haidi: good morning. i'm haidi stroud-watts in sydney where australian mochas are just open. shery: good evening from new york. i'm shery ahn. sophie: i'm sophie kamaruddin in hong kong. welcome to "bloomberg daybreak: asia." ♪ haidi: top stories this thursday. patients and a long-haul peer the fair -- fed chairman says to stay on hold for some time as he watches. the global situation play out. . theresa may requests a brexit

delay. the eu says it is up to her to drive the deal through parliament. and the business of baseball. tokyo welcomes at the start of the new season and we speak to the moneyball agent, billy dane. shery: let's get you started with the quick check of the markets close in the u.s. stocks had quite a rise today. they reversed earlier losses after the fomc dovish stance, but then turned negative to end in the red. we saw president trump saying that tariffs on china would route -- remain until china complies with a trade deal. industrial took a hit and the dow fell. financials also took the s&p 500 lower. the 10 year yield fell to the lowest level in more than a year after that more than expected dovish turn from the fed. we are also seeing s&p futures unchanged at the moment. . a little bit of pressure throughout the session. . let's see how we are setting up for asia. sophie: asian stocks could be in

a bit of a fog after we got the dovish tone from the fed. we do have gains in sydney up 1/10 of a percent. one of the leaders is brick works. that stock gaining about 1.5% this morning after its first half results were posted. we do have stocks in new zealand edging slightly higher after a two day decline. futures experiencing losses in seoul. nurturings. futures lowly -- nudging lawyer -- lower. some key earnings from the lack of tencent to look forward to. switching to check in on the kiwi dollar, jumping as they digest the latest gdp data. gdp growth did meet the quarterly estimate for the fourth quarter. that has pushed the kiwi dollar back into the 69 zone. on australian bonds gaining grounds this morning.

10 year yields below 1.9% with eight basis points of 26. watch for regional bonds to track that move. to firstt's get you word news with selina wang. the european union is considering an unscheduled meeting next week to decide whether to brand a brexit extension. the sterling fell as the eu president donald tusk says it's up to theresa may 2 drive the deal through, while france says they need a guaranty before anything is granted. they had asked for a delay until the end of june. may says she intends to put her plan to the house of commons again. although the hope for success may seem frail, even illusory, and other brexit fatigue is increasingly visible and justified, we cannot give up thinking of a positive solution.

reporter: new zealand's growth accelerated in the fourth quarter, driven by construction and services spending. gdp grew 6/10 of 1% in line with forecasts. annual growth has 2.3%, the weakest since 2013. the kiwi dollar climbed as investors priced in a slightly lower chance of a rate cut later this year. the reserve cut bank has said it is not planning to hike until 2021. japan is downgrading its assessment of the economy for the first time in three years. the cabinet office sites weakness and factory output underscoring rising concern october. tax hike in and 2014, the economy contracted sharply after a similar tax situation. global news 24 hours a day on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countires.

i'm selina wang, this is bloomberg. shery: the federal reserve stoned global markets by sounding and even more dovish tone than it did in january. policy makers/to the forecast for rate hikes this year to zero unless the door opened to the next move in either direction, depending on what happens with the economy. kathleen hays is here. jay powell turning even more dovish than we expected. reporter: absolutely. recently as december, the federal reserve was signaling gradual rate hikes this year. people said the consensus was, people thought three could easily be done, and here we are three months later, the fed looking at its economic projections again and changing their mind are medically -- dramatically. when jay powell went to the press conference, he gave his prepared remarks, strong economic fundamentals, the labor market is strong, a positive view. he acknowledged the data that

they have to see if it plays out. also talking about the slowdown china.pe and he says it's a good time for the fed to watch and wait. he also talked about inflation. core inflation he said would be 2% at the fed target, but because of cheaper oriole, the headline will be below. this is important to what the fed decided today. let's listen. inflation a little bit below our target, particularly headline inflation will be meaningfully below the target for this year because of lower oil prices, and that gives us the ability to be patient and not move until we see our target goals are being achieved. reporter: just to put a picture to those few words, let's jump into the bloomberg and look at this. you could call it a sweet spot for inflation if you wanted the fed not to go on pause. clearly the fact that core

inflation is under target, this has the fed concerned that maybe -- why are you raising rates if your key number is not even at the target? that's the question. one more thing the fed did besides have a mixed view on the global and mastic economy was they will say they will end the quantitative tightening, as it's called, the balance sheet runoff. they will move off the chart and go to the balance sheet to talk about it for a minute -- little bit. if you asked somebody a year ago, there was no time it would end. not that specific. this is another dovish aspect of what they said today. haidi: let's talk about those dots. were just talking to al broadus. theas, for many years, president of the federal reserve bank of richmond. besides weaker growth and subdued inflation which made a big change, the middle in from

the left, you can see if you wen it over, and at the cone are going wider at the top and narrow at the bottom, that's what it looked like yesterday. a big change. many people at the bottom not looking for any rate chances -- changes. he said the reason for this big change is clearly linked to inflation. >> the forecast is clearly on the downside. the possibility of a down slide with inflation getting less inflation than they want and need. interesting that fed funds futures traders are starting to price in even more of a chance of rate cut this year. i think it's under 50%. i think al broadus said maybe you could see a cut. not the base case for most economists, but certainly jay powell itself -- himself said to watch the data. if it gets too weak, maybe a cut. shery: thank you so much, kathleen hays.

let's discuss this and bring in sonia meskin, standard chartered bank u.s. economist. following up on kathleen's point, we were talking about inflation and the growth outlook. what should we be focused on when we take a look at the fed's move. is it more about growth concerns or the fact that inflation, it's ok? >> i think that's a very good question and exactly where we should start. clearly the reaction unction has shifted for the fed. why has it shifted? i think in the background of the fourth quarter, what was going on in the markets, the tantrum, if you will, explains quite a lot. the fed looked at what's going on and said, the growth outlook may be weakening, more so than we might have expected in the first half of 2018 when we look to 2019. inflation is probably not going anywhere. we would expect it could potentially start rising above targets because we had fiscal stimulus, unemployment is low,

but if the global growth momentum was weakening and inflation even at this juncture is not accelerating meaningfully, then what is the fed worried about in the next downturn? it is worried about deflation and expectations building. that is why inflation is so important today, because what they want to avoid is meaningful increase in expectations for deflation. once the downturn hits. shery: we are now seeing the 10 year yield at the lowest level in more than a year. where do we go from here given that these are the concerns? rangemight very well see bounce from here the markets are saying the fed told us the next move when it comes, and we don't when, but it's more likely to be a cut than a hike, at least from what we see in the money market. the probability of eight cut -- a cut is higher than the probability of a hike. haidi: there's a real debate going on in the fomc as to where the mutual rates go to for the

rest of the year. why are they saying different things? think there is a divergence of views. it is difficult to give a precise estimate of the neutral rate among but i think from the fed's perspective, the probability of a policy mistake from further tightening has increased, and they don't. want to make that mistake there could be theoretical discussion about where the neutral rate rise -- lies, but the balance has shifted and powell has said that many times recently. haidi: is there a concern that -- i guess a sense of relaxation in the markets that we assume the fed will down hold for the near probably middle meeting term, we are expecting a cut -- do you think there's a chance that if we do get worse than expected economic conditions that the fed doesn't have as much room to maneuver as they

would otherwise, if they had stuck to their trajectory for a while longer? >> i think they generally are a little bit worried about what to use in the next downturn, so that's why they have initiated .his policy framework review we first heard about it in june where there will be a series of conferences and the fed said it hopes to actually deliver the new framework in early 2020. but it is because precisely they are worried about and munition for the next downturn. -- ammunition for the next downturn. shery: they also announced the balance sheet runoff would end in september. beenchart shows we have changing the balance sheet. >> we will probably be around 3.5 trillion dollars, the upper range of what they have given previously. we might end up with a bigger balance sheet than that, easily. i think they will be erring on

