tom: these are the stories that set your agenda. asian shares trimmed gains as chinese markets returned from the lunar new year to face the trade war with the world's

biggest economy. nikkei reports that honda and nissan have dropped their plans for a tie up. alphabet slums post market on slowing growth in its cloud business. chipmaker amd also slides on a disappointing outlook for its data center division. and president trump proposes the u.s. takes over and rebuilds gaza, relocating palestinians to other countries provoking criticism and concern in the middle east. happy wednesday. the rally we saw in tech shares yesterday on the nasdaq 100 looks short-lived with futures pointing lower on that metric. alphabet and amd and the disappointment in focus.

you also saw gains yesterday on european stocks but currently losses of 0.5%, the read across round china, mainland markets reopening after the lunar new year. the u.s. and china now in that trade war with 10% tariffs and beijing retaliating. for the 100 pointing lower 0.3%. s&p futures after notching gains yesterday pointing lower by 0.5%. and nasdaq 100 futures off by 130 points. alphabet and amd will be the drags, pointing lower currently 0.6%. let's have a look cross asset. treasuries stable, and mark u.s. 10-year yielding 4.50. the move is there for the japanese yen. we will unpack that but broadly this is a story of higher wages and expectations that the boj has space to go with another hike possibly as soon as june. 153 on the japanese yen, up 0.6%.

brent down 0.2%, gold at a fresh record, this is a safe haven play. gold up 0.6% today, up 40% the last 12 months, 2858 per troy ounce. let's cross to singapore. april long standing by with the check on the asian markets. avril: we will get to what we are seeing in japan. also checking in on mainland markets. they are back from the long holiday. we were watching to see how they would open today. a lot has been happening while markets were shot. we had trade war corrupting, we had the deepseek narrative taking hold, so today despite gains in the early goings, we saw stocks in the mainland sinking amid tariff concerns, and sentiment taking a hit from the u.s. postal service suspension. losses on the csi 300 and hang seng driving down the mood in the broader asia region.

that gauge erased gains, offshore and onshore yuan seeing witness as well, this is the first day back for the onshore currency. this is on a day where the yen is the top gainer, most asian currencies are gaining ground, this is against the backdrop of strong inflation outlook you alluded to this short while ago, but in the past 20 minutes, i wanted to highlight the focus has been this report that honda and nissan are dropping their integration plan. this deal was always seen as a sort of bailout for nissan. the reaction pretty clear. honda revving up, nissan with deceleration, trading suspended on the stock. this is what we see in asia for now. tom: a busy session in asia with mainland china coming back after that lunar new year holiday and

the focus in japan around autos and the yen. we have novo nordisk later today and vest us. credit agricole the french lender with the beat in the fourth quarter. net income at 1.6 9 billion euros, above the estimates of 1.41 billion, the asset management part of this business performing well. potentially a fly in the ointment for this lender is alone lost provision number coming in at 594 million euros, that is above the estimates. that looks like a challenge for credit agricole but the top line is a pretty decent beat in the fourth quarter in terms of net income, also upbeat on revenue, seven euros versus estimates of 6.5 6 billion, full year dividend per share of one euro .10 above estimates had been just over one euro. we will speak exclusively with the ceo credit agricole, the deputy ceo jerome grivet, at

7:30 a.m. u.k. time. tune in for that conversation. the first shots of the u.s. china trade war are sapping sentiment on the markets. let's bring in mliv strategist mark cranfield. give us the deep dive in terms of market reaction in mainland china on the reopening after that lunar new year holiday to the second round, in terms of the trade war of the u.s.? >> as avril was saying, on the surface, it looks as though chinese equities are not doing great. if you look at the major indices, csi 300, shanghai composite, they have been choppy all day. under the hood it is a very different story. it is becoming a stock ticker's market. target gains for software developers, particularly those in the artificial intelligence base, people benefiting from the deepseek narrative. there is gains for metal companies like tungsten-related companies because china will put tariffs on the u.s. in that sector. you have the e-commerce sector

