haidi: a very good morning in sydney. shery: good evening from new york. so forth 'm so forth from hong kong, welcome to day break asia. haidi: our top stories, a mixed nothing to d does alter the view of its policy path this year. with the latest minutes showing to ers are committed patience and want to end the balance sheet runoff this year of a down grade as

teresa may seeks support in brussels, the u.k. and e.u. may compromise.oward shery: a quick look at the markets closed, s&p 500 seeing the seventh out of eight sessions and for the first last year august of entering territory in the 14-day above that 70 level. we have seen caterpillar really eading those pearls producers higher as they had some bullish comments about demand in china, helping the stock market there. the dow also gained a quarter%, unchanged.was we are seeing s&p futures as well at the moment holding 2785. we'll see how the asian markets mentioned thatve dovish tilt from the fed has in place.till sophie: we are seeing some come asia, we have q.e.

stocks adding .7 of a percent online air .1. she were slipping on wednesday waiting on jobs data. slower growth in employment. morning round this jumping 10% to the highest level in 20 weeks after reporting earnings. let's check in on a gain of the d as well, it missed lowest analysts estimates. e have aluminum demand growth outside china expecting to the modest according to the company. around electric vehicles and that is helping the company. like to put up the board for flight center if i could. flight center under pressure up 1.5%.ing now, the company saying the in at the ly to come bottom of iets guy dance range amid volatility in australia the leisure within

unit, that is for flight center nd the company is supposed to pay a simple dividend. over the past s year. the company is saying it saw a in the first half haidi. the rising prices, haidi: i'll be asking allen in ur exclusive interview at 7:30 hong kong time whether he still has to prove to investors hether this turnaround and profitability is sustainable. let's get you to the news. >> china's top economic aid joins the trade talks in washington later thursday as the clock ticks down towards president trump's march 1 tariff deadline. he has held progress in the talks so far saying he would repared to extend the truce if he feels an agreement is close. upis more than ready to ramp tariffs if they don't offer what wants.

teresa may, some voting against her strategy and challenging her. sources say up to 15 ministers are involved, a cross party prevent the u.k. crashing out of europe without a deal. it comes as may went back to russels to plead for legal assurances on the irish back stop. can be no ys there more talks. chinese premier is warning of a short-term d by lending saying banks should offer longer loans to support company. reaffirmed that the current policy won't change and the float the won't system with excessive liquidity. they cut the amount of cash by 100 basis points last month to encourage more lending. signalled utin has that he will aim new weapons at the u.s. if the pent done's missiles in europe. has no plans to deploy missiles but would respond to any u.s. moves. annual state of the nation address was less belligerent year ago when he showed

c.g.i. demonstrations of new target the seem to u.s. >> policymakers were widely in ending the run off of he bank's balance sheet this year. raise rates at all in 2019. joins us in new york. in favor of it ending this year? >> they said that they will finish the unwide in the second half of this year, so to e was a need for them really announce the details as soon as possible. they will maybe announce the details as soon as may meeting.

for the march, it might be a little it too early, a bit too ambitious to reveal all of the details including the balance on of the sheet. there are still a lot of questions remaining with respect to the maturity of the assets on the balance sheet. it's a positive evelopment if we move some uncertainty for analysts and for the market participant. positive development. we'll hear more later. more dovish in the last meeting? >> they were dovish overall meeting and ember in the january statement the minutes were slightly less dovish than the revious communication in our view. so basically the statement, the ffluency statement was ambivalent with respect to what

the next fed move will be, hike or a will be a cut. after the statement in january basically didn't rovide any clue in that respect. the minutes on contrary actually a d the next move could be hike still, so i think there is a little bit of tilting going forwardking rather than staying on hold or each a cut. more would get any clarity on the other wild card which is inflation. >> well, inflation will what the fed will do. it's probably not going to be the fed t, although will listen to the markets and all of that. the key determinant of what to the fed policy this year will be inflation and if accelerates this year, we will see further tightening monetary policy because the

ed will not tolerate high inflation. shery: thank you for that. espite the narrative, our next guest said the fed minutes were hawkish than e expected and rate hiking are still on the table. we bring in john hill. have you with us. we were told that it sounded a little bit more hawkish as well. is that your view as well just because at the same time we got commentary on the potential rate cut. >> yeah, that's exactly right. the word recession didn't even up in the entire minutes. we are still at a moment where hold or hike.n of the economic data just frankly so poor as to justify the full extent of some of the rate cut pricing that in the market. so i think in reaction to the that occurredturn in january, some pricing might have gotten out over its skis. it's kind of hawkish relatively.

they are certainly on pause. in march, notving moving in june at best in that would beeven pretty aggressive. we're still in a world where either they're staying still or hike. the question is, do they hike with hings coming inline expectations or do we need to hit a higher growth plateau and to justify another move. shery: yeah, they agree on the that the balance sheet rolloff should end this year. does that show some sort of how that could affect financial conditions? >> the way the fed has thought internally, it shouldn't directly impact financial conditions. and wanted to do it slow methodically. in don't see a shock treasuries, widening, anything like that. minutes, it in the think em that investors

that balance sheet runoff, they contributed to the selloff in december, some of the negative sentiment in january. f you're the committee, you don't want to be influencing financial conditions, positive r negative and ok, we'll maintain a bigger balance sheet, plus the underlying demand for bigger. seems it seems like an elegant solution to maintain a bigger balance sheet and we think they announcementke the as to what they do as early as march. this is something they want to ahead of and not be too, another tightening financial volatility and equities. ophie: maybe this is a power ka pitlation, a reaction versus the balance sheet itself. seemed a little bit ridiculous we were talking about the balance sheet on autopilot. clear policy tool that

can be tapping. are we going see increasingly what they're focusing on and could we get to a point to whatever move they not, would be or the equivalent after a rate hike? say 's always difficult to and really the mechanism by when how uld impact markets is well do fixed income markets and ates handle the increases treasury issuance that results from balance sheet rolloff. that markets seems were handling it in stride, everything was in autopilot up moment that it really wasn't. reaction catches them off guard. that being said with load eutral rates, with 30 years barely trying to keep 3%, when the federal cuts in the next recession, it's likely they're back to zero and likely they'll use balance sheet tools again. end of it's kind of the this narrative or the end of his chapter in the balance sheet story, the idea that we're

