>> welcome to daybreak australia. we are counting down to asia's major market open. >> these are the top stories. a brexit extension of up to 12 months, however france says a link deposit should not be taken for granted area policymakers grappling with significant uncertainties.

australia comes down to the vote. may 18 seen as the most likely date. >> let's get a quick reminder of how u.s. stocks ended. with the fed confirming its dovish tilt, we are seeing this in the u.s. equities. broke their indices eight-day winning streak yesterday. we are seeing a little bit of rebound. the dow just barely eking out a positive ending. had it not been for boeing which had been down for the past four days down about 30 points, this could very well have been higher. seeing the nasdaq up by 7/10 of a percent. the s&p, the top three sectors real estate tech and technology as well as consumer discretionary. we are seeing a definite positive. in a tads. cpi come

less than expected. >> with that handoff we could see some caution looking to persist with a mixed start to the asian session. pointing ates slight losses adding potentially to disaster. in japan we are keeping and i am carmakers. japan reportedly plans to reject auto quote is next at the trade talks with the u.s.. inflation data and politics coming to the fore as the first round of voting in india's national elections are due to begin. the australian prime minister may call for the may 18 federal election by today. politics definitely our major

theme of the day. the u.s. and china are moving closer to a trade deal with treasury secretary steven mnuchin saying the two sides have agreed on enforcement procedures. he says offices in east country make sure the other lives of two terms of the deal. include ip issues protection and tech transfers. india's election begins thursday. it involves 900 million potential voters as the prime minister seeks a second term. he has adopted a nationalist pitch with elections seen as a referendum on the handling of the economy. opposition is led by a congress party. benjamin netanyahu remains on course for a fifth term as the israeli prime minister after the opposition lula white party

conceded defeat. the two sides one the same number of seats but netanyahu's been able to win support from small right-wing and religious parties. blue and white says they will continue to oppose netanyahu from within parliament. scientists have shown the first glimpse of a supermassive blackhole in what is being called a groundbreaking moment. it draws questions about conventional physics. the images were presented simultaneously across the world. if they show the event horizon, the edge of the blackhole were gravity is stone -- so strong that no physical laws apply and not even light can escape. news 24 hours a day on air and at tictoc on twitter powered by more than twice 700 journalists and analysts in more than 120 countries. this is bloomberg. >> thank you. eu leaders are meeting to agree to the terms of a brexit extension with officials telling us theresa may is likely to be offered a delay of nine to 12

months. at that as much longer than she wants. a could provoke a backlash from hardliners and her conservative already. it's good to brussels. what is the latest? nine to 12 months. it was that out of question? the situation here is we have a very real debate going on behind the scenes. will be aen told this very long night. it is all about the long versus the short extension. we understand a number of european leaders do want to give theresa may a long extension possibly toward the end of the year. the problem here is emmanuel macron once a short extension. onleaders will have to agree this by the end of the night. unanimously. agreement, get an the default option is the u.k. will crash out in two days.

those stakes are very high in brussels today. optionesa may wants the of the early exit. how much\issue likely to say the back home as a result of this? >> very much. the prime minister has already failed to deliver brexit and time. u.k. should have left the eu in march. she has said for months that the u.k. would leave deal or no deal. if is forced to stay for longer, the u.k. will have to run in the european elections. it is another testament to failed negotiations were the prime minister has not unable to meet any targets that she put out for herself. .t is another bro -- below it puts her in a very difficult situation. you can see why this is one of the reasons as to why the prime minister insists that she will want to have the option to leave

before the end of the year. >> you were talking about emmanuel macron being reluctant to get on the bandwagon. what would it take for him to do toor does he have the power pull people closer to his side? ultimately, he has a lot of power. this decision will have to be taken unanimously. overruleleaders cannot each other. they all have to agree. what micron says is that the delay in brexit will not solve the fundamental issues. the prime minister has not been able to bring a deal after three clash with thell european elections which is a big deal here. you liked all the big european jobs and also have a new budget. the concern for the europeans and the french is that if you get the u.k. to run in the election and you have a skeptic

they will block the big legislation that they need. macron, he has to deliver a european reform. at the primeking minister speaking to the press. he has called a federal election for may 18. putting in place the next you weeks of difficult campaigning as they try to strive for a third or return for the national coalition. is going to be an uphill bottle -- battle. >> the government cannot be trailing in the opinion polls. 47 to 53 was the last result. he has held off as long as he possibly could.

