for the u.s. dollar since one nine hundred eighty seven and we actually have a little chart here this is one nine hundred eighty seven the the dollar into the first month of nine hundred eighty seven right here is two thousand and eighteen it's looking as bad as one nine hundred eighty seven right so eighty seven crash it was long overdue in this particular market going back to these charts the dollar heading into eighty seven started to you know we you know a lot of weakness here you've got in this market a huge concentration of money in the so-called fang stocks facebook app all netscape and google and apple's kind of been weak in the last couple of few weeks there's a lot of weakness in the stocks of the fang the fang group of stocks that say they start to lose favor after having this enormous run amazon is also in that group and amazon ok it's trading at something like over one hundred times forward earnings so that's stocking could drop fifty or sixty percent and still be on a chart basis in a bull

the guy who signs the dollar bills the new dollar bills that he wants it to go lower according to this headline here they said that basically opens this up as a one way bet for traders and traders will keep pushing it and keep pushing it said one strategist there is a possibility that it could be a spiral that it gets out of control luckily we did hear on kaiser for tell you a few weeks ago to load back up on gold because of course we're going to get into that in the next headline buy gold has obviously done very well against the dollar as the dollar has been tanking it in the openings weeks of twenty eighteen i see the world through gold colored glasses because stacey has been pointing out for a few months now the rotation back into gold is well underway hitting three year highs and you said and i agree that gold could hit a new all time high in twenty eighteen down that are over two thousand dollars an ounce i mean solar would be fifty sixty seven dollars an ounce and crypto currencies are on the back foot lot of money that was in the multi hundred billion dollars krypto spaces down

the guy who signs the dollar bills the new dollar bills that he wants it to go lower according to this headline here they said that basically opens this up as a one way bet for traders and traders will keep pushing it and keep pushing it said one strategist there is a possibility that it could be a spiral that it gets out of control luckily we did hear on kaiser report tell you a few weeks ago to load back up on gold because of course we're going to get into that in the next headline buy gold has obviously done very well against the dollar as the dollar has been tanking it in the openings weeks of twenty eighteen i see the world through gold colored glasses because stacy has been pointing out for a few months now the rotation back into gold is well underway getting three year highs and you said and i agree that gold could hit a new all time high in twenty eighteen or over two thousand dollars an ounce i mean so over it would be fifty sixty seventy dollars an ounce and crypto currencies are on the back foot lot of money that was in the multi hundred billion dollars krypto spaces down fl

significant risks, both for the euro and the dollar. david: we have priced in the right hikes and we have seen that happen. and inflationsees threat, interest-rate rises and you sell the currency. that doesn't exist. it's just things that people talk about. you can see that we are ahead of the curb. -- curve. there is a current account deficit but politically there are still issues with brexit. yes, we are buying it today. ultimately, i would be selling sterling right here, right now. are you saying that this series is really exaggerated? david: yes, because what's a rigged flag -- red flag for markets? currency falling into the central bank, 1994, united states, raising rates from 3% to 6%, the dollar goes down, down, down. you think that the central bank is behind the curve. the market is saying no, no one is behind the curve. absolutely normal, no signs of inflation threats in their. maybe that is why the dollar is a by standard in this equity market selloff. what about the qe trade in general? is it over? i mean, i think, we've still

look at the dollar. the rand today rising to its highest level since february 2015 versus the dollar. yesterday, it has rallied 20% over the last three months. it selected its leader in mid-december. the next critical milestone investors say will be the assessment expected at the end of next month by south africa's plagues theg, which nation on review for a downgrade in november, but the rand had been surging in the last month. 30 minutes into the session in the u.s. how is it looking over their? julie: the sixth day of rallying. it is the longest winning streak for the s&p 500 since january 9 but the largest spot day gain going back to october 2015. it has been quite a rally over the past several days. we get a look at just how big of rally has been. look at the five-day returns for the major averages plus the russell. the nasdaq gaining more than 6% over the past five sessions. the dow and s&p up. also take a look at what the u.s. dollar has been doing over the past five sessions. we have seen it go in

this is the dollar-yen relationship. what is it going to take to save the dollar? is is the 10 year yield. there is no correlation at the moment. it is falling apart. a fresh dose of inflation failed to cure the dollar's ills. if you look at dollar-yen, literally it did not blink on the back of the cpi numbers. the dollar is under siege. that's the title of the story this morning. we have a number of big issues for the dollar to deal with. deficitwin evil, the and the overall shortfalls. what you have is wonderful line i wastephen engle, attending an fx conference in miami. you should never leave a margarita on the table. let's get to juliette saly with the first word news. jacob boomer has resigned as president of -- jacob zuma has resigned as president of south africa. he says he disagrees with the ruling decision to force him out, calling his treatment unfair. president -- they must choose a replacement within 30 days. lives should be lost in my name. and also, the anc should never be divided in my name. come to thefore decision to resign as president of the repu

the dollar, third positive week in four for the u.s. dollar.hat has people talking about whether we're at a turning point and if we'll rally from here what are your views? >> we think it's more of a consolidation. it's licking its wounds after dismal start to the year when it comes to the fed story, it's hard to see the fed being a long-term driver for the dollar going forward. if you believe that the fed funds rate is at 2.5%, 3%, markets are pricing this in. it's hard now for the fed to be a big driver for the dollar. the dollar's focus is much more on structural things this is a multi-year trend it won't happen every day, every week but certainly the direction of travel forev the dollar is on a downward trajectory. does it come down to secretary mnuchin saying things like a weaker dollar is a better dollar, even if he backtracked on that? >> certainly that was one of the catalysts at the start of the year. it's hard for washington to put that weak dollar genie back in the bottle the cat is out of the bag there. that's fueling a structural ad

