manus: daybreak middle east. our top stories this morning. the federal reserve stuns economists and investors with an even more dovish tone than expected. rate hikes are off the table for this year. on the edge of a no deal, theresa may shocked the e.u. by an thing for a short extension, but the block says that is only possible if she can persuade in the vote for a deal next nine days. president trump says he will keep tariffs on china. high afterother 2019

the biggest withdrawal of crude in u.s. storage tanks since july signaled further tightening of supply. 9:00 a.m. across the emirates. this is bloomberg daybreak middle east. i am manus cranny in dubai. we are cranking it up when it comes to moves in the markets. have a look at the 10 year government bond rate. maybe one hike next year. i emphasize the word maybe because the market right now is pricing in more than a 50% probability of a 25 basis point cut this year, so 10 year bond yields really were in focus. rolet over the dmn market matt the gmm market

map. the move and emerging-market currencies. i am not going to skilled juliette saly's thunder. morgan stanley asia pacific ceo fx is rocking it out. indonesian rupee is up. south korean won is on the up. you are seeing a manifestation of the dove, of this real move by powell doubling down on patience, and how that has manifested itself in markets. we will talk more about that with my next guest. in the meantime, debra mao has your first word headlines from around the world. debra: new zealand will ban semiautomatic guns and assault rifles following last week's deadly mosque attack. the government will set up a

nationwide buyback of all such weapons in circulation at a cost of around $100 million u.s. it will take effect on april 11th. the prime minister says the move is one of many to come after christchurch. receive andill consider further amendment to our gun laws. these proposals will go through process.lsome be assured, this is just the beginning of the work we need to do. debra: the european union is considering an unscheduled meeting to decide whether to grant a brexit extension period sterling fell as e.u. president donald tusk says it is up to theresa may to drive her deal through while france says they need guarantees before any extension is granted. delays asked her a through the end of june and will brussels she plans to put her plan to the house of commons again. china is defending its ambitious

belt and road initiative. the policy is criticized for abating on -- for ladling debt on poor countries. italy will sign a memorandum of understanding when president xi is in rome. beijing insists it plays by the rules. >> we always encourage chinese companies to actively engage in international cooperation. during this process, we always encourage them to follow margaret rules and abide by local laws and regulations. market rules and abide by local laws and regulations. experts working with flight reporters 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 going to ask another country to assess the data. a team has been providing

technical expertise. oil reached a new high for the year after the biggest withdrawal of crude in u.s. storage tanks since they live signaled further tightening of supplies. imports from saudi arabia dropped by more than half. venezuelan shipments to america stopped altogether. domestic inventories of gasoline and diesel shrank, indicating strong demand. global news, 24 hours a day, on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am debra mao. this is bloomberg. manus. manus: thank you very much. the federal reserve stuns economists and investors with an even more dovish tone than was expected, taking any chance of a rate hike off the table this year while leaving the door open to a cut. >> we don't see data coming in that suggests we should move in either direction. it suggests we should remain patient and let the situation

clarify itself over time. when the time comes, we will act appropriately. the said abandoned projections for a resumption in hikes this year and signaled a swift end to the balance sheet contraction. this is what we have on the mliv. cranfield.e -- mark the tcu this morning. goodd this introduction -- to see you this morning. i read this introduction. on thee a doubling down message or was it trying to get ahead of the patience? mark: he is trying to give himself plenty of room. the data has started to look a bit poorer. there is also the possibility that the fed slightly regret sounding as hawkish as they did in december. they are doing catch up with

themselves here. they say we need more time to assess this and we are going to give ourselves basically the rest of the year to do that. and if, by the end of the year, the data is starting to show a softer economy, inflation is coming down, the global economy is certainly weakening oa bit, the fed will be patting itself on the back saying that pause was the right decision and holding rates was the right thing to do. the big question, as you were eluding to earlier, is whether they were looking to next year and seeing whether they might want to lower interest rates at that point. people might talking about the next u.s. recession around the corner. for the time being, they are doing all they can to justify that a long pause is the right option for them to take. it might get some of us off their backs. they sent a very clear message. no hikes this year. get over talking about it.

focus on the data. where was it most manifest in asia? is at an eight month high. currencies are rocking out. is it in the emf you are seeing the biggest reaction or is it across the asset classes? mark: bonds and currencies are taking the lead for the time being. equities are slightly behind. that is not too surprising. there are a few central banks in asia who will be happy to see this extended fed pause because countries like malaysia, philippines, indonesia, probably and yet again, they probably would not mind considering a rate cut of their own for sometime this year. india have already done one. they would not mind doing a second one. to openow is starting for these central banks to seriously consider even cutting rates ahead of the fed, which is an unusual circumstance, but conditions are falling into place. from an investor's point of view, this is a double whammy.

