♪ good morning. i am haidi stroud-watts in sydney. markets have just come online. kathleen: and i am kathleen hays in new york. sophie: i am sophie kamaruddin in hong kong. welcome to "bloomberg daybreak: asia." haidi: our top stories, president trump says there will be no response to the iran -- th e iran attacks. oil continues to slide.

people might say it has been the best performance currency, thailand. and the bank of thailand. we have an exclusive interview. kathleen: markets have opened. aussie yields are rising. little change to the upside after the session on wall street that saw u.s. stocks pare gains after a fresh eye. the offshore yuan. this check in on the yen morning, holding onto a three-to decline after a wild start to 20, -- holding onto a three-day

decline after a wild start to 2020. new york crude staying below $60 barrel, falling as much as 5.7% overnight. oil supplies remain intact. haidi? haidi: president trump backed away from a war on iran but said they will be tough, new sanctions until they change their ways. statesrump: the united will meet liam pose additionally -- additional, punishing sanctions that will remain until iran changes its behavior. , by all assessments, it seems like that reprisal from create noesigned to additional fatalities.

is this a step down for them to theeast put an end to situation? >> they did not want a direct confrontation with the u.s. there was a warning before the missiles went off, and then they were launched at parts of the airbases that were not populated or had u.s. forces in, and there were no u.s. casualties. that gave president trump the opportunity to switch gears and offer perhaps a diplomatic , and it remains to be seen if they will also reciprocate now, but for the time being, at least the tensions have eased substantially, despite the threat of additional sanctions put in by the u.s., the u.s. of course already having many sanctions against iran. there is limited targets for those going forward, so the

president opened the door towards negotiating a new thatar pact with iran, and might be the next step in the diplomatic dance. that could be an issue. view" columnist who specializes in covering the middle east wrote, "do not kid yourself. this is not over. iran's bloodlust will not be satisfied yet." joe: there is still concerned about additional responses from iran that might be much less direct. they have proxy forces throughout the region and other places. there is also still concern about cyberattacks , andiran -- cyberattacks, and iran kneew

waiting.and they are for the time being, both sides are willing to give the appearance, at least, that there could be an opening here. joe, does this mean that president trump, because i know the initial decision to strike and the killing of the iranian general was controversial, does this give him more support at home? had been more retaliation or continued response from iran, there certainly would have been greater pressure in congress. right now, republicans are pretty much lined up in support of the president. democrats are going to try to make an attempt to vote on

restricting his ability to take military action against iran, but that is ultimately going to be fruitless, because it will not get through the senate, so there will be with his voters some easing. faction ofcertain trump supporters who do want to disentangle from these -- from the middle east and are not relishing further involvement there, so the president was able to have it both ways, taking tough action without it spiral my out of control. kathleen: thank you so very much, our congress editor joining us from washington. well, let's get more on iran. sterling. is a cio, great to have you back in the studio. 2020, you wereo

pretty optimistic and upbeat on stocks, one of the reasons being it is an election year. how has this changed, if at all, with this unexpected, you know, rise intentions, which may not be over, between the u.s. and iran. sterling: good evening. happy new year. there was a risk-on phase, and we saw the s&p 500 in new york, and what has happened in iran the last few days is troubling. a geopolitical point of view, it will add more volatility, and as we will talk about, no doubt, this is really the area where they should be focusing. kathleen: many people have come on shows and pointed to history, that went something like this happens, a geopolitical

instance, -- when something like this happens, a geopolitical instance, things are volatile for a while, and then they settle down and move on. do you think that pattern will repeat itself? stirling: that is a good question. people are already calling this the "roaring 2020's." the challenge between the u.s. and china has not gone away. a good job of distraction, throwing up flares left, right, and center. from an economic point of view and social point of view, iran is a very active player in terms of cyber. we have not seen that yet. you cannot quantify that. tech one of the biggest risks you are watching this year? yes.ing: they have software.

we do not know how or where they will deploy it. what is important to know is to just be vigilant and that 2020 will be unprecedented. from a financial and economic point of view, as we talked about last time, as well, we are still in a risk-on phase, which means there is upside in the s&p 500 in the u.s.. however, when there is a retracing, we will find out in the next two or three years, then obviously redemption of capital is important, and it is not just about making the right investments. it is about having systems in place as well as protocols to make sure you redeem your investments and understand the exposure and risks you're taking, both from infrastructure point of view and more. haidi: so it sounds like a wild yet before we see this rotation into value. again, i would like someone to show me a mathematical equation of what is

of value in 2020. it is being reengineered at the moment. we do rely on these formulas, and they have been very helpful in the last 75 years of economic history, but things are changing, and, again, if you do have a cyber threat that we cannot mitigate, somebody affects your hard drive, or a server compromises your data, there is a number of real-life threats that are compromising what we are doing in financial markets and also the real economy. again, what we are all learning is that the world is getting tougher for all of you get we maybe need to focus on the things that matter. matters thist year? do you hedge? are the things that look good in equities? are there certain bonds of any kind that look good? do you think they are going to go to 2.5% in the 10-year, and then they are down? el-erian wasamed

talking about tilting away from the u.s. momentum, and his position, and i agree with that, is do not exit yet. the momentum is still in north america. with the financial markets, and the markets will be in fixed income and equities, as well. kathleen: so what do you think will be the high for the s&p this year? we could have another 20%. there is no reason to say we will not do last year again. 2006, 2007. we know there is a lot of money to be made in the markets over the next 12 months, but there is a real cliff coming 12 or more months from now. -- steadyadying hands hands, but making sure that you are well prepared. stirling, stay

with us much more to discuss. in the meantime, let's get you caught up with the first word news with jessica. jessica: the european union is on the course for a new brexit path. an audience in london was told that the eu is ready to work butnd the agreement warren's fourth johnson there simply is not time for detailed negotiations. boris johnson there is simply not time for detailed negotiations. global growth will likely pick up modestly, but less than previously forecast despite the easing of trade tensions. expansion will be around 2.5 of stabilization across a handful of economies.

