

for america to be present. it makes it more difficult for us to partner alongside them. we want to make sure we identify them with the opportunities and risks associated with using that equipment. jessica: new talks are underway fundingngton to solve for security among the mexican border and avoiding a second government shutdown. friday night is the deadline for some government agencies. they may pass an extension to keep them operating. president trump is heading to texas for a rally that will include renewed demand for his border wall. u.k. prime minister theresa may is bringing forward a statement to parliament on her brexit deal from wednesday to tuesday. she will say she is not considering a customs union with the e.u. the uncertainty drag investment to its lowest since the

financial crisis last quarter with gdp rising just .2%. two large chinese corporate borrowers are said to have missed payment deadlines this month, underscoring the rising danger at a credit market with the most failures on record. failed toment group meet its favor a first payment to bondholders while they did not honor a restructured payment last week. when they'd -- they defaulted. the trial of former malaysian prime minister -- has been delayed indefinitely as he prepares an appeal against charges linked to the missing aliens at 1mdb. billions at 1mdb. the proceedings are running well behind schedule. global news, 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries.

i'm jessica summers. this is bloomberg. thank you. haidi: thank you. still ahead, singapore's incredible shrinking stock market. 1ery: up next, and the march tariff deadline approaches, we look at the chances of a deal with former deputy u.s. trade representative john for a no -- john. this is bloomberg. ♪

shery: this is "daybreak asia." i am shery ahn in new york. i am haidi stroud-watts in sydney. movers in the tokyo session. we are seeing some big movers so far already. >> that is toshiba on the radar. we have the stock falling over 6% this morning. the most since november 2017. it does seehas said

full-year forecast close to what was reported by the nikkei news. we did have the nikkei reporting that toshiba is preparing to cut its full-year profit forecast by at least half, hurt in part by expenses in the energy business, weighing on stock this morning. shery: let's turn back to u.s. and china trade talks. they are beginning again in beijing as president trump's march 1 tariff deadline is looming ever closer. let's head to washington. john barrow no -- john joins us there. great to have you with us. thank you so much for joining us. the whitering from house adviser, kellyanne conway, saying that president trump doesn't want to meet president xi jinping. when it comes to the timeline, he has to meet kim jong-un. this means that we could be seeing that meeting happen after the north korea summit. it is a delay in the tariffs

inevitable at this point? >> i don't think it is inevitable, but it think it is likely. when ambassador lighthizer is meeting with his counterparts, as long as they make enough progress, the chinese are negotiating in good faith, i think it is more than likely that the tariffs will be delayed and there will eventually be a summit between president xi and president trump. >> what will be the minimum needed here in terms of a deal to keep both sides have any -- happy and allow them to save face? it is unclear, frankly. ambassador lighthizer has been a critic of the chinese trade actions and policies for a good number of years, so i think he goes into it with a fairly skeptical view, but a constructive approach to finding a deal so that you can report back to the president that there to thee can report back

president that there is enough to justify a meeting between the two leaders. haidi: given that we talk a lot about beijing's power in terms of it being a centralized economy and being able to react very quickly to the domestic slowdown, how effective, in terms of leverage, are using tariffs? john: the president concluded that the u.s. had no leverage. president obama raised many of the same issues that are being raised now, but without any leverage, there was very little movement, so i think the president concluded tariffs were necessary to get leverage, and i think between the concerns about theening economies and tariffs themselves, i think have created at least the potential landscape for a negotiation. haidi: one of the areas i find it most challenging, i think, if you think about what potential compromises look like is a complete fundamental shift in china's ambitions when it comes

to technology and china 2025. do you realistically see some sort of resolution or longer-term detente being formed on those issues given that they are so fundamental to beijing's ambitions? as yourll, i think question suggests, i think there is unlikely to be fundamental structural changes, but there needs to be some changes in behavior. i think it can be expected on the u.s. side. ambassador lighthizer would expect that. i think there is unlikely to be a complete renewal of the relationship and all concerns being addressed by the same token. i think, without some meaningful progress, i think these tariffs will stay in place and could escalate. shery: ambassador light had to has made it very clear he wants a verifiable and enforceable deal. you have been part of many trade negotiations. how challenging is this --

ambassador lighthizer has made it very clear he wants a verifiable end of forcible deal. you have been part of many trade negotiations. how challenging in this -- is this? john: if you get an agreement, it is hard to confirm it is being are divided by. one of ambassador lighthizer's strong points that has weakened his negotiations has been there must be some enforcement mechanism, whether that is a snap back of tariffs or some other means by which the u.s. could take action if the u.s. believes china is not following through on an agreement, assuming an agreement is reached. shery: i alluded to president trump meeting north korean dictator kim jong-un at the end of the month. given his tendency to link trade geopolitics, what are your expectations in terms of linking this two together? will north korea have an impact on china trade talks? john: i don't think they will have much direct impact.

the trade concerns that have been raised that things are in their own sphere and ambassador lighthizer has controlled those and is not involved in the north korea discussions. i see them as relatively separate. however, the u.s.-china nowtionship is complicated because it's not simply trade issues. there are a lot of security issues that have come to the fore. there was linkage between the security issues with china and the trade issues with china, but i think less so with north korea. haidi: that comes -- geopolitics and diplomacy and security, particularly relevant in asia. there's been a lot of criticism that says that, you know, president trump really wanted to counter the rise of china's tpp was a way and to do it. do you think there's any potential appetite for more of a multilateral approach to trade from the trump administration? john: the window for the

tpp, ist, reconsidering probably close right now. it could reappear, but i think it is closed for now. the administration has been trying to create some coalition with the europeans and the in aese to approach china unified way on some of the trade concerns. however, those efforts have obviously been undermined by the fact that the administration has also imposed steel and aluminum tariffs on the european and japanese steel. haidi: has this been an unusual -- we know it has been an unusual path to trade negotiations, but i am wondering if that will continue in the wese that is there a chance will see these lower-level talks not really come to much fruition and a lot of that really comes down to a leadership meeting between xi and trump? is normally just a formal signing and inking of documents at that stage. john: typically, it would be.