leaving balance sheet policy in the future is probably wrong. back there within the next several years. haidi: a lot of concerns where the eading to fed is now that they're going to is there, overhawkish, also concern they're going to undershoot and if we come out of this period of extraordinary policy with a much bigger balance sheet than anticipated, what can they there is an f unanticipate, sort of recession nature conditions or economic actually worsens more than expected? >> yeah, absolutely. that was one of the reasons they to get interest rates move zero. they wanted to get away from zero to at least give them some space to cut. they wanted to start the balance sheet rolloff. they are kind of if you know tining measures they can do as well as they're normalizing of the pal ion sheet, say they skew things a little bit towards shorter maturity. in response to the next downturn, they can do whereby they wist

sell shorter maturities and buy longer maturities. down interest rates in the back end and can lead to heaper funding costs for corporation and households. the reaction since the fed turned dovish at the start f the year, has it been counterintuitive for you toward the dollar? classic le bit, a dovish fed is lower rates, more equities, maybe compensation and a weaker dollar. the ongoing strength of the to run a little bit counter to that narrative that we're he ways interpreting is we need to look at this in the global context, right. dollar, even if it's hold ground, it's holding ground against he euro, where g, against the yen you are starting to see severe evidence of global weakness or a or recession turn

nature signals in parts of europe. just the fact that the dollar is olding ground might be indicative that it's kind of weakening by comparison, but in i would free with that idea that it is a little bit some of the ive moves we're seeing. shery: we are in unprecedented i suppose when it comes to sentiment and conditions. for your time.ch let's check in on some of the trading the start of in sydney. ophie: quite a number of overs, a flood of earnings, quantas dented by higher oil prices. the carrier is forecasting that 2019's fuel bill will come in announced a y have $305 million buyback. we have flight center under this morning. come something at the bottom of guidance according to the is paying a it

special dividend. amatil sliding, net coming below estimates. ther movers of note in sydney so far this morning, gaining on the up 8.8% jumping back of its earnings update and on 14 climbing the most year guidance. performer of at least 10% and expects the tv you want to be profitable in the fourth quarter. and another gaining ground up morning, rising the most in more than two years first half ing a $119 australian. haidi: sophie with some of the sydney so far

this morning. coming up. us for an ining exclusive to go through those time.gs in 20 minutes trump warning the u.s. might tariffs if . with they don't reach a trade deal. we'll tell you what it means for the auto factor. this is bloomberg. . this is bloomberg.

shery: this is day break asia, shery ahn in new york. haidi: i'm haidi stroud-watts in sydney. he north korean leader must do something in a meaningful way if sanctions are to be lifted. derek, the president really lot of experts and critics of the singapore summit needs to saying, there be something more substantial, more detailed, more enforceable singapore as in that

framework deal. right.t's exactly the president has said that all things are possible in this asking for he is something meaningful, now, what does he want that is meaningful? said yet.really we're hearing reports that erhaps kim is looking to maybe offer the disabling of the research facility there and inspections that would verify that. of course, that would be a tangible step. that would be a real step that would probably be the real tangible step that president have extracted from of aside from the lack missile launches and things of that nature. necessarily solve a problem about korean obviouslyzation which was the original objective of this whole effort and so the question sort of where the draws the line at meaningful, is he ok with like a he ible first step or does want something more than the

north koreans have so far been offer?g to haidi: will we have to change his goal when it comes to the egotiations of where he wants to take the nuclear negotiations, right? over here in the u.s., president really ramping up his rhetoric over european car we rts as well, of course, know that he has received that report from the commerce department on whether auto are a threat to national security. he saying now? >> so president trump told the reporters at the white house if we today that, look, can't get a deal with europe on absolutely going o slap tariffs on european car imports. tariffs at 25%, on he lower end unaffordable and put them out of the strata they're competing in. that's dangerous in your bmpg or mercedes, those sort of

firms. 90-day review process. there is not a decision imminent ere, but as you're talking about through the rest of february, march, april, this is going to be a thing that we're very, very ve to carefully watch. keep in mind, this might sound like a bluff from the president it is, maybe it's just a piece of negotiation fluff, same sort used this of authority to throw tariffs on steel m, to throw it on and washing machines even. idea thatdiscount the something like this might actually happen. preparing countermeasures that they have in case and just european carmakers are trying to production in states that president trump carried last cycle to try and president that this

go t the road he wants to down. shery: despite the fact that we derek, thank you so much. derek wallbank in singapore. comes to the trump-kim -- we will he will have in-depth coverage. don't miss it. this is bloomberg.

>> i'm shery ahn in new york. pressure is mounting on teresa may as she pleads for brexit assurances in brussels. lawmakers have quit the party and the party is ticking toward

a grand divorce. a busy day for teresa may. what came out of this meeting? >> you can see it was a very for both sides, the and the u.k. here. the at pace in addition to the continuation of these talks are it ly basically hammering home to everyone saying, listen, we're not really going to go anywhere any time soon. so with regards to what they talked about, legal assurances has the irish back stop, it continued to be this thing, a brexiteers some critics have said have hijacked conservative party to make them very, very inflexible on this. e.u. is trying to find some kind of deal here. possible also some additions to the declaration u.k.'s ng the e.u. and future. lateral they'reead of ours.

high described as very profile joining eight ex-labor a new rs to form independent group. their hope is to stop a no deal 29.it by march ministers,lots of 15 february 27 is the next time that parliament will be taking up a vote here, but in addition that, looking ahead to this going to rs. may is the middle east to egypt and she many e speaking with leaders of the nations on the summitt. of that >> coming up, quantas has

reported, higher fuel prices, really shredding that profit margin. exclude ng to speak civil to the c.e.o. next for his take on what happens now. this is bloomberg.

the estimate was for around $13.9 billion. gross margin higher. 14.6%. the estimate was for 13.7%. the third-quarter operating profit coming in a 444.4 million. when it comes to the nine-month revenue outlook, that was also $39.33 billion. gross margin, 13.9% for the nine-month period.

we have expected earnings recovery to continue in the three months ending in december. it has the earnings estimates for the previous two quarters. we have seen the company's pc chip -- shipment higher than the industry average. that has helped lenovo. lenovo started trading in hong kong.

>> the latest fed minutes show -- when the fed said it would be flexible on shrinking the balance sheet and inpatient on hikes. jay powell said caution was needed amid uncertainties including bishop -- the slowdown in china, and the follow from the u.s. government shutdown. president trump has again threatened to impose tariffs on autos imported from the eu if it fails to produce a new trade

deal. he said negotiations are continuing and the eu team is tough to make a deal with. the president is weighing a commish department report on whether auto threat to u.s. national security. he has 90 days to decide whether to act on its findings which have not been made public. president trump has said kim jong-un must do something "meaningful" to see that. there will be a second summit with kim. they are expected to discuss the next steps with korea, building on a statement they signed in singapore last year. the president says he does not think the summit will be his last meeting with kim. standard chartered says it will take a $900 million charge related to fourth-quarter estimatesd it covers for potential penalties from probes into violations of u.s. sanctions, currency trading, and financial crime controls. it is facing a u.k. relic -- regulatory penalty of 130 million dollars after settling a separate currency investigation

last month. it is due to report next week. is quietly using the saudi led restrictions on qatar. 20 months after the standoff began. a circular suggests abu dhabi will allow cargo to be shipped to qatar after trade was up to josh was -- after trade was suspended. vessels are barred from docking in abu dhabi. global news, 24 hours a day, on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. i'm selina wang. this is bloomberg. let's get your check with how the aussie markets are faring at this earlier thursday session. sophie: it is a very busy morning for sydney markets. we do have the share market gaining 2/10 of 1%, resuming gains let higher by discretionary and utilities to the aussie dollar is looking

little changed ahead of jobs data. study after slipping one third of 1% on the wage data that we saw on wednesday. let's get right to movers of note with earnings. we have web jet jumping the most in more than 14 years after posting a 42% rise. a 33% rise in revenue. theer and paypal rising most in six years after advising it has settled litigation with resmed involving no payment. seeing no material impact on earnings, guidance request farmers is climbing to a 14 week high. the retailer says it is well-positioned to growth after getting rid of its automotive mechanic units and consumers remain cautious. paying a dividend of one aussie dollar a share. star entertainment gaining a dashing gaining ground after posting a 66% drive. looking similar to the first half amid a drop in turnover. flipping the board for the

laggards in sydney, mineral resources falling more than 10% earlier as the first half fell 92% year on year. revenue dropped 35%. the company saying it is due to the delays. to fall at 5.2% of the stock was ground -- was downgraded. an aristocrat under pressure this morning. we have the companies saying results is putting it on track for fiscal growth, gaining operations expanding and digital bookings growth seeing supported by new game early. investors giving the thumbs down. all right, let's talk about one of the big movers. launching another buyback despite the first half falling 19%.

group ceo. great to see you again. thank you for joining us this morning. in terms of your confidence that the carrier will be recovering from the burden of fuel costs going forward, what makes you so confident and can you let us know how favorably your hedged at the moment? alan: yes. the first half we had a fuel increase of around $460 million. we recovered most profitability millionaid down to 780 down 180 million. what we are seeing going forward gives us confidence. it continues to be strong. we are seeing the fuel hand -- of the fuel headwind coming off. it is around half of what it was for the first half. we are seeing our competitors capacity come down to either flat or negative growth. recoveringd for us fuel. it gives us optimism that in the

second half, we will fully recover the fueling grades. as i said, the first half, even though -- it is a record revenue performance for the qantas group. the best revenue we had in 1990 years. -- in 99 years. to focus on the international business where margins are being pushed to the edge of profitability. that was on the fuel cost burden. the domestic business which is doing the heavy lifting, we are seeing an australian economy that is slowing. consumer sentiment falling. and a lot of political uncertainty. are you concerned domestically, we will see a withdrawal when it comes to demand and how do you anticipate the international side will hold up going forward? domestically, we are actually seeing some very good results. qantas domestic had a record result. we are seeing some strength in

part of the economy. the resource sector, and the last two years has seen a big revenue. we are adding 10% capacity to that sector. we are seeing weakness in some sectors like darwin, which has seen a big dropping codes of a big resource project there. overall, still very healthy. some of the commentary about consumers may be different when it comes to experience. consumers may be cutting back on retail, on alcohol, but i think what you can see from the travel companies is people are still --nding on travel on and in on experiences. that looks like a change in consumer behavior. the end -- the international business, we have confidence on that. we are going forward, seeing strong demand and some of the structural changes we have are starting to come true.

our fuelmost of increases was in international. if international had not have flat few will come of this year will -- we would with those headwinds lessen the second half, the demand is staying strong. we are confident we can fully recover it in the second half. shery: how about the corporate side of things, corporate demand, especially when you have so much uncertainty, whether it is geopolitics or u.s.-china trade tensions? alan: yes. again on corporate demand, there is a little bit of mixed performance there. there is a lot of growth in some sectors. decline in others. what we are seeing overall is the revenue coming from the corporate sector for us is growing. and continues to grow. we are also seeing and improve

in the markets. market share is moving quite considerably. we are actually seeing a big sign up of small and medium-size businesses. improving theg -- revenue. given both of those, our overall performance in the business market is quite strong. we are conscious of some of the indicators out there in the marketplace. we are watching whether this has an impact of consumer or business demand. and we do have a lot of flexibility and adjusting supply if demand was to be weak. at the moment, not seeing that. we have seen your stock outperform. this gtv chart shows that in the past few years, your stock has been -- has been doing pretty well. in the last couple of years, more rocky. you have been returning funds to shareholders. that has been continuing for the past few years. are we approaching the end of the capital return cycle?

alan: if the been to -- of the business continues to perform as it has been performing -- wondering, have you determined not just in terms of whether it is possible, but is it going to be commercially viable venture? wondering, have you

determinedalan: we are still wog through the business case. we have made progress on the capability of the aircraft and that from thehave east coast of australia and new york. that is great. we are now in about 20%. the cost, we are made for the financials. we can't do these sectors at the moment in the agreement. we are working with the regulator to make sure that they are comfortable with the fatigue rich management. we are redesigning the product. if that comes together, which we hope it will by the end of 2019, if the business case works, and we will have the aircraft coming in 2022. boeing and airbus have aircraft ready for us in that year. it all depends on us completing those projects this year.

haidi: given the recent purchase for dreamliner's, can we assume at this year -- at this point that the triple seven is ahead in that race? no.: i don't think you can assume that. the 350 is a good aircraft as well. i think boeing and airbus really want to win this. i have an executive from boeing telling me that it was a space race, that the first person to get to the middle -- the minimum. any know there is association with having the aircraft that can probably do the last frontier in global aviation flying from australia to london. or to the east coast of america. they are very keen for their credibility and brand to have this competition winning. i think we are going to have a great competition between boeing and airbus. that will help us make the business case. shery: to what extent are higher fuel costs a threat to this route? so, perk london is the

longest route on our network of that has given us confidence that sunrise will work. it has been operating since last march. it has been profitable in this high fuel environment. is the most profits we have made on the london market since 2010. the first time we have made money since then. we can show them these long sectors with the premium market wanting them, that we can make good money by having the right product and the right aircraft. that gave us confidence that sunrise and a high fuel environment will work. haidi: before we let you go, the last time we spoke, australia was in a state of political paralysis. things have not really change as we add -- edged toward the may election to what would you like to see if we get a change of likenment, what would you to see from the government from may onwards?

what we are always after and everyone in the business community is stability. political uncertainty does not help in the business world. you want confidence. you want people to have stability and policy settings. you want people to know what is going to happen. we work closely with both sides of politics. opposition, whether in government, and we will continue to do that. we have good relations. we need to issue a national carrier. it is important for the country. we will work whatever party wins the election and we will have good relationships with them. alan joyce joining us, thank you for your time joining us here on bloomberg television. be filing lyft could for an ipo as soon as next week. the latest on the race to go public. cooper also eyeing that as well.

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this is daybreak asia. i'm shery ahn in new york. haidi: i'm haidi stroud-watts in sydney. its ipo finding as early as next week or let's go straight to our reporter eric newcomer. what do we know so far? lyft could file next week. they announced it in december. the roadshow could begin the week of march 18 with a certain in march or april of this year. sort of a quick pace to get onto the markets. the nasdaq is their pick. haidi: right. we know going into a year that will probably get an ipo from

uber, that they have seen a slowdown. do we know much about what is under the hood of for the lift in terms of their growth expectations and numbers? >> there have been some leaks in their financials. we know less about them than uber. uber has publicly disposed -- disclose them quarter after quarter for quite some time. sense. seen a better with uber, we have seen this revenue. sustainingses are over $1 billion last year. according to their adjusted numbers. see somethingl side.r on the lyft it is a question of the magnitude and where the market lift really falls between and neighbor on the ridesharing

war in the united states. haidi: do we know who -- shery: do we know who could be getting the peace of the pie when it comes to helping them with their ipo and financial institutions being involved? >> jpmorgan is a leading the lift effort. we have morgan stanley on the uber side, who helped them right that perspectives. that is the two key banks on either side. it is a matter of finding underwriters and preparing for the actual listing. eric newcomer there. our startup reporter with the latest on the list ipo and uber ipo as well. two big ones to watch out for you can get a roundup of what you need in today's edition of daybreak. on the mobile in the bloomberg anywhere app. you can customize those setting so you get the news on the industries and assets that you care about. this is bloomberg. ♪ this is bloomberg. ♪

haidi: this is "daybreak: asia." i'm haidi stroud-watts in sydney. shery: i'm shery ahn. they have reported their third quarter earnings beating the highest estimates and posting the highest revenue in four years. let's dig into these numbers with senior semiconductors analyst. always great to have you with us. them toexpecting continue their recovery. what drove the latest numbers? >> the pcs were very strong. this is surprising for a company to betill continues exposed to 26% of asia and from a non-chaise a -- nine china exposure. a good 45% of the company's sales are tilted toward asia. pc sales are ok. this is interesting. this is a big focus idea.

i think expectations are very low for pcs. threes going to be a horse race between dell and hp. that was one component. -- and theyntinues are continue to be focused on profitability per at margins were good. the second part is the mobile. -- mobile business which has been a big headwind for them. actually posted a profit. big thenot matter how prophet was to the fact that it was not a loss is a pretty big deal. revenues were down substantially. retooled thehave business to focus on a smaller footprint of sales. they are heavily geared toward latin america. they were able to produce a profit. the data center business which is a growth engine for them, they whisper shy of our numbers. but very strong growth. it is nonprofitable but that is not the point. when you put these pieces of the

pie together, pcs are 75% plus of sales. that drew both of them. the other mobile business was better than anticipated. data center was ok. really surprising that managed to turn out, particularly with the fierce competition in the chinese market. talk to me about the company's financial situation to we saw them selling bonds in january. is it likely they will need to go to market again throughout the course of this year if they are cash flow negative? a cap britain -- a capital market rates perspective, they may need to tap the debt markets or restructure their debt. there is also some debt coming due this year. there is some movement of capital on the debt side that needs to be done. shery: thank you so much. bloomberg intelligence senior semiconductors analyst. let's preview the market open.

south korea starting trading at the top of the hour. here is sophie. sophie: we are seeing green shoots and antipodes. quite a few scenes may drive sentiment. tech shares may move on the back of product launches in keeping an ion construction on caterpillars bullish outlook for chinese demand. it bears watching. it is top developing the vehicles we are keeping on -- keeping an eye on stocks like this. investor visitor arrivals rising 7.5% in january. here is a chart to put in your back pocket. illustrating an unusual divergence as the yen weakens. case is being reinforced that the boj will wrap up. in the wake of the trade they we got yesterday. shery: thank you so much for that. coming up on the next hour of "daybreak: asia."

an interview with the singapore trade and industry minister. don't miss that. plenty more coming up. this is bloomberg. ♪ ♪ this isn't just any moving day.

