♪ haidi: i am haidi stroud-watts in sydney, where markets just opened for trade. shery: from bloomberg global headquarters in new york, i am shery ahn. sophie: i am sophie kamaruddin in hong kong. welcome to "daybreak asia." ♪ ♪ haidi: our top stories this monday. deutsche bank confirms talks with commerzbank, aiming to retain a stake after the potential merger. theresa may hopes for first time lock, warning hardliners that failure to back her bill could

see the u.k. remain in the european union. to review gunows laws, the prime minister promising to move as fast as possible. shery: in the u.s., we saw the dow gain a third consecutive session, the s&p 500 saw the best week since november. with was a lot of volume, options and futures in the indices and stocks expiring at the same time. a a lot of volatility because of that. continues,lly broadcom lifting semiconductor stocks on positive earnings. the nasdaq at the highest level since october. a little bit of pressure for s&p futures, with investors focusing on central-bank boe, and, the fed, several central banks in asia making decisions. see how we are shaping up in asia? sophie: regional central-bank

decisions from the philippines, taiwan, indonesia and thailand this week. see aof that, we positive start to the week, asx 200 advancing after faltering on friday. technology among the leaders so far at the start of cash trade in sydney. 50 continuing to climb, at fresh all-time highs even as we see several economists from the new zealand institute of economic research lower their gdp growth prediction for 2019 for new zealand. we are seeing japanese stock futures gaining. they open in less than two hours, which comes after the boj kept things unchanged on friday. haidi: let's get you the first word news with ramy inocencio in new york.

ramy: a new bloomberg survey expects the federal reserve to bring rate hikes to an end after one more increase in september, marking the peak of the cycle with the upper end of the target range at 2.75%. in december, the same survey expected two hikes this year with the cycle peaking at three point 25%. saudi arabia says opec and its allies still have a lot to do to rebalance the oil market, but they insist they will do what is necessary. the cartel and independent producers met in azerbaijan, and the saudi minister said the group needs to continue to restrict output until at least this june. he says excessive u.s. inventories mean a risk of short-term oversupply. initial data from the ethiopian airlines flight recorders show similarities with the lion air disaster from five months ago.

information from the so-called black boxes have been downloaded, and the ethiopian transport minister says there are links to the indonesian crash. authorities hope to release a per luminary report within one month. onearthquake and landslide the popular indonesian tourist island of lomboc killed at least five people. the quake struck sunday afternoon. least 58ay evening, at people died and thousands were displaced by flash floods in eastern papua. most of that water has receded, but agencies expect mille -- the number of deaths to rise as it has been not possible to reach affected areas. global news on tictoc on twitter, powered by 2700 journalists and analysts in over 120 countries. haidi: germany's biggest lender and one of its biggest rivals have confirmed they are in talks of a merger. deutsche bank and commerzbank ended months of speculation,

saying they are in contact but will only emerge if the deal makes economic sense. let's get details from our bloomberg editor in washington. tony, why the timing of this potential tie up? tony: there's a bunch of factors coming together here. you mentioned some of them. the share prices of both banks are at rock-bottom. the turnaround certainly at deutsche bank, which is the bigger of the two, has been floundering, and of course you also have the bigger macro picture of very low interest rates, and the ecb has not followed the fed, as we know. that's creating a very tricky environment for making either of these two banks profitable again , and that is where the german government, perhaps it is not losing patience, but sees pressure to get something going

to move things along. shery: we know that deutsche bank and commerzbank together employ 140,000 people, more than half of them in germany. what would the german government really want from this merger? tony: that has been one of the big questions in our reporting. we have reported that getting the assurances that the government would back the two banks against the backlash of job cuts in germany was one of the essential things. all this is still in flux, chancellor angela merkel has been said to be somewhat hesitant about the whole project, which seems to be driven more by the finance ministry. the job cuts are a huge issue that would certainly have to be addressed. there's also the risk of taxpayers being stuck with the if the government felt it

inted to sell its share commerzbank, which is why you have the story today that they would like to retain a share, if the merger comes to pass. of how the deal eventually stacks up, does it appeal to investors? tony: all the reporting we have done says that investors are quite skeptical. one of the reasons is that most or it ise merger, quite possible the merger would require capital increase. a 8analyst talked about billion euro injection. that would dilute investors. is never a nice prospect. the more general issue, you are taking two it is fair to say banks at a lows,

in their fortunes. combining them, does that actually create one strong bank? of course, the skepticism also comes from that question. shery: sure. rather we will see synergy or not. tony, thank you so much. tony czuczka there. dayb , more on subscribers on terminals. you can also customize settings to get only news that you care about. shery: u.k. prime minister theresa may and chancellor philip hammond are putting the ry euroe on hardline to skeptics to back her twice defeated brexit, saying failing to do so risks subjecting the country to a long delay in leaving the european union. kathleen hays has the latest

brexit developments. the prime minister has lost twice. could the third time be the charm? kathleen: maybe just the pressure of the clock ticking, noteven the brexiteers wanting to wait too long. they can't ask for a hard brexit now. it is interesting, the u.k. chancellor of the exchequer, philip hammond, spoke over the weekend and said they are trying to get more of the euro skeptic, pro-brexiteers on board. after she lost again,, it is a work in progress. he couldn't tell the bbc when exactly or if they will for sure have a vote this coming week, but he said it is a possibility. here's what he said. >> what has happened since last tuesday, a significant number of colleagues, including some very prominent ones who have gone public, have changed their view on this, and have decided the alternatives were so unpalatable to them that they on reflection think the prime minister's deal

is the best way to deliver brexit. haidi: theresa may has already conceded at this point, the march 29 brexit deadline has to be delayed. but she warned in an article on "the telegraph" that a long delay could be a problem, and she reminds everyone that the e.u. demanded they must put forward a clear purpose for any extension the ask for. here's what she wrote. "the idea of the british people going to the polls to elect members of the european parliament three years after voting to leave the e.u. hardly bears thinking about. there can be no more potent symbol of parliament's collective political failure. the trade secretary, i named him brexit secretary last hour, liam fox, pardon me, mr. fox, said there's no point of a vote if they have no chance of winning. they will make sure they have the votes lined up before they even think about putting the boat back, but they also seem to

think they are getting enough people to their side and maybe have a chance. are there signs that by going tougher on the hardliners that she has a chance of winning on the deal finally? but at thet seems, same time, boesler mcveigh -- esther mcveigh, a cabinet minister who left the cabinet to protest the brexit deal, now says it is a bad deal, but i may have to back it. jeremy corbyn of course, an opponent of the deal for some time, member of, excuse me, leader of the opposition labour party, he's looking for a good deal, a dynamic relationship with the e.u., including the trade relationship. he says he may tell his mp's back an amendment calling for a referendum on any deal that passed, and he said it

must be a credible choice for both levers and remainders. and this may possibly alienate members of the labour party who are pro-e.u., and people who voted for him in the past who voted to leave, so he's walking a tight rope as well. all this dancing around. who knows where it ends? you know, you can't give up on theresa may. shery: so many different alternatives out there. kathleen hays, thank you so much. our global economics and policy editor. still ahead, we are waiting for the latest trade data from japan, which will indicate how much the trade war's hurting the economy. haidi: and a look at the week ahead for markets. this is bloomberg. ♪

haidi: this is "daybreak asia." i am haidi stroud-watts in sydney.