certainly, in a traditional administration, once the two leaders meet, it would be a formality. it is a nontraditional administration. i think it is quite possible there could be a range of options left on the table when the two leaders meet, if in fact they do meet, but the challenge on the chinese side this week is to have enough movement and have ambassador lighthizer feel that there is a good faith prospect for a meaningful completion of these negotiations, even if that conclusion does not occur until the two leaders meet. shery: we continue to see the hostilities on capitol hill when it comes to a potential government shutdown. again, this friday, given the political environment right now, how big of a risk is it that the president will not want to really inc. any sort of deal -- ink any sort of deal given it will face criticism from democrats anyways?

of thehe first two years administration, the president enjoyed criticism -- a criticism-free zone with regards to his trade policies and republicans supported him. the markets were favorable to ,is positions, but i think now more market volatility and more concern on capitol hill, and now with the house controlled by the democrats, i think it is quite likely that whatever the theident concludes with chinese, assuming there is a conclusion, will be criticized by democrats and china hawks because they will always -- there will always be an argument to be made that it is not good enough and does not go far enough. haidi: john, really appreciate your time and your insights here with us. john veroneau, a partner at formeron and burling and trade representative. don't forget our interactive tv function at tv . you can watch us live and dive

into any of the securities or the bloomberg functions we talk about. you can become part of the conversation by sending us instant messages during our show. this is for bloomberg subscribers only. do check it out at tv . this is bloomberg. ♪

shery: this is "daybreak asia." i am shery ahn in new york. haidi: i'm haidi stroud-watts in sydney. apple shares closed near session lows as investors considered a new report on china's slowing smartphone market. it says shipments plunged in the last quarter of 2018. ramy inocencio, what is really interesting is that these are a broad slowdown. apple's, twice as bad as that. ramy: exactly. -- apples numbers, twice as bad as that. ramy: exactly. let's take a look at the

negative reaction on the share price first. over today's trading day, it fell by .6%. not so bad, you will say, but this is the first time that it's actually seen three days of falls in the last six weeks. 5% over these three days here. that's flip up the board because i want to walk you through this. apple down 20% for the first quarter of 2018. shipments into china. he met the orange bars, this is also the share of each company from huawei, gevo, apple, and xiaomi in the company. apple has a little more than 10%. as you are alluding to about huawei, huawei rose by more than 20% year. it also has the biggest share in the country. coming in just under 30%. we can see that on the flip side of things, xiaomi not doing well

at all. it has some issues with inventory as well as internal restructuring. the shipments all by a little more than 35%. it has about a 10% share in terms of the overall market. one more thing that answer this negativity, flip up the board one more time. filings coming out of the u.s. here. various investment managers, institutional investment managers, coming out, saying we reduce our holdings in apple the first quarter of 2018. this includes oppenheimer, oak ridge, as well as jpmorgan. and idc from that report that just came out today that said the domestic smartphone mountain environment in china, get this, "doesn't look very optimistic." shery: let's talk about huawei because within china, they seem to be doing very well, but overseas, they are really feeling the pressure on their 5g ambitions. ramy: we know the narrative in terms of people saying is this a

security issue? is this an espionage issue? way.with me this mike pompeo is basically saying it is either the united states or it is one way. this is a quote he told reporters in budapest, where he is now on the european tour. he says if the huawei equipment is co-located where we have important systems, it makes it difficult for us to partner alongside them. we want to identify the opportunities as well as the risks with using that equipment and then they will get to make their own decision. he stresses the independence of each of those countries. he is in budapest. take a listen to more of what he had to say. sovereign nation. they get to make their own decisions with respect to these things. it's imperative we share the risks of huawei's presence in their networks. actual risk to their own people,

the privacy protections for their own people, china uses data in a way that was not in the best interests of hungary. we will do so. he's going hungary, to poland, slovakia, belgium, and iceland. we expect him to see the same push back against huawei. , thankramy inocencio you. coming up, signs of stress in chinese corporate bonds with two big borrowers set to miss payments. we will look at the fallout for the wider credit market, next. this is bloomberg. ♪

jessica: this is "daybreak asia." i am jessica summers. president trump's march 1 half deadline is looming ever closer. had met in beijing and top-level talks on thursday and friday including the vice premier, the treasury secretary, and robert lighthizer. enough concessions .o allow an extension president trump has signed an executive order directing the u.s. government to prioritize artificial intelligence in its research and development spending. amid concernss about china's ambitions to

dominate the sector. aims to ensure ai develops in a manner that reflects u.s. values. and push training for the future workforce. member states may jointly respond to cyberattacks allegedly conducted by a chinese hacker group. the u.k. presented evidence of network infiltration by an organization known as advanced persist in threat 10. they were at the center of the u.s.just meant -- department assessment. as the belittle call and additions of thailand's princess are over, the electoral commission formally banned her from running for prime minister a next months election. her brief nomination for a party linked to the family brought a rare -- her rare public admonition from the king. he said her entry into politics was greatly inappropriate.

global news, 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am jessica summers. this is bloomberg. haidi: thank you. we have got some more data coming out of australia, painting the picture of why the reserve bank of australia last week and its quarterly statement on monetary policy is slashing growth expectations and forecasts. they are seeing a contraction of 6.1%, far worse than the contraction and steepening from the decline we saw in the month of november. by fiveues also down point 3% and also worse than the previous month as well. business conditions, this is a gauge that fell in the previous period in december by the most since the global financial crisis. in at seven so a little bit of an improvement. business confidence and conditions continuing to see pretty much a deterioration. separately, we are seeing a

change to the rate outlook. that privacy asleep -- previously expecting them to hike it in 2020. it is expected to stay on hold, saying the rate call will be a hold over the forecast to rise and given we have seen that sharp downgrade when it comes to expectations of growth from the slump inll as a sharp business sentiment and conditions continuing to play out here in australia. it's take a look at our markets reacting amidst all of this. sophie. sophie: checking in on australian assets, we see stocks in sydney, adding .4% after a two-day decline. we are seeing moves on the back of that raft of data. the aussie dollar gain .1%, rising somewhat after hitting a five-week low overnight. the despite some of downside we saw in the data, the larger than expected drop in approvals for december for example. we are seeing asian stocks

