haidi: very good morning. i am haidi stroud-watts in sydney. australian market had just opened for trade. shery: i am shery ahn. sophie: i am sophie kamaruddin in hong kong. welcome to "daybreak asia." haidi: our top stories this friday, talking trade. president trump says he should have news in the next month one way or another, but a summit with china is put on hold. backing.ay wins

the european union wants to know what will change. deliveryuses all macs -- max deliveries. we are in beijing with tom mackenzie as china wraps up its annual policy powwow. tom. tom: that's right. we are outside the great hall of the people where delegates will on a new foreign investment law. we will bring you the details, later in the show. haidi: looking forward to that. they protect of major averages in the u.s. and how they finished the thursday session. between gains and losses. president trump and president xi jinping would not be meeting this month. aswould happen as early april. we got some sort of confirmation a few minutes ago saying we will get some sort of announcement on the trade deal. there has been a lot of factors that investors had to weigh in

on, including the brexit vote that happened in the u.s. afternoon session. to stay500 did manage above that level but with all consumers and materials shares really weighing on the index. the nasdaq down .2%. u.s. futures not doing much. let's get you a check of how markets are shaping up in asia. sophie: after the end of a choppy week, a mixed start to a friday session that will see the boj decide rates and china trader prices, plus figures. the mood in sydney is looking a little dour at the start of cash trade. clients.the among -- declines. laggards, -- compressionmargin for the australian banking space. in new zealand, the mood is optimistic.

head foreeing shares a sixth weekly gain. a broad recovery in manufacturing. we are seeing a move higher for aussie shares. check in on the currencies base. we are seeing the kiwi dollar resume gains. that is driven by the pmi data. after dropping thursday on news that a u.s. china trade deal remains elusive, which has pushed the cnh above 6.72. paring losses after the parliament backed a delay. haidi: sophie kamaruddin in hong kong. let's get you the first word news with selina wang in san francisco. >> the boeing 737 max 8 could remain grounded until they are given a software update. knowing and the faa are racing

to produce a fix. they are expected to take at least six weeks. the u.s. is sending its own investigators to help. producers tot oil cool production levels to prevent the return of a surplus this year. the cartel says it sees a risk of inventories becoming too high in the fourth quarter. opec members and their allies will meet in azerbaijan. israel's financial hub is on alert after two rockets were fired from the gaza strip. one rocket landing outside the city and the other falling into the sea. say missilesports were intercepted. the military has denied that. it is the first time tel aviv has been targeted by militants since the gaza war of 20.

india says it will continue to implement economic reforms in respect of what happens in the upcoming general election. to between 7.5% to 8%. the ministry noted the global slowdown in the trade war as important risks. 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. >> president trump says he should have news on a china deal in the next three weeks to four weeks and he says people will be talking about it for a long time. joe sobczyk joins us from washington. we reported that a deal is unlikely before march is out. what is going on behind-the-scenes in terms of what is driving this timeline? trump says, either way, we will

have news in three or four weeks. joe: heated. the original timeline of having some meeting with president xi at the end of march was already quite a bit optimistic dividend the complexity of the issues involved, so today, he said he will have news either way, but he also suggested things were going well. as being veryhina cooperative in the talks, and it was a bit of an optimistic note. both sides have been saying for sometime that they are making progress. there are difficult issues to work through, but it is at least some sign that there is movement. the president tried not to oversell it too much, but he did suggest that it was something that people would be talking about, so that would -- might be some sort of deal to realign the u.s.-china trade relationship, and so, going forward, we are looking to april. perhaps they will meet and they

can sign off on some deal. the chinese have been reluctant to go in without most of the deal worked out, so we will be looking for some sort of announcement in the coming weeks of a meeting. shery: president trump also looking for a win on his border wall, but the senate, including many republicans, standing in the way of that. what happened today and what does it ultimately mean for the president? senate voted to disapprove of his use of emergency funds for the border wall. 12 republicans joined with all of the democrats in the senate for the throat. that is not enough to overcome a veto. house republicans are sticking with the president. the first really significant break with the president by republicans. up until now, trump has held a on theiron grip

republican party. he remains popular with the base. with senators and even a few members of congress on the republican side now willing to buck him, that may be a signal to the president that going forward, he may have to make some compromise and not necessarily get in his way. this matter still is going to be going to the courts as it is once the president vetoes it and tries to move the money around. several lawsuits are already underway and in planning. out yet.not played it will be heading into budget negotiations for next year, where he wants even more money. shery: joe sobczyk in washington. and you so much. in the u k, theresa may won array of victory in her brexit drama with the house of commons backing her plan. is followingek developments. summit.of the e.u.

what could we expect in the next few days? sebastian: it seems like theresa may's lives on. we will probably get a third vote. looks like it is a short extension to brexit. it is just until june 30. time to get the technicalities sorted and signoff on the agreement. if not, the extension is longer, and the risk, she says, is that plenty of opportunity to reverse the referendum result. of course, this needs permission from the e.u. as well. it has to be unanimous from all of the 27 e.u. countries remaining. they do not have a unified position, but they indicated they might accept a two month for three months extension if the deal is approved. if not, that e.u. is more divided in its course of action,

but some suggestions are that the leader could back the delay of at least a year. it may will want a good reason for doing so. has to show that this is part of an overall strategy and not just a way of kicking the can down the road. those were comments echoed by the irish -- needs to bee.u. open to any extension request, and this fits in with the calls to avoid a hard brexit. ireland stands to lose. the second-biggest trading partner is the u.k. 2018.llion of trade in it is really not in ireland's interests for a no deal brexit to happen. although he probably is one of the more lenient within the e.u. with that view. they: what are the chances could be unlucky in getting a deal through?

sebastian: it all depends on how much she can scare the hardliners. the hardline eurosceptics. they are backing the conservatives up at the moment. the strategy here really is -- the longer extension could give rise to a referendum and the e.u. setting the terms of the relationship. may says she will give parliament a chance to take over. possible to the hardliners at all so it is critical may gets these on board. there were secret talks of a compromise between the government and these hardliners within the party. we will find out if she is successful in that early next week. haidi: sebastian salek in london

with the latest on brexit. still ahead, huawei has appeared in court in new york to deny defrauding banks. we will hear from the company's founder and ceo. to a seniorll speak portfolio manager about what to expect for markets for the rest of the year. this is bloomberg. ♪

haidi: we are counting down to asia's first major market opens this morning. japanese future is like this ahead of the bank of japan decision day. you're not expecting policy tweaks. we are looking for any sort of narrative from governor kuroda on the growth outlook, inflation outlook, and the bank of japan commitment to whatever it takes. media futures up by .2%. this is "daybreak asia." i am haidi stroud-watts in sydney. shery: i am shery ahn in new york. our next guest says equities