the side of caution. shery: do we have any idea on the composition? >> they said they would try to match the outstanding maturities in the treasury market, but they have not given more detail than that. so it depends on the treasury issuance, of course. haidi: what about the global macro picture, the? we have no further resolution when it comes to brexit.we have more uncertainty than ever when it comes to trade. at one point does this stop bleeding through the way we see the points in asia? >> we don't actually know. more supportive federal reserve policy should be helpful, but it would also be helpful if we see an escalation of tariffs. that would be helpful for u.s. businesses as well as globally. we are also seeing additional stimulus from china that is very important. we are seeing interest in europe as well. we expect to see more of those in the year. i don't think the picture itself

is particularly dire. i just think the fed is more concerned about downside risk than upside risk at the moment. risk, in terms of upside what would potentially -- we have talked a lot about potentially the chinese economy getting out. is there potential for upside in the economy? >> yes, and in the u.s. as well, especially relative to a very negative views that emerged in the fourth quarter last year. i think the u.s. momentum could remain quite decent, still above potential. bech the fed estimates to 1.9% year-over-year growth. shery: have central banks around the world come in in time? >> it seems like it. they are wary of over tightening at this stage. haidi: that was sonia meskin,

standard chartered u.s. economist. join us with analysis when it comes to the fed's decision on daybreak. we break it down on the terminal. it's also available on the mobile in the bloomberg anywhere app. customize your settings so you get news on the industries and assets you care about. straight ahead, we will be joined by jeffrey's chief global equities strategy to talk about brexit headlines and all the other risks. shery: next, president trump says it's making sure china complies with trade deals. this is bloomberg. ♪

haidi: president trump says tariffs on china will stay in place until he is sure that beijing is complying with any trade deal. this comes as dim hopes that the two will have a lasting truce.

it seems like this isn't just the stick and carrot approach, wants to use trump tariffs as a means to compliance. reporter: yes. i think if this is baked in, if president trump is sticking to this line about keeping tariffs in lace, don't forget there are on billions of exports to the u.s., there are hurdles to the straight talk. priority for china has been removing at least part of the tariffs, part of the $250 billion u.s. if president trump says those will remain for a substantial amount of time, it is difficult what china is going to do because they need the public and show members of the communist party here to show it is more than a one-sided deal. of course, china's leaders face different political pressures to president trump, but there are political pressures and we know there are divisions within the

government over how to approach these conversations. this is significant paired we have already heard on how the trainees have started to push back on some of their previous u.s. demands around things like data for pharmaceutical companies. from the chinese perspective, they have made significant changes to their interactional -- intellectual policy. the trainees were hoping the u.s. would reciprocate by at least engaging in a discussion about the removal of tariffs. for a long time, the u.s. side had said they need to have the possibility of using tariffs to enforce any future deal. for a long time, president trump says previous u.s. administrations have failed and fallen in negotiations with the chinese because they have not had enforcement mechanisms. if he is sticking to this line on $250iffs will remain billion worth of chinese goods, you can expect further pushback from the trainees. gete this timetable will

pushed further into the second half of this year. shery: we have been hearing that a potential summit could happen as early as this month, april, and then i have heard also june. what is the timeline looking like right now? reporter: the good news is the negotiations are expected to continue. we are likely to get u.s. trade representative robert lighthizer along with treasury secretary steven mnuchin here in beijing some point early next week to continue we have been told high-level talks with chinese counterparts, and the vice premier who leads the chinese negotiating team, will travel to washington to continue these negotiations. but these -- this is a more significant set of hurdles around the tariffs. they have consistently said, at least in the last two weeks, that this needs to be a two-sided deal. the chinese need to come away with something in terms of negotiations. it cannot be seen as a one-sided

deal. shery: tom mackenzie in beijing, our china correspondent. thank you. you can see past interviews on our interactive tv function, tv . also you can dive into any of the securities or bloomberg functions we talk about and become part of the conversation. sent us and send messages during our shows. this is for bloomberg subscribers only. check it out, tv . this is bloomberg. ♪

haidi: this is "bloomberg daybreak: asia." i'm haidi stroud-watts in sydney. shery: i'm shery ahn and new york. onto the big moves and commodities. oils closed for the record highs in new york after a drop in u.s. fuel supplies. iron ore futures tumbled in asia latest news.s let's start with oil breaking through $60 a barrel. reporter: if you look at a

five-day chart, it has been going the other way. a lot of volatility in oil. then a surprise drop in u.s. supplies. it shoots right through the $60 technical barrier. very important. a lot of headlines have to do with the fact that we are seeing both of the opec plus cuts, the imports from venezuela have virtually almost gone away, very reduced imports from saudi arabia, and increased demand from refineries that really pull down on the u.s. supplies in a way that supplies almost every there. estimate out we are at the highest level for west texas, mainly traded here in new york, since the beginning of the year. that is significant. again, short-term, that has the bulls in control of the oil trade. haidi: metal on the move again particularly after brazilian made the decision to restart

operations. tot did we see when it comes that? reporter: as we go to air, we are hearing that they are closing the alley agree on mine. let's go to the iron ore trade. we did see a significant drop in iron ore futures. that has to do with the fact that there was a 20% jump after the february accident with the mine in princeville. that has many investors concerned that as they come back online with production, the brazilian government has given them approval to restart the mine, that could impact the output. a lot of analysts are saying that perhaps it will not be able to be online as quickly as originally thought. also, they are shutting down asther mine preventively they review operations. a lot of interest in what's

going on with iron ore because of the decision. let's take a look at what's going on with palladium, which in the last two days has been at a record. copper also moving higher. gtb is where you can find our library of charts. palladium is reaching an all-time high. yesterday, extending in the latest section. copper also moving higher. byot of this also supported dollar weakness and also by possible progress in a u.s.-china trade deal, because that is good for demand. haidi: su keenan with a rap of all the action across the commodities complex. let's get a quick check of the latest business flash headlines. one for five years after turning up the first pair of jeans, levi strauss is proving fashionable to investors. they raised 62 $3 million in its ipo.

it is the largest u.s. listing this year, at least until an offering next week. shery: google has been fined 1.7 billion dollars by the european union in its latest antitrust judgment. ofis the last in a trio probes that have wrapped up 9.3 billion dollars in penalties for google, which is making changes to how they display ads to comply with 2017 orders. haidi: netflix jumped to a five month high, thanks to positive analyst reports. a strong slate of international shows could seal subscriber additions, and there are notes that there are consistent satisfaction trends. both analysts have outperforming trends on netflix. coming up next, theresa may says she is determined to get on with brexit. this as theuk's --

u.k. stands on a no deal divorce. we will get the latest developments. this is bloomberg. ♪ you.