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haidi: good morning, i am haidi stroud-watts in sydney. asia's markets have opened for trade. shery: i am shery ahn. sophie: i am sophie kamaruddin. welcome to daybreak asia. ♪ haidi: top stories, asian stocks flat at best, the global rally running out of steam, wall street managing to eke out again. one to watch later in the hong kong session, third quarter topped highest revenue estimate. shery: theresa may seeks support

in brussels, the u.k. in even if -- and the e.u. edging towards compromise. after three sessions of gains, let's get straight to the market action. clear direction. stock futures looking little changed. the yen looking to hold a three-day decline, setting near lows while gold pursuing gains after falling on fed minutes. shares in tokyo opening flat. some drivers when it comes to machinery makers, komatsu on the radar as a bullish outlook for china. we have stocks in seoul under pressure. gaining ground. communications players, seeing a bevy of earnings that are moving stocks the like of web jet jumping.

let's switch out the board to check in on samsung which is under pressure. we have samsung losing .6% in the wake of its product launch, the company revamped 5g and low-cost options. haidi: thank you. let's get to first word news now. economic china's top aid joins the talks as the march 1 deadline looms. there have been talks progress, the president saying he would extend if there was an agreement that was close. but he could also ramp off -- ramp up tariffs if china does that give with -- give what the u.s. wants. negotiations are continuing with the e.u. and the u.k. the president is weighing a commerce department report on

tariffs impose a threat to u.s. security. findings have not been made public. theresa may facing a threat to her authority with some considering voting against her strategy and challenging her to factor area up to 15 ministers are involved, part of a cross party effort to prevent the u.k. crashing out without a deal. may went back to brussels to plead for legal assurances on the irish backstop. there can be no more talks. the chinese premier is a warning of the threat of short-term lending, saying banks should offer longer loans for the economy. he said current monetary policy will not change, the government will not fled the system with excessive liquidity. they cut the amount banks must hold to encourage more lending. lenovo posted its highest quarterly revenue in four years,

at $14 billion in the third, up 10% on the previous year. a high,mart devices hit and it was growth worldwide are the first time since the motorola deal in 2014. net income $233 million compared to $200 million estimated. 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 selina wang. this is bloomberg. shery: we are seeing samsung shares trading down .6%. that after it unveiled a new lineup of handsets and a major redesign to its marquee galaxy phone. we are seeing the broader kospi in negative territory. let's see how the stock performance throughout the session. new phones have been unveiled on wednesday including a new foldable model. know get all the details

from mark gurman who was at the event. how big were these launches? revivingy help with the struggling global smartphone market? the mosts was one of significant phone launches i have been to. samsung introduced five new phones, fairly unprecedented, four models for the current range. this is the new s 10. it is across the board from low-end to the high. there is the regular model, the eger version, the e which is a smaller version of the low-cost price. i say it is low-cost, for them it is low-cost, $750. a super high-end phone, the 5g, one of the first mass-market 5g phones on the market. it will be in the u.s. and south

korea. there is also the galaxy fold which is $2000, opens to a seven inch screen like a folded book. dual panels, flexible, foldable screen. samsung introducing a new category to the smart phone landscape. do people want to pay $2000 for a foldable phone or even wonderful to open? -- that folds open? haidi: is it something just to draw headlines? mark: even if it is a failure, which i think this first generation will be, i am not sure there are many people that want to spend that money on a first generation product, but at worst, it is giving samsung attention. it ended his cool technology. when they get it to a price point in the future that is sustainable and reasonable for mass consumers, they are there.

it is like them teasing what they have in public before it is really available for consumption, like the google glass, but google glasses years ago but we will only see real ar glasses if people want to buy at reasonable costs. shery: how will they compete with apple and huawei? samsung has been driven out of the chinese market. mark: samsung had an opportunity to price in their lohan sent -- their low end handset but they took the apple approach, priced around the same of $750 in u.s. pricing whereas they missed the boat going after china. they are not solving that problem. they are competing in the same space. i don't think that will give them much benefit or a way to mitigate their previous issues. haidi: always appreciate your

time, mark kerman. still ahead we have an interview with the singapore trade and industry meter test minister. show: and the fed minutes consensus on the balance sheet but uncertainty over the course of rate hikes. this is bloomberg. ♪

shery: we are seeing the numbers for the first 20 days of february, export numbers to china from south korea declining . those are the export numbers to china. in the first 20 days exports , smaller than the arst january 20 days we saw earlier. also imports falling much more than in the previous month, falling 17.3%.

those are for the first 20 days of the month of february. there is a good signal of what the final export and import number will be. a good barometer to see where trade data in china will go given the dependence of the south korean economy, interconnectedness with the chinese trade numbers as well. we know south korea's exports ofl 5.8% in the month january. arehe first 20 days we seeing a fall of 11%. the numbers for the month of february so far not looking great, haidi. looking atty grim that first 20 day exporter number as being a barometer of the asian trade woman to, seeing the trade war affecting sentiment and a broader economic slowdown affecting demand. we are seeing asian stocks

struggling to keep their head up despite the seventh out of eight gains with wall street. japanese stocks trading lower as weakness coming through when we get into the greater china open. this after we had the fomc minutes showing people in favor of ending the runoff in the balance sheet. there was uncertainty over the need to raise rates in 2019. let's bring in and occur in. -- let's bring in enda curran. there was broad consensus as to putting a balance sheet stop, but were the ministers as dovish as hoped for? enda: there are two key takeaways. we got clarity on the balance sheets side of things. the red off will end this year.

that will be comforting where quantitative easing has been hurting the economy. people saying it hasn't had much of an impact on markets. on the rate side of things there was much less clarity there. colleagues in washington were reporting signals from the fed, there may well be another rate hike left in the system just yet. at the certain -- at the least they are not talking about cutting interest rates. they are seeing what is happening in china, a look at europe. their own physical -- fiscal stimulus coming off but the minutes did not rule out a further rate hike. for that reason there was a view that the debate is whether to hike next rather than cut. shery: -- we have seen south korean trade numbers worsening for the first