not doing well because u.s. post have put restrictions on packages coming from hong kong and china into the united states. it looks as though amid the fog of the tariff situation between the u.s. and china, what stays and does not say what investors are becoming selective rate stock pickers are having a field day, it looks it will stay that way whether we get more stimulus, whether there is lower interest rate from the pboc. we get choppy trading on the indices level but under the radar there is a lot more going on and people are clearly benefiting. software and ai-related is boosting the economy. we got that information from bloomberg economics. it is pushing up gdp in those areas. for the months ahead, if you want to play in china, you have to know which sectors to be in, and which ones to avoid. tom: you have got to do your homework on these china stories with the ai catalyst one of the

drivers of some upside. the fed's philip jefferson and mary daly signaling yesterday that neither of them have urgency when it comes to u.s. rate cuts going forward. let's take a listen. >> i continue to see a gradual reduction in the level of monetary policy restraint placed on the economy, as we move towards a more mutual stands, as the most likely outcome. that said, i do not think we need to be in a hurry to change our stance. >> we can take our time to look at what is coming in. both on the economy and any policy changes, make decisions, we don't need to be preemptive. tom: fed officials in no rush. how is this adjusting the pricing from traders as they listen to these fed officials and weigh in from policy? >> a couple of things we are

seeing happening, the yield curve is flattening, we see a lot more demand for long end treasuries compared to the short and. we are seeing people dial back expectations of rate cuts this year. for now we only have one interest-rate cut fully priced into the market. we have another half cut priced item but that is gradually being reduced. it is a consistent theme from fed speakers, they want to see more information. they are concerned there could be inflationary impact from the new measures from the white house administration. it may shave longer-term growth off the united states as well. bloomberg economics as it could be more than 1% off gdp if tariffs become a big thing for the united states and their counterpart. there is uncertainty where the direction is going. typically central banks like to sit on their hands. they don't need to move one way or the other too decisively. they take their time in which

case we may see interest rate cuts totally priced out of the market. some analysts are suggesting the fed will sit on their hands the whole year. that feeds into the picture of giving the u.s. dollar support, but at the same time, take japan for example where the inflation needle is moving in favor of the bank of japan, that's why dollar-yen is lower today. tom: mark cranfield from bloomberg's mliv team, with the market analysis on tariffs on china, but also the view around pricing and potential repricing around the fed that seems to be possibly braced to sit on its hands longer than maybe some expected. to the geopolitics right now. what could be a dramatic new u.s. intervention in the middle east.president donald trump proposed taking over the gaza strip and assuming responsibility for reconstruction. he says that could turn the war-torn territory into quote the riviera of the middle east.

trump made the comments during a news conference with israeli prime minister benjamin netanyahu. pres. trump: i do see a long-term ownership position and i see it bringing great stability to that part of the middle east and maybe the entire middle east. everybody i have spoken to, this was not a decision made like, everybody i have spoken to love the idea of the united states owning that piece of land, developing and creating thousands of jobs. >> he has a different idea. it is worth paying attention to this. we are talking about it. he is exploring it with his people, his staff. i think it is something that could change history. and it is worthwhile really pursuing this avenue. tom: trump also insisted that egypt and jordan will take in palestinians displaced from the strip. horizons middle east anchor

joumanna bercetche joins me from dubai. how viable is this proposal from trump? he says the u.s. could own gaza. >> the region is reeling from that press conference a couple of hours ago. for several months now, president trump had floated the possibility of palestinian displacement, but this is the most explicit, yet we have gotten from him. he is saying the u.s. need to take ownership of the gaza strip. they will be responsible for the reconstruction. they will deal with the unexploded devices within the territory. but then also said that palestinians should be resettled into neighboring countries including egypt and jordan. going one step further, saying his plans are to quote build a riviera of the middle east. this is at odds with the reality on the ground which is gaza is a strip full of rubble.