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shery:shery: this is -- reporter: this is "bloomberg daybreak: asia." i'm selina wang with first word headlines. rising global risks weigh on the outlook for the u.s. economy and domestic inflation remains muted. jerry powell says there's no that policymakers should remain patient to let the situation payout. projected rated payouts from 2% to 0%. >> we are not currently seeing a signal that would suggest moving in either direction, which is why we are being patient. we feel our policy rate is in the range of neutral. the economy is growing at about trend, inflation is close to

target, and employment under 3%. it's a great time to be patient and watch and wait to see how things evolve. reporter: president trump has rebuffed china's plea for .ariff relief he hopes ongoing negotiations may be hearing a halt to restrictions placed on imports. china has been pushing for the removal of tariffs to be part of any agreement with the u.s. the boeing drama has taken a surprising turn with reports that french experts working with flight recorders from the ethiopian airlines crash will not carry out further analysis of the data. the downloaded flight information has been sent back to ethiopian authorities, who are expected to ask another country to assess the data. u.s. agencies and a boeing team have been providing technical expertise. the billionaire founder of epic games is offering grants worth $100 million to game developers with no strings attached.

epic burst onto the scene with rtnite, that has attracted millions of players worldwide. net boosted the founders worth to $7 billion. global news 24 hours a day on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countires. -- countries. i'm selina wang and this is bloomberg. shery: time for a check of the australian markets. let's go to sophie kamaruddin. sophie: we do have aussie shares . we could see a little change after a two day drop. we have some reports from fortescue, suspending operations on the allegra your mind. alegria mine.

we will get a check in about an hour. a long bond focusing on the front end on the the curve, now trading below the rba cash rate. falling about 50 basis points since the start of december. with that backdrop, ahead for aussie bond futures. that could be smooth. there may be speed bumps ahead as the climb to three-year contracts is starting to resemble the parabolic spike we saw in the year of 2014. picture the median looks to be in favor of the bond bulls. let's get a quick check on stock movers of note. deal, eclipse a extending losses after plunging to a record, raising more than $202 million in value on wednesday. it was unlikely to proceed with a sale of the company to larger rivals.

mcmillion, shakespeare, and eclipse has upgraded. sigma health care gaining ground despite disappointing results. i want to highlight new farm as well. up 3.5% this morning after losing more than 24% on wednesday. there is speculation around what it might do with its assets. you.: thank u.k. prime minister theresa may is rolling the dice on driving her brexit deal through parliament. >> today, i have written to donald tusk, the president of the european council, to repress -- request a short extension up to the 30th of june to give mp's a time to make a final choice. shery: of course, how much time is the bigger question. eu council president donald tusk says leaders will grant a delay, but only if parliament passes may's deal next week. joining us is our rates reporter david.

how real has the risk of a hard brexit become? definitelyt has risen in the short-term, no doubt about that. theresa may has asked for an extension to the 30th. they came back and said you can, if your deal is passed. given the popularity she is experiencing right now, it's questionable whether that will be passed at all. therefore, the eu is being vague. they did not offer a long-term deal. we don't know what conditions that would be. the parliament might say, we don't know those conditions if there are already conditions attached to it. there's a chance the u.k. says the best option is a no deal. the only way to avoid a no deal brexit is to agree to a deal or get an extension. the probability has written -- risen. you have seen that in the sterling in the last 24 hours.

shery: that has been the reaction in options markets as well. reporter: in the short-term, no surprise to have seen them begin to rise. they were coming up quite a bit because of the idea of a no deal being taken off the table was appealing to the markets. we were seeing it come down, but you were seeing development come about. you saw a quick reversal. one week or two weeks, starting to move higher. more than likely, they will continue to move higher until there is clarification on when the deadline will be and what is the probability of avoiding a no deal. shery: and of course we are headed to the bank of england rate decision. couldey say anything that support sterling amid this uncertainty? reporter: it is certainly a tough one for the bank of england. the data recently has been decent. the payroll date is good. inflation data is a bit mixed.

overall, not bad as far as the bank is concerned. however, it does not know how this will play out and does not know the impact on sterling, which if it does fall, will be inflationary. if there is an orderly exit, we may do this regarding rates, but their hands are tied to some degree in terms of what they can say because it has no idea how this will play out. haidi: david finnerty there in singapore looking at all the options when it comes to brexit and the implications. the lack of clarity continues. despite guest says widespread political uncertainty, the global store is far from over. sean darby joins us from hong kong. you take a look at the fed, much more dovish than expected overnight. is there a sense that investors have fatigue, be it this to an

fro when it comes to trade, and now we are thinking a little bit further from a good story on trade than we thought and brexit is still a mess. what is going on when it comes to sentiment at the moment? >> i think it's very easy to get distracted, but the reality is real rates in the u.s., europe and japan, if you base it simply on the wages and those economies, is actually very negative. you have this big dichotomy between low cpi, which is what the fed and bond markets look at, and what is really quite strong wage status. that is actually a good sign for the global economy. even though we have had uncertainties over the year, the trade dispute between the u.s. and china, most of the intentions globally remain recently high. . the corporate sector still remains confident about the cycle. i'm not in the camp we will suddenly see a recession or indeed a market slow down from here. haidi: it does sound like you're

in the camp where you expect to see that combination culminating in a goldilocks scenario to be extended into the rest of this year. >> that's true. i think that has been reflected in the commodity markets, which actually has seen uncompromisingly strong markets, whether improper or oil, despite a firm dollar. again, data from china shows that imports of commodities have held up reasonably well. parts of the global economy, particularly in the capital goods and intermediate goods area, which has affected korea, germany, and to some extent japan, has actually rolled over. that was primarily due to the credit crunch in china. elsewhere, the global economy is holding up reasonably well and that is showing pmi numbers from toin through ireland through greece. a lot of them are actually doing

quite well. shery: you mentioned japan paired we are seeing this chart on the bloomberg showing japanese stocks have trailed global equity markets. will this change given the boj stance, not to mention, stock violate -- valuations are low? >> i think the markets are a little bit ahead of themselves expecting the boj to suddenly change policy. the wage estate is pretty good. this is an economy that has been running above trend over the last 24 to 36 months. my take really is provided the data doesn't show the condom is lurching back into deflation, the boj will keep its hand pretty steady. i think the irony is that there is at the moment a lack of catalyst for the investor standpoint, but may be some stabilization in china. it's only what we can see in emerging markets that actually turns out to be good for japanese exporters.

again, it has underperformed, but i'm not necessarily thinking that will continue. shery:shery: we have seen the japanese government cut their view of the economy for the first time since 2016, and it's not just the japanese economy. it seems that although we are not headed to a recession, the growth outlook seems to be dimming, and fund managers are trimming the u.s. stock allocations and upping the allocation to cash. is this a sensible strategy when you are seeing the growth outlook dimming? >> not really. generally, the goldilocks scenario of low inflation and low growth has tended to be quite positive for equities, and certainly when we look at the attributes of equities at the moment in terms of free cash flow and price to earnings growth rate, they are actually in reasonable territory. giving up on stocks at this point in the cycle seems to be not something we would recommend. bear in mind that the cash rates

are signaling that the fed is going to probably start easing in 2020. again, that doesn't necessarily bode well for holding cash at the moment. in our view, the equity markets look like a good place to be in. bear in mind their was no real spillover risk from the quarter disruptions to the bond markets or ipo markets. shery: sean darby, thank you so much for that, jeffries chief global equity strategies. plenty more to come on "bloomberg daybreak: asia." this is bloomberg. ♪

haidi: of course, the fed isn't the only central bank in process week. indonesia out with policy decisions this week. thailand kept its rates on hold ahead of the nation's first general elections since the military coup five years ago. our chief asia economics correspondent joins us now from hong kong. enda curran.

let's start off with thailand. we know the threat to the economy is the economy is a fact that they are underperforming atential growth and looking economic problem -- populism into these elections. what did the bank of thailand have to say about this yesterday? reporter: on hold as expected, no real change. i think the takeaways are significant policy uncertainty around the election. millionbeen about $700 taken out of thailand's stocks and bond markets at the beginning of this year, a lot of it linked to the uncertainty out of what comes out of the sunday, the first one in five years. that is a key driver for policy in the country and for monetary policy.externally as well, thailand have to wait a little bit because of the trade war story. that's a big deal for thailand's manufacturing and exports sector. we need to see a resolution come out of that. that will play true to thailand's broader economic story.

