>> good morning, i'm shery ahn in hanoi. haidi: australian markets have just opened for trade. sophie: i'm sophie kamaruddin in hong kong. welcome to "daybreak: europe." haidi: our top stories this thursday, markets with a muted is dialingington back expectations for sweeping trade deal. jay powell says it's hard to prove that tax cuts and lifted then have

economy. denuclearization is on the menu as president trump and kim jong-un meet for the second time. it's 6:00 a.m. here in hanoi and were gearing up for the official talks between president trump and kim jong-un. north korean state media already saying they are expecting comprehensive and innovative results from the official talks. today we are expecting another one and one -- one on one this morning and a joint statement in afternoon, following some friendlier talks last night where the two leaders dined together and they joked around, saying they had an interesting dialogue in that 30 minute conversation. the key questions remain, are we going to see more steps on denuclearization and could we get an inner for declaration? withll discuss all this ban ki-moon later this hour.

and will speak to christopher hill and leon panetta. let's see how things are shaping up for the markets. the u.s. first look at close, we had a topsy-turvy session with the s&p 500 closing flat. health care weighing the most on the benchmark, closing lower for a second day along with the dow while the nasdaq managed to eke out some gains. investors assessing congressional testimonies from michael:. u.s. stock futures looking fairly flat. the asx 200 coming online that changed with spiking in new up 11%. the asx 50 chinese pmi and japanese industrial production and rate decision from south korea and data from australia for the fourth quarter.

let's look at the big movers in sydney. in comes in is the lowest .stimate cement sales volume offsetting residential weakness but it does not seem significant. this getting the nod on its acquisition of dollars. which announcing ao -- share buyback of up to $75 million australian. that's the story so far in the start of trade. the first's look at word news with selina wang. step closeray seems to pushing her brexit deal through parliament as in these voted to back her strategy in a nonbinding decision.

a key demand over the so-called irish backstop make it more likely that her deal will when approval in the house of commons next month. if he's also voted to allow parliament power to prevent a no deal divorce. >> we don't want to extend article 50. >> pakistan has closed its airspace amid growing tensions with india as each side claims to have shot down or plain from the other. the dispute is disrupting air travel, forcing singapore airlines to cancel flight from frankfurt to singapore and avert westbound services leading to refueling stops in mumbai or the goal. thai airways canceled flights and united airways canceled flights to india.

saying that etf buying is needed as part of the bank stimulus package but that boj would have unrealized losses on its etf holdings if the topics falls below 1350. the index close wednesday at 1620. he says the bank cannot face .ssues the president of iran has rejected the resignation of the foreign minister. rouhani set the resignation was counter to the national interest and he does not accept it. said he's considered by the highest authority to be trustworthy and courageous. state media showed pictures of him already back at work. 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'm selina wang. this is bloomberg. the u.s. top trade

negotiator says washington is pushing for a trade-in with beijing that includes significant structural changes to the chinese economy. robert lighthizer also says china has offered to buy more u.s. goods but it is not enough to resolve the trade war. i'm not pollyanna. i don't believe this is going to solve all the problems between the united states and china. we have very different systems. they are either in a process of reform or they are not. if they are in a process of reform, we will make headway. if they are not, who will go right back having problems. shery: let's cross to washington. is the ambassador trying to lower expectations for any quick in to the trade war? president trump is eager to get a deal. he has gone so far as to say that he could have a signing ceremony at his florida resort

sometime as soon as next month. bute is moving along, robert lighthizer is saying this really needs to be more comprehensive deal than simply more purchases from the u.s. to china. he has gone back to what has long been the sticking point for the structural changes in china's economy, particularly when it comes to intellectual property and transfer of technology. adding into that is the issue of currency, the u.s. and china are working toward some sort of deal where they can assure that china is not manipulating the currency , but there's is still some difficulty in figuring out how that would work and how it would be monitored. so there are some major issues left. they are the same ones that the devil these negotiations throughout. there has been some movement but

we still have some difficult issues to settle. haidi: does that mean the terra relief sentiment could be short-lived? joe: it is possible. there has been no timeline put on this. when the president said he was suspending the imposition of additional tariffs on chinese goods, it's not clear whether that is open-ended, whether we will get another 30 or 60 day deadline for the talks to move on. but the indication is that the white house wants this to move deadline wille not have to be imposed. of this time it's a matter -- it is open-ended. going back into the negotiations, that may be useful for some leverage with the chinese that there could be a deadline imposed and the talks have to get moving.

joe sobczyk with the latest on trade. jay powell continuing to signal that the fed reserve can be patient, and waiting to see more rate hikes are needed this year. on day two of his testimony to comments of had interest. kathleen hays was listening in. someone did ask the question today. kathleen: he was the ranking republican on the house financial services committee, so he was the second person to ask jay powell questions today. i think it's just his second or third question. because hesting aswered ready clearly what fed chair would always say. let's remember, people think there is a put it is the stock

market plunge in december. the fed went from gradual rate ause it announced in january. here's what jay powell said about it. >> when there are major changes in broader financial conditions, as you point out, not anyone market or set of markets, but iod, for a sustained per there are important changes in broader financial conditions, it matters for macroeconomics and the achievement for the dual mandate. let's look at something called financial conditions. this is something investors watch. steady hikeine is a for interest rates. look what is going on in 2017 and most of 2018. stocks are rally. falling,ks started

concern that the fed was not backing away from congressional stocks selloff in china and this is the point were people say the fed, because financial conditions got tighter, was ready to change its mind, which it did. if you are the federal reserve, when you see a drop like that in financial conditions, it's going to affect the real economy. that's what you have to respond. this raises the question, if stocks continue to rally this year, they've had one of the best arts in a long time, is this one more factor that might push back on that rate hike? we will just have to wait and see. what about the path on the balance sheet reduction? powell said they will announce their plans pretty soon. ef code what we got from the last meeting. nearly a majority of the said they were looking to start

ending the balance sheet reduction. and jay powell saying it would happen soon is a very important confirmation of that. to look ather chart while we discuss what is going on here. this is the balance sheet. you can see it started coming down in 2017. the balance sheet reduction got steeper. look how much stocks rally, as it got bigger you can see it is starting to get smaller at a faster rate. a lot of people say that contributed to the stock market selloff. reserve, thederal fed vice chairman for supervision on the board of governors saying a couple of days ago, by the second half of this year they will be stopping this balance sheet reduction. jay powell saying today it would probably end at around a trillion dollars eventually. they did say would

take years to wind it down and it is ending a lot sooner than people thought. kathleen hays thank you so much. still ahead, we are speaking to former u.n. secretary-general needs toon about what be done to denuclearize north korea. haidi: but first will speak to california representative brad sherman about trumps messy domestic politics in washington. this is bloomberg. ♪

shery: this is "daybreak: europe." haidi: i'm haidi stroud-watts in sydney. president trump and kim jong-un have struck an optimistic note as they met at the start of their second summit here in hanoi. they are looking to advance nuclear talks.

