what does the boj do now? why the boj has not been aggressively reducing purchases.the back of their minds, they are worried about the impact of the global selloff on markets in japan. also dollar-yen. >> let's start with today and a brethren areour waiting for. what will that be? >> it is likely they will revise down the inflation this year. the policy innk japan has run its course. the next one to watch is most likely the fiscal in japan. with the hike schedule in october this year, prime minister abe has been coming out with countermeasures to offset the impact of the vat hikes. , i think it isar a break deal. looking at the agendas, one is current account balances. , having a fair amount of current account surplus, it will gohard to see how japan can into austerity this year. we have seen the fiscal stance in japan at least neutral or moderately expanding. >> the boj has been on the back burner. but, the ball is in prime minister abe's court. how do factor that into the bond and currency positions? >> the output gap in japan will continue to narrow because of the

the purple is the boj. how does what might play out boj?it will presumably help in so far as the doj may feel less compelled to taper. at the end of the day, the issue -- the issueutfit is, as we mentioned at the outset, the bank of japan facing the economy. we think the bank of japan is likely to stay on hold. they don't want to tie in fiscal policy with the hike and fiscal policy at the same time. if you ask the government, you have no cushion on the monetary side. in the event that it does enter a downturn. that is true but we have a fiscal levers to pull if need be. there is not a state of panic. it is difficult to see how much , butforce the boj could do for all intents and purposes, it will stay the same. that does include continuation of the etf purchase program annually at ¥6 trillion. ramy: expectation is to stay the course. kathy matsui, chief japan equity strategist for goldman sachs joining us live. don't forget our interactive tv function, tv on our screen. watch us live and catch up on past injuries as well as dive into a

the boj stands pat on policy but cuts its inflation outlook.he outcome is a weaker yen. 109.64.en at we are a little weak on the msci asia-pacific index. concerns swirling around global growth and trade. the pboc pumping liquidity through the banking system. the one strengthens -- yuan strengthens. manus: miles to go before i sleep. copper bounces. bit --is just a little in terms of the run. a six-day winning streak. u.s. equity futures indicated just a little bit higher. we got dumped yesterday, 1% slump. second worst day in the s&p 500. who is right here, larry or talks?on after chinese that is the mood in the market. ceo stephen schwarzman, corruption investigations are stymieing growth in the chinese economy. he also believes there is a failure to ensure china's compliance in any trade deal which could cause a breakdown in negotiations with the u.s. he spoke to bloomberg erik schatzker in davos. the chinese economy is slowing. that is pretty well-documented. there are a few reasons for that. including the corruption investigations in china,

of course, this just puts the boj further away from its global peers. the ecb meeting tomorrow, not to mention the federal reserve next week. the numbers you mention are even more astounding when you consider the boj's balance sheet is $5 trillion. without that, they still have not been able to show any meaningful uptick in inflation. we are getting the ecb tomorrow. expectations that mario draghi will signal that those risks remain to the downside and then we have the fed on deck next week. this is interesting, there are only expectations of a 2.6% chance they hike rates. three months ago, that was nearly 80%. it really shows you how much things have changed over the past three months. it is something that our own bank of canada governor has had to grapple with. bloomberg got a chance to speak with the bank of canada governor at davos and got his take on everything from the trade war to government data. shape,economy is in good we have a couple of things we are dealing with, low oil prices for one, uncertainty around the future of the global trading sy

cheaper oil undermining the boj.hit the 2% target. >> beijing says banning huawei from 5g networks will have "repercussions."

extent, maybe still these huge balance sheets caret by central banks, not just the fed but the ecb and boj, bank of england as well, that are putting downward pressure on long yields. andit is that flat curve, of course economists are debating whether that is meaningful and something we should worry about. it would be nice to have data so we could check it. shery: what do you make of the fed's massive communication campaign after their last meeting? what were they trying to achieve? chris: i think the most important thing, now that we

how risky is that huge amount of credit that the ecb has and boj has? matter that we could see a downturn in the market? mike: i think the next time around, next time we go into a downturn, when it does happen i think that the ecb will have to be focused on sovereign. because the feedback loop comes to the sovereign and then into the banking system. what they will have to do is the rest concerns about the sustainability of some of the sovereign debt burden, and to do that they will have to buy under an omt program or they will have to go outside the capital to bring the sovereign's down. they might get some more corporate as well, but that is not were the main risk is in europe. in the u.s., there are more concerns around credit. guy: i guess it depends who is the next leader of the ecb and what path they will take. michael bell, thank you for sticking around with us and talking with us this afternoon. now the conversation i had with guy hands founder and chairman , of terra firma. we started off with politics. guy hands: the issues we have got are all

year havehe last shown the asset classes the ecb is struggling with is an issue for the boj.ot have a well-defined timeline as to when things could happen in normalizing policy. either way, the markets will continue to expect the boj will either do nothing or have to gradually start unwinding its vast monetary stimulus, which in relative terms, will translate to convergence between the fed and boj. nejra: thank you so much. valentin marinov, head of g10 fx research at credit agricole for joining us for the hour. we talked about a lot of issues around the hour. today, we asking what key market issue is brexit drowning out? poor brexit coverage next. this is bloomberg. ♪ manus: good morning from dubai, this is "bloomberg daybreak: europe. nejra: live from westminster in london, i'm nejra cehic. these are today's top stories. manus: 72 days left until the u.k. leaves the eu. theresa may's divorce agreement is rejected by the biggest landslide in modern british history. her government faces a confidence vote. we are live from westminster. more dovish messages from prominent fed o

this morning we will be getting minutes from the boj's december meeting. in recent weeks we have heard from the boj. they have cut their inflation forecast. we will get ppi data from japan this morning as well. some corporate's also reporting from japan this monday. we will be looking out for some reaction as well. nissan, some news the heads of nissan and renault will be meeting this month. kamaruddin with a look ahead at what to expect later today. let's get you the first word news now with su keenan in new york. facing at, theresa may potentially career-defining we can parliament. they are voting on amendments to her brexit deal. the government is resisting moves to force a delay in the march 29 divorce date rather than crash out of the eu with no agreement. brexit critics fear a no deal split will cause major disruption, economic hardship, and a return to violence in northern ireland. europe's retail is deepening with leading companies preparing to cut thousands of jobs in the face of accelerating online shopping. they are reported to be illuminating 1

the week ahead featuring the world economic forum in decision from the ecb and the boj.his is bloomberg real yield. ♪ jonathan: on jonathan ferro. this is "bloomberg real yield." the shortened trading week, the u.k. prime minister theresa may presenting plan b for brexit, maybe one day. we also get earnings reports, gdp dates from china and rate decisions from both the ecb and the boj. was my colleagues i will be at the world economic forum in davos, switzerland. tipp,with me as robert kathy jones and eric stein from eaton vance. on credit, a lot of people look at this rebound in high-yield, not much issuance coming through , it just started in the primary market starting to heat up little bit. a real lack of participation in investment-grade. why isn't investment-grade running with the rest of the market? uma: ms. jones: is way doubt --ms. jones: it's a way to down by the pond are once -- the preponderance of triple these. the widening and spread is still there and the profit growth is slowing down. we have economic growth but it's slowing down. we have high debt levels

increasing qe from the boj is not going to achieve an awful lot.s to me they are at a stage where they're going to have to throw in the towel and say their efforts to reap -- reinflate the economy are failing. given where yen trades in terms of valuation, we are going to see more pain over the year. manus: one thing that struck me was the lack of aggressive moves in yuan. this is a china story. myt is -- i am looking at bloomberg and it says one year swap rates in china are the lowest since 2016. it has probably drop since before you woke up. level sincelosing 2016. that tells me this market expects china to cut rates. is that a possibility? do you think the yuan will bust seven? >> if you look at dollar yuan, it trades in a very tight range. what we saw on the ground the fourth quarter was that the chinese were running down their fx reserves again. intervening in order to prevent further weakness. my view is we are going to see w yuan lower-- dollar by the end of the year. the chinese threat is in deficit. that is the first time in 30 years. i'm n

the boj governor warns amid temp nations. the qatar investment authority says he is talking to solve the gcc crisis. aramco is gearing up for its takeover of the region's biggest company, sabic. ♪