shery: i am shery on in new york. -- shery ahn in new york. one strategist has recently upgraded the yen to overweight. let's bring in sean taylor, dws chief investment officer and head of emerging markets. given the selloff last year, this evaluation call? sean: for a number of reasons. we've had a very good run globally over the last few months. igher now.e.m. are h we think the rally recently has been driven by changes in rates expectations, good news over the trade deal, and more positive policy news out of china. but we think in the second half of the year, we will see a more stable chinese economy, and earnings not being downgraded, even possibly some upgrades. shery: as you said, there's been an exuberance in emerging

markets. the rally has been ongoing. charts on the bloomberg show we are now seeing emerging markets starting to underperformed the s&p 500. some analysts, morgan stanley turning a little cautious because they think the traders crowded. you aren't -- because you think the trade is crowded. you aren't worried about this? sean: actually, one of the overall observations on the rally, people didn't really invest in it. it is probably more crowded on the emerging-market point of view, and we have had a lot of passive money going into the equity market, particularly into china. we would expect the next nine months of the year to have more opportunities for alpha to be generated. but we have had a good run. we could correct a few percent, consolidate, and when we see the

real data come through in the second half of the year, i expect people will be more engaged. of that basis is reliant on a weaker u.s. dollar going into the second half of the year? wasstart of the year perhaps counterintuitively characterized by a pretty resilient u.s. dollar, despite the fed doing its turnaround. shawn: we made the big call on the dollar last year, when the tolar was at $1.23, to go $1.50. it reached that target, but exhausted domestic reasons why the dollar should be strong. the dollar flatness from then on has really been because of weakness in other markets and other currencies. we would expect the dollar to be fairly flat for the rest of the year, and maybe next year start to see it declining. i think the real reversal is to do with growth expectations. looking at the end of last year, growth indicators, both leading indicators, asset prices, and

confidence from ceo's, were really showing very negative growth. the level of growth where traditionally central banks would ease rates. but the rhetoric in the markets at the time was putting rates up, and that sold off markets. what we have had this year is simply a reverse of that. powell is on hold. the ecb needs to do more given the european data, and that has caused markets to rerate again. haidi: that's right. prevailing sentiment seems to be we could be setting up for another goldilocks situation. more of your thoughts on the chinese markets. looking at this chart of the shanghai, signaling a bit of range bound trading. we could see the upward price action continue. my question is twofold. is it useful to look at technicals when it comes to the chinese market now? and is the reason for it to continue, given that it is such

a heavily retail driven market and rally? sean: i think it is important, the technicals. a very sentiment-driven market. the other thing to also look for is policy. year, there has been a change in policy response from china. last year it was about tightening and shadow banking, and all the uncertainty over trade, and sentiment and confidence in china both at the investor and company level was very poor. this year, the government has been much more constructive on policy. we haven't seen it come through yet in economic figures, but we have seen favorable policy moves for the market such as insurance companies being allowed to invest more in a-shares and margin lending levels being elevated. i think that is important. but when we talk about retail, we are not talking about huge amounts of retail. it is still quite high net worth retail that really drives the market. if you talk to the brokers, most

of the money is made from the top 3%, 4% of the population. shery: does it matter these days, whether it is from the npc or pboc governor himself talking about china's room for reserve ratio cuts being limited -- the focus seems to be shifting from monetary easing to fiscal support. will the likes of tax cuts be enough to support the economy, and also the market sentiment? sean: on a medium-term basis tax cuts are very important. if the fiscal sliders improve, and we think china slows to 6%, but steady at 6% for the next year or two. it means that is sustainable growth out of china, and not the old ways with massive stimulus, growth picks up but also debt levels pick up. so i think that's really important. i think there's much more room, if you go back to the financial crisis, 2008.

when the chinese banks were not listed. they had triple-r, something like seven, so there's an awful lot to go. the best news for china, really, is a slightly slower u.s. economy and the dollar being flat, which doesn't put pressure on the rmb and allows them to do things. the other thing, there could potentially be another rate cut. those are all important matters. haidi: sean, always appreciate your insights and taking the time for us. chiefaylor, dws investment officer, joining us from hong kong this morning. some big guests coming up. we will talk about the outlook for aviation with the cathay pacific ceo. on "daybreak australia" tomorrow, u.s. agriculture secretary sonny perdue will be with us to discuss chances to end the trade war and what the fallout could be for farmers and investors.

this is bloomberg.

haidi: new zealand prime minister jacinda adern says the country will change in laws as mourn the loss of 50 people, and that they will deal with facebook having allowed the outrage being streamed. what are the options of the prime minister to change gun laws, and does she have any support to push changes through? >> much of the focus is on semiautomatic weapons, such as the one used by the gunmen in christchurch -- gunman in christchurch last week. the biggest challenge seems to be that any licensed gun owner can hold one of these weapons, but they can be modified to make them much more lethal, which appears to have happened in this tragedy. the prime minister's option

range from an outright ban or a moratorium, to tighter controls on registrations, limits on use of ammunition, more scrutiny of imports. a range of things the ministers are discussing in cabinet today. we expect to hear more later. support from the usual people you would expect, the police and police association. ribs like the deer stalker's association, which doesn't really use these sorts of weapons and promotes responsible recreational use. but on the other side, there are gun owners, gun retailers who oppose these new changes. shery: facebook also under intense scrutiny after the gunman live-streamed his attack. what's being done about this?

tracy: certainly facebook is amongst other social media providers getting a lot of .crutiny over the live stream there's been suggestions some delays on live broadcasts would be encouraged. jacinda adern said she wants to talk directly to facebook about the issue. facebook has made attempts to take some of the videos down, and has had some success, but of course it spread very quickly. across a number of channels. shery: thank you so much for that. bloomberg's breaking news reporter tracy weathers. haidi: let's get a look at the latest headlines. t-mitsubishi-nissan's alliance may review sales goals as part of efforts to "really find the alliance's purpose." nissan will announce new

restructuring plans to improve corporate governance. rival lyft hopes to raise $2 billion with an ipo, seeking evaluation of $20 billion to $25 billion, and they will set the number of shares in an updated regulatory finding. they forecast a listing on the nasdaq at the end of the month. shery: amazon has won approval to set up a second headquarters ., which isgton, d.c claimed to create 25,000 jobs in the area. worth 715 subsidies million dollars. more than 200 cities across the country competed to win amazon's favor. plans for the new york borough of queens were abandoned after meeting resistance from local people and officials. coming up next, a policymaker who says that patience is a

virtue. a preview of central bank meetings around the world next. this is bloomberg. ♪