that means he is in the unusual position of having to win the seats in this election just to hold onto power. the key thing here is the government will be hoping that people have forgotten all of that dysfunction and fighting over the past few years. scott morrison will be the third prime minister and four years. the deputy leader is gone. another is retiring. other governments have come back from worse positions. government will look to fight on its record of economic management. is that going to mean the sole deciding factor? >> there was the budget last week.

there will be tax cuts as well but there would plenty for the government to attack. the opposition labor party is looking at changes to tax breaks around properties. look for the government to attack that. you wouldn't rule out this getting personal. there is the old favorite of border security as well. >> we are seeing the lines being drawn around missions reductions. it is been confusing given that both sides have had similar policies. but they are not agreeing on it. >> climate on the background like a dark cloud. partye seen the labour

campaigning on a climate policy. >> one of the areas of criticism for the policy paralysis. scott morrison has called a federal election to cut -- take place on may 18. up ahead, india goes to the polls as well kicking off today. chiefroup's global economist says don't be full by the equity rally. there are plenty of reasons for caution area that this is bloomberg. ♪

>> we are counting down to the start of trading in sydney. politics gaining ground when it comes to making headlines.

the prime minister is dissolving both houses of parliament this morning and moving to call for a may 18 date for when australia .s heading to the polls i will u.s. stocks are edging up. i'm here in sydney. >> i'm in new york. you are watching daybreak australia. the fed has released the minutes of the march meeting. policymakers were grappling with significant -- and persistently low inflation. >> at a very special guest joins us here in our washington dc studio, catherine man. she is the chief economist at citibank in new york. job, she wask this the chief economist at the oecd.

she started her career at the fed. she taught at brandeis university. we were just talking about the fed minutes. we know they are talking about global uncertainty. right now, one of the biggest ones is brexit. the possibility of a hard brexit. we just heard our reporter talking about this. risk is brexit particularly a hard brexit to the european economy? and to the world? >> we have to keep in mind that the european economy and of the u.k. economy have been tightly related to global value chains and cross-border services and financial services. even though the u.k. seems like it is small, it is a very important partner linked up to europe. a hard brexit would be damaging for all of those relationships.

though they are breaking apart over the last two years, businesses have moved some of their activities. a hard brexit would be jarring. it would lead to financial market implications. europe does not need any more shocks right now. presidentthe french being so tough on this question of extending this brexit talk? the eu seems ready to give it. micron is saying maybe no delay at all. >> he has to balance three issues. the one he is most concerned in,t is if britain stays they will participate in the elections which means they will place some people in the european parliament. he is worried that those people will put a collage on any of the good things that might happen

within the eu. that is one piece. the second thing he is balancing against is ripping off the band-aid. at the heart exit. that is the second thing. the third dimension is, how bad would another year of uncertainty be? those are the things he is weighing. he believes that the concern about electing and putting into place these eurosceptics would undermine the capacity of europe to work together for a more union oriented legislation. >> you just mentioned the european economy cannot take any more shocks. today butl bank met they didn't say or do much. it seems like they are afraid to say they are afraid. >> i think there are some issues that are on the table for potential improvements in the european economy. as we know, germany is

particularly related to the chinese economy through a number of different sales relationships. we think that the chinese economy is on the mend. we think the policies they have put into place have likely arrested that the deterioration in the economy and that is going to be beneficial for germany. that is good news on the horizon. another issue that is not well appreciated is that if we the domestic strength of many of the european economies compared to external weakness, many of the economy's are actually like a domestically even germany. fed, youmove onto the can see a second have picked up for the dust for europe. that is what the fed is hoping for. interesting in the minutes today, they were talking about inflation. a lot of people came away saying