next, the week ahead featuring the world economic forum and decisions from the ecb and the boj.is "bloomberg real yield." ♪ ♪ jonathan: i'm jonathan ferro. this is "bloomberg real yield." time for the final spread. over a shortened trading week in the u.s., the u.k. prime minister theresa may presenting plan b for brexit, maybe one -- maybe monday. we also get earnings reports, gdp rates from china and rate decisions from both the ecb and the boj. plus my colleagues and i will be at the world economic forum in davos, switzerland. still with me is robert tipp, stein.ones, and eric on credit, a lot of people look at this big rebound in high-yield. not much issuance coming through, the primary market starting to heat up little bit. a real lack of participation in investment-grade. why isn't investment-grade running with the rest of the market? is wayes: i think it weighed down by the preponderance of triple b. the widening and spread is still there and the profit growth is slowing down. we have economic growth but it's slowing down. we have high debt levels of the corporate balance

gdp rates from china and rate decisions from both the ecb and the boj.lus, my colleagues and i will be at the world economic forum in davos, switzerland. so look out for some great interviews coming up through the week. still with me around the table in new york is robert tipp from pgim fixed income, kathy jones from schwab, and eric stein from eaton vance. final thoughts from you guys. kathy, to you on credit, a lot of people look at this big rebound in high-yield. not much issuance coming through. the primary market starting to heat up little bit. but a real lack of participation in investment-grade. why isn't investment-grade running with the rest of the market? ms. jones: i think it is weighed down by the preponderance of bbb's in the universe. and we have had some issuance that had to be absorbed, a little bit of duration there, but the fundamentals driving the widening in spreads are still there. we have profit growth, but it is slowing down. we have economic growth, but it is slowing down. we have a high debt levels at the corporate balance sheets

up next, the week ahead featuring the world economic forum and decisions from the ecb and the boj.his is "bloomberg real yield." ♪ jonathan: i'm jonathan ferro. this is "bloomberg real yield." it's time now for the final spread. coming up, over a shortened trading holiday week here in the united states, u.k. prime minister theresa may presenting plan b for brexit, maybe monday. that's what's scheduled. we also get earnings reports, gdp rates from china and rate decisions from both the ecb and the boj. plus, my colleagues and i will be at the world economic forum in davos, switzerland. so look out for some great interviews coming up throughout the week. still with me around the table in new york is robert tipp, kathy jones, and eric stein. final thoughts from you guys. on credit, a lot of people look at this big rebound in high-yield. not much issuance coming through. the primary market starting to heat up little bit. but a real lack of participation in investment-grade. why isn't investment-grade running with the rest of the market? ms. jones: i think it is weighed down by the prep

this boj meeting underway to talk about the volatility we have seen.ll watch the markets and make their own policy decisions. when we talk about japan, you have the 10 year jgb below zero, the topix down 10% in december, bear market for japanese equities. please japan still a safe place to park your money? -- is japan still a safe place to mark your money -- parking money? wey: we are neutral japanese equities but it is still closely tied to the yen. we hoped it will break out because there are companies, opportunities in the japanese market so the way to extract value is to have companies in like japanions and europe and a lot of these companies are in the u.s. we havef that, overweight into asia to capture the valuation. rishaad: thank you for joining us. happy new year. wey fook hou from dbs group. tv go. catch up using join the conversation by sending instant messages to the team during live programming. have a look at tv . this is bloomberg. ♪ yvonne: looking at your china and hong kong markets at the moment. apple lows, not a big worry today.

