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 wednesday, asia-pacific markets are set to expand on a strong u.s. session. president trump's new tariffs flexibility. opec lowers its forecast of demand for oil on the global

slowdown and continuing rise in u.s. production. latestthe rbnz is the central bank to test the new dovishness. traders are betting on a rate cut later. it are markets kicking off trading in asia. let's turn to sophie. we are seeing some risk on moods already. sophie: checking in on how we we racing for this session, have the rbnz expected to hold out its policy rate. going to be getting fourth-quarter gdp growth. flipping the board to check in on the market open in tokyo, we have the nikkei 225 continuing to rebound from a one-month low. we have the nikkei 225 adding .8%. arek in on how stocks faring. stocks in seoul gaining .1% while the shares have been fluctuating in the session. we have been trading fairly flat. kiwi stocks are climbing for a sixth straight day to an october 2 high.

if i can pull up very quickly, this stock gaining ground. a kyoto reportee that the company could see ¥80 billion investment from a group of chinese and taiwanese companies. we are seeing a move in sk hynix as macron string -- micron grows.h check in on sk hynix. we are seeing the stock move higher by 2.1%. demand micron seeing continued to be healthy. that may influence how chipmakers move and the rest of the region. taiwan in particular. guys. haidi: all right. sophie kamaruddin in hong kong. let's take a look at the first word news with jessica summers. jessica: president trump is downplaying the threat of a new government shutdown despite

saying he's not entirely happy with his security funding after friday's deadline while repeating he is considering declaring a national emergency to bypass congress and release funds for his border wall. pres. trump: i do not think you are going to see a shutdown. i would not want to go. if you did have it, it is the democrats fault. i accepted it. i am proud of what we accomplished. jessica: theresa may's top brexit aid has reported she will wait until the last moment before putting her deal to parliament. discussed thethey this week.er they would force lawmakers to choose between her deal and a potentially lengthy brexit delay. she is asking the commons to give her more time to renegotiate the deal. mark carney says brexit could be the asset test.

he says the outcome of the e.u. split would show if it's transparencyroaden while boosting accountability. and are threats to growth the impact is already being felt. >> it's possible that new rules of the road will be developed for a more resilient global economy. at the same time, there is a risk the country's turn in words, undercutting growth and prosperity for all. concerns over this possibility are already impairing investment jobs and growth, creating a dynamic that could become self-fulfilling. jessica: indian retail inflation has eased to a 19 month low justifying the rbi's decision to lower rates and opening the way for more. consumer prices rose a fraction over 2% in january. that compared with median rbi'stes of 2.5% and the

two .8% projection for the first quarter. the bank says there is a high probability of back-to-back rate cuts. global news, 24 hours a day, on at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am jessica summers. this is bloomberg. sent: president trump has a conciliatory message as trade talks continue in beijing, saying he is open to extending a march 1 paris deadline if the two sides are in agreement. tom mackenzie joins us with the latest. all of this coming ahead of the vice from your meeting with secretary mnuchin and ambassador lighthizer. we have lost tom mackenzie. we know those talks are coming on thursday and friday. we are looking ahead to those talks, and as we have heard from the white house adviser, kellyanne conway, this president

does want a deal. renewed trade -- haidi: -- tomy: we are going back to mackenzie in beijing for the latest on that. we finally got you. us. it seems it is coming ahead of the crucial high-level meeting. very optimistic in the sense that we could get something out of the stocks. ahn, artainly, shery more positive tone from president trump. as steve mnuchin and robert lighthizer are in beijing, ready and preparing for those talks premier, it isce interesting that trump talked about the potential of extending the deadline. from the chinese perspective, ever since this meeting between the two presidents, china has made a big effort at trying to downplay this 90 day deadline. there was an op-ed in the last maligninguggesting a of the western media's obsession

with the 90 day deadline and suggesting it could be pushed back to march, april, or even further back. removed the tariffs on chinese goods. the threat of additional tariffs, they want to get that nixed. china watchers would caution against any expectation of major changes as a result of this deal. there is simply no sign of that from china's leaders. you have to bear in mind modern chinese history as well and the way that adds to the thinking of the communist party. we talked about the idea of low hanging fruit. the deeper structural issues are longer. there is a potential satisfactory deal for both sides. think you are right. i think we can put aside the

question of buying more soybeans from the u.s. consequential at this stage when it comes to the bigger issues. in areas where china could move the needle around market access, we are seeing some sectors move. open up some of the sectors around autos. tesla, for example, is the first foreign automakers to have a wholly-owned manufacturing plant. they could dangle that as a carrot. tocould see further moves open up additional sectors and reduce the caps on need for jb's . we had some moves from the chinese as well. there is some discussion about around the made in china 2025 industrial policy but it is market access we should be looking for.

haidi: tom mackenzie there, joining us for the latest. these renewed hopes of negotiations between the u.s. and beijing could at least perhaps result in that march 1 tariff deadline being extended. that has got investors looking to build on the wall street rally. the s&p finally breaking through the 200 day moving average and rally a broad-based across markets. our next guest says the risks are still proving threatening. let's get over to the head of asia-pacific at aberdeen in singapore. this pointtly put that these longer-term structural changes that the u.s. is asking out of china, they are either not going to have been or they are not when to happen quickly. how does that inform your outlook when it comes to the risks for another leg in a market downturn? >> again, the risks are obviously high. we have the old and the new powers. we are going through a quiet period in the market has taken

tons from that and we have seen a recovery generally in markets. not going to go away. we have the outstanding issue in front of us. it is a short-term issue, but the huawei issue is a focal point, so maybe some easing might help. if the states decide not to follow up there. but i think we are going to have this running sore for the next maybe few years. it's not going to be easy when you have the old dogfighting with the new dog. haidi: the great sort of strategic and competitive kind of battle of our times. i am wondering, when it comes to come you know, what we have seen, and the lack of conviction, if you will, a lot of this would have i guess been happening regardless of a trade war, right? because china is still on its own going to a domestic structural slowdown, so you

know, you look at the concern over the slowdown of the chinese consumer, you look at the number of profit warnings coming from companies from apple to caterpillar. how much of this china slowing negativity story would have played out even without a trade war? hugh: i think a fair amount of it would. we have been looking at the weakening global economy irrespective of trade war and the threats of trade war. they don't help that at all. deferes corporate decisions, sitting on the fence, waiting for things to play out. we have seen the rise of populism around the world, of course leading to greater protectionism. again, more threats to global trade. again, which affects the growth there global economy, so are plenty of concerns. there are still grounds to be optimistic as well. ans not all negative, and to

extent, markets have started reflecting that. our worry last year was that markets were shrugging off these concerns. it then hit markets quite badly towards the end of the year. now, they have stabilized. i guess that is the way markets operate. bouts of enthusiasm followed by sort of distress and then a recovery of confidence. we are seeing confidence recover slightly, but will that be dented with some of the full-year earnings? quite possibly. and more importantly, we will need to see how companies start talking about this year as a whole in the outlook for this year. is that it will be a slightly dampened outlook for this year. shery: are you expecting a big stimulus package coming from the

pboc in china if we see the economic slowdown getting worse? think china's goal is to keep the growth going at a certain level, so pumping more money in. sure quite what an effect that will have. one has to query. in many ways, we were hoping for a global normalizing shin last normalization last year. interest rates were going up. that has reversed and we are all talking about dovishness across the world. shery: we have just seen the dollar halt its longest rally since 2016. this chart on the bloomberg just -- what are your expectations for the dollar and

where that is going to have an impact when it comes to the chinese -- to the asian markets and currencies as well? ways, we have been wanting a slightly weaker it simplyt of course has not been happening. the currency markets, personally, i find always rather confusing and frustrating. not always operating terribly logically and the dollar still remains the safe haven currency. but one hopes for a little weakening in the u.s. dollar. haidi: i mean the weakness in resolution inr, a the trade war, they are basically the parameters that many people have said would be setting up for a revival in emerging markets. chart to throw up this looking at volatility. after what has been a torrid few years, we are looking at

volatility across emerging markets. this going tois be the year we see a resurgence in gm's -- em's? does a sustained strength put a spanner in all of that? of course, as a long-term investor in emerging markets and developed markets, one is always looking for that goodyear of performance, and certainly the relevant valuation in emerging markets is attractive, and there are some fabulous companies in emerging markets, and still, prospects. growth almost, i would say, irrespective of what goes on in the world. so some of the fundamentals driving the india's of this world, for example, are still very, very attractive. whatever goes on in the wide world outside. so, yes, i would say optimistic

about emerging markets, but as we know, in any given year, they to this year end read. they pull money out of emerging markets. it is almost irrespective of the long-term prospects of those markets which for investors like us give us great opportunities, so we are very comfortable investing in areas where people , again writing the fundamentals remain good and the relative valuations, as i mentioned earlier, of emerging markets are at a deep discount to many of the developed markets. shery: stick around. we will have more from hugh young, including which sectors he is looking at. makersplus, some video stock at an unbeatable level. he tells us why investors should be avoiding japanese gaming players completely. that is coming up. this is bloomberg. ♪

shery: this is "daybreak asia." i am shery ahn in new york. haidi: i'm haidi stroud-watts in sydney. time to check in with sophie for some of the movers. sophie: let's take a look at yamaha motors. disappointment given expectations were for the company to target profit growth, even if only minor. year of in the first its new medium-term business plan. they are sliding after cutting its outlook. they booked an ¥11.3 billion right down. -- writedown. they have maintained their dividend forecast. moving to the upside, it is rising after earnings meet analyst consensus. they did post a drop in adjusted byrating profits, impacted

its mobile network business, but looking ahead, the company is targeting double-digit revenue growth this year, excluding its securities business, shery. shery: let's continue our market discussion with hugh young in singapore. as top holdings are samsung and tencent. you are seeing opportunities in holdings arep samsung and tencent. you are seeing opportunities in the tech sector. hugh: yes. , but adding to samsung, taiwan semiconductor, for example, in the recent fallbacks. but keeping a broad spread across. we are expecting some fairly term given shorter what is going on. but again, longer-term, these are extremely strong companies with leading market positions. quite decent valuations and providing a decent yield.

samsung, tencent, and taiwan semiconductor in our income funds. in this part of the world. another company is one of your top holdings as well and timebeen an interesting for a, particularly the iron ore market. has your outlook changed in the wake of the latest issues and the disaster it had? hugh: yes, frankly. concerned,ainly extremely concerned about what has happened. behind holding stocks -- we have quite large holdings bhp for their resources that are highly in demand, so that remains, in fact. shery: you are making a big consumption play in china? it's a mix, to be honest.

we are exposed to some of the tech sector within china. not going through an easy time. auto sector, quite a bit of an explosion in the financials, and insurance, for example. it's quite attractive. again, our strategy within china, we are running both dedicated-- large funds. ofhave been adding to some the sectors that have been hard hit by market moves. china is an exceptionally volatile market, and very much driven often buy retail speculators rather than by longer-term investors, and for of course, those gyrations give us opportunities when we are comfortable with the they are stillo

quite keen broadly on consumers, but that includes a raft of financials as well. haidi: what about the indian markets? geographically, china takes the top portion, and then the second largest geographic holding is indian markets. do you expect that cap to close in terms of opportunities arising? india has been a major exposure for us for probably around 20 years, so we have been overweight for that length of time. we are still overweight. one of the issues with the indian market has been not so much one of quality. it has been one of valuations. it's been an expensive market for quite a time. again, for us, the pullback we have seen, a sharp pullback in the indian market and in the indian currency. confidence tos add here and there, whereas previously, we have been taking

money out of india. always great to have you on with us. always great to have you with us, hugh young. bloomberg users can interact with the charts we showed during that conversation with him. you can browse the future charts , catch up on key analysis, and save them for your future reference. this is bloomberg. ♪ ♪

haidi: this is "daybreak asia." i'm haidi stroud-watts in sydney. shery: i am shery ahn in new york. nasdaq company has launched a joint venture. business follows three years of collaboration with the japanese banks. it expects the network to be available in japan by the first half of 2020.

mitsubishi ufj says it wants to toand the payments business a global scale and support new payment channels. amazon and general motors are said to be in talks to invest in a u.s. pickup truck maker. it could value them between $1 billion in $2 billion. a deal is not close. they unveiled a concept vehicle at the l.a. autoshow. gm says it is myers the contribution to a zero emissions future. shery: t-mobile's boss has his proposed takeover and claims the deal will raise bills. he told lawmakers his company does not use huawei equipment and won't after the deal is computed -- completed. will reduce competition. t-mobile and sprint insisted will improve the challenge to leaders, at&t and

verizon. coming up next, jay powell and loretta mester -- we will discuss. this is bloomberg. ♪ the latest innovation from xfinity

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jessica: this is "daybreak asia ." i am jessica summers with the first word news. on tariffs could slide. treasury secretary stephen mnuchin and trader representative robert lighthizer top-levelk level -- talks in beijing on thursday. there is cautious optimism china may offer enough concessions. march 1 marked the end of the president's 90 day terror of truth -- tariff truce. that is despite his government defeat onan historic refugee policy. they passed a law allowing doctors --

since 1929irst time and australian government has lost a substantial vote on its own legislation. showing mores signs of strain in the growing global slowdown with its unemployment rate rising to the highest level since 2010. the rate climb last month of 4.4% against estimates of 3.8%. it as to the signs that the minimum wage hike is doing more to harm unemployment growth than they are to raise income. el chapo has been convicted with "an industrial-scale smuggling operation." authorities produced evidence about his gang, gathered since the late 1980's. the trial included tales of murder, political payoff, jewel

encrusted guns, and a naked prison escape. global news, 24 hours a day, on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am jessica summers. this is bloomberg. shery: thank you. markets in japan, south korea, new zealand, and australia trading at the moment. let's see how they are shaping up. sophie: we have a busy morning with a busy morning with earnings. overall, we are seeing asian's talks tracking higher. helped along by optimism over trade and the u.s. budget deal. the nikkei 225 above 21,000 points. the aussie dollar is now trading flat, easing -- and the kiwi dollar holding steady at a three-week low amid speculation that mcgovern aramaic signal looser policy -- the governor may

signal a looser policy. trading at a september 28 high. across the region, energy companies are helping to boost gains. saudi pledged to deepen production cuts. haidi: sophie kamaruddin. more later. news comes to no surprise as global demand continues to rise. ramy inocencio has more on this. ramy: 240,000 barrels a day

cut they are expecting for demand and global growth right now coming from the cartel. this is to the level of 30.5 9 million barrels per day. if you look at the chart behind me, you can see that this would be the third month running if they were to do that, so in december of 2018, that was a little more than 700,000 barrels per day that was cut. 800,000 barrels per day for january of 2019. 240,000 here. we can see that this pulldown is trying to boost the oil price. i will show you exactly what has been happening as well. december january period, you can see this little trough. to takese started offense, we saw the price of oil for brent as well as of uti both rise. with that said, it is down by 25% since its high it hit in the october. wti both rise.f with that said, it is down by 25% since its high that it hit in october. as we look ahead, one big elephant in the room i suppose that we all know about is what is happening with u.s. shale production. this is in the gtv terminal library. this is the production happening

out of the united states. oil production, shale production, is in yellow. is at 10.2ly output million dollars, falling because of the cartel. fluctuate.inue to will u.s. shale continue to be the big elephant in the room? shery: given all of that production, not surprising we are seeing the secretary-general urged the members to keep their promises to cut. in other words, don't cheat. ramy: he is trying to push them vocally. we are talking about mohammed barkindo, the opec secretary-general. he is basically saying everyone needs to stick with the cuts they all agreed on. otherwise, whatever happened to all of the ships, all of the production. it will affect everyone pretty equally here. he did call out the kingdom of

saudi arabia, saying without them, they would not be in the successful situation they think they are seeing now. continues to exhibit leadership from the front and by example, but no one of a can perform the role swing producer. one interesting thing i mentioned to you, saudi arabia is down to 10.2 million barrels per day in terms of what they are pumping. their target was $10.3 million. they went under that, cutting by 350,000 barrels per day, and in march, khalid al-falih told the financial times that that is going to fall to 9.8 million dollars, so they are clearly doing their job. hopped back into the bloomberg terminal. we have to bring that back in. despite what's happening with saudi arabia, that is in white for all of opec for the cuts in blue. we can see that rising. numberseeing that these here are almost the same for the net change of just zero.

looking ahead, everyone is saying that what is happening with u.s. oil production, if that continues to happen and opec continues to cut, still more cuts need to be enforced. shery: thank you so much. now, the federal reserve made an unexpected dovish u-turn at its policy meeting and its january meeting. what are we learning today -- three taught said officials give speeches. kathleen hays is here. officials gave speeches. kathleen hays is here. kathleen: she is very important. she has been over the years probably the most hawkish member of the federal open market committee. there was a year when the fed darted raising -- was not raising rates during the recession. be listeninge will to her. what's interesting is before the

january meeting, before they pause, she herself came out and urged her colleagues to be patient on rate hikes. closely did not look enough. we already heard from loretta the federalident of reserve bank of cleveland. she is somebody who in the past was hawkish in her policy position. and today, we heard her saying that she is on board with the and see attitude on rate hikes. here is something very important that encapsulates where a lot of people are on the fed consensus. if she says the economy reforms, basically, strong economy, inflation around 2% or better, this rate may need to move a bit higher than current levels. turn the page, folks. some of the downside risks manifest and the economy is weaker than expected, i guess i will just need to adjust my outlook and policy views. maybe even open the door to norway hikes, maybe rate cuts.

in the q&a, loretta mester saying that she thinks the dot plot helps the public understand said policy but the fed should get better at conveying the uncertainty around the dot plot. that is so important. when the traders to use them, they think it is a done deal. no, it is data dependent. wait to see what she says when she speaks in kansas city. and when she said we need to take it upon's for a minute, that was a real game changer in the shift in tone. jay powell's message that we heard, the economy is strong. the possibility of a recession is not really on the cards for him in a big way at the moment. what does that mean for rate hikes? kathleen: that is all we know. i am watching the data. depending on how they turn out, we could have a couple more rate hikes. there is also the other eventuality that something could get cut. jay powell speaking about rural poverty.

all he really told us is he sees a solid economy, a strong labor market. he does not see a heightened risk of recession. let's take a look at a couple of data points we had today that that.rate look at the steady move higher. so many employers are saying i need to hire workers. this is the kind of thing that makes jay powell and others say we have a solid economy. fromt something today -- a milliona quarter of members. they do a survey for decades now. int they found is a big drop their business sentiment. it's back to where it was in january 2 years ago when president trump was first elected, and the thing that , there wasd uncertainty index jumped to its highest since march 2017, and this takes us. go. uncertainty globally.

about the trade war. inut how it hurts exporters asia, brexit, and more. that is hitting a lot of central banks now. haidi: kathleen hays. we will continue to talk about central banks. new zealand's central bank could be the next to turn dovish. traders are wrapping up that's cut -- bets that a rate will happen before november this year. let's get a preview of all that. is going on with the domestic economy that is creating this potential for a tilt? considerthings to here. domestically, there are some changes to look at. .mployment is still very strong but it did go up unexpectedly. same story there as many easinges, the lack of growth, the tenure bond yield hit a record low as well. then you look at the global

picture, and many central banks are now concerned about global growth, and new zealand is particularly exposed here. his trading partner is china. the biggest trading partner is australia. you can see how exposed new zealand is to the fickle tradewinds. also, other central banks are having a second thought about whether the next move might be up or down. otherwise, the new zealand dollar can spike. haidi: what would a tilt to a dovish stance potentially look like? paul: it's all in the language. we love reading between the lines, don't we? we may see a reappearance of their comments that the next move may be up or down, much as the reserve bank of australia are reintroduced that language as well. in new zealand, that was taken out late last year. that could be a powerful signal dovish tilt has

returned. as to win rates might eventually ise, that the whole -- that mobile family can play. swap traders think we will see a cut by november. shery: and we have seen the rbnz changing the timing of the rate decisions. why did they do that? paul: no code to decipher here. nothing to see, really. it's all procedural. there is a larger committee now for the rbnz that is including external exports as well, so few changes there. that is the top of the hour and it will be followed by a press conference from adrian or a while -- adrian a while later. latest.e have the they are raising their iron ore forecast to $80 a ton. that of course coming after production cuts. a really tragic problem after that disaster late last month.

and investors weighing a likely shortfall of iron ore. demand in china. prices broke above $90 last week. that iteeing them say will limit growth. they just raised their iron ore forecast 29% to $80 per ton after the production cuts that we are seeing. coming up next, troubles and china continue -- in china continue to weigh japanese videogame makers. we have risers will tell us why they are recommending zero entiree to the sector. this is bloomberg. ♪

haidi: this is "daybreak asia." i am haidi stroud-watts in sydney. shery: i am shery in new york. sophie. sophie: i want to highlight

what's going on. maker ise game fluctuating this morning, earlier dropping 4.5%, now rising 2.6%. the company warned of lower gains revenue where it generates half of its sales. in thegradual thaw market. also there is still anticipation about when the company is to release a mobile version of dungeon and fighter. the cfo says there is no definitive date yet. swirling about the potential sale of part or all of the parent company. but acknowledged reports offered new details. they are going to bid for a controlling stake. let's jump into the terminal to get a visualization of nexon soft patxh. the company put -- soft patch.

that is signified by the bars in overallo that has hurt results. total revenue, the orange bars on this chart, they fell 13% below what was projected, and nexon is forecasting that revenue will slip in the march quarter. .aidi: sophie kamaruddin our next guest cover the japanese gaming sector, and years recommending a zero exposure when it comes to japanese game makers. we are joined by the senior strategist. why so bearish? >> will basically, there is a number of -- well, basically, there are a number of developments that are negative. the approval in games in china

and tencent, but generally, in japan, what we have is that, you know, developing costs on the mobile side have been going up every year, as the handsets become more and more complex and sophisticated in terms of graphics rendering. you know, the cost of development has been going up. but more interestingly, given the plethora of games that are being launched, or free in the japanese market, the content sales have been diluted per title. the other thing that is happening that in order to get your game noticed you really need to advertise and. there have been a number of -- you really need to get your game noticed and advertised. you have in terms of time and money to play these games. so those are some of the factors. [laughter]

haidi: i certainly have not, you know, really delved into the playing side of things, but as sophie set up before, some of complication, talking about their weakness, we have seen the wild success of fortnight and apex legends. do you can mobile gaming will see a revival? no, i don't think so. i think the market has much urge for the current generation of platforms. we have seen the market maturity. i think we are looking for the next generation. nintendo's own council, -- had gamethey networking. there was big game consoles that were doing quite well. things like battle royale games

like fortnight and apex legends. those are the games played on usually more powerful consoles. should do of games ok. very well in the case of apex. generally, we think the market is maturing, and we are looking for the next generation game through,arket coming and it does not seem we will get a big shot in the arm this year. disrupting is really the industry in a way. how will that affect the prospects for nintendo? firstly, the gamers that play those type of games, but usually play those games, are or the xbox. ps4, hardly ever play those games on nintendo switch, even if it was available, given the fact that the consul is very under pat -- iscole is very -- console

very underpowered. it does not have the network growth. nintendo is the weakness among platformonsole providers, microsoft and sony. shery: what is happening to the mobile gaming market? i thought that was the next area of growth? amir: it is growing into a talladega, but it is a very, very crowded market, especially in japan, where it has been the highest in the world and attracted a lot of overseas developers to kind of localized their games and launch their games in japan, so it's a very, very crowded market. and i was saying that given that most of these developers make their money from in game content sales, the games themselves are

given away for free. given the number of launches we have seen, by definition, we are seeing a dilution of in game content sales per title, so the game titles are not as profitable as they used to be. ago inree or four years japan. the total market is growing. but it's very difficult to get noticed and make the kind of money we are seeing being made a couple years ago. shery: thank you so much for joining us. amir. out lateother earnings wednesday that we are watching. 11:00 a.m.e out at hong kong time. the company is expected to cut their profit forecast by at least half. we are looking out for recruit holdings. at 2:20 -- sony financial later today. this is bloomberg. ♪

haidi: this is "daybreak asia." i am haidi stroud-watts in sydney. shery: i am shery ahn in new york. in a sign that the generic drug price war is easing, a company reported did corporate profits, listed by double-digit sales growth in the u.s. it is some really for sun after whistleblowers claimed its

shareholder was taking money out of the business. a lawsuit in california has heard claims that cbs executives sold shares ahead of sexualosure of alleged misconduct against les moonves and other officials. disposed of athe least $200 million of stock over 18 months before the new yorker published the allegations. shery: banker santander has rattled the bond market for bank debt. the announcement came right on the deadline for the decision after santander kept investors in the dark for weeks. it may drive up costs and could tempt other lenders to follow suit. haidi: we are about to hand over to "bloomberg markets: asia." we are seeing another day of robust gains for japanese

stocks. also, the kospi seeing gains of .4% despite broad data when it comes to ppi from japan as well as soaring jobless numbers out of korea. futures looking higher. take a look at futures trading at the moment. we have seen more optimism that the economy is in a good place. we are hearing from esther george that this is a very different economy. really repeating some of the comments we have seen from the cleveland fed president, loretta mester, as well as chair jay powell. that is it from "daybreak asia." our markets coverage continues. this is bloomberg. ♪

rishaad: it is 9 a.m. in hong kong and shanghai. welcome to bloomberg markets: china open. yvonne: japan leads markets higher amid optimism about trade. the nikkei 225 near the highest in two months. rishaad: opec lowering estimate on oil in the global slowdown and continuing rise of u.s. production. yvonne: the latest central bank to test the dovish environment. traders are betting on a rate cut. ♪ rishaad: straight to the