they seem to be saying that is their fulcrum. how inflation moves up or down is determining whether or not they hold steady, hike the rate or have to cut it. >> there are three different things that the fed has to way. two of them are the well-known mandates. the price stability or inflation and full employment. we can put that aside. the third shutout mandate is financial market stability. many people interpret that meaning they don't like volatility. that is an incorrect interpretation. what financial market stability is predicated on is that assets are priced incorporating credit risk, turn risk, and credit risk. the concern the fed has is on the inflation front, they might want to pause for longer. on the financial stability front, they might want to leave on the table the potential for another rate hike because that would cool some of the front and

financial markets. they have to balance between the two of them. we think there is potential for inflation surprise this year. we think about the tariffs. we think about them passing through the price index. we know that wages have been rising. cards islso in the that all of the companies who borrowed have a lower interest tax shield this year. potential for this to push upward pressure on cost and firms are going to have to decide, do we pass it through? >> can you give me a quick answer, are they going to hike the rate this year? >> i think they will. in the middle of the year. thank you. these stay here. about china and

what it means for the u.s. and european economies. we will continue in just a few minutes. >> great conversation. eu leaders are said to be considering a brexit delay until october 2019. this would be a compromise date given that we heard they were looking at an extension. up nine to 12 months. theresa may doesn't want that long. she wants the early exit. she is still pushing for an exit by may 22. because of the backlash that she would get back home if they went for a longer extension. we are hearing the erie -- eu pushing eu leaders are for an extension until october. you can get a roundup of the on the terminals and on

the mobile in the bloomberg anywhere app. this is bloomberg. ♪

>> welcome back. uber could file for an ipo is soon as this thursday. offering is expected to be andlargest ipo this year among the 10 largest of all time. the road to the market has not been totally smooth. let's look at the journey so far. ♪ >> 10 years ago, two men launched uber.

within five years, it had a short name and had completed one billion rides. two years later, it was 5 billion. across 600 cities in 70 countries. reached annual sales $495 million. making it one of the fastest growing startups ever. all of the growth came with many challenges. regulators and taxi drivers protested international expansion. reports of assaults raised alarm bells about writer and driver safety. 2017, their toxic corporate culture was exposed. reports of sexual harassment led to the firing of over 20 employees. year, they were accused of stealing trade secrets from alphabets self driving car. the leadership reached a

breaking point. investors pushed out the once untouchable ceo. expedia ceo was brought in to fix it. he hired new management, work to rebuild trust and reputation. it has not been an entirely smooth ride. selfrch 2018, the uber pilot was involved in a fatal accident. they remain locked in litigation with drivers who want better pay and benefits. still, they strive to push the bounds of ambition. $2.1 billion.ed ever posted much watch flying taxis by 2020. as they spend more to feel the

global expansion, profitability remains a big concern. will they attract investors are cosan to hit the brakes? >> that was emily chang. let's check on business flash headlines. amazon and microsoft are standing in the winter -- winner take all race for a club services contract. they remain in play after the dod said it has eliminated oracle and ibm. the project will become the primary data repository for u.s. military services worldwide. the winning bidder will not be announced until july at the earliest. >> apple has been given a negative recommendation. analysts say it could take time for the digital services platform to generate returns.

coming up next, we will be joined by city breaks -- citibank's global chief economist. ♪ so with xfinity mobile

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away. teachers went to up to dance at 1%. they are still looking for a catalyst although we do see incremental progress on trade. steven mnuchin saying that they are making progress on trade talks. >> i'm in new york. it is six: 30 p.m.. you are watching daybreak australia. let's get to first word news. nextstralia will elect its federal government on may 18. polls are showing the liberal national coalition trailing the

opposition labor party. the parties heading into a five-week campaign which will be dominated by policy differences. issues include tax cuts, boosting wages, and one of the world's worst per capita polluters. eu leaders are in brussels to agree to terms of a brexit extension with officials telling us theresa may is likely to be offered a delay of 1912 months. that is much longer than she wants and could provoke a backlash from hard-liners in her conservative already. some cracks are appearing in the eu's solidarity. the french president says a long delay should not be taken as granted. >> i know many people will be frustrated. the u.k. should have left the eu by now. i regret the fact of parliament has not been able to pass a deal. >> [indiscernible]