kathleen hays has the imf report and a preview of the boj policy meeting that starts today.h better than china or europe. why? absolutely. what a contrast. germany's growth forecast was ed for thish year. the imf looking very favorably at that's in japan. this year and next, japan's economy is not going to roar ahead. 0.5% for 2020. this is welcome news. jump into the bloomberg library and let's take a quick look at this chart which shows what has been happening to japan's gdp. one of the successes of the boj's extreme stimulus is you have a lot more green in terms of gdp growth than you did in consecutive quarters. natural disasters of all clients hitting the economy, down 2.5%. concerns about the trade war. overis what is hanging japan. another reason why this probably resonates with policymakers across japan and investors as well. fiscal citing greater support. people are so concerned. hikes have, the slowed down japan's economy, but this year, this program designed specifically to make sure it does not hit particularly younger people too hard. the abe cabinet voted a rec

not go down that much. ,ven if it is a more dovish fed the fed is still more hawkish than the ecb or boj, and the real rate of interest rates in the u.s. is so much higher that i think it will be difficult to see the dollar really fall a lot. i think you would have to see a recession scenario in the u.s. where people felt the u.s. was catching up to economic problems in other parts of the world. with trade moving in the right direction that does not seem logical at this point. as we anticipate what will drive markets next week, we have more earnings. >> halliburton. ivy and tuesday. you can see the list. which one would you be paying attention to in terms of setting the tone and giving us a read through for earnings season? >> it is about guidance. it is about cyclical guidance. when you are looking at companies, focusing on the economically sensitive ones, so, ibm have had idiosyncratic challenges, but possibly a read on retail, read on the global technology demand story. comcast perhaps a read on advertising, but i think you want to look at guidance, and specifically from the cyclicals

the boj governor warns a prolonged dispute will have deep-seated and widespread implications.g markets: asia." ♪ reporter: we are entering the last hour of the morning session in hong kong. asian stocks struggling for direction, we had that whipsaw attention on wall street. you have south korea supported, the bank of korea keeping rates on hold. they have the forecast, but we have seen sk hynix boost that. japan under pressure, off .4%, and other major markets are mixed. watching currency moves today, the aussie dollar down .25%. that volatile employment it a coming through. rishaad: let's take a look at what is going on in context and have more from mumbai when things get going. take a look at those futures, ,hat we have for the nifty probably looking at a flat open. there 44 minutes away from cash markets.

has been pretty aggressive in raising, where the ecb and boj have been mostly unchanged. are there concerns now about peripheral europe, if mario draghi cannot get off the bottom, and there is a slowdown, what else can he do? noelle: we kind of agree with iain's view that he will come out dovish in march. the gdp numbers, expectations will have to be revised down. at the most recent meeting, he kind of kicked the can to march. we think they will continue to be dovish, european growth will stabilize, and that will stabilize chinese growth. that will be a good environment for credit. taylor: we talk about slowing chinese growth, you're also looking at a slowdown in the u.s. perhaps. what is the impact on emerging markets? jose: in terms of markets, we see rates stabilized. a slowdown has been priced into the bond market pretty well, especially at the long end. .hat lowers interest rates from our perspective, emerging markets look pretty compelling on a debt and equity side. we see prettyly, stable growth, as you alluded to. this year, good growth in em. the question is the

the boj governor warns amid temp -- tense negotiations. the qatar investment authority says he is talking to solve the gcc crisis. aramco is gearing up for its takeover of the region's biggest

one boj official saying 80 could pointsible, but at what is the boj going to start to intervene?et's get you caught up with first word news. observers numbers of are warning the government shutdown could hurt stocks. markets are confronting increased volatility, uncertainty about rate hikes, and a trade war hitting global growth. now they are factoring in a closure in its 27th day. there is fear it will spread as workers go without pay. the shutdown prompted president trump to pull the u.s. team out of the world economic forum next week. stephen mnuchin was to have led the delegation, along with wilbur ross and mike pompeo. the president was going originally, but withdrew. he also denied nancy pelosi a military plane to visit europe and afghanistan. top envoy has arrived in washington as u.s. officials say high level talks are planned on a possible second summit between president trump and king jim on. he speculated a meeting could happen in hanoi. the vietnamese prime minister said his country would be ready to host talks. i actually don't know if the two will decide to have the