however, it does warned that global growth conditions remain fragile. and the bank of thailand will take further steps to ease curbs in an attempt to slow gains in the baht. liberalize foreign-currency deposit accounts and insurance companies allowed to invest abroad. they have struggled to write in the currency which has gained 6% against the dollar -- struggled to rein in the currency which has gained 6% against the dollar. >> people say it is the best performing currency, and indeed, when the currency is not moving in line with the fundamentals, the best-performing -- ghosn has gone on the offensive. he described his arrest 14 months ago as "brutal," saying

he was ripped from his family and the world as he knew it. he also named the new ceo and others and what he called a hoot to destroy him and prevent -- what he called a coup to destroy him and prevent consolidation with reynaud. carlos: what was written about , a few prosecutors and executives. you know what? this guy is a cold, cold, greedy dictator. news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2,700 journalists and analysts in more than 120 countries. i am jessica summers. this is bloomberg. so much, thanks jessica. still ahead, the bushfires in australia and they're hit to gdp. next. gdp.d their hit to

our exclusive interview with the bank of thailand governor straight ahead. this is bloomberg. ♪

♪ live: you are looking at a shot over the iconic sydney opera house, a milder day when it comes to the weather. air-quality starting to clear ahead of what is expected to be hotter temperatures going into the weekend. we are still seeing fires burning across large parts of australia, and they are not expected to come to much of an end. in terms of the market, a bit of a recovery when it comes to sentiment, affected by the iran-u.s. tensions, a calming down of the rhetoric by president trumpian let's stay with the bushfires. it may hit -- rhetoric by

president trump. let's stay with the bushfires. difficult atis this point, particularly as the crisis rages and the insurance claims continue to come in. aredamage assessments pretty much a movable feast at this point, but what is your take on how detrimental economically will be, taking into account things like retail sales and consumer confidence? thoughts to people back home. there is nothing clever to say about this national tragedy. from the gdp economic point of view, i think it could be much higher. we are already seeing tourism -- there are official figures from the tourism board of australia, people saying please do not avoid coming to australia. that is good. australia is now in its 30th year of economic expansion. reserve bank has been smoothing

out these metrics for a long time, and if we have a true recession on the basis of something people now take more seriously, like what has been happening with the bushfires, obviously, none of us want nt of those scenarios, but the fact that we are in this -- none of us want any of these scenarios. haidi: yes, a recession is not restain noble -- not sustainable or normal. coming up with a cohesive energy policy that has this mix, if you look at a potential transition into low carbon, into renewables, if you are an investor who once to be on the right side of history, if you to be on thewants right side of history, if you will, but do you say? blame government for everything, and we all need

to be responsible across the world. from an energy point of view, i think we need to have a serious national conversation about solar and obviously about nuclear, as well. australia has 83% of the uranium . we have been fueling power around the world. again, an important conversation that i think australians need to have and obviously will affect how we invest moving forward. haidi: does this change what the rba does or does not do this year? : as i said when we spoke six or seven weeks ago, there is no way the global economy will keep moving in the way we talked about with the sentiment risk on and stay where we are without stimulating the economy. following the u.s. economy, only one way to do that, and that is by printing money, and that will affect the australian government

bond 10-year fixed income market in very significant ways. in our system that relies on that, the 10-year government bond. again, we need to have a very sober and important conversation about what we are doing, what we are funding in society, how we are giving back, and how we are planning for the future without telling ourselves one thing and watching our country burned away in the meantime. kathleen: getting back to the bank of australia and what they may or may not do, you're saying just do not go down the united states, but the federal reserve bank of australia, which, in the past, has had resistance to monetary easing, nevertheless, there are a lot of economists in australia and around the world to say that eventually that is where the rba will get, because they will cut rates a couple of times, because there will not be enough physical support, and

they will have nothing else to do. stirling: that is correct. it is not just the central bank and the fiscal and central part of our government that needs to do the heavy lifting. we have the australian banks protected by constitutions. if the royal commission concluded anything, it was to repeal or bring back the policies. it has done its purpose, and again, we are now living in an economy with its longest history. in human we have the largest expansion in residential investments in australia, and, again, even if we do, if the reserve bank cuts rates or starts printing money or whatever they do, the banking and the private wealth side needs to be efficient, as well, and there is clearly huge inefficiencies in that part of the market. kathleen: in terms of investments this year, where would you be in terms of

australia, or would you say stay away? the market is seeing highs, and the australian market -- dollar is high, and we are exporting to china. true anymore, and the australian dollar is still sticky. this is despite the geopolitics and of the things concerning all of us, but australia really has a hard case at this price. kathleen: thank you so mary much -- so very much for joining us. asset management cio, stirling larkin. you can dive into any the functions we talk about and be part of the conversation by sending us instant messages during our shows, for bloomberg subscribers only. o>.ck it out at tv

this is bloomberg. ♪

♪ kathleen: you are watching "daybreak: asia." a quick check of the business headlines. spending a record amount in the betweenore, $1.4 christmas eve and new year's eve, up 16% over the same time in 2018. apple also had a single day record on the first day of 2020, and their shares have more than doubled in the past year. the bell, having withdrawn financial guidance with declining sales, same-store sales in the third-quarter quarter declining, the 11th for bed bathine and beyond. improvement platform of the chinese version of

craigslist is planning an ipo. they are close to completing a private fundraiser for an ipo that could evaluate up to $2 billion. they offer a range of services from flower delivery to home cleaning and is vying for market share amid bitter rivals. up next, easing tensions between the u.s. and iran. we will have a former clinton and obama advisor. ♪ kathleen: taking a look at tokyo, where you can see the nikkei futures are poised to move higher, perhaps following the lead of the u.s. declines overnight, we are today, everything is looking brighter, like the sunshine over the imperial palace. ♪

>> in particular, in this region, currently, we are doing everything possible to restore normalcy, to arrest the situation before it spires out of control. >> we are not forecasting a shortage of supply, unless we have a catastrophic escalation, which we do not see. the opec secretary general and the uae oil minister reassuring the oil markets amid these tensions in the middle

east. we will stay with that story, and president trumbull ask nato to be more involved in the middle east, also saying iran would never be allowed to hold nuclear weapons. ar guest is gary samore, senior official responsible for nonproliferation under clinton and obama. you. great to have two points. the killing of soleimani, stopping the nuclear program in preventingll as further attacks, does that make any sense to you? does that impact their nuclear or military capability? toy: well, it is too early give a definitive answer. i think the irradiance use the killing of soleimani -- i think used use the killing. iran was probably headed in that

direction anyway, because they have taken a number of steps to exceed the limits of the nuclear deal, but from iran's standpoint, they are hoping in the context of the solar money killing, -- the sony money -- they want toling, ive the nuclear deal, so think they will try to arrange behind the scenes or mediate behind the scenes some kind of an agreement between the u.s. and iran to resume negotiations. at this point though, it is hard to think that that is likely to happen, but on the ground, iran has been very cautious about reviving their nuclear program, and i expect that to continue, because they do not want to take actions to provoke additional military response or sanctions. ry, over the last 24

hours, we have seen the reprisal u.s. bases, the two the damage assessment coming through, suggesting this was a targeted attack that was designed not to create any fatalities. does that give the u.s. a window, and we kind of see that from president trump's response, that there will not be anymore military responses. is that it for now, the end of the tit for tat, if you will, between the two parties? i am veryt of all, relieved that president trump decided to declare victory and made it clear that he said he would not tally eight against the missile attack, -- would not retaliate against the missile attack, which did not kill anybody inside iraq. i do not think this is the end of the story. the next story will be if iran

,ncourages its allies inside the various she on militia groups, to resume their attacks with rockets -- the various shia militia groups to resume their attacks with rockets inside a rack. -- inside iraq. to try to game is force the united states out so that iran will have the uncontested, dominant position, ians thinkk the iran the best way to do that is to continue to pressure the united states and hope the iraqi government will follow through on its recent threats to ask the u.s. forces to leave. gary,ary, -- kathleen: kathleen hays in new york. do you think that will happen? you think after they had their beloved general killed, after --

you just also said they do not want to provoke more sanctions, that they are going to go ahead and provoke that? because this murder, killing, whatever you want to call it of ani, that happened after an american contractor was killed. why would they think he would not do something like that again? gary: well, that will be the calculation we will have to make. of course, we do not know what they will side -- decide to do with tehran creed at the same have the iranians demonstrated they can fire against facilities that have american forces, and the president has chosen not to retaliate, so in the future, the they canmay feel continue to carry out those attacks as long as they note --

do not kill any americans, but we cannot count on that happening, so i think there is still a risk that in the future, the iranians will encourage indirect attacks through their allies on american forces, and that could result in american casualties and lead to escalation once again. advising if you were president trump, would you advise them to stand with the iraqis so what you just mentioned will not happen? has ai think the u.s. strong interest in trying as much as possible to encourage to be an independent, sovereign country, in part as a check on iran's position in the persian gulf, but also to continue normal operation against islamic state. trumpot think tgrum -- shares that view. if things get difficult, he may

well come forces as part of his broader interest in reducing -- he may welcome forces as part of his broader interest in reducing troops. ni, theling of soleima u.s. could be forced to leave iraq, and if that happens, i think it will be a victory for iran. there are forces who do not want to the u.s. to leave, and i think delaying as long as possible, the recent parliament vote for the u.s. forces to remove, so there is still room, i think, to try to work with the concerningnment american influence, but, again, tohink iran, the best way undercut that is to increase violence against american forces inside iraq. kathleen: a high-stakes game of geopolitical chess, isn't it? thank you.

center,ore with crown joining us from boston. to go to hong kong for a market check with sophie. asia, likelyin risk-on moves. in theere paired overnight session, and ek futures gaining -- and nikkei futures gaining. in optiona pickup volatility, as energy and defense-related names jumped while refiners and airlines were among the laggards in tokyo. checking in on gold, hovering around $15.60, retreating from $1600 an ounce. morning, just higher but staying below $60 a barrel. this, after the biggest drop in three months for crude, with a

focus very much on output. a commodities strategist at "bloomberg intelligence, and what he thinks wti is more at risk of revisiting $50 a barrel instead of pushing $70, given the non-opec supply. all right, let's get you to jessica summers for the first word headlines. jess? jessica: thank you. contradictory reports over what caused the crash of the boeing 737 in iraq. technicald difficulties before speaking of an engine fire. ukrainian embassy ruled out terrorism and then change the statement, offering none at all. passengers and crew on board were killed. the plane was just a few years old. the hong kong tourism board says it is cautiously optimistic about the upcoming lunar new

year holiday, despite the plunge and visitor numbers amid months of social unrest. there were antigovernment protests, with many increasingly staying away, but the hong kong government is launching a campaign to lure visitors back to boost the city's attraction. >> we are in uncharted waters in hong kong. the last half year has seen a drop in tourist arrivals year on year of about 36%, and this is on top of last year's figures, when we had the opening of the hong kong macau bridge and also the opening of the high-speed rail, so a lot of people were here to try out the bridge and the rail. protests continued in hong kong, police breaking up a small scale protests in the eastern part of the city. a local student died in

november. there was a car parked police operation. police operation. and coal mining sector opening up to investors with boosted production to meet energy needs, allowingsures, existing environmental certificates for other industries in mining in india. they have a goal of producing one billion tons a year by march 2024. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2,700 journalists and analysts in more than 120 countries. i am jessica summers. this is bloomberg. ♪ kathleen: jessica thank you. we went to give you an update. -- we want to give you an update.

it is said they do not have time for the carlos ghosn comments, where he blasted others. he is the former head of nissan, withe is being charged overcompensation, for taking money he should not have. they said they do not want to make a comment now. up next, taiwan getting closer --landing on the currency thailand getting closer to landing on the currency watch list. this is bloomberg. ♪

