haidi: a very good morning. i am haidi stroud-watts in sydney. we are one hour away from the australian market open. shery: i am shery ahn. sophie: i am sophie kamaruddin in hong kong. welcome to "daybreak asia." haidi: our top stories this tuesday, asia-pacific stocks facing declines after the rally ran out of steam in new york. rio tinto in focus as sydney opens. missing shipments

estimates. trade back in the headline. -- to allow president trump to claim a win ahead of the elections. tom: i am tom mackenzie at the shanghai auto show. bewon't be speaking -- will speaking to the ceo's of lamborghini, bentley, audi, and mclaren. stay with us. shery: a quick check of our markets. goldman sachs was the biggest loser on the dow after missing estimates on sales and trading revenue. 1.1%.w fell it did not help that energy shares were dragged down as the vti felt towards $63 a barrel. the s&p 500 did manage to stay above that 2900 level, which it

lastd last week -- topped week. u.s. futures unchanged. let's see how we are shaping up for the asian markets. sophie: kicking it off, we have kiwi stocks looking to extend gains for a fourth session, but we are seeing the potential advance in tokyo take a breather after the topix closed at a december high as trade talks continue in d.c. aussie futures pointing to a soft start as we wait on the rba to release its april meeting minutes this morning. later new home prices today from china. flip in the board, it has been a busy morning. rio in focus. the miner did cut guidance. pushing rio to seek out reducing dependence on irinvestments in s such as copper as well as minerals. the stock has ralliedup nearly .

$100 aussie per share. sophie kamaruddin with a look at what we are expecting as trading gets underway. let's get you caught up today with the first word news with jessica summers. jessica: fire has swept through notre dame cathedral in paris, forcing the evacuation of thousands and causing president macron to postpone his speech to the nation. the building had been undergoing renovation at the time. live pictures show the spire and part of the roof collapsed. most of the structure has been saved. larry summers's backing current said policy while suggesting -- fed policy. he agreed the markets are betting that jay powell is "considerably more likely to lower rates." president trump has argued the fed is needlessly restraining u.s. growth at a time of low

inflation. india's trade deficit widened in march from a month earlier as higher oil prices raised costs. billion,eached $10.9 up from february and more than a billion wider than seen in bloomberg surgery. weakening global growth and trade are a threat to emerging economies. china's treasury holdings rose for a third month as beijing adopted more u.s. government debt amid the continuing trade war. tona's holdings increased just over $1.1 trillion in february. japan remains the second-biggest holder with just over $1 trillion, and that is up $2 billion from january. powered by more than 2700 journalists in more than 120

countries, i am jessica summers. this is bloomberg. shery: china is said to be considering a u.s. request to shift some tariffs on key agricultural goods so the trump administration can sell any eventual deal as a win ahead of the 2020 elections. joe sobczyk has the story. are we seeing some softening stance is between china and the u.s.? joe: it is a sign of progress that they are negotiating on one of the key sticking point to any deal. the trump administration wanted to keep tariffs in place on chinese goods as a means of leverage to ensure chinese compliance with the terms of the agreement. inna is not interested removing its retaliatory tariffs, so now, they are discussing where those things would move, and that is critically important for both sides because agriculture is a sensitive political issue for both president trump and the

chinese government. costs forise some china and hurt a sector in the u.s. that is very politically and in line with president trump so the fact that they are at least considering these prospects suggests there is at least a little bit of movement in the talks and that they are getting down toward the final details. haidi: incremental progress perhaps, but what are the risks that still remain here? joe: one of the risks is certainly is if they are removed from agricultural products and shifted to other u.s. products, there will be some herbal effect from that. ple effects -- rip from that. other areas, equipment, chemicals, semiconductors. if those categories were to be subject to some new tariffs as part of this deal, that could

have some political risk as well for the president if it causes losses in industrial sectors. by the same token, there is a thatfor president xi in they are interested in reaching a deal and have expressed interest in purchasing more u.s. farm goods. you know, rising prices as a result of tariffs on u.s. imports are politically difficult for the chinese government because that raises the cost of living for chinese citizens. manage both ofo those things and also some whether orin china, not they are going to continue to take those other imports beyond agriculture. shery: the u.s. also moving ahead on two other trade france with japan and the e.u. any progress? joe: these are just getting

underway. agricultural figures prominently on both. the japanese government is interested in getting some sort of deal to avoid any import duties on cars or quotas on vehicles coming from japan to the u.s. the u.s. is a big market for those japanese products, but by the same token, the u.s. wants to open up a japan -- open up japan to more agricultural imports from the u.s. those are going to be two of the issues that are most delicate for the two parties. and prime minister abe is going to be reluctant to give the u.s. a much better deal than he has negotiated with the e.u. or his other pacific trading partners. likewise, the e.u. is looking to soothe over some relations with the u.s. and avoid tariffs on autos. on other industrial products.

so both sides, they will be on this track towards negotiations, but we are still at the very beginning point of those. haidi: joe sobczyk in washington for us. automakers are pinning their hopes on china like never before as sales weaken around the world. the same idea. tom mackenzie is at the shanghai out of show. tom, for those that are used to the breakneck pace of chinese growth over the past decade or so, is this year sounding a bit different? tom: it really is. there has been such a crucial market for foreign automakers, the chinese market. in 2018, we saw the first decline in almost three decades and we had 10 straight months of falling sales. the strength of the chinese consumer and the market is crucial, one of the key questions that executives are asking themselves as they look towards the second half of 2019.

we spoke to the ceo of vw and asked him this question, and he said that essentially, he things things are starting to bottom out in no small part thanks to some of the tax cuts. he is banking on some of the stimulus coming into play. even though sales fell in 2018, vw managed to extract pretax profit in the double digits. they are all ok, but there is concern when they are doubling down on their market share here. they have 80% of the market share in china. it accounts for 40% of their global sales. take a listen to what the vw ceo had to say about his views on the strength of the chinese market. >> we are not too scared about china, and we hope that with some advances and medications between the united states and advance in communications between the united states and china, it will be better. tom: they are putting $30

billion into play in terms of developing the electrification of the country. a lot of the money will be spent here. with their three joint venture partners, they are looking to buy a stake in one of their smaller partners. he said he does not have any more details but he did confirm they are looking to strengthen their partnerships with their three main chinese partners. vw, 22nt to be producing million electric vehicles by 2028. they expect about half of those to be being produced out of china. we also asked him about talks they are having, vw, corporation talks around four. he says those are progressing nicely. other questions for the automakers revolve around the trade tensions. we seem to be getting to a place where we might be getting a deal between the u.s. and china. a major concern now is what happens with the u.s. and