the boj could cut back buying.and the companies are planning a joint venture on ev batteries -- ev batteries. indicate news is reporting suzuki has developed a new plan to boost capacity by double digits. and look at sunday motor, which is -- hyundai motor, which is upping investments in various places. we are watching companies like oci on china's review of antidumping measures of poly silicon imported from the u.s. and korea. ramy: we are counting down to those opening a few minutes away. and for daybreak asia have state street global market strategist been luck. we will talk about what he is taking u.s. and asia equities over japan and europe. we will look at the china markets and what his outlook is for the u.s. and any spillover for u.s.-china trade. paul: let's get a quick check in on asian markets. australian markets have been trading for an hour. the asx is higher by .4% one laggard is falling the most in 17 months after reporting the first-half earnings drop down, 12% down on the year. the broader index hi

we have the yen picking up some steam after the loss we saw on wednesday after the boj cut its inflation. switching now to check in on sk after very much in focus it missed estimates on its profit forecast given weakening member demand. we are seeing the stock gain ground up over 3% in seoul. so much for you that. sophie kamaruddin in hong kong. taking stock of the comments we are hearing. telling multiple stories in the u.s.. aftere the dollar sinking six days of gains. let's get more with our mliv strategist. we had a lot of talk about a dollar demand at the start of this year. it certainly is not helping when you hear white house advisers talking about zero growth in the first quarter. the ongoing partial shutdown in is really states pushing the fed after the picture. they are struggling already because a lot of the data they require is not coming through to them. it is being postponed because of the shutdown. many understand it to be the first quarter of 2019. be extended further if the shutdown goes down into a second or third month. the fed is being pushed back. reducedare certainl

the latest from the boj governor. gettinge are also breaking news crossing the bloomberg.elopment in china-north korea ties xi jinping has notified north korean leader kim to visit north korea, accepting the invitation to visit north korea. and his predecessor was the last head of state from china to visit north korea. that was back in 2005. it follows kim's visit to beijing. it looks like it yields positivity when it comes to talks about relations with the u.s. this is bloomberg. ♪ ♪ from: where an hour away trading. a mixed picture when it comes to the markets that are trading so far in asia. also s&p futures in the u.s. showing a loss of momentum after four days of pretty robust gains for u.s. equities. aftersm is prevailing three days of talks between washington and beijing to put an end to the trade stalemate. some of the comments that got through from beijing, officials statements suggesting the talks broad, deep,, comprehensive and they would continue. fairly -- we will take that positivity as we get it. >> especially when you have fed minutes showing a dovish stanc

they are not considering a meeting with the boj or government.dlines est dropping on the bloomberg. thank you for , that. let's turn to the u.s. the we have a scene, democrats are not wasting any time on their control of the house of representatives hours pelosi took the speaker's gavel. the house is looking toward 13-day government shutdown. diligent and ent, persistent in trying to open up government. i said today on the floor, we fromtake ideas, good ideas wherever they come. including the idea of the bills passed by the republicans in the united states senate. we're joined est now by bloomberg's senior schneider.al editor we saw president trump this morning during a white house doubling down on his demand for a border wall with mexico. pelosi really r not budging. right.t's the two sides are doubling down on their positions. border t trump bringing control agents to the white house to make his case yet again that $5 billion he wants for our border wall with mexico, and pelosi taking over as she speaker, showing that has the resolve to also ma

yvonne: making it harder for the boj to watch turns. it is beyond their control.er big interview to tell you about. bloomberg, we have interviews with chicago fed president at 4: 10 new york time on friday. do not want to miss that one. this is bloomberg. ♪ is bloomberg. ♪ yvonne: a quick check of the latest business flash headlines. jet airways says it is working with creditors to revamp $1.2 billion of debt which may lead to changes on the board. sources say one option is for lenders to seek investment. before the debt is restructured. jet airways has accumulated more losses than any publicly traded carrier in asia, apart from pakistan airlines. rishaad: top regulators referring a merger [indiscernible] this is at odds with the markle government -- merkel government. german regulators want to get an bankdeal because deutsche remains too weak. david: a very look across all markets. first shakeup of leadership. tencent, if you're waiting for a game of thrones game on your smart phone, aversion is coming out from the company. it is the one that owns 25% in the publ