climbing this tuesday and the nikkei 225 -- tech and financials the biggest boost. the cost be adding to monday's gains, led higher by tech and discretionary stocks. the korean won under pressure, extending its retreat at a two-week low. the yen on the back foot, off .1% against the dollar as the greenback has been seeing some resurgent strength that has itswed it to erase declines. taking a look at some stocks on the move, switching it out on the terminal, i want to show you some movers amid these earnings that we are seeing in tokyo. this company rising to a three month high, jumping nearly 16%. the electronic components maker did see its guidance missed estimates, but the company did boost its full-year dividend forecasts although that was below analyst estimates. they jumped 7.5% after third-quarter operating profit

beat the highest estimate on cost cuts and rising sales and we do have a length is after third-quarter operating profits .ell 21%, missing estimates the company also announced a four for one stock split on march 31. i want to highlight this from a company, set to halt a two-day drop. the drugmaker and pfizer plan to discuss going forward. a prostate cancer therapy after it did see positive trial results. we are seeing positive reaction to that stock rising this morning. shery: thank you so much for that. missedge chinese words deadlines this month, highlighting the risks piling up in the credit market. tom mackenzie has the story in is this telling us about the state of china's $11 trillion bond market? pretty essentially, it

comes down to this. we should expect more corporate bonds to default and miss payments. we saw a record number in 2018. a quadrupling of defaults. and the problem is that you have had a lot of companies in china loading up on short-term debt. isis strategyt ok when liquidity was easy and you get a lot of access to credit. over the last 18 to 24 months, they have been turned off. liquidity has become more difficult. you have this squeeze. months,ast six liquidity has become slightly easier, but it has not come down or filtered down to all sectors. an example of that is these two companies you mentioned. a chinese investment company missed a bond payment in february. if it was to default, it would be one of the largest on record. it has $34 billion worth of debt to invest in renewable energy and real estate.

the other company is a coal company. in 2018,ts it restructured its debt, and then missed a payment on principle as well. it has to pressures on companies that are not benefiting from a slightly easier liquidity market in china. we should expect more of this to come in 2019. that is the environment. including one of our contributors on the mliv blog, saying this is a positive thing, a development china needed. fact, it has been a long time coming. i spoke to someone in 2017. we need to tackle moral hazard. this is part of it. in that sense, it is a positive. haidi: what can we expect to see from the data they lose expected -- deluge expected out of china this week? tom: a couple of key data points, we had the fx reserve that came out yesterday afternoon in beijing. they came in in line with king up,ions, tici

suggesting there has not been a major pullback of fx reserves. no surprise given the recent yuan strength we have seen. money supply data is the want to focus on over the next two days. expects aintelligence pretty dramatic tick up in aggregate social financing. one is the chinese new year and the other is the steps being taken by policymakers to ensure there is more liquidity in the system. loans expecting new yuan to double in january. that is a data point to look to as well as the trade data out on february 14. we are expecting a further deterioration of china's exports and imports. we have the inflation picture. cpi and ppi out of friday. that is the expectation at least. what are they going to tell us about the pressure on corporate

profits in china? of course, we have the trade talks taking place here in beijing as well. haidi: a week for investors. tom mackenzie, our chinese correspondent. china andong focus on its debt woes. he spoke about what we are seeing with surging defaults. thehina purports to be second largest economy in the world with 15% share of global gdp, but if you look at cross-border currency settlement , less than 1% of the world settles in chinese currencies, so chinese is really just a paper tiger. china is a paper tiger. i think they have done so much work in order to prop the yuan funny thing is, as we consider calling them a currency manipulator on the weak side, in reality, what they have been doing is intervening to strengthen the currency and hold

their whole credit market together, so to your point, what is their true pile of fx reserves worth? how much money do they have in order to defend the currency before they have to let it go? globalizedcomes more and wants to become more of a real currency, today, it's not even a real currency, being less than 1% of the global settlement. will act onc forces it and you will see a revaluation. >> when do you think that time bear?come to >> more money going out of china than coming in. i think that they are so desperately short dollars that they need portfolio investment to hold everything together given the extent of their credit position that they are in today. the tipping point will be when you look at china from a macro perspective, they have a current

account deficit and they are running a massive fiscal deficit. it is north of 10% of gdp. including local government finance vehicles. think about the u.s. 4%are a little bit more than of gdp and all the alarm bells are going off. china is starting to look like a traditional p.m. problem, meaning they are borrowing -- they borrowed $1 trillion in the global capital markets, and chinese banking system is more leveraged than any banking system has been in the world. they are running a current account deficit. they have reserves that are dwindling, and so, when you ask when is the time, i guess the answer is no one knows, but it sure is worsening as we speak. >> there is a bloomberg report about two large chinese investors that missed payment deadlines this month. that just goes to the whole point of how the over leverage is a problem in the chinese corporate sector. isand the concerning thing that these are two bank highly

embedded big borrowers out there. your perspective here? how many defaults are we likely to start seeing? what sort of default cycle army anticipating coming from china? and who does it hurt -- are we expecting coming from china? and who does it hurt? >> they work in their domestic world where it is on the monarch -- rnd, nominated -- denominated. china could -- -- if it is that, they could sweep it under the rug. if you look at how many rmb they have printed or more importantly $30e 2009, they printed

trillion worth if you look at the chinese money supply. the have printed like it is national pastime. they have embarrassed the u.s., japan, and europe on the printing side, so i think that is all going to come home to roost soon. shery: that was the founder and cio at hayman capital management . another story we are trapping at the moment, an airline company failed to reach an agreement on ending the pilot strike. that has really amounted to a loss of revenue of $3.4 million so far for china. you can see other stocks being affected. airlines being traded in taiwan. 80 flights being canceled since friday by china airlines. another 20 flights are expected to be canceled today as we hear from china airlines that they failed to reach an agreement on the ending -- on ending that pilot strike at the union wants more signed to long-haul flights.