20 days of february. what does it mean for asian central banks when you have the fed being dovish but not as much as expected? enda: the fed is still a critical driver for this part of the world. there is a big shift in line with the fed's own. india is moving to easing territory. other central banks were in a tightening cycle last year now certainly are at the least on hold. their view will be the ongoing relief will continue. looks like the fed is on hold. it doesn't appear that the fed is categorically ruling out interest rate hikes. that will keep people on their toes but at the least it adds to the positive tone of currencies. it probably takes pressure off the central banks on hiking at the same time growth is slowing. shery: thank you so much for that. joining us now from hong kong is ian steely, j.p. morgan asset

management. great to have you with us. fomcwe hear the fed and meeting minutes, seeing dovish it -- seeing it as dovish but not as much as expected, what does it mean for the asian economies but depend on what happens in the u.s.? >> you are still looking at the fed acknowledging the u.s. economy is doing well. good job growth, good wage growth coming through. it has to acknowledge if it continues and maybe later this year they will have to reassess and see whether rates need to move higher. economies, it is going to be so much reliance on what happens with the trade decisions out of the u.s. and china. that will be a bigger driver for asia than what the fed is up to. shery: we have seen weakness in

economicarea, eric -- numbers, retail sales not looking great. how much will it depend on china for growth this year? >> that will be the big dependent. if we get agreement in trade which means you combine that with stimulus coming out incrementally from the chinese over the last few months, that should help to stabilize to start with the european economy and hopefully a bounce there and that will be good for the global economy and emerging markets. china and the u.s. are big components for the rest of this year. haidi: the question is until we china anddown in signs that we are already seeing in terms of domestic credit numbers the transmission of what the pboc is doing starting to come through. ofterms of the destruction

animal spirits from the trade war, is it easy to reverse sentiment wise? iain: it will not happen overnight. it is a good point. in the later stages of this year, there are things where you have a patient fed, so you don't and thet implication dollar not strengthening to the same extent. if you have the trade war go away and the tariffs stay where they are or come down, that will be good. stimulus is starting to come through. if we get more of that second half of this year, those spirits can come back. i don't think we will get the same maybe we saw late 2016 but good enough for the markets to continue moving higher. you said china is a bigger catalyst but it is still about the u.s. dollar. we talked about counterintuitive

or surprising the dollar strength has been playing out since the fed turned dovish. has that changed your view on what emerging markets do this year? iain: i don't think so. the question is dollar versus developed markets. the u.s. is still attractive because as we heard, possibility we could get rates moving higher later this year. the dollar is still a high-yield relative to the developed markets. there will be continual requirements for assets and that will keep the dollar supported. the question is whether it continues to rally the same. that is unlikely. if it does stabilize, it becomes an attractive carry trade. given the performance of currency last year. [speaking simultaneously] shery: go ahead. haidi: you go. we have seen the rally in

chinese fixed income as well. given beijing is extending policy easing measures, what is the likely direction of the bond market? iain: split it into a couple of areas. the chinese government bonds have been doing well the last year. we have seen easing from the central bank and also we have got a supportive technical going into bond indices later in the second quarter. that will be supportive. men may be of the high-yielding parts of the chinese corporate markets, they will be supported from the stimulus coming through. it could be a good environment for chinese bonds. haidi: let me bring up this chart with the balance sheet. i want to get to this question whether we have seen capitulation from the fed or a

power push. this is the correlation in terms of what you have seen with the s&p 500 and the balance sheet. is this going to be the new policy tool? wondering if we get after all of this extraordinary monetary policy and the one winding, is the -- the unwinding, is the fed left with future tools if we get a surprise downturn? iain: part of the reason they wanted to unwind the balance sheet is because next time we get a downturn they may need to revisit and use it. i feel that the interest rate will be the predominant tool they would like to use. they have done a better job than many other banks as they have managed to get that rate up to a level which will allow it to cut in the next downturn. but we will talk about quantitative easing and again balance sheet expansion. let's talk about credit

markets in em because we have seen the local emerging markets balance sheet widening. has it been overdone? iain: i think so. look-- emerging markets good at the moment. they look compelling. if the dollar doesn't move much higher, it is a good story. i think em as well, the spreads at the moment, historically this would be a good entry point. under normal market conditions you have made money when you are adding em at the levels. haidi: the rate [indiscernible] divergence story has really changed. we have seen more convergence like bank of indonesia with their decision. are you seeing less of a convincing trade or is em looking overcrowded given we are not seeing divergence as much?

iain: not sure it is overcrowded . there have been some going back into the markets in the course of this year but i feel that people are under allocated where they would like to be in emerging markets. when you buy emerging markets, you need to be able to stomach the volatility. i think if we have lower volatility environment, if it continues, it will entice people back. you will not the treasury yields move higher than they are at the moment. there will be additional yields you get from em that starts to look attractive. one quick final word on the yuan and where markets go from here. a key component of these trade negotiations and any final framework, the u.s. once a pledge to currency stability. is it possible because i am sure beijing would like to have

currency stability, and will it be helpful? iain: it is interesting because what should happen with easing policy is your currency weakens. that has been the case. we have seen the fed raising rates relative to the pboc easing policy. the yuan should have been weakening. last year, not surprised by what happened to the currency. what will be interesting to keep an eye on is whether we see stability and the currency by theive -- supported authorities in china and trying to keep the u.s. happy. there would be tightening from the fed him a maybe more easing out of china. -- from the fed, they be more easing out of china. we could see easing slightly. haidi: j.p. morgan asset management fixed income cio joining us there.

a big event, that summit between president trump and kim jong-un. we will have in-depth coverage from hanoi next week. shery ahn will be there. you can get a roundup of the stories you need to go -- you need to know to get going in daybreak. you can go to debut to -- dayb on your terminal. settingslso customize so you only get news and headlines and industries and assets that are relevant to you. this is bloomberg. ♪

haidi: let's get a quick check of business flash headlines. rewarding shareholders with a one dollar per share special dividend worth $1 billion in total after reporting a 4.5 billion dollars bottom line profit. it follows a tumultuous time for wesfarmers when they spun off off kmart tire and

oil businesses. and the ceo will join us live on daybreak middle east at 3:30 p.m. sydney time. ubs tumbled at home in zurich and new york after being slapped with a record fine in france. they must pay $5 billion or helping wealthy fresh -- french customers hide -- the illegally laundered funds. complied with the laws and will be repealing the fine. irresponsible lending in home loans. reports that the lead plaintiffs were given five loans worth $1.8 million australian which were calculated using a household expenditure measure than assessment of expenses. they say they were granted loans

they could not repay. a bloomberg show -- survey shows homes housing held steady in january. this is bloomberg. ♪ this is bloomberg. ♪

haidi: just getting the latest numbers when it comes to australia crossing the bloomberg, employment changing, and addition of 31,000 jobs added in the month of january. that is more than 15,000 expected. also building on the 21,000 added in the month of december. the unemployment rate staying at 5%, the lowest since june 2011. part-time employment contracting 26.3 thousand, full-time and addition of 65,000 jobs being -- full-time an addition of 65,000 jobs being added.