>> this is daybreak asia. your first word headlines. air asia group c.e.o. tony gwynn fernandez has quit facebook after the site failed to prevent streaming and repeated postings of the christ church shootings. he took to twit tower say facebook could have done more and he has been the victim of many fake online stories himself. new zealand's prime minister says she plans to address the issue of live streaming the terror attack with facebook directly. the australian government is warning that the stalling property market could hit the wider economy. the treasurer says falling house prices could spill over into household consumption and small business investment.

australian interest rates remain at a record lien sydney home prices have fallen 13% from the peak as the country heads into general election. a new report says the australian budget will return to surplus in fiscal 2020 but a preelection spending spree would be a threat to the bottom line. the april 2 budget will show an underlying cash surplus of almost 10 billion aussie or $7 billion u.s. despite sharp deceleration in growth as tumbling home prices reverberate through the economy. president trump is turning his concerns over new technology onward to driverless cars. he has followed up his tweet about overly complex airplane software by saying self-driving vehicles are now a menace to society. he is said to consider the driverless revolution to be "crazy" and he'd never let a computer drive him around. the 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. this is bloomberg. haidi: thank you. let's look at our aussie markets in hong kong. >> stocks are rising adding a third of a percent while the aussie dollar is steady after halting a three-week slide as observers consider the impact of an anticipated prelex spending spree by the australian government. kiwi stocks are gaining ground building on gains at a fresh high even as economists including from the treasury and rb have lowered the gdp growth forecast for the year. the movers in sydney, i want to highlight for you, jumping 3% this morning perhaps as the minor is closing in on a $1.5 billion iron bridge project and gains are extending at a record high, the stock climbing nearly 125% over the past year and is among the best performers on

the index this year along with other tech stocks. we do have hub 24 on the other end of the spectrum leading losses on the benchmark this morning. now to gauge reaction to a note out from morgan on the prospect for the global takeover of australia's rural co morgan's does not expect a rival offer to materialize from australia's elders. so the bid also not attracting concern from the regulator. and we do have the stock moving higher for a fourth straight day rising to the highest level since the summer of 2018 after announcing the launch of new toddler snack products on cold supermarket shelves through may 2019 and the application process for registration in china for new products. >> the federal reserve is expected to send more doveish signals later this week as the fomc prepares to debate how

ong the pause will last. we have a preview. kathleen, really we're not expecting them to move on rates. what are we watching? >> we are watching something we call the summary of economic projections. every three months all the members of the fomc update their views on gdp growth, unemployment, and inflation. that is where they get their dots based on any moment in time if i see stronger growth, higher inflation i put my dots up. if i see less i might move them down. that is what is so critical now. remember, in january these consensus still thought too high. let's jump into our dots from the bloomberg and talk about this consensus. very definitely calling for 2019. let's go over here. 2019. they are clustered around the two. ok? people on both sides. but the question is, since they, in december when they

made the forecast for what they'll do in 2019, what did we see now? this is the question. will the dots change. the bloomberg surveyed the latest one in terms of traders and economists. they're not fed officials. they see just one rate hike this year. i think another thing we'll be watching for very closely is any talk about the balance sheet, run-off, and if they're getting ready to stop. a couple officials already said it is likely to end. they might stop the program entirely in the second half of this year. what this just shows you is how much balance sheet we've run off so far from about 4.5 trillion down to 4 trillion. you can see morgan stanley, goldman, and jpmorgan differing on how much further they will go. but the fed itself lately seems like it's gotten nervous about the economy. it's gotten nervous about the global economy. they are getting the feeling that maybe they've done just about enough with the funds rate near neutral, etcetera. so that's another big thing to wait for from the policy statement and certainly from j.

powell's press conference. >> with the markets, kathleen, really kind of heading toward we'll see another year of goldilocks sken arroyo circumstances for the economy. what are we likely to hear from powell about that? kathleen: so far i think at this point the jobs report for example, we've seen up and down, haven't we, the last report in fact had a very, what seemed to a lot of people a flukey gain of only 20,000 in payroll but wages were still rising. unemployment still falling. many people said it is a mixed bag. how will jay powell, the policy statement depict the labor market? that is so important. also what will they say about inflation and also inflation expectations? go back into the bloomberg with me now. if you look at the break evens, what traders are forecasting with the way they trade, the market, 30-year break even, the white line. the blue line is 10-year break even. five-year break even. you can see how the inflation expectations fell a lot when the stock market was cratering

at the end of the year. now they've recovered. are they as high as they were back in, let's look at the beginning of 2017, no. and a contrary survey of consumers in the university of michigan that inflation expectations number is down to one of the lowest levels it has seen in many years. that is the mix there. i think the global outlook of course, the way the trade war is affecting the economy, brexit is a big story. we know jay powell will be asked about that. it is easy to conclude he'll sound very cautious and the whole wait and see stance of the fed will not change but the very interesting thing will be if the dot plots change and if the dots move down. that could be a real market mover. shery: always watching the dot plots. a look at the fed. let's get over to hong kong, our chief asia economics correspondent there with us. it's not just the fed we're looking at a flurry of policy

makers from thailand to indonesia this week and a patient pause largely expected in this part of the world as well. >> in the same way, haidi, the fed drove the story in asia last year when we had some of the most aggressive hikes among central banks for sometime now with the shift by the fed the story is somewhat changed weefment have as you mentioned philippines, taiwan, indonesia among the central banks that are meeting. the story is while they're not likely to cut interest rates any time soon they are certainly not going to raise interest rates either because of the slowing global growth story. their own economies are facing pressure. currencies have broadly stablized. i think the central banks will be on hold, wait and see what the fed does. wait and see how the u.s. and china trade talks play out. in particular we'll be listening to commentary on how they think their currencies have stablized. that is one of the key reasons they were raising interest rates last year. now of course there is less pressure to do so. so a big week for central banks

in the region. >> and of course the inflation picture across asia pretty different from what is happening in the u.s. so how does the fed's turn doveish affect the central banks to decide on what to do next? >> it's been something of a game changer ever since late last year early this year and chairman jay powell signaled that shift as kathleen just explained. that has taken pressure off the central banks in this part of the world, it has taken pressure off capital outflowing away from the region. as you mentioned the inflation story is also somewhat subdued. in particular look at the philippines. they had run away prices last year. that seems to be somewhat contained. i think the broader view for central banks in this part of the world is they are certainly under no pressure to hike interest rates any time soon. the base if anything will turn to if they start lowering interest rates as the year goes by we've already had india do so and some suggestion others may follow suit. a lot depends how the global economy plays out, the trade

war talks, and in particular how china's recovery goes over the coming months. >> our chief asia economics correspondent with a preview of that plethora of central bank decisions coming out in southeast asia this week. in just a moment staying the course. saudi arabia urging oil producers to stick with production curbs saying more work needs to be done. we'll bring you the headlines from the opec meeting next. this is bloomberg. ♪