tom: very quickly, what does the speed of the dollar truck, the brutal -- dollar drop? s in the globe, and that is reflecting in terms of currency volatility as you have seen in yields and equity prices. the second thing it is showing -- and this is my big worry -- the dollar always used to be a safe haven currency. it would appreciate as it did in late 2008 and 2009. tom: dollar up. komal: that is not happening, and the dollar is weakening. it is losing its safe haven status of the past year, ever since president trump his interest in a weak dollar. that again is a major concern of mine. once it stops dropping for global investors, why should they hold u.s. equities are bonds when the president and treasury secretary say the dollar will be weaker? tom: thrilled you are both with us. love a collegial disagreement. we get you ready for your weekend reading. adam posen ready to join us in the next hour and then michael howland will join us on radio later on this morning. what do you need to do if you are across america coast-to-coast? you are captive in your car. you can d

bonds are contracting with the u.s. dollar. ield is around 3% right now, which is an attractive risk premium, given the strong global backdrop. >> however, a rising rate environment, if you were to rise too high, could become challenging. the emerging markets could grow because they contain the global the bestich remains case of what was forecast, but this could become a challenging market for the emerging markets. anna: i get the defense, like in many parts of the world, if we see the u.s. rates rising. that could create a more positive story for em. this could be all about constraining inflation. geraldine: very much so. the fed needs to rein in inflation. that is the dangerous environment. enjoineding market is global growth. but in 2018, we have stepped up our global forecasts. that growth is actually coming into emerging markets while the developing market has seen a little bit of a slowdown. francine: patrick, what is the biggest threat to synchronized global growth. that was a mantra in 2017, and even into davos week into

indexdig in at the dollar shooting higher, dollar-yen under pressure all morning. margin. roundtable, michael mckee and nathan sheets of pgim fixed income still with us. mike mckee, you have had a minute to look through the numbers. what are details behind the higher inflation? reporter: a big rise in apparel prices. chart,want to go to my this shows you that what happened in november, prices sell significantly and bounce back. part is seasonal adjustment, up 1.7% on the month. big change. 1.8% rise in transportation cost. used carcrease in prices, new car priced flat. it seems to be a rising car insurance rates, maybe the first of the year, that is the first thing that stands out. the other thing, any other special category, sometimes as to this price, they were up as much as previous months. no real change. a couple categories influenced what we saw. apparel and transportation are in the core. that pushes that higher. the thing it tells you, inflation maybe is getting a foothold because it is broad across the various categories. alix: michael arrington, you do thi

if the u.s. dollard that hurt oil prices >> it's always a headwind for oil. again, we continue to watch the fundamentals, we continue to see the fundamentals as constructive sure if there's a sign that opec was breaking up, combined with the strong dollar, that would be bad for oil prices right now the floor is pretty firm >> thank you very much >> thank you >>> switching focus. deutsche bank is planning up to 500 job cuts joining us with laura noonan investment banking correspondent for the financial times. laura, thank you very much for joining us clearly this story comes a few weeks after they said they were going to pay bonuses for the first time in a couple of years. square that for me in terms of the sort of conflicting messaging coming out of both of those stories. >> i guess they would say they are going to pay bonuses and reward talent, but equally they will cut costs and do away with 250 to 500 jobs. we do hear banks talking about the need to differentiate between the poor performers and the h

the u.s. dollar is a currency that other countries recognize as funding wars and the weapons and the poverty that they're trying to escape. hello again israel has been called the beacon of light and hope in the middle east by the u.k.'s defense secretary gavin williamson also stressed that the nation has a friend for life in prison i was just asking if those thoughts chimed to longer. if you were the u.k.'s defense secretary which country would you call a beacon of light hope in the middle east jordan do you fly them to hold you should definitely not the us. put it this way i suppose i would think lebanon where christians and muslims appear to work out a way of living together and sharing political power you're right perhaps he was talking about israel israel no i don't agree because of the palestinian troubles i don't subscribe to that they're not very good at adapting to other people i think it's just going to home a two state solution but do you think israel is a beacon of light yes why because we

is it about the yen or weak dollar? the u.s. dollar has weakened against every single one of its peers. it comes back to the twin deficits, inflation. fundamentals, it is the twin deficits that matter. equities are up, but i would watch this more closely. fx.i: lots going on in let's get more on the yen. we are joined in singapore by mark cranfield. valentine's day, chinese new year, all the love going to the japanese yen. the yen is in a difficult position, dollar-yen especially. on the yen side, there is a growing sense that the bank of japan has run out of bullets. there is a lot of talk from the bank they are going to keep going for 2% inflation. it will take a long time. they need to surprise the market, think out-of-the-box. on the other side, there is increasing lack of confidence in the way u.s. fiscal policy is run. go back to a time when america had twin deficits, which was very damaging for the u.s. dollar. it is soft investment out of the united states. there is a fear we are going back that way again. a sign of this

however because the dollar has deprecated so much already, and the u.s. is going through this big budget deficit scenario, we're not seeing impulses on the inflation side yet, that tells us from an emerging market experience the dollar continues to deprecate over the next few months what about emerging market debt, in terms of the dollar that's been an interesting story as well >> