haidi: a very good morning. i am haidi stroud-watts in sydney, where australian markets have just opened for trade. shery: i am shery ahn. sophie: i am sophie kamaruddin and hong kong. welcome to "daybreak asia." haidi: our top stories this wednesday, brexit blues. theresa amazed revised deal is rejected -- theresa may's revised deal is rejected again. sterling held losses. she said she mentioned a second

referendum for the first time. the u.s. trade representative staythe tariff option must to ensure china adheres to any potential deal. breaking start with news out of south korea. the unemployment rate for february came in at 3.7%, which is a much better number than 4.2%.xpected it is a better jobless rate than the previous month when we saw a rise of 4.4%, which is the highest since january of 2010. south korea saying they added 263,000 jobs in the month of february, that against the 19,000 jobs added in january. we have not seen the unemployment rate in the 3% range since december of last year. this coming at a time when the korean economy is suffering from restructuring in the manufacturing sector as well as retail.

let's get your type of the u.s.t's close in the session. the second consecutive session on the s&p 500 with health care and utilities leading the gains. we have the dow under pressure, dom .4%. that of course after boeing saw its biggest two-day drop since june of 2009. boeing, brexit, and another reading played into the markets. sees turn to sophie and what is moving the markets in asia. sophie: we could have asian investors take this midweek to take some time to reflect on what's been happening, waiting for some catalyst to really grasp onto. we are seeing a cautious start for stocks in wellington and sydney. the asx 200 little changed after a three-day drop. this after the asian benchmark clocked the biggest jump since

january on tuesday, led higher by japan. the rally looks set to stall. cause me -- kospi futures higher. kb security says it is not attractive given prospects. let's take a look at the pound, which is holding losses after the most volatile session since november. trading volumes at almost double the 2019 average. 1.9%ing fell as much as going into that brexit vote, the biggest drop in almost two months. makes says the pound -- it clear what parliament does. haidi: sophie kamaruddin. she mentioned theresa may's latest brexit plan has been roundly rejected by the comments, opening the door to further political crisis and paving the way for potentially chaotic exit from the e.u. or perhaps even though exit at all. a renewed -- renegotiated deal. she is hoping the new language

on the irish backstop could win them over. >> let me be clear, voting for leaving without for a deal and without an extension does not solve the problem. will want to know how to make such an extension. our reporter, sebastian salek, is watching all the developments out of london for us. where do we go from here? sebastian: we get a vote tomorrow on whether or not to rule out no deal. there will be another vote on extending the brexit process. that is widely seen as being lighter. we have the attorney general saying the extension is now inevitable. of course, we need the e.u.'s permission. donald tusk said he wants to know how long the u.k. wants to extend for and their reasons for

doing so. this does notut solve any problems. this is a short-term fix. the overarching issues really remain in place and there is a chance we could end up later down the line at another cliff edge and another potential no deal situation. ofember of course, also, all these are statements of intention. just because mp's rule out a no deal doesn't mean it will happen. at the moment, it is a default procedure. if we get to march 29 and no other decision has been made, the u.k. will leave the e.u., deal or no deal. another group that has been affected is of course business. we have had various statements from this miss groups, the confederation of british industries, saying enough is enough. the british chamber of commerce saying businesses have been failed over and over again, so powerful language from these lobby groups. a retailers group saying they are exhausted by this squabbling.

the auto group saying we are close to a catastrophic scenario. all of this escalation of uncertainty has curved investment and growth. shery: what about an option of no brexit at all? we have heard my minister about a second referendum. thestian: it was really -- prime minister talk about a second referendum. sebastian: -- it is still a more extreme scenario. take a listen. this house will have to answer that question. does it wish to revoke article 50? does it want to hold a second referendum? does it want to leave with a deal but not this deal? these are unenviable choices. the house has made

this evening, there are choices that must now be faced. sebastian: you heard the cheers and the booings, showing just how divisive the idea of a second referendum is. it will be a big boost to those who are in support of it. theresa may is mentioning this as an option. the threat of no brexit was a threat to try to get them on board. that did not work. it seems they fear her deal more than the risk of another vote and they could have good reason to do that because theresa may says herself that people have changed their minds. we could still get the same outcome. we could get the british people voting for brexit, and that would leave us no closer to resolving this than they currently are. fory: thank you so much that. bloomberg's sebastian salek joining us in london. first word news with jessica summers. jessica: thanks. the top u.s. trade negotiator says washington must keep the

option of raising tariffs on china to ensure beijing sticks to any trade agreements. robert lighthizer told the senate finance committee the u.s. must have the ability to counterigher duties the any potential violations of a deal. his comments pushback at speculation that an agreement would see the two sides lift tariffs immediately. indian inflation remains subdued . that offers a potential dilemma goingime minister modi into the general election. most politicians might cheer price rises, but india's low inflation is driven by falling food prices that cut farm incomes and push-up debt. the slowdown raises the possibility of another rate cut. boeing rose slightly in late trade after the faa repeated its backing for the 737 max, saying there is no reason to ground the plane. however, the stock slumped more than 6% in the regular session the jetnations banned

on safety concerns. the jet side its biggest decline in a decade as the e.u. and india suspended flights following the second crash. global news, 24 hours a day, on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am jessica summers. this is bloomberg. thank you. still ahead, nissan lands another blow on the u.k. as it pulls back from western europe. we take a look at plans to end infinity production in britain. shery: the latest on the trade-off with the boss of an e-commerce site. this is bloomberg. ♪

haidi: this is "daybreak asia." i am haidi stroud-watts in sydney. shery: the u.k.'s departure from the e.u. faces more uncertainty

as theresa may's revised brexit basel fell to a heavy defeat in the comments. and he's are expected to vote against the no deal scenario on wednesday. the attorney general an extension beyond march 29 is inevitable. they told parliament a second referendum may be one of the options left for the u.k. with her deal now dead. let's take a look and discuss this. export now founder and ceo, frank, and also for ambassador to singapore. we continue to see the brexit saw the play out. it seems that it is another case of kicking the can down the road, whether it is the delay of brexit or a second referendum. when you have so much uncertainty coming from brexit, how dangerous is the situation? at the same time, we are seeing signs of an economic slowdown around the world, whether it is

europe, china, or just parts of asia and even the u.s. now. frank: thanks for having me on. first, i think you are exactly right. the two things no business wants is extra costs and lack of predictability at this brexit process, which adds both. it adds extra costs, complexity to decision-making and it reduces predictability. they are thinking through their global strategy, their e.u. strategy, and it is very difficult to plan in this kind of environment. haidi: in between brexit and the uncertainty over global trade, how hard is it for businesses, exporters, importers, factories to be making investment decisions either in the short or medium term? frank: i think what we are going to see because of this lack of clarity, we are going to see businesses still take a positive view to the u.k.. it is an attractive market for marketing businesses, retail,

-- they are going to hold off on capex, long-term decision-making. keep building in the market, defer what you can until the dust settles on this brexit process. we really have no predictability when it comes to the u.s.-china trade negotiations. we heard from ambassador lighthizer pushing back on the idea that tariffs on chinese goods were completely off the table. what do we expect when it comes to a final package? could we see those restructuring demands that the u.s. is making right now? arek: look, i think there several elements we will see in the final package, and i think this kind of comments by bob lighthizer are sort of part of the normal give-and-take, meaning he has got to try to tod the other party's feet the fire in these final weeks,

so to speak, or else if you don't, there is always the prospect of deterioration. i think it is the right kind of statement you should expect. i think the final package will have very little in the way of macroeconomic restructuring. they are not want to change ministries because the u.s. is acting that -- asking them to restructure. some better ip protections and we will see a purchase order sidement when the chinese agrees to make a large purchase from the u.s. in several defined categories. if i may say, your comment on brexit and china, there is some similarity. the trade negotiations at complexity and decrease predictability. china is a very attractive market and serious businesses need to think through a china strategy even with this lack of productivity. shery: at the same time, though we seem to be seeing this bipartisan consensus in washington to not go easy.

president trump should walk away from a weak china deal. has the barb and set a bit too high? -- bar been set a bit too high? frank: the last of element has been this shift in u.s. position towards a more skeptical view of china. there is a general consensus in the u.s. across the political spectrum, in the business community, and in the academic scholarship community that china is not liberalized, have not kept haze with its commitments to the international community consistent with its economic growth. 20 years ago, it did not matter so much. today, its economy is quite consequential. itit bars a foreign product, is consequential to the global economy. there is a consensus that china has not stepped up to its requirements.

haidi: there is a view that this gives an opportunity for beijing to make these structural reforms, that it also want to undertake. is the window closing in terms of it is now grappling with a slowing economy and having to return to the old playbook? it will not be able to do that quite so easily. frank: this is a really interesting point. look, this could easily be a meaning theome, u.s. gets better market access, but china, by lowering tariffs, makes his industries more competitive. it takes some of the distortions out of of its own economy, provides broader consumer choice, and temps down on down onnary -- tamps inflationary pressures. if china is smart -- i think xi jinping is pretty smart -- they will take advantage of this. they have limited flexibility in changing government structures. that is harder to do. there is a domestic political constituency there. xi jinping has to get through

this process making it look like it was his idea and he owns the decision. he cannot get through this process saying donald trump was mad at me, bob lighthizer was tough, and the americans were unhappy. he has to say i am doing this for my reasons, for china's reasons. haidi: what is a win-win scenario? frank: sure. lowering tariffs is a win-win. toning up segments of china competition is a win-win. i would say better ip protection in china is a win-win, because there is this extraordinary chinese tech community which is flourishing and if the entrepreneurs and the coders and the techies in china have better protection of those ideas, you're just going to have a more robust economy in china, so it is not a favor or concession china is granting other countries with ip protection -- it is strengthening its own economy. shery: what about economic structuring?

is there any incentive for china to act on that part of reform that the u.s. is demanding? frank: i think there is incentives, but it is harder to do. think of the overcapacity in china in the steel industry. everybody in chinese leadership says we know we are subsidizing it. this costs money. we have really got to find a way to ratchet this down. but you're talking about people's jobs, factory towns that their entire economy is based on the steel mill, and seats on the central committee and standing committee. the steel ministry is in the cabinet. it is easier to say than to do. step-by-step.e what is china going to do? my guess is they are going to flatline capacity and there will be mills taken off the market. shery: what happens on who has the biggest leverage? ofare really nearing the end

that agreement. that is the impression you're getting. president from signaling that he is ready to sign a deal in mar-a-lago perhaps as early as this month. who can outlast who? who has the biggest incentive here to actually strike a deal when china's economy is slowing down? frank: i will tell you this -- i would not get into this with the presumption that president trump's blessing. i would not. i would take him at his word, right? he has put his personal equities into this. he says i will give you 90 days leave. i would take that as a very serious statements and i would make full use of these 90 days to come up with a package that is suitable. i would not going to this with he isanship saying i bet bluffing, i bet i can fall short, i bet i can do this or that. watch out. the whole thing could blow up. that is what kim jong-un saw in hanoi, that president trump has the capacity to walk away from

the table. my advice to friends in beijing is cut a deal. find out what you could what a reasonable package is, what is a win-win, and cut that deal and declare victory. haidi: on that final word of advice, frank, we will have to leave it there. frank lavin, founder and ceo joining us. you can get a roundup of the stories you need to get your day going in today's edition of "daybreak." bloomberg subscribers can go to dayb on their terminals and it's also right there on the mobile in the bloomberg anywhere app. you can customize your settings so you only get the news on industries and assets that are relevant to you. this is bloomberg. ♪ . ♪

shery: this is "daybreak asia." i am shery ahn in new york. haidi: i am haidi stroud-watts in sydney. bp says it is not going anywhere