european union. take a listen to what he had to say about trade tensions and the impact on the business. >> we have trade tensions between europe and the u.s., china and the u.s. there is a cloud over our business. there is a lot of uncertainty. so far, i think, going through all the uncertainties -- diess sayingert the lack of certainty around global markets and the trading system was essentially the new companies like his simply have to learn to adapt in that environment. he said it was positive. in terms of brexit negotiations, that deadline has been extended. the chances of a no deal has been diminished. the uncertainty around the e.u.- u.s. relationship is a key question for automakers like him. back in europe, the economy is

slowing. they are facing regulatory challenges around some of the emissions challenges and tensions with the labor unions as they look to restructure to focus on electric vehicles. main issues automakers have to wrestle with. haidi: our china correspondent, tom mackenzie, at the shanghai auto show. still ahead, we have a hands-on galaxy.samsung's a new phase for the smartphone industry. shery: the outlook for markets .ith quinn his stock picks our next. this is bloomberg. -- are next. this is bloomberg. ♪

shery: let us take a closer look at the u.s. market underwhelming earnings from goldman and

citigroup helped snap a three-day rally. the s&p 500 was within striking distance of a new high. su keenan has more on this. there were not really bad earnings but just investors were not really too happy or too confident about those results. su: they really need to impress is what a lot of strategists are saying, so coming in line does not cut it. a disappointing growth outlook, definitely disappointing. let's take a look at the way the market snapshot ended the day. the s&p 500 financial and that was one of the areas of weakness. goldman was the biggest the decliner in the dow. it was down near $63. we will get more on could this be the end of an uptrend? the big movers. they set baton for morgan stanley and bank of america, which report later today and tomorrow.

come back moment like we saw with tiger woods. they missed estimates for sales and revenue. citi retreated despite meeting expectations. we have a little bit of insight into the oil picture. themay stay in a range -- title of this chart is in gtv. look for a wider range in 2019 if the uptrend snaps. you are seeing a pretty decent rise. we have oil up well over 30% year-to-date going into this month, but you are starting to see a bit of a downturn in that had something to do with the fact that stocks were lower, and in particular, banks were lower, concerned about growth. shery: su keenan, thank you so much for that. joining us now is our guest.

great to have you with us. the optimism that we had last week over jpmorgan's results, pretty short-lived. how do you like financials in this microenvironment? guest: i think you hit the nail on the head. investors got way ahead of themselves way across the board. if you look at goldman, for instance, they had a breakout above that range that they had been in. 200 on that jpmorgan news. they are getting ahead of themselves. i was not all that surprised with goldman's print today. they had an environment with the shutdown. they discussed a lot of their deals being off the table.

obviously, you are going to see revenue decline on trading volume. i think that their stock was bought up. there was optimism today. it surely could have been a lot worse in the financial sector. i think it was ok. shery: we continue to see a lot of uncertainty over the state of the global economy yet we are now seeing copper prices holding steady and actually on an uptrend. the gtv chart on the bloomberg showing you that as we see copper futures higher and continuing to gain ground. how much confidence does this give you about where the economy could go from here and where stock markets could go from here as well? tell my wife. it is the first thing i look at every single morning, because ultimately, copper is going to lead us. it's why they call it dr. copper. the fact that we have seen this

$2.90, $3 area is huge. this is hard to fudge. if there is confidence surrounding trade, then people are going to be buying the raw materials that go into all of the projects that are going to fuel global growth, so when we start to see that fall off, then i would become concerned. i want to see it break out. i do not think that will happen until we have some finite, not necessarily resolution with china, but definitely some progress. the fact that it is holding in this range, well off the lows, it gives us confidence we are heading in the right direction for sure. haidi: in terms of incremental progress on the trade front, we

are hearing from the japanese economy minister, speaking in washington, saying that after this first round of talks that were held with robert lighthizer , these first trade talks yielding -- the spirit of the that being in line with september agreement. they talked about the order of what to discuss there. getting underway for the u.s.- japan trade talks as well. is there a sense that there is still a lot to be done, not just when it comes to china, but all of these other trade talks as well that washington is embarking on? great deal of a uncertainty that perhaps the markets have not priced in. quint: for sure. i would have to say that as an der, i just tra do not put a lot of meat into these trade talks. i will say that if we sour with china, that could be the domino effect. but everything that wall street is watching really does hinge around china.

and the ancillary discussion, brexit,you look at it is just not, you know, garnering as much market down,nt, enthusiasm up or when we have the headlines. yes, it is important. we are not pricing and huge negative outcomes there -- in huge negative outcomes there. haidi: it is a busy time, as we speak to you we are getting another line crossing the bloomberg. breaking news that deutsche bank has been subpoenaed by house democrats. details on you more this developing story as they become available to us. in terms of political risk, given that this is clearly the territory we are veering into, what makes sense to you? as we get into this late part of the cycle, as the micro uncertainties and geopolitical uncertainties continue to build, you need to be an active manager

at this point. quint: i will use the term active manager rightly because it has been a passive index play. if you are looking to put money to work, you had to be very selective, and i think you have to try to find the opportunities that are not as influenced by the big macro picture or maybe the headline, in that is why we like a company like corning. optics,n 5g, fiber doing exceptionally well. this is a stock trading around 15 times forward earnings. they are growing those earnings, at least next year, by almost doubled. strong balance sheet. you get paid to wait. that is the type of stop we -- stop we like. welike a company -- stock like. we like a company like oracle.

this is a company that has been shifting and doing an exceptional job moving their service revenue over to the cloud. on the top line -- when you look into the basic fundamentals -- it might not look that cheap, but because they have shifted, those margins should increase, and we might see a better profitability for that company going forward, which then ultimately does lead it to become a value play here in our minds. the level isp 500, still not at the levels we saw in september. so given the central banks right now seem to be having your back, is it a little bit under invested? quint: i think so. we are a little bit under invested for sure. we have some cash still on the sidelines. we were participating in the rally. we took some gains because the rally seemed very, very hot and heavy and very quick, so we booked some profits.

that proved to be incorrect. with that said, i am not chasing. i am not going to go out there and chase momentum. what that does is any pullback probably will be shallow, as investors look to play catch-up, institutional managers and the like, when there is opportunity. joining us.ro always appreciate you coming on and giving us those views. lots more to come on "daybreak asia." this is bloomberg. ♪

shery: a bit more on those breaking lines we had earlier. we are hearing that deutsche bank and other lenders have been subpoenaed by house democrats. house intelligence committee saying they issued subpoenas to multiple

banks. he said subpoenas related to foreign influence on politics -- we are hearing as that relates to the business dealings. we will be talking rio tinto. this is bloomberg. ♪

jessica: this is "daybreak asia ." i am jessica summers with the first word headlines. china is said to consider u.s. request to shift tariffs on to other good so president trump can sell an eventual trade deal as a win for farmers ahead of the next election. it would involve beijing moving duties on $50 billion of u.s. goods. washington says it will not lift its own tariffs on chinese goods even if a trade deal is agreed. carlos ghosn is facing yet more allegations. he is being accused of improperly charging rhino for a three -- renault for a $3000

scooter. the bike was seized by renault after auditors asked whether he had been entitled to it as part of his compensation. he denies any financial misconduct. accused of woman illegally trying to enter president trump's mar-a-lago has been florida denied bail. the judge at west palm beach said her actions and statements indicate "she was up to something nefarious" and that she is an extreme flight risk. she has pleaded to not guilty -- she has pleaded not guilty. nuclears begun removing fuel rods from one of the reactors at fukushima more than eight years after the devastating earthquake and tsunami. withdraw reactors.

it is a small step forward in what is expected to be a 40 year cleanup effort. the more challenging removal of 2021. fuel will began in and spacex has won a contract to play a real-life version of the arcade game asteroids. the deal is part of nasa's planned to show it has the power to deflect an asteroid by smashing a spacecraft into one at high speed. the mission is scheduled for june 2021 and the class will travel to space on the falcon nine rocket. it aims to hit a small asteroid about a year later. 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 jessica summers. this is bloomberg. shery: thank you. let's get straight to sophie kamaruddin in hong kong for another check of the markets. sophie: let's tee up for the start of cash trade in korea. we're watching samsung. the sales of its galaxy s can

rose -- s 10 rows. aramco agreeing to buy a 17 billionstake for $1.6 with the option to buy another interest. speculation ramps up a month who may become the interested parties for taking over asean airlines. over in japan, flipping the board, watching this company after it cut prices on its mobile phone data plan, up 40% in the face of government pressure. toyota is to sell electric a chinesech to startup which will give toyota preferential rights under china's new quota system. we are watching sony after the stock was upgraded from buy to

hold at jefferies. the company reported softer third quarter results on weaker sales to chinese consumers. it does seem modest growth ahead. the stock has been under pressure. down nearly 30%, so again, these coming under pressure. that may not bode well for the company. rio tinto has slashed its as first quarter clarida's plunged after its operations in australia were hit by fires as well as a cyclone. trackinginger has been this story. what is the outlook for the rest of the year when it comes to iron ore given there were those various natural disasters, fires, and the like? david: good morning. as you said, rio this morning said the shipment in the first quarter had fallen about 14% on the same period a year earlier. often best to compare like with

like, because it is cyclone season in those opening months of each year in australia. the outlook from here on in, there will be continued disruption. they are flagging there may be lingering impact in the two this -- into the second quarter. there is slow progress. they have been hampered by a second tropical cyclones at formed off the region, so it is a case of getting those ports that up and running to focus that city and really getting things moving again. said,t does mean, as you that annual guidance for shipments through 2019 have been cut by rio as low as 333 million tons. if it did hit that low-end, that would be lower than the amount shipped in 2018. course, this just adds to the bearish sentiment in supply around the iron ore market. shery: exactly. what impact will this have on

the market, on the iron ore market and places? rices? p david: it should be and mother signal that adds to that -- another signal that as to that tightness in the market. they are reeling from the implications of january's dam disaster in brazil. iron ore prices spiked. we are seeing in australia are just going to exacerbate that through the year, so it certainly looks like prices will potentially go higher or certainly be maintained at these elevated levels for much longer. there had i guess been some hope from chinese steel mills, that the australian suppliers could help offset some of those losses from brazil. no cyclones and other issues mean that is not the case. the other issue is those cyclones and other

issues mean that is not the case. shery: david, thank you. executives had to assure investors they will make more progress in revamping certain units. dan reichl joins us from san francisco. why are analysts and investors so concerned? dan: there was a reaction today. goldman shares slipped quite a bit. 3.8%, which is the biggest decline of the year. citi was down earlier. came down to be even. investors are worried on the goldman site about -- side about the outlook for the investment bank. it seems it might be used up. helpsvestment bank really the results. side, they are not seeing the growth in the consumer bank that they were promised and there were some questions about that today.

haidi: was there anything notable when it comes to each bank? or was it steady as she goes each quarter? dan: there was interesting developments. it was down at goldman sachs. int contributed to a decline overall trading. at that was notable because it was the worst compared to citi largemorgan, the two banks we already heard about. it was the second steep decline in a row for goldman sachs. it was thei, opposite. bond trading revenue was a surprise. from its bondunce trading, outperforming both goldman and jpmorgan, which saw declines in that area. shery: so what are we looking for in the second quarter and indeed for the rest of the year? dan: one of the things for goldman looking ahead is the investment bank. a lot of deals came to fruition in the first quarter. suntrustiece of the

deal. -- they had a piece of the suntrust deal. ceo, david solomon, is in the middle of a firm-wide review. he is promising all sorts of changes for the scope of the bank and the businesses that it is involved in. in citi, you have to watch her credit quality, b quality of their loans. credit quality, the quality of their loans. they will be looking at the possibility of more bad loans. shery: dan reichl, thank you so much for your time. will the cherry blossoms bloom in washington, as trade talks wrap up? we will ask the chairman, when we come back. this is bloomberg. ♪

shery: we are counting down to asia's first major market opens this morning. bitn futures under a little of pressure, down .2%. this coming up to sessions of gains. we are seeing a phenomenal rally for japanese stocks, with the nikkei gaining 13% this year. this is "daybreak asia." i am shery ahn in new york. haidi: i am haidi stroud-watts in sydney. the japanese trade minister saying the u.s. and japan's finance ministers have already got an agreement when it comes to fx. the negotiations have kicked off in washington this week. he just spoke, saying the first session with the ustr robert lighthizer,, was in the september agreement. let's take a look at the prospect and timing for this deal. kristof joins us now. given that we know a lot of the heavy lifting was done painfully

over many rounds of negotiations over the tpp, are you optimistic, notwithstanding issues over autos in particular, that we can come to a pretty conclusion? >> the two countries of course have already negotiated a considerable amount in preparing for what would have been u.s. participation in the tpp, the transpacific partnership agreement. we think there is a lot of groundwork that have already been laid. theu.s. has negotiated agreement with canada and mexico to replace nafta. and there is a lot of very important content from a business perspective in that. a lot of work has been done, and i think the two leaders, from everything we have seen, including that joint statement you mentioned, seemed to have , soted a course here