the bond market starts to do better, the currencies start to appreciate, it would start to feed into equity markets as well. it is a nice, positive cycle starting to build up. it will take time to play out because the fed is not promising a rate cut themselves. it is a brave central bank that goes ahead of the fed. asian central banks are lining up. we could see a few asian central banks lowering rates even before the major countries do so themselves. manus: it is interesting that when we look at how the curves reacted in the united states, a little bit more flattening, if anything is on the cards. great going to- the markets. mark cranfield in hong kong. joining us is a portfolio manager at tribeca investment partners. good to see you this morning. i was using -- the line i was using is the fed are doves. would you agree with that?

it was certainly, certainly very dovish compared to the market expectations. i would kind of agree with that, but look, the dovish tone was not a surprise given what the rest of the other central banks had been saying over the last month or so. and the global data has been totty weak over the past 12 18 months. we are expecting the dovish tone, but that was a downgrade of the dot plot towards more dovish than the market expected. that is why we are seeing a negative response to the downgrade. r thethe lower fed rate o study fed rate, it does support as a prices. think about what has outperformed in the last five years. the valuation will be supported. on that front, it is probably good news for the equity market once they get over that downgrade. you -- embue ad

little bit of value. i'm looking at the dollar. is this the final deathblow to the dollar? i am so tired about talking about the dollar rolling over, but is this the dollar disaster that they have been waiting for? it is like a shakespearean tragedy. they just keep coming back for more. what do you make of it? look, the dollar is heading lower. we talked about it late last year. it peaked late last year. there is a fair bit of optimism towards emerging-market equities because of the currency, the dollar currency, weakness. you should see improvement on equities. yes, it is heading lower. and the overall economic data is a little bit mixed. the fed is buying itself time.

and to us, you know, the dollar itit is very hard to see how would lift off when the expectation is for a cut for next year. manus: can we dig a little bit deeper? pop the curve into the library. this is tracy alloway who created this one. tracy focused in on three months versus 10, so what you're looking at here is the gap is the tightest now since 2007. if you look at any of these curves, it all makes the same story. this is something that might irk the fed because the one thing they don't want is a series of inverted curves, do they? jun: no, absolutely, because that discourages investment. when the future rate is almost today,, lower than it is it is signaling a recession.

we saw that across some parts of the yield curve of the risk taking place. at this point, we do not see that as a real risk because economic data is still not weak. there was some seasonal impact with the employment numbers, but the slack has been improving. the wage growth is taking place. it is just there is a bit more uncertainty in the world. we want to see the trade deal taking place. we want to see potentially brexit to sort of region and. -- reach an end. and there it is. you have the business investing again. manus: don't worry. you will get your say on brexit as to where we are with that. you stay with me for three minutes. you can say everything you want on brexit. the portfolio manager at tribeca investment. is buying u.k. stocks. still ahead, president trump says he will keep tariffs on

china until he assure that beijing really is complying with the trade deal. it was is near. up next, on the edge of a no deal, theresa may shocks the e.u. by asking for a short extension. can she succeed? we discussed. that is next. this is bloomberg. ♪

manus: it is dubai. 9:16 a.m. in dubai. oil is up. $60.27. the fed has gone to this overly oved position. crude storage moved the market, trading above $60 for the first time since november. but the one fact of the day -- you know i love a fact of the day -- u.s. crude exports

climbed to the second highest since 1993. where were you in 1993? i know where i was. i was trading crack spreads in 1993. $60.25. i did not read them very well. let's talk about the european union and brexit now. they are considering an unscheduled meeting to decide whether to grant an extension. as donald tusk said it is up to theresa may to drive her deal through. france said the e.u. needs guarantees before an extension is granted. today, i have written to donald tusk, the president of the european council, to request a short extension of article 50 to the 30th of june to give mp's time to make a final choice. >> the question remains open as to the duration of certain extension. ofme minister may's proposal merits, of june has its

creates a series of questions of legal and political nature. leaders will discuss this tomorrow. manus: we're back at home. jeremy corbyn ripped into may's handling of brexit. clock on adown the concerted campaign of blackmail, bullying, and bribery has failed to convince the house. countries all the that her deal is anything but a damaging national failure and should be rejected. review froming jeremy corbyn, leader of the opposition. still with us is a portfolio manager at tribeca investment partners from our sydney studio. i have written down here the headline that we have this morning is that the e.u. is pushing the u.k. to the brink of no deal. would you agree with that or is

it a pragmatic response from europe to the prevarication of the united kingdom and its parliament? morelook, it's probably a pragmatic response. to be honest, from the rest of the world, at least from the equity market perspective, we just want them to get on with it. get the deal done. or, you know, whether deal or no deal, get on with it. the businesses cannot invest. the no decision can be made with all that uncertainty hanging out there. we have seen the real economic data impact. slowed itas down. there are a few other issues. it has made impact to that eurozone area, and the currency just going to that volatility, you know, to be honest, they just need to get on with it. get the deal done. , its: in terms of the data

is interesting when you look at the jobs data coming through, we are fizzling along. 220,000 jobs. so could this be similar? i am looking at the data. this all belies similar moves i saw in 2008 and 2009. it was quite an extended period of time before the reality kicked in. is that is what is happening in the u.k.? it is grand in terms of employment, in terms of wages, but the reality make it again at a later stage this year? jun: it's possible. we are seeing a lot of weaker data coming through over the last few years. if you look at the commercial properties and other activities, they have been gradually grinding lower. it is part of the global slowdown, but it is slowing, and then, the real economic activity the news flow.

it will take place. the longer you hang out, the deeper or the more harsh the reality could be in six months or 12 months down the track. manus: one of the biggest stories that we are tracking over the past 24 hours is the ceo at ubs saying we have had one of the worst quarters in quite a while. ipo's, businesses down. when you see a major ceo of probably one of the biggest wealth managers in the world, that was quite a shocking statement yesterday that he made in london. what does that set off in your head when you see that red headline? jun: that is interesting. it is probably the sign of where the equity markets than that the moment, because right now, if -- theerms of global sense --

equity market has performed quite well in the first two months, first three months of the year. gradual pullback. a lot of valuation for some sectors. it has almost gone back up to where was before the fall back. one example is the tech sector. you know, so, it is a good environment for ipo's, and you know, a lot of these deals that come to the market, but of important forvery the economic fundamentals to follow, and with the trade conflict, with the brexit uncertainty, it is just very hard to see the market get to the next level. you want to get the deal done now. manus: and you certainly want to get the wealthy to trade. the first quarter was one of the worst in recent history. you could be more cost cuts to come on that story. jun bei liu, portfolio manager at tribeca investment partners.

thank you for being with me this morning. up next, president trump vows chinas will stay until complies with any trade deal. how does that affect the negotiations? this is bloomberg. ♪ negotiations? this is bloomberg. ♪

manus: president trump says he will keep tariffs on china until he is sure that beijing is complying with any trade deal, bashing expectations that the two countries will agree to roll back the tariffs. kongschneider is in hong with the very latest. jody, if i ever saw a carrot on soliloquyory, a written up on the newspaper, this is it. president trump is saying that he is going to -- it could be a long time before the tariffs are removed even after

an agreement. billion,ing the $360 when you combine both sides in tariffs, could stay on for quite some time. china has wanted those removed as soon as there is an agreement. that had been what the expectation was. this could be posturing by president trump. this could be art of the deal kind of talk. that is the kind of thing he has done before. he seemed quite serious about this. this is leverage that the u.s. want to be able to make sure that china is living up to the end of the deal that they come up with. this could complicate further talks. u.s. negotiators are headed to china this weekend and china is said to want very much care to be removed. to beon't -- tariffs removed. they don't want to wait a long time. 10 already said that on intellectual property productions, which they have been negotiating on, they want

some assurance on tariffs before giving in on that part of the agreement. manus: it is interesting. on the other side of the coin, beat that it is coming along nicely. robertlmost as if lighthizer is coming along in his comments. jodi schneider in hong kong. on the ground in hong kong. up next, the driving appetite for kuwaiti stocks. what is it? we will take a look at our market movers in the middle east. i leave you with risk this thursday morning. the dollar has nipped into the green. doves, the fed out of the -- out-dove the doves. day five of the longest winning

streak since the 31st of january. the yuan hit a nine-month high. continued dollar weakness globally. ♪ this isn't just any moving day.

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debra: you are watching bloomberg. i am debra mao. the fed says interest rates could be on hold for "sometime" as raising global risks outweigh the outlook for the u.s. economy and domestic inflation remains muted. chairman jay powell says there is no did it to suggest a move either up or down, adding policymakers should remain patient and let the situation play out. shed rate hikes from two to zero. >> they are not sending a signal which we should move. we are being patient. we feel our policy rate is in the range of neutral. inflation is close to target.

unemployment is under 3%. it is a great time for us to be patient and watch and wait and see how things evolve. debra: the european union is considering an unscheduled meeting next week to decide whether to grant a brexit extension period sterling fell as donald tusk said it is up to theresa may to drive her deal through while france says this e.u. -- the e.u. needs a guarantee. she intends to put her plan to the house of commons again. japan is downgrading its assessment of the economy for the first time in three years. the cabinet office sites weakness in exports and factory output, underscoring rising concern about the scheduled sales tax hike in october. in 2014, the economy contracted sharply after a similar tax rise. the bank of japan -- the billionaire founder of epic games is offering grants worth

$100 million to game developers with no strings attached. seenburst onto the with fortnight. it attracted 215 million players worldwide. fortnight boosted tim sweeney's net worth to $7 billion according to the bloomberg billionaires index. global news, 24 hours a day, on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am debra mao. this is bloomberg. let's get over to juliette saly now for a look at the markets. juliette: it's looking pretty good for this thursday here in asia. most major markets tracking higher. a little bit of weakness in australia today as banks weighed there. japan is out of action for a public holiday. a lot of buying coming through in these emerging markets. the philippines and indonesia. taiwan coming through with rate decisions today. all of this follows that very patient dovish powell we heard

overnight. in terms of currency moves, a big spike coming through in the aussie. unemployment in australia fell to a decade low, 4.9%. the aussie up by .4%. the hong kong dollar still looking pretty strong. $1know there has been about billion put in by the de facto central bank in hong kong to protect that so far this month. manus: they just keep on going at it. juliette, what about i.t. stocks? they have been leading the gains in the region today. what is the specific company news that is behind that renewed push? microne: we heard counted output. the i.t. sector is the best performing in the region, up by 1.5%. a little bit of a switch out of communications stocks today. a couple of other stocks i want

to focus on, particularly in the chinese session, a new life rally substantially. you can see in the asian market, it is up by 6.3%. the company denying that it's ceo usedillegal -- its illegal drugs and said she wanted a scar to be treated. morgan stanley saying the results of the hong kong-based automaker was an absolute shocker. they have also downgraded their price target on the company by 11%. morgan stanley also downgraded as well. the group in hong kong off by 7.7%. manus. manus: juliette, thank you very much. up by juliette saly in singapore. -- the announcement of some huge hiad.cts in r

there is beauty and cement. >> you are making more money out of it. we have seen something similar happening in saudi before. it just spurred a rally of some cement stocks. we have several of them trading in riyadh. 19 are part of the main index in the stock exchange. manus: this goes back to 25 billion potential makeover for riyadh. >> it is a lot of money and it is a lot of cement expected to actually be part of this project, right? .hey are located in riyadh they are probably the ones that are closest to the potential new project. of course, we just saw investors

placing their bets. it was the best performing day for the stock in over one month. and we heard from analysts on the ground that this is probably the best explanation to actually tell us what people are thinking. manus: it has had a pretty big since july last year. is this about inclusion later in the year or is there something more? >> this is a market we have seen performing quite well, manus. it has been delivering returns in a quite tough environment for both markets in general, and yes, there are expectations that it will get a bigger chunk of .he frontier markets index the macro picture is seen as quite stable. earnings are expected to grow. and valuations are still attractive for certain names. it is a very concentrated

market. if you want to play this market, you should look at exactly the names that could benefit the most going forward. manus: some of the names that are on the move. it is the banks in kuwait, isn't it? >> the biggest lender in the market. goingo major vendors through a merger right now, which are treated in kuwait. and kfh.h -- aub manus: thank you very much. manus:our resident stocks reported in the middle east. let's extend the conversation a little bit more into qatar. qatari stocks are experiencing the roughest start since the start of the year. the index is down 7% this year. bucking the trend of our middle east market gains. doha is us now from the senior director of asset

management. it has been a tough start to the year for qatar. is that just a pause for thought and a reevaluation of valuations in your market? >> good morning, manus. 27% or so in had the previous year, and i think it was the first or second best market in the world, you will have and you should have a bit of a cause as the market consolidates. the important thing here is foreign investors are key drivers of the market. it was $2.5 billion that came into qatar last year. buyers int by foreign raising their allocations. one of the interesting things this year will be to see what extent does active foreign buyers continue to reduce their underweight positions and qatar. manus: with -- in qatar.

manus: with that in mind, do you think we are put in a flaw? akber: historically, the market has softened after dividend season. it runs up strongly into dividends and after dividend, there is a bit of a softening as recent investors take profits, and you enter into ramadan and summer, etc. it looks right. as you rightly mentioned, the contrast given what is happening elsewhere, from a seasonal perspective, qatar is behaving how you would expect it to. elsewhere, it is clearly lagging. manus: what about -- you have one call which is slightly contra -- it is qatar transport. where can we get you on it? it is the monopoly's

transporter of lng from qatar to its customers around the world. qatar is obviously the largest exporter of lng in the world. it produces 77 million tons of gas. it has about 60 vessels, which are the largest lng vessels around the world, which transport this around the world. policy ofa stated increasing the lng production from 77 to 110 million tons a year by the middle of the next decade. it is very likely, given the theyship structure, that will be benefiting from this 45% increase in the country's lng output, so you have extremely high visibility, five-year growth. in the meantime, you have improving revenues, expansion, and a 5% dividend yield. while the real outside will come -- upside will come in a few years, you're getting paid quite well. manus: you reserve the right to

wait and see whether they bail or join in in qatar. kuwaite the point that could have a much bigger boon from msci inclusion, potentially in june. how much of that is in the market? how much bigger camera flow be? -- can the flow be? akber: we have the two-stage ftse inclusion in q4 last year, and there was about $1 billion of money that came in. if msci makes the announcement in june this year, which will essentially be 12 months notice of inclusion, if they are to say that kuwait will come in, that will trade into billy at -- trigger $2 billion in anticipation of that. you would see significant buying given that liquidity in kuwait is not as big as, say, saudi or some other markets in the region. this will have a very outsized

impact on performance. we see kuwait as the best way to play the index changes in the region. thank you very much as always for joining us and giving us your thoughts. akber khan, senior director of asset management. coming up on the show, betting on baseball. mgm resorts has become the first official gaming partner of the major leagues. our interview with the ceo. that's next. this is bloomberg. ♪

manus: a little bit of breaking news coming through on emirates nbd. the shares are going to be suspended from trading for an incoming disclosure. we don't know when that incoming disclosure is going to be about. there's some big issues in the marketplace out there. they recently announced the ipo -- the potential for network international. issueave the ongoing

about their activation of the bank in turkey. there is the potential of rights issues. nothing is known. as soon as we get that, we will bring that news to you throughout the morning show. in the meantime, let's move the agenda along and we will talk baseball.r league regulard off its season in japan, including the first official gambling partner, mgm. if get to our chief north asia correspondent, stephen engle, who is at the tokyo don't. steve. stephen: thanks a lot. we are at the tokyo dome, game two of the major league series of baseball. happy to have the chairman and ceo of mgm resorts international, jim. thanks so much for your time.