you have thousands of buildings destroyed, 1.5 to 2 million people residing there, hundreds of thousands of families not having homes to return to. the middle east envoy steve wycoff's casting doubt on the ability to reconstruct gaza in a three to five year time horizon. but it risks angering some of the u.s.'s most important allies in the middle east because consistently most countries in the region, pretty much all the major players in the region, have said under no circumstance should there be forcible displacement of palestinians. 5:00 this morning local time, the saudi arabia ministry of foreign affairs said the kingdom unequivocally rejects infringement on the legitimate rights of the palestinian people, also reiterating that they want to see establishment

of an independent palestinian state with east jerusalem as its capital. swift reaction from saudi arabia. we are likely to see comments from other countries not least egypt and jordan, who president trump is pressuring to take on more palestinians. shocking development over here. many from the region will say the proposal is dead on arrival. but it is something that president trump is focused on now. tom: a remarkable plan and the responses coming swift. the saudi's up early to respond to the proposal. joumanna bercetche with the context and the update, thank you indeed. switching focus to technology now. a big day in learning stateside. alphabet and amd tumbling in extended trading after downbeat earnings, fourth quarter revenue at google's parent company, alphabet missed estimates after growth in its cloud business

slowed. chipmaker amd gave a lackluster outlook for ai, it forecasts strong double-digit growth in the division, but that disappointed investors who are used to sales doubling at nvidia. matt bloxham from bloomberg intelligence is here with the details. a on whether we are seeing a turning point for big tech stateside. >> it is more a stalling point to be honest. clearly, ai is gathering momentum, innovations like deepseek definitely fuel that fire if you like. one of the big questions for google is whether they can get return on the enormous investments they are making. they guided to $75 billion of capex this year primarily to support ai efforts. i'm surprised it was a surprise, but it was a surprise to the market given we heard that meta upped their capex

number. it is a big increase. given all the competition in ai, people are questioning how do you generate incremental revenue from this, is it a defensive move to protect your research position? given the weakness in cloud whereas a lot of enterprise ai is coming through, those two things go together. tom: let's listen in to the ceo of alphabet responding to the innovation challenge of deepseek. ok, we were hoping to have the sound of sundar pichai of alphabet, he did comment on deepseek in the earnings call. talk to us about where things stand. the capex spend is there for alphabet. part of that capex spend will go on ships for nvidia, possibly to amd, if there is disappointment on the prospects for amd. his nvidia continuing to grow

the gap? >> certainly, amd is stumbling in terms of closing the gap. there is a huge difference between the two ai chip business is great hundred billion dollar run rate for nvidia, $5 billion for amd, a massive gulf. it is 60% growth but at least on the call, some sense that there is work for them to do to close that gap. overall the results for amd were a bit better, but you had weakness in that data center business, which is half their revenue, so there is a lot of work for them to do. nvidia has got great momentum. tom: matt bloxham breaking down the earnings story when it comes to alphabet and amd, the maker of ai accelerators. coming up, it is china's muted response to u.s. tariffs indicate that has more to lose from a trade war? we will assess that question and the geopolitical impact of

trump's tariff threats. that conversation coming up next. this is bloomberg. ♪

tom: happy wednesday. chinese markets returning from the lunar new year holiday with a cautious start after the first volleys in the emerging trade war between the u.s. and china. joining us for the market assessment is xiaolin chen, head of international at kraneshares, thanks for joining us. what is a 10% tariff on china, what did that mean for china inc.? xiaolin: thank you for having me on your show. this is clearly less than what market has been pricing in terms of the percentage of tariffs announced on the first of february. market even a few weeks ago was

giving the message that tariff be raised of 60%. this announcement of february tariffs and now china announcing certain sectors that they import from the u.s., they will also introduce different level of tariff around 10 to 15%. at the end of the day, tariff is a double edged sword. it'll hurt both sides. however from a few weeks ago 60 present to only 10% and potentially discussion that xi jinping and trump are talking to each other. this led me to believe what if market is pricing too much? tom: possibly the market is pricing too much pessimism. do you then position -- given what happened with mexico and