>> the russian energy minister says it is still too early to discuss extending output cuts into the second half of this year. alexander novak also told bloomberg russian oil companies are fully compliant with the opec plus output curves. >> i think that it's too early to discuss what happens in the

second half of 2019 now. too little time has passed. it's just about 2.5 months since the new phase of cooperation has started plus there are too many uncertainties in the market today which could affect it either way. so i think it makes much more sense to start discussing this topic in may or june when we actually have a lot more clarity on the state of the markets and how these uncertainties are playing out. >> russian oil companies have sometimes dragged their feet when it came to cuts. they've ban bit more reluctant. they've been a bit more reluctant. is it going to be harder to get them onboard if you extend another six months of curves? >> i think i would not agree with you about the production decline or the reaction of our companies to this. they are in full conformity with the targets which have een voiced publicly. they're fully on schedule with specific ment for the

factors which are the oil industry. you can note immediately in one goal produce reduction in the winter months. our companies have very good research departments and very good strategic departments so very good to see the benefits of the cooperation and the stable markets but, of course, before we make any final decisions in the future of the cooperation in 2019 we'll want to again gather with the companies and discuss the pros and cons of continuing in this format and only then we will make a decision but once again the decision will be dictated by market needs. >> when will russia be a hundred percent compliant implementing the 228,000 barrels a day cut? >> currently we are on schedule in regard to the gradual and tion of production this schedule goes for

achieving dimension targets by the end of march beginning of april. >> last month the u.s. president tweeted about prices and urging opec to cool off. i want to ask you are you hearing from other consumers any sort of concerns or anxiety about oil prices getting too high? >> well, we pretty much hear these things from the same sources as you from public statements and the media but if you ask for my opinion in regard to this, currently the prize is acceptable to all parties both to consumers and producers, and you see the level is extremely low which also indicates a fairly balanced state at this moment. >> if we are balanced at this moment do you think there is any need then to extend these cuts in june? >> we are balanced today at this time but i cannot say the same for april or any other

time period. >> last year you talked of this range between 60 and 70 for the price of oil. that is where brent is right now. is russia still happy with that price range? >> we are consistent in our views and i can say once again the 60 to 70 oil range seems acceptable to the global economy and is sufficient for budget information including for our country. i can say at the same time this is a price range which seems to suit consumers as well. so this is a healthy level and at the same time allows to maintain some investment into the oil and gas sector. >> that was the russian energy minister speaking to bloomberg there. we'll get more on the opec plus meeting and we're joined by jim here in sydney. this seems to be the whatever it takes kind of camp but russia certainly seems to be expressing some reticence to commit beyond the middle of this year. >> that's right. definitely getting a sense of the split between saudi arabia

which is giving the impression it wants to extend these cuts beyond june and the russians in particular who are saying let's wait and see where we are in may or june and have a look at the situation then. we also had iraq on probably more on russia's side of things saying let's see what happens in june. so the saudis in some ways are little bit isolated on this. it will be interesting to see what sort of comments come after the meeting today. we have the sort of prematch commentary from both sides. but when they get together we might get a slightly different message. it will be interesting to see what we get. >> the output perks have certainly helped prices please the chart on the bloomberg showing for w.t.i. we are about to see the 50-day moving average cross above the 100-day moving average which would be a really bullish indicator for prices. what are analysts saying about price forecasts? >> well, as you just heard from alexander novak, the market is probably fairly well balanced between the needs of consumers

and producers right now. you know, we went down toward 40 bucks last year to start that supply response from opec and that was the price of that. we had to push up toward $80 and people were talking about a hundred dollars a barrel. we're just about around the mid point of that extreme range. i think there is probably not a great amount of urgency on either side right now. >> james, thank you so much for that. we'll have to leave it there. plenty more ahead on daybreak asia. this is bloomberg. ♪

>> we are just getting japanese trade numbers for month of february coming out under shooting but still managing to swing toward surplus for the month of february the trade balance seasonally adjusted coming in at 116 billion again. the surveys for bloomberg certainly expecting a slightly higher number but when it comes

to the prior number we did have 370 billion so a swing to surplus in seasonally adjusted terms. unseasonally adjusted number at 339 billion yen there slightly higher than expectations. exports seeing a contraction of 1.2%. imports also seeing a contraction of 6.7%. of course in january we had exports falling the most since 2016. let's get the reaction from wisdom tree, japan's c.e.o., but we know we probably need to get to march before we can get an undisported picture of things particularly as we had chinese new year falling the first couple months and that will play havoc with some with and import numbers regard to china. s it uncertainty over trade, japan-u.s. trade talks in the auto sector or just a regional and global slowdown in demand? >> look, i think it is very clear you've got a slowdown in demand particularly for capital

goods and that's compounded by the weakness we've got in u.s. car sales. for japan that is very important. again, exports in february down by more than a percentage point. you know, that is not good news. it's going to put some warning signs on some of the profit forecasts particularly for the apanese car companies. >> right. so in terms of what could potentially also further complicate matters we're still looking at of course getting that sales tax hike as well. do you expect that to be as disastrous for the japanese economy as the last time we had a sales tax rise? >> no, absolutely not. it is actually very interesting. you know, you've got a global economy that is weakening but the japanese domestic economy is actually accelerating very, very smartly. you see that in the very strong

retail data. you see that in housing starts actually coming through. josephine you look at finance data, credit card and consumer finance data, you do see that mr. and mrs. watanabe are opening their purse strings and spending. it is a global slowdown and domestic strength here in japan. >> what about the 2019 wage negotiations? where are we expecting them to go given that the labor market has looked pretty strong? >> very important point here. that is the next key focus here. you should expect wage gains, which last year came to around 2%. they're probably going to be around 2.3, 2.4%. not a very big lift up here but t is interesting you find that the wage gain is skewed by wage groups so the younger generation, university graduates actually seeing their base salaries rise by as much as 6% so the tightness in the

labor marked is at the front end, the young generation. that is where the wage gains are coming through while the old mick jagger generation is still seeing wages decline. >> given everything happening with the global economy there seems to be a market expectation that the bank of japan could in fact employ some additional policy accommodation. this chart on the bloomberg federal bank he balance sheet. will the b.o.j. be forced to blink just because other central banks are turning more and more doveish? what is the concern about central banks really having little ammunition left? >> i actually don't think the b.o.j. is going to be doing anything new. remember, this is the most accommodative bank, central bank when you look at the price of money, the fact that you've got negative rates at the front end and capping the 10-year bond yield, so from that

perspective monetary policy, you know, is really very accommodative here. the focus in japan is going to be fiscal policy. you know, we already have an dditional supplementary budget from prime minister abe. i think if we were to see further weakness in the global economy, i do think you know, additional fiscal measures are likely to be coming here in japan. if things get really bad, you know, i think it is even possible that the sales tax increase is going to be postponed. that is only, you know, if you were really to slip into a lobal recession. >> how much do we rely on the weakness in the yen to be able to benefit in particular an input bill in the sense we are also seeing the rise in energy prices? >> very, very interesting. you put the finger on the pulse