regardless of what ultimately happens with brexit. the yield bob dudley explains the implications the split could have for the company. >> i think for bp, it is a company that has its revenue and pays its dividends in dollars, so we are one of the least affected companies in london. i also don't think she lost "a" vote. there are many big days and big votes. negotiations always go down to the last minute and there is more time here, so i think it is too early to draw a conclusion. >> are you stuck piling things? we heard -- stockpiling things? we heard that from other companies. adequate fuel supplies and we are not really affected by that. back tou do revert that, wto rules in theory have had delays. are you thinking about that at all? bob: we will be prepared for

changes. the company itself is not going to be really impacted by it. we will be ready for whatever circumstances come around, but bp, i am not nervous about it. i still have not at all reached a conclusion on where this is going to go. haidi: that was the bp ceo, bob dudley, with bloomberg's alix steel. nissan is terminating production of its upscale infiniti models in the u.k. as part of its plan to withdraw the brand from western europe. nissan/renault/mitsubishi alliance is moving on from the carlos ghosn era. they are streamlining decision-making with one single board to oversee the collaboration. ngry: tim meisner and roger has been banned by the federal for their roles in malaysia is scandal.illions the coordinated bond offerings that about cash to be stolen from the investment fund 1mdb.

$1.4 millionined and pleaded guilty to charges including conspiracy to money laundering. the trend for the iphone is going from bad to worse. that is the assessment of an analyst who affirmed his mutual rating on apple and found that multiple price cuts did not stop chinese search trends further the device from weakening. bloomberg data shows almost 1/5 of apple's fiscal revenue came from the iphone. shery: the maker of budweiser and stella artois beer is turning the leftovers from the process into salty snacks. --'s backing a food startup that is working to turn the protein from spend growing grain into edible treats. it is recycled currently into animal feed but new technology will let the company turn it into a higher grade product. thes get your check of

asian markets rating underway right now. the asx 200 falling for a fourth consecutive session. kiwi stocks also under pressure, down .1%. we have a bit of a mixed picture when it came to wall street trading with headlines over u.k. lawmakers are rejecting prime minister may's revised deal, really playing into investor sentiment, not to mention the ongoing woes of boeing played into the market. nikkei futures unchanged, holding at -- this coming after we saw positive sessions earlier in the week. also, as we head towards japan's february ppi in january machine orders due out in 20 minutes. kospi futures unchanged at the moment after the korean won climbed the most in two weeks. we have seen asian currencies gain on improvement in risk sentiment. right. coming up next, we will talk

results with ping an insurance's ceo. you don't want to miss that. this is bloomberg. ♪ you.

all of you. how you live, what you love. that's what inspired us to create america's most advanced internet. internet that puts you in charge. that protects what's important. it handles everything, and reaches everywhere. this is beyond wifi, this is xfi. simple. easy. awesome. xfinity, the future of awesome.

jessica: this is "daybreak asia ." i am jessica summers with the first word headlines. the u.k. support for from the e.u. faces more uncertainty as theresa may's brexit proposal fell to a heavy defeat in the comments. sterling was under pressure in nine sessions. mp's are expected to vote against a know just scenario on wednesday. the attorney general says an extension beyond march 29 is inevitable. may told parliament a second referendum may be one of the options left to the u.k. with her deal now dead. attackedundlach president trump for what he calls a "shocking growth in the

u.s. debt burden." he noticed the incredible increase in corporate and federal borrowing with federal deficits on the expected to grow. the treasury department said total u.s. public debt had risen to a record. as the reserve bank of australia is assessing the impact of climate change and its implications for the economy deputy governor, -- says the bank is looking at the effects on production and inflation. politics have become increasingly polarized in australia, prompting the central bank to carry out its own research. australia is one of the leading per capita polluters and the world's driest inhabited continent. parents, university coaches, and a college admissions counselor are among dozens of people charged in a criminal conspiracy that sought to help applicants get admissions to delete u.s. -- elite u.s.

schools. they were having their kids cheat on entrance exams. global news, 24 hours a day, on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am jessica summers. this is bloomberg. shery: thank you. china's biggest insurer, ping an, is planning to buy back as much as $1.5 billion of a-shares profits beatar estimates. let's speak with the co-ceo in hong kong. thank you so much for joining us today. congratulations on your earnings report. your health insurance unit really held out well, despite premiums falling industrywide. would you say that you have fully absorbed the impact of tighter regulation? we are very happy with

the results that we announced yesterday. as you rightly pointed out, operating earnings were up 19%, close to 16 point 8 billion u.s. dollars. i think the key drivers -- 16.8 billion u.s. dollars. i think the key drivers are that our customer numbers grew by 11% to 184 million customers. at the same time, our profits for customers -- per customer grew by a strong 18%. these operating earnings, around three quarters comes from our insurance business. year for lifecult insurance last year. we saw that industry had a very, very low growth, but despite that, our life insurance business actually managed to

beat the market and outperform the market significantly. 3% value market share was up in up to 40% of the market. shery: what is your outlook for the rest of the year when it comes to premiums and value growth? lee: the company is very focused on delivering value for our shareholders, so we are focused much more on the new business and better volumetric rather than the total premium, so i think, we are encouraged by the improving prospects of the china insurance market. we think that this year will be a better year than last year. haidi: do you think there will be fewer regulatory headwinds? has the business fully absorbed that side of things? lee: the government has been coming up with a lot of regulations. i think rightly so to actually help put the market on a

sustainable growth path. i think all this is very good for the industry. and the industry has been absorbing the impact of these regulations in the short-term. it will have some impact on weline growth, but all in, should see a better performance in the industry and 2019 and beyond. -- in 2019 and beyond? haidi: are we expecting to see profitability anytime soon? we are the largest shareholder of ping an -- they announced the results earlier this year. i think the market likes the results they announced. doctor's shareprice