♪ haidi: you are watching "daybreak: asia." thailand is getting closer to landing on the currency watch list. haslinda to has been speaking to

the bank governor. nda: basically, the governor said it is essentially still too strong, so in the next couple of months, you can expect measures to ease capital controls, and by that, he means he would like to encourage capital outflows, for instance insurance companies being encouraged to invest more overseas. now, you sense this frustration in the governor, because thailand has struggled to rein in their 9% upside for 2019, the best currency in asia versus the u.s. dollar year-to-date last year, so it has been a huge headache and despite measures, continues to remain a strong, putting pressure on growth and exports. take a listen to what he has to say.

governor: we have said that we think the movement of the thai baht is not in line with the fundamentals of the thai economy. it has appreciated too much in 2019. there were other factors that led to financial flows from outside thailand into thailand, where there were changes in economic conditions and conditions of the global financial markets. when there was a change of monetary policy stance, central banks, and that contributed to overflows from other economies into emerging market economies, and due to thailand's strength, some may say it is the best performing currency, thailand. indeed, when the currency is not moving in line with the fundamentals, it is not performing in a way that we would like. you have talked about it not performing with

fundamentals. in what way would it? governor: we have talked about the movements of the currencies. we look at the dynamics of the changes. we compare the movement of the thai baht with the movement of regional currencies, for instance currencies of other emerging markets that have similar status of economic recovery. has appreciated too much. inda: you will defend 30. is 30 the lined in the sand? line in: -- is 30 the the sand? there is no line in the sand? governor: no, there is no line. we look at the exchange rate and a different factors contributing to the movements of the baht. haslinda: so would you allow it to appreciate beyond 30?

governor: if you look at the factors contributing to the movement, not only just the baht but other emerging market currencies, it has largely been of theby the value currencies, like the value of the u.s. dollar, the value of the great britain pounds, the value of the euro, and that has contributed to the movement of the exchange rate of emerging markets, so we have to look at the whole context of factors contributing to exchange rate movement. obviously, when we see the movement, if it is too fast, we are not happy about it. if it is with the movement of other currencies in the region or other trading partners or competitors of thailand, then we would be very concerned. at focus is more on looking the movement as opposed to a

fixed level. : you talked about concern about speculative inflows. are you prepared to implement measures like a holding period? governor: there could be measures that we could implement. we continue to keep this measures on the table. what are those measures? what is still in the toolkit? governor: when we are ready to apply them, we will let them know. a: recently, you implanted measures for the easing of capital outflows. are you prepared to do more? governor: yes, that is something we will do more of an 2020. baht: well, the depreciated about 20% on the back of the governor's comments, and thailand is at risk of being

called a currency manipulator by the u.s., one of three in asia, among singapore and china. now, if you take a look at the intervention that meets the criteria, and the trade has exceeded $20 billion, and that is the threshold that is put across by the u.s., and if you take a look at the past couple the tradesince 2014, surplus has exceeded 2% of gdp, so we await that watchlist. bloombergthat is our markets editor, haslinda to, terrific interview, -- haslinda amin, terrific interview. let's bring in our guest. great to have you back on our show. very, very important issue for the thai economy right now, the bank of thailand, and

they have been trying to deal with this overly strong baht. do you think that the bank of thailand is on the right track now? this concern reflects the complex situation of the thai economy. economic growth has been slowing. the central bank has been easing monetary policy because of the weak economy and very low inflation, and still, the thai baht has kept on. it is not a surprise that monetary authorities are trying to stem the procession. on toen: i want to move china, because in one of your recent notes, you said the phase one trade deal, the u.s. and china, is welcome but is possibly overrated. what do you mean, and what does it mean for the chinese economy, because it is one of many that could be helped by progress here? tuuli: well, i see the phase one

deal as a positive development, given confidence, and therefore able to support trade and private sector investment, but at the same time, the scale back of the tariffs was fairly modest, so high tariffs remain in place, and that will be a constraint for the chinese economy and the global economy, as well. major the removal of the headwind of the trade war from the global macro environment, do you think this is being overstated? it would definitely be economies in asia that have been adversely impacted, not only because of the trade conflict and the ripple effects through the original supply chains but also global demand has been weak, and then there has been this downturn in the electronic sector, so all this -- all these impacts have affected the slowing down, but i think there

have been some early signs of a consumerat least with confidence and the manufacturing sector confidence starting to stabilize and even recover, so i think we are close to bottoming out. here in australia, clearly, the bushfires are still going on, and we are starting to count the costs to the economy. what do you see with the economy and the rba policy? it is, of course, a very unfortunate development, and i see the economy impacted by many ways. first of all, it will have an impact on confidence, both business confidence and consumer confidence. there will be an impact on tourism, and then we will see an impact on investments. at the same time, there will be a pickup in government spending because of the response to the

bushfires, and then, eventually, there will be a reconstruction effort that will boost things. on balance, i think it is absolutely a negative impact on the economy, and we will likely see a response from the reserve bank of australia. i see at least one more cut over the next couple of quarters. you,: always great to have head of asia-pacific economics. more on "daybreak: asia." this is bloomberg. ♪

♪ you are watching "daybreak: asia." a quick check of the latest business headlines. industry, 10e million cars being checked for potentially faulty airbags, with those involved in the recall

sharing faulty parts already replaced. at least 25 people have been killed worldwide by takata inflatable's. investigation into some companies after the revenue department says they got undo tax benefits concerning imports from indonesia. a current court had ruled the probe invalid, but the supreme court decision means the investigation could continue involving the adani group. they have denied the accusations. haidi: the korean market will open, and it is on the brink of a recovery, extending a year-long rally, shares briefly hitting an all-time high yesterday. as of the close. with the opening just a couple of minutes, that should do the trick. samsung has earned estimates as to prices hold themselves.

-- as chip prices hold themselves. somee seeing new zealand moderate gains. aussie stocks are up. ♪ and they lived happily ever after. the end.