will be up this year. treasury rates stable. high-yield bonds will be the best the former within the fixed income sector. joining us now is margaret patel, wells fargo assets manager. let's talk about the u.s. equity markets first because we have seen this rally recently, but every time we get ahead or above that 2800 level, it seems that we get to that resistance of 28.15. this chart showing the cripple curse we had in december. can we talk that resistance level and what will be the catalyst for the move higher? >> i think it will just be continued growth in the u.s. economy, continued growth and earnings. it is true that that earnings are likely to be flattish. gdp should be very low. policyflecting the fed's

last year being too tight. in the second half of the year, companies stick by their outlook of better growth in the second half of the year. i think we will see higher levels. shery: should we be worried about the recent u.s. data? stabilizing in january, but after the december numbers were revised down, does that put a cap to how high we can go? >> no, i think it says we will have steady growth. it will be more modest. maybe 2%. something like that. that is certainly enough or companies with growth characteristics to grow their earnings by enough to lift the whole market up. inry: in terms of -- haidi: terms of what you are saying, it sounds like there are expectations building that we will see another year similar to last year -- low inflation, but robust growth, and the fed not having to do much? >> the best thing that has happened is the fed really

,aking on a more passive stance realizing they were too aggressive in trying to raise rates up to a target that did not fit the economy. inflation remains very low. i think that is a big change. fourwere going to have increases this year. i think now they will have zero. in addition, they will stop allowing the balance sheet to run off at the very fast pace they have been doing. that makes a pretty good backdrop going forward. haidi: those that inflationary outlook and said policy outlook if we have some of the removal of the big uncertainties over global growth, things like the trade war and brexit, but also potentially if we see a bottoming out of the chinese economy and asian growth start to pick up on the back of that? margaret: even in the asian economies, they are growing, and they also have moderating inflation. just like the u.s. is growing

and has very low inflation. we have had 2% or less for a number of years, so i think inflation moving higher is just not going to happen. i think the world has changed. we are in a low inflation world for the ftse able future. that changes it. shery: the treasury yield will the ftse cap -- for able future. that changes it. shery: the treasury yield will say capped? margaret: very low volatility. very little change in rates because the fed is not going to do much and inflation remains stubbornly low. shery: in this environment, where do you see the best performers in the fixed income sector? margaret: in the fixed income sector, the risk taker will be rewarded. by that i mean below investment grade, high-yield bonds will provide the best return because

they offer about four percentage points. defaults are very low and should continue low. over 2%.a little that says to me that sector within the bond market should probably perform the best. do they continue to trade more or less sideways? it has been very quiet in that corner of the market. we should continue to see very low volatility. i think volatility really was increased by uncertainty about the fed actions now that we know the fed will be very passive on the sidelines. that's as we will continue to have low volatility. high volatility people are going to be disappointed again for this year. shery: as the trajectory of the u.s. dollar surprised you? ever since we had the turnaround -- haidi: has the trajectory of the u.s. dollar surprised you? it feels like the dollar has behaved pretty counterintuitively. margaret: people keep expecting

the dollar to have a sharp correction, and it really has not. i think the reason is simply because the fundamentals of the u.s. economy are pretty sound. a little slowdown in the first half of this year and a pickup in the second half so the dollar is probably priced right about where it should be. i am not looking for a date gain in the value of the dollar or a big correction. shery: let's -- for a big game in the value of the dollar or a big correction. shery: shares have really rallied. the optimism over potential trade deal has been factored in. 60% or more of those investors in china's a-shares are retail investors. with the risk of a sharp downturn if we do not get everything we expect from this trade deal? margaret: certainly, that market is much more volatile than the u.s. market or some of the european markets, but still, i think it will react to the

fundamentals, and a think we are expecting that we will have a trade agreement that will be more or less satisfactory to both sides. so everyone can be pleased with the gains they have made. i think that says the basis for chinese growth should continue to be pretty good. obviously, gradually slowing down as the years pass on, but close to 6%. that is not a bad backdrop for chinese investors either. shery: where do you invest when it comes to different sectors? korea,e china, south other southeast asian countries. is there pockets of value in those markets? margaret: i think that particularly the consumer related companies might do a little better than average. of foodve had the price come down, that puts a little more money in the consumers pockets. inflation being pretty

low across the board. stable wages. those consumers will have more money to spend. always great to have you. margaret patel, wells fargo asset management senior portfolio manager. and you can get a roundup of the stories you need to know to get your day going in today's edition of "daybreak." bloomberg subscribers can go to dayb on their terminals and it's also available on mobile in the bloomberg anywhere app. you can customize your settings so you just get the news on industries and assets you care about. this is bloomberg. ♪

shery: this is "daybreak asia." i am shery ahn in new york. haidi: i am haidi stroud-watts in sydney. one has appeared in court in new york to deny that it defrauded businessconcealing

with iran. and bankf conspiracy fraud. she remains in vancouver, fighting extradition to the u.s. she maintains the case against her is politically motivated. will not reduce our investment in canada because if the united states is closing at benefitat would be the for canada. it is an individual case. i do not think it should influence the relationship canada has with huawei. shery: apple has successfully defended itself in a legal spat with qualcomm and will not have to pay billions of dollars in possible damages. a u.s. court found no evidence apple violated an agreement under which qualcomm had been paying billions in what apple for haidi:ebates

royalties. tesla's -- royalties. haidi: tesla's problems seem to have eased. state media said that more than around the were held country. tesla said at the time it had reached a resolution with customs and that sales of the model three in china were not affected. shery: facebook is losing two executives. mark zuckerberg says they had spoken about wanting to do other things. chris daniels is leaving. the founder quit amid disagreements with zuckerberg. let's get your check of the asian markets right now. australia trading, fluctuating between gains and losses after gaining ground in the previous session. two stocks are up for

consecutive sessions after coming from wall street lack of direction. we have seen the u.s. stocks hold three days of gains. under a little bit of pressure at the moment, nikkei futures, despite the fact that we have the japanese yen falling a tiny bit. we have the boj governor kuroda speaking on friday. we were not expecting any change in the policy settings, but markets are bracing for a potential downgrade on economic forecasts. ,e are hearing from taro aso speaking in tokyo, saying we do not need to be too focused on the 2% inflation target. no japanese citizen is angry because we have not hit that 2% level. he also mentioned trump's choice to head the world bank. is an appropriate person. coming up next, friday is the final day of china's national people's conference. we will be outside the great hall to tell you what to expect. this is bloomberg. ♪

>> "daybreak asia this is "daybreak asia." this isso this is -- "daybreak asia." i am selina wang. the 59 to 41 vote was short of the 67 needed to override a veto. the president immediately took to twitter to say he looks forward to vetoing the resolution. yucaipa minister theresa may has primerare victory -- u.k. minister theresa may has won a rare victory. her deal remains in play. she is offering mp's a choice of backing her plan.