newse getting the latest out of nbc saying that u.s. negotiators are no longer demanding that north korea fully disclose their nuclear weapons. how can you even start to denuclearize if you don't know what sort of weapons and ballistic missiles they possess? >> at think the key word here is full disclosure. it could be a mechanism of the u.s. trying to gradually get north korea to open up partially even about its nuclear facilities, about it uranium enrichment facilities, which could be a gradual step two ultimately allowing dismantling of the complex and whatnot. we've seen president trump himself trying to lower expectations going into the summit. what kind of take away would mean that it is a successful meeting? in terms of success, a lot of

analysts watching north korea are saying they want more substantial details on concrete measures that kim jong-un can commit to, instead of these ambiguous statements he makes, such as i'm willing to denuclearize, my dream of world peace has always been to denuclearize the whole country. how they define denuclearization, the extent of it, would be very much crucial and determining of the success of the summit. shery: thank you so much for that. joining us is the chairman of the foreign affairs asia subcommittee. brad sherman. thank you so much for joining us this morning. latest newss the for getting from nbc. we are hearing that u.s. negotiators are no longer demanding that north korea fully disclose their new their weapons and ballistic missile programs. of course north korea has already achieved a nuclear deterrent.

longer an achievable goal? it should be now that the united states has lowered expectations. i think we should lower expectations, but now it appears they are lowering them to an incredibly low level. at a very minimum, we need to see a freeze in the creation of additional weapons of mass destruction. if north korea does not initially tell us about where they are storing their existing weapons, that might be ok, but if we cannot verify that they fit is alld creating material, then this would be a failure, just as the last summit was. kim has created a no fissile material for at least nine luke -- nuclear weapons between the singapore summit and today. if he is allowed to create more biological or more nuclear

materialnd fissile after the summit, i don't know if we've achieved anything at all except to make massive concessions. >> with the president have achieved the easing of tensions in the region? he drove tensions up in 2017 with his comments about little rocket man and who's got the bigger button. then he takes credit for tweetsg his antagonistic in 2018, and then he tries to convince us that the high tension we remember from 2017 was really somehow obama's fault because it must've happened in 2016, if our memories are not working that well. but that these treaty, we have to ask why does kim wanted so badly? he wants to undermine support in a continuedfor

american military presence. he wants to undermine in south korea support for a strong south korean military. the goal of kim is reunification under his leadership, and his way to do that is to undercut the u.s.-south korean alliance. that peace treaty is not because he believes in peace, but because he believes in undermining that relationship. so this is coming at a time when the president is facing many domestic challenges. how much will this take the focus away from other issues at cohe including michael n'testimony in congresss? people will pay attention it will capture whatigger headlines, but

we've got to avoid here is making massive concessions when we eliminate the joint exercises between ourselves and south korea, we undermine our defense posture and we feed into the narrative of those who are trying to undermine the south korea-u.s. alliance. as we have, when we refuse to impose sanctions on large chinese banks, but only take a few small and insignificant ones, and we make it easier for kim to do business. member,hy my ranking the cheap republican on the asia subcommittee and i back in the last session when he was chairman and i was the ranking member -- the chief republican, have demanded they sanction the big chinese banks doing business in violation of the yuan resolutions. we have gotten no response in spite of writing not only in 2017 but again in 2018.

so we have rolled back the sanctions atmospherically by doing this summit. we have rolled back sanctions by winking and nodding at the large chinese banks doing business with north korea, and we have made it easier for kim to do business. we have undermined the , andsouth korean alliance we have done it all in return for nothing that has made us any safer. shery: congressman, we are seeing china's influence on north korea behind the scenes. will this eventually translate to leverage in trade negotiations with the united states? fear that we will be capitulating in those trade negotiations for the most part, in any case, but clearly we have got to make it plain to china responsible for the eight that they have

extended to north korea. 90% of korea's north -- north korea's trade goes through china . for china to continue to have access to u.s. markets while they undermine yuan sanctions and support kim while he is conducting this nuclear program is something that should not be acceptable. we couldn't get much more concrete, other than that the its pausetinuing with on monetary policy. did you get all the answers you were looking for? what could we expect in terms of monetary policy with jay powell at the head of the fed? brad: trying to read the tea leaves from the fed is something that some of the best traders on wall street are trying to do.

in my own time, questioning chairman powell, i focused on the need for us to have a more secure system for wire transfers , as britain does, where you identify the payee that you're trying to wire the money to. there is a lot of fraud going on with wire transfers and we need to do something about that. whenf i could tell you interest rates are going to be adjusted again, i would not be on your show, i would be meeting with my broker. much forank you so your time. that was representative brad sherman, chairman of the foreign affairs asia subcommittee. plenty more to calm on "daybreak: europe." this is bloomberg. ♪

haidi: let's get you a quick check of the latest business

flash headlines. google's china earnings grew 60% last year to more than $3 -- has not is decided whether to return to china with a modified search engine but is seeing a surge in revenue from chinese tech companies buying at the prop 8 aody's has downgraded brazilian miner to junk status, becoming the first ratings company to do so following two d am collapses last month. bonds and shares dipped slightly on the news and the stock was down 16% since the disaster. the formerned by secretary-general ban ki-moon for his expectations on the trump-jim summit. whether diplomatic overtures

could come from these two days of talks. almost upon us is the asian market open in tokyo and seoul as well. lots more to come here on "daybreak: europe." this is bloomberg. ♪ want more from your entertainment experience?

just say teach me more. into your xfinity voice remote to discover all sorts of tips and tricks in x1. can i find my wifi password? just ask. [ ding ] show me my wifi password. hey now! [ ding ] you can even troubleshoot, learn new voice commands and much more. clean my daughter's room. [ ding ] oh, it won't do that. welp, someone should. just say "teach me more" into your voice remote and see how you can have an even better x1 experience. simple. easy. awesome.