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read it again, papa? sure. i've got plenty of time. life line screening. the power of prevention. call now to learn more. ♪ haidi: a very good morning. markets have just opened. kathleen: i am kathleen hays. and i am sophie kamaruddin in hong kong. ♪ our top stories this thursday, president trump said there will be no military response to iran's attack on u.s. bases in iraq. however, there will be tough, new sanctions.

asian risk assets hoping for a relief rally. the brinksamsung on of a record as markets open in oeul. -- sp straight to the market action with sophie. rally: we are seeing the tickled in japan, the nikkei 225 and the topix -- we are seeing the rally taking off in japan. holding steady after sliding to a one-week low, and we are seeing some futures picking up with the start of cash trade in asia. this is looking a bit more positive after u.s. stocks climbed to a fresh high overnight. let's check in on korea, because i wasost be -- the kosp gaining ground.

samsung could be set for a fresh, all-time high. chipmaker' is shares have been the beneficiary -- chipmaker's shares have been a beneficiary. the korean markets have been cut to underweight. now, a 5-5-year high when it comes to overweight, leaving -- a five-year high when it comes to overweight. let's check in on australia, where the aussie dollar is trading near a three-week low. shares resuming gains, up nearly 1%, and oil and gold stocks under pressure. pressureining under after retreating from 1600 overnight. we are seeing a slight pickup in crude, hovering around the $60 a barrel level.

let's check in on bonds. aussie bonds falling, with the 10-year yield rising about five basis points. the jgb up also. 10-year yields hovering around 1.87%. haidi? haidi: all right. let's get more on the tensions with the asian markets. a guest joins us. off,dent trump has backed so no need for further retaliations, so will the rules come back? >> i think people are hoping they can reboot their year. forget the first couple of days of trading. let's start again and start the predictions over 420. we could well see a return -- 2020.tions over for

global growth and the way in which equities, in particular, will be one of the dominating asset classes. we have seen some high volatility in the past few days, and now people can probably it back to thinking, ok, what is driving asset classes for 2020, looking ahead to some of that, but there'll probably be a little hesitation, because there was the very abrupt event with iran, so who is to say there may not be something similar with another country this year? they will probably want to look at some option plays where they can get some defensive positions, as well, so one thing with elevated option volatility, we could see people wanting to defensive -- some

moves. overall, you would expect the sentiment is going to be a lot better now than it was a few days ago. interesting. we had a guest on who was more bullish and has also gotten more defensive. as the new year begins, what assets are most likely to benefit? can look athink we global equities for a start. we just heard overnight that the world bank is endorsing a higher outlook for global growth in 2020. that is a stark contrast to months ago, when everyone was downgrading the growth outlook, so that overall will benefit equities. we may see a generally decent performance for global equities this year. we can also expect some of the things we saw towards the end of last year, asian currencies and emerging-market currencies starting to improve against the u.s. dollar.

that is another theme that we could expect to be reestablished as portfolio flows go into the catch up, because the united states dominated the securities markets, but one would expect there will be relative growth in other parts of the world, so that will favor asia and emerging markets, and some of the people who lagged behind of it in 2019, so you can expect to see that play out in asian currencies. they will probably establish a stronger foothold, and it may even be with something like gold, because a minute know when to give up all of the risk aversion plays. because everyone may not want to give up all of the risk aversion plays. have a weaker year this year, so gold may not go down as far as people expect. it may hold up better. that could be one of the

surprises, that you do not see much downside. kathleen: thank you so much, mark, joining us from singapore. and you can follow more on this story and all of the day's trading on our blog on bloomberg . there is commentary and analysis from bloomberg expert editors on mliv . the first wordto news with jessica summers. kathleen.ggs, contradictory reports are emerging -- thanks, kathleen. contradictory reports are emerging over what cause the plane crash in tehran. they spoke of technical difficulties before talking about an engine fire. they ruled out terrorism but then change the statement to offer no comment at all. all 100 76 passengers and crew on board were killed in the

crash -- all 176 passengers were killed. carlos ghosn with his first comments since fleeing japan. monthsribed his arrest ago as brutal, saying he was ripped from his family and the world as he knew it. he also blamed the ceo and others for what he called a coup to destroy him and to prevent further integration with french carmaker renault. more than 20 books of management were written about me. minute, all of a sudden, a few prosecutors and some executives say, you know what? this guy is a cold, cold, greedy dictator. jessica: the hong kong tourism board says it is cautiously optimistic about the upcoming lunar new year holiday despite the plunging visitor numbers a bit months of social unrest.

arrivals have steadily tumbled in the face of antigovernment protests, with tourists increasingly staying away. the hong kong government is launching a campaign to lure visitors back with a rebranding campaign to boost the city's attraction. >> we are in practically uncharted waters in hong kong. the last half year has seen a drop in tourism arrivals of about 36% year on year. now, of course, this is on top of last year, when we had the macaug of the hong kong bridge and the opening of the high speed rail, so a lot of people came just to try out the bridge and the rail. jessica: as protests continued in hong kong, police arrived to break up a small scale demonstration in the eastern part of the city. protesters had blocked roads where a local student had died in november. there was a car park police

operation during a demonstration. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2,700 journalists and analysts in more than 120 countries. i am jessica summers. this is bloomberg. ♪ ahead, we will be assessing the outlook for oil. a guest joins us later. kathleen: at up next, we return president.speak to a a lot of new presidents coming online. this is bloomberg. ♪

♪ this is "daybreak: asia." i am haidi stroud-watts in sydney. kathleen: and i am kathleen hays in new york. sophie kamaruddin.