here the terms of trade in japan and the combination of import prices and exchange rate is very, very important. the good news is that domestic competition is intensifying so actually i as a consumer in japan, i'm actually benefiting from producers offering lower prices. and also the japanese government is doing a fantastic job at boosting the purchasing by cutting people telecommunication prices, ordering cuts in pharmaceutical prices. all of the regulator prices this year are actually going down between 2% and 3% so i do have a very nice boost in the purchasing power of the people. >> last week we were speak tog the former b.o.j. policy member and she was quite concerned about the exchange rate being included in these future negotiations on trade between the u.s. and japan. is that a big risk? >> look, the trump

administration is very clear they are weaponizing the dollar in the sense that any trade negotiation, the currency is now openly out there. in the past it was always in the background, a potential sort of threat that us analysts like to talk about. but now it's out in the open. that is one of the merits of the trump administration you actually have. what you see is what you get there. for japan, it's interesting. i believe that there are lots of goods and little presents the japanese can offer president trump and like for example an infrastructure investment fund. >> sure. >> from that perspective i think the risk of tariffs is pretty low for japan. >> thank you so much. so great having you with us, c.e.o. of wisdom tree, japan. coming up on the next hour of daybreak asia we'll speak to the chief apec economist about the busy week ahead for central banks.

the market open is next. this is bloomberg. ♪ omberg. ♪

♪ good morning, asia's major markets have just opened for trade beauty -- four trade. >> welcome to daybreak asia. ♪ >> our top stories, theresa may is hoping to be third time lucky as she warns hardliners failure to back her bill could mean the u.k. remains in the european

union could russia tells bloomberg it is too early to extend oil curves. they expect to have more clarity in a couple of months. >> data is showing -- is expected to show similarities between two airplane crashes. trading get underway in south korea and japan. it's get straight to market action with sophie. sophie: japanese stocks extending gains we saw on friday, the nikkei 225 adding half a percent, while the yen is trading around the 111 spot you'd -- spot. exports falling more than expected in japan, and it is not good news, and warning signs for profits, particularly for japanese automakers. we did highlight that consumer consumption is beginning strength. seoul,g in on trade in we're seeing gaining ground come

up a 10th of a percent. global investors did by heavily in futures 20th last week. where also keeping an eye on south korea, considering holding talks with the north. this is in the wake of solid earnings from broadcom, that theirbe weighted ahead of results, due to the the memory chip prices. electronics on the back foot so far in seoul. we have aussie shares rising a quarter of 1%, while the aussie dollar is steady. observers are considering the impacts of a pre-election spending spree. 1%, atocks adding 2/10 of fresh all-time high purity even economists have lowered their gdp growth forecast for new zealand for the year. all right.

let's take a closer look at what we will be watching as markets get underway in asia this monday morning. we are joined by mark. given that we had a stellar end to that global rally last week, the best performance of a global stocks in four months, we expecting the optimism to continue? mark: continue. -- the morning. the tailwind is good. markets around the world had a great finish last week. there is nothing major on the horizon you can expect to derail the positive sentiment we had. the icing on the cake is likely to be this week's fed meeting. towardtions are shifting seeing the whole dot plot, a lower trajectory. that will be a reinforcement, but not just that the fed is on hold, it they are on hold probably through 2019, and people will become more convinced that the next move for the fed is likely to be a rate cut even though it might not be

until 2020 or beyond. the fact is that fed hikes now are really something right off the radar, and that is another good thing for markets, especially the emerging-market crowd, where there are a few countries that would like to start thinking about lower rates. the endorsement from the fed this week is going to be very positive for markets, and we are beginning to see the early signs of that. performing well. it looks as though everything is in place for a decent week for asian markets. >> does a weaker dollar and more stimulus from china really give support to the rally? mark: indeed. it is a virtual circle. often you get the situation were asian currencies start to get stronger, that feeds into markets, or foreign inflows, portfolio flows coming to asian equities. foreign managers like to

take the currency and equity view at the same time. it's sort of feeds into itself. you can see currencies and equities performing well at the same time. banksear, asian central were mostly in tightening mode and that is well behind us now. there looking for opportunities to add liquidity, to add fuel to the rally. all in all, it's just a very good picture. the mentum that -- the momentum is definitely favoring emerging markets. it makes the near term look even more exciting for people who want to be in emerging markets. it's decent at least in the short-term. shery: mark, thank you so much. you can follow more on this story and all the day's trading on our market live blog. you can get a rundown and commentary and analysis from bloomberg's experts. you can find out what is

affecting your investments right now. now to the first word news. first up, a new bloomberg survey expects the federal reserve to bring its current cycle of rate hikes to an end after one more increased this year, that is in september. that would mark the peak of the cycle with the upper end of the target range at 2.75%. back in september, the same survey expected to hikes this year, with the cycle peaking at three and a quarter percent. initial data from the ethiopian airlines flight recorders are set to show similarities with the lion air disaster five months ago. information from the so-called black boxes has been downloaded into the ethiopian transport minister says there are links to the indonesian crash. the data will undergo further investigation in authorities hope to release a preliminary report within a month. tony fernandes has quit facebook after the site

failed to prevent the livestreaming and repeated postings of the christchurch shooting. he said that facebook should have done more and he has been a victim of fake online stories. us and our during session plans says sheinda adern plans to address facebook directly. itsi arabia says opec and allies have a lot to do to rebalance the oil market but have said they will do whatever is necessary. the cartel and independent producers met, and the saudi energy manager said the group must continue to restrict output until at least this june. he said the job is nowhere near complete, and excessive u.s. inventories mean is a risk of short-term oversupply. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i'm ramy inocencio. this is bloomberg. shery: thank you.

u.k. prime minister theresa may and chancellor phillip hallam are putting pressure on tory eurosceptics to back her twice defeated brexit bill, warning that failure to do so risks subjecting the country in a long delay leaving the european union. kathleen hays has the latest on brexit developments. will this really be enough to have them vote for her deal? kathleen: i don't think it's it is theeat, i think inevitable outcome that there will be a long delay if they can get something passed now. if they have a go back to the european union, they have to ask for a long extension. philip hammond speaking on the bbc today says there are signs support is growing, and as such, the could be a vote this week, but everybody has talked about it these last couple of days, including payment, saying we will only hold a vote of we think we can win. it is a work in progress, after

she was so soundly defeated last week. she came back from her meeting with john called juncker thinking that she could get it through. she is already conceded that the march 29 deadline has to be extended. ideas now looking at this that maybe there is a chance she can move ahead on this, and if she can't, they will be in the middle of them month in the middle of the european elections for parliament, which no one who is pro-brexiteer want anything to do with. here's what she said, the idea of the british people going to the polls to elect members of the european parliament three years after voting to leave the eu hardly bears thinking about. it is parliament collective failure. i latest story -- our latest story is underscoring that. may will continue to put