selena: this is "daybreak: europe." president trump and kim jong-un are optimistic at the start of the second summit as they attempt to advance nuclear talks that have's that set of largely stalled since singapore. do his best tol deliver the outcome everyone wants. more substantial remarks are expected later thursday. the leading u.s. trading go shader has told congress that increase purchases of american goods by china will not be enough to allow a new deal. the u.s.ghthizer said team is pushing for significant structural changes in china's economic model as well as ways to ensure beijing keeps its

promises. his downbeat comments contrast with president trump's apparent optimism. president trump's former legal fixer has laid out a litany of allegations against his former boss, despite being assailed by republicans as a convicted liar seeking publicity. michael cohen said everyone's job is to protect trump and that most people know they are expected to live for him. fed chairman jay powell has told see that it is hard to slashing regulations has boosted economic growth. saying that while the tax cuts have given a short-term lift, the long-term results are hard to predict. he said he plans to announce plans to shrink the fed balance sheet in the coming weeks. >> we work out the framework of a plan that we hope to be able to announce soon that will like

the way all the way to the end of balance sheet normalization and that will result in the end of asset runoff sometime later this year. >> 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'm selina wang. this is bloomberg. haidi: that's get a check of how aussie markets are tracking. sophie kamaruddin is in hong kong. sophie: asx 200 climbing for a second day with several shares trading at exergame it in. bond yields nudging higher ahead of figures for the fourth quarter. bingo industries is jumping by the most in record after everest two. diversify earnings. earlier rose by 6.6%, the

most on record after delivering -- the multiplayer said it will unveil a strategic plan in the fourth quarter as the costs are expected to stay high through december. we did see a pickup in profit, but weakness was observed in australian operations. the company is actively looking for potential sites in singapore and investigating sites in croatia. ramsey health care climbing to a new high. some laggards of note in sydney, linux posting a 63% drop in first nat -- first-half net income. it is still in talks on licensing issues. narrowed as bonds improve.

demand for construction materials is seen to be stable. after cutting the earnings outlook in suspending dividends, saying it needs a fundamental change in direction. shery: let's get straight to the next guest, former un's secretary-general ban ki-moon great to have you with us. we're getting the latest reports saying u.s. negotiators are no longer demanding north korea to fully disclose their nuclear weapons program and their ballistic missile program. can there be complete denuclearization without full disclosure? : i would like to make it clear that the ultimate goal of this negotiation is complete denuclearization of north korea.

[indiscernible] , the focus be sure least summit should be at the first full declaration of includingapons plutonium, and facilities in the area. this could be seen as a success if they can agree at this time. of course president trump has said that there may be continuing negotiations, but at the same time, there should be a roadmap to implement this agreement. aerefore i can tell you that

-- otherwise this can be an unsatisfactory disappointment again. everybody believes that the summit meeting in singapore last june was not very satisfactory. i hope that president trump will make sure that this time, north see it as a way to make sure we -- sure we accomplish the mission. other administrations have failed to get anything concrete in this process. so what will make the difference this time around?

: at first the u.s. administration has made it clear that nuclear denuclearization should be realized in cbi the ways. [indiscernible] , we should make sure that this should be fully .isclosed and fully verified dismantlement may take place at a later state, that we can understand as a technical and realistic way, but i hope that .resident trump make sure i understand according to american sources that the north chairman is pushing for

relaxation of sanctions. that should be made in accordance with what north korea has promised and pledged, full disclosure of nuclear weapons and destruction of nuclear facilities as they had already promised. haidi: so you are basically saying that without full disclosure of the missile and nuclear programs this time around, the summit this week, you would consider that to be a failure? i would not say that it would be a failure, because we are making step-by-step approaches and some advancements. is not going to be the final one.

i accept this and i think it will be necessary to continue to have negotiations, but at least bethis time, it will measured in two ways. first, full disclosure of roadmap,eapons and a otherwise this is a , not to mention to the people of the republic of korea. happening summit is at a time when u.s.-china ties are afraid with the trade talks. concerns about china undermining it sanctions against pyongyang and concern from south korea that any sort of peace expiration to be used as another excuse for president trump to withdraw military presence out of south korea. is there a legitimate worry that north korea could be trying to exploit some of these tensions between the relationship between the u.s. and some of its

traditional asian allies in the region? : yes, we are very concerned about any possible pitfalls such as anything, 80 weakenement that could the u.s.-korean alliance, any lead toat might sanctions with kim. these pitfalls we are very much concerned against. i hope president trump will make he makes itis time .uite clear at this time i would like to , a wise maxim, hope for the best, but prepare for the worst. make surewe have to

we make the best approach as much as possible. tensions are flaring between nuclear armed india and pakistan. how much of a risk is what is happening between these two countries for the rest of the world as these two countries are nuclear armed? : as former secretary-general of the united member of the elders of the world, i'm deeply concerned about this ongoing conflict and escalating conflict between india and pakistan. two nuclear armed states. it is seriously alarming and i hope the leaders of both india and pakistan refrain from taking andher escalating actions

discussed the matter by sitting down together and resolving it in a peaceful manner. at this time, i am urging the ,eaders of the two countries while nuclear negotiations are going on between north korea and the united states, when two armed nuclear states are in this since very worrisome matches is -- messages to the world. i urge them to refrain from taking further actions and resolve this in a peaceful manner. i hope the secretary-general of the united nations will be involved in this case and i'm own that they have their , and ato maintain peace

mutual relation between the two countries. shery: you are here also because you are launching the ban ki-moon foundation, what is uniteddubbed a mini- nations. how will it contribute to? peace? ban ki-moon: is my third year since i left the united nations secretary-general. in the last three years i have been doing similar, the same things as in the united nations. byt i am aiming to achieve establishing my own foundation is to continue and support the international community to implement sustainable development goals which were dumped it in 2015 and also climate change.

to makedo much more sure climate change is prevented. at the same time, there are many people whose basic human rights and opportunities are not respected. be empowerment for women and youth. the people are marginalized. these are the areas where i want to add my voice as former secretary-general to the global effort. also foster to global citizenship among youth and political leaders. because have much hope they are very much divided at this time, but at least make sure our next generation should be able to lead the country in

more prosperous and peaceful way. that is what i intend to achieve through establishing my own foundation. ban ki-moon foundation for a better future. this is my purpose. and i count on the support of everybody. the world seems to be range of ever greater risk from strategic and economic trade wars at a time when u.s. isolationism is the thing we have been talking about. do you still believe in the effectiveness of multilateralism as a strategy for diplomacy and international relations? : i'm sure everybody will agree to the fact that multilateralism is now under serious threat. benefiting the international

community for economic prosperity among all the countries in the world. i am particularly concerned that those countries who have benefited much from countriesalism and have been leading the world are now staying away from multilateralism. unity andforce multilateral actions. there is not a single country or single individual in this world, however powerful and resourceful they may be, that can do it alone. and pool ourite resources and wisdom together to address all these global challenges like climate change and sustainable development issues. refugees needand

our immediate attention and support. worldore i am urging the leaders to be united. we are all in this together. , wess we work together cannot advance our face the global challenges we are facing. leavee to make sure we the world happier and more prosperous to our succeeding generations. let's hope that global leaders are listening to you, mr. secretary general always great to have your insights. that was ban ki-moon, former unit -- you and secretary-general. the virgin group's out of the gates in the next big space race. this is bloomberg. ♪

shery: this is "daybreak: europe." stroud-watts in

sydney. space is becoming ever more credit for the venture backed by softbank, richard branson's virgin group launching the first of around 600 satellites from french guiana. we will discuss all of that now with sir richard branson and the founder of oneweb, the company behind the initiative. great to have you. launch, youugh the are clearly happy with the successful launch. where does the company go from here? >> it was a very important milestone today. spacetellites are up in climbing higher and higher as we speak. everything went flawlessly. there are up to 2000 satellites that will be put up in the years to come.