they are waiting for how the trade talks go. shery: let's turn to indonesia. this chart showing the indonesian rupee has seemed to regain its footing after those aggressive hikes last year. can they have some leeway to unwind now westmark -- now? reporter: they do seem to be on pause for a while. the currency has recovered. they shortened their buffers. last year was about the facet. much less pressure this year. it is hard to look beyond the fed, but it has been a major development for emerging markets, the message that they may not be hiking at all this year. that will relieve indonesia. if anything, the debate will be when they start cutting interest rates. shery: and a current, thank you. bloomberg's chief asia economics correspondent in hong kong. coming up next, the business of baseball. we are in tokyo to hear from moneyball pioneer billy beane

about how technology and wall street strategies are changing the game. this is bloomberg. ♪

baseballe major league season is underway with an opening day thousands of miles from home. the seattle mariners started with a win against the oakland tokyo. stephen engle was there. plenty of on and off the field changes in the major leagues this year. what has been the impact on the business side of baseball? reporter: first of all, as you said, the games are starting this season in japan again. they have done this about every so. years or the last time the oakland a's and seattle mariners met in 2012 to kick off the major league baseball season. they have done that about every four years since 2000. they even opened up the diamondbacks and the los angeles 2014.s in australia in

this is the number one sport in japan. in the united states, not quite. in fact, the popularity of the game is starting to wane. that's why some of the biggest rule changes this year and next regard pace of play. they need to speed up the game to boost popularity with younger audiences. also for the first time, major league baseball has its first official gambling partner. that is mgm. we will be speaking with the mgm chairman they are today here on bloomberg television. i asked as well the mariners' general manager about whether it was hypocritical for major league baseball to sign up with a gambling partner such as mgm at a time when major league baseball has had a checkered history with gambling, including banning for life hall of fame where the player and manager, pete rose. this is what jerry the proto-had to say on that subject. >> i don't think it has anything to do with the history of gambling in baseball, even

dating to the black socks. gambling has been fantasy sports -- fantasy sports have been such a big part of the last 15 to 20 years in baseball and sports in general. reporter: meanwhile, we also caught up with mr. moneyball, billy beane. he's the senior vp of operations for the oakland a's and the subject of that brad pitt movie and the book bestseller, "moneyball." he says in this day of advanced analytics, every team has all the data. it is finding moneyball that is the biggest challenge for small-market clubs and low payroll clubs, like the oakland a's, to find a leg up over big spending clubs like the new york yankees. here's my exclusive conversation with billy beane. game is really smart. in fact, i would say baseball has become one of the most intelligent industries in the world in my opinion. with the use of analytics, the

people running baseball are much different than when i started. i think it's a complement to the intelligence of the game. it is challenging. one of the advantages in oakland is there has been a continuity at the leadership standpoint. we have been together for 20 plus years. this is my 31st year in the organization. there is no fear in making decisions that we have to be right on all of them. i think it lends to a good atmosphere in terms of making changes. i don't know that we are any smarter than anybody else. reporter: the playoff history kind of shows you are doing something right. where do you take analytics to the next level, with artificial intelligence coming, with lock train capabilities, what are you doing? >> anything you see happening in the financial markets are happening to some extent in baseball. we are just valuing different things, but the process has become the same. anything in the markets is also

happening in baseball because you have the same guys who 25 years ago would have been running quantitative hedge funds baseball teams. absolutely, it will be a part of a lot of businesses, but i think baseball is cutting edge when it comes to implementing things. we have always looked to the financial markets as an inspiration. it was a good way to run a baseball team, similar to warren buffett. reporter: how do you cai changing this?you mentioned health tech, but there's also new technologies for tracking pitching. treasurelly take that trove of data that everybody has and getting that little extra to put you over the top. >> that's it. everyone is looking for the extra edge. i think the biggest opportunity for change is using health. teams that stay the healthiest

success.nes that have the one area we have not gotten our arms around in terms of analytics is health. a lot of it is because we don't have full access to all the data. you can understand why, for concerns. but i do think the ability to minimize an athletes time on the disabled list or being preventative, that will come through data. guys, with us, a lot of when we sign a player, 17, 18, old, we don't have access to the first 17 years of life, which might be important to health. reporter: do you have a blockchain guru on stuff? >> i would tell you if we did. reporter: fair enough. seattle won 9-7. game two is tonight. o mania here, the 45-year-old likely playing in his last game in major league baseball. shery: thank you so much for that. stephen at the tokyo dome.

more on baseball sponsorship when we joined exclusively by the mgm ceo. let's get a quick check of the headlines.ness flash ubs says business conditions are the toughest in years for the quarter, shaping up to be one of the worst in recent history. the bank will slow down hiring and step up cost-cutting by $300 million as it confronts the worsening situation. the downbeat assessment from the ceo says -- sends a be ours tumbling. bmw says earnings will fall well below last year's level and it is bucking on a $14 billion efficiency drive to counter the trade war and the rise of electric cars. shares fell the most in september after bmw says pretax revenue would decline more than 10% this year. they will cut development times by one third and hit the brakes on hiring new staff. shery: authorities planning to

-- forward planning to spend $900 million to build self michigan.rs in it would see the creation of about 900 new jobs and comes after president trump's criticism of general motors for shuttering a plant in ohio. the markets in south korea and japan get underway at the top of the hour. let's get a preview with sophie kamaruddin in hong kong. japan, of course, is off-line. sophie: we are focusing on the open in korea. futures pointing to losses. gauging the to be reaction from the latest export figures, drop of 5% in the first days of march. semiconductors, chip exports fell. we are also watching display manufacturers on reports that apple is to adopt oled screens for three iphones to be released in 2020. china's boend

apparently shortlisted for production. keep an eye on hyundai motors as elliott management is urging a vote for real change one shareholders meet for the march 22 agm. elliott noting that poor government and leads to bad decision and urging to right side the balance sheet. sophie kamaruddin there. asian markets. australia, trading underway. seeing a little downside when it comes to new zealand as well. gdp for the fourth quarter just missed estimates. here in australia, a doubt -- about 1/10 of 1% down. tokyo markets closing for the vernal equinox. the market in seoul almost upon us. this is bloomberg. ♪

>> i'm haidi stroud-watts in sydney. asia's major markets have opened for trade. >> from bloomberg's global headquarters in new york i'm shery ahn. >> i'm in hong kong. sophie kamaruddin. welcome to "daybreak asia." >> our top stories this wednesday, patience and a long pause for fed chairman says rates will stay on hold for some time as he watches the global situation play out. and teresa may requests a brexit delay. the e.u. says it's up to her to drive her deal through

parliament. >> and president trump says trade tariffs will remain in force no matter what happens in negotiations with china. >> south korea opened, japan on holiday. let's get straight to the market action with sophie. sophie: the a.s.x. looks to extend declines and the dollar getting a lift from the dovish fed and how declines for the n.d.x. 50 and the kiwi dollar is continuing to gain ground, being lifted by that better-than-expected g.d.p. print when it comes to the quarterly number. it did match estimates coming in at .2% on a quarterly basis. now, we do have the kospi coming online. let's check in on how stocks are faring in seoul. the kospi gaining .4% this morning. we will be gauging reaction to the latest export figures for the first 20 days of march. we did see a drop of nearly 5% for shipments and chip exports. particularly seeing pain there

with a drop of 25% for that industry in the first 20 days of the month. i want to highlight some vement when it comes to that space. s.k. henex shares jumping as much as 4%. this is hyundai motor because we're keeping an eye on this in the wake of elliott management issuing a letter to shareholders urging for real change at the upcoming a.g.m. on march 22. but let's look out to check in on chip makers. we do have samsung, s.k. hanen gaining ground and micron suppliers on the up after the u.s. chip maker said it does see improving demand for memory chips in the second half after this tapering. an appetite that we've seen of late which has spurred micron haidi. ts output, haidi: let's look at the first headlines for you this hour.