what are you looking at? theie: one chipmaker among top 10 performers back in 29 teen, and another climbing after a nikkei news report that its first-quarter operating profits abc year on year, but posting a missing third quarter sales, haidi. technologiesdell with the consumer electronics show in vegas. their president of client solutions joins us now. obviously, you have got the u.s. theumer stores strong to trade war implications, but china, as well. where are you seeing opportunities? sam: welcome our business is doing pretty well. if i look at our last quarter,

we grew 5% in our client business. wholew a little bit the year, so we are seeing a lot of interest in pc's and technology, and we are seeing growth. if you look back at our history, we hit over $11 billion of revenue in our client business, the highest we ever had. we just started a new decade. if you look back at the past decade, people were talking and maybee pc's went even the death of the pc, and now with the technology and people's hands, it is pretty exciting to me. haidi: sam, talk to me about this trend, the folding screen, lenovo. where yourallpark product is priced, and do you think this is a sustainable trend or more of a novelty with the stagnation in the pc sector?

sam: i think it is an exciting trend, and we are pushing -- if it is our devices and a concept we showed off year that has a foldable screen, devices that are getting thinner, more portable, devices that are getting intelligent, people want tools that allow them to be more productive. they want to a proportional. they want tools that can go with them, and i think it is an evolution. with the pc, the glass keeps getting bigger. you are looking at your screen, and we have folding glass, so you have the flexibility of a large-screen device. you can do networking and video conferencing on one side. you can write your notes on one side. it is about giving people more options. i think those devices, what we find is people want more premium devices to help them do more things, and we see increasing demand for that in the industry,

and that is why we are exploring some of the concepts we showed off here at ces. veryeen: well, they looked cool. sam, this is kathleen hays in new york. the folding, laptop devices, are they coming into production anytime soon? how are you pricing them? lenovo price them around $2500 a unit. how big is it? sam: we have not announced pricing and availability dates. what we did do is put them out as concepts. we have been working in our lab for multiple years, so it was the first time for us to take the innovation and things we were working on and show them off and then look at the right time to bring them to market. obviously, we sell everything from a couple hundred dollars of moreto those in the expensive space.

they can get productivity out of that, than they are willing to pay more for those devices, so our am was to show off some of the great things you can go and do -- our aim was to show off some of the great things you can do and what can be even better and hit the price points that will allow us to scale to more volume. a portableaming, gaming device, sort of like a nintendo. is it coming to production, and how big of a market, and how big of what you do atde -- of what you do at dell? sam: the gaming space is really attractive to us, so we acquired a company more than 10 years ago. we built the number one gaming business in the pc space. it is a fast-growing segment. you look at people sometimes going to school, using a pc for

school work but gaming on the side but get it is increasing popularity. we showed off what you talked about, concept ufo. it is a device we were working on in our labs. we wanted to show people where gaming can go, and it is a full power pc, so you think about the performance, the graphics, the capability of a pc game. it went into that device and is really impressive, and it gave you the flexibility to use that device,gle handheld detach the screen, use a controller, even cast that two to other tv's in your house, and we think there is opportunity for people to use pc's for entertainment. we see more people watching on our devices streaming services than using big tv's, so that is

where i say the device and the tv started the decade but ends the decade with a lot of interest in how people can use that technology for their good and for their enjoyment, for their betterment. kathleen: all right. thank you so much, sam burd, with client solutions, speaking from ces in las vegas. we want to bring you some breaking news from the former nissan, speaking at a press conference just now in tokyo, saying he feels trade by carlos ghosn -- saying he feels betrayed by carlos ghosn's comments, his first comments since he escaped from japan, blasting nissan, blasting his former colleagues. sn does not really

know why he was removed. he will continue to work with despite differences. i let more coming up on "daybreak: asia." this is bloomberg. ♪

♪ >> for 17 years, i was considered a role model. writtenn 20 books were about me. in minutes, some executives and prosecutors say, you know what? greedyy is a cold, cold, dictator. there are many other people. and member of the board was the link between the board of

nissan, nissan, and the operators. it is not difficult to come to a conclusion that you are going to die in japan or have to get out. i am here to shed light on a system that violates the most basic principles of humanity. i am here to clear my name. kathleen: that is former nissan chairman carlos ghosn, speaking after his escape from tokyo, taking his case to the court of public opinion, obviously. the fallen nissan and renault boss. our chief north asian correspondent, stephen engle, has been following this from the beginning and joins us now from taipei, where he continues to follow it. so, broadly, steve, what is the reaction to this so far? just are those comments from carlos ghosn, and he said he turned around nissan in the late 1990's, when nissan

needed him the most and that he has now been repaid by people. he talked about the nissan and other executives, those in the japanese government. he claims it was a plot. so this is a battle of narrative. also, before the break, there a, whoeadlines from saikaw was giving his own narrative. now the carlos ghosn, i do not want to say a free man, but he could technically be called that, even though he has been interpolat notice on as a fugitive of justice in japan, but he is a free man now -- inoot, and he is going -- he, and he is going to was in detention for more than 100 days, in detention in a japanese prison, as well as under thee arrest

justice system in japan, but he is giving his side of the story, and he has scores to settle, obviously. yes, what happens next to carlos ghosn, steve, b says -- because he says -- what could potentially be the option now? yes, the japanese, we are still awaiting comments from the japanese justice minister, as i understand giving a press conference, and he will likely come out swing, as well. they say they will take appropriate legal action against carlos ghosn. keep in mind that the former director of nissan also accused of financial misconduct is still in japan, out on bail. his legal fate is unclear, as well, but carlos ghosn, under the japanese legal system, cannot be tried in absentia, so we are not sure what legal

action they can tangibly take. they have, prosecutors have, withed carlos ghosn's wife alleged perjury for allegedly giving false statements to prosecutors in the investigation, so what is the next step? it is going to continue likely to be a battle of narrative, and a asre hearing from saikaw he is giving his narrative, and he says he feels betrayed by carlos ghosn, and carlos ghosn says he feels betrayed. was it a clear case of financial misconduct or an emperor syndrome, as someone said in japan, of carlos ghosn? says that ghosn does not understand why he was removed. kathleen: i want to jump in because we have a minister

speaking. she says she wants ghosn to make his case in a fair trial. him toly, she wants come back. people inside and outside tokyo, people in the legal profession have criticized the system for a long time, so, you know, i just want to put that on the table for you as you assess where everything is now for us. i think the, justice ministry is probably grabbing at straws to figure out what they can do. how carlos ghosn got out of the country is one side of the equation, and then, what are they going to do next? she has only been on the job since october, so she is trying to get her ducks in a row as well in what is expected to be two very high-profile trials. now, that is all out the window right now. i think there is a lot of questions still to be answered. haidi: steve, thank you for

that, stephen engle with the latest on carlos ghosn and his family. i am going to leave that there. you can keep watching at live with the others of the day. this is bloomberg. ♪

news crossingg the bloomberg. the australian trade surplus coming in at 5.8 billion aussie dollars for the month of november. we are getting some details. -- that trade war has had an impact on the trade balance. we are looking at that number just coming through for the billion,november, 5.8 slightly more than the estimate of $4.1 billion. 2% from exports rising a month earlier. imports falling 3%.