it was this man's brainchild a number of years ago. , how cane on the idea we connect the world? has managed to rally lots of wonderful people around. it has been a great day today. greg, oneweb is part of the segment, there are a lot of competitors, spacex and others. what differentiates your venture from the others and gives you that competitive edge, do you think? >> oneweb has major advantages right now. with these six satellites, we bring into use our spectrum. we are the only one with globally harmonized spectrum rights. we have been working with countries around the world and have landing rights in hundreds

of countries around the world. the second thing that differentiates us is we already have a supply chain that cannot be underestimated. we've been working to or three years to build a supply chain and we are ready to go. when the satellites checkout, we can turn on production and build several satellites per day. we will on satellites every 21 days beginning in september. [indiscernible] >> i'm sorry, i talked over you. could you say that again? i was just going to do a bit of showing up. this week we put three people into space with virgin galactic. oneweb satellites. i just had to get that in. but it's been a pretty good week for virgin, oneweb, and space.

it's really a wonderful week. haidi: sir richard, i will continue with you then. this idea of using space as an industry, being a minefield for investors, do you think this kind of smaller and cheaper satellite, does that change the game in terms of making the industry more investable? >> i think so. we have already raised over $2 billion for oneweb. that is sufficient moneys to see it through to profitability, and then it should be relatively easy to raise further moneys. is the time for space companies today to succeed. commercial space companies didn't really exist a few years ago, particularly putting people into space. now i think with three or four

of us creating wonderful ventures, i think the time has come for space. haidi: greg, i wonder if you see consolidation as being the way ahead in the sector, with all the different competitors, or do you think there is a market for everyone? greg: right now, we are the only ones with satellites, with money, with the satellite supply chain, and with spectrum rights. i cannot speak to consolidation at this point. right now everything is focused on validating these satellites and continuing to launch. the customers are extremely excited about what we are building. when you announce so many people have dreams and say they are going to do it, it is extremely hard.

this system has been extremely hard all the way through, right on the verge of never making it, but we are here today and we are launched. there is room for plenty, but getting there is a very tough journey. we don't really look at anybody else. we look at what we need to do in front of us, and we have a lot to do going forward. >> but if there was competition, the demand is enormous. there are 4 billion people who are not connected. trains ships, airplanes, , all sorts of things that need better connectivity. there is room for more than one player in it, but obviously we are delighted that oneweb are in the lead. i will endrichard, with the question unrelated to what we're here for today. the -- given the latest brexit, are you feeling more confident or

comforted about brexit right now? >> i'm feeling a lot better today than i did two days ago. actually if you look at the it's feeling a lot better than it did two days ago. it really does look like we are moving towards -- i mean i hope no brexit at all, but at least i think the no deal brexit is firmly off the table. foronfident for the future that little country that would partneringter off with europe, but we will see what happens. haidi: we have to leave it there, thanks so much for joining us. let's take a preview of the market opens in japan and soul and south korea. sophie kamaruddin is in hong kong. sophie: caution may raymond

futures hinting at a flat start. we have some industrial production figures from japan and korea. japan industrial output fell 3% on a monthly basis for january, more than dissipated. we are keeping game makers on .he radar this morning amazon and comcast are throwing their hat in the ring to bid for one day maker. they may start a car sharing service in japan. may move on report that is seeking price cut from auto parts suppliers. day motors in his pledge to invest $40 billion in the next five years. up on the next hour, will be joined by some great guests to talk more about the hanoi summit.

will get insights on how to negotiate with the north, and we do have the market open upon us. this is bloomberg. ♪

shery: good morning. we're watching president trump second summit with kim jong-un. it is 7:00 a.m. here in vietnam. i'm shery ahn. haidi: i'm haidi stroud-watts in sydney. asia's major markets have opened for trade. kamaruddin inphie hong kong. welcome to daybreak: asia." ♪ haidi: top stories is thursday, markets facing a muted start after wall street it -- wall street drifted lower. all street dialing back expectations for a deal.

the rising tension between india and pakistan is affecting international travel. carriers are canceling some flights. be on thezation will menu is president trump and kim jong-un meet for the second time. let's get straight to the market action in asia. sophie kamaruddin in hong kong. sophie: let's get a first check on the yen which is holding your overnight lows after reaching the 111 handle overnight. investors watching moves and global yields after a treasury form. counting down to u.s. gdp data due on thursday. we will gauge reaction to the latest figures from japan. reaction on the nikkei 225. the benchmark lower it by 2/10 of 1%. the kospi always -- also nudging lower. having gainsney with several socks -- stocks trading dividends. i frequent for -- 3.7%.

than 3.7%. industrial output coming out this morning. we do also have on the countdown when it comes to the agenda, the bank of kerry a decision due out later this morning. when it comes to stocks to watch, keeping a close eye on a makers. -- on a game makers. the korean stock sliding 3.3%. this on the back of a report comcast,ave amazon, and ea joining the bid for next on, netmarble was one of the --n bidders for next on makes on. this by amazon, comcast, and ea seen as a negative. soft.tive for nc we do have netmarble off by 3.2%. let's get to first word news with selina wang. selena: fed chairman jay has told lawmakers it is hard to prove president trump's has

boosted economic growth. he said that while the president's tax cuts have given a short-term lift, a long-term effect is hard to predict. to announcehe aims plans to shrink the fed balance sheet in the coming weeks. i think, theout, framework of a plan we hope to be able to announce soon that will light the way down to the end of balance sheet normalization and it will result in the end of asset runoff sometime later this year. to be: theresa may seems a step closer and pushing her brexit deal through parliament as mps voted to back her strategy in a nonbinding decision. sterling rose again is leading brexit hardliner, a key demand over the so-called irish backstop. herng it more likely that deal will win approval in the house of commons next month. mps voted to allow parliament powers to prevent a no deal divorce. government does not want to extend article 50 care the