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shery: this is "daybreak asia." i am shery ahn in new york. haidi: i'm haidi stroud-watts in sydney. singapore online fashion site has raised more than 200 25 million u.s. dollars to fund the expansion into australia, indonesia, and the philippines. the startup is said to be worth almost one billion u.s. dollars. are provided free, charging commission of between 10% and 20% on orders. shery: toshiba fell the most in 18 months after it confirmed the nikkei report that it will halve its forecast. the move is prompted in part by higher costs in its energy unit. an operating profit through year-end in march will range

from 180 to $270 million. amount far below the toshiba protected in november. earnings are due on wednesday. haidi: ebs is said to have cut the forecast for investment bankers in asia after a slump in equity offerings. it has been reduced by 8% with managing directors the hardest hit. more staff will receive no bonus at all compared with 2017. at thesales plunged asian benchmark suffered its worst quarterly performance since 2015. getting back to one of our top tech stories, and readdit has raised money from investors. tencent was among the investors at $3oundup valued billion. shelly banjo joins us now from hong kong. shelly, before we get to the controversy, why is tencent keen

on investing and read it -- reddit? >> tencent would love to get their hands on any tech company they can. it already has invested in companies like snap and tesla and this is one of the few private companies that tesla was able to invest in, so far. and reddit has a whole bunch of users that are incredibly interested and enthusiastic about some of the games that tencent owns stakes in light fortnight and other kinds of -- like fortnight and other kinds of video games that they are a part of. been -- therelso have also been incredible protests. known: reddit's users are for being extremely vocal about things that they like and don't like. it was founded by a community, and over the years, the founders respondedhave really to things that the community liked and did not like, and so, in the wake of this investment,

you start seeing people come on and say we don't want censorship. they are posting things about tiananmen square and winnie the pooh, which is a proxy sometimes for chinese president xi jinping , and you know, they are saying we are going to post all this stuff now before the chinese censorship arrives. so you know, there's no indication that it actually would happen. tencent is still such a small minority shareholder of reddit. it is more of the symbolism that these resid -- reddit users are protesting against. shery: we have new rules. how does this play into that? shelly: that is the interesting question now. the new rules that passed recently say that the u.s. can actually review investments like this. they are smaller, minority stakes. it used to be that the rule-making bodies would review the big deals, but now it opens it up to a lot of questions, and we are not really sure what is

going to happen. right now, they say the funding have closed, but that does not necessarily mean that the u.s. government might still be able to review this deal, and you know, potentially crush it. shery: shelley, thank you. you can get a roundup of the stories you need to know to get your day going in today's edition of daybreak. subscribers, go to dayb on your terminals. it is also available on mobile in the bloomberg anywhere app. you can customize your settings so you only get the news on industries and assets you care about. this is bloomberg. ♪

this is- haidi: "daybreak asia." i'm haidi stroud-watts in sydney. shery: i am shery ahn in new york. sophie: chinese tech players may move after pompeo mentioned ultimatums. that can put pressure on the shenzhen composite. and chinese drug makers may move on government plans to offer value-added tax policies for rare disease and cancer drugs. keeping an eye on this after it rose to a record. a quick check on what is ahead we will haveenda,

philippines trade data due at 9:00 a.m. hong kong time. they are seen rebounding in december. we will get retail sales from singapore. and later figures from taiwan. india will report cpi and factory output. haidi. haidi: sophie kamaruddin with a look at what to expect throughout the course of the trading day. we are taking a look at singapore. it long competed with hong kong for the title of asia's top financial center and the science that while the city state has strengthened its position as a wealth hub, it has fallen. theutnumbered listings for past five years. singapore has 741 listed companies in december. it is down from the peak of 782 in 2010. let's take a look at why this is happening. olivia joins us from -- what is causing this malaise in the stock market?

delisting is a global trend, and people have said that it is because of the rise of private equity and venture capital funds, and in singapore, the problem is that alongside these delisting trends, there is a lot of interesting companies coming to market. at a little bit of a disadvantage because there is no hinterland to depend on. the domestic bases is strong. liquidity and volume is lower than other markets, which is why companies are more interested in listing in places like hong kong. >> what is the singapore exchange doing about this? livia: the singapore exchange has tried many ways to solve the problem. class sharese dual which is supposed to help companies -- track more companies that want more economy in terms of shareholding. on top of that, they also created code listing with the stock

exchange. they also have an in-house research team that helps to identify and promote small to mid class stocks. million that the government is providing to help companies list on the stock market. haidi: they consider themselves a financial hub. thehat is this doing to economy itself? it's actually not a big problem. diversified, and therefore, it has a lot of its revenue coming from commodities as well as derivatives. it does not seem to depend on the equities business. it seems that they are a successful wealth management hub. they have pharmaceuticals and biomedical for creating a good environment for tech startups. it does not need the stock market in order to do well.

shery: how is this playing out when it comes to investor sentiment in the city? investor sentiment has been somewhat impacted because, while singapore is a very big fund management hub, a lot of the fund managers have to be based here but look at southeast asia as a whole. retail participation instead has also fallen. we have it in the story that is about 30% according to the fetzer mark. mark.fessor retailers have also looked outside of singapore for our options. singapore investors are savvy and they can go online and invest in other countries. that is our reporter coming to us from singapore. before we hand over to "bloomberg markets: asia," let's take a quick look at how markets are trading. japan traders coming back online after the long weekend. we are seeing robust gains. higher. be also trading

we have the backdrop of a stronger dollar for a ninth consecutive session, taking pressure off some of the strength we have seen across asian currencies. we are also seeing gains when it comes to here in australia despite the dumping of the rate ase called by the r.b.i. -- well as some hormones data sharing. seem to bes rebounding, up .2%. we could see some optimism over a trade deal playing into the markets. the ftse futures closed down. that was after gaining ground in the last session. that is it from "daybreak asia." our markets coverage continues. this is bloomberg. ♪ ♪