in the months to come, it will be interesting to see the impact of the bushfires and the range of data points. retail spending, inflation of course being key. let's look at how the markets are faring so far. >> risk on moves for assets. equities being led higher. the nikkei 225 up while the kospi is gaining ground, set to close at a fresh record high, on the back of an earnings beat. expecting a turnaround in the ship recovery to materialize. hsbc cutting its view on korean equities to neutral. aussie dollar picking up about 2/10 of 1%. the offshore yuan is holding

below 694 while the yen is trading at a low. softbank is well, the big boost to the nikkei 225 rising. other, in tokyo, japanese energy stocks falling including .efiner jx tv under pressure in tokyo, including ec, -- including losing after rallying on wednesday. gold having retreated from $1600 per ounce. gold futures remaining under pressure. kathleen: our next guest says

2020 will be a wild year of geopolitical, financial market volatility. andeconomics president president -- joins us from washington. jason, what a wild new year. i am sure that watching the energy market has kept you up late and gotten you up early. do you think it is over for a while, the volatility? do you think it will settle back in its range? >> i think we will see these kinds of moments where we get price spikes on various risks. in general we do see the prices probably being a little bit more depressed at the front of the year. q3 driven by2 and a strong labor market. kathleen: you are certainly someone who follows opec and its leaders and policies very

closely. when you look at the u.s. attack on iran, the killing of the revered general, the retaliation anybodythat not kill last night, what does this mean for opec? is this a factor they cannot ignore? because this is not a conflict between any of the members, it is probably a business as usual type of thing. anything that is price supported is probably not something that members will object so. ais appears to be more of shot across the bow where there were not any iraqi or u.s. casualties. that kind of thing, where we don't have a conflict between the members, not really something that will affect policy.

their biggest concern, global growth. there is a global manufacturing recession going on right now. those are the most important .hings for oil prices right now haidi: is the shale revolution enough to comfort anyone concerned about supply to the u.s.? jason: the ability to pull more supplies on line quickly is not just something that eases concerns, it is one of the reasons when we see these price hikes on what would have historically been sustained price actions higher, companies probably coming in and hedging quite heavily. this happened in september when there was a who's the rebel attack on saudi oil infrastructure. one might have thought historically you would see prices i for quite debt crisis high -- you would see prices

high for quite some time. haidi: when you take a look at the metals complex, it looks pretty buoyant. precious metals have been sustained by geopolitics. if you assume the trade war being put aside and we are seeing this kind of recovery across manufacturing and demand, does this mean industrial metals are looking like they will set up for 2020? jason: there are a few things at play. it looks like that of the industrial metals, september or october, where we had the weakest global pmi total. the numbers for december combined were very weak, the weakest since september. as long as the global manufacturing economy moves forward, those prices are likely to find support.

believe -- china is a bipartisan issue that we are likely to hear about in the year ahead. that means that the trade war is not over. armistice of sorts going on right now. i would not expect a been rolled back. what is going to pull the global manufacturing recession out? are you basically saying that the trade war will cool off, that even if tariffs are not removed, that there will be more ?onfidence fed's i think the re-expansion of its balance sheet is important. they have already cut rates. it is sort of why we had -- we

see this business recession in the u.s. and the second half of 2019, hitting as a result of the lower rates in 2018. likely to be better for the second half of 2020. it takes a while for it to have a really positive impact. of course, the expansion of qe, those things likely to push the u.s. and global economy a little bit stronger this year than last year. haidi: great to have you, jason schenker. let's get you the first word headlines. latest from the world bank says that global growth will likely pick up modestly this year and next, despite the easing of trade tensions. marginally accelerating to 2.5%, largely because of stabilization

across a handful of emerging economies. it does warn that global growth conditions remain fragile. the european union is on course -- for therexit u.k., sandy trade deal -- saying a trade deal this year is impossible. they said the eu is willing to work around the clock to strike an agreement but boris johnson that there simply is not time. boris johnson has demanded a deal by the end of the year. the bank of thailand will take further steps to ease curbs on capital outflows in an attempt to slow gains in the bhat. they plan to limit the amount you can hold overseas, liberalize insurance amounts, and encourage companies to invest more abroad. almost 6%as gained

against the dollar this year. hase think that the bhat appreciated too much. people might say it has been the best performing currency. when it stops moving in line with the fundamentals of the economy, and should not be considered best performing. up its: india is opening domestic coal mining sector. the new legislation removes restrictions. it allows bidders to use existing environmental certificates for other industries in mining. global news 24 hours a day on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i am in jessica summers, this is bloomberg. kathleen: coming up, maintaining a negative outlook on china's

big banks. this is bloomberg. ♪

kathleen: this is "daybreak: asia." fitch ratings is maintaining a negative outlook on china's banking sector, citing week economic growth, --et impairment, and we started off the year with another round of easing by the pboc, another reduction. continuing this ramping above credit support. the fact that the pboc has delivered a series of supportive measures to free up financing. does this put further pressure

given that i know that fitch and others are expecting more easing measures from the government. >> in terms of our expectations expect anye do not significant monetary loosening because bain capital is still a major constraint against easing. our expectation is they will announce more details with regards to the domestically important banks this year. we estimate this from the primary indicators released from the authorities last year that -- 10 of these banks and potentially they would be facing higher capital requirements. for the four state banks that are already globally systemically important facts, we think the requirements may be pushed forward to january 2024.