performed quite well after the announcement. i think this is -- seen him doctor is one of the unicorns goodwe incubate -- ping an doctor is one of the unicorns that we incubate. it was perceived very well last year when it was launched at ipo. the biggest funds being our investors for the ping an good doctor. going forward, i think the prospects for ping an good veryr within china is positive. this year, there will be a lot of attention and focus on the health care sector in china by the government. and i think the government is for the use of technology to improve health care delivery to chinese

consumers. all these are very good for ping an good doctor's prospects. at the same time, we have been taking ping an good doctor international. we are going to a joint venture. opportunities in other markets as well. shery: when it comes to other markets, i do wonder about your investment strategies. because he continued to see u.s.-china trade tensions. we have seen them over the past year or so. youroes that affect investment decisions and your business as well? we could see chinese consumer sentiment really taking a hit? and china trade issue has not impacted our core so far.es at all in fact, any of our core businesses. especially on the retail side. 87% of our operating earnings comes from our retail business, so retail has not been impacted at all by the u.s. and china

trade tensions. obviously, there's been some volatility in the capital markets, and this has affected some of our asset investments. on the credit side, you know, we have a very big consumer lending business. we have seen that the credit quality of our consumer lending know, held up during this time. ratio for our consumer lending business is only about 2.3%. a very healthy level. haidi: thank you so much for joining us. that was lee yuan siong, ping an insurance group co-ceo joining us. let's take a look at how the markets are faring so far this morning. become a written in hong kong. -- sophie kamaruddin in hong kong. sophie: asx 200 down .5%, led

lower by communication and energy players. the aussie dollar on the back foot. a pulse check on consumer confidence from westpac. the gauge fell for march. in the bond space, we have moves for the 10 year yield, falling below 2%, tracking the rally we saw overnight in treasuries. one bright spot in sydney. gold is gaining ground after macquarrie says more m&a is coming to the sector despite the deal. macquarie says consolidation is seen as the driving force. flipping the board for laggards in sydney, sigma health care off 3.3% as it rejects an approach from australian pharma that was made in december, saying it remains highly conditional. player offng a state 1.4% after pricing an aussie dollar convertible note

offering. the fundraising comes -- 800 million australian dollars. the company has maintained its fiscal 2019 guidance. on aviationk related stocks in sydney as australia is to suspend boeing 737 max operations to and from the country. it says it will not introduce any new aircraft unless it is completely satisfied with safety. we have virgin australian shares off 2.5% this morning. haidi: we are going to stay with aviation. boeing shares have raised barely after the faa reiterated it sees no reason to order the grounding of 737 max planes earlier this morning. we had the worst today decline -- two-day decline. the statement from the essay comes after more -- faa comes countries suspending

flights following the second fatal crash of the model in just five months. our bloomberg opinion columnist joins us for more analysis. lastos time we had -- the time we had a grounding, it also effected boeing planes. are they digging their heels in a bit? how do we view the stance they are taking? >> if you look around the world and look at where the 737 is being flown, three days ago, 350 were in operation in 50 different airlines around the world. onlyis stage, this plane flies in the u.s., canada, and the golf -- qatar and the uae -- the rest of the world has already canceled flights. there is an argument the faa would make that we should not take the views of other regulators into consideration. i think if you look at the sort of mandate they have, it comes back to is it a reasonable thing to do to ground this plan? at -- this plane?

at this stage, it is a reasonable case if you consider it a matter of safety. there are thousands of people who board this plane every day and we are not quite clear on what has caused these two strikingly similar crashes. haidi: clearly, other global regulators have taken that as a reasonable approach or standard to at least wait and see and not have these planes flying in and out while they are awaiting further information. david: exactly. if you consider the balance of risks here, the balance of risks -- if there is a connection between these flights -- we have already got more than 150 people who have died in a crash in either your your five months after the first crash. ethiopia five in months after the first crash. you are causing costs to boeing, to the airline, and ultimately, insurers will bear a lot of the costs. that was a 123 day grounding,

which is longer than we would expect in this case. boeing declared pretty soon afterwards that the costs were minimal. it gets taken away in the program costs. shery: what do you think of boeing's stance? it continues to claim its planes are safe to fly and there is no basis for grounding. way,: i think boeing, in a is obliged to do that. they are obliged to be the last person to come forward. if they did not think their plane was safe to fly, they would not be selling it and they could not sell it. the certification of new models of planes is obviously a very complicated issue. one thing that will need to be looked at over time is how the 737 max is being treated as an update to an existing plane that has been applying for 40 years

or so, when in many ways, it is substantially different. whether that certification was done rightly or wrongly i think will be asked for many years to come. haidi: you wrote your piece on this potentially changing on what trump tweets before the president tweeted. is this somewhat political given the nature of boeing? david: it is highly political. boeing's ceo has worked very hard to cultivate a close relationship with the white house and with donald trump. he spoke to donald trump after that tweet that went out yesterday. and i think the thing that is really important to understand is the decision to ground the put a or not, you can technical basis on it, but it is ultimately a judgment call that goes to the faa. the department of transport boss is the president of the united states. it is a judgment call and political call that we can discuss as a technical call, but ultimately, it is not a technical bar that decides this.

to have more going analysis on boeing later on bloomberg. we will be joined by the airport authority, hong kong's ceo. we will discuss that later in the day. this is bloomberg. ♪

haidi: let's return to our top story. theresa may's latest defeat over her brexit plan. joining us for some analysis is a director of the institute of global finance and a professor at the university of new south wales. two years on, right up there we started. [laughter] >> that exactly right. i think that is the very issue that some people are arguing that maybe we have to reflect and start again, reposition ourselves to see what is next. options,t of all the

maybe a second referendum, perhaps new elections, political crises, a no deal exit, an extension, what is most likely to you? david: there are -- >> there are a number of forces at the moment. assuming that the house of commons would say no deal, basically exit. in other words, no brexit without any deal, let's assume that first step is rejected. the second one is a question of would it be an extension of the article 50 exit process? the answer is probably yes. there are a number of uncertain questions. would be e.u. leaders except, if you like, the extension? yes, what kinday of negotiation are we going to have? would the e.u. reopen the entire