>> oil output in venezuela fell for the 21st consecutive month in march as rolling power outages shut down production and paralyzed shipping. monthly output sank 28%. bloomberg data shows that is the lowest level since january 2003 when oil workers went on strike in protest. three years after hackers stole 100 million dollars from bangladesh's accounts of the federal reserve, cyber criminals are reining in their ambitions. the highest funnel the money to the philippines. fraudulent transactions last year ranged from $250,000 to about 2 million. the majority of those fake deals were sent to banks and

asia-pacific. global news 24 hours a day on air and at tictoc on twitter powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. let's go to hong kong for another check on the markets. what did futures hold? >> after asian stocks fell on wednesday, futures are pointing to a mixed start here. we have kiwi stocks gaining ground up one third of 1%. we could see politics remained a very much a focus given the indian elections are to kick off today. in australia, we see scott morrison facing a battle to gain a third term. he has called for a may 18 election. when it comes to stocks to watch, we are keeping an eye on rio tinto.

the stock was downgraded on valuations. i also want to highlight whitehaven. also watching amcor which may move after the brazilian antitrust regulator approved the acquisition of another company without restrictions. board, crown rates -- remains on the radar. we did have the stock jumped a record 20% on tuesday. now that it is known to be on the market, that means other

unlikely bidders for crown. >> it seems that m&a continues to be the theme in the global casino industry. let's get back to our guest. citigroup global chief economist. global economics and policy editor. switching to the topic of trade, the u.s. china still continues to be in focus. step withing a baby both sides saying they have agreed on the issue of enforcement. what is your reaction to this? been ancement has important issue. a stalemate on whether or not it should be unilaterally applied from the u.s. side. we have to look beyond the enforcement and look at the bigger picture which is supposed

we do get a deal. the deal involves a shopping list. it china has to buy certain things from the u.s.. what kind of deal is that going to be? to be a lot of negative spillovers to other economies. getting the deal done, there is going to be a sense of relief. the market will be happy. then we will open up the basket and say i don't know if i like what's inside. >> explained to us not liking what's inside. >> i don't think that's with the zeal is designed to be. free trade with no tariffs. clear identification of reciprocal trade being the objective. it should be balanced. that implies that there is going to be chinese purchases of u.s. products that there would have purchased from someone else. that is the spell over.

>> i think it's interesting that were trying to separate how much of the downturn we have seen is cyclical or structural when it comes to china and how much of it comes from the trade war. how difficult will it be to unwind even after we do get a deal? experiencingbeen an investment downturn that was our slowdown. theas engineered at beginning of the year in order to try to reduce financial access. -- access. then concerns over employment because of the -- the constraints run the private sector. then we have a trade shock. chinese have a range of policies in place to deal with each one of these shocks separately. spending,government subsidy changes for trade. that package is going to stabilize.

>> talking about u.s. china, we have to talk about u.s. eu. of a story today that said donald trump not finished with his trade wars yet. how do you feel about that? >> what we have been calling it is tariff limbo. even though the deal with china it is viewedhed, as a victory. the next group to look at is in europe. japan may as well be on the docket. we already know that we have the section 232 on autos that is been -- the report has written. it is waiting to be issued. that does seem like the next target in line is the eu. >> we speak about the eu, we look at brexit and the u.s.