brussels is open to a postponement, but the e.u. wants to know exactly what the prime minister things will change. opec is urging oil producers to cool production level. arecartel says supplies outstripping current demand growth and see is a risk of inventories becoming too high. the opec members and their allies will meet in azerbaijan to review the curves they have been implementing. india says it will continue to reformnt economic irrespective of what happens in the upcoming general election. the finance ministry says as the measures start to take effect, the growth rate will rise between 7.5 to 8%. the ministry noted the global slowdown and trade war as important risks. global news, 24 hours a day, on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries.

i am selina wang. this is bloomberg. haidi: let's take a look at how australian markets are faring. what is going on? food falling as much as 10.8 percent earlier, slipping to another all-time low amid allegations of insider trading and tax avoidance in a parliamentary inquiry. of doughnut king and gloria jeans and it is under scrutiny for turning and burning . it is seen as the poster child across the retail food industry in australia according to the parliamentary inquiry. flipping the portray check on the overall share market in sydney, we have the asx 200 giving us some of its earlier advances, with little change for the mining stocks. these p.m. rio losing ground.

bhp and riod rio -- losing ground. the tightening supply picture is underappreciated. goldman sachs is forecasting that chinese minds of come to the rescue, anticipating a boost in output that may threaten the iron ore rally which has seen 18%, hoveringver around $85 per time this month. lip in the board for a check on the aussie dollar, it is steady after it delivered a punch chineset from weak eco-data and news that a u.s.-china trade deal remains elusive. pairing the weekly rise. morgan stanley sees more d onside risk for the au widening rate differentials. shery: president trump saying he expects news on a trade deal with china in the next three to

four weeks. the two countries are said to have delayed a possible presidential summit to april at the earliest. let's cross with tom mackenzie. so where do we stand in these negotiations? it is difficult to know how much to read them to president trump's comments. to say different things on different days, but we are of course, as you say, here and now, three weeks to four weeks. our sources in washington saying it is very early at the end of april when the two presidents are going to sit down to sign off on any deal, and of course, we know that there are still major issues and hurdles as robert lighthizer has said, remaining in these discussions, particularly around the phasing out of joint ventures, around the enforcement mechanism, and around paris. are veryhe chinese

concerned, as we have been discussing, about sending president xi to florida or washington to sit down with trump. concern trump could walk away and repeat what he did in vietnam was the north koreans. they are wary of that. chinese officials are concerned this will end up eating a one-sided deal, so they want to have an enforcement mechanism they describe as a two-way enforcement mechanism. and of course, their priority is seeing these tariffs removed. the consensus is that we will get a deal in the not-too-distant future. the timing is becoming less certain at this stage. haidi: in terms of what is on today, the delegates expected to rubberstamp a foreign investment law. in terms of the implications, what is the significance? margaret: -- tom: we are outside the great hall. it is a windy day. blue skies and clean air for once. what they are going to be focusing on is the foreign

investment law, which is a pretty significant change. sweeping changes to the investors doing business in china. in theory, it is meant to make doing business here easier. it is meant to level the playing field. it is meant to ban things like forced tech transfer and end the discrimination many face. there is a lot of uncertainty. that is what we have been hearing from the business lobbies. their concern about what the implications are. there are certain significant changes for those who have joint ventures. the new investment law means that they may have to work through some of their contracts with their chinese counterparts to amend the contracts and put them in line with the new law. uncertainty. this is particularly for automakers, many of whom have

joint ventures here. the vast majority have joined ventures. talk to theyou businesses, they say this comes down to how this law is implemented and executed. there is a lot of skepticism. it is not clear that this will theove life at a time when environment, economic environment, the slowdown is making china a less enticing proposition. haidi: tom mackenzie there in beijing. looking ahead to the closing ceremony of the national people's congress in just a couple of hours time. let's get straight to ho chi minh city now. our columnist joins us. chris, great to have you. through some of the potential implications of the overhaul of the foreign investment law. the lack ofd to attractiveness when it comes to foreign inflows and the china at the moment? -- into china at the moment?

chris: it is designed to meet u.s. demand. as tom pointed out, it is simply adding to a lot of uncertainty. as any businessman and china will tell you, the loss is one thing. how it is implemented and theuted is really always question in china. it does not mean it will be executed in a similar manner. you inhow optimistic are terms of whether we are seeing a bottoming out when it comes to the chinese economy, whether some of the stimulus measures have been announced? is it a reiteration of the same old playbook we have seen from beijing before? are they doing a reasonable job of managing the structural slowdown? and the think the pboc banking regulators have basically indicated that they want to avoid, you know, an

irrigation-type credit flood. even though january's numbers -- credit numbers were absolutely enormous, their general intent is to push up credit notes enough to keep the climate relatively stable while making sure that they do not see new credit growth of something like 30% as we have seen in previous years. so i think it is much more likely that they are going to try to stimulate while also not letting it get out of hand. shery: the unemployment rate just jumped to the highest level . 5.2%. how at risk is china's labor market? chris: i think he would have to consider that there is a not insignificant amount of risk. you know, if you look at the manufacturing sector, we heard .eports about layoffs even the chinese new year job by somewere almost 98%

accounts. the reason that is important is if people felt they had better job opportunities, then that number would be significantly lower. we had heard anecdotally of a tech layoff. i did think that there are significant indicators that the chinese employment situation is relatively weak. china,we always look at and we think they have a high savings rate. capital inbundant the economy. how true is that characterization of the chinese economy and how much do they need foreign capital at this point? i think there is a significant need for foreign capital, and that is why we are seeing it in the banking industry, the bond market that you are definitely seeing significant opening in these areas. the bank of china just started recapitalizing. about howstimates many banks and how large the recapitalization of the chinese banking industry is going to be over the next couple of years

and then over the next five years to get in compliance with basel three. there is an enormous need for foreign capital. even foreign capital is not going to be able to meet the capital needs of this economy over the next five years. those capital requirements are simply too large even if you include foreign capital. a lot of that is going to have to come from china at the end of the day. haidi: we know that it is a balancing act, an unenviable balancing act, particularly when we are seeing a slowdown going on and it is always whack-a-mole when it comes to addressing risk in the economy, but what is the biggest achilles' heel for china at the moment? basically local governments are probably the number one place that i would look for and also the real estate market. there's estimates as to how much debt is off the books for local governments and also relatively

significant slowdown in a lot of , even aste metrics they are trying to get growth administrative restraints a lot of cities to encourage consumption, but if you look at household expenditures, the biggest jump in household expenditures was in how much people were spending on their homes and rental properties, and that is having a significant constraint on the overall consumption picture that we are seeing in china. shery: with regards to the local government, does that were you even more that one of the headlines and most meaningful policies that came out last week increased focus on local government bonds, special bond issuance? chris: yes, because what they are basically trying to do, i think a lot of the indicators are that it's something cannot be repaid. they are trying to roll it over

into the long-term bond issuance is similar to what happened in 2013. so there is basically a need to stimulate and rollover longer-term debt. that is one of the reasons we saw an increase of 15% in the overall issuance cap. shery: is that why for the chinese economy, when we believe 6% isdp numbers of 6% -- just not good enough for the economy? chris: that is one of the key issues. let's assume that real growth thoughn at 3% or 4% even that might be solid, that is not enough to keep the financial machine motoring. that is one of the key issues. look at china. is only increasing by