deal? or they are going to say we have done our job. it is up to basically the united kingdom to finalize her position again. that means, maybe, a very softer deal, -- if you like -- which could imply customs union for a long time or going back to single market, which means mobility of labor. this is the very issue that the u.k. wanted to avoid, and for that very reason, we had a referendum in 2016. the issues ahead are not going to be simple. there is a enormous uncertainty ahead. haidi: january gdp was a surprise to the upside. realistically, are we getting any policy certainty while brexit is hanging over the clouds? arenternationally, there many negative forces going on, whether it is a trade war,

slowdown in the european union, economy, and eurozone economy. financial institutions are having plan b to relocate from london, if you like, as a major financial center. basically, we are not seeing too many positive signals when it comes to economic activities and particularly investment. haidi: we continue to see that uncertainty being prolonged whatever happens with brexit now that this revised deal has been rejected. the gtv shirt on the -- chart on the bloomberg showing the economy is slowing down. this is showing we are all in the negative, especially when it comes to euro data. of thisis the risk uncertainty being extended, of kicking the can down the road when the global economy is slowing down? is substantial

risk. the bank of england has already risk, if itat this continues on, this process of uncertainty, there is no question that economic activities are slowing down in different parts of the world. and for that very reason, if you like, the members of parliament will become even more concerned if we end up with an extension of negotiations until june. we i think even beyond that, don't know whether there is going to be a final verdict one way or another, and this concept of uncertainty is going to influence the way members of parliament and the united think, and for that very reason, frankly, i would not be surprised that at the end of the day, they might say maybe we should revoke article 50 for the time being, regroup, and then come back to the concept of brexit in a few years time.

they: how vulnerable is global financial system from financial shocks like brexit? have we already priced everything in given how long it has taken to unfold? of brexit the issue and uncertainty in the global economy is in the context of the continent of europe. in other words, would large multinational companies, large they are in a position to continue investing, having long-term plans, three to five years, looking at europe as a great destination, looking at london as a major financial center while there are disputes within the u.s. and china with regard to trade. that is the bigger picture which is making multinational companies and large investors hold back rather than investing. i think that in itself will have implications when it comes to , as well asbs

technological changes. haidi: great to have you, director of the institute of global finance, professor of finance in new south wales. in sydney, breaking data out of japan as well as -- king higher than expected. we were expecting the uptick on account of the rise in oil prices as well as the weaker yen during that period. it was an indication of capex. a decline of 5.4%. we were expecting a decline of 1.5% year on year. worse thanost 3% what we're expecting, largely on account of depressed sentiment, the slowdown in china, and the trade war weighing there. much more ahead on "daybreak asia." this is bloomberg. ♪

haidi: a quick check of the latest business flash headlines. uber is to pay $20 million of federal lawsuit in california, challenging the companies classification -- company's classification as drivers as nonpermanent staff to avoid paying the minimum wage, overtime, sick leave, and health insurance. want bille said to johnson to be its next ceo. sources saying he is the frontrunner to replace geisha williams. the company is headed for collapse amid billions of dollars in liabilities for the devastating wildfires. let's preview the market open in japan and south korea. sophie: futures are pointing to losses in seoul. we get a bunch of data points this morning. when it comes to stocks to watch in korea, he and a group related dai group related shares

are on the radar. a're keeping our eyes on beverage company and section company.onfectionery this after the stock rose to a seven-week high on tuesday with other biotech shares spoke with plans to nurture the industry. i want to check in on the kospi. this rebound may be under threat as it comes as analysts are cutting their earnings outlooks, sending the valuation to a near two-year high which kb securities says is not that attractive given prospects. haidi: sophie kamaruddin. coming up on the next hour of "daybreak asia," we are joined by the managing director of a company. shery: we are going to have more on the outlook for sterling with and macro- ubs fx

strategist --. this is bloomberg. ♪

good morning. ime in sydney. the major asian markets just opening for trade. good morning. welcome to "daybreak asia." >> our top stories, brexit lose. deal rejected again. and the u.s. trade the optionive says

must remain. >> boeing suffering the worst decade asecline in a india joins others grunting the 737 max. seeing lots of topics. the nikkei 225 up, well the yen is holding steady. we did see producer prices higher than expected. bigger than expected drop in orders for january, down 5.4%. let's push the board is to check on the mood in seoul. losing ground, 0.25%. -- the korean jobless rate improving a touch. let's check on the mood in australia. aussie stocks sliding for the fourth straight day. the aussie dollar down 0.3%.

kiwi assets also under pressure. let's check in on the british pound. we do have it holding losses after the most volatile session since november. trading volumes almost doubling. key brexito that vote. the biggest drop in almost two bank months. nomura says the pound is in a range -- the first wordu news project cassette the summers in new york -- first word news. jessica summers in new york. >> washington must keep the option of raising tariffs to make sure beijing sticks to any trading agreement. he said the u.s. must have the ability to impose higher duties

to counter violations of a deal. his comments pushback on speculation and agreement would see that two sides lift tariffs immediately. boeing rose slightly after the repeated its backing for the 737 max, saying there is no reason to ground the plane. the stocks slumped more than 6% as more nations banned the jet. eu and india suspended flights following the second fatal crash of the model in five months. subduedflation remains to read that offers a potential dilemma for prime minister modi. india's low-inflation is driven by falling food prices. the slowdown raises the possibility of another rate cut which would give modi and the

economy a boost. university, coaches, and admissions counselors among those charged with a criminal conspiracy that sought to help people when admissions to elite u.s. schools. wealthy parents alleged to have paid bribes of around $200,000 onh to help kids cheat interests exams. global news 24 hours a day, powered by more than 2700 journalists and analysts. i am jessica summers. >> getting back to our top story, theresa may's latest brexit plan has been rejected, opening the door for further political chaos. paving the way for a potential