hopefully, at the trade negotiations, things can proceed relatively quickly. haidi: how much concern do you have that the wildcard really remains the issue over auto-parts and automobiles? and what other parts of the japanese economy should the agreement be focusing on? there arer: we think several urgent issues. one of them clearly is agriculture. u.s. farmers are under considerable pressure at the moment. getting equivalent access to what their european and some of their asian and pacific counterparts are able to offer in the japanese market would be very important from iteris point point of view. there is the auto issue. we would like to see the japanese government adopt the same standards the u.s. government uses here so we can export cars. and then lastly, there is the pharmaceutical pricing issue, which is going to have a major

impact on one of the most important u.s. goods exports to japan, which is pharmaceuticals, unless the two governments can come to an understanding about a more positive approach. shery: who are you speaking to to drive momentum for the trade talks? christopher: the american chamber of commerce in japan has just had a visit to washington, where we brought a large, ceo-level team to talk with senior administration officials as well as leaders on capitol ofl to lay out our vision what are trade agreement could look like and what it would mean for american business. and in essence, what we are looking for is a comprehensive agreement that would cover not only those three critical issues i just mentioned, but also point the way to the future, so that the two countries and the businesses in those two fortries can begin to plan

a business environment that clearly is going to be changing very, very rapidly in the coming years as digital technology influences an increasing number of industries. shery: u.s. lawmakers have been pretty wary when it comes to thea, whether it is democrats or republicans. there seems to be consensus about china not participating in fair trade. what is the view of what -- in washington as it concerns japan? christopher: they have been our strongest partner for decades now. our cooperation with japan is absolutely critical to moving the international trade situation toward a better one for american workers and businesses. japan as a strong ally, and i think most people in washington do, too.

there are some issues we want to work out, but i think this trade agreement could and should be a forward-looking one, and if we can set some high standards and a lot of critical areas such as how data is managed across our two economies, then we can have some really important influence, we think, over how the rest of the asia-pacific region you vols in the trade area. -- evolves in the trade area. haidi: how detrimental has all of the of the 20 -- the own tradey over its deal with the u.s., how much of that has been damaging do you think to investor sentiment, animal spirits, capital spending amongst your membership? christopher: if you look at the markets, you probably sees somewhat contradictory -- see some somewhat contradictory results.

it is clear from japan, and sitting in tokyo, you see exports in the machine goods ina have been declining recent months. and that clearly is having something of a dampening impact. it is fair to say that the debates that are going on between the u.s. -- the negotiations, i should say -- going on between the u.s. and very important. the sooner those get -- i think, fundamentally, japan. onsee pretty much eye-to-eye what we need to do to strengthen the rules in the international trading system. shery: taro aso speaking in tokyo, saying he has no comment when it comes to that currency clause after the economy minister said the finance ministers had agreed on something when it comes to fx. will have to keep watching that

one. how happy will your members be if you get something similar to what the u.s. agreed to on the tpp? christopher: we think the tpp set a very good standard in a number of areas, and we would certainly like to see this forthcoming, we hope, trade agreement between the u.s. and many of theorate key elements that were negotiated there. as we said earlier, since then, the u.s. has negotiated with canada and mexico, and really improved upon some of the aspects of tpp in several areas. and so, we think incorporating some of that experience into the negotiation with japan probably would end up giving us a stronger agreement that would help business in both economies, and as you know, japan, meanwhile, has also gone ahead with a new free trade agreement with the european union.

and so, we certainly need to take a look at that, and hopefully see that u.s. exporters are able to compete on a level playing field with those from europe as well. shery: christopher lafleur, thank you very much. that is the chairman of the american chamber of commerce in japan. plenty more to come on "daybreak asia." this is bloomberg. ♪

shery: let's now take a look at one of samsung's boldest devices today. they unveiled a handset that can be a phone or a tablet and carries a price tag of nearly $2000. mark gurman got his hands on one for a closer look. mark: remember eight years ago when they launched giant, expensive smartphones, and there was a group of you who thought it was a gimmick?

samsung is doing it again. this is a $2000 full double phone -- foldable phone. the user interface is intuitive. there is a smaller screen outside the phone and a bigger screen when you open it. i have a feeling it will get better over time if samsung continues to invest in this style of smartphone. it is basically a tablet. it is the size of a iphone mi ni. there is a 5g version. this one goes on sale at the end of april. it comes in several colors, including this blue and gold color. there is a silver. there is a dark gray/black color. there is a green color that almost looks gold. productivity and business users are probably going to like this thing. for multitasking, you are able to pin three applications at

once. overall, it is going to appeal to those types of users. the $2000 question is, are people going to want to buy these things so soon after they hit the market given the technology is still fairly early? i am mark gurman for bloomberg news. new york. haidi: that was mark gurman with a closer look at that new samsung phone. let's get you a quick check of the latest business flash headlines. jet airway lenders have finalized a short list of bidders. they chose india's fund as well indigocapital and partners. they have suspended all international flights after failing to secure emergency funding. the carrier is flying only seven planes on domestic routes. shery: foxconn says they will go into mass production in india, a big shift for the chairman, who

has focused production in china. hasaid prime minister modi invited him to india as part of foxconn's expansion plans there. apple has had all their phones made in bengal are -- bangalore for years. haidi: try going for a spicy hot pot. the couple who founded a chain are $5 billion richer this year thanks to insatiable demand in china. last year, revenue surged 60%, helping push the stock up more than 77% so far this year. payy: unicredit agreed to $1.3 billion to resolve u.s. allegations that it offered cleaning services to clients in violation of sanctions. the overall penalty, $700 million more than sources forecast, and it is one of the largest ever related to u.s.

sanctions. standard chartered agreed to pay more than $1 billion to resolve it dealings with iran. the markets in japan, south korea, and australia get underway at the top of the hour. let's preview the top of the open. sophie: futures are hinting at losses at the start of cash trade in tokyo and seoul. rio will be very much in focus after the miner cut its iron ore shipments, following the drop we saw in first-quarter cargoes.we have a few other updates from australia inc. as well. it came in below estimates. reported revenue of 398.1 million aussie dollars for the period. the energy player said it is targeting signing the gas deal in papua new guinea. i want to highlight cannon, which has been upgraded to overweight at morgan stanley. a 22% increase from the last

close. bloomberg intelligence has a more sanguine view on the company. sales have been declining in the first quarter as demand continues to weaken, amid rising competition from smartphone cameras and the like. industrial revenue has seen softening as memory chip -- on samsungng an eye at the opening seoul given that it did see an uptick of 16% for its s 10, which is better than we saw for the s 9 model. a look at whatke we are expecting when it comes to the asian market session. new zealand this is the picture. picture when it comes to seoul as well as tokyo, despite asian shares hitting a six-month high in yesterday's session.

risk appetite for the bull market has checked out for this holiday-shortened easter week after stocks fell after three days of gains on muted bank earnings. the reception was pretty muted. lots more to come on "daybreak asia," including those market opens. this is bloomberg. ♪ ♪ moving is hard.