.1%, and there is very little reason to believe that number is going to accelerate over the rest of 2019, so if they are looking at flat price growth, that is going to cause a lot of pressure on the industrial giants, especially in base metals and commodities. shery: the chinese government has been pushing to get into passive investments. how much will the msci inclusion announcement help financial markets, especially getting the much-needed foreign capital? chris: as a percentage of the overall bond market, it is not going to have a major impact. it definitely will have an impact, but not a major impact. that really provides china some breathing space. fxt helps to balance the flows to stick pretty closely to inflow and outflow that they have imposed on themselves. haidi: what is a flexible but stable -- does a flexible but

stable policy actually mean? chris: your guess is as good as mine. what we have seen over the past couple months is they are trying to reach a deal with trump. track the u.s. dollar index quite closely. , late november and december, around the time of the argentina meeting, those two numbers have significantly diverged. basically stable probably means the inflow/outflow ratio, they are keeping it would close to 1:1, but flexible means there will be some movement, and basically, it is the reverse u.s. dollar index, even though that wedge has continued to grow in the past three months to four months. i have not checked at this point. shery: thank you so much. joining us from ho chi minh city, vietnam.

we will have more in-depth coverage throughout the day. we will be joined by a co-author of write capitalism and privatizing -- red capitalism and privatizing china. this is bloomberg. ♪

shery: we are counting down to asia's first major market opens this morning. japanese futures up .1%. we are seeing the japanese yen a little bit under pressure. we are expecting paralegal kuroda to make an -- haruhiko kuroda to make an announcement. this is "daybreak asia." i am shery ahn in new york. haidi: i am haidi stroud-watts in sydney. theresa may scored a rare victory. the house of commons over moral month --pported a overwhelmingly supported a motion to delay the exit from the e.u.

ceo ofjoined by the advisory firm international capital strategy. serves as a fellow at the council of foreign relations. great to have you with us. where do we go from here? a two-month extension is not particularly long in the sense that we have been working on this for two years now. it feels in many respects like we have just come back to where we started. >> it has been a pretty interesting week this week in u.k. politics. this third vote that was taken to actually delay article 50, brexit was ae of victory, as you said, but only because the first two votes this week were, you know, the first vote was on a withdrawal agreement. it was resounding rejected. the second one was resoundingly

rejected. this gives her the authority to go to the e.u. and ask for more time. how much more time and what are they looking to achieve with that time? is going toe.u. take a hard look at what is the purpose of the extension? i think they probably have some clear ideas about what they would consider an acceptable purpose. lowering terms of the of risk, if you want to look at it that way, we are seeing some relief when it comes to a no deal brexit. certainly not much relief for policymakers in terms of how much uncertainty is still in the situation. heidi: i mean, there has been a great deal of uncertainty for the past several years, and obviously, financial firms and businesses generally have spent a lot of money, time, and effort investing in contingency plans for the worst-case scenario, which would be a hard brexit

with no deal at the end of it. now, with this extension, you have an additional prolonged uncertainty. hopefully, there will be a little bit of light at the end of the tunnel, but to get there, they need to agree with 27 e.u. members on what are the terms of this extension and for how long? remember, the e.u. has its own politics to contend with. shery: is the extension a done deal when we still have not seen a unified position from the e.u. ? heidi: no. you have european parliamentary elections coming up in late may, so you really have either a request to extend to a short period of time such that the u.k. would not be legally bound to actually run in those european parliamentary elections. after the whole of the brexit negotiation in the u.k. and with past two yearshe

would be really quite something to see the u.k. have to legally participate in european parliamentary elections. that is one of those timing barriers coming up down the pike. so that would need a short-term extension. time toneeded to have ark through a soft brexit, withdrawal agreement, or figure out how they would manage a hard brexit, or if they take, you know, the decision to extend far beyond the may parliamentary election date in the e.u., then you come up against the need for either a new referendum or new elections in the u.k. i think those are the only reasons the europeans would look at giving a big extension. shery: thank you so much for joining us today.

plenty more to come on "daybreak asia." this is bloomberg. ♪

shery: welcome back. let's get the latest on the boeing drama. in the last few hours, the company says it has paused deliveries of all 737 max 8 aircraft. that comes on top of earlier news that they could be routed through april at least. ramy inocencio is here with me. what are the details? ramy: on top of the positing of boeingse 737 max 8s, says they will keep building them, but they will be watching if there is any hit to demand. but with regards to what has been happening in washington, d.c., house lawmakers were briefed by faa officials, saying this could take somewhere on the order of six weeks or so because they have to update the software that is installed in all of

those planes. they have to train up all the pilots who are commandeering those flights. said, donald trump himself is continuing to weigh in. let's take a listen. pres. trump: i hope it will be very short period of time. what ite to find out is. the biggest thing is they have to find out what it is. i am not sure if they know. i thought we had to do it. we had to take a cautionary rout. sophie: one interesting thing is ahas also developed report from the new york times saying air traffic controllers saw it moving up and down. he said he did not know exactly what was happening, but we are trying to connect the dots as this investigation continues. hopping into the bloomberg terminal, looking at the share price, this has been a major fall over the past nine days. we can see that boeing has been oversold in this gtv terminal. this was mid-november. there could be some light at the

end of the tunnel. haidi: let's get more on boeing's woes, now spreading to japan. sophie: you're watching japanese carriers as japan joins the ban of 737 max 8. an order of the 20 starting in 21. we are watching for reaction regarding unclear information a bit of a nikkei -- amid a nikkei report. we are checking in on the yen ahead of the boj decision. decline in six. when it comes to the futures, let's check it out. the kospi may resume declines. looking ahead, several strategists this month have turned their outlooks for the nikkei and the topix. the median forecast is for the nikkei 225 to hit -- by year-end. so much for you

that. coming up on the next hour of "daybreak asia," we will be joined by a former boj board member as they prepare their latest policy decision. ♪ ♪ want more from your entertainment experience?