european union is considering an unscheduled meeting next week to decide whether to grant a brebsity extension. sterling fell as e.u. president said it's up to teresa may to draft her deals through while france said the e.u. needs guarantees before any extension is granted. may has asked for a delay to the end of june and told brussels she intends to put up her plan to the house of commons again. >> the hope for a final exit may seem frail, and although brerksity critics increasingly visible and justified, we cannot give up seeking until the very last moment a positive solution. of course, without opening up the withdrawal agreement. haidi: president trump has rebuffed the relief saying duties will remain in force until he can be sure beijing is complying with any trade deal. his comments lower any hope

that ongoing negotiations may bring a halt to the restrictions that the two countries have placed on imports. china has been pushing for the removal of tariffs to be part of any agreement with the u.s. >> in the fourth quarter, driven by construction and services spending, g.d.p. grew .6% in line with forecasts. however, annual growth was 2.3% as the weakest since 2013. the kiwi dollar did climb as investors priced in a lower chance of a rate cut later this year. the reserve bank has said it's not planning to hike until 2021. >> the boeing drama has taken a surprising turn with reports as french exports working with flight recorders from the ethiopian airlines crash will not carry out further analysis of the data. the download of flight information has been sent back to ethiopian authorities where expected to ask another country to assess the data. u.s. agencies and boeing team have also been providing

technical expertise. shery: the federal reserve stunned economists and investors with a more dovish tone than expected taking any chance of rate hikes off the table this year. while leaving the door open to a cut. our global economics and policy editor kathleen hayes is here with how jay powell explained this plus reaction from a former fed official. kathleen, so we went from two rate hikes to none. how did this happen? >> wow. that's all i can say. let remind everybody who is knots familiar with the fed's dots that they're based on the fed's view of the economy. g.d.p., sploint, and inflation. and every three months they update them and from those projections they say hmm, that's what the economy is going to look like and i see rates higher, lower or not moved at all. and obviously they went a lot of people changed their minds. when jay powell went into that press conference, he faced a lot of -- i thought really smart questions from everybody there. certainly from our bloomberg team. he said i got a positive view. we've got a positive view on the economy.

the fundamentals are strong. the labor market looks good. but he also acknowledged there's been some weak data recently. he is especially highlighted weak retail sales in the u.s. basically said it's a great time for the fed to watch and wait. and he said in fact the fed isn't really sure what it's going to do but everything is on the table. >> we don't see data coming in that suggests that we should move in either direction. they suggest that we should remain patient and let the situation clarify itself over time. when the time comes, we'll act appropriately. >> so inflation very important. one of the specific things that jay powell said is we see core inflation up around 2% by the end of the year, hovering there mostly. that's important. that's the fed's target but because of lower oil prices they see the headline inflation falling. let's look at some other things that were more dovish and what drove the fed as jay powell explained it. they did cut their g.d.p. forecasts from 2.3% to 2.1%. that's a pretty decent reduction. what did they cite? well, besides some of these

weak economic data in the u.s. they will wait to see how those play out and slowdowns in europe and china and jay powell thought the outcome for china is good and is there nevertheless and past rate hikes, it takes a while to take hold and they're watching that. the extended hold on rates, that's what he sees potentially and again leaving the door open to rate hikes. one more thing it to put on the table the balance sheet runoff. the end of quantitative tightening is going to be by september, starting in may, hadei. a year ago the fed wasn't even talking about ending it. now they've got that definitely on their map, too. suggesting that that is one more -- more source of potential tightening on the economy. they think it's time to get rid of. you can put that on the dotchish side as -- dovish side as well. shery: the fed projections don't signal a cut but something that seems to be much more on the radar. is it likely? >> well, it's likely only if i

think -- if there is a much weaker economy. if this early year weakness, often the first quarter g.d.p. in the u.s. picks up in the second half of the year. and even jay powell said he still thinks that tax cuts may be helping in a delayed way, investment, productivity, even workers' wages. we asked jay -- al broadus about this earlier because fed funds futures traders are starting to price in greater odds of a potential cut. al broadus, former president of what he ond fed, thinks the fed has to see to cut the key rate. >> a sustained weakening in the job numbers or perhaps in something like consumer spending. but most importantly, if you get a single in any of the inflation data or data on inflation expectations, that suggests that the inflation outlook may be even weaker than now seems to be a possibility, i think that would be what would trigger a downside move on the rate.

>> fed chair powell also talked about inflation expectations when he was speaking at the press conference. let's jump into the bloomberg terminal and see what they're doing. i think we see another reason why the fed is being cautious and why they paused. if you look back to 2013, you can see how there has been a steady decline in inflation expectations. and many of these are based on consumer surveys. people just -- and those -- people don't see inflation rising and jay powell in the press conference said that this -- this inflation that stays low, stubbornly low, not just in the u.s. but around the world is probably one of the biggest challenges they face. so another very important indicator for us to watch as we try to figure out what the fed does next. shery: thank you nor that. policy editor kathleen hayes and we're getting the latest lines out of the bank of korea. saying that this is not the timing to lower rates. that monetary policy is in an accommodative trend but not yet

timing to cut rates. this coming after yesterday we still have the minutes saying that the growth prospect this year, they warned about the growth prospects this year. so we're going to hear more about this -- from the central banks in asia as we get a rate decision out of the philippines and indonesia later on today as well. let's discuss this with james keenan who joins us from singapore. a blackrock c.e.o. and global co-head of credit. james, great to have you with us. let's talk about the latest fed decision. how dovish in your view was today's dovish turn? >> yeah. i think -- it was obviously dovish. but it was really a confirmation of the language used by the fed in january. and you see that reflective in market prices today. but i think it's a positive in general. i mean, the financial conditions tightened dramatically in the fourth quarter of last year. and the fed has been responded. a variety of different factors that was cited by chairman

powell that are coming into play. and the fact that they're going data dependent, there's a bit of wait-and-see as the economy -- economic data weakens up. i think the dovish stance right now is positive from an economic picture. it's supportive for markets. and we'll have to see how the economy goes whether they are going to move further or not. shery: as an investor how do you look at the environment right now? where do you put your money? >> yeah. we -- right now, based off of the rebound of asset prices that you've seen in the first quarter of this year, and the supportive stance of the fed, we think economic data will continue to be slightly weaker based off of the financial tightening that we saw at the end of last year. that being said, we think that you'll see stability at lower growth levels, inflation is in check and now we have a little bit more certainty with policy. so we like kind of quality carry assets. in general, there's ways that you can get income flew credit

in that 5% to 7% range without taking a significant earnings risk. based off the path of economic data we like sitting out there right now. shery: we saw treasuries rally and the dollar fall and it's been a slippy period for u.s. treasuries. do we expect further room for the yield to fall? >> i do. obviously there's been a pretty big move since the last several months. but if you think about that environment with some weaker economic data, i think the rate arket is responding to that. weaker inflation, supportive fed, at 2.5 on the 10-year. i wouldn't underwrite the fact that you're going to see a significant rally in rates. but that being said, i think it's -- relative to where the fed data is rates are going to be a little bit more range bound here at this level. >> what about other opportunities across

sovereigns? new interest in australian and new zealand bonds at the moment because you essentially are looking at central banks that still have room to go lower? >> yeah. i mean, if you think about it, i mean, obviously relative to the fourth quarter, asset prices corrected. you've seen not just the fed move. but the pboc in china has been very stimulative through the fourth quarter of last year. that paints a pretty good picture from some of the assets and some other assets out there. so we do think that, you know, if you have a range bound u.s. treasury, you have a fed that's becoming a little bit more dovish, you should see some weakening in the dollar, the strength or the recovery of some of the chinese markets, and stability down there. i think you can see some pretty good quality assets and some of the e.m. space. we do like e.m. -- e.m. credit at this point. but again, on the higher quality end of the spectrum. >> we do want to talk e.m.,

especially china but do stick around. c.i.o. nan, blackrock and we're counting down to the latest check on the australian economy. we'll bring you the unemployment numbers as they break. up next, why japan is downgrading its view on the economy. the first time in three years. this is bloomberg. ♪