canada, and as you say president xi and president trump could be on a call anytime the next two days. three position for a pullback, for reassessment of these tariffs? xiaolin: definitely pricing for what is more resilient, what is more reliant on domestic consuming sectors. that is definitely more resilient to this tariff talk. second this will benefit from the 1.4 billion people living in china who hold their day-to-day life as normal, even if tariff talks going on or pricing slightly better. this year will be full of surprises but on the upside for a very simple reason. the policy easing is on track, is intact from all the announcements by chinese policymakers. second if you look over chinese new year, the market on mainland just opened, you don't have all

the detail yet but certain sectors consumer side have shown great signs of recovery. particularly the program they introduced to encourage, certain promotions, even cell phones. apparently 14 million people shop for cell phones, nearly 19 million get sold to those people. just a small fraction but at the end of the day, people in china live their normal life. the consumer side, policies around helping the household and demand side, you will see a good surprise from that side. tom: do these trade tensions lead beijing to go further and faster on stimulus? xiaolin: i would think so. that is probably one of the reasons why last year in third quarter, they started introducing easing policy to focus on domestic economy. one is focusing on domestic. second is directly talk to trump

administration. the people in administration are with young, entrepreneur business action person, hopefully that leads to constructive conversation. tesla has 30% revenue from china. if that is the case, trump's ears have music from musk all the days. he had an experience with china nothing but positive. hopefully these two governments can talk. market is pricing all the negativity and extreme scenarios through tariffs. tom: how do you trade the deepseek story for china? xiaolin: this is really a shock to the market right before the new year time. at the end of the day, it is proof again, you just said there is a lot of earnings of big tech companies today and in coming days. it is an interesting dynamic

with deepseek now entering the market with extremely low costs and extremely capable. i have handled the app, i have tried it out, it seems to have different dynamic and styles that chatgpt for instance is yet to be able to vary localized. it is chinese new year, i did that with deepseek i looked up my luck, is one of the things i like to do. i used deepseek to see if they covered all the elements, all the things you look for, just say what is your luck in 2025? i have to say it is deeply oriented to the cultural locally. this is a positive did namic for ai markets. it has created volatility long-term. this is positive particularly for the user side. you and i are both the end user for ai. this is actually a positive. tom: xiaolin chen head of

international at kraneshares on these markets in china pricing too much negativity. thank you for your input. there is plenty more coming up. this is bloomberg. ♪

>> major story in japan, honda and nissan dropped their plan, we will get more details, honda and nissan and there

i'm tom mackenzie. chinese markets return from the to a trade war.

honda and nissan dropped plans for a tie up. alphabet slopes. amd slides. disappointing for dater centers. president trump proposes the u.s. takes over gaza relocating palestinians to other countries, provoking criticism and concern. we are looking at prices and that is the analysis with danny lee in terms of numbers, operating profit at an increase

of 19, here is the redhead. it's sales increasing, 24% at the top and. it is a beat. supply of obesity drugs is crucial, obesity sales coming in below estimates. in 20 25 they are putting through a dividend of 11 .40,

some key moments. estimates were for 20 billion but the redhead is around the sales, comfortably above estimates. we will speak with the ceo at 9:20 a.m. so cute in. nikkei reporting nissan will abandon combining with honda. where do things stand? danny: nissan planning to walk away, it would have formed a

challenge and given the japanese competitiveness, honda rescuing nissan, calling all the shots and choosing what to do however honda wants to make nissan a subsidiary, still waiting to hear from the company is honda

sales soared. tom: where did they go from he re? >> big question whether it is in control, whether that will be taken out of the hands of nissan , a tough test because we have tariffs between canada and for nissan a risk, sales come from

mexico so it's a real risk. remains to be seen what happens. >> ok, danny lee. challenges for me sand. pain point in tech, u.s. futures point lower and nasdaq futures are down, gains of 2/10 of 1%. today losses, fed officials are comfortable assessing the

impact, a move of one basis point, stronger wages as soon as june. gold at record highs. a safe haven. president trump will speak to xi jinping after agreeing to pours tariffs, to combat drug trafficking. krishna bought suwanee says these are bullying and using