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haidi: a very good morning, i'm haidi stroud-watts in sydney. asia's major markets have just opened. shery: good evening from bloomberg's global headquarters in new york, i'm shery ahn. sophie: i'm sophie kamaruddin in hong kong. welcome to "daybreak: asia." haidi: our top stories, talking trade. president trump should have news in the next month. a summit with china is put on hold. theresa may wins backing for her plan to delay brexit. the european union wants to know what will change. 737 maxoeing causes all

8 deliveries with them at least being grounded through april. let's get to the market action with sophie. sophie: taking a look at the mood in tokyo. gains for the nikkei and the 225 adding .06%. we see the optimism paired with trimming. we had the medium forecast as of february at 23,000 by the end of 22,000. that has been trimmed. the yen has been trading at 111 against the dollar. under pressure and heading for a fifth weekly decline. the focus is on the boj's policy decision do this morning. the economy will be closely watched. if the boj suggest is the policy will last longer or debt keeps growing downside risk. let's check in on the kospi. .0is resuming declines off

1%. switching the board to check in on how the mood is. you have asx 200 looking at a little bit of change. u.s. china trade talks will be stalled, causing that. the likes of bhc and reality of pressure. under pressure due to the iron ore prices here on out. the aussie dollar gaining some ground up point &. -- .10%. andaw weak chinese eco-data trade talks with the u.s. remain the focus of investors. sophie kamaruddin in hong kong. let's get the first word news with ramy inocencio in new york. ramy: president trump says there will be news on a trade deal fourchina in three to

weeks. earlier, sources said a summit had been delayed until next month at the earliest. china wants a formal state visit to washington, rather than a florida.ppearance in earlier report suggested a summit to take place this month as a follow-on to president xi's upcoming tour of europe. >> one way or the other we will know in the next three or four weeks. when that gets done, it will be something people will talk about for a long time. ramy: the senate has set the scene for a showdown with president trump by rejecting his declaration of a national emergency to pay for his border wall. the vote was short of the 67 and needed to override any white but is seen as an embarrassing show of republican disunity with the white house. the president took to twitter to say he looks forward to vetoing the resolution. the boeing 737 max could remain grounded through april, bar from flying until planes are given a flight control software update. boeing and the faa are racing to

the processfix, but is expected to take six weeks. the flight recorders from the ethiopian airlines plane have arrived in paris for an analysis by experts. the u.s. is sending investigators to help. is urging oil producers to cool production levels to prevent the return of a surplus later this year. the cartel said supply is outstripping current demand growth. risk of inventories becoming too high in the fourth quarter. allies will meet this week to review output curves and implementing to revert a glut prices.nd oil global news 24 hours a day on air and at tictoc on twitter powered by more than 2700 journalists and analysts in more than 120 countries. i'm ramy inocencio, this is bloomberg. expectsresident trump news when it comes to a trade deal with china when it comes to the next three or four weeks. this comes as the country's are

said to have delayed a summit next month at the earliest. tom mackenzie is with us. where do we stand when it comes to the negotiations? seems that the timeframe is being pushed back. the end of april the earliest is what our sources are saying. we have heard that chinese officials have been planning for president xi on the back of a european tour later this month to add on a trip to the u.s. to sign off on any deal. chinese officials have no scrapped that plan -- have now scrapped that plan. a deal is still the most likely scenario, but we do know, as light hauser has put it, there are major hurdles. many major hurdles are around the fading out of joint ventures and the enforcement mechanism,

and of course, tariffs. from the chinese side, their priorities are trying to persuade the u.s. that once a deal comes into force, the tariffs on $250 billion worth of lifted.e they also want to create the impression that this is not a one-sided deal. they are concerned president xi could go to the u.s., only for trump to walk out at the last minute. they are concerned he can pull the rug from underneath them on any potential deal. they want to get as much done before they send president xi over to sign off on any deal. atlooks like we are looking a longer time frame. most people expect a deal to be signed off on, given the significant conversations need to continue. shery: one thing that could help with relations with the u.s. is the fact that the mpc is expected to rubberstamp an update on foreign investment law. how significant could the move be? tom: absolutely.

officials involved in those negotiations with the u.s. on trade will hope that this for an investment law will go some way to addressing those concerns. to gotes are expected across to the great hall of the people in the next 30 minutes or rubberstampoff and the new investment law, which is pretty broad sweeping. in. , it levels the playing field for foreign investors and businesses doing business here. forced tech transfer, it would treat foreign businesses as equal to their chinese counterparts. it is being met with a lot of skepticism by the business lobbyists, the europeans, the council. the business they are skeptical as to how it will be implement it. there's concerns parts of the law could see many foreign businesses here have to rework

their contracts with their chinese counterparts to ensure they are aligned with this new law. that could be a process. they have been given five years to do that. it could have all sorts of complications. there are 300,000 joint ventures operating in china. it will come down to hall the law is interpreted by the different ministries in china, and how it is implemented. thee is skepticism among foreign business community over just how far this will go to address key concerns about operating in china. it comes at a time when the economy is slowing. it is a less enticing place to do business for many foreign executives, at least. shery: as we wrap up -- haidi: as we wrap up this fortnight of political pageantry, what else are you looking at? the timeframe today, 9:00 local time is when the delegates will be in the great hall of the people to rubberstamp these

laws, this work report, at the end of these 10 days of discussion that have taken place. the closing ceremony at the great hall of the people. we are then looking ahead to the premiers press conference, which is awaited at about 10:30. questions will be put to him by many of the state media. there's an opportunity for him to clarify some of the discussions going on in the last 10 days, particularly around time frames. one thing we are looking out for is whether or not he gives details on the new tax cuts and when they will be implement it. particularly the cut for manufacturers. that can be significant we may get details on the timing. shery: tom mackenzie from outside the great hall of the people in beijing, thank you so much. prime minister theresa may won a rare victory in her brexit drama with the house of commons backing a plan to seek a delay to the divorce.

we are following developments in london. a welcome piece of good news for the prime minister. her brexit plan is still in play? sebastian: it looks like we will get a vote probably once more on her deal. that will be early next week. the arrangement will be this. you can pass a deal, then there is a short brexit extension until june 30. just to rubberstamp the deal, nothing fancy. that could give brexit record opportunity to reverse the course of the arrangement. you need unanimous approval from the eu 27. they are a little bit on united at the moment on how long to allow that. there is some indication that it will be two to three months if a deal is approved. if parliament rejects it and we need longer, this is where the divide starts to appear.

there is also suggestion that they could back a delay of at least one year. one thing that is clear is they need a good reason. it can't be a good reason to kick a can down the road. may has to come up with a plan to present to say "this is what i will use." shery: -- haidi: good the third time be lucky for theresa may? tom: depends on how -- sebastian: depends on how much she can scare the hardliners on the right wing of her party and the northern irish party. this is essentially a threat. she says the long -- she says it could be a threat for another referendum, and also, if no arrangement happens by march 25, she will let parliament have a chance to take over all of this. it is really in palatable to the dup and the right of her own party. it's critical she gets them on board.