reserve. yvonne: we are seeing, maintaining the official cash rate of 1.75% which was not a surprise to the market, but about what we're hearing in the guidance from the governor in about one hour. we are hearing the press conference. some parts of the statement right now. they are expected to keep the official cash rate at this level through 2019 and 2020. signaling a pause for the next year or two. also pushing back their forecast for a rate increase to early 2021. you are seeing that reaction. rishaad: that is what we have the moment. just too the upside, the upside of 68 u.s. cents. you can see the chart with the reaction immediately. we also have several equity markets coming on stream. taiwan and indeed others as

well. yvonne: it is interesting. zn joining on this list of central banks. turning a little bit more towards the dovish side of these worries of global growth are growing. what we were watching out for the equity markets has been the positivity when it comes to wall street session. you have president trump saying he is considering this border deal. marchallowing that deadline to slide, helping china by sometime. rishaad: markets reflecting this as well. we have futures up by half of 1%. hang seng, the slight gain at the start. also this optimism over u.s. trade talks. we also have him inching he is not really at the moment that keen on another government shutdown. president trump also, as we said is extendinghe

the march 1 tariff deadline if the two sides come anywhere near an agreement. yvonne: let's get to tom mackenzie, joining us with the latest out of beijing. how will this change the tone? how will this be read in beijing now that the talks are undergoing right now? tom: you say the talks are undergoing and we expect the premier to sit down with robert lighthizer and steve mnuchin thursday and friday. they are in the capital. the two lead u.s. negotiators. you could weigh these comments around trump around extending the deadline and what his administrations have said about his expectation about getting a deal with china and wanting to sit down with president xi for a one-on-one meeting in mid-march. you might pull that together and think we are getting close to a point where we could get a deal with the u.s. that will not be

too painful. the other way to look at it is to suggest negotiators more time to drive a harder bargain to get a more consequential and sequential deal from the chinese side which may play into caution in beijing as to how to weigh these comments. from the chinese perspective, they want the terrorists removed. -- tariffs removed and want to keep talking to the u.s. rishaad: of course, the u.s. wants things from china, concessions. tom: we talked about things like intellectual property and the fact they have bumped up the intellectual property, even though the u.s. is pushing for more moves on that side. they have got a law that is going through the motions. the u.s. wants to see more and an enforcement mechanism in place. it seems like market access

maybe one key area where they may see the chinese put more on the table. we have seen financial sector, moves to open that up. the auto sector. china could point out that tesla opened up a manufacturing hub in china. they made engle that as a carrot for the u.s. and say there are additional measures we can take. market access could be in focus as these talks get underway. anything that china puts on the table in that regard could be interesting. yvonne: it was interesting to hear from mike pompeo talking about this almost ultimatum when it came to huawei. choosing between the company and the u.s. how will that likely play into talks this time around? tom: officially, it is not going to play into talks, at least if you listen to the u.s. side. unofficial, this is a major issue even if you get a deal on trade. the tensions around china's

technology ambitions are likely to remain. huawei is symbolic for many of the u.s. of those ambitions and some of the bad behavior that china has undertaken to get to the point where it could really challenge some of the u.s. technology corporations and national security. that will be a longer-term issue for both sides. you so much, tom mackenzie in beijing. let's get to singapore. alex from j.p. morgan private bank. there seems to be a little of a thaw. there seems to be some moves in the right direction, but is it two steps forward and one step back? alex: that is certainly a possibility. i think the chances of reaching an agreement, whether it is by march 1 which is somewhat unlikely, or an extension on trade specifically, on tariffsi is likely.

i think the interests of both countries are fairly aligned along the trade deficit along ip. forward,, two steps one step back. reaching an agreement around trade is one aspect of u.s.-china and tensions. while that might get better, whether it is around huawei, market access for tesla, or broader tensions will likely get worse. yvonne: trump is saying he could allow this march 1 deadline to slide. how should the market read into this news? is it good news that they are getting china more time to reach a deal or bad news given the fact it extends the uncertainty? alex: we try to advise against looking at every piece of news out of trump because we see so much back and forth and volatility. i will say it is good news. trump initially set that as a deadline and that there would be

no extension. the fact he is willing to extend thend the fact oyyou see representatives arriving in beijing early and indication that both sides want a deal probably means they are making progress. the fact markets reacted when trump said he would not xi before the deadline -- there is no time to meet. the fact you have to meet after the deadline anyway. rishaad: alex, he needs to win, doesn't he, fundamentally? alex: yea, globally the economy is not looking strong. seeing mixed data in the u.s., but markets have been extremely jittery especially going into the fourth quarter last year around the trade issue. i think both sides have recognized the damage these tariffs will have. looking at apple specifically, you can see they suffered quite a bit in the fourth quarter. in some ways, the damage might

already be done, similar to what happened with korea around the issue of deployment. yes, i think going into 2020, he will want this as a big victory. yvonne: alex, stay with us, head of investment strategy for asia at j.p. morgan private bank. let's get the first word news. su: thank you. we will start with president trump, who is downplaying the threat of a new government shutdown despite saying he is not entirely happy with the security funding deal worked out on capitol hill. a bloomberg source says the president is likely to regretfully sign the legislation and use his executive authority to fund additional border measures. he says he will be getting $23 billion for border security. >> i don't think you are going to see a shutdown. i would not want to go to it. if you didn't have it, it is the democrats' fault.

i accepted the first one and i am proud of what we accomplished. su: prime minister theresa may's soft brexit aide is reported to have said she will wait until the last moment before putting her deal to parliament. allie robbins discussed the move in a bar in brussels earlier this week. he's claimed to have said that may would force lawmakers to choose between her deal and a potentially lengthy brexit delay. she's also asking the commons to give her more time to renegotiate the deal. bank of england governor mark carney says brexit could be, could be the acid test for the new global order. he says the outcome of the split would show if it is possible to broaden the benefits of transparency while enhancing accountability. carney also warns that rising trade tensions and protectionism and the deglobalization are

threats to growth and the impact, he says, is already being felt. >> it is possible that new rules of the road will be developed for more inclusive and resilient global economy. at the same time, there is a risk the country will turn inwards, undercutting prosperity for all. concerns over this possibility are already impairing investment, jobs and growth. creating a dynamic that could become self the filling. su: opec has lowered its estimate of how much oil the world must pump this year as u.s. shale production climbs and global demand wains. the cartel and its allies have agreed to restrict output until the end of june which would take constraints into a third-year. oil prices remain about 27% below the four year peak seen just a few months ago in october and u.s. output has surpassed

that. saudi arabia and russia. day onnews 24 hours a air and on tictoc on twitter powered by more than 2700 journalists and analysts. this is bloomberg. yvonne: thank you. still ahead, how the fed's newly dovish sentiment is influencing monetary policy in other parts of the world. our discussion with alex wolf continues next. rishaad: plus, beijing walks the line between boosting services and bursting a new bubble. a look at china's new measures to revive its equity market later this hour. this is bloomberg. ♪

about 15this is minutes away before the china markets open.