this is pretty cool. we have the run of the tokyo dome today. how much closer are you and perhaps as well as japan naming the new partners with the casinos here? jim: the law passed only a year ago and we made the decision to focus all of our energy in osaka. we believe osaka is going to be the first integrative resort location. the government is very excited about it. they won the world expo just recently. it's going to happen in 2020 five, so the government is very anxious to help get the whole ine in osaka developed connection with that world expo. we will know probably in the next three or four months what the timing is going to be for osaka. the city government will present an rfp. it will be very competitive. mgm is going to be one of the and is for that rfp,

think they will make a decision about this time next year. stephen: there are a lot of companies you are potentially vying for. you are confident you will get one of the three. hokkaido, greater tokyo, and osaka. jim: i am confident osaka will be one of the three. i am working really hard that for mgm to be the ir operator in osaka. and all we can do his work as hard as we can, meet with japanese companies, form a japanese consortium. we are trying to outwork our competitors a little bit, so we will see. major leagueously, baseball has a new partnership with mgm. how deep will this go? jim: we have a deep relationship with sports. we signed with the nba, with the nhl, major league soccer. we are signing with pga and of course with mlb. deal.s a four-year it probably will go on beyond that. we are sharing data together. we are looking at how to promote the sport of baseball not only in the united states but around

the world. and this was a great opportunity for us to help bring the seattle mariners and the oakland a's here to japan. and based on last night's crowd, it's going to be crazy tonight. there's a big fan base for baseball. japan loves baseball. we are in the entertainment business. baseball is a common bridge between the two countries, and we could be happy to be a part of this. stephen: how have things changed ? there is a checkered past between baseball and gambling, whether it is he grows or the black sox. how do you see the times that have made it right for you to come to japan? it is still controversial, legalized gambling here in japan. jim: first off, baseball, basketball, hockey, the leagues recognize the most important mission is the integrity of the game, integrity of the sport, which is why we

are so proud that they chose us to help navigate through these very complicated issues. and i think japan feels the same way. gaming has, yes, evolved from being in a smoked room to broad entertainment, whether it is having lady gaga or no mars or the golden knights in our t-mobile arena and baseball. and our job is to help promote the sport in an ethical, highly -integrity way, and baseball recognizes that is important as well. jim: you did get a recent two-year extension. those that in golden you to invest further? a full slate of development -- stephen: you did get a recent two-year extension. does that embolden you to expand further? jim: we have invested $3.5 billion through our mgm china company.

and the prophets are starting to ramp up ther as we are developing more of oure vip business. we are long-term believers in the macau market. and we would love to overtime invest more. theresionaires need to prove the right to be in macau. we hope to be there for a long time. stephen: the last time we talked was a couple of months ago. we are expecting a downturn from a cow as a whole. has it changed -- macau as a whole. has it changed? jim: i was on a panel and i was a little more conservative in my gross gaming estimates. lawrence was more aggressive and he was right. the macau market is doing really well. the infrastructure around the region has helped the business, which is the backbone of macau gaming. the business has been stronger

than i had expected it to be, and we are now becoming a beneficiary of that because we had this product in the mansion. stephen: can i ask you quickly about the united states? you have an activist board member, keith meister. what will be the priorities as you look at that market which could potentially become the third-largest market in the world? boardeith is an active member, not an activist. i invited him onto the board and i did so because he knows gaining quite well. he understands the issues that we deal with. he has already been very productive in the board room. mgm is embarking on a major profit resurgence through a 2020 plan that we announced to improve our margins. we have invested quite a bit of capital into our properties, so now, we believe we are in the harvesting of free cash flow mode. as we continue to harvest that free cash and put it toward shareholder returns in the form

of increased dividends, balancing strength, and buying backstops, i think that keith would say, as a large investor in mgm, it's a good bet to make, and it -- i could not be happier to have him on board. stephen: thank you for being on bloomberg television. we are going to send it back to you from the tokyo dome in japan. manus: stephen, great interview . up next on this show, on the edge of a no deal, theresa may shocks the e.u. by asking for a short extension. can she succeed? live toive -- are brussels with the one lady who knows a thing about brexit. this is bloomberg. ♪

manus: the european union is considering an unscheduled meeting next week to decide whether to grant a brexit extension period sterling fell

as the e.u. president, donald tusk, said it is up to theresa may to drive her deal through. france said the e.u. needs guarantees before an extension is granted. have written into donald tusk, the president of the european council, to request a short extension of article 50 up to the 30th of june to give mp's the time to make a final choice. the opposition leader, jeremy corbyn, has ripped into theresa may's handling of brexit. months of running down the clock on a concerted campaign of blackmail, bullying, and bribery has failed to convince the house. i doubt of all the countries that her deal is anything but a damaging national failure and should be rejected. manus: let's get to brussels now. anna edwards. great to see you. great to have you with me.