tariffs will backfire. well worth the read on a blue. -- bloomberg.com. we loved the piece. there are supporters say it is getting results. is it not working? guest: in the short tom i am the first to admit i'm wrong and it appears to be working. he audience is domestic and he points to the fact that they've done what he wants but what is

it do to the u.s. reputation? these are the most important allies. partners and allies wondering if donald can do that it damages the reputation of the united states as a player in the post world war ii era, really concerning. tom: short tom winds, longer-term this damages

washington. how do you think europe fincen? will they reassess the relationship with beijing? guest: too much of a stretch. everyone is trying to figure out what their playbook will look like including the chinese. the chinese retaliated but not robust, matching trumps energy. they signal they want the deal

on their terms. might is right framework is familiar to the chinese and countries used to dealing with china. tom: really crucial. really worth reading her opinion piece. indeed. president trump said the eu could be his next target but england may be spared. keir starmer is in a somewhat awkward position and lizzy burden joins me.

10 keir starmer balance a relationship? lizzie: he is talking to both sides. it's the first time a prime minister has been to a summit dinner, he has less room to accommodate trump's demand, the most bullish case is ruthless pragmatism and starmer would pick the eu reset, despite brexit, he backed denmark and

that was noted by both sides. tom: keir starmer had a message, what was the message? lizzie borden: he hoped the sentiment in that you need to spend more to prevent war, notably no confirmation of gdp spending. there is a sense that keir starmer is the demand or. you look at how physically

squeeze and it's hard to see him spending on defense spending. tom: indeed. a potential challenge with the u.s.. the maker of obesity drugs bracing for thinning sales. this is bloomberg.

♪♪ ♪ three little birds ♪ ♪♪ ♪♪ ♪♪ ♪♪ ♪♪ ♪♪

welcome back to the earnings focus, novo nordisk coming through with fourth quarter

sales slightly below estimates. full year sales, just above estimates. no additional cash flow. they want to spend on capex. let's get the latest with a stock around 26% down, let's bring in our copenhagen bureau chief. what is the assessment?

guest: record profit, quite impressive but they are looking at the wide range sort of consensus so it could be lola it could be hired. why can't they narrowed down? there are watching the pipeline, sales were not good. column: share price has been how

much determination is there to turn things around? analysts are pointing out problem with the pipeline a drugs to replace with a new phase three trial, maybe this will be the blockbuster drug. they are not saying much other than it is their biggest market.

not talking about trump, trade war but they would not be hit by tariff so it won't be this news for them. they are building in expectations so we need good news. tom: fantastic. indeed. we will speak with the ceo of novo nordisk, you don't want to miss it.

we have credit agricole and santander intending to buy back shares as it posted of record profit ahead of estimates, pushing up lending income this year. speaking with that she had -- the chair in the next hour. well worth your time. plenty more coming up, context around the decision to limit small packages from china, ramifications as china comes back from lunar new year.

stay with us, this is bloomberg.

welcome back. 10% tariffs, we assess mainland markets and china retaliating, decision by trump administration to put pressure on u.s. postal service under $800 value into u.s. market, a key loophole to ship into the u.s.. u.s. postal service suspending them, sheer size of exports to

the u.s. has been key for move and alibaba are. this is being weighed up by the markets. that's the numbers being sent into the market. the boj could go with another hike. wage increases have been a key consideration.

nikkei is down, not walking back from their spend. spending 75 billion u.s. dollars, an increase from 2024, continuing to spend. investors are anxious. coming up we will speak with

executives from credit agricole and santander, credit agricole coming in with loan loss provisions increasing. join me tomorrow as well, i will speak to germany. we will be speaking to the ceo of commerzbank bank as well, so tune in. this is bloomberg. a sleep number® smart bed is perfect for couples the climate360® smart bed is the only bed that cools and warms on each side and all our smart beds adjust the firmness for each of you and now, save 50% on the new sleep number® limited edition smart bed. shop a sleep number® store near you.

>> earnings rolling