the pressure of capital, especially as volatility will come under greater pressure this year. the biggest picture, the varying measures of profitability, it doesn't matter if you are looking at return on equity, return on assets, or pressure on nims, they are all falling. anthere any expectation of improvement given that at least the trade war element might be put to the side for this year? >> i think there is still medium-term pressure on margins. the intention from the authorities is for banks to lower interest rates to support the borrowers and the economy. in reserve

requirement ratios, temporary relief for banks to ease liquidity pressures, overall, that tension will play a bigger role in supporting the economy. , the more media to long-term horizon. intervention from the authorities in terms of which to,or, authorities have let and the overall broad guidance of interest rates. justcovering the loans announced last week, all point to the fact that banks are still expected to lower their profitability in order to support the broader economy. kathleen: i think this is fascinating because one of your concerns, you made it very clear is trying to

figure out how to help smaller businesses. saying, being at the bank, to loan to them, it will help. you are pointing out that it concerns you, that it may be problematic. to what extent is this one of the negative factors you are watching as you look at the chinese banks right now? >> overall, it is a balancing act. on one hand, banks are asked to support the economy. on the other hand, there is the regulatory requirement to build up additional capital buffers. these initiatives kind of run counter to each other. banks are expected to do a lot of things right now and it is not always possible to achieve these goals. for thectation is

regulator to continue way fairly strong commitment toward tightening. we do not expect massive loosening. there will be fine-tuning here and there, possible reductions of reserve requirements, pressure from banks. it is going to involve a lot of fine tuning. kathleen: you are also suggesting that some tanks might higher capital requirements if they are designated as domestic sib's. how big of a factor will that be for the bank? >> at the moment, our estimate is that there will be at least 10 chinese banks that will be designated as domestic systematically important banks. theminimum requirements for systematically important banks it is unclear at this point whether authorities may also ask

them to increase capital buffers. commitment to addressing some of the risks we have seen that has been built up in the sector over the past decade. i think that intention have banks build up capital buffers in the long-term, i think that commitment is still there. i think that will act as a real constraint against loosening. up next, hong kong tourists to come back after months of protests. our schools of with the hong kong tourism -- our exclusive with the hong kong tourism board chairman, next. this is bloomberg. ♪

kathleen: you are watching "daybreak: asia." now, a quick check of the latest business flash headlines. recallinger takata is in more cars in the u.s.. the parts covered in the recall sharing the same basic flaw as faulty components they had already earlier replaced. at least 25 people have been killed worldwide by takata inflator's. india's supreme court is

revising an investigation into a company. the regulator claiming they won undo tax benefits by overvaluing coal imports. they ruled the investigation can continue. the adani group has not commented. kathleen: samsung hit a new high in seoul. the stock is being buoyed by earnings amid estimates as shipped demand climbs out of a persistent rut. haidi: one of the big movers today, samsung just out of the gate, heading into that fresh record high. we are currently seeing upside 1%. and 8/10 of the price situation began to improve. rut across the industry. we are watching this is the japanese justice miniature --

justice minister continues to speak to the media in tokyo, responding to carlos ghosn's press conference in beirut over the night. he said the ministry will work to spread correct understanding of japan's laws. we are looking to get more out of that press conference happening live. this is after carlos ghosn was heavily critical of the judicial system, saying that his wife he had his great escape. the chairman of the hong kong tourism board says no amount of spending could be enough to rebrand the city for travelers. he spoke about how the city can weather the ongoing challenges. practicallye are in

uncharted waters. the last half year has seen a drop in tourist arrivals of about 36% year on year. of course, this is on top of last year's stellar figures when we had the opening of the macau bridge. whilst the movement is not going to end, for a while, the force of the movement, as well as the number of occasions when the number comes out, perhaps it will be more tempered. as it is today, even in the month of december, despite all the negative imagery on television, we had 100,000 visitors coming to hong kong every day in december. >> how do you get the mainland visitors back? they shop the most per capita. they are the largest demographic of any inbound group. they buy luxury, property.

kong's bar culture, pop culture, our events, our arts events, sporting events, there are so many things going on in hong kong that they will not see in their hometowns. >> if they are not canceled. rugby seven. >> it is on. parade is going to be on. >> chinese new year is early this year, late january. how critical will that be? >> we are in a period where things are a little bit calmer. i think the more severe balance has not been repeating itself in this one. ,t the end of this month perhaps feeling that things are better and they can perhaps come to hong kong for the chinese new year. consciously optimistic.

>> how much does the government need to spend to rebrand hong kong? >> it will never be enough. i am looking to re--- to double our budget because there will be a major investment required to go to each market and explain what hong kong is about and why it is a good place to visit. >> there are predictions that after the lunar new year, there could be a wave of layoffs. >> after the new year, yes, there may be an increment, but hopefully that will in a way be -- by the numbers of people coming to hong kong. >> how concerned are you by the reported case of pneumonia coming out of wujan, china. there's been cases here. >> hong kong, after the

experience of sars, has a very well organized public health system which knows how to deal with these kinds of diseases. already, the health department is under alert. we have had experience of sars. we have conquered it and we can conquer this again. i don't think so because it is a wuhan disease. >> that was the hong kong tourism german-speaking exclusively to stephen -- tourism chairman speaking exclusively to stephen engle. lot next. i whole this is bloomberg. ♪ and they lived happily ever after. the end.

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read it again, papa? sure. i've got plenty of time. life line screening. the power of prevention. call now to learn more. in beijing,0 a.m. shanghai, and singapore. we are coming down to the opening of trade in hong kong and mainland markets. thed: rallies across markets as president trump downplays the attack on u.s. bases in iraq, but there will be tough new sanctions against tehran. slams hisrlos ghosn accuser after his dramatic escape. nissan critics and the japanese government are heading back. tom: and paying the price for months of unrest. the hong kong