government's policy is to get the legal binding changes, so this house can support the deal and we can leave on the 29th of march with a deal. selena: pakistan has closed its airspace with growing tension haveindia, has it seems to shot down warplanes are the disputed disrupting air travel forcing singapore airlines to cancel a flight from frankfurt to singapore. and divert westbound service leading to refueling stops in mumbai or the gulf. they canceled flights between bangkok and london and united airlines canceled flights to india. u.s. trade negotiator has told congress increased purchases of american goods by china will not be enough to allowing new deal. robert lighthizer told the u.s. -- told a house but the u.s. team is pushing for significant changes in china's economic to ensureell as ways beijing keeps its promises. the downbeat comments contrast president trump's optimism. 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. a look at whatke will be moving asian markets today. marco joins us from singapore. what are we expecting when it comes to -- it feels like we are at a crucial junction for the yuan and chinese equities. absolutely. it is the big one of the day. the china pmi is always widely anticipated in asia. be forecast is there will little changed to 49.5 compared to the previous month. below the important 50 line. you can see investors seem to be moving on, looking beyond what happens to the pmi, and some of the stimulus that china is doing and the improvement we have seen an equity market. a great performance already. i think people are more forward-looking. they are expecting a trade deal to happen. even though mr. lighthizer was

cautious yesterday, you can see the reaction of the offshore yuan was limited. didn't do a great deal. the implied volatility is forwarding quite quickly particularly in relation to fort josh short-term volatility. people are looking for a lower trading range in terms of the dollar against the yuan. they are expecting stability. probably a clause in the trade agreement which shows the yuan would become a stable currency. all of those things are falling into place. we can probably look through the pmi data. this is a really horrible mess on the downside. it should be a fairly limited reaction and markets and people go back to focusing on the fact that the equity market is stronger and stimulus is projecting growth for the rest of the first half in china. shery: we have seen big modes -- big lives in the u.s. treasury markets. what will that mean for asia? it isi think again,

something which they can look beyond. it is a lot to do with the end of the month, contract role. a lot of hedging of new corporate bonds supply. way, it is a good sign for asian equities. it is less demand for the haven that u.s. treasuries are. usually when there is a big problem and financial markets, treasuries are the first place to go. even with the friction between india and pakistan, treasuries did not really get a strong bid. that is a good sign that see this not taking too long to play out. they say the rest of the world is in pretty a good sign for asian equities. it is less demand for the stabl. growth is starting to pick up. all in all, the fact that treasury yields rose slightly overnight is probably a sign that investors are getting more confident on the outlook for stock markets and growth in general, and they are willing to look through some of the short-term disturbances which we

are seeing. in general, not a big problem for asia and they will be able to look beyond it. thank you so much for that. our bloomberg strategist. you can follow him on the mliv blog. on your terminal. president trump and kim jong-un have struck an optimistic note as they met at the start of their second summit in hanoi. the two looking to advance nuclear talks which have stalled since they met in singapore. our reporter is here with us. we saw more friendly ties between the two leaders last night. what is on the agenda for today? another one-on-one conversation. >> guess. in two hours, they will meet again. they will have a one-on-one meeting before continuously having extended meetings with bilateral talks with their aides attending as well.

what is interesting is that their nuclear envoys, that discussed the details of what they will be signing, they will be joining at the latter bit of the meeting. it is really down to the process of determining and confirming discuss, if itys would make it ultimately on the joint statement or not. be considereduld enough to make the second summit a success? the most important bit is from the singapore summit to the hanoi summit, having an actual differentiation. the biggest difference between the u.s. and north korea and the biggest point of criticism that singapore had was there difference in defining what denuclearization actually means. what that means for kim jong-un to do. what that means for north korea to fully commit to and be credible in terms of their commitments. that definition drilling down importanted be a very

and crucial point to determine the success of the summit. shery: so far, we have seen kim jong-un's days touring vietnam. making the most out of being here. jihye: yes, they have been on the front pages of local papers. they were and how long day, on a cruise ship taking selfies, eating a very luxurious lunch with the vietnamese officials. they are touring around economic sites, checking out business sites. could be a show of economic force or a north korean statement saying we are ready to open up our economy like vietnam. from: did we hear anything that dinnertable conversation at all? the brief exchange we heard between kim jong-un, his words being rare to the world, where very poetic. he was crediting donald trump as a deserving of all of this

credit, to make the second summit possible. kim jong-un said there were a lot of hostile actions trying to interfere with the second summit from happening. yet they persisted. they both talked about how they are looking forward to concrete talks and bringing about innovative results as north korea's state media reported earlier today. we will have to wait and see if that actually comes to fruition as a result of the summit further talks. shery: thank you so much for that with the latest on what is happening in a hanoi, vietnam. coming up next, harvard kennedy school director gary seymore for his insights on negotiating with north korea. this is bloomberg. ♪ korea. this is bloomberg. ♪

shery: this is "daybreak: asia." i'm shery ahn in hanoi. i'm haidi stroud-watts in sydney. president trump and kim jong-un

began their summit in vietnam expressing positive thoughts about the prospect of a deal. this is what some of our guests have had to say. >> the trump administration, characteristically president trump himself, have tried to lower expectations for the summit. at the same time, it does appear that a lot of things have not been hammered out. there will be a one-on-one meeting. i think it does create some that in terms of giving away too much, it may be in the areas of doing things that would really go to the u.s. alliance relationships in asia. >> what we really hope comes out of the that in terms of giving away too much, it may be summitt of the envoys on both sides to fallogether, get negotiating teams, and start hacking away, frankly, at the tough problems, just as we did in the iran deal. ofthe declaration [indiscernible]

otherwise, this can be an unsatisfactory and disappointing. -- disappointment. gary samore coming he served as white house coordinator for arms control and weapons of mass destruction under president obama. they too happy with us. what specifically would you need to see today for you to consider it a success? dr. samore: i have very low expectations for the outcome. i think if you had a set of some concrete measures, as well as an agreement to begin serious on a roadmap as well as execution of those concrete measures, i think that would be sufficient to set the stage for any eventual third summit that might be able to announce more significant actions by both the u.s. and north korea.

how positive would it be if we do actually get the opening of liaison office -- liaison offices in both countries? dr. samore: i think it is a positive step. as well as the declaration of the end of the korean war. what the north koreans are really looking for is sanctions. particular, the hope that the u.s. will support a resumption of south, north, economic projects which is what the south korean government is hoping for as well. that may be possible if north korea agrees to dismantle one of its nuclear complexes. outcomethat is the best for the summit. whether or not that will be agreed to at the one-on-one meeting tomorrow between president trump and chairman kim, of course we will not know that for a couple of hours. we speak about the peace declaration is one of the more likely symbolic diplomatic

gestures that could come out of the second summit. do you have mixed feelings about that in the sense that it would provide president trump with another -- he is kind of already suggesting withdrawing u.s. troops from south korea. dr. samore: certainly president trump has a record of not on the a high value u.s.-south korean relationship. the security alliance. troops on korean soil. but the u.s. government and the south korean government both want the alliance and u.s. troop presence to continue. i would be very surprised if president trump gives that away at this very early stage of a negotiation. summit mind, this second is likely to produce a very small step in what is going to process,remely long likely to go on long past the trump administration has left in office.