>> it is 9:00 a.m. in hong kong and shanghai. this is "bloomberg markets: china open." >> japanese stocks lead the way on a return from a long weekend. showing optimism. a trade deal could be reached soon. thatvestors encourage china may offer enough to put new u.s. tariffs on hold. report latern will its first earnings since the carlos ghosn erupted. we are live at its headquarters in yokohama. ♪ yvonne: looks like we are headed

for green arrows. japan coming back in a big way. will be interesting to see how china, the bullish momentum, can it continue? china, the bullish momentum, can it continue? rishaad: they have been on the present. locatechina, the bullish momentn it continue? rishaad: they have been on the present. locate -- lurking in the background. the data is not too bad. those reserve numbers as well. on top of that, looking at real direction from the street of dreams. this is what we have at the moment, slight fallback for singapore. things are flat. could turn either way. depressing pressure on the taipei market. moving to the upside. we have apple supplies which are helping to support what is going on. nikkei 225, 1.5% out of the gate after the long weekend. how does all of this translate for chinese markets as well? let's have a look at what is going on looking at the hang seng premarket.

this is the position down. features in hong kong, a little lower. if you take into account the value, looking at a flattish start. two thirds of 1% to the upside. that is what we have. looking forward to the fixed as well. should i sayix, or movement anyway since july. 6.7 for the onshore. this is what we have at the moment. iss is something which perhaps driving what is going on in turkey. at supporters leading the charge as we get dollar strength. yen weakness. we have seen it every day since june, we have seen the dollar move to the upside. there we go, dovish fed. helping, ironically, what is happening with the greenbacks. this is the situation. data coming out. yvonne: let's look at the trade balance a numbers coming from the philippines which was a massive miss. export to urine your for the

month ofyvonne: december fallin. this is the continuing trend we saw. we were expecting bounce back up 2.8% for exports. imports falling 9.4%. economists were thinking of a 5% gain. we are seeing that leading the trade balance and a deficit of $3.7 billion. that also is a slightly narrower than what we were expecting, up at $4 billion deficit to we will see how this plays out when philippine markets open. it's get you caught up with for -- first word news. su: we start with the u.s. keeping up the pressure on china. hinting at an us or them ultimatum over telco provider quality. --huawei. mike pompeo says contracts with huawei could harm links with washington and limit the availability of american equipment. huawei was made hungry a key .ase and europe f

the trump administration has accused the company of espionage and working for china. we see that around the world. it also makes it more difficult for america to be present. if that equipment is co-located in places where we have itortant things that make more difficult for us to partner alongside them to we want to make sure we identify them and have the opportunity, with using that equipment. su: president trump meanwhile has signed an executive order directing the u.s. government to prioritize artificial intelligence or ai we see that . in its research and development spending. the order comes amid concerns about china's ambition to dominate the sector. it does not outline specific funding goals but says it aims to ensure that ai develops in a manner that reflects u.s. values and training for the future workforce. eu member states may jointly to cyberattacks allegedly conducted by a chinese

state linked group. bloomberg sources say the u.k. presented evidence last month of network infiltration by an organization known as advance. pushback would include sanctions or a warning. it was at the center of indictments back in december. new zealand prime minister says there is no diplomatic rift with china after questions about why a plane was forced to board a flight to shanghai. they say the dreamliner return to auckland because of "registration problems." the paperwork included a reference to taiwan which china took to be a claim that the island is independent. 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 su keenan. this is bloomberg. yvonne: thank you.

that without the credit china,s are receiving in too large chinese borrowers missed payment deadlines this month and a market that is witnessing the most company failures on record. rishaad: let's have a look at this. we have the editor here. tell us about those china, too large chinese borrowers missed payment deadlines this in trouble. which two companies are we talking about first off? >> hi. industryompanies are champions. by somet, is considered as the largest private-sector investment company. in the nation. and it has interests in renewable energy and the real estate sectors. both of these site -- sectors are in a downturn. that is why the company is in trouble. a bond that was it hasjanuary 29 and

pledged to investors that it will pay three days late. we reported yesterday the company still has not paid the bondholders. the other it has pledged to investors that it will pay three days late. we reported yesterday the company is a big coal province in central china. it has already defaulted on a lot of its debt. it was the second-largest bond folder last year. last week, it fell -- failed to honor an obligation it out -- it's promised to pay but did not. investors definitely paying a closer attention to china, because that company has a huge amount of debt. of debt.on that is among the highest among chinese private sector companies. usnne: what does this tell about the policy stimulus measures from the government? are the impacts limited and an even, not going to benefit all firms? indeed.: yeah, stimulus measures that the

government wrote up since that second half of last year to help private sector companies has been uneven. the fact that those two big industry champions fell to make of debt small amounts payments shows that liquidity crunch is very much present among many of the chinese companies. it also shows that the government is determined or being selective in helping out the companies with of of debt payments shows that liquidity crunch is very much present financial resources. recent examples, we have seen the companies have bailed out, are more local government their financing vehicles. that is state-owned. yvonne: all right, thank you. lianting tu, our china credit editor joining us from singapore. joining us now is jpmorgan asset thierry alwaysf great to have you. i want to pull up a chart to talk about the credit risks we have seen here. the spreads we solve between chinese sovereigns and corporate

bond yields were narrowing. before we saw these headlines of default. what does that tell you? is there complacency in the credit market? >> if you look at the chinese sovereign markets, the fact that the central bank is relaxing policies, providing liquidity to the system come interest rates are coming down. at the same time, the difference between the chinese government and the chinese corporate sector is also very significant. a lot of the default risk on the rise are typically with the corporate sector, not with the chinese government. you can argue the government may look to sponsor or bailout some companies that could worsen its financial position but the reality is because of the level of ownership of chinese bonds, it continues to be resting with thel investors with china, risk of capital flight which typically we associate with emerging market crisis. rishaad: i think yvonne was referring to the corporate side of things. this is where we have been, like

you were saying, people have been complacent or do you think they remain that way and is that a worry? again, the most policy stance from china we saw in 2018 again, thequidity, although more thoughtful in terms of how they try to support the economy. that liquidity has helped to push down those sovereign and corporate interest rates. you are right. i think there's some extent that because of the easing that investors are giving more thoughtful a great degree of leniency about when companies they set the cre. at the same time, don't forget that in the past couple of years, the chinese government has been trying to allow more companies to fail in order for the corporate bond market to price things correctly. rishaad: absolutely. there is always this danger lurking, expecting to be a huge wave of these defaults. it doesn't materialize. that is perhaps leading people to be complacent. tai: i think that is fair.