-- or no brexit at all. she took new language hoping which on the irish backstop would win them over. >> let me be clear. leaving without a deal does not solve the problem. eu will want to know what use we mean to make of such an extension. he will have to answer that question. sebastian is watching the latest developments in london. what happens now? >> we look ahead to tomorrow. another going to be extending the time. attorney general's saying an extension is inevitable. but we need permission from the eu. saying the eu needs to give reasons for the extension, as

well as reasons for extending -- how long they want to extend the negotiations. this is a short-term solution. be that we get to the end of an extension only to find another no deal edge. these are statements of intention. just because parliament says it this, it doesn't mean it is going to happen. 29th, theto march u.k. will crash out without any arrangement. this is a headache for business and we have seen some fiery comments. vote sayinger the enough is enough to the british chambers of commerce saying businesses have been failing over and over again. this putting a damper on

growth, curbing investment, causing trouble for the bottom line. >> what about the possibility of a second referendum step? this in choices she says parliament may face. take a listen. will have to answer that question. does it wish to revoke article 50? doesn't want to hold a second referendum? does it wants to leave with a deal? -- on enviable choices. they are choices that must know be fixed. passionate cheers and boos at the mention of a second referendum.

those in favor who will see a boost, the threat of brexit may make the hardliners back her deal. many did not end up doing that. it seems they fear her deal more than another vote. they may be justified in that respect. noing herself she sees evidence people have changed their minds. if we get a second referendum, return. get a similar the british people saying they want brexit and that leads us no closer to a resolution. >> thank you so much for the latest on brexit. presidentw, the vice -- great to have you with us. we saw this defeat for the prime minister but it was a smaller loss in the historic defeat back in january. does this count for something? >> i think it does count for something.

we saw quite a bit of political chaos. we have a couple of scenarios to think about going forward. vote scheduled for later this week. we will see the vote whether parliament wants to proceed without a deal. have a no deal hard brexit crash out. that looks likely to fail. thursday, another vote in parliament wants to extend article 50 and allow themselves up with ano come agreement. i think the vote today was quite significant. >> what about the possibility of a second referendum? the prime minister herself mentioned in being a possibility in the coming months. how real a chance is it for another vote? >> there are some quarters that want a second referendum.

jeremy corbyn came out in support of this, although there was no plan put forward to get there. we do have these important votes coming up. ,f there is no clear majority perhaps momentum will grow for a second referendum. that does not seem to be the next step in the process. how much of a disappointment with this have been? there was a sense when this deal was struck yesterday, they probably would have preferred it to be accepted as well. >> the eu has been pretty firm. they have gone as far as they can go and there will be no more negotiations. the agreement that was reached monday night between the prime minister and european commission president was intended to persuade the u.k. to accept the

deal. go far it did not enough. prime minister may -- the vote was damaged when her own attorney general issued an opinion on the legal agreement she reached saying although it would reduce the risk the u.k. would remain tied to the customs union, it did not reduce it significantly. members who are thinking about agreement,nst the that got them over the finish line. it seemed there was no way it could pass following that ruling. investors react to all of this? it seems like whatever the outcome is, a second referendum, an extension, we are still in

for a time of enormous uncertainty. >> i think we are in for a time of uncertainty. the amount of time under consideration now is just a couple of months. it seems unlikely that would allow enough time for the parliament come up with a plan for how it wants to withdraw. is a couplen time of months because we are headed european parliament elections. no one wants the situation to bleed in. there is tremendous uncertainty uncertainty for businesses who are unable to plan their supply chains. the u.k. will need to come up with a new set of trading agreements after it leaves the eu. that will take time. until the new trading agreements

and regulations are put in place, there will be continued uncertainty. >> what about some more certainty on the prime minister's job after she has survived so many crises? is her time up? questioning her leadership. she brought her withdraw agreement to parliament twice. it has failed spectacularly. as of now, there does not seem to be a clear successor. we will see in coming days whether there will be another confidence vote in her government. >> we are getting some breaking news in melbourne. hearing of the sign -- finance

minister, he has been sentenced to six years. the judge delivering that sentence in the last few minutes or so. 877, that means he would be in jail for three years plus a parole. . oflty of five charges indecent acts. the most senior catholic to date to be wrapped up in these charges. australia's most senior catholic to be embroiled. been this.as a three year time. the levelted come of of interest this case has

gotten. the sentencing hearing was live streamed. around the world continuing to ground the 727 max but the u.s. government standing by. >> we will look at competing factors affecting global markets. this is bloomberg. ♪

>> this is daybreak asia. i am shery ahn in new york. hope for the best but expect the worst. global strategists telling us to prepare for both. there are positive catalyst. stimulus support. -- policy labels. weaker corporate earnings

growth. a great deal of uncertainty over these themes at the trade war let's discuss all of that. a portfolio manager. over $100 billion in assets. in the assets -- absence of a strong catalyst, how do investors position themselves for the rest of 2019? global --e of another goldilocks situation, is that likely to play out again? >> that is a possibility. given that bankers have started to push back. clearly on an easing path. unlikely they're going to hike more than once this year. sell down is going to stop at some point.

emerging markets are not going to hike rates. where you situation could see muted inflation. starting the second or third quarter this year. which would cause an uptick in the estimates for earnings. you could see markets go further. emerging markets? especially china, does that mean there is still a ways to go? yes. since there is a good deal on trade. if you don't get some of the likeical uncertainties brexit, developments between the u.s.and europe on trade, and china itself, a could run up more. globalnvironment where

conditions are stable or easing, rates do well.x >> we have seen that rally. tos chart showing compared the u.s., the outperformance has not been that much. showing the u.s. has outperformed chinese markets. will chinese policy support to be the game changer? the game changer turning sentiment around. you had policymakers showing more inclination to do a trade deal with the u.s.. cuts on the fiscal side of things. a noticeable departure. they are not spending as much as building infrastructure.