having a look at the dollar at the moment. the dollar index pretty much flat. a weakness in the previous session because we have had comments coming from fed chair jay powell who said the u.s. economy is good and policymakers don't feel that probability of recession is elevated. yvonne: we are snapping out of eight days of gains for the dollar which has been interesting. this rally has been the longest since 2016. we heard from cleveland fed loretta mester saying the u.s. economy is in a very good spot, despite risks to the global growth picture. rishaad: we have the yuan reference rate against the dollar. some big moves we have seen, not much of an adjustment. yvonne: let's return to alex wolf still in singapore with us. talking about the fed, but it has been interesting about the rbzn, where they are talking about not hiking rates and

keeping and pausing for the next year until 2021. yet, everyone in the currency markets is still saying this was not dovish enough. i am wondering what you make of all this given the fact there is global growth concern all around among asian central banks. are they overdone, these concerns? alex: i don't think that they are. i think we are seeing some risks around global trade. when you look at now cast, expectations have grown in the fourth quarter, growth has looked to weaken. in the u.s., we have payrolls that look relatively healthy, but if you look at growth in germany, imports in china and the impact that will have on japan and elsewhere and asia and you look at global trade conditions, there is some weakness. i think global growth concerns are definitely something to be worried about.

however, i don't think it is necessarily time for central banks to go into easing mode. i think the r.b.i. was somewhat justified in india because inflation is that low but i think we have to wait and see how trade concerns play out. we have to see how first quarter data comes through. rishaad: i want to talk about the fed. do you think the fed got it all wrong and yet all right at the same time? what i mean there is, of course, there was the environment last year where you certainly thought that interest rates did need to go up but they were perhaps missing the effect of what happened with the fiscal stimulus. if that disappeared and you have more qt going on, it leaves them with no option but to pause. what is your thinking on that? alex: i think that they likely factored in fiscal stimulus and the impact that would have had on the labor markets and overall growth.

i think initially, the overall impact was underestimated. the tax cuts an extra spending was larger than most had expected. i think we are back in the same equation we were in 2015 around the previous g20 went the fed hikes create global weakness. it pushes the dollar up. it creates external vulnerabilities that could feedback and to the u.s. the same time where the fed finds it hard to move. two, the financial stress it causes in the u.s. as well did cause the fed to pause. i think that is something you cannot really plan for. rishaad: what you are suggesting is there was a negative feedback loop in regards to the hike. certainlyink that played out. over the dollar strength the course of last year and you saw weakness and emerging-market

currencies. the outliers of argentina and turkey standout. you saw a broad downtrend in terms of growth global trade broadly weakened over 2017. one aspect of that, not the only aspect, was the fed moving. it creates tighter rebound we are seeing in equity markets -- the moves are quite

erratic. the dollar is up despite the dovishness from the fed the small caps are performing. you also have industrial metals surging despite the china slowdown. are you seeing any clear direction in markets? alex: it is difficult. right now, there is a lot of overreaction to every policy shift. we are in a very fluid environment around policy but also around the growth of outlook where you go back to this time last year, the narrative was clear around global growth and now it is a decent guys global slowdown with fluid policy not just from the fed when global central banks with talks of fiscal stimulus in europe, with a very unclear stimulus out of china and unclear impact on that stimulus. so, i think the environment kind of is creating this narrative that is not necessarily clear on the markets. yvonne: we spoke about what the narrative is an here is what he said about the america first trade. >> the obvious relative trade is u.s. stocks versus the rest of the world. what we have seen in the recent past is the rest of the world has done better than the u.s. i think that is going to reverse . yvonne: is this really the return of the diversion straight -- trade? alex: no, i don't think so.

i think you have to see data come through stronger in europe, in japan and china. you are not really seeing that. the only place you are seeing these in data is the u.s. we are seeing these and economic data, talking about the orders and ism. in addition to the fed pausing. i think is not necessarily speak to the rest of the world's strength versus the u.s. yet. you have to see the results of the china stimulus and we are expecting a fairly underwhelming expectations and response from their efforts. with global trade also weakening across the board, it is hard to get very excited about rest of the world assets versus the u.s.. rishaad: putting your hat on as head of investment strategies, how is that strategy, allocation wise, etc.? so we are still looking at adding duration.

even though yields have come down, we think we are at the end of the cycle. now is a good time to add duration. we also put the risk of rising rates is also significant. moving up in quality, looking for secular gains. whether that is in tech or health care, and moving to a more defensive sector away from cyclical sectors. we do think there is a tactical rally around the fed. we have to it knowledge the fact that policy is changing. they are easing in china, whether it is effective from the growth perspective or not but that will help chinese equities. within china, there are sectors whether it is banks or a consumer that still looks good. the u.s. is one area where we are seeing some growth. that speaks to some upside to the u.s. equities. rishaad: thank you so much for that, alex wolf, of j.p. morgan

private bank. a lot more on the way. we start and continue to count down to the china open. this is bloomberg. ♪

rishaad: five minutes before things get underway in hong kong. let's have a look at the latest business flash headlines. activision blizzard has been rarely on the headlines, but slashing costs after missing estimates and delivered a disappointing forecast. the largest independent u.s. videogame publisher. revenue was $2.8 billion. bloomberg reported last week that activision plant to announce job cuts. yvonne: nexon fell the most in the month after warning that they may fall by double-digit percentage this quarter as a it awaits the release of

a marquee title. nexon foresees a roughly similar slump now. it generates half of its sales in china where tencent distributed popular pc game. rishaad: t-mobile chair as offended its takeover of sprint, and claims that the deal will raise. the company does not huawei equipment and will do so after the deal is completed. opponents said the $26 billion plan will reduce competition, while t-mobile and sprint says it will improve the challenge to market leaders. yvonne: we are counting down to the open up markets in hong kong as well as mainland china. futures looking positive now. take a look at the hang seng, pretty much flat. the china 50 futures up a fifth of 1%. offshore seeing a little bit of strength given the dollar weakness we saw overnight. stocks, 14 on the

way down. the biggest gain of 2.3%. the biggest loser aia group, down 1%. the open is next.