make sense of it all. is this europe pushing the u.k. to the brink of no deal, as i saw with some headlines in the past 24 hours? well, it could become a menace. good morning to you from brussels. the short-term immediate schedule of business is theresa may has got to try and convince thatrs, e.u. 27 leaders, she should get a short delay. donald tusk talk about the possibility of granting that, but she could be met with some resistance. the french and dutch talking about what is the reason for the delay? we need to see some evidence that there will be more progress made. how long a delay will be granted is difficult to say. jean-claude juncker wants it may 23. theresa may has ignored his advice in these proceedings. a busyts us up for meeting. a debate on monday. lots of exploration for alternative proposals on monday and a meaningful vote at one point, but make no must take. yesterday and today -- yesterday

was about high drama on the brexit front. many: look, there are questions about theresa may's future. your reading of that statement last night at number 10, she signed her frustration at not delivering the march date. anna: indeed. she was certainly setting out that this was something she personally took very seriously. she was apologetic that she wants meat the march deadline. apologetic that she will not meet the march deadline. the short delay might only be granted if there is evidence next week that there is support in the comments for her deal. so that sets us up for meaningful vote number three, which means she has only a day to convince the speaker that she is able to hold the vote and to convince us figures of other parties that they should support her in that. the questions remain over what happens if she has managed to get support from her deal. manus: anna, i knew i would get

you into the middle east show one day. it just took the time zones and a crossing of the channel. anna edwards, we salute you. we will continue the conversation in "daybreak: europe." it's a live shot of london. ♪

yes europeang headquarters -- good morning from bloomberg's european headquarters. the federal reserve strikes a more dovish tone than expected. rate hikes off the table for this year. all in. theresa may gambles on a desperate bid to get her brexit deal approved. can she persuade mps to vote for her plan and avoid a long extension? trump says tariffs on china can stay in place until beijing is complying with any trade deal. tensions with the u.s. continue.

manus: when it comes to the fed, they have outdoved the doves. we have gone to zero. emerging-market effects up. -- emerging-market fx up. a 50% chance of a 25 basis point cut. the fed almost has to keep up with the market again. yuan made an eight month high. you are seeing this latitude.

the door opens. brent is flying high. drawdown ing the u.s. stocks a little bit more than the market anticipated. crude exports climbed to the second highest level since 1993. the reverberations are substantial all the way around the asset classes. those are the international markets. i by the excited was fed decision that i decided to stick with u.s. assets. what we saw yesterday was equities. the s&p 500 lower by 0.3% lead by the banks. the dollar dropped the most since january. cable and euro get a lift. the 10 year yield not trading right now with japan markets close. it did close at its lowest in over a year. the point you make about the markets pricing in 50%

probability of a rate cut this year, when we say this is a dovish surprise from the fed, i would ask, isn't this the fed just confirming what the markets are already expecting? as you alluded to, bond traders want even more. jerome powell did say the next move could be a rate hike or cut. lots of questions to put to our guest. let's check on the markets in asia. juliette saly has more. we have japan out of action today. watching the msci asia pacific index, you can see it is a risk on decision as we did see that dovish fed coming through overnight. we did see weakness earlier in the session breakdown. he also had a surprise drop in unemployment in australia, falling the most since 2009 for the month of february. in likelihood of a rate cut

july dwindled. the csi 300 falling flat. a lot of money going into ems. the philippines coming through with a rate decision in a couple hours. let's have a look at the stocks we have been watching. cuts. announcing output that has seen the chipmakers rally. samsung currently up by almost 4%. blockade in peru . the government minister in peru saying that could cease. a lot of money going into that company in hong kong. i thought i would end on a beer stock. china resources off. it came through with its -- missing lowest estimates. they do believe they will continue to see strong demand over the coming year.

not friday for us yet, but still appreciate that. think you so much. avoiding the deflation trap. jay powell says interest rates could be on hold for some time as price pressures remain muted. officials/their projected rate increases this year to zero. decided tocials also slow the drawdown of u.s. central bank bond holdings starting in may before ending in september. the most notable market reaction we are seeing in the bond market. the yield fell to the lowest level in more than a year. the fed chairman says it may jobssome time before the and inflation calls for a clear change in policy. >> the data we are seeing are not sending a signal which suggests moving in either

direction, which is really why we are being patient. our policy rate is in the range of neutral. the economy is growing. inflation is close to target. employment is under 3%. it's a great time to be patient and see how things evolve. guest.john roe is our was ay perspective, it triple whammy. rates, balance sheet, and inflation. they went the full monty as far as i can see it in reaffirming all the messages to the market. just how dovish was this for you? >> dovish as it could be. by signaling the tapering of the balance sheet from may, he managed to do a draghi where you deliver this dovish surprise even when people expect you to be dovish. he has taken out one rate hike to 2021. we are far away from his inflation target. there is also this talk of