given we haven't had a very conventional path to this first or second summit, there has not been the level of lower-level, mid-level discussions that have been underway since we decided -- we heard that the summit was taking place, is there a danger that the president is going into this underprepared and perhaps there is a risk he will give away more in terms of compromise? dr. samore: the north koreans are very deliberately avoiding having negotiations at lower levels. thinks theim jong-un best deal he can get is directly with president trump. jong-un'sertainly kim experience in singapore when trump trump quite

surprisingly agreed to suspend u.s. rok military exercises. trump quite surprisingly agreed to suspend u.s. rok military exercises. i think the reason why we have not seen much progress in hanoi is because kim jong-un wants to to your point ofpresident underlying u.s. alliances, what is the risk of getting an icbm only agreement that will leave u.s. allies, like south korea and japan, vulnerable to short range missiles? any agreement we get, whether it is dismantlement oficbms, or dismantlement others, they will all be partial steps. ofieving the final objective complete elimination of north korea's nuclear forces and will takerces, that many, many years to achieve. as i say, probably long past the trump administration. how much of a risk is

there when you look at the afraid relationship between beijing and washington and the fact that we have seen more isolationism more than multilateralism in the u.s.'s approach to the asian pivot, or the pivot away from asia? do you think that would combine to create a risk that north korea could potentially try to exploit the weakness in the relationships between the u.s. and the other countries and powers in the region? dr. samore: i think north korea has already exploited that weakness. thatnk it was inevitable when kim jong-un shifted to a diplomatic approach, and halted testing of the weapons and missiles, that would leave the chinese to ease the implementation of sanctions. i think that has been considerably weakened the since the hanoi summit. that will be continually to be the case unfortunately.

it is part of the reason why i think this process will drag on for a very long time. haidi: perhaps some surprisingly, we have this nbc report saying u.s. negotiators are dropping demand for north to provide full disclosure of its nuclear weapons and ballistic missile systems. the longer wanting the full accounting can maybe not surprising given the lower expectations we had going into the summit. do you think that is detrimental to the credibility of any outcome we get? someone earlier in the hour and he said if there is no disclosure, then the summit would be something of a failure. dr. samore: special representatives has said that there will have to be a full accounting at some point. that is not going to happen at the beginning of the process because north korea is not willing to do it. the best you will get out of the summit is a limited, concrete dismantle -- it is

dismantlement of icbms, or a small u.s. expert being able to visit facilities under construction like the nuclear test site and the missile engine test stand. don't expect the summit to produce some really dramatic breakthrough, like a full declaration of north korea's nuclear missile forces, or a full freeze on its nuclear missile programs. that simply is not in the cards. the best you are going to get our small, concrete steps and a commitment to negotiate a broader comprehensive roadmap. and hopefully some commitment to hold a third summit in six oonths or nine months t evaluate the progress of those negotiations and hopefully announce another step forward. haidi: what about a potential return to six party talks? what sort of outcome could we get by the end of the day today or by the end of the week that

would be truly surprising to you? dr. samore: i think at some point, there has to be for party talks to negotiate -- four party talks to negotiate a treaty can't that would be a south korea, north korea, the united states, and china. if we come to an agreement that includes a declaration that the korean war is over, and that is a symbolic step, but it could serve as the basis of four four party talks to begin negotiations on a peace treaty. whether that happens out of this particular summit or out of a third summit, i think is an open question. i do believe at some point, multilateral negotiations will be necessary to establish a peace regime on the korean it -- on the korean peninsula. ahead as we talk and look to the potential of peace on the korean peninsula, we are getting an escalation of tensions between nuclear armed india and pakistan. a lot of people were surprised that india's response to pakistani aggressions. this is becoming a real concern

that it turns into a tit-for-tat and escalates quickly to threaten regional security? neitherre: i think india nor pakistan want a general conflict. both sides have demonstrated the ability to limit their exchanges, and what we have seen is certainly an exclamation -- an escalation. i thought the prime minister's call for dialogue was something that prime minister modi would find difficult to ignore. is aially because there lot of international pressure on both india and pakistan to avoid further clashes. i am not particularly concerned that this current skirmish and fighting back and forth will escalate to a general conflict. in part because both sides know the risk of using nuclear weapons would be really existential to both countries. haidi: really appreciate your time.

gary samore of harvard kennedy school joining us. a lot more to come on "daybreak: asia." this is bloomberg. ♪ bloomberg. ♪

haidi: a quick check of the latest business flash headlines. total revenue is soaring across the greater china region. china earnings grew 60% last year to more than $3 billion. it is prompting an expansion of its local ad sales. google has not decided whether it -- whether to return to china with a modified search engine. they are saying the surge in revenue from chinese tech companies dying abroad. huawei and samsung say they have settled something over smartphone technology. both companies owned vast numbers of patents that have not been able to reach a deal on how to share licenses in order to standards tostry the terms of the settlement have not been disclosed but it brings

in end a two-year battle involving suits in the u.s. and china. coming up, the spike in tension between -- of the spiked tensions between pakistan and india. all of the latest next. ♪

comcast business built the nation's largest gig-speed network. then went beyond. beyond chasing down network problems. to knowing when and where there's an issue. beyond network complexity. to a zero-touch, one-box world. optimizing performance and budget. beyond having questions. to getting answers. "activecore, how's my network?" "all sites are green." all of which helps you do more than your customers thought possible. comcast business. beyond fast.

selena: this is "daybreak: asia." president rouhani kim jong-un are optimistic at the start of their second salmon as they extended to a -- to talks. the president said the first summit was successful and he expects this one to be as good or greater. kim says he will do his best to get the outcome everyone wants. more remarks are expected thursday. bank of japan governor says he will keep buying exchange traded funds even if the bank faces paper losses. he's had the etf buying is needed as part of the banks stimulus package but that the boj would have unrealized losses on its etf holdings if the topics.