investment at the markets in china, investment capital continues to be capital. you can take money out of the country but it is not easy. therefore, you have to put the money at work somewhere. the fact that the government is willing to support and provide liquidity to the system, that was a strong signal to investors that you should be looking at corporate bond markets and equities because ultimately, these companies will have a slightly easier time to meet the payments. rishaad: got this breaking news. back to you in a second. they have cut the purchases of 10-25 year bonds. the. first time they have done that since july. the situation. ¥50 billion at the moment. this is currently the position at the moment as we did get more information of their yield curve. tighteninge cells

ted leonsis back to china. we can talk about japan later. i'm wondering, it is interesting to see these growing concerns of his -- of defaults. there is this bullish momentum happening in the equity market. how do you square these two? in thee bullish momentum equity market comes in two fronts. the valuation was truly beaten up back in 2018. a lot of investors, until recently, was cautious on the environmentrnings and also the general sentiment because of u.s.-china trade and a slowdown in the economy. we are coming to a point where investors are slicking -- our thinking, the government is propping up the economy. pricing the bad news. maybe it is time to step in. it is only until before chinese new year or after the chinese new year the investors are starting to switch on again in terms of the risk appetites. this is quite athinking, the gos propping up the economy. potent potential for the asian markets and can

spill over into asian markets in hong kong. you may see a correction and brought asian markets in the last couple of weeks. the asian markets have been enjoying strong momentum, especially in the small caps space. stick with us. tai hui from jpmorgan asset management. the united states ramping up the pressure on huawei. hinting at an ultimatum against countries buying the firm's equipment. we will have the latest in the issue with china. yvonne: we will discuss the new additions to the world index. cha me takes a spot in the em index. this is bloomberg. ♪ this is bloomberg. ♪

is the kickoff.

the reference page is coming out at 6.7.na is at 6.7. a big move to weaken the currency. it was 6.74 in the session monday this time yesterday. quite something. that will be the cause of that as well. the dollar, the best rally in two years. i think everyone has been talking about it. short. msci, they will be 17 additions. one deletion from the msci world index. three largest addictions -- additions are these. that will be china's foxconn, and xiaomi. the news coming out in the last couple of hours. is with us. hui let's start things off with you, sophia. what are theywhat are they thin?

>> the big issue here is xiaomi has an unequal voting class structure for the shares. a few stocks in thea few stocksh were added like snap which has no voting shares are that was a huge deal over there. it is a big u-turn. these shares actually rose a lot yesterday. there were whispers going around in the market that they would be added. it was an 18 month process where msci said we do not want these shares to be included in our indexes because it is not fair for investors. there was pressure from shareholders because they want to own these stocks. this is significant because $14 trillion is tied it to msci benchmarks. billion in$800 etf's. you would expect money to passively flow into these stocks. the next step we are watching is

will xiaomi be eligible for southbound investors? right now it is not. it is a high profile stock. in china. obviously a huge smartphone maker. china's answer to apple. it would be a stock that would be popular for mainland investors. yvonne: you mentioned the stock moves we saw yesterday leading up to that decision. the likes of xiaomi, jumping 5% to 7%. how significant is this, especially when looking at the tech sector? tai: i think it is important. compiler needs to balance the needs between investor protection and also what investors are tracking and looking into. the fact that some of these companies are followed by lots of investors come active and passive alike. it does make some sense in terms of including these indices. rishaad: absolutely. this chart is showing you the benefits membership does bring. the white line, foxconn.

and xiaomi there in blue. sofia: you mentioned benefits. what was interesting last are is when they included eight shares, if shirt -- a-shares had one of their worst year since the financial crisis. i wanted to say, now that msci is consulting on increasing the weighting of china, do you think this matters, is a different because also chinese security regulators are making things easier for foreign investors? tai: i think so. when you look at the kenexa and it has channels, developed in a more positive way in the past couple of years. it is true the asian markets it didn't perform well last year. it reflects on the fact that index inclusion is not the magic wand people are looking into. or a reason to invest in the short term. if you look at both the scale of the chinese markets and the access to this particular

market, it has improved over the years and it makes sense to expand that, to benefit the global investor base. yvonne: talking about these changes we saw, doubling the quotas under the qb program, scrapping these margin rules, you think those will help when it comes to sentiment and bring back more inflows? it seems like the investment story in china is different now given the economic concerns in the capital in terms of the current account. tai: i think it is a complicated question. relaxing of this rules, i think what we don't want to see is create another roller coaster ride in terms of the stock market. as we saw in 2014, 2015, the market went up and was happy. when it of this rules, i think what we don't want to see is when itnother roller create -- corrected committee was painful for investors, regulators, the government. if the idea was to use the relaxation to create another wave of smoke -- of stock market boom, the risk is you may see another roller coaster ride. i think the government is trying

to avoid that. the reality is some of these rules is trying to develop markets, allow investors more tools to invest. that is a positive. there are pros and cons. that is a positive. there are pros and cons. i don't necessarily think investors will be fooled again in terms of, let me that the big. grownk investors have quite quickly to understand some of the dynamics. rishaad: very briefly to both of you. what is the sense you are getting from the investment community from the people you have been talking to about -- perhaps what tai was alluding to? sofia: there is a sense that there is a lot more caution this time around. you can see by looking at turnover and mark -- and market financing, a lot lower than it was three years ago. we have seen quite a significant rally in january. also continuing after the lunar new year break. it is very risk on.