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haidi: i'm haidi stroud-watts in sydney, where markets adjust open for trade. shery: good evening from bloomberg's global headquarters in new york. i am shery on. sophie: i am sophie kamaruddin in hong kong. "daybreak: asia." ♪ haidi: our top stories this tuesday, asia-pacific stocks facing declines after the rally ran out of stream on wall street. the s&p 500 something from a six-month high. rio tinto in sydney open for trade. i don't shipments -- iron ore

shipments missing. shery: trade is back in the headlines. china is allowing president trump to claim a win. let's go straight to the market action. we are seeing weakness of the start of cash trade in tokyo, where the nikkei 225 is sliding after a three-day advance. the yen is looking a little changed. again is falling below your high levels amid concerns that the u.s. may demand a pricing clause in talks with japan. jjp traders will see an option of twenty-year debt today. checking in on the mood in seoul. the cost be looking unchanged. ospias at -- cost be -- k looking unchanged. aussie see on the airlines continuing to surge. the stock jumping 15% this

morning. industrial,ubo after speculation over who may be interested in taking over the stake in the korean carrier. the asx 200 is under pressure. up .1%. the aussie and bonds are steady ahead of the april 18 minute. rio cut its iron ore shipping guidance. checking in on new zealand. kiwi stocks looking to extend gains for a fourth session. the kiwi dollar is holding steady. sees the kiwi dollar raising to $.70. the policy is not a game changer for the currency, but 40 basis points of rate cuts priced in. i want to put the board for blackmore's, which is under

pressure in sydney. sliding about 7.7%. the lowest in some time. this is after the third-quarter update. soft numbers coming through. weaker sales to chinese consumers. it is anticipating modest growth this year. the company saying it plans to combat the decline in u.s. -- chinese sales. haidi: sophie kamaruddin. let's get you to the first word news with jessica summers in your. jessica: fire has swept through the notre-dame cathedral in paris, forcing the evacuation of thousands of visitors and local residents. it's causing is a macron to bust on a speech to the nation. the 850-year-old building have been ongoing motivation at the time. live pictures show the fight -- expire and though roof collapse -- the spire and the roof collapse. most of the structure has been say. is backing current

fed policy, was adjusting the next move will be a cut. at the peterson institute in washington, he agreed the markets are betting that jay powell is considerably more likely to lower rates than raise them. president trump is argued that the fed is needlessly restraining u.s. growth in a time of low inflation. deficit -- india's march.eficit widened in the gap between exports and imports reached $10.9 billion, up from $9.6 billion in february and more than $1 billion wider than seeing in a bloomberg survey. we heard warnings last week that weakening global growth and trade are a threat to emerging economies. holdings rosery for a third month as beijing adopted more u.s. government debt amid the continuing trade war. china is holding its notes, bills and bonds, increased $4.2 billion to just over $1.1 trillion in february.

japan remains the second-biggest told her with just over $1 trillion. that is a $2 billion from january. global news 24 hours a day on air and on @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm jessica summers. this is bloomberg. japan says trade talks with the u.s. have kicked off a lot of the same lines as the agreement they struck in september. our bloomberg senior editor is watching this. the administration says it was a currency clause to prevent japan from using a devalued yen to boost exports. we are hearing a different thing. speaking in washington, they are saying that there is a fixed within these talks. -- fix within these talks. >> it's a little bit confusing, because there was some further comment that said this isn't that was a topic for

him. thingint of the currency is the u.s. is very concerned about currency devaluations in asia. they are concerned about currency moves as a way to gain an edge in trade. the u.s. has been concerned about it. when the u.s. gets into bilateral negotiations with japan, a lot of these areas where the u.s. has a problem is going to come to the fore. the last time u.s. and japan were in trade talks, this is part of the multilateral transpacific partnership, which the u.s. pulled out of. now in a bilateral situation, the u.s. sees a chance to do some real moves on auto, agricultural, prevent problems with currency. these are the some things they are targeting in these talks. shery: no wonder. one of the reasons that the u.s. wants that currency clause with china as well.

do we have a more details on those negotiations -- any more details on those negotiations? derek: i do want to say something funny. if you have been watching currency for a long time, especially during the rise of donald trump, you would notice that the japanese yen has been correlated with good news for donald trump. it was through the campaign and his presidency. i think that's amusing as we start coming in. china talks are certainly going well and progressing. it looks as if some of these t's are getting crosesssed, and i's are getting dotted. we are still waiting to see what the next formal step will be in terms of talks between washington and beijing. critically, the announcement for when donald trump and xi jinping are going to meet, because they said that step will happen when a deal is close to done.

the simple announcement of it could be taken as a good sign for markets that a deal is close. haidi: there also seems to be an appreciation or willingness to compromise on the political uptake of this. that what understand they need and what trump made for a win by come -- back home. quite right. there was some news that broke been suggested that china and the u.s. were looking at modifying some of the placements that these tariffs were made, even if the full tariffs would not get pulled. one of the interesting places that that looks like it might happen, is if china adjusts some tariffs put into our culture. farmer -- agriculture. farmers are a key constituent of donald trump. back to the north dakota senate race, the republican running there, kevin

cramer, campaign saying, short-term pain, long term gain. trust this president and things will work out. this coalition will be huge in states like wisconsin, michigan, key swing states have a heavy agricultural presence. the president was to show a win for a key farm constituency. haidi: thank you so much for that. derek wall bank in singapore. let's get straight to sophie. she is looking at something moving in tokyo. sophie: we are seeing moves in the japanese telco space. cut itsafter docomo prices on cell phone plans, as much as 40% in the face of government pressure. raising 4.5%. record 10 under pressure. kddi jumping the most in more than two years. these are on the back of what are seeing on the back of docomo's strategy against record tends entry.

that will see some downward pressure on telco as record 10 record 10 ister -- -- rakuten is set to enter. haidi: still ahead, find out why moody's says china's property sales slowdown will continue this year. haidi: find out why id groups rodda will- kyle come out on top in 2019. this is bloomberg. ♪

♪ is "daybreak: asia ." haidi: i'm haidi stroud-watts in sydney. isning us now from melbourne kyle rodda, market analyst at ig markets. the earnings themselves, they were pretty run-of-the-mill.