>> this is "daybreak asia." i'm shery ahn in new york. >> i'm haidi stroud-watts in sydney. the downgraded assessment of the economy for the first time in three years underscoring rising concerns ahead of the south -- tax hikes slated for october. throughout asia, economy managing editor malcolm scott here in sydney. and a fair concern given the last time we had the south -- it was pretty disastrous for the economy. >> that's right. the real head winds are coming from the external sector at the

moment. the trade story and this synchronized global slowdown that at least we've seen in this first quarter. the first quarter in japan looking pretty miserable. the trade numbers, the factory numbers have all been pretty dire so far this year. the numbers to china, the export numbers to china have all weighed on it. so that's -- north industrial complex is certainly struggling. how much that's to do with the trade tensions and how much that's to do with the technology slowdown we're seeing, or just a general economic slowdown that's still unclear. but put all those three factors together, and there's a real weight from the external sector on japan's economy right now. that of course, the domestic economy, by japanese standards, looking ok. not doing anything fantastic of the but it's looking ok. but put those two things together, and the price outlook doesn't look fantastic at the moment, either. and .8%, c.p.i. at the moment. still a long way from that 2% target. >> some b.o.g. officials believing it's hard to reach that 2% inflation target

according to some sources so what are the policy implications of this? >> this overall tepid outlook and of course the recent downgrade tell us there's some real worry that this g.s.t. increase scheduled for october is a good idea. as haidi mentioned earlier. it was a big hit last time they did this. you want the economy to be really firing before you do that. that's on the fiscal side. on the monetary side, there's a little bit of renewed debate coming around. whether that 2% inflation target, you know, 2% or bust, whether that's really the way to go. the -- the negative consequences of this, all out stimulus effort in japan, are piling up. you got the regional banks suffering. you got some of the big banks posting some losses on some of the assets they've had to chase to get some yield. so we had tara aso the finance minister saying is it a good idea maybe we cannot be too

obsessed about that 2% number, so far the b.o.j. is sticking to script. they remain of the view that they need to give the market that assurance that they will keep going until they get 2% or even further. but, you know, these questions have to renew themselves. especially if we start to see c.p.i. reverse again as many economists now expect. .8% at the moment. they could be headed lower. you got oil prices a long way away from where they were when that 2% target was set. we've got weaker mobile phone prices. a whole bunch of domestic pressures that just aren't there. some good signs. we've got companies investing more. but overall, it's a tough outlook for the b.o.j. >> bloomberg asia managing editor malcolm scott. with that downgrade to economic growth expectations in japan. the blackrock c.i.o. james keenan is still with us and james, malcolm spoke about potentially some of the

technology and the structural aspects of why we're not seeing inflation materialize globally. when it comes to japan, though, it's essentially whatever it takes, right? >> yeah. i think -- i mean, it goes beyond that. i think obviously technology is a big factor. but for sustainable long-term inflation, i think there are some major head winds to that. for one, is really just a dead burden on the global economy. you know, if you think about the last 10 years, there's been a lot that's been done to help out. the structural issues where that debt was on household and banks. but the reality is as we -- deleveraged as a global economy, we've just taken on leverage at the central banks and the government balance sheets. and again, that is still going to be a headwind, long-term sustainable inflation. and add on some of the demographic issues, japan is one but globally speaking we see some of that. and i think these are just issues that are going to weigh down not just on inflation but long term growth levels. >> i'm curious about your view of emerging markets and the

rally, the last couple of years whether that has further room to run particularly when it comes to southeast asia and some of the asia e.m.'s a lot who are facing starting with thailand this weekend geopolitical and domestic political uncertainties. where do you see opportunities when you look across that part of the world? >> yeah. i think in general, starting point is -- as mentioned before we like all forms of kind of higher quality credit. we're not really at this point post the rebound and what you see in economic data trying to take a significant amount of earnings risk in the credit market. but if you look at what you're seeing in the data, obviously in 2016, post the commodity cycle a significant amount of stimulus that came in from central banks and specifically the chinese central bank. and you have really seen a rebound of that sense. the data that you're seeing today is softening. there's a maturity of that, that cyclical nature of the rebound there. on top of the tightening that you saw from really the central

banks early on last year that really had an impact on e.m.'s. so i think what you're seeing now, not just the fed, but the stimulus that the pboc has put in, will start to take hold. i think that stimulus is different. so we don't expect a purely commodity run here. and from an e.m. standpoint, similar to what we see in north america, we like buying kind of the higher quality company basis. and areas that you're not taking a significant amount of earnings risk. and i think that's a good place to get a pretty solid income stream at this point. shery: that tightening in the central bank across asia we can see it on the philippines as well this g.t.v. chart showing how they increased that 175 basis points in 2018 alone following the fed. these economies across asia, and emerging markets, they face a different scenario, right? inflation is an issue in the philippines. not to mention some elections coming up as haidi said.

when people say that the fed's dovish turn will help emerging arkets, is that really true? >> i don't think -- i mean, i think you're pointing out the fact that you have to really look at what specific types of assets. and i think in a low growth environment, at the end of the dey, you're going to have winners and losers. and, you know, the global markets regionally, by country, everyone is generally fighting for market share of a lower growth environment. i think the two-fold is a weaker fed. or a more dovish fed, is something that is not going to put as much pressure on the dollar which by nature of the funding of many of these emerging market countries that should be a positive from a global funding source. but really, the system -- -- stimulus from china will start to go into the market and you'll see the response if you think about asia high yield and rallied almost 200 basis points year to date. we would now put that more in

the -- a more fair value relative to what we see in other asset prices. and what we're seeing in the current economy picture right now. so i do think the dovish fed is a positive. the pboc is a positive for e.m. assets. but you have to pick your spots and it's not an overwhelming stimulus that you're going to see significant rally from here. shery: thank you so much for your time today. james keenan, blackrock c.e.o. and global co-head of credit. and you can get a round-up of the stories you need to know to get your day going in today's edition of daybreak. bloomberg subscribers on your terminal and also on your app and customize your settings and only get the news on the indices and assets you care about. this is bloomberg. ♪

>> a quick check of the latest business headlines. 145 years after turning out the first pair of jeans levi-strauss is proving

fashionable to investors. levi's raised $623 million in its i.p.o. pricing shares above the market at range. the stock will trade from thursday on the nonk. and under the ticker levi. the largest u.s. listing this year. $1.7 gle has been fined billion in a trio of probes that have already racked up $9.3 billion in penalties for google which is making changes to how it displays ads to comply with the 2017 order. >> netflix jumped to a five month high thanks to two positive analyst reports. imperial capital says a strong slate of international shows could fuel subscriber additions while r.b.c. capital notes netflix' record user penetration in the u.s. and consistent satisfaction trends, both analysts maintain outperform ratings on netflix which has erased a loss in the

final quarter of 2018. plenty more to come on "daybreak asia" including the australia february unemployment numbers. this is bloomberg. ♪

shery: crossing the bloomberg the latest employment and labor market indicators out of australian employment change just -- 4,600 jobs added to the australian economy in the month of february. that's an underwhelming number considering we're expecting 15,000 to be added. having said that in january that mammoth almost 40,000 jobs added. unemployment rate down to 4.9% against expectations of holding at that 5% level. fourth time unemployment was revised down by a subtraction of 7,300 jobs. but again, remember, we had 65,000 added in full-time jobs in january. and when it comes to part-time