shift in the ecb rhetoric, talking about downside risks to growth and we saw a revision downward from boj on growth expectations. policymakers are becoming more dovish. we support this environment of adding duration and going into better quality stories out there. just to bring it back to way,t in a tangential let's talk about the ecb, the language out of the ecb, like other banks, has been softening. brexit remains a risk. believe that the ecb is going to be able to hike rates the cycle at all? is that the ecb might struggle, even when you take brexit out, there has been weakness in european macro data and some of that is not brexit related. some of that has to do with weakness in global trade because of the u.s. and china on trade. the risk of the downside for european growth are coming from numerous points. the brexit uncertainty, china's slow down in growth is weighing on exports and we have had week data or issues around the auto sector. given that they are facing headwinds from different areas, it is difficult for the ecb to start to tighten policy. the german ten-year is trading ro

it is like the boj yesterday. as you were, we all know six months from now, the broader story might be different. rishaad: hurry up and wait, in some senses. --the same time enda: growth is somewhat ok. rishaad: did they say anything about the global economy, where that is going? surely what they predicate their forecasts are is what is going on outside the country as well because they are so export-dependent. enda: and so reliant on china, especially for chip and electronic exports. chips make up 10% of gdp inside korea. a risk of protectionism. they noted that trade talks between the u.s. and china seem to be progressing. we all know there are so many economies effectively on hold until we get clarity around this march 1 deadline. unless there is a continuation of truce or the whole trade thing collapses and we go back to where we started. that is why i made the point about treading water. david: it is funny how quickly that light -- outlook changes. on your bloomberg that shows you where the market thinks these

extent, maybe still these huge balance sheets caret by central banks, not just the fed but the ecb and bojnk of england as well, that are putting downward pressure on long yields. andit is that flat curve, of course economists are debating whether that is meaningful and something we should worry about. it would be nice to have data so we could check it. shery: what do you make of the fed's massive communication campaign after their last meeting? what were they trying to achieve? chris: i think the most important thing, now that we have the minutes, we know there was an intention to signal a change of move. they are not as eager to raise rates, but we missed that on december 19 at the press conference. reactedtraders mostly to chairman powell's very optimistic stance on growth. and the way they interpreted that is we are looking at the markets, we see the markets, but we do not agree with the markets. since then, the message has changed. yes, the economy is slowing down. yes, we are aware of some of the challenges in europe, in asia. and we know that there is the possibility that could spil

importantwe had an interview with the former central bank official from the boj.rt we may on the back of it. he basically says that the yen is likely to reach its strongest level as japan enters a recession, which could come as early as follow this year. you can see we put some of the ranges where it was in late 2012. let's go back to brexit. the uk's front pages are dominated by the prime minister's no-confidence victory. the guardian says, may survives .he vote highlights may's overtures to opposition mps and jeremy corbyn's refusal to attend any talks the far. joining us now is anna edwards and simon french and sebastian, the head of european strategist at deutsche bank. what will it take for jeremy corbyn to actually weigh in? he keeps saying he wants assurances of a note of brexit. anna: it is amazing. only in you can politics cannot be -- can there be such animosity between the two sides. and then only from a no-confidence vote there be a call from the prime minister to put aside differences. yesterday, they were certainly invited and then refused to go beca

really the international picture is the key i think both to the ecb and boj own the fed because whatabout contagion a slower global economy into the u.s. we had no warning signs that the u.s. was really slowing in a meaningful way the data have been very solid so it's really about how hard does china land and what are the ripple effects around the globe and takes time to assess. >> how many other apples will there be in terms of the warning? >> exactly. >> steve, thank you very much. julia kona do. >>> up next, the charts to see if the market should be worried about the decline in consumer sentiment. >>> tiffany shares rallying today. coming up, we'll hear from an analyst who's still bullish on that stock despite those concerns uh uh. is it homeowner's insurance? no... uhuhuhuh! is it duck insurance? nope. ahhh! do they pay me money directly when i get sick or injured? yeah. aflac! you got it. you know aflac! boom! get help with expenses health insurance doesn't cover. get to know us at... aflac dot com. onmillionth order.r. ♪ there goes our first big order. ♪ 44, 45, 46... how many