moving to average inflation moreting, which would mean -- in inflation. should the markets be concerned that the fed knows something the market doesn't about the outlook from here? or was this the fed just confirming what they said before and bringing their expectations down to what the market was already expecting? >> i don't think it suggests the fed has got something we can't seem. -- we can't see. they were worried about downside risks. it is more about this idea they want to get slightly higher inflation and this is a change in the fed's reaction. this really is, we are going to tolerate inflation. one thing we have touched on is the balance sheet. the taper will slow down in may

and stop in september, but it was the manifestation of that, they are going to roll holdings into -- which we have seen. the ramifications of this news on the balance sheet? >> on the ending of the wind down of qt, that was a given. it had to happen to avoid a sharp drop followed by having to grow the balance sheet as the economy grew in 2020. on the mbs side i don't think it is a big thing. if they wanted to change the shape of the curve they could do something more dramatic. the flattening we have seen is really the market accepting that this is a medium longer-term change with a greater tolerance for inflation, hence the six basis points off the tenure. --

10 year. nejra: we saw the fed give the bond market what they wanted, but we have seen the 10 year yield close at the lowest in more than a year. inders have started to price the chance of a rate decrease this year. jerome powell did say the next move could be a rate hike or cut, but if they did want to start signaling again that a rate hike was on the table, how do they do that without causing some type of a taper tantrum? >> it would be difficult without the data. they would need significant inflation or the financial markets to start getting a bit , almost likeddy when yellen talked about expenses. she started to worry things aren't really her mandate. something along one of those lines to start moving. not really the market

saying we think a 50% chance of a rate cut. it is a 90% chance of no rate cut but a chance of multiple rate cuts if you had a big slowdown. that leads to this pricing of rate cut. i looked at what mr. minard at guggenheim said. experts were right. they have given the punch bowl back to the market. everyone is going to take a drink. you think one should sell in distress on this. >> do we think that is the genuine -- general market narrative? been buyingple have into this world of, when we get close to the all-time highs, we will start exiting equities. pebble is a good indication of how it can continue. at the bestk

spread, that is close to neutral, which is surprising given we have had a near 15% equity rally. what would cause us to sell would be accepted of -- excessive optimism. there is a chance we move more optimistic on the sentiment side. for now, this is very much the party is in full swing and we want to be invited. nejra: want to be invited to the party the party that that is continuing for now. thank you, john roe, you stay with us for the hour. the fed's rate hold came with a dovish pivot. the would be on rates, on balance sheet, also the inflation forecast. central banks throughout europe and asia are due to report today. markets are waiting to see if they follow the fed's lead. dani burger has the details. >> traders are anticipating more deflation's today.

the swiss national bank announces their decision in just a few hours. according to credit, policymakers will likely wait until the frank starts to depreciate before tightening. at the bank of mark carney's hands are tied without any sort of brexit resolution. when he markets don't expect any rate hikes until at least 2020. before we get the decision at noon, gorgeous bank will announce it is set to leave its ears behind to cap inflation, norway will probably raise rates to the highest level in four years. then we get to asia. all economists surveyed by bloomberg think the philippines and indonesia will leave benchmark rates unchanged. investors are dialing up their expectations that there will be lower borrowing costs. goldman forecasts 50 bits of cuts. the scene is set for another dovish surprise. when those doves cry and

fly. dani burger with very latest. let's get your first word news. debra mao is with us from hong kong. debra: theresa may's standoff with the european union is driving the u.k. to the brink of a no deal divorce. the prime minister has asked to delay brexit, but the bloc warns extension will only be possible if she can get her deal through parliament in the next nine days. if she can't, the choice will be a prolonged delay or crashing out of the eu without a deal. >> we will not leave on time with the deal on the 29th of march. this delay is a matter of great personal regret for me, but i am not prepared to delay brexit any further than the 30th of june. says he willmp keep tariffs on china until he is sure beijing is complying

with any trade deal. carrie lam warns more issues lie ahead. prepare,aid we have to that this is not a final solution. there will be other deep-seated problems that need to be resolved. >> new zealand has banned semiautomatics and assault rifles. the country will establish a nationwide buyback in the wake of a terrorist attack that left 50 people dead. the prime minister says the ban is taking immediate effect to prevent the stockpiling of firearms while legislation is being drafted. global news, 24 hours a day on air and @tictoc on twitter powered by more than 2700 journalists and analysts in more than 120 countries. nejra: coming up, theresa may's

standoff with the european union is driving the u.k. to the brink of a no deal divorce. we are live in brussels next. manus: if you are traveling to work, hop onto the radio. this is bloomberg. ♪

manus: this is "bloomberg daybreak: europe." just before we get to the markets, just going to bring you a headline that has been crossing the bloomberg. bps health care said to reconsider its london listing on brexit woes. this is a hospital operator in the middle east, europe, and india, reconsidering plans to list in london do uncertainty surrounding brexit.

let's get to the markets now. japanese markets closed today. that's having a bit of an impact on asian trade. --saw u.s. equities trade close lower yesterday. equities in japan on the front foot. we have seen the yuan -- the aussie dollar on the front foot as well. this: how much more of equity market run do you want to have? goldilocks,st says three scares. s&p futures are rallying. cable is at 1.3212. who's got the gun, who's got the bullets? it looks like nine days and counting and europeans one action from the u.k.. 0.125%.p by let's get to debra mao. she has our business flash.