they are letting the people decide where to spend the money which could bring out a boost to consumption. china clearly has sentiment. the important thing is whether the policymakers decide to let markets run. markets is unless the rally up significantly, they would be keen to maintain growth at current levels. which should be good considering valuations are not expensive. we have come down significantly from the olden times. at 10-15 times. they are affordable, not expensive. well.ould do markets could do well. convinced theeem

fed can back off from a rate hike. can afford to be patient. commodity prices threaten the outlook? >> at this point in time, the increasing this year will not really cause inflation to go up. the next to bring quarters, the outlook should be benign. let's take a step back. second and third quarters, strong for oil prices. the commodity push on inflation is weakening. if you look at u.s. inflation, is u.s. price element, that weakening as well. we don't expect inflation to be a real concern unless you see a significant spike in oil prices

higher. feds the assumption of patients breeding complacency? it depends on how you see the economy of all. muted.ectations are we do not see a spike up. which means the fed can afford to remain patient. if you believe core inflation will push higher, of course the current levels of markets suggest there could be complacency. the fed could come and surprise markets. is going to be negative for assets. >> always great talking to you. thank you. we have another guest coming up. paribasa bath -- bnp

ceo. this is bloomberg. ♪

this is daybreak asia. --let's get a quick change check of the latest business flash headlines. nissan terminating the upscale infiniti models. focusing on north america and china. the alliance is moving on from the carlos ghosn era. they are streamlining operational decision-making. to overseengle board their collaboration. new -- to the whole organization. be more efficient and

simplifying the structure. a former goldman sachs -- the fed says the coordinated bond offering that allowed money to be stolen. he has pleaded guilty to u.s. charges including conspiracy to money laundering. >> the trends for the iphone are going from bad to worse. ratingrmed his neutral and says multiple iphones did not stop chinese -- from weakening. the iphone made up at least 60% of earnings. the faa continues to stand by its decision not to ground that the -- the 737 max.

boeing shares tumbled. we will have more on this unfolding global crisis. 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.

>> this is daybreak asia. theresaertainty as revised brexit proposal fell to a defeat in the comments. sterling under pressure. mp's expected to vote against a no deal on wednesday. an extension beyond march 29 is inevitable. she told parliament a second referendum may be one of the options left with the deal now dead. jeffrey gundlach has attacked

president trump for what he calls the shocking growth of the debt burden. he noted the increase in government borrowing, with deficits only expected to grow. the treasury department said total public debt has risen to a record, above 2200. as the reserve bank of australia is assessing the impact of climate change. is looking at the effects on production and inflation. climate politics have become increasingly polarized in austria, prompting the central bank to carry out its own research. driestne of the continents. chrysler's iconic chrysler building could be reborn as a hotel.

for $151ng bought million. that is significantly less than the 800 million paid in 2008. it would consider renovating the hotel once the a deal is complete. global news, toy four hours a day, on air and twitter, powered .y journalists and analysts i am jessica summers. this is bloomberg. >> thank you. let's take a look at how asian markets are faring. >> asian stocks are under pressure after a rise. bonds gaining ground. a 10 year yield going to 2.6%. the australian two year yield, -- checking in on the aussie dollar, weighing on the

currency. falling as much as .4%. since 2017.evel the korean won also losing some steam. toward 1128.move let's check in on some stock movers across the region. machineryhighlight -- orders declining more than expected. after as rising long-awaited share buyback. which could act as a catalyst to drive prices earnings. over in seoul, korea and stocks continuing to climb as the health ministry said they will theunce a plan to industry industry -- nurture that industry in april. australian to -- austria to

suspend boeing max operations. they will not introduce any new aircraft unless they are completely satisfied with their safety. >> let's continue discussing boeing as shares are rising. reiteratedthe faa there is no reason to order the grounding. --y innocence all >> it seems the u.s. is the last major economy standing in the face of this higher of pressure. let's go ahead and show this graphic we have of what exactly is happening around the world. flights, 737. singapore,ustralia,

all these governments are saying they will stop flights until they figure out what is going on . or if anything is linked to what happened with indonesia's lion air. those are countries where toline carriers have decided ground their flights. mongolia and asia. south africa, morocco. as goal air.well in as well.eighing countries and carriers across the board. tomorrow, we are looking ahead to canada. a press conference to talk specifically about this. jet saying it is suspending the 737 max

operations. nosek prize, let's take a look at the share price. falling over the past two days of trade. down 13%. a loss in market cap of $37 billion. a couple of superlatives. the worst today fall in nearly a decade. in terms of the worst seven-day fall, ever sense to summer twice sixth. >> where do we go from here in terms of policies and the investigation? >> the flight recorders have already been found. the probe is going to try to figure out what happened. thought here, speculation, is there a link with what happened five months with lion air? that had to do with an anti-stall function that didn't

the nose of the plane down. case here?e the faa saying there is no evidence linking the two. of note, we have been seeing a lot of policy support from the u.s.. sayingicular the faa quote airworthiness, no surprise, saying may have full surprise. one wildcard. donald, the president himself. let's show these tweets. toolanes are becoming complex to fly. pilots no longer needed. from m.i.t..tists he compares that to a pilot been someone like albert einstein. you want someone that can actually fly these planes. he wishes he could harken back to an earlier time when things

were simple. we do see there have been headlines, talking to the boeing ceo. airworthy and the is safe.aft we are seeing faa support. we will see what happens if that supports the share price. right now, down 13% the past few days. down $24 billion. market cap. bringing us the latest on the boeing saga. the american top trade they must says maintain tariffs. david engle is looking at this. at the heart of one of the biggest concerns, enforceability. always a little bit

testimony before the senate finance committee. they need to keep the heat to make sure beijing does not backslide. we have to maintain the right to whatever happens to the current tariffs, to raise them in situations where there are violations of the agreement. cannot predicts success, but we are working hard and we have made real progress. further, if ad deal was struck, he would not speculate other than to say it is still a subject of negotiation. negotiations are always caret and stick.

u.s. is making headway on issues it considers important including getting deep structural changes to the state driven economic model. he added as well there are major issues that have to be resolved. of pinpointed that by saying any deal must be enforceable or trump will not sign it. we have a separate item. threatsligations about to the five g network. >> this is again on capitol hill. we are getting the house intelligence chairman saying he has profound concerns about do believe it is a

national security threat. telling reporters following some comments he made. particularly if it becomes integral and integrated into our five g network or that of our allies. the trump administration has told allies including germany intelligence sharing could be limited if for example germany toceeds allowing huawei build mobile internet systems. those concerns have only been heightened since he initially raised these concerns. you so much, the latest on chinese trade tensions with u.s.. >> parliament rejects the fx forecasted next.

this is bloomberg.