the boj forecasted prices will rise just .9% beginning in april.il prices are the big reason. for the first time since the partial u.s. shutdown began last month, the senate has agreed to vote on rival proposals for reopening it. it is not clear either can pass. both sides debate border security. both sides debate border security. mike pompeo may run for senate from kansas next year. both sides debate border security. mike pompeo may run for senate from kansas next year. bloomberg has learned that pompeo has spoken recently about the possibility with senate majority leader mitch mcconnell. a spokesman said he is focused on being secretary of state. global news, 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm sebastian salek and this is bloomberg. tom: thank you so much. data check, interesting market. equities, bonds, currencies, commodities. i have one screen today with futures up fractionally. the euro a little bit weaker over the last couple of days. i don't know

does it frighten the boj into doing anything? were seeing these moves in more normal market conditions and the yen appreciating at the pace it has gone when markets are functioning more normally, maybe later in the month, then that would possibly be on the boj's agenda but i think that they'll because this and of the fact that these are not normal markets we are looking at. of rbc, thank you. joining us, the head of derivative strategy at b.n.p. paribas. what do you make of that? the price action of the last 24 hours? we have to make his liquidity is very thin, so moves tend to be extreme and we tend to make too much of it and the reality is we shouldn't. guy: nevertheless, we find ourselves with extreme moves. we've seen flash crashes in similar timeslots than we have here. is this a dysfunctional market? do we need to fix some of this? edmund: that is possibly true, but in the fx market, it is even more liquid than the equity market. i'm not so worried about turkish lira, but yen-aussie dollar is a major pair so we should be su

pboc, ande boj, the the ecb.e do not monitor this changes month-to-month yet they have bigger balance sheets. matt: let me ask about the market shutdown. asis getting more attention it goes longer, and today, federal workers will miss their first paycheck. when will the u.s. shutdown matter for markets? i think the narrative around the shutdown for investors will turn a lot more negative by the middle of next week. some federal workers will be missing paychecks means there might be more absentees next week, particularly relevant to tsa employees. this means flight destruction and more in the news and people realize is not just about the large chunk of the population foregoing pay, it is the function of the economy that is being constructed. there are a whole number of ways this is happening. overall, the u.s. economy is being disrupted. we will start to see forecasts getting impacted and lowered slightly, and that is why i think that by the middle of next week, it will turn more negative, why i think you will see

we are in the middle of this swing for the boj. risk off can affect the bonds.abelle in the meantime has your business flash from our hong kong studio. good day. manus.le: thanks, california utility pg&e bonds have been cut to junk status by s&p, the rating downgrade from triple b minus to b comes after shares plunged on news it is exploring bankruptcy filings. pg&e faces an onslaught of wildfire liabilities, estimated to be as high as $30 billion, far exceeding the company's $10 billion market value. slowing memory chip demand and the u.s. china trade war left samsung profits below expectations. preliminary operating income fell to $9.65 billion, below the forecast of $12.3 billion, about a third below the figure of a year ago. trade tensions hit demands for chips in samsung's biggest export markets with shares down a quarter last year. and the activist investor targeting barclays says he lost faith in the bank and will seek shareholder approval for board changes after being denied a seat. edward bramson holds more than 5% of the stock and calls for a recomposi

boj is that b largely a nonevent. that therk excited d.o.j. would take on externally easy policy.haps a more interesting debate is how the bank of japan missed its window to tighten. we are talking about the end of fed policy, people have been discussing one the fed is cutting rates. if the global central banks start cutting rates again, maybe the be oj whenever be able to try this extra dinner policies. to me, this is a slight worry, i will continue to grind lower when we don't have those scary events. anna: mark, thank you for joining us. remember, if you want to join the debate or get involved in the question of the day that we are asking here on bloomberg tv and on the market live blog, you can. markets under pricing or overpricing the global growth slowdown? coming up, we speaks to the publicis group chairman, maurice levy, about the challenges facing the ad agency for his business. this is bloomberg. ♪ ♪ matt: welcome back to the european open, this is "bloomberg markets are: take a look at stocks, we're looking at job across the board even after we had a mixed session the r