rishaad: 9:29 a.m. in hong kong and in shanghai. counting down to the start of the midweek session in china. this is what we have at the moment. we have trade talks shedding some light with hints from president trump that we could see a delay on that march 1 deadline. also, the shutdown, something he is now trying to avoid. positive sentiment for markets. we had a good day on wall street, that providing some tailwinds. oil has rebounded from two week lows. saudi arabia will be cutting production, that is their thinking. yvonne: commodities looking pretty good today. take a look at what we are looking at the china market. we are looking at the headlines,

reflecting the dollar weakness. snapping out of eight days of gains, after what we saw with the shutdown and the straight talks as well. the kiwi-dollar is soaring today. rbzn forecasted they will keep untilat this level, 1.75% 2021. areink hkiwi bears disappointed. rishaad: very slightly positive. we have shanghai as well moving to the upside. looking at what is happening elsewhere, you would have thought the technology stocks will be down so much last year, perhaps people would be looking bottom surging. this is not the case, is it? yvonne: no, they are actually buying the chicken in the pic farmers out there.

quite interesting how this is happening. looking at african swine flu. rishaad: they were beaten down. yvonne: it comes to these chicken farmers. talking about these agricultural rules that could lead to some type of structural changes. the rotation is quite significant. showing the white line what is happening with the hang seng composite index. the agricultural component of that benchmark. yvonne: let's ask that question to tommy, from shanghai, joining us from ubs at of china equities. the small caps. not really about the big names anymore. these agriculture companies leading these gains. is this really a short term trend or something you could buy into? >> we definitely see some rotation from sector to sectors. you today, the market -- year to date, the market has been quite

positive. we definitely see the earnings forecast has been closely watched. i'm not surprised some other sectors playing catch-up. rishaad: it is not really so much catch-up, but perhaps flight for safety. what is your view? thomas: our strategy is definitely pretty positive year to date returns. primarily supported by the valuations and stock index level. definitely, you can see with the rally over the past six to eight we arewe definitely see, advising our clients to look at low beta name and make sure you play on the same side, near-term rotation or correction. yvonne: what do you make of the reasons behind this rebound of

chinese stocks now? is this merely an unwind of a selloff that has gone too far in the fourth quarter or are you seeing clear signs of risk behavior now? thomas: we have mixed signals. muchfinitely is very rebounding from a very poor december performance. as you can see, the overhead of the trade talk, we can see some constructive. there is still uncertainty, but constructive messages that creates the sentiment. if you look at the overall for an inflow, you are looking at continuing adding of china a-shares into the index. a lot of expectations towards the announcement by the end of this month. all of those providing positive sentiment into the market in the near term. sorry, notex,

alex. tom, what is your view now on the data because we are in that dead zone at this point of the year. we just had chinese new year and that means we cannot rely on figures for a couple of months. where does that leave you guys? thomas: well, we have been closely watching. one of the reasons we advise our clients to be more cautious in at near-term is if you look data and earnings,

some negative momentum because of the general slowdown from the chinese economy last year. this could be some of the disappointment in terms of data but that is priced into the market. we are definitely seeing the market may take a positive towards the end of this month and the rally from there. yvonne: we have a chart that shows what we have been seeing how this is playing out across bonds as well as stocks in china. it is interesting to see that the earnings yield that we are seeing in the shanghai composite and the spread between that and credit and aaa corporate bonds, that spread is narrowing now. bonds are outperforming stocks in 2019. how do you see this playing out? this tug-of-war between bonds and stocks. do you think stocks can still outperform? say the risk would off positions -- normally the risks tend to outperform. at the same time, we are in the --ironment where globally china was the early one last monetary policy

is taking a pause and going into a little more accommodative and easing. that would obviously support the general bond market. if you look at china in china in theith stock market inclusion and the volume index adding china onshore fixed income into the benchmark. 250ectively, we expect billion inflow in the next 12 to 18. rishaad: this naturally begs the question who is getting it right. it seems both are, but traditionally bond investors are more savvy, at least that is what they like to think. tell me, what are they at the moment pricing in? the generaloverall, market is seeing a relative easing from monetary point of view.

institutional investors in the market. if you look at the china stock market, still roughly 80% retail. as you can see with the foreign inflow into the china stock market, that institutional component and international component looking into the longer-term, more fundamental, those are making a bigger representative into the stock market as well. yvonne: what should i be buying on fed stimulus? more on the defensive plays, state-owned enterprises, or more towards the consumer side, private sector for more opportunities? thomas: quite a few things. definitely internalize asian -- interne international ization. picks.ernational

the performance will reflect your to date -- year to date. at the same time, there in lies the potential pause, market volatility is. also advising those in the money to take low beta sectors, a little more defensive. better earning yields, those other sectors in the shorter term. rishaad: stick around, tommy fang. it is now seemingly getting a bit harder for people in seoul to get a job. let's find out why with su keenan. su: we start with south korea, showing more signs of strain in the growing global shutdown with the unemployment rate rising to the highs level since 2010. the rate climbed last month to 4.4% against estimates of 3.8%.

it adds the signs that the president's hikes doing more to harm implement growth than they are to raise income. india's retail inflation has eased to a 19 month low, justifying the r.b.i. decision to lower rates and opening the way for more consumer prices which rose a fraction over 2% in january from a year earlier. that compared with median estimates of 2.5% and the r.b.i.'s 2.8% projection for the first quarter. there is a high probability of back-to-back rate cuts. agencya's state news says the attorney general wants the trial of the former leader to begin before the end of the month. the case concerns the missing he's facing a range of charges, including corruption, embezzlement and

breach of trust. the trial was supposed to be this week but was postponed while his legal team prepares an appeal. lordious mexican drug joaquin "el chapo" guzman has been convicted of what the new york court describes as an industrial scale smuggling operation. he now faces decades behind bars as the authorities produced evidence about his gang gathered since the late 1980's. the three-month trial included tales of murder, political payoff, jewel encrusted guns and a naked prison escape. global news 24 hours a day on air and on twitter powered by more than 2700 journalists and analysts in more than 120 countries. i am su keenan, this is bloomberg. yvonne: coming up, we find out why beijing is walking the line between reviving a beaten-down stock market and engineering another bubble. that is next.

this is bloomberg.

rishaad: you are back with bloomberg markets: china open. authorities in beijing ruling back some of the trading on the stock rout which has brought mixed reactions. yvonne: on the one hand, investors are cheering the barrier of short sales, but also fears of the more free market could fuel another bubble. rishaad: could it? let's turn that's who are reporter. why remove these curves now? that is the one question. losty now after the market $2.3 trillion last year? people are saying it is not really a time to say we are not in emergency mode quite yet because confidence is so low.