>> kicking it down the road. if parliament votes again, can theresa may put the squeeze on? it doesn't look like that at the moment. >> i think from the eu side, they are looking for a longer piece of string. 3-6 months. there, that ism the next variance in the market. an extension of article 50? the answer probably would be yes. leaders except if you like the extension? yes, the nextsay question would be what kind of negotiations are we going to have? >> some of our daybreak guests.

again, the pound fluctuated against the dollar and the euro. let's discuss. great to have you with us. that we sawfact this volatility, it seems investors are optimistic about the trend of the pound. this chart putting sterling stronger by the end of 2019. around the 136 level. what could be the catalyst to push sterling higher? >> since the beginning of the year, it is the best performing currency which came as a bit of a surprise. clearly the situation is fluid. there are a lot of scenarios and uncertainty. it seems the possibility of a hard brexit is receding.

most are expecting this to be confirmed with a vote. likely to reject the no deal scenario. this is what markets are trading on. less danger of a very bad outcome. >> what about the broader markets and risk sentiment? the keep hair is euros swiss. it has been an interesting indicator of risk. it is typically considered to be trading off of italian offense but brexit has had a significant impact. if we were to see some of the risk sentiment improve, even if it is just postponing some of the decisions, you could see the swiss franc starting to weaken.

>> a great deal of uncertainty. perhaps a mex c brexit off the table. so much uncertainty in terms of duration. within the u.k., whether we see an election. how to you trade around that? >> it is very difficult to trade the pound. a bit of a delay to the article 50 deadline, it is not going to be a particularly along one. the longer it is, the more the markets are going to like it. you see a rally in the pound, to us, that would signal most of the good news is priced in. it is difficult to expect more than that given the uncertainties. the point where we are starting this divorce agreement.

through that.ee for me, the bigger question, delay, canis a investors relax a little bit about a risk for the next six months. what kind of broader impact will that have? the confounding dollar strength we have had. a lot of people were expecting dollar weakness. looking benign. where does the dollar go? the story is an interesting one. if you look at the volatility, very low. the dollar for once is a positive currency. you are in a much higher interest. than just about any other currency. that combination of low-level tillery and high yield what helped the dollar. what you need to happen, that

are growth in china. in europe. some kind of repricing of expectations outside of the u.s.. see some ofestors the european yield curves moving higher, that is the signal the dollar will start weakening. to be fair, we think it is more of a second half of 2019. you like european assets. why, when we have seen so many downgrades, not to mention the ecb unleashing new stimulus? rallies, look at the they are relatively broad. if you look at for example across the equity markets, one area underperforming is germany. equities are looking at

in terms of catch up to the market. the ecb has been dovish, but a lot of the dovishness is already priced in. the euro itself is quite cheap on a long-term be cysts -- basis. an opportunity there over the medium term. >> thank you so much for that. plenty more to come. ♪

volkswagen says the car market is increasingly tough. -- aiming toeping keep profitability at the same level as last year. he said he is optimistic about a deal and atrade brexit solution that would stabilize the market. >> we have the same outlook for this year. keeping profitability at this level. car markets are really difficult. but they are optimistic because they can change. a settlement between china and the u.s. if brexit would be clear. this could be another good year.

also, we are investing a lot in new technology. it to you toant is howa good brexit deal, and optimistic are you that it can happen? >> it is an important market. we are a company depending on exports from the island. brands have axury market share in the u.k.. brexit, whatever decision would be very important. andan you quantify that tell us what you expect? >> we have different scenarios. if it is really an uncontrolled we could see the

difficulty of preparing a few things. you can only anticipate so much. it would not ruin the company. we would notice. china-u.s. trade deal, do have optimism? can you put that into a quantifiable figure? >> we have about an 80% market share. china is really important for our worldwide presence. markets are really down starting last year. close to 10%. hand, there are a lot of new products. i am optimistic we will see a solution between both economies.

i see a lot of eagerness in to find a compromise because it is so important for both companies. china will probably suffer more. i am optimistic. i hope we have a better second half. >> you have your forecast for 5% sales growth. does that assume a neutral or positive outcome? >> it is soon as the second half of the year will be better. we hope we can flatly grow, whether it is 5%. vw ceo withf blue -- matt miller. uber is to pay $20 million to settle lawsuits in california challenging the classification of drivers as independent

contractors, not employees over traditional benefits. themusiness model treated as nonpermanent staff to avoid paying the minimum wage. reports from japan say nissan may appoint a former head as chairman. a specialady on committee on corporate governments. the alliance is making changes to executive operations, streamlining operations. >> let's get market action and preview what to watch later. partners inn eye on china. very much on the radar. the ceo spoke of changing the shareholder structure. motors partner in china.

earnings front, going to get results. getting reaction to the results. we did see profits beat estimates. we are also keeping an eye on chinese brokerages which have outperformed the rally. continuing to rise. suggestends can -- strength is gaining. >> that is just about it. market coverage continues. stay with us, bloomberg markets, the china open is almost upon us. this is bloomberg. this is bloomberg.

to9:00 a.m., welcome "bloomberg markets: china open" and i am tom mackenzie. yvonne: i am yvonne man. david: let's get to your top stories. theresa may's revised deal rejected. a vote wednesday on a no deal divorce. yvonne: the u.s. trade representative says a tariff option must state to ensure china adheres. >> boeing sees its worst two-day decline has the eu and india ground the 737 max. ♪