unemployment, we're seeing addition of just shy of 12,000 jobs there. the workforce participation rate also ticking a little bit lower. 65.6% there. let's put this into context. earns and young chief economist from sydney joins us on set. the strong -- the robust labor market has been what the aussie has been hangingity hat on. and -- has been hanging its hat on. and still not bad but considering february which was so exceptional. >> that's right. an -- the standard on a monthly jobs read is about plus or minus 30,000. so it is really important to look at the trend in unemployment growth. and as you say contextualize around it what we've seen in the last few months. from my perspective, the tick down in the unemployment rate was very welcomed by -- they've been focused on that unemployment rate. their own forecasts are expecting a gradual decline to 4.75%. so in that sense it's a reasonable rate. haidi: the hope is that this feeds through to wage growth

and will it be enough given most house are predicting two rate cuts this year? >> well, we don't really know what is enough to generate wage growth. but i think what is encouraging and what you've seen in the u.s. which is a period of a very low unemployment rate. is actually now generating some wage growth of the in short it tells us the phillips curve still exists. and not broken. it's just taking a very long time to come through. so to the extent that we can continue to see a gradual decline in the unemployment rate here, and the underunemployment rate importantly then over time we should generate wage growth. but it will take time. >> we are seeing business confidence starting to slip so that could put the brakes on hiring? >> yeah. i think the business confidence angle is actually really interesting. there's a lot of things that are concerning australian businesses at the moment. everything from energy, policy, we've got a federal election coming up. there does seem to have been quite a significant slowdown in economic momentum in the second half of this year. so i think what happens to business confidence will be

important. what we do know, though, is that the economy lost a lot of momentum in the last half of last year. but the employment data is telling us that things are ok. so a bit of a conundrum at the moment between those two data releases and i think businesses will be watching what happens to their own demand very closely over the next few months. >> what about the pressures that we're seeing on the housing market? are we -- are weaker housing prices being felt in -- and following through and moving through to spending? >> the answer to that is yes. some recent research from the a.v.i. suggest that wealth effect from the housing market, particularly is acute in motor vehicle sales which have collapsed here in australia. incredibly sharp declines there, motor vehicle sales. and also in spending on furniture and furnishing which the retail trade data also showed as being quite weak. but what we're not seeing is a really, really broad collapse in consumption. overall consumption growth has slowed. but it's still running at about 2%. so a lot of them -- where it

was but not a broad based collapse and we need to look at the fall in house prices in context of the rise that we've had. >> that's right, isn't it? in terms of the politics of australia, and counting down to a may election and how much policy change do you expect post may if we are to -- we do get a change in government? >> well, obviously with a change of government, there's a time to sort of redirect policy. we've seen some big policy differences between the two. and we'll get a bit more information in the first week of april. everyone tends to be focused on the budget. but of course we'll get the opposition reply to the budget on that thursday evening. so that will set the scene for the election. but we do -- i think both parties will have income tax cuts in their platforms. so that will be important for supporting the consumer. >> yeah. a statement of economic populism coming through already. and always great to have you. joanne masters, earnest & young chief economist. shery: we go to su keenan. >> thank you.

we start with the fed which says interest rates could be on hold for "some time" as rising global risks weigh on the outlook for the u.s. economy and the domestic demration remains muted. -- inflation remains muted. jay powell saying no data suggests a move up or down adding that policymakers should remain patient and let the situation play out. the fomc surprised the market by slashing the number of projected rate hikes this year from two to none. >> the data that we're seeing are not currently sending a signal which suggests moving in either direction for me. which is really why we're being patient. we feel our policy rate is in the range of neutral. the economy is growing at about trend. and inflation is close to target. and unemployment is under 3%. it's a great time for us to be patient and watch and wait and see how things evolve. >> to the trade talks now, president trump has rebuffed china's plea for tariff relief

saying duties will remain in force until he can be sure beijing is complying with any trade deal. his comments reduced the odds that ongoing negotiations may bring a hope to the restrictions the two countries have placed on imports. china has been pushing for the removal of tariffs to be part of any agreement with the u.s. japan meanwhile is downgrading its assessment of the economy for the first time in three years. the cap net office cites weakness in exports and factory output. underscoring rising concern about the scheduled sales tax hike in october. now, in 2014 the economy contracted sharply after a similar tax increase. the bank of japan also takes a dim view, cutting its assessment of exports and production at its latest meeting. international aid is arriving in southern african countries that have been hit by severe flooding. this after a devastating cyclone over the weekend. countries around the world are

sending multimillion dollar packages to mozambique, 50 babwe and melawei with 3 people confirmed dead. the united nations say it may be one of the worst natural disasters to hit southern africa in living memory. indonesia threatening to ban imports from the european union in retaliation for the decision and impose new limits on the success of palm oil in green fuels. jakarta says to protect the interests of almost 28 million people whose livelihoods are tied to palm oil. officials hint that planes made in the e.u. could be among the target for a boycott with indonesia needing more than 2,000 aircraft in the coming years. global news 24 hours a day, on air and on twitter powered by more than 2,700 journalists and analysts and more than 120 countries. i'm su keenan. this is bloomberg. >> thank you. a bit of a mixed picture across markets in asia. let's see how we're shaping up.

sophie. sophie: yes. stocks indeed trading mixed. japan offline today and we're seeing gains on the kospi which is set to halt a two-day drop adding 1% with chip stocks among the biggest boost as investors digest micron's outlook for chip demand which may offset data showing more weakness in semiconductoror exports. we're also seeing korean displaymakers like l.g. display gain ground amid reports that apple will adopt oled screens for three iphones to be released next year. now, over in sydney we are seeing the a.s.x. 200 on the back looking to extend declines for a third day. on r i -- mcfari on the the drag and the kiwi dollar is jumping after economic growth picked up in the fourth quarter. so switch it out to visualize the kiwi move. and i want to show this on the terminal because we do have the kiwi dollar back above 69 as observers assess the likelihood of a rate cut from the r.b. a.s.b. still sees that risk in 2019 because g.d.p. growth did slow over the course of 2018 by more than the central bank

expected. now, despite that bit of cheer from the g.d.p. report, you have new zealand's 10-year yield potentially pushing toward 2%. tracking that fed fueled move that earlier saw the aussie benchmark yield further below 1.9%. but we are seeing that rally cool after the latest jobs data. the 10-year yield moving back above the 1.9% for aussie bonds. and we are seeing the aussie dollar spike on the back of that data. we did see the february jobless rate unexpectedly decline. a bit of cheer coming through there. and as joanne masters of e.y. told us it looks like a reasonable set of data from australia this morning, haidi. shery: president trump is not budging when it comes to chinese trade tariffs dashing hopes for a quick deal. we have the latest. this is bloomberg. ♪

>> this is "daybreak asia." i'm shery ahn in new york. haidi: i'm haidi stroud-watts in sydney.

president trump says tariffs on china will stay in place until his -- he's sure beijing is complying with any trade deals. the comments dim hopes that the nations will roll back duties as part of a lasting truce. senior bloomberg international editor jodie schneider. we've been talking about what potential implications there will be for compliance and enforceability and how they will be able to get that into any potential deal. and it sounds like president trump wants to use the tariffs as a form of compliance. >> that's right. he wants to use them as leverage it appears from these comments. he's saying that he would lift the tariffs only when he thinks that china is living by the terms of a deal. and he said in the past, china has had some problems living with certain deals. so of course this dims those hopes that once they did -- once the two sides reached an agreement, that those tariffs could come off. and we're now up to about $360 billion in tariffs when you add them all up on both sides.