thely this has been one of only bright spots in the australian economy which has seen other pressures. one of the key signs the rba has been looking at in terms of where it goes from there. they are betting we will see a cut in the reserve bank by the middle of next year. recent numbers for january, 39,000 jobs added, more than twice that was expected to the australian economy suggesting the labor market at the least is continuing to see resilience. we are expecting volatility with trading indollar these numbers. getting over to sophie with a look at the market reaction. sophie: we are seeing a pop in .he dollar, above the 72 handle this as we had the jobs data coupled with pmi numbers to consider, coming in softer indicating economic growth that continues to slow. the aussie dollar gaining ground

, after slipping 3% overnight after missing fourth-quarter wages wednesday. on the shares resuming gains amid the earnings onslaught. the asx gaining, looking to hit a new all-time high after reaching a record high in september last year. shares in tokyo and seoul under pressure with tech leading us off on the kospi. samsung losing 1% so far this morning, this in the wake of korean exports. here is a chart to depict what we are seeing with korean exports figures. seeing weakness at the start of february, hinting at a third straight month of softer growth. we saw 11% decline in exports the first 20 days of this month. chip shipments sank 27% while exports to china dropped 14%. looking at movers of note, inatsu gaining ground, up 3%

the wake of caterpillar signaling a bullish outlook for chinese demand. seeing fischer and pay paul -- they have settled litigation with another company. we have a limit on the -- this one on the back foot after an income that missed estimates. demand is expected to be modest but alumina saying deputy -- saying the appetite is expected. shery: let's get to first word headlines with selina wang. officials favor ending the asset holdings and are uncertain about rate hikes of the fed. they build on the dovish message when the fed said they would be interested on tricking the balance sheet. chairman jay powell said caution was needed with global

uncertainty including china, brexit and the follow-up from the shutdown. jong-unt trump says kim must do something meaningful to get sanctions lifted. he will fly to hanoi for his second summit with kim. they will discuss next steps in dismantling the nuclear program. he doesn't think it will be his last meeting with kim. standard chartered will take a $900 million charge related to fourth-quarter results. it covers potential violations of u.s. sanctions, currency and crime control. they face a regulatory penalty of $130 million after settling a separate investigation last month. it is due to report next week. abu dhabi is quietly easing saudi-led restrictions on qatar after the standoff began. they will allow [indiscernible]

to be a to qatar. land and air traffic remains closed, and people are banned from docking in abu dhabi anti-e.u. ships cannot call on qatari ports. president putin signaled he will aim new weapons at the u.s. as the pentagon stations weapons in europe. gluten has no plans to deploy -- president putin would risk want u.s.at respond to any moves. he showed cgi demonstrations of weapons that appeared to target the u.s. 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 selina wang. this is bloomberg. more, a bit oft a recap on the blowout australian jobs numbers that came through. employment being added 13,000 jobs, twice than what it was

expected in january. the unemployment rate matching the june 2011 low of 5%. full-time unemployment adding 65,000 jobs, underemployment ticking down as well. participation higher is 65%. job vacancies in terms of online ads rose to a seven-month high last month. i want to bring in malcolm scott for context. the rba would be clinging on to these rare bright data points. employment market is bulletproof now. it is the one part of the australian economy that keeps outperforming and it is the one reason that rba is still on the fence. all the other numbers if you stack them up, looking bad. falling house prices, falling credit numbers, low inflation below the rba's target. all of that suggest the bank ,hould lean toward reduction

but why would you produce interest rates when you have this bulletproof market, unemployment 5%, which not responding but not going backwards, 2.3% year on year. we saw that data last -- yesterday. it is really keeping the rba on hold for now. shery: let's turn to indonesia because we are expecting think indonesia to make a rate decision. no changes expected but could we see a dovish turned given the rest of the central banks around the world? >> maybe not yet. the rupiah is under less pressure than it was toward the middle of last year. 12.5%.p to 55% -- that has taken the pressure off. there is no need to keep that hawkish rhetoric after the fixed increases last year to protect the rupiah as indonesia was failing that -- feeling that

pressure. it changed with the pause. we have got to get clarity on how long that will be. but at the moment we will see bank indonesia continuing to stay ahead. they don't want a renewal of pressures. they have got a wide current account gap that leads them -- leaves them vulnerable should markets swing again. on hold to 6%, that is what economists we are serving expect and no real shift in buyers yet. managingr asia economy editor malcolm scott. theresa may facing a new threat to her authority with some of her own ministers considering voting against her strategy and challenging her to sac them. them.k the e.u. says there can be no more talks. needhave underlined the

for legally binding changes to the backstop to ensure it cannot be indefinite. that is what is required if a doll -- a deal is to pass the house of romans great we agreed to find a solution. time is of the essence. it is in both of our interests. when the u.k. leaves the e.u., it does so in an orderly way. shery: let's bring in jodi schneider. what has changed since prime minister may met with prime minister juncker? said they had constructive meetings. in this case it means something. some say including the spanish foreign minister that in agreement with the e.u., could be coming within days, something being hammered out even now. that may have something, theresa may may have something to bring back as early as next week. she has every desire to bring something quickly to parliament

because on february 27, there is every indication that parliament will try to take hold of this process, try to take over the process and delay the brexit. pressure is rising domestically on theresa may. she has plots against her leadership. what are the implications there? rosy atings are not home. key lawmakers quit the party and there is growing concerns that she will face as many as 15 ministers voting against a plan and threatening her to fire them. there is a lot going on and there is this real concern and real desire to take over that process, parliament wanting to take over so if there is not a deal she can get through in the next week, that is likely to

happen. it is looking like there may be something that could be done. there was no discussion, opening the agreement in the statement that came from theresa may and the e.u. commission president. but there is talk perhaps on this irish border backstop, the contentious issue that perhaps there could be legal assurances that there would be a temporary nature to that backstop which could mollify some in parliament. haidi: our senior international editor there, jodi schneider. now our interview with the singapore trade minister, find out how the city state is preparing itself amidst global uncertainties. this is bloomberg. ♪

asia. this is daybreak

i am haidi stroud-watts. ahn.: i am shery singapore is preparing for a host of global uncertainties from trade tensions to brexit. they unveiled measures to support local business and transform their economy later -- earlier this week. our correspondent haslinda amin has the latest. this budget is aimed at building a strong and united singapore. $1 billion expected to be allocated to the lower income because of difficulties given the challenging environment. let's get insight from singapore's trade and energy minister. good to have you. this coming at a time when there are lots of challenges and uncertainties globally and also when the world is facing the fourth industrial revolution, digital challenges. does the budget go far enough in putting singapore in place for