pressure on them but only bring it to a vote this week if there is a strong chance it will be approved. she will head to a summit of european leaders on thursday to seek a lengthy extension to the brexit process, potentially taking talks back to square one. not only would that perhaps disappoint hugely the people of the u.k., it also opens the door to european nations coming back and asking for things about fishing rights, from france, or gibraltar from spain. it is fraught with difficulty. other signs that may has a better chance of securing a deal? kathleen: it's interesting, former cabinet minister in may's group who actually quit in protest says it is a bad deal, i don't like the deal, but the eventuality of the long

extension is worse, so she is considering backing the deal. jeremy corbyn, the labour party leader, opposition to theresa may, is saying he could back a deal, but it is a dynamic agreement that includes trade could he's talking about backing a referendum so that people, believers and -- the levers and remainders have a potential to vote. he's also threaten a no-confidence vote and the general election. he's not exactly on board but even he is saying there some kind of deal he could vote for. haidi: all right, kathleen hays there with the latest on brexit. still ahead, the latest on the investigation into the ethiopian airlines crash. investigators are saying there are similarities with the earlier tragedy in indonesia. shery: next, we look ahead to a big week for asian central banks , with a chief economist. this is bloomberg. ♪

♪ haidi: investors will be gauging signals from global central banks this week with a number of them set to announce policy decisions. on tuesday, the rba releasing in its from us last meeting, where they set a record low rate for 28 straight meetings. on wednesday, the fed in focus. hike is expected this year, but patience is asked by chairman pal. the philippines, indonesia, taiwan, and bank of england on thursday. shery: and of course, as the fed has turned more dovish, the key question is what will central banks in asia do? we've seen some more leeway for central banks to act, but at the same time, remember in countries like the philippines, inflation

has been a key issue that has remained high. we have seen it fall recently and it's now within the 2%-4% target, but is that enough to make them confident and ask? perhaps -- and act? perhaps not. of course, there is the decision was thailand, which is a country that has seen perhaps a better economic picture. gdp per capita has been strong. foreign reserves have been solid. the bought,comes to this is the u.s. dollar falling against the bought. we have exports that have tumbled a little bit. blue,are the bars in while imports have risen. haidi: let's get more on thailand. joining us from hong kong is alicia garcia herrero. always great to have you with

us. let's start on thailand, is a concern that regardless of who into the tories in the election, were going to see a government relying on the old playbook of economic populism at a time when mrs. an economy that arguably has underperformed its growth potential? alicia: absolutely. i think thailand is an early comer in asia, that's what we have very low rates and thailand. this is a structure of a tight economy. their tourism sector has boomed. this is china, but beyond china and will continue. region needs more pleasure hong kong andust singapore. i think thailand can grasp the

opportunity beyond tourism. i think he could bring a lot of good news to thailand for the for siebel future. thailand, the bank of i think it's really very hard to move your i think nobody is going -- to move. i think nobody is going to move. if anybody, malaysia. certainly not the philippines. certainly not thailand. it's a little too early to understand. we know the fed is going to pause. confirmill too early to the next cut. i think it is about wait and see in this part of the world at this moment. todi: and when it comes geopolitics, we are waiting and seeing as well, talking about if we getlking about closer to a u.s.-china trade deal. it's your view that even the short-term good news story out of trade will not be the panacea

for regional growth that perhaps some are expecting. alicia: i really don't see any immediate good news on trade, no matter what happens was negotiations with the u.s. and china. forceding to be mainly imports from the u.s. into china, which is not necessarily good for the region. the only thing that can help the region is massive stimulus from china. we have heard mixed news in that regard. i can't really see how trade is going to impact positively in the region. reform.e this is really important for small economies. if the wto does not manage to together, this could structurally harm trade in this part of the world. that's why i would not expect too much from trade at this point in time. shery: when it comes to the chinese economy, it was surprising to see the unemployment rate in china jumping in the first two months of this year.

is this going to be an issue for the chinese economy? market, especially when policymakers are trying to focus on the employment for strategy? alicia: certainly. this is why they were mixed signals about stimulus, but frankly speaking, i don't buy them. i think they are going to stimulate the economy. unemployment data, is extremely important for a country like china. we know the structure is aging, but at the end of the day they care for the short-term from -- short-term. again, i think we will see more stimulus then we were told we would see at the meeting. and that will be good for employment data down the road. artificiald be because it's just about stimulating the economy, no structure change. shery: how much does it matter

that stimulating the economy will come more from fiscal support rather than monetary easing? alicia: this is what we heard. we heard that there would be tax hit the causeest of the trade war. frankly, i don't think china can create growth of tax cuts. we saw that last year. i think it's going to come mainly from the private sector. that's the difference from 2018 and today, and that they can stimulate as much. the impact on growth will be more limited because the private sector is smaller in china than state owned. but in a nutshell, i think you'll be more bank traded then fiscal. shery: thank you so much for joining us, alicia garcia

herrero. e to come. this is bloomberg. ♪

♪ let's get a quick check of the business flash headlines. amazon has won approval to set up a new headquarter campus their washington, d.c. the move is said to create 2500 jobs in the area. more than 200 cities across the country competed to win amazon's favor. plans for a site in the new york borough of queens were abandoned after meeting resistance from local people and officials. there is hope to raise $2 billion for an ipo on monday. a market valuation of $20 billion, and a number of shares and an updated regulatory

filing. hope to be listed on the nasdaq at the end of the month. 40 million cars by 2022. the chairman told the nikkei news that the goals are under review as part of efforts to redefine the alliance purpose. nissan says it will announce new restructuring plans next week and held meetings of the weekend to discuss ways to improve corporate governance. initial inspection of the data recorders from the isiopian airlines boeing 737 set to show similarities with the lion air disaster in indonesia five months ago. we have been cautious to draw connections and regulators have been the same. what do we know now? it a step this takes further. we have the ethiopian transport minister saying yesterday there

are clear similarities between the european -- the ethiopian airlines disaster and the indonesian disaster. this is based on satellite data, on limited evidence from the crash scene, that there might have been a connection between the two disasters. now we know, even though it is a preliminary analysis, the flight data showed similarities. this i guess takes us a step forward down that road to find out what happened. shery: for the first time, the boeing ceo has made a full statement when it comes to these latest developments with the crash. what exactly did he say? angus: that's right. boeing out and said that is still working on the software patch, remember they are working on the fix to the 737 max control system, i guess it works

to control the plane's pitch. if it seems about the stall. it seems that was triggered by a reportcant and very deep by the seattle times that analyzed the 737 max and the relationship between boeing and the u.s. aviation authority, the faa. -- i guess intimated a failure of oversight at the faa, because the delegated oversight of the safety of the aircraft to boeing, and that raised questions about how that was carried out, and if they really had a thorough understanding of the power of that software that controlled the planes reaction to a perceived stall. inyou couple that analysis

the seattle times with the preliminary conclusion by ethiopian authorities, and really there is more pressure on boeing, and how the certification process took place. software think the rollout and the update was some of the pilot training revisions, will that be enough to get the planesungrounded? angus: we don't know yet. it depends on the findings from the flight data recorders that could be in about 30 days. we know boeing is working on the patch. it will be rolled out in the coming weeks. it seems to be a relatively easy fix. whether that will be enough to alleviate the pressure, whether the faa will be happy with that or the airlines will be happy with that remains to be seen. meantime, it will cost boeing in -- cost boeing around several million dollars. there's still more scrutiny to come in and says from the data reported haidi: and very much

depends on what comes out from that the poor. just getting some lines from the u.s. transport department saying it is now probing the faa boeing's 737 max approval.