china trade war. stocks go up against everything is fine then there is a gloom and doom because we can't boost inflation. what is your sense of the global economy and what central banks can or can't do about it? >> when we think about the global economy, the tendency is to look at gdp growth and be done with it. there is really quite a bit of difference between what we call domestic resilience on the back of a strong labor market and rising wages. this really supports domestically oriented firms particularly in the services sector. then there is the trade headwinds. is the relative performance of equities that are outwardly oriented and manufacturing-based versus ones

that are more inward oriented and services based area across all of our markets, it is not just the u.s. phenomenon, we can see that differentiation showing up in stock market performance. >> we also heard over the last 15 minutes that those in the eu are considering an extension to the brexit deadline until october. how much does the risk become larger that the situation gets kicked down the road and we continue to see deterioration of sentiment that we already started to see from corporations? uncertaintyr the last, the longer you are going to see some businesses making decisions. they have to make decisions. of carryingndpoint on with their business. in some sense, from a business perspective the train left the station two years ago. they have already been making

some fundamental decisions about where they want to put their business. >> we appreciate your time. coming up next, indian elections kick off today. joining us to talk about their economic prospects. this is bloomberg. ♪

>> welcome back. >> you are watching daybreak australia. just as we get a bit tired of looking at the catalysts on the macro front, how are the fundamentals looking? >> it will be a relief for people that we get back to looking at companies and the

basics of what makes a company profitable or not. the big banks in the u.s. already get things going later this week. it takes the focused away from some of these macro headwinds. clearly what is happening on the earnings front, as you can the clearly hit gtv on your bloomberg terminal to bring up this chart. it shows us the pace of earnings. it has continued that trend that we are seeing now building or if you want. this weeks to a couple of things. a lot of the worries by the earnings recession we were talking about a cube or of last year have largely dissipated to a degree. is now flirting with or inching back toward and setting new record highs. it is still going to take quite a bit to push this market on from an earnings this active but what you do see is a lot of that

pessimism -- what you are seeing from a companies perspective is worries around earnings for companies outside the u.s.. as our guest was talking about there. a lot of companies that are making money in places outside of the u.s., that typically is were the slowdown is occurring. what we are going to be hearing from banks especially is how much of a setup do we get from the rest of the year from these first quarter earnings? are we getting a picture coming through this is the idea of the global economy having largely bottomed out from a slowdown point of view? talking about a pickup in the second half of the year and just what companies are doing to readjust to that environment? that will be the key and that will give us the next leg of a potential driver to give us market kicking on. australia's economy is

slowing. the rates market is gunning for cuts to interest rates as the property market slumps there. what gives them that the stock market is going to continue to perform so well in this environment? economic, from an standpoint it is clearly a very tricky spot for australia at the moment. we go into this election in may against a backdrop of a central bank that is largely being forced by the market into having to make a move at some point to bring borrowing costs down further to support a consumer that is already struggling in the face of a housing market that continues to slide area what you are seeing from an equity market perspective is a end toed drive higher some decent performance now. largely, that is to do with what you are seeing her continued recovery in the resources sector. also, from financials. if you think back to the royal condition. that largely has not

materialized. it was slightly more favorable to the outlook for banks and many people had expected. that has allowed some of those somewhat. to rerate the australian equity market is in a reasonable position. it is part of a global picture where money is being flowing into equities across the board not just in australia. clearly against the backdrop of a central bank that looks like it is setting itself up for easier policy over the next 12 months or so. that could further support the check outket area >> gtv for this charts. that's where it's at. we are getting news. the eu council president is now meeting with the u.k. prime minister theresa may. leaders have agreed to an extension of article 50. that would be a date of october 31.

something of a compromise given that the eu had been looking for a 12 month extension. we had earlier reported that the extension would be to october 21. the correct date is october 31. we will continue to watch that. into indian elections which kick off today. the world's largest exercise in democracy. the seven part election series gets underway with indians heading to the polls. spendre pledging to billions of dollars to shore up growth. let's look at what to expect. our guest is a professor at the university of chicago. great to have you on with us as always. we saw someone

coming to the forefront. has he made the most of the democratic advantages of the country do you think? it is been a mixed record on the economic front. there has in some signal reforms such as the services tax, the billsptcy code as well as regulating real estate. the his -- these have been beneficial to the longer-term growth of the economy. ist has been not so good that they have not done very much on issues like labor flexibility, land acquisition, some of which are now becoming muchcal for india to grow pressed her the biggest issue in this election seems to be on the economic front. the issue of jobs. are there enough good jobs and millions coming into the workforce every year is to mark?