low 30's hundred 50. the index closed the -- on wednesday. he says the bank will not face financial issues because it can allocate reserves to cover any downsides. former legalmp's secretary has laid out a litany of allegations against his former boss despite being a convicted liar's -- seeking publicity good michael cohen said everyone's job is to protect trump and most people know they are expected to lie for him. cohen brought up numerous legal threats from hush money paid to a poor and star before the election to the president allegedly overstating his net worth in order to get loans. haspresident of rouen rejected the resignation. he says the resignation was counter to the national interest and he does not accept it. rouhani implied backing from the country's supreme leader. state media showed pictures of

him back at work. 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. shery: thank you. time to see how the asian markets are shaping up so far this morning. sophie: they are shaping down, sliding. tech shares going the most in tokyo. we also have the figures from korea and japan. perhaps weighing on sentiment. moreese production fell than expected, down 3.7%. over in sydney, stocks have swung to losses with cba and willies, the biggest drag. several earnings. are tradingks ex-dividends. check out the aussie dollar jumping one third of 1%. this on a better than forecasted data. with a kiwi dollar raising its earlier decline, falling as much

as .2% after we saw business confidence slipped for new zealand. the yen picking up a touch after overnight. above 111 let's switch the board to check in on movers in tokyo. i want to highlight game makers in nine rising the most of spirit this is on reports that amazon, comcast, and ea have joined the bidding. jumping 5.6% this morning. this move is seen as a negative for netmarble as it could drive up the bidding price. sliding 3.3 percent in seoul. chip related socks -- stocks are under pressure this morning in korea and japan. madehave given up gains over the last month. tokyo electron, one of the biggest chip manufacturing equipment makers in the world is off by 2% this morning. the ceo in an interview with bloomberg said there could be a potential midyear chip rebound.

but there is no way to avoid a short-term slide, due to the u.s.-china trade spat. haidi: sophie kamaruddin their care the most that -- serious military confrontation between india and pakistan shows little signs of easing. warplanes shot down. itsstan has close down airspace. a number of international airlines have canceled or diverted their flights as a result. let's look at the implications. -- jody joins us. we spoke with the former u.s. secretary general within the last hour. take a listen to what he had to say about the conflict. >> i am urging the leaders of , why they are calling on north korea and the when two other nuclear weapon states [indiscernible] this is a very worrisome

message. haidi: have we heard or seen any theomatic overtures from leaders that could bring this escalation down a bit? one later has gone ahead and called for calm. as has international communities, the u.s., china, and russia. more khan perhaps has reason to do so because the economy in pakistan could be affected much more adversely, much more quickly than that of india. to both sides have reason not back down entirely. imran khan has to contend with a military that is trying to assert its dominance. on the other side, prime minister modi has general elections coming up in a few weeks. he does not want to back down entirely. this will be interesting to see how they do this balance. they can't afford a full-scale nuclear -- military

confrontation. both sides have nuclear weapons. at the same time, the loss of the jet fighter has certainly inflamed the tensions. that indian air force pilot has been captured. how is his playing into the conflict? he was brought on pakistani television. that has really received a sharp rebuke from india which said it was in violation of international norms, and even of the foreign minister who said it was in by an -- violation of the geneva convention. that obviously has played into this. side, this during a general election campaign, -- willgoing to be used be continued to be brought up in the tensions do seem to ever

reached a boiling point. the question is, can that sense of calm, the calling for calm that they are doing, could that prevail? do you have heard from the u.s. as well, the pentagon saying that they hope tensions could be brought down right away. the other question here really is, what is next with pakistan? and what do they do? the military there quite dominant. thank you so much. bloomberg senior international editor jodie snyder. the impact of the u.s.-china trade war is being closely watched around the war from washington where legislator and jay powell says trump strategy is hurting the you -- hurting the economy. our global economics and policy editor kathleen hays is here to connect the dots. the fed chair discussing the so-called powell put.

but was not eager to discuss trade. why? kathleen: the does not want to be dragged into any discussion which would make it look like he was either praising and supporting donald trump's policies that affect the economy or criticizing them. he certainly try to avert any comments on the impact of tax cuts or lower regulations. when it came to trade, hard to avoid it entirely. he did say something many fed officials have said that businesses are voicing the uncertainty that this trade war casts further business decisions. that is a negative. he said yes, it would be good to have the trade issues revolved -- resolved. when he was asked about the powell put, the ideas that the fed would cut the key rate dramatically or stop raising them because the stock market is suffering and they want to bail out investors, this is what the powell put is all about. what jay powell said is we move in response to the stock market when it looks like it may damage the real economy. let's listen to how he answer that question.

major changesare in broader financial conditions, not anyone market or set of markets, but for a sustained period, important changes in broader financial conditions, that matters for the macro economy. it matters for achievement of the dual mandate we will take that into account. kathleen: one of the most important things for investors was jay powell confirming what the january fed minutes said. what randy coral, the vice chair on the board of governors at the fed said. they are getting ready to announce, and jay powell said they will announce its income of their plan for ending balance sheet reduction. that is something people will await. perhaps in the next meeting to get more information from jay powell and the fed when they announced their decision and he faces another big press conference. world in this part of the on to, japan, big numbers coming out.

let's look at china in terms of the pmi rate. kathleen: i think even though china's economy is now more services oriented than at score driven, export certainly still plays a big part. china's manufacturing pmi is expected to be below 50. for the third month in a row. this is where comes in handy, what you can see here is what we saw last month. 49.5, just below that level. it has been weaker. now the survey median is looking for something even more negative. 49.3. if i had exports on this chart, you would see the vix down in the 47 territory. around 54.5. it is expected to stay there. for china, some damage from the trade war. maybe not so devastating. we will watch that number closely. now we move on and have the

japan industrial production numbers. what you are seeing there is a pretty steep monthly decline. in januarypected down 3.7%. this translated into 2% year-over-year decline. i think what is interesting here, the white line showing this is signaling year-over-year japan gdp that has been flat and could get flatter. i think it is interesting we heard selina wang telling us about governor kuroda from the jet -- from the bank of japan saying they will buy etf regardless of what it means for paper losses. these are the numbers the bank of japan doesn't want to see. even though we know industrial production is probably being hurt by trade, weaker exports, it is still something in the near-term that they cannot shrug off. it will not be good for hitting that inflation target. haidi: global economic and policy editors, -- editor, kathleen hays and we will look at china's latest pmi rate. we will be joined by betty wong. this is bloomberg. ♪ ♪

shery: this is "daybreak: asia." i'm shery ahn in hanoi. stroud-watts in sydney. we are expecting the latest pmi reading from china. manufacturing data expected to have slipped marking a third month hello the 50 threshold that -- the third month below the 50 threshold. a temporary campaign by industrial provinces let's look at the reading and the implications with a betty wang who joins us in hong kong. great to have you. we have mention they asked anyway circumstances. seasonality, comparing the chinese new year period is difficult as well as we know that this time of year, there is that campaign to shut down factories and reduce pollution over the winter. to you take the numbers with a grain of salt today? betty: yes.

i think we are of the view that the economy deal is not in good shape. especially considering we have got so many uncertainties outside and inside of china. case, morethe expansionary credit and fiscal policies to be implemented to stabilize growth. a bit lower than contested. point four or 49.5, still below that 50 threshold which more we still need supportive measures to be implemented. haidi: if you look at the latest loans and credit data, there is some suggestion or hope that we are starting to see monetary policy transmission. do you think the pboc will hold off on further measures until they see how the stimulus is are already being rolled out? we will still likely seehaidi: more to come.