nothing spectacularly bad about them. investors are clearly looking for more. is this a sign we are getting some new patients in the market? is this a pause as we stop and take stock of company fundamentals with earnings season getting underway? what is be the nature of the last stretch of the growth cycle? -- will this be the nature of the last stretch of the growth cycle? kyle: i think they said the bar high. markets got enthusiastic on friday night. we saw activity pick up. we do not see activity particularly high overnight. results, wasn difficult to take. it's a early days in the earnings season. the barometer is what we are looking for. risk-taking and growth going into 2019. earnings will be low this quarter. we are waiting for some industrial stocks to really report. the tech giants as well. to get a read on what corporate

america is saying. of enthusiasm friday night, before we can look to bigger indicators of the overall macro story. the trade talks, yeah. making incremental bits of progress in the u.s.-china trade war. is there a sense that we have lost a bit of momentum? kyle: definitely. the headlines have stopped being stimulus as we have been seeing over the past three months. andare seeing less tweeting commentary on the side from president trump, but other key stakeholders in this one. there's an understanding that it doesn't move the market so much. it doesn't stoke bullishness anymore. thatts have priced in

there is a neutrality of the trade war at the moment. things don't seem like they will escalate. the markets are looking for some tangible policy changes, mostly as it relates to tariffs and the removal of tariffs to boost trade flows. haveall well and good to the sense of boosters on the headlines, but the markets went to see something meaty. that's why were not seeing the same juice from the stories. not to mention how much markets are banking from dovish this from central banks. raldovishness from cent banks. kyle: that will underpin markets going forward. the chinese growth story is a big one. we have to see the chinese growth turnaround and show signs of bottoming. at the end of the day, valuations, if you put it in the context of earnings season, the uh and scum a relative yields, are still relatively attractive for stocks. fallen quites have considerably.

that is a bit going on central banks have the power to stimulate growth again. we will be looking for confirmation of those two stories. particularly how it relates to growth and rest. shery: and china, we are seeing data that shows that monetary situations are loose. they are showing aggregate financing and loans. china, but nowin with the economic data being a bit more positive recently, could we see a pullback in stimulus support coming from policymakers? what would that do to -- what would that do to the markets? pullbackk assets would and temper their enthusiasm. the run higher we saw in china's equities, for example, is because valuations were attractive for chinese stocks prior to the big announcement.

i guess you could say there would be some deal being struck in the trade war, going back to february. we did get an adjustment there. the bigger part of that was that we were expecting things like cuts to the reserve ratio requirement or other monetary policy measures that would push flows into equity markets. -- particularly with the growth data turning around, it may actually cause some upside to chinese equities in the short-term as markets adjust to the fact that monetary policy conditions are being priced in. the bigger picture will be about what the growth outlook is. we get some us data related to that. it may put a break on the rally for the short-term before true fundamentals can come back into the picture. do you -- do you have a -- you have a financially stable country in china. you see some movement on the

trade war, you have the fed being stable. good going forward or the u.s. dollar still in is inainty? kyle: it uncertainty. yields have stabilized across the global market. for now, that concern has subsided. as it applies to china in particular, it has to be on turnaround in the growth narrative. we can speculate on what policymakers'extensions will do in the short-term, and thrive -- they tend to thrive in an varmints for yields are reasonably low and the growth outlook is strong. the yield will be given -- driven by the fed. pretending to china, whether the growth engine can be restarted.

it's a tiptoeing through emerging markets. much different than but were getting in developed markets. some risk-taking will still be there. haidi: does that mean a short-term cap when it comes to the aussie dollar rally? kyle: potentially. i don't think the fundamentals at the moment are reflecting well on the us trillion dollar. i think the sentiment play. the prices are being driven by a return of solid growth conditions because of supply shocks globally. there is an attitude evolving in the markets. note --s been a opportunities opening. volatility to the is -- volatility is subdued. it's giving a bit of a green light to these risky growth assets to rally and take a leg up on sentiment.

but being in australia, and as it applies to the australian dollar, the yield differentials have widened between u.s. denominated assets and aussie dollar denominated assets. that will reassert itself over time. we may be entering a period, because of the low volatility environment, that we start to see those irrational moves occurring in the market in the short-term. we are positioning for that. the longer-term picture is not favorable for the australian dollar. shery: we continue to see growing uncertainty over the fate of the global economy, yet prices have remained supportive this year. how much should we take away from the commodity market and what it is telling us on the macro picture? lot and i think it is much more reliable than what we will be getting out of equities or currency markets. a lot of the have a risk we were talking about before, has stepped over to one side and reduced volatility in the currency complex. the fact that financial conditions are supported by the

pboc, the fed, the ecb, is that equities are going to tread on the fact that risk-taking is given a green light. the commodities space will be more difficult to hide fundamental issues of the global market. you look at copper and industrial metals, we have a leg higher recently, but some of its more recent climbs, markets are try to judge where the growth outlook will be, and what licymakers will have. you also see oil prices, which is heading toward a potential flashpoint. my personal favorite at the moment is gold, which will be the most contentious trade of the year. the commodities space, you have to be keeping a watch on it to get a better gauge of the fundamentals. the fundamentals are being clouded and distorted.

haidi: always great to have you there, kyle. kyle rodda, market analyst at ig markets. go on the bloomberg. you can customize the settings in the bloomberg app as well. you can get the assets you care about. this is bloomberg. ♪ shery: let's get a quick check

of the latest business flash headlines. a string of big banks have been subpoenaed by congress for documents related to whether foreign governments tried to influence u.s. policy. sources say they included bank of america, j.p. morgan, citi and deutsche bank, which has been a target since the u.s. to the house in january. they say they are cooperating and committed to providing information. haidi: deutsche bank says it

could lose the equivalent of 20% of commerzbank's annual revenue with the merger. customers seeking reduce exposure to the entity could pull out of business worth $1.7 billion. we are told the last estimate is a key factor in deutsche deciding whether a merger make sense. shares in riog tinto trailing the early part of the trading session. a sharp drop in iron ore production and lowered its of the 19 production guidance. -- 2019 production guidance. up by about 1.25%. you see the bounce in the share price. some of these challenges for ball flight. >> all you had to do was quite literally read the smoke signals. i will get to that in a moment. let's get across the numbers. shipments down 14% to city 1.9 million tons. rio also changing its guidance

for the full year and are 33 --ing a three to 330-338 millinon tons. quite literally, there were fires. a fires, one last saturday at court. also, a cycle of blue through toward the end of march, dumping a foot of rain throughout the minds. those mines are just now trying out and getting back to production. a series of setbacks there. to reduce supply disruptions. shery: we could see upward -- we could be seeing upward pressure on iron ore. paul: absolutely. we are seeing upward pressure in iron ore. bhp face the same cyclones. there was that take told -- that

vale,dam crash affecting taking 93 million tons out of the market. we will be hearing from the largest iron ore producer in australia on wednesday. falltein saying shipments -- have fallen, meaning prices rise. what does it all mean for china's steel production? take a look at this chart the gtv library. this is some commentary from interest -- an industry veteran, the founder of shanghai steel homes, who says that china may not be prepared for these living iron ore shortages. 100inventories fall below million tons, we could see more volatility in the market. haidi: paul allen here in sydney. coming up next, we'll take a look at huawei, saying that

accusations of spying art fair. we will be hearing from the chief representative to the eu. this is bloomberg. ♪