haidi: president trutch just this week said that -- trump just this week said that the trade deal is coming along nicely. where do we stand on trade negotiations? >> well, he is saying that this is coming along nicely and negotiators from the u.s. are going to china over the weekend. and these talks are obviously continuing and they're continuing almost around the clock. however, obviously this is -- this does give some concern about the tariffs not being lifted immediately or the president saying that at this point there had been hopes that those would start to come off. and that china would -- that that was part of one of the things that china wanted to see happening. china's obviously concerned about this continuing to use leverage and they've said to be pushing back on some of the agreements and some of the things that the u.s. wants in the agreement. apparently china had been willing to make some changes to

its intellectual property policies. but now that the u.s. is using these as leverage, there's concern there about how much china will have to give to be able to get those tariffs off. haidi: thank you so much. jodie schneider, our bloomberg senior international editor. president xi jing ping will visit italy and france in promoting his belt and road trade initiative and his e.u. ambassador has spoken exclusively to bloomberg. and described the china-e.u. relationship as one of cooperative competition. and that the two sides know how to handle their differences. >> between china and e.u. there are some differences, different ews in some areas like any partners, between any of our partners. fortunately, we know how to handle such differences.

through dialogue, cooperation, not confrontation, not through unilateralism. nd also we compete in some areas. lso like any partners. but such competition i think is .ot a bad thing if we make comment on the competition between china and it's a i want to say cooperative competition which is helpful for better bilateral relationship. >> and now that you talked about bilateral relationships,

we understand that on friday, there will be a memorandum of understanding at that will be signed between the government of italy and china. i know -- well, chinese are very happy about this. i'm just wondering on behalf of the e.u., did you encounter any resistance? they always stress that everything gets done in europe has to be done multilaterally, not bilaterally? >> well, mentioning the signing of the document with italy, between italy and china, so i nt to have some words on the visit of my president. president will start his visits o europe to visit italy, monaco, france. both of them e.u. member states. tomorrow, i think, yeah.

d this will offer a good chance for the communication mong both leaders. to strengthen political cooperation. >> china's ambassador to the e.u. zhang ming speaking exclusively to bloomberg. tv go on the bloomberg you can watch us live and you can catch up on past interviews as well as dive into any of the securities for the bloomberg functions we talk about. blues become part of the conversation as well. you can send us instant messages during our show. this is bloomberg subscribers only and do check it out. it's at tv go. this is bloomberg. ♪

>> this is "daybreak asia." i'm haidi stroud-watts in sydney. >> i'm shery ahn in new york. let's get a quick check of the business headlines. the largest u.s. maker of computer memory chips says it's cutting production because of a slump in demand. micron technology, second quarter revenue, fell 21% and it says the current quarter will likely fall again and miss estimates. micron is cutting manufacturing investment by $500 million to protect revenue. shares rose in extended trading. haidi: b.m.w. says earnings

will fall "well below last year's level" and is embarking on a $14 billion efficiency drive to counter the trade war and the rise of electric cars. shares fell the most in september after b.m.w. said pretax profit would decline more than 10% this year. the company will cull underdeveloped models and breaks on hiring new staff. shery: ford is planning to spend $900 million on a plan to build electric and self-driving cars in michigan. the project would see the creation of about 900 new jobs and comes after president trump's criticism of general motors for shuttering a plant in ohio. ford is updating earlier commitments on building plug-in vehicles and a factory south of detroit. shares fell but are up about 12% this year. haidi: u.b.s. has business conditions of the toughest in years with the current quarter shaping up to be one of the worst in recent history.

the bank will slow down hiring and step up cost cutting by $300 million as it confronts a worsening situation. e downbeat assessment from salmati said the declines at rivals credit suisse and deutsche bank as well. valuable stock in asia is due to release earnings later and tencent shares have had a strong run-up despite a projected 16% profit slump. bloomberg intelligence analyst joining us and gains last year a torrid year for tencent. what are we expecting to see in that fourth quarter set of numbers? >> yeah. the clampdown really ended at the end of december. and so tencent will not have new games in the fourth quarter and highly likely that we'll see another sequential slowdown in its mobile game sales in the fourth quarter. haidi: margins have been trending lower. should we expect that to continue in today's report?

>> yes. games are -- well, the most profitable segment for tencent. so that's slowing down. and fourth quarter is seasonly high quarter for content spending on video, on top of that we have macroeconomic weakness affecting app sales and tencent is ramping up low margin businesses like payments and clout. so i think it's highly likely that we will see margins decline. and consensus forecast margin of the lowest on record for tencent. haidi: the pipeline for approvals have restarted again. is the outline for gaming starting to look more positive? >> yeah. i think the market has reason to be more optimistic. tencent, nao game after the approval, it's called perfect world, launch in the first quarter, has been very successful. and it's contributing revenues that are almost 50% of what its flag ship game is doing. so we have reason to be optimistic. but looking ahead, the pace of

approvals may still be very slow. there can be still some uncertainties in the coming quarters. and the regulatory environment is still fairly strict. so i think we shouldn't expect the pace of game sales to grow like we've seen before. haidi: and the gaming licenses being renewed. has the damage already been done from that halt? >> yeah. well, clearly, the second half of last year was extremely bad for the entire industry, tencent, and going forward, approvals have restarted. but the pace is slow. and there's a huge backlog to clear. and i think the overall environment for the gaming industry is slightly different. penetration of gamers is already very high. and the only leverage for growth is to make these gamers spend more and that's going to be harder to do than back in the last couple of years where the gamer numbers are rising.

and we have the authorities, being concerned about playing time of minors, my ethiopia so a -- myopia so a stricter and playing time will impact sales for the industry as well. >> thank you so much. our bloomberg intelligence senior analyst. all right. let's get a preview for what to watch in markets later this morning. sophie. sophie: we do have a barrage of earnings from hong kong and china and we're going to get get results from petrochina, cnon and pipelines and cap-ex and a focus on capex to rejuvenate domestic demand and petrochina, to create a separate pipeline company. we are also keeping an eye on the lead intelligence, flipping the board this after the stock was cut to neutral at city. this is china potentially severe cuts to electric vehicle subsidies. will be a drag on revenues in 2019. now, citi says the 27% rally this year in geely has priced

in positives with customers, chinese battery makers, spending an estimated 60%, haidi. haidi: all right. sophie kamaruddin there in hong kong. the bloomberg invest asia event where on staining at the moment speaking on the future of hong kong. the hong kong chief executive carol ahn speaking there as you can see. that's just about it for "daybreak asia." and we will be right there at the bloomberg invest conference. looking at live pictures of the chief executive of hong kong, speaking there. and she is delivering that keynote on the future of hong kong. and standing by, joining us to take a look at some pretty major guests that will be speaking to throughout the course of the day. >> that's right, haidi. nd we will be talking things through at the bottom of the hour and what it came to trade tension tensions and the impact

of hong kong. she wasn't very optimistic back in devos speaking to haslinda back then. and we'll see how things are now. but we have a great lineup of guests to talk through not just trade but the global economy and that fed u-turn and that 180 dovish tilt we saw overnight as well. morgan stanley's managing director and co-c.e.o. laroya will be talking through markets bioligics, argest chris zhen in the 10:00 hour. >> a great lineup of conversations there. and just before we hand it over to bloomberg markets asia let's take a look at how markets are trading, and it is a holiday thin session. we have the nikkei 225 in japan closed on account of the vernal equinox and trading in tokyo today but we are seeing a general upside when it comes to trading across the rest of the region. and we had a pretty up-and-down

session in the u.s. overnight. getting some respite with even more dovishness than expected fed but certainly some of these concerns, tases between the u.s. and china won't be lifted at least in the short term. casting a bit of a cloud over sentiment, shery. shery: and we saw the s&p 500 and markets here in the u.s. take a turn to the negative and end in the red. but s&p futures at the moment looking up. .3%. also futures in taiwan, in china, in the green as well. that's it from "daybreak asia." our markets coverage continues. the china open is next. this is bloomberg. ♪ want more from your entertainment experience?

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