a report in the times newspaper before the deal said there was talks of a secret compromise between the government and these wings. it will be interesting to see just whether she will be successful in that endeavor. haidi: sebastian with the latest on brexit in london. coming up next, not long until the latest bank of japan decision. we speak to the former boj more member -- board member sayuri shirai. shery: we get into emerging the head of the mei shares. this is bloomberg. this is bloomberg. ♪

shery: this is "daybreak asia," i'm shery ahn in new york. haidi: i'm haidi stroud-watts in sydney. the bank of japan will wrap up its latest policy meeting in the next few hours. it's expected to go in the same dovish direction as other global

banks. not with any change to policy tools, but officially recognizing the japanese economy is weakening. economics policy editor kathleen hays is with us. one goal is to revive the economy's inflation. how can they grow more dovish? kathleen: we know the governor, head of the bank of japan, has resisted this. we are not talking about a change in policy tools, no change in yield curve controls, no change in asset purchases, bonds, and dts. tt's been considered a til because they recognize there is a weakness in economy, export production, and global growth. it's a slowdown in global growth. china is very largely to blame for some of the slowdown we are seeing. we are looking at exports. it is far right hand side, down a .4%. the most -- down 8.4%.

the most they fallen since 2015. we will look at a very important signal for many big industrialized economy, machine tool orders. 10t month they sank to a year low. coming down from that blue line to these bars. the yellow part is orders from overseas from foreign buyers. they were down nearly 22%. when you look at china slowing down, the u.s. china trade war, you understand what's going on. our economics team has the tracker for japan. it is pointing to a drop of 2.5% in the first quarter, down from 2%. they expect a revival. when you look at the consumption tax, there are still clouds. how can inflation rise when you will have weaker growth? another interesting to put in the mix is the head of japan's bank lobby is also the head of

japan's third-largest bank. he was speaking earlier about his complaint with the bank of japan's policy. it is tough on banks. the yield curve is difficult. boj should not be too insistent on achieving the price target. they should adopt a more flexible inflation target with a wider price range. they should also be more cautious about the side effects of the prolonged ultra easy monetary policy. kathleen: very interesting that japan's finance minister said earlier in the week when he was speaking that maybe the bank of japan could be more flexible here. i think this is something that when he faces the press conference, so many questions will be on the table. they were pushing a different direction, more dovish or less the fish -- dovish. shery: thank you so much. we cross now to tokyo, and our

next guest sayuri shirai is professor of economics and former boj board member. always great to have you with us. kathleen just laid out the reasons why the markets could think we need to get more dovish with the boj. we are talking about a week reading in growth inflation and trade. could they blink and follow other central banks more dovish? perhaps not in this meeting, but later in the year? sayuri: i think it is possible. happened to the exchanges, especially the japanese yen against the u.s. dollar, japanese stock prices at this moment, it is moving a comfortable inch. that is very good. at this moment, i think the boj will take any additional monetary accommodation.

in case we start to see appreciation of the yen, together we see a curious sign of economic slowdown. the boj probably has to take additional policy tools. if the governor wanted to act, where would he have leeway to act? would we go further into interest rates? are we talking about buying more assets? perhaps expanding the monetary base? what options does he have? sayuri: the bank of japan can purchase the etf, that's where they are doing from october last year until now. they can continue to increase it. they can do it within the current framework. they already made the adjustment from july last year. is i thinkan do lowering the 10 year yield is not an option because of the impact generated on the

financial sector. rather than lowering the 10 year yield, the boj can expand the om plus or -0.2% to 0.3%. the bank of japan can lower the negativeield in the territory. otherwise, i don't see additional options now. speaking heard earlier in parliament saying that there is the 2% inflation target, and maybe there shouldn't be that much focus on it. that is the boj benchmark. from that.long way is there a good argument they should stop looking at that? given we know there are many structural reasons why inflation is needed, not just in japan, but globally?

sayuri: over these few years, i insisted the bank of japan should adapt the inflation target range. plus or -1%oduce target levels. it is not a good idea for them to completely drop out that thereet, given will achieve it and are considering whether they should introduce a stronger monetary policy framework this year. if the boj completely abandoned the 2% target, that may cause sharp appreciation for the yen. it is not a good idea for them to do that. other than that, introducing target range is a regional -- reasonable option. haidi: they are tied up with the 2% target.

we area look at whether at the peak of growth in japan. we have been above trend for so long. this is our japanese gdp tracker pointing downwards. the gdp real annualized levels we are seeing here. we are going into a year where we are looking to have the tax hike. last time that was put in place, it was disastrous both for sentiment and the rural economy. do you see that being a major risk this year? sayuri: yeah, one thing we have to note is that the january data, according to the business conditions index, they have adjusted the assessment to downside. that means they think -- they are signaling a possible chinese point. let's see what will happen. with theo check japanese economy if entering

into that stage. the most important thing is the business capital expenditures. that was a major driving force behind economy growth. according to the recent business survey, they say they might frome a capex spending april this year. happens, globally, japanese economic growth will be slower than they expected. in that case, i think people may start to think about what will happen to schedule consumption tax hike, and whether the boj needs additional monetary easing. haidi: because a risk to the economy could be upcoming, negotiations on trade with the u.s. for japan? sayuri: that is very important for japan, especially with the growth of exchange rates being included in the japan/u.s. trade agreement.

if the exchange rate grows, it will be included. should not intervene in foreign-exchange markets. somethinglso create for the appreciation. i think they are trying not to include the exchange rate growth. that is a very important issue for japan. haidi: always a pleasure sayuri shirai, university professor of economics and former boj board member. you can get a roundup of that story or the stories you need to know to get your day going in the friday edition of "daybreak." bloomberg subscribers go to your terminal. it's also available on the mobile in the bloomberg anywhere app. customize the settings to get the news on industries and assets you care about. this is bloomberg. ♪

haidi: a quick check of the latest business flash headlines. is appeared in court to deny it product banks by concealing business deals with iran. the plea marks their dissents against conspiracy and wire and bank fraud. the cfo is charged in the case. she remains in vancouver. she maintains the case against her is politically motivated. hired a fun founder after he was charged this week in a wide-ranging college admission scandal. the business focus on social goods impounded its growth investing. other parentsith in the indictment detailing bribes to get children into top colleges. they are allowing investors in the fund to withdraw their money. boeing'sming up next,

problems with the 737 max 8 give china an opportunity to store. we look at the competition, next. this is bloomberg. ♪

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ramy: this is "daybreak: asia." i'm ramy inocencio with your first word headlines. president trump said there will be news on a trade deal with china in three to four weeks. theces said it's possible presidential summit was delayed until next month at the earliest. china wants a foremost a visit to washington, d.c. rather than a low-key appearance in florida. early reports suggested it could take place this month as a follow-up on president xi's upcoming tour on europe. >> we will know in the next three to four weeks. if that when gets done, it will be something people will be talking about for a long time. ramy: u.k. prime minister theresa may has won a rare victory with the house of commons endorsing her plans to

delay brexit. that result means her twice rejected deal remains in play. offering a choice of backing her plan and delivering brexit with a delay, or risk it never happening at all. brussels is open to a postponement, but the eu wants to know what the prime minister things will change. reports are coming in of explosions in southern gaza after tel aviv was targeted by rockets. no one was hurt, with one rocket landing outside of the city and the other falling into the sea. some of media reports said missiles were intercepted by israel's defense system, but that has been denied. israeli television says it's the first time tel aviv has been targeted since the gaza war of 2014. india will continue to implement economic reforms, irrespective of what happens in the upcoming general election. the finance ministry says that as its recent range of measures take effect. the economy's potential growth rate will raise between 7.5% to

8%. the global slowdown and the trade war are noted as important risks. global news 24 hours a day on air and at tictoc on twitter powered by more than 2700 journalists and analysts in more than 120 countries. i'm ramy inocencio, this is bloomberg. let's see how asian markets are doing with sophie. sophie: asian stocks are building on the weeks with japanese stocks holding a two-day drop. the yen is heading for a fifth week leading losses. observers are waiting to see if the central bank will take action in light of sluggish exports and production. the aussie dollar nudging higher on news that a u.s./china deal remains elusive. the asx 200 is looking a little changed. let's look at some movers across the region. i want to highlight one in sydney, retail food sinking to a ofsh low amid allegations

insider trading and tax appointments in a parliamentary inquiry. that south korean prosecutors are searching the headquarters of the curve yet exchange to the biotech firm's ipo. omnitel is tanking, falling to the weakest level since 2009 as it is reported that japanese prosecutors are seeking a 10 year sentence for the former ceo who was on trial for alleged embezzlement. i want to end on some advancements in the region. camacho rising as much as 2%. the rating was lifted on its stock to outperform on solid demand seen outside of china and indonesia. ground,ares are gaining rising after a nasty result and climbing ahead of this sunday's opening of major league baseball in tokyo.

shery: thank you so much. jpmorgan chairman and ceo jamie dimon says the longer the extension to brexit, the better, and a chance of a hard exit is only 10%. toaking exclusively bloomberg, he said he is prepared for all even to quality -- all events wally's. -- eventualities. >> they didn't really prepare the last two years for what i call a hard brexit, a new deal brexit. a lot of things will change immediately. we have the changing economy. we are prepared, because we have to be. . we need some kind of extension. the longer the better. think about need to what they are trying to accomplish and the downsides. >> a 10% risk? 20% risk? if it does happen, does it freeze the markets? >> i would say 10%. it could freeze the markets.

that, wer we get to will go to war room status to make sure we are prepared to make sure that clients, demands. something like this will have unintended consequences we should prepare for. >> can london survive as the financial center? brexit or hard brexit, london's financial status will diminish over time. you will see demand that more technology,ne, risk, credit, order, compliance, i think it really changes the forecast you expect for the financial center. hopefully it will be not quite what it is today. >> you mentioned brexit and china. how worried are you on china? how should we look at china? the trade issues are real in china. they need to be resolved across all these issues. to be resolved.

we can both parties want it. they are complex. they are talking about hundreds of pages of memorandums. if it doesn't get resolved, it's reasonable for the markets to be worried. china's economy in 30 years will be bigger than the u.s., but they have a tough road. they are smart, but they don't have enough food, water, and energy. they have corruption. in terms of research, capability, knowledge, rule of law, they don't have all of that. they will have a way to go. they will grow now, but there will be times in the future where there will be real bumps in the road. >> what does that mean? as an investor in china, you slow down until you see the lay of the land, or go all in to get market share? >> we are all in. we are not slowing down. people are slow down because of trade. not what i just said. theythey do have problems, may build up huge imbalances in the financial system. that will come home to roost one

day. right now, they can handle it. china can micromanage -- china can macro manage. they can tell the companies and the people what they need to do. that will not always be true. one day, the imbalance may cause a deduction, a recession. >> a financial crisis kind of disruption? >> we had a financial crisis in america, markets panic. they can handle that today. in five or seven years, they have to be careful of him balances. thebigger the markets get, more they can control what they would want to control to stop that from happening. i'm not saying it is not going to happen, but they are so used to getting to 7%. the second they don't, i think the rural -- i think the world reacts more scared than they should. haidi: that was jamie dimon speaking exclusively to francine lacqua in paris. the boeing 737 max could be grounded until at least may. this as boeing suspend deliveries of the jet.

the cockpit recorders arrive in france twos be studied. richard engel joins us now with the latest we have learned -- stephen engle joins us now with the latest we have learned. so much thate is has come to light. the recorders, data, and voice recorders arriving in france. they will be decoded. no word on how long that will take. aviation regulators and flying public around the world want to know what caused this airliner asmarch 10 to crash, as well if it is linked to the october 29 crash. already more than 40 plus countries have grounded it, including the faa, which followed suit yesterday. the most recent development, boeing has caused deliveries from its -- paused deliveries from its company. they are aiming for 57

deliveries -- completions a month this year. that probably is in jeopardy. it appears it could remain grounded through at least april. until may, flights will not resume until the planes receive updated flight control software. it could be at least six weeks for that to happen, or more, depending on the additional training needed for pilots. the longer the grounding, the more troubling it is for boeing. it will trim 737 max orders. it originally ordered 39, it trimmed it to 20, now it will trim it further below 20. the french president will also has toing them when he china. get morecomes as we chilling details about the first few minutes of the flight that ended after five minutes, crashing in ethiopia.

the new york times is reporting the pilot signaled to the tower within one minute that he wanted to return. voice, butirly calm after three minutes, the plane, according to those speaking to the new york times, started going up and down by hundreds of ant and the pilot requested emergency return to the airport. very chilling details coming endedhat cockpit as it incontestably 5 -- in catastrophe five minutes later. we are tracking the latest on this story. haidi: how much of this could be an opening for china's newly developed commercial jets? they are keen and have been on talking up this development. could it take some of the market share that is left open? stephen: potentially it will. breaking that duopoly of boeing

and airbus will be tough. they have perhaps a plane to do that, the c010 began test flights. it is to begin in 2021. it already has 815 orders to 20 customers. you are seeing the test flights. they also have the arj 21, which is more of a regional jet. they are also developing the cr 929 as a wider body airplane. they are developing it with a russian company. they have eyes set on breaking the duopoly. interestingly, commack said they will need 9000 airplanes over the next couple of decades. two thirds of them will be the single aisle planes like the 737. shery: this is also having an

impact on travelers. india now boosting airfare. shery: -- stephen: we are getting reports that with the grounding in india and canceling of flights, there has been gouging on ticket prices. we see average fares on 14 main routes in india jumping more than 65% on thursday alone. ticket sellers taking advantage fo th -- of this grounding and cancellation of the flights as passengers have to rejuggle their plans. shery: thank you so much for that, stephen engle with the latest. coming up next, slowing but growing. the state of the global economy with blackrock's head of emd high sure -- shares. this is bloomberg. ♪

shery: this is "daybreak: asia."

i'm shery ahn in new york. haidi: i'm haidi stroud-watts in sydney. likext guest emerging-market equities, particularly in asia. joining us is blackrock head of emea ishares, stephen collins. let me talk about your positivity when it comes to emerging markets, it has become quite crowded. how much further is there to go? necessityuire as a some sort of resolution to the trade front, and also a market weakness in the u.s. dollar this year? clearly there has been a pretty solid rally both across emerging-market assets, or increasing fixed income over the last 15 months. on ongoingend progression in trade talks. that is increasingly getting priced in. we are coming from a situation 2018,for all of 2017 and

investors were gradually shifting away from emerging markets. allocations have been relatively low. that's why i think we see a lot of flows over the last two months, really since chairman powell's comments at the end of 2018 that sparked the move, and probably before the risk on move. in terms of the dollar, it depends on what currencies you are looking at. against emerging-market currencies, we will continue to want to see em currencies performing. i think that is very possible. one of the reasons is because there is a renewed bit for yield around the world. what's happening with central banks on the back of the weakening economic data in q4 is we are back to a world where investors are looking where to get yields. high-yielding currencies are involved. we think it could continue as we look into the second quarter of

the year. haidi: in particular, we see chinese stocks really go gangbusters in the past few weeks. having said that, they are coming off of being deeply unloved. given we are seeing a number of chinese markets very much overboard territories, what do you see? stephen: the short-term move has been pretty drastic, 40% in a short period of time. it's hard to see us maintain that pace. you are starting to see some impact of the stimulus come through. i think that will continue to give confidence to global investors about china. i think that removes the concerns of the trade deals, but we still need to see that ongoing progress to some sort of conclusion to the trade talks. haseneral, i think there been a good amount of money going into china. there is further upside. i think it will be slower.

i think china is just a market where global investors have started to put some reallocation into it. we are coming from a situation where two or three years ago we had a huge move in china a-shares. it was very short-lived, a very aggressive rally followed by a significantly sharp slump. that is something investors remember. there will be caution through the year given how quickly the market has moved in the last 32 months. shery: those trade negotiations, we are getting the latest lines hasng that china's premier been talking to ambassador ambassador -- lighthouses are. they are getting a substantial progress on the that they are making material progress on that for the day.

given this trade optimism we have seen factor into the markets, is this hype going to lead to a letdown? what is the risk that if we don't do anything substantial that the markets will die? i think if there is anything we have learned in the last few years, the risk of geopolitical hype and disappointment is pretty high. the other thing we have learned is markets have a pretty good habit of seeing through some of this. this is likely to continue to be a fairly volatile ride. we do believe it is in the interest of both parties, as well as the global economy, that we end up something that works for china and the u.s.. increasingly, trade concerns have been less of an issue for markets over the last two or three months. that's partly because we have seen this progression. there's always risk of a letdown. i don't think it would lead to a

dive in markets. even if you have a short-term setback, we believe it will be on the path towards getting a longer-term deal in place. bearing in mind, i think the markets are very driven by central banks at the moment. to a slowing economy, one were central banks are more cautious. we have seen in the past that it reasonably good environment for risk assets. as long as that remains in place, they said each other. if you have some challenges, in terms of trade negotiations, and concern of what that means for the short-term outlook for the economy, it argues for the fed to be on pause. all of that weakens the dollar and leads to better environment both for yield assets and globally.

shery: do you expect the u.s. economic exceptionalism to continue this year? pretty seen some disappointing economic numbers out of the u.s. lately. the challengenk in the u.s. is seeing through the impact of what we had with the tax cuts, the repatriation of assets, and how much of that was such a short-term boost to the economy in the first half of 2018, versus something more reflective of the global economy. if you look at economic data, you have a slow. if you look at data elsewhere, it is similar. earnings have held up significantly better in the u.s. than they have, for example, in europe. -- for thert market stock market, it was good. the s&p and u.s. stocks were really the only game in town. the u.s.cation between

equity market and most equity markets around the world was something we have not really seen for a significant amount of time. i think that has changed. in a world where slower global economy, partly driven by the u.s., actually is a world driven by central banks, you see investors look for the yield trade, you see things like emerging markets. we are also at a point where if we look at relative valuations, there is where investors are underweight. over time, we will start to look more interesting. i think there will be more investors looking for relative value away from the u.s.. shery: thank you so much for your thoughts, stephen cohen blackrock ahead -- head of the mea ishares. you can watch live and also catch our past interviews. conversation. the send us instant messages during our shows.

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haidi: this is "daybreak: asia." i'm haidi stroud-watts in sydney. shery: i'm shery on in new york. let's get a quick check of the business flash headlines. tesla's problems in china seems to have eased. sources tell bloomberg chinese customs lifted their suspension on the model 3. more than 4000 teslas were held

at ports around the country after officials found irregularities in paperwork. tesla said it reached a resolution with customs and the sales were not affected. is betting heavily on the u.s., adding about $3 billion to a longtime investment plan. it raises their u.s. spending to almost $13 billion over a five-year period, including a revamp of many production cars and 600 new jobs. the move is partly based on concerns over potential tariffs in the new north american trade deal. shery: ubs agreed to pay $48 million to settle allegations by hong kong security's regulator that it mismanaged three ipo's in the city. it also received a one-year ban from acting as an ideal sponsor in hong kong. it's not only bank being punished. charters, morgan stanley, and merrill lynch are facing fines for what the regular calls

failures. haidi: i would be controlled investment fund has halted new business with goldman sachs, adding to the fallout after its role in the one mdb scandal. action inbegan legal november, seeking damages for what was goldman's central role in the scandal. part of the bank is more lucrative where it originated. let's get you a preview of what to watch in chinese markets coming online. sophie: we are on earnings watch results do from w group and china coal and product announces earnings after the close in hong kong city. expect growth to moderate for the fashion brand after spiking in the first half. they don't see the results acting as a positive catalyst for prada. jumped 23%, value beating estimates of growth fueled by china.

scrutiny andicked slowing consumer spending. we are going to see if chinese advertiser beaumont can continue after soaring on its trading in hong kong. could that set the stage for today's debut? three or four of these new stocks declined, including malaysia and a metal products player. shery: thank you so much. that's it from "daybreak: asia." wekets coverage continues as look ahead to the start of trade in hong kong, shanghai, and shenzhen. the china open is next. this is bloomberg. ♪

♪ to "bloomberg markets: china open." national people's congress is holding its closing ceremony. yvonne: i am yvonne man. we are counting down. david: let's get your top stories, trade. president trump says he should have news in the next month, but a summit with china on hold. yvonne: theresa may delaying brexit. the eu wants to know what will change. one of