>> this is daybreak asia, i'm jessica summers with the first word headlines. china is said to be considering a u.s. request to ship some to other gods, so president trump could sell a trade deal as a win for farmers, i had of the next election area we are told it would involve beijing and moving duties about $50 billion of u.s. goods to nonfarm imports. lift itsn says it will own tariffs on chinese goods, even if a trade deal is agreed. an -- ghosn is facing get more allegations, being accused of charging rent out for a $3000 scooter when he was chairman.

said -- they say it was bought by him and he said he was entitled to it as part of his compensation. he remains in custody and denies any for -- misconduct. japan has begun removing nuclear fuel rods from one of the reactors at fukushima. more than eight years after the devastating earthquake. plant owner will withdraw 556 rods from storage pools and the number three reactor. it is a small step forward, and was expected to be a 40 year cleanup effort. effort ofenging removing feel at the bottom of a reactor will begin in 2021. has won a contract to play a real-life version of the arcade game asteroid. the 60 $9 million deal is part of nasa's plan to show it has the power to deflect an asteroid by smashing a spacecraft into one at high speed. the mission is scheduled for june 2021, and the craft will

travel to space aboard a fat -- a falcon nine rocket. it will hit a small asteroid 11 million kilometers from earth, about a year later. global news 24 hours a day on air and on @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm jessica summers. this is bloomberg. haidi: let's get a market check with sophie. does it feel like risk has already checked out ahead of the easter weekend? sophie: we are seeing a turnaround come out with stocks gaining across the region. nikkei 225 adding .25%. looking to extend gains for a fourth straight session. the kospi could be set for a rally of 13 days, the best winning streak since february of 1984. -- a mosthe gainers, the gainers, kcal raising -- cacau rising.

rio cutnd focus after its shipment guidance. let's check in on stock movers in seoul. dusan corp. jumping as much as 10%. this is optimism over its oled and fuel cell services. the units have strong growth potential. ana airlines rallying. -- asiana airlines rallying. let's check in on japanese telcos, which are mostly higher on the back of docomo announcing price cuts to phone plans that would seem to be incremental to ease concerns over in earnings in voting price war sparked by the impending entry of rakuten, under pressure this morning.

they are to respond with major price cuts. haidi: foxconn will start mass-producing apple iphones in india this year. it's a shift away from its traditional manufacturing base in china. let's get more details from bloomberg's asia technology executive editor, peter elstrom. withuch of this has to do the u.s. china trade war and trying to move away the supply chains from china? peter: what you are seeing is foxconn, apple's most important supplier, making the shift, moving away from its traditional manufacturing base in china, and announcing, that for the first time, it is going to mass produce iphones in india. war, related to the trade it diversify their ability to manufacture these products. it's not that foxconn is pulling manufactures out of line of

china at this point. it's about the promise of the india market. china is still the biggest smartphone market in the world. india is the fastest-growing. are buying smartphones in large numbers. there is a lot of promise there. for apple in particular, apple has not been a significant player there. largely because their phones are too expensive. is, when theytors don't manufacture the phones in their market, but they bring them in, that to pay 20% import duties. if foxconn is able to make the phones in the market, that will help them on the cost side and they can become more competitive in this important market. how much impact have we seen from global macro conditions? the chinese slowdown and the uncertainties posed by the tech side of this trade war? overall, i would say the key issue here is the smartphone market is stagnating.

we have seen this in apple's earnings and foxconn's earnings over the past few quarters. they need to find growth somewhere else. apple is not focused on india in the past -- has not been focused on india in the past. their phones are not cost competitive. xiahall me and shanghai -- omi and samsung are the market leaders. they need opportunities for growth. so they're trying to step up with their manufacturer. foxconn is trying to step up. they're largest producer of iphones. precise details on how they want to expand, but they will become an important manufacturer in china. to prime boost minister modi, who is been trying to boost the manufacturing sector. he is focused on bringing in these important manufacturers into the country. theypport their -- them, support both foxconn and apple.

the founder,ng of terry go, he is than at the head of his company for more than four decades. we are now hearing he's going to step back from day to day operations. what do we know? peter: it was a chaotic event yesterday in taiwan. he talked on the sidelines of an event there. the first made some statements that were reported as him giving up his chairman post. event,orter was at the but did not hear that to go,, but then clarified with a spokesman, saying he won't give up that post, but he will step back from day to day operations. foxconn has some issues with communication sometimes, in saying things clearly. with their wisconsin play, they were stops and starts there. -- there were stops and starts there. he is saying he will step back on the day today and focus on strategy. executiveomberg news

tech editor, peter elstrom with the latest on foxconn. towei's chief representative the european union says accusations of the companies spying for the chinese government are not fair. the u.s. continues to pile the pressure on its european allies to lock their access to five g networks. they put the hat over our head as a chinese spy. it's not fair. the trust has to be based on the facts. the facts have to be verifiable. the verification has to be on the common industrial standards, which is equal to everyone. europe, youhat in are open on discrimination. how huawei, the

environment, we appreciate it. huawei one of the successfactors -- is based on this global one of the success factors for globalis based on this acceptance. we want to get into the german market. we have a lot of collaboration with other operators. if you talk about 5g,5g cybersecurity, journalists have made a good example of how a , what is theach addressrection to go to these kind of cyber security concepts? we admit this is very important. we have all agreed this is an important part.

it has to be based on a safe network. problem, howthis germanyss this concept, has set a benchmark and in example. we are part of a solution for that. .ou have been talking to us is a reputation damage to huawei. someone has said it is a big advertisement for us as well. i will give you an example. the first two months of huawei's business, revenue has increased 30%. many of our colleagues would not expect this at the beginning of the year. our annual budget has increased about 20%. because ofwo months,

the huge advertisement that the caused, we see big figures. all this talk about huawei and 5g, many people begin to notice huawei. beenprivate company has constantly repeated by the u.s. president, or secretary of state. they talk about cybersecurity. they check with the labor, and their friends, what is it? this phone is so nice. there are nice features. they like to trying it. people say to each other, i think the credit was built by years. the reputation has been built over tens of years. --olitical allocation allegation can damage for a bit,

but we are confident for our future business development. huawei's chief representative to the european union, speaking on bloomberg. coming up next, chinese property market may be bouncing back, so is it time to buy some brick and mortar? we will ask an expert when we come back. this is bloomberg. ♪

shery: this is daybreak asia, on haidi stroud-watts in sydney. shery: i'm shery on in your. china's property market has been returning, with robust lovers in march after contracting in the two previous months. majort sales of nine developers rose 20% in march from a year earlier. today, we'll have two days latest home prices. our next guest says audi sales will continue to slow of the next year. joining us from hong kong is

kaven tsang, vp and senior analyst at moody's investor service. this gtv chart on the bloomberg showing property prices in china. acrosse still growing all cities, but the prices have been softening quite a bit. you expect sales to continue to in the or show weakness next few months. what is driving this weakness? moody's expect the chinese property sales will slow down continuously for the rest of the year. slowdown in by a lower tier cities. there are several reasons behind it. the change in some of the government policies and redevelopments, and secondly, the sales growth and low tier cities has exceeded demand.