this is being encouraged by the new chief. i want to maybe ask you, how much do you think -- how much of a rally do you think is being driven by these changes? tai: think it is a culmination of factors. changes,the regulatory but a lot of alone was not sufficient last year to learn investors back in. and you have small fiscal things coming through. i think you have a combination of factors that are driving this current rally. some of it is fundamental, some of it is regulatory. sofia: and you are not concerned? tai: not at changes, but a lot of investors have been waiting for this moment to turn up. where chief valuation this poin. i think the market is looking at relatively soft earning expectations. i, stick around. sofia, thank you so much. looking ahead to the start of the trading day in hong kong, over in shanghai. this is bloomberg. ♪

yvonne: five minutes to go before the china open. we have been talking about how chinese stocks making a comeback in january. seems like we have continued the lunar holiday. rising 3% yesterday. seems like we have entered this new phase in this china buying as well. more risk appetite. rishaad: let's look at the business flash headlines. the most in 18 months. this is after confirming a nikkei report that it will have its forecast reports. the move prompted in part at high costs in its energy division. we have operating profit through the year and in march through $270 million. that is a widespread. earnings are due on wednesday. yvonne: activision blizzard fell in the low as in two years. than 7%k slumped more after benchmark cut its price

ofget on the expectation your product successes. and uncertainty around the competition -- from the contributions. revenue is projected to fall 2%. and activision is planning layoffs that could be in the hundreds. rishaad: looking at singapore, raising more than 212 5 million u.s. dollars. investors include the principal and singapore state fund. the startups that -- said to be worth $1 billion. between 10% and 20%. the principal and singapore statewe are coming day in hong kong. as well as in mainland china. let's look at how things are shaping up at the open. hang seng down by 2/10 of 1% premarket. looking at eight shares. pretty much flat. we have the cnh offshore yuan, 6.8. a look at the stocks we are

watching. we're looking at xiaomi, on the way -- on their way up. tencent investing and read it. reddit. the open is nearly upon us and will be next. ♪ next. ♪

>> we have seen japan coming back from the holiday, up more than 1% in tokyo. reflecting the dollar strength that continues through the markets, the best we have seen in 2016 and eight days of gains for the dollar. since january

23rd. steady,es remaining like a headwind or tailwind. wasquarterly figure positive. this is what it looks like and it could all change as well, 2/10 of 1% lower. it is interesting to note that we chatted goodyear thus far, hang seng up. -- we of had a good year thus far, hang seng up. index.all-cap moving higher than what we have.

line, hang seng, small-cap index in the purple the purple line there. we are hearing that the agreement in principle has been reached and the u.s. shutdown talks. there has been a lot of talk when it comes to immigration. , lookscans and democrats like there is an agreement in principle. we will see how that plays out. there's a couple days before this deadline. >> lets you back to the chart very briefly. small caps outperforming, this a lay cycle trend. aat are your views on this --

late cycle trend. what are your views on this? washe real performance toward february. i think that is where investors are looking at the china stimulus and the dollar in january and think emerging markets might be coming back. asia, hongis in kong, it gets well supported. what other positive news that we need to get for this rally to continue? , if we haveshutdown a resolution, will that be enough? >> probably not because i think some people are expecting some sort of compromise. i think it is good news. it will be a lot of the

political rhetoric. they will try to keep the economic growth running for as long as they can. beyond that, i think it is the economy. , i thinkwe can rebound the recovery will be crucial. anchor: looking at what happened with the dollar, the dollar index went down and then way back up again. be immediate reaction was to negative. >> when you look at the dollar against major currencies, especially the euro and scandinavian currencies, it strengthened in february, but emerging markets a much lesser extent and em currencies still gained.

important,is very emerging markets, asian stocks for the rest of this year. the you think all of this has been priced then? -- o some extent, yes priced in? yes. some extent, given that we [inaudible] there's always room for maybe one or two hikes this year. idea of whatus an you should be having? >> let's say the first half of the summer of this year, i think it continues to be robust, and i think that is equity -- good for equities. in the longer term, the global growth is gradually slowing down, so it does call more

balance. anchor: near-term, there should be tied growth. what sectors? >> [inaudible] growth environment is still constructive, but the longer-term, that is where you get defensive sectors behind different stocks, investors generate more for their return. for fixedat about income, this bond rally has been spreading all the way to new zealand now. can you go any lower from here? >> i think it is important to pick the fixed income with the right spread. if you want fixed income that is attractive, you think of dollar you get softer, i think

need to switch the inflection point. that is where the bonds come into play, but at this point time, i think corporate bonds, emerging market debt, those are [inaudible] anchor: thank you for coming in. we will have a look at what we have been talking about and washington, is there a degree of trade? >> the u.s. and china have begun s as the deadline looms closer. trade talks will resume thursday. analysts say china may make anugh concessions to allow extension in the temperatures.

meanwhile, theresa may is bringing forward a statement to parliament on wednesday. on tuesday, she will say she is not considering a customs union for the eu. the uncertainty draghi u.k. investors to its lowest, with gdp rising just 2/10 of 1%. former malaysian prime minister has been delayed indefinitely as he prepares for .n appeal he faces 42 counts including corruption, and embezzlement. he denies any wrongdoing. the proceedings are already running well by schedule and highland ambitions of king are over as the election

commission formally banned her from running for prime minister and next month's election. brought anomination condemnation from her brother. he says her entry into politics was gravely improper and inappropriate. global news 24 hours a day, powered by more than 2700 journalists and analysts in over 120 countries. this is bloomberg. coming up, america's top diplomat says it is our way or the huawei. themissued an us or ultimatum.

anchor: the u.s. secretary of state mike pompeo has issued a

veiled warning to governments to find huawei technologies -- fine the huawei-- fine huawe huawei -- who huawei technologies. reporter: he is on this european tour. he stopped budapest and hungry to talk about a variety of things, but he brought up the subject of huawei. he said they are encouraging others to not use their equipment.

that may lead to some negative consequences. a very big push into eastern europe, particularly hungry and what ifpeii's -- pompeo said is they are located alongside important american systems, it would be difficult to continue those relationships. about it orpecific if there were military implications, but he did say that he continued the pressure had the u.s. government applied, telling governments they should not use the equipment for security reasons. the whitee think house is treating this whole issue a little bit differently? it feels like the implications are bigger and they are going aggressively against this company.