the future? >> i think so. we are playing for the long game. the greater uncertainties, long-term perspective. this is why we spend a lot of time in the budget talking about positioning singapore in the new economy. as you look at uncertainties brought about u.s.-china trade issues, brexit, slowing chinese economy, we need to make sure we distinguish ourselves. haslinda: could the problem be deeper? down 12%, korea, singapore, huge slump and same thing for japan, down 18%. could the problem be bigger? >> we should become is an of it. one is certain forces, uncertainties brought about by the u.s.-china trade conflict,

brexit, these are the short-term here and no immediate factors which you must be aware of. in the larger causes, the pattern of trade across the world is trade -- is changing. part of it is brought by technology. part of it is [indiscernible] if we look at traditional measures of trading goods versus services and emerging digital economy, that is going to change quite rapidly. some of the numbers have to be interpreted in the larger context of how the entire global trading system, [indiscernible] is shifting. hot budgetne of the issues is foreign workers pre-we saw a tightening of foreign workers in the services sector. companies in the sector are struggling with consolidation. could the government be cracking the whip too much? >> i think we have done a

surgical move as you have mentioned just on the services sector and within, we have a distinction between different types of services. theof this started with [indiscernible] --a sustainable, tragic trajectory. we will not have an unlimited number of foreign workers in singapore but what we have and want is a higher quality of foreign workers. look at the pyramid of our foreign workers. at the very top, talking about the global talent in ai, fintech , we make an aggressive posture and are permitting them to come here and create opportunities for singaporeans. but we want to make sure we muchn them and we are on a more sustainable trajectory. this is for the long-term. haslinda: under what

circumstances would you use measures -- these measures -- what you -- >> we don't have a strategy. we wanted smooth trajectory to allow firms to have the ability to plan long-term. we are putting those measures to help firms to become much more manpower lean, to have a dependency system. haslinda: we talked trade earlier. are you concerned or more optimistic, more concerned now improvementseeing in the talks of usn china? -- of the u.s. and china? >> they have a lot to resolve on trade friction. there is wider issues that have to do with technology competition and even wider

[indiscernible] i think we have to watch the dynamics carefully and the results will depend on the domestic politics of both u.s. and china. what we are worried about is the move in the u.s. that seems to have turned in the perspective towards china and whether they see china as a partner, the two largest global economies [indiscernible] another,ith one end or or do they announced each other in antagonistic way? haslinda: the u.s. is taking on the e.u. and japan. what is your take on that and how difficult will the environment be? >> i think everyone in the global economy has to come together and decide. do we want open, rule-based

trading system that has lastited us all for the 30, 40 years whereby the growth of the world economy, the prosperity that has brought about [indiscernible] the uplifting of millions from global poverty, or are we going to have a turning point where we start thinking it is better for us to have unilateral, more policies? t this reminds me of 100 years ago before the great depression. at that point in time it was the fork ink on the road -- the road. open a rules-based system or end up with more unilateral isolationist policies? haslinda: singapore is very open, dependent on trade and the u.s. as well as china. do you see singapore getting caught between the countries, having to decide which way to

turn? >> we want to marry -- remain plugged in with both the chinese and u.s. ecosystems. we will not only be dealing with one and not the other. this is the same position for the rest of the asian countries as well. is it possible those that singapore and the rest of southeast asia may decide which ally to go with? >> it will be a forced choice. we want to continue to value add to china and the u.s.. we stay in a space where we want to remain neutral, open so this is a place where u.s.-china, europe and come, be engaged and do productive activities. if you look at activities around to world, for singapore distant west ourselves, we have the long-term stability, the

pro-business environment, neutral position where people can come here and be engaged. production,lectual the skill set of workers, these are good qualities that if we get fundamentals right, we will ride out the short-term challenges and position ourselves for the long-term. haslinda: the trade and industry -- energy minister from the lion city speaking to us. haidi: all right, haslinda amin. next week is a big week when it comes to chinese monetary and political development. we will look at the national people's congress as it kicks off. we will have coverage in daybreak and in the bloomberg china open, coming to you from beijing and hong kong. guests including from deloitte. u.s.-china's bit business

councils -- and the china met asset manager. this is bloomberg. ♪

shery: lenovo's third-quarter profit talk to the highest estimate on record, revenue thanks to its computer business and recovery in smartphones. our editor joining us from hong kong.

talk us through what drove lenovo's results because when we talk about strength in the pc market that is a rare thing. we are seeing some of the early fruit of what they call their intelligence transformation initiative. the managing is stabilized costs . it is important. a big part of what drove this outperformance is declining component prices, stuff like memory and storage. a lot of it had been factored in. you saw a rally in the stock sumerday but i think in what this does is ensure that their turnaround is back on track. pcdi: we were expecting the business to remain strong on account of the -- but it was the mobile division that was the big surprise. is it sustainable? there were questions that the

profitability was down favorable accounting. the mobile division turnaround is impressive. we saw a [indiscernible] of their business in china alone. that had to do with low-cost phones and a new brand that appealed to younger consumers. coming off a low base. the chinese market is a very intensely competitive one. it will be interesting if they can maintain this momentum going forward. it is tough. the lenovo story is one of a huge cash flow and increasingly stable business but over the of notterm they are kind really leaders in any of the game changing technology. whether you talk about ai or 5g, you don't have a strong position. i think you will continue to see a stable distance with a lot of

cash. shery: that was our asian tech editor in hong kong. we will have details on their outlook coming up later this week in what -- on bloomberg tech. haidi: before we hand it over, let's look at the markets trading. not a great deal of momentum. poor data when it comes to the first 20 days of the south korean exports continuing to show regional trade slow down. boost numbers failing to trading and optimism in sydney. more coming up here the chinese open, china market open is almost upon us. this is bloomberg. ♪

a.m. in hong kong and in shanghai. this is "bloomberg markets china open." a globals drifting as rally runs out of steam. toshiba the winner. one to watch after profits topping the highest estimates. revenues of $14 billion. >> policymakers committed to rate hike patients. -- patience. ♪