the high growth in the last two years caused a high base effect. shery: we saw the national people's congress, the government reaffirmed their focus on the study development of china's property market. how much of support can we expect to come from the government? moody's believes the government will take long-term stability in the chinese property market. of the last few years, we saw that governments have tightened many controls over different cities, and we believe that the chinese government will continue to closely monitor the development in different cities, to ensure the stability of the market. we do not expect that there will dramatic tightening of control over the sector. however, we believe that individual cities could adjust their policy control accordingly

to ensure the long-term stability of the market. for example, if the property price goes up, more rapidly, they would tighten the data control. down,r, if the sales slow and there is some property price downward pressure, the control measure could lose a little bit. in terms of bright spots, where are you seeing resilience kaven: which cities with a be? -- which cities with a be? -- which cities would they be? because of the stronger economic growth in these regions, and also the continuous urbanization and development of economic situations. we see the river delta and the bay area have greater potentials.

i mentioned earlier, that the lower east cities could slow down more. tierome of these lower cities could still be benefiting from an economic growth and an upward trend. haidi: do you expect the gap between top and second-tier cities and lower tier cities to continue to develop? the major cities, yes. certainly. they will benefit from the continued urbanization and economic growth. some lower tier cities, we believe they won't -- they will enefitting from the economy. some of the lower tier cities in remote areas, their sustainability might not be as strong. growthct that the sales will slow more rapidly in the cities going forward -- these cities going for. shery: what is the state of

liquidity and refinancing needs in the market, and how developers doing? -- our developers doing? -- are developers doing? kaven: the developers faced difficulty over the 12-18 months period. it's because of the issuance of over the last one or two years. certain conditions in china and the offshore bond markets have improved over the last few months. that helped many of the rated chinese developers to issue longer data points for the refinancing and the repayment of debt. se believe that moody' redevelopment, they are refinancing risk -- the refinancing risk has reduced. shery: kaven tsang, vp and senior analyst at moody's investor service.

we have an alert on the bloomberg. we are hearing from foxconn's terry guo, that he is considering running for president in taiwan. that heheard from him will be stepping down as his role of head as foxconn, after founding the company 45 years ago. we are hearing from terry guo that he is considering running for president in taiwan. mentioned he will reduce his commitments in foxconn. foxconn moving some of their manufacturing and production to india in order to take advantage of the growing smartphone market there. now we're hearing guo considering running for the taiwan president -- presidency. plenty more ahead on "daybreak: asia." this is bloomberg. ♪

show ishe shanghai auto getting into gear with electric vehicles high on the agenda. china is a leader when it comes to cars come up with a huge number of companies in the market. while traditional auto sales in china are falling, demand for electric cars is robust. it will come down pretty significantly. we expected that.

announce a price increase as early as february to anticipate the subsidy reduction. we think it will have a short-term impact on the overall consumer demand. in the long run, it will be good for the whole sector. the subsidy is benefiting from low-end players. getting rid of the subsidy forces consumers to focus on the products. and the value proposition. that is something we are emphasizing. >> in terms of the shakeup of the electrical vehicle shakeup -- the startup, what percentage of players do think will be left in two years? >> i think the shakeup well have been pretty to medically. witnessed, the market is becoming very concentrated. always talk about dozens or hundreds of players in this market, but today, if you look

around, only a handful of players are getting the attention and developing products. most players are fading away. this business requires a lot of resources and commitments. most ofthink people, the players, what be able to attract their resources and talent that have the ability of building an organization to meet that requirement. going back to the subsidy question, the subsidy, going away in the next 12-24 months, or being to medically reduce, will have an impact on the players that are coming to the markets. these players will not have the window like we had. to access markets with the support of the government. for them, you have a product a year from today, they will be faced with a lot of competition and a lot of government support. we have to ask about tesla. their building a factory outside of shanghai. is there comparison to be made

between tesla and, apple, in terms of apple's fortunes in the chinese market, or customers become price conscious, and they're looking for domestic brands. sales follow. its is that some thing i could await tesla as some startups like yourself and others pushed out into the market? >> i certainly believe that will be a trend for most chinese consumer markets. the chinese market, as you point always first educated by expensive luxury segment products that educate chinese consumer markets what a high technology product of site. quickly, just like the smartphone market, you will have domestic players coming to market and extending the segment. it doesn't mean iphones are successful. they are successful. but a rival of chinese domestic brands at a high quality and affordable prices, will expand

the market to where the cost is. >> what is your sense on how much pressure is on the chinese consumer? sentiment iser something to watch. the auto sales decline is something that is quite significant. what we see at the same time, is that the electric vehicle segment is growing at a fast clip. every month, you see growth about 80% or so. that is impressive. market,ast to the auto i think ev is enjoying a growth rate that rivals the best. shery: brian gu there. we're taking a look at a look at the next picture across asia. -- mixed picture. sophie: we're watching chinese battery and material makers that is been downgraded on the impact

of battery downsizing and standard securities, as credit suisse is increasing their capital injection. new china life increased. sands china was downgraded to hold. it is seeing a softening for macau. keeping an eye and foxconn, as the company aims to boost iphone production in india and a shift away from china. hadcoverage continues as we to the start of the open in hong kong. this is bloomberg. ♪ xfinity watchathon week has sadly come to an end.

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>> it is 9 a.m. in shanghai, beijing and singapore. welcome to bloomberg markets china open. i'm tom mackenzie. yvonne: i'm yvonne man. were opening up to the trade in hong kong and mainland markets. tom: let's get you top stories. asia falls after a six-month high after it adjust earnings reports in the u.s. and japan. risk appetite may have checked out for easter. chinese indicators have impressed the head of gdp, but are they too good? markets are spooked by the possibility of less than does. david: we are and the fast lane at the shanghai auto show. electric cars are all the rage

as manufrs