? ♪ shery: we have breaking news out of singapore, we are getting domestic imports -- exports you are your, rising 4.9% in the month of february. that would be a huge beat from the january numbers when they fell 10.1%, and that would've been the biggest drop in two years. this is also coming after three months of losses for the nonoil domestic exports, really rising 4.9% year on year for february. a huge beat. when it comes to non-oil domestic exports. , afterbig rise of 16%

falling 5.7% in the previous year, and really both numbers beating export -- beating expectations. when it comes to electronic exports, still down, falling 8%, that this is still a follower -- a smaller fall than expected. the previous month, the electronic exports fell 16%. as we seehuge numbers continued declines in shipments to china, south korea, hong kong for the singaporean economy, but the expects -- the exports your and your beating expectations, 4.9%. more: were also getting details on the breaking news that the u.s. department of transportation is launching an investigation into the faa approval of the boeing 737 max

aircraft. this is according to "the wall street journal," and follows on that deadly lion air air crash and ethiopian airlines crash. we know from the preliminary investigation, the if european transport minister saying we see similarities between the two incidents. we're hearing the u.s. transport department is investigating the faa and its approval of aircraft. inquiry intoual potential lapses in federal safety approvals for new aircraft, and comes during a time of immense pressure on boeing. the 737 max is its workforce play. the fleet has essentially been , chinay grounded starting the grounding, and the faa finally joining as well. hasbiggest crisis boeing experienced in about two decades. we are still waiting the end of the investigation into the

flight data recorders, as well as the longer investigation joining the connection between the two ethiopian air and lion air crashes. let's get you the first word news now. a new report says the australian budget will return to surplus in fiscal 2020, but a free election spending spree would be a threat to the bottom line. it is said the april 2 budget will show a cash surplus of almost $2 billion aussie. someone home prices are reverberating throughout the economy. the australian government is warning that the property market could hit the wider economy. it is said that falling house prices could slide over into small business investment. sydney home prices have fallen 13% from their peak as the country has into a general election.

landslide on and popular indonesian tourist item has killed at least five people. the quake struck sunday evening. manyal people died and were displaced by flash floods. most of the water has receded but agencies expect the number of debt to rise, as it has not been possible to reach some of the affected areas. gm'sdent trump has asked ceo to do something quickly to get it working again. the final car rolled off of a factory recently and the factory is in talks with the labor union. trump says gm has left the country down, and says that " better car companies are coming to the u.s. in droves." the french president is failing vestft reaction to yellow protests that turned violent.

many people were arrested. 80 stores on the avenue were damaged, it was the 18th consecutive weekend of protests, and he says the strong action is now needed. markets in asia, let's see how they are shaping up. sophie: resting singapore the start of the week with global stocks trading on highs. grinning --cost gaining ground. the yuan is seeing strength coming through. we are seeing the yen hold steady as investors digest the japanese trade figures. taking a look at the aussie sure market, up by a third of a percent. we have some corporate stories and play. health scope on the radar. a looks like they may be backing

away from a deal. kiwi shares gaining ground on the third straight day. even as we do have economist from new zealand downgrading the gdp growth forecast for the economy. let's check in on stock movers across the region. i want to highlight fortescue, jumping in sydney. they are climbing in singapore, hitting $19 per ton. a korean consumer player gaining ground as the stock was reinstated with a reduced call. rising with other consumer shares in seoul, perhaps finding support on expectations that china may lifted bans on online travel packages to south korea. hanmi giving back some of its gains. makersseeing electronic leading gains in tokyo, and

chipmaker stocks are gaining ground. there is a rally in semiconductor shares in the u.s. on friday and the good mood is continuing this monday. we said earlier, japan exports falling for the third month in february, really highlighting the risk to the global economy from waning global demand and the trade war. --'s bring in our japonica are japan economics expert. probablyews is we won't see the surplus continue. where is the export weakness coming from? as youexport weakness, mentioned, it is the global slowdown. japan, itsically for key trading partner china is slowing, and that's having a big impact on japan. we did see a little uptick in the china exports in february, but if we look before that

january, there was a huge fall. that is clearly key for japan. were also sing a general slowdown in the tech cycle, affecting japanese exports. semiconductors and other key products. how is this having an impact on the water japanese economy? -- wider japanese economy? brett: industrial production is looking week, and that in turn is affecting capital expenditure. business plans are weaker. if you look at the first quarter for japan, is looking a little week. some economists are even think contracting again, that would be after the third quarter contraction. exports for a dependent economy like japan, it really is hurting and feeding through into the wider economy. haidi: what about the broader outlook? we know the rest of the year, we have the sales tax hike, and the

last time we had that, it was pretty disastrous for the economy. brett: yes. the tax will increase, the sales tax, in october. the likelihood is the economy will contract in the fourth quarter. that is a big cloud on the horizon for japan. when we look at trade, we also have the problem of the u.s. trade talks coming up. the u.s. wants to go through with its round of talks with china in the likely the focus will swing to japan and other countries and there will be a lot of pressure on japan to strike a deal with the u.s. to the u.s. advantage. an hour -- aot lot on the outlook for japan that's not good. they need a strong export economy to get the economy happening better than it is now. shery: thank you for that. after months of informal talks in years of market value losses since the financial crisis, germany's two biggest banks have

agreed to start official discussions on the merger. if they succeed, deutsche bank and commerzbank would give wall street a run for its money. remy innocence you has the story. investors were not very confident about this, it seemed like they were running out of options. ramy: but they also now have the backing of the german finance ministry. the finance minister himself saying he is supporting this merger in addition with possible job cuts in the tens of thousands. i will get to that little bit. were talking about the country's biggest lender and the country's second-biggest lender to possibly create a powerhouse to really come up against wall street. let me read you this quote from the deutsche bank ceo. he says he is on board after this turnaround. he says i consistently stressed the consolidation in the german and european banking sector.

it's an important topic. we will only pursue options that make economic sense building on the progress we made in 2018. but we are talking about years of market value losses. what of people would say exact progress was there really? for example, they had issues with revenue growth, especially with the cut to the investment banking units. it seemed economic growth fall. we know what's happening with german economic growth, let alone the whole world. also, the market cap. just at the past year, but ever since the financial crisis, as companies share prices have fallen about 90%. we have some support from journeys finance ministry, they said -- from germany's finance ministry, they said they will not block any job cuts. jobs are at risk according to some analysts, as many as 30,000. haidi: to be fair, the two banks have just been talking in an official capacity. a lot more hurdles ahead.