like theseit is not curves have really helped the market. because they are so restrictive and it is also kind of making the people that they want to attract to the equity market, fresh capital, foreign capital -- it is not really in attractive market for them. it is not a functioning market. e, they company's sid have been struggling getting financing from the market. we were talking this morning about how bond investors are only buying the safest stuff. they need to make the equity market functional for companies to fund themselves. that is the reasoning of the why now. investors are taking it as a good sign, a confidence boost. the regulators think we don't

need these emergency measures anymore, that things are not bad anymore. yvonne: talking about how this deregulation could go too far. what are the implications of that? sofia: what he said is beijing is kind of walking a tight rope because yes, these curves were not liked by investors in the index and foreign investors were calling for it to be removed. triggereds kind of some speculative behavior. chinext does came up its best three-day rally in 2016. that is the balance we need to see here. it is too early to call it a bubble because valuations are still depressed. if we see a pickup in margin financing, all the things that made people worry in 2014, that is what we should be -- yvonne: we are seeing signs of

that now. we are back to the pre-2015 levels. sofia: exactly. it is very easy to draw comparisons because valuations are exactly where they were in 2014. margin financing as well and trading volume too. rishaad: stay with us because we will get back with you to talk about chinese equities. tommy, same question. why did this now -- this horrid year last year, what about the timing? -- two if you look at it things. one, china domestic asia market is an emerging market. they have limited history so the regulator in the market participants are still working towards the international standard. the second part is with the major index inclusion, the market will be more and more connected to the global market. whatever global practice

prevails, that to me is an encouraging sign. i would say this is a positive. we have been working closely with our global regulators. our message is global investors want to allocate their assets into china, but you want to make sure they are free access in and out of the market and they will also have proper hedging to hedge their risk. those are the message that we have been accommodating to the regulator to check the 74. -- step forward. sofia: you say that the hedging tools were a key, something that was really missing from china's equity market. other curbs or restrictive measures do your clients and people you talk to want to see scaled back? thomas: well, quite a few things.

they wanted to make sure the rules are relatively clear. so, window guidance was often used but that was removed in the later part of the years. obviously, potentially using financial and future -- index futures to hedge their portfolios. lendingng borrowing and to really manage the portfolios. those are the tools we have a looking for. is latest announcement definitely moving towards the right direction. yvonne: where do you think beijing is right now between reviving the stock market and potentially engineering a bubble ? do you think there is a bubble risk? is that too early to talk about right now? thomas: two parts. advice to the regulators is set up an

international practice market to have the capital markets -- to really do their function, to invest capital into the best companies and find a marketplace to identify a proper price for the equity and bond. that is where the capital markets should be functioning. let the economy and corporate earnings do their own job to propose to the market where the price should be. instead of the regulator worrying too much about whether the price is too high or low, that is not really the regulator's job. sofia: someone i was speaking to yesterday said maybe these curbs should be scaled back for institutional investors, and you are

driven by retail investors. what is your reaction to that idea? thomas: i would say retail investors definitely need more education. with the current dynamic of the market and the composite, i think a regulators should take that into consideration. overall, in china, there was a lot of lending and financing that is widely available to domestic investors, but initially not to the international investor. the way you bring that level playing field, you will attract more global institution investors into the market. rishaad: ultimately, it will depend on what the investing environment is like and how attractive it is. we have been discussing valuations, stunningly low, stunningly attractive, but people are still frightened to put their toe in the water, aren't they?

thomas: yes. a key here is you look at the macro economy for china with 6.6% gdp growth for the year. then, you look at the overall learning level. it is in the mid-single-digit level which can support the current valuation which is relatively around a three-year low. those are the things with the rewriting of prize earning ratio and with the credit and mandatory policy and stimulus policy which we are expecting in march. the market should definitely be looking at better sentiment. rishaad: tommy, thank you so much for that. tommy fang from shanghai, head of china equities at ubs. and sofia. you can catch up with all our interviews using the bloomberg terminal. watch us live and dive into any of the securities of the

bloomberg fountains we mentioned. also, become part of the conversation. this is for bloomberg subscribers only. have a look at it on tv . ♪

yvonne: let's do a quick check of the latest business flash headlines. nissan is trying to end the debate on whether carlos ghosn deferred cash on income by taking $68 million. ghosn denied wrongdoing, saying his payment was never fixed, therefore making it not a legal. operating profit will be the lowest in six years with sales weaker in all major markets. our brand value is not sufficiently strong so we cannot boost sales volume without incentives and fleet sales. enhancing the value of nissan is

our task going forward. rishaad: nasdaq announcing ventures with mitsubishi financial for a blockchain base. the company called gonet follow three years of collaboration with the japanese bank and expects the network to be available in japan by the first half of next year. mufg says it wants to expand the payment business to a global scale and underscore new iot payment channel. yvonne: rattled at $340 billion bond market by skipping a call option on $1.7 billion of contingent convertible bonds. the announcement came on the deadline for a decision. kept investors in the dark for weeks. it may drive up costs for relatively driven bank bonds and cause other lenders to follow suit and. rishaad: indonesian markets about to come on stream. up.composite, 3/10 of 1%

we have various moving parts as well. we have at the moment global fund selling some indonesian bonds. that is one of the headlines coming through. miningmoment, indonesian companies earnings may be strained in the year ahead. that is what we have at the moment. credit suisse cutting indonesian stocks as well. that is a move perhaps affecting sentiment of the market, which is however on the up. yvonne: take a look at fx given what we are seeing in movement. kiwi stronger today. bank of america, merrill lynch cohead joining us to talk to us about the central bank moves. more dovish stance. as well as the dollar rally. rishaad: we have this call yesterday. if they were saying iron ore would hit $100 at 100 metric

tons. that was a call from this man, the head of metals and mining research. he will be on the program in the next hour. stay with us. this is bloomberg. ♪

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yvonne: it is almost 10:00 a.m. in hong kong. rishaad: japan leading equities higher. and nikkei 225 near the highest in two months. bnz held its cash trade at a record low, saying the next move could be up or down. rishaad: reports say theresa may will force lawmakers to vote on her deal or there will be a delay. mark carney the uncertainty is damaging. ♪ rishaad: markets hate

uncertainty. on the other hand, they can't live without it. that is the irony. getting more clarity. donald trump dialing back on a government shutdown, the trade deadline,he march 1 all that engine during positivity. yvonne: some risk on momentum. equities, risk on. following the wall street session, positivity and the equity markets. 1.5%ikkei 225 higher by today. singapore up 1%. hong kong up .4%. it has been that dollars story. when we got the headlines on