>> lion air is planning a one million-dollar ipo. it would be the third-largest indonesian offering on record. this is the country's biggest airline is trying to move past the october crash that triggered the crisis surrounding boeing 737 max 8. bloomberg understands the share cells -- sales could take place as soon as this year. jp morgan's corporate and investment bank is ending in person campus visit. --will use online behavioral the changes pave the way for j.p. morgan to connect with more students throughout the year. waiting bids for a piece of asked watson. bloomberg has learned singapore's investment company is considering selling a 10% stake for around $3 billion. the holding has drawn interest from chinese tech billionaire

jack ma. that is your bluebird business flash. flash.mberg business global news, 24 hours a day on air and @tictoc on twitter powered by more than 2700 journalists and analysts in more than 120 countries. nejra: the prime minister has formally asked for an extension. >> today i have written to the president of the european council to request a short extension of article 50 to the 30th of june to give mp's the chance to make a final choice. >> the block has its own conditions for granting such a delay. anna edwards joins us from brussels. led to thisto what decision by theresa may in the last 24 hours. >> to see you. -- good to see you. a night of high drama culminating in theresa may addressing the nation, doubling

down on her gamble trying to explain her request for a delay to the british people. she had already heard from the president of the eu council that a short delay might be given, but only if she can prove parliament will back her deal, which means she has only got a few days. she has next week to convince the speaker of the house she should hold the vote and convince other mps they should back her. we know jeremy corbyn is going to be in brussels as well. theresa may is on her way to talk to eu leaders. clearly there are other avenues being explored by opposition leaders. some met with theresa may yesterday. jeremy corbyn left that meeting because he did not like who he was having to share the room with. big questions hangover theresa may, whether she will remain in power. she does not want to ask for a longer extension. with the eu granta longer extension, or will the eu push the u.k. over the cliff? that is the question.

if you have a crystal ball you are going to be the richest woman in europe. from where you are standing, what happens next? dynamics of the next they are going to be important in terms of her relationship with other leaders. thefrench, the belgians, italians, perhaps. so many countries stacking up concerns about why they should agree to a delay in asking questions about what the delay is going to before. that could be a sticking point with the french side. also look for how long any kind of delay will be. jean-claude juncker will not ask for a delay because of eu elections. into next week, the crucial thing will be the debate on monday. the government will lay down a motion will be amended. that will be used by opposition parties to explore if there are alternatives. if theresa may's deal does fail, what could the are turning to --

the alternative look like? they have failed to galvanize around an alternative. today, the focus is on brussels. theresa may will be here. this be the last time she addresses the eu council? nejra: we have to take this day by day. thank you for joining us. jamie dimon has weighed in on the deepening political crisis in the u.k.. he says the extension request will not remove uncertainty surrounding the impasse and will only raise the odds of a messy divorce. he adds that hard brexit would the u.k. andto less so for europe and the united states. john roe is still with us. how do you prepare for all the implications of brexit in your portfolio without predicting what's going to happen? the difficult bit. >> it just keeps changing. up to now we have been betting against a hard brexit but that is now taking up.

-- ticvki hard brexit risk has dwindled and we are getting to the point where the brinksmanship does mean the risks become more symmetrical. it is unlikely we get the hard brexit. volatility could be two-way. the time horizons are coming down from weeks today's and now potentially if you do see big swings, you just have to decide is it overbought or oversold? there are still opportunities out there. one of the strangest things i have heard is people say you cannot take views around brexit when actually there have been some violent moves particularly in the pound and that has inevitably given opportunities. it is interesting jamie dimon has gone from a 10% possibility to some of this

language, there is a growing risk. >> that's true, but it's also because people worry about the to aure of the ftse 100 successful outcome. a lot of people are not that keen to take a view on this risk . if you get soft brexit, the ftse 100 will underperform on a relative basis in the short-term just because of the pound translation effect on overseas earnings. i think that's one reason why you have seen sensitivity. the u.k. has been a pretty unloved market. at some point that tends to a performance. the strangest thing we have seen from our perspective is this move for a short delay. until now, it looked like her idea was to get the erg onside with this threat of a long

extension. it is hard to see how she gets them on board now. manus: who is pushing who to the edge? john roe stays with us. we are going to talk very very shortly. ♪

nejra: u.s. equities close lower. green on the screen when it comes to asia. up 0.5%.pacific index you have to talk post fed, taken double shall he by the market. dovishly by the market. the fed not just delivering on the dots but also on the balance sheet and the growth forecast in terms of the dovish tone. manus: a triple whammy. almost a full 360 on the language. the question