this happened and does it marked a headache with governor kuroda and prolonged frustrations of the bojtile chase for inflation? yvonne: it is all about earnings. check out shares of fast retailing. quite remarkable the performance in the session. despite missed earnings estimates, the stock gained the risingnce july after overseas operations helped offset. despite the gains we are seeing today, you think a domestic japan business could we aken. >> last year, there was a really good run and they left sales on the tail because it'd never enough inventory for january and february. this year, they loaded up on quite a bit of inventory. the weather has not been their friend this year and they have had some poor same-store sales and as a result, we think we are going to see more discounting in , so sales and profitability will get hit in q2. there will bef, easier comparisons and soft cavy -- cost-saving initiatives will kick in. this is how deflation comes about. china's slowdown be another headache for japanese retailers? a guest said it depends which ones. always take a bottom-up approach

boj pretty much does nothing as you have a safe haven bid coming into play.ons get repriced and crude off by 2. this is bloomberg. ♪ ♪ alix: there goes the bank rally. morgan stanley, posting its lowest revenue in three years. the government could indict him way technologies, adding other to tech talks.rs the government shutdown starts to hurt 1.2 million government contractors ensnared in the longest shut down history. we are going to sit down with sam zell on business spending. david: welcome to bloomberg daybreak. i am david westin with alix steel. the banks are in. alix: morgan stanley, not so great. stocks down. back to theto turn economy overall. you reminded me we have that shutdown. alix: there is that. david: i forgot about that for a minute. alix: this could be bad. the white house saying it is 1/10 of gdp we are going to shave off. david: worse than we expected. alix: in the market, a negative sentiment. euro-dollar flat. inflation steady but below the ecb target. monetary tightening going nowhere fast. in the u.s., buying back. fedeeper curve as y

i think the boj would defend around 105.tommy something as well, we had a guest on the other day talking about the yen being down to the 80's. support that and anyway? thomas: at this point i would good low. a very i think it is way too early. to 1500.s the s&p goes i cannot see that right now. yvonne: the dollar reemerged a little bit last week. everyone talking about fading the dollar, do you see that happening? thomas: it is interesting because there are divisions. the euro is hovering, trying to base but having a tough time. obviously exit concerns are really volatile. within asia, i noticed something interesting this week with the dollar being bid. that is one of the parameters i use of risk on, risk off. strong. are one of them is going to be wrong, just like the cnh. strong. have been it is a very odd correlation. normally you see the dollar go down as the a 50 goes up. right now, you are seeing the opposite. i think the dollar is wrong here and my target on cnh would be 160 two short. from that point the dollar would

the yen, the boj released its meeting minutes.ill continue easing persistently. the yen is trading around the 109 handle. we also got pbi data for december. rising a touch softer than expected. increasing 1.1% on a yearly basis. let's check in on the open in tokyo and seoul. the nikkei 225 on the back foot. resuming losses. down 2%. the topics also lower. set to snap a two-day gain. the cost be looking to extend its advance for a fourth straight day. on the markets are closed for the australia daybreak. asian stocks looking good after a three week advance. let's look at hundai. this stock in focus as aramco has said it's buying up to 20% valued atk in a deal 10 trillion won. this deal was the oil bank raise. 2 trillion won. it could become one of the bigger shareholders of the company. haidi: sophie kamaruddin on the markets. let's get you the latest first word news with su keenan. su: we have reports from london saying theresa may has told the cabinet she will rule out a no deal brexit. ministers have been informed, but made doze

this as annexed boj official says the 80 zone is likely to come as soon as this year.ollar holding steady. the pound just a holding firm here at 128. we have cnh gaining some ground as traders dismiss the pboc's latest fund injection. but see the news with selina wang. selina: french finance minister calls for the dismiss of carlos ghosn as ceo. they indicate the government has abandoned him and assures he will lose his last grip on executive power. france owns 15 prinercents and union leaders say carlos ghosn cannot remain in charge. chief economist says the yen could reach 80 against the dollar, its strongest level in more than six years. he told bloomberg the central bank would be powerless to stop the move in the current state. a negative lending rate could slow down. analysts forecast the yen for the end of the year at 108. the inflation rate remaining low in japan, the yen is on course to strengthen further. currently it is ¥10 lower than the amount indicated. there is a possibility it could go ¥10 higher. i don't pick it will hit 70's but the 80's is quite likel