in terms of policy rate cuts, lending rates, or even the other rate, we do not see the possibility for an imminent cut because as you mentioned, the policy which was implemented late last year will need time to -- feel through get i do not think the pboc will do anything further. as mentioned, the targeted measures will still be implemented. how much is a strong credit expansion that haidi mentioned expected to have actually helped financial conditions for businesses? it could help to some extent. it is better than nothing. a point worth mentioning, considering the january number, is we see some point of relaxation. is usedt of the money

to be used by private sectors. crack -- contractually on that month probably suggests it is improving in terms of funding conditions. i think we are still in the urgent need to get the access to credit so that on that front, we need more efforts. commodity prices are also rebounding recently. how will that factor into the environment? pricesi think commodity has not translated into higher inflation in china. what we have seen in the past that the trend in ppi inflation, which is a warning sign to us because we high correlation between china see ppi inflation and industrial profits and growth momentum. if ppi continues to trend lower

the active territory, that would be a warning sign. that requires more policy response from the pboc and the government said. so far, i have not seen the higher commodity price translated into china cpi inflation or cpi inflation. that requires more time to observe. we saw the most recent chinese recovery rally in the equity market kicked off by the from prez -- from the president that there needs to be a balanced approach in supporting growth. he read that to mean that if beijing is not a real leveraging, certainly deleveraging is taking a back seat? i think that really depends on the time horizon. in the near-term, i still think please relaxation in terms of credit extension. some fruitlly we got

thee buried after 2016-2017. tohink this window for china toust their monetary policy pump more credit into the economy to support private sectors. but over the medium to longer time, i see the need for structural reforms. and the to pump more credit into the economy to support private economy needs to go to more of a sustainable way rather than credit prompting growth. we have overheard chinese premier warned that he will not slug the of account -- the economy with liquidity. when you are seeing it follow to local year low, what does the print policy? betty: i think what he needs here could be a controlled way of doing whatever expansionary credit and the fiscal polity -- policy. expecting somere

higher insurance quota for special local government bonds. it could be a very important founding to support infrastructure investments. this is different from so-called stimulus which was rolled out in 2008 and 2009. quota wills kind of be controlled by the npc and the state council. nowhat front, we can say, when we have expansionary policies from pboc and the it will be conducted in a controlled way. shery: great to have you with us. betty wang of an don't forget our interactive tv functionz. tv . we have had early good conversations these past few hours including the former u.s. secretary general. of the conversation by sending us instant messages during our shows.

this is for bloomberg subscribers only. check it out at tv . this is bloomberg. ♪ his is bloomberg. ♪

shery: we are coming up to 8:00 a.m. in hanoi. a big day as we see president trump and kim jong-un for formal talks in their second summit. reporter is here with the latest. they get plenty of facetime, don't they, they have another one. >> they too.

-- they do. they will meet again in an hour and half. they will be meeting just one-on-one before being joined by their aides. their last meeting for today, just before signing the joint summit -- a joint declarationan. they will be meeting just one-on-one before is the nuclear envoys. that could seem where the concrete confirmation of what they actually plan to take in terms of denuclearization. shery: do we have any idea what that could include? we have been talking about everything from a piece declaration to potentially some steps to denuclearization. the biggest credit -- criticism as they talked about denuclearization. they said the word many times. they still don't know how they can design it. theh korea wants to get u.s. strategic assets out of the korean peninsula. the u.s. wants solely north korea to denuclearize.

the definition of denuclearization could be crucial. could be their biggest agenda for the joint statement. stakes areuse the high. you are ready had one summit where you got a general consensus of what working toward denuclearization could mean. now we are getting this news from mn -- nbc saying perhaps it could be that the u.s. is backing away from actually asking for full disclosure of their weapons. or missile programs. is this anything new that we have not heard before? jihye: there is a mix of opinions. steven begin, when he spoke at a recent stanford each, he used the word sometime. willid these declarations happen over some time. he did not specify that it would happen during the summit. definitely a mixture of opinions and reactions to this report whether or not it is exclusive. having said that, this

one-on-one meeting with kim jong-un and donald trump, many analysts are wary and concern that donald trump may promise some concessions that his administration may not necessarily agree to. wondering whether or not these personal relationships between president trump and kim jong-un is an asset or liability. because he could really overpromise. in the meantime, with the summits taking place, what are we seeing in terms of north korea trying to show a more open image to the world? jihye: like you said, we mentioned earlier about -- about north korean aids going about, not only in on oil, they went on invited, took selfies, the local media to cover them. also attended a luncheon with the vietnamese officials. toy much a show of action show that north korea is ready to engage with the world you have their leaders sitting down at the other side of the table with the u.s. president being legitimized in a way as a leader.

definitely wants to send out a message to the world that they are ready for academic exchanges. shery: thank you so much for that. i will let you go stock kim jong-un again today. stalk kim jong-un again today. let's get a check on what to watch in markets. sophie: a close eye on developers. it remains upbeat despite home price weakness and watching new world after it posted earnings on wednesday. keeping and i am hong kong exchanges after the stock fell for a second day. also unveiling a three-year plan including the expansion of northbound capital inflows. flipping the board, keeping a close eye on chinese pmi. expecting contraction from man u pat -- manufacturing pmi numbers. haidi: that is it for "daybreak: asia." markets coverage continues. we are looking ahead to the start of trading in hong kong,

and shenzhen. the second day of these talks between president trump and the north korean later -- leader. a big day in hanoi. let's take a look at how markets are trading. treading water. looking at equities globally losing that momentum. a topsy-turvy day on wall street overnight. remarks from fed chair powell about having a plan of how they want to halt the balance sheet. we are seeing declines across the cosby and trading in tokyo. also modest inclines in sydney despite government caps coming in's more than expected. this is bloomberg. ♪ this isn't just any moving day.

this is moving day with the best in-home wifi experience and millions of wifi hotspots to help you stay connected. and this is moving day with reliable service appointments in a two-hour window so you're up and running in no time. show me decorating shows. this is staying connected with xfinity to make moving... simple. easy. awesome. stay connected while you move with the best wifi experience and two-hour appointment windows. click, call or visit a store today.

>> 9:00 a.m. in beijing. we have the pmi numbers for february. it is a third straight month of contraction. 49.2 for the manufacturing pmi. that is below the surveys of 49.5. three straight months of contraction for china's manufacturing sector. in terms of the nonmanufacturing pmi, a number of 54 point three. below the surveys of 54.5. still comfortably above the 50 level for the services and construction components around pmi. it is the manufacturing in the third straight month. some indications had suggested