>> what policies would you like to see? this dividend is going to run out. what needs to be the priority if we do get another term as to people it is to get more moving out of agriculture into jobs and then you fracturing as well as service sector. also for the people who are out of it, better jobs. it all boils down to how you can create that employment. india needs a bigger construction sector. differencesiggest in comparison to china is the construction sector. there are tons of houses to be constructed. lines, but foray that you need to fix the problem of land acquisition. it is hard at this like in india acquiring land area that creates

a lot of uncertainty for anybody starting a big project which requires infrastructure creation. fixing land acquisition has to be a priority. we need to make it fair but also easier than it currently is. >> you spoke just now that the jobless rate is the biggest issue. which party do you think has a better agenda to tackle unemployment? what kind of agenda do you think needs to happen if both of them. ? all political parties are trying to talk about what they will do for the marginal -- marginalized people in the economy. the farmers and the poor. nobody is laying out a strong reform agenda in the postelection scenario. my guess is that has to come

because we really need to tackle this issue of creating jobs. point, if you look at the bjp record and the congress record before that, the agendas they followed have been similar. the success of one party over the other has been on the basis of how much political support i have rather than about eight difference in agenda. >> looking back on history when the bjp kicked in in 2014, it was the first party in 30 years to win a majority on its own. scaling back to the political side of his, you think they will be able to do that again? >> this is the question that everybody has. what they have been doing in this election is emphasizing their greatest strength on issues of national security relative to the opposition.

that does mean that they have moved away from the economic reform agenda which was their strong point in the previous election. that would suggest they don't think it is as winning a platform as earlier. they want to emphasize the national security credentials rather than their economic credentials. with a second rate cut of the year, we have seen a complete dismantling of the regime or the reversal of hikes we saw under governor patel area do you think this is getting into risky territory? >> i think at this point, we are in election mode. much ofld not make too policies at this juncture.

i think there was an attempt to build bridges between the government and the central bank. what we need to look out for is the policies that emerged the selections which would be more reflective of what the underlying philosophy is. >> in terms of the global growth , what is the biggest challenge for india and what is the biggest way that in terms of trade policy the country and the government can rise to the occasion? thatthink the same issues are perturbing everybody else which is how wide does this ? does the problem between the china and the u.s. get fixed or do we have new avenues opening up with the auto sector with europe and mexico? i think india like everybody else will be hoping that the trade .onflict dies down

india benefits tremendously when the world is more open. india is onsue for monetary policy. if this. stability that we don't have that we don't have a time of rising interest rates, this will serve india well. it has to take every action they can to stabilize the economy right now area it has to look to its fiscal deficit which it needs to straighten out. this is a good time for it to do all it can and elections would be an optimal moment. >> enqueue for your time. -- you for your time. switching to technology. amazon may be listening in as customers use their alexa devices. sources say the company has a

team that monitors a voice recordings from echo owners homes area. why is amazon listening to people's voice commands? >> amazon and google and apple and all of the countries -- companies working on these systems, they have a ton of data. it is turned largely automatically. how much of that data has to be imitated by hand? what amazon is doing is sending andall sample of recordings having people transcribe and annotate them asking questions like did they get what they want or not? it is to train the system and make it better. controversial is this going to be for consumers? >> it is unclear. peopley shows that for who do not buy a smart speaker,

privacy is more often than not their biggest concern. there have been new stories about the creepiness of having an always on a microphone in the home. some sort of notable missteps where amazon and google have either sent recordings in error to somewhere else or done something that violates privacy. creeped outr how the world will be about this. >> i am sure there will be a lot weighing in on this. plenty more in the next hour on daybreak asia. a guestbe joined by with his take on the markets. >> we will get all of the action on daybreak asia next. also, breaking news.

when australia will be heading to the polls. this is bloomberg. ♪ the biggest week in television is back!

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>> good morning. just under an hour away from the open of australian markets. >> good evening from new york. i am rainy inocencio. >> welcome to daybreak asia. ♪ our top stories, leaders agree to delay brexit. australia heads to a federal election.