>> certainly, they are taking a much more aggressive stance and a much more proactive stance. te got in trouble because they violated sanctions on iran. they ended up having to take some extreme measures, but that was a fairly narrow dispute aside -- beside these iran sanctions. is much moreit pushback. the u.s. is saying it is a dangerous equipment to use and to worry about the equipment -- the security applications. as governments are looking to spend billions of dollars on fifth-generation wireless technology which will make things work more quickly on your mobile phones. while way, it is important to note that the founder of the

pass onsays they do not information to the chinese government and customers will always be a priority. anchor: has there been any howence put forward as to they actually spy on the half of the chinese government? it does not seem like there's anything concrete to read what is going on -- concrete. what is going on? >> the u.s. has not been implicit about what their concerns are with their allegations of spying. there are two cases, one is about bank fraud connected to iran sanctions and another is stealing ip, bone when it comes to security risks, they have not been explicit, although behind closed doors they may be giving more details, but the general argument is that chinese

companies are beholden to the chinese government and the chinese government come to them and says you need to cooperate and passes information, they will be obligated to do that. because they are equipment have is viewedpopular, it as high quality and affordable. -- become sos come popular, that feels like a threat to the u.s.. anchor: thank you, there in tokyo. a bipartisan deal has been reached over border security funding to avoid another shutdown. part of this may involve some money for the barrier. achor: derek, we know this is tentative plan for now, but what are we learning so far? have we averted a shutdown? reporter: headlines on your

bloomberg terminal right now, a deal has been reached in principle by congressional negotiators to try to avert another government shutdown. the details are still coming out. and has not been put to paper. staff are working on the agreement. the top democratic negotiator in the house and the top republican negotiator in the senate have agreed to a deal in principle. nancy pelosi has seen the framework and is ok with it. yet fromon't have word the white house on whether president donald trump will be ok with it. about that, richard shelby told our reporters that he is helpful the white house will support this deal. he has been given a wide amount of latitude in terms of

negotiating this deal, so they are hopeful the president will support it. holds, you could be seeing some vote in the house maybe as early as later this thursday.esday or we are waiting on details still. this is a very late-breaking, headlines just and that the congressional negotiators have reached a deal in principle, to try to avert another government shutdown. tentative,s is all ultimately, isn't it? because there is a wildcard and his initials are dt. >> donald trump is always the wildcard. donald trump is going to come on stage, probably within the hour in el paso, texas. he will be flanked by signs that building him to finish

the wall. he will be talking to a broad auditorium of supporters, just miles from the u.s.-mexico border and he is not there by accident. we will be carefully watching what donald trump says right now in this moment, but it is a big deal. a big say this, it is deal that this negotiation came to a conclusion before trump takes the stage because that means that the next word on the anddown will be trumps word not negotiators. has said he is cautiously optimistic that the white house will like this. the rally will be having minutes away their -- there. up next, investors will finally learn [inaudible]

we go live at the company's yokohama headquarters. this is bloomberg. ♪

anchor: this is what we have at the moment, trending across the bloomberg universe on the bloomberg terminal. new york preparing for another winter storm. from remarks considered -- anti-semitic. .aking argentinian wine cheaper bloomberg.com preparing for their results and a look at stories trending on the bloomberg terminal, more online.

to yokohama, go where steve is standing by. sagauch will carlos ghosn early weigh in on today's results? reporter: it was 86 days ago was taken intosn custody. it was in the later part of the third quarter and those of the results that weibel -- that we will get today. will be get a dismissal? probably not. what we will probably get is overall weakness that nissan has been getting in its overall business. in january, down 19%.

they have flip-flopping policy in the united states, were tolos ghosn says we need focus on profitability. spot china has been a week for nissan. that has to be a focus going forward. there's also concern about brexit. they are scaling back, not suv at theheir sunderland, u.k. plant. so, there are a lot of other .oncerns besides carlos ghosn nissan wants to paint a picture of them turning the page going forward. they have a lot of issues they need to address. going to gete're at today, they might look good on paper. a are expecting about a 24%

increase, but that is really wallpapered because the previous -- [inaudible]y anchor: where does the board bits ofth regard to the bg -- mitsubishi alliance as well? reporter: everybody says they want to keep the lines together. the architect was carlos ghosn, so it will likely take on a different feel. rene has a new chairman -- chairman, likely to meet with nissan this thursday, which happens to be the day that they will report their results.

they will likely need each other, given the obvious disruption in the auto industry. repair and the damage caused by carlos ghosn is going to take time, both sides have acknowledged. our chief north asia correspondent, let's look at the business flash headlines. he says there is no diplomatic rifts with china about why a plane was forced to abort a flight to shanghai. -- the new site has paperwork to taiwaneference claiming china says the island is independent. anchor: [inaudible] heard fees. we have been told that it has been reduced by about 8%, with

the directors to receive no bonus at all. itsasian benchmark suffered first -- worst quarterly performance since 2015. ofhor: will see the return owning half. it says no more than five stand for reelection. bankruptcyile for after links to $30 billion in liability. bank east asia will be talking about the credit concerns in china. more credit will probably lead to some problems within the next three months. considering -- concerning their bond program,

that they continue to manipulate the yield curve. weibel talk about that and a member -- weard will talk about that and a former boj board member. this is bloomberg. this isn't just any moving day.

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>> it's almost 10 a.m. in hong kong. welcome to bloomberg markets asia. rishaad: asia pacific stocks on the way out. we have a week and yet helping japan lead the way. there's also positive the about a trade deal and a government shutdown being avoided. it is 20 years since the bank of japan turned to zero interest. we will examine its performance since with a former policy board member. ♪

rishaad: a lot of moving things this morning. a lot of breaking news. of aave the possibility u.s. government shutdown, friday being averted. donald trump will be talking in el paso at any moment. perhaps he will be addressing that. we don't the white house feels about it. it is a deal struck in congress. yvonne: texas is certainly a prime location to be talking about border security issues. cannot leap,s kicking things off in a robust type of sentiment here. japan just hit 2% gains on the nikkei. further extending a game that we saw returning from the holiday. taiwan, i second day of gains here as the lunar holiday and's. tech stocks of late. we heard from jpmorgan about how sentiment has changed. we've entered a new phase and it is bullish momentum, not just for chinese mark