if it all went through, what with the new entity potentially look like? ramy: something bigger than it is now. of course, taking a look at the global landscape, it turns out this new entity, if it did come to pass, would be the fourth biggest financial firm in the world. excuse me, in europe. it would have assets at one point one trillion euros. the government could stay a shareholder. a currently has a 15% stake and commerzbank. deutsche bank is the bigger bank and it would probably be the acquirer. let's bring up another chart. with the addition of commerzbank, potentially that could help deutsche bank's slump.

it's at 25 billion, it could add another 10 billion euros to hit nearly 35 billion euros. i mentioned before, the employee base, 141,000 is where they stand, but these cuts, they have not been factored in. 30,000 is a huge chunk. not only that, investors may not be very happy about one possibility for the new entity needing a cash infusion. to alion euros according bank analyst. he says if that comes to pass, investors may not be happy because that means share dilution. early days yet, a lot of challenges to get through. ramy inocencio: there. we are heading straight to beijing to take a look at the impact of new policy measures out of the national people's congress the wrapped up on friday. we will be joined by james

parker. this is bloomberg. ♪

♪ the chinese government has announced measures to encourage more foreign investment. national people's congress, they said new legislation would put all companies registered in china on a level playing field. joining us now is james parker, the chinese business council vice president. how optimistic are you that this will be the case? we need to recognize the foreign investment law is not a silver bullet and will not all all of the challenges businesses face in the china market overnight. but it has a positive aspects in some that need additional information. allows foreign companies to dissipate more directly in standard-setting processes in the market, it forbids the

chinese government from forcing technology transfer for foreign and u.s. companies operating the china market. it also has some areas that still could use additional clarification. the parts on joint venture contract and some of the previous loss are being eliminated to allow the foreign investment law to come into force, and they will see additional implementing to truly understand the implications for foreign industry. haidi: in a way, it never some of the concerns with a broader trade talks. put it into regulation, but what would you say for those -- to those dubious about implementation? jake: one of the challenges of course is that moving in accelerating a foreign way thent law in the chinese government has done is a direct response to the bilateral trade negotiations. they were on a tight timetable and went with vague language that would allow to pass in the

national people's congress, as we saw, into the challenge with think -- and the challenge with vague language means more needs to be developed over time. the law will going to force on generally first 2020, which allows regulars about nine months to figure out details that have yet to be articulated in the text of the law. one of the challenges we have experienced on the ground in china is a big difference between promises to perform an action into the actual implementation. we will have to see the details and plummeting -- details of implementing. shery: it appears the chinese government has rushed through the laws. is this a promising sign? we would view it as a promising sign, the fact the chinese government has formally written into law they are no longer going to allow forced technology transfer is something important. the veryo seen that end of the process, about three

days before the final vote, they added new language to the regulation that would give criminal penalties for intellectual property right infringement, something china has never applied before in the past. -- before. in the past, it was considered a cost of doing business. this could have a reasonable impact on u.s. companies operating in the china market. china cutting vat rates, tried to support infrastructure investment, how will this impact foreign businesses on the ground? jake: i think it is clear that the people's bank of china set a loosening bias for 2019. we are seeing additional room for infrastructure investment, we're seeing borrowing rates going up. inn there is more liquidity a market, that creates more opportunities for all businesses operating here. u.s. and foreign companies will also benefit from the pie increasing. shery: thank you so much for joining us, jake.

next, part one of my interview with the president of croatia and the yuan general simile. stay tuned, this is bloomberg. ♪

♪ is "daybreak: asia." a slowing global economy

is not just a concern for the markets, it can also lay bare gender disparity. i recently spoke to the presidents of croatia and he u.n. general assembly, two toale leaders dedicated gender parity around the world. i asked if anything can be done to mitigate this. proves thatata that when men and women are given the of, opportunities in terms and can fully contribute to the economy, there are more chances the economy will be stronger, healthier, and more sustainable to start with. so if the economy is slowing down, we have to make sure. we have to be very attentive that the cost of economic slowdowns do not affect men and women. we have to look at what is going to happen. of globalres a lot

attention about civil society deploying the work they do, but governments also doing their share. we really need to be careful where there sharing is an economic slowdown everywhere. >> i would also put an emphasis on dual education, on lifelong education as well, and on the responsibility of the government also for different programs to assist women who basically have no choice because of their education. of course, unemployment among women is higher than among men in croatia because women mostly tend to be family caretakers, whether we talking about children or elderly. croatia the pay gap in is smaller than in the rest of the european union. we have embedded that in

legislation, equal pay for equal work. i can guarantee for the institutions for the public service that is being completely respected. i don't know if it works completely in the private sector. but there is a pay gap of about 10% in comparison to the eu average of 16%. to the pay gap mostly is due the fact of the hierarchal difference. more men are in the hierarchy, and higher positions, and get paid better. but governments can have programs. in croatia, the government has an excellent program for women who are in their 50's or 60's and cannot find a job any longer, there is a program to make them family caretakers for the elderly or people in isolated areas, to give them a chance to work instead of social

workers, for instance, we lack. shery: that was the first part of my interview with the president of croatia and the united nations general assembly. wee into part two, where delve into the lack of female leaders around the world. now a quick check of the latest business flash headlines. jetng indian carrier airways is said to be canceling all flights to and from abu dhabi from monday. the economic hindsight letter from the letter to staff, without abu dhabi, he says the fight cancellations are part of the route restructuring and are not linked to a lack of support. they are also reducing flights to dubai and bangkok. has been ordered to stop production at another local operation admitted increased gurney following dam -- increased scrutiny following dam

failures. prices have jumped as investors worry about supply restrictions. of's get you a preview markets coming online this morning. sophie: in taiwan, we are watching if momentum can be sustained after the taiwan had its best weekly gain. commuters this morning woke up to the train service disrupted. keeping an eye on product after profits on the downside, and the stock is been downgraded to sell on disappointing earnings. howi: let's take a look at other markets are trading at the moment before we handed over to "markets asia." received the nikkei 225 up half of a percent despite falling for another month, really underscoring vulnerability in the japanese economy, particularly on the demand side of things.

trade tensions before the u.s. and china weighing on demand. the cost be looking positive, and aussie shares trading on the upside. the global rally continues to be continuing. shery: u.s. futures under a little bit of pressure, down 1/10 of 1% after seeing the best week since november. were seeing the taiex futures gaining a 10th of 1%. closed up.es also the chinese offshore yuan is holding steady could that is it from "daybreak: asia." the market open is next. this is bloomberg. ♪

>> it is not :00 a.m. in beijing, shanghai and singapore. we are counting down to the open of trade in hong kong and mainland markets. when doves fly. jerome powell and a host of global central bankers. the paused should continue. tom: china is facing a delicate balance enact. -- balancing act. how to stimulate the economy and keeping debt and check. yvonne: max approval is said to be investigated amid similarities between the ethiopian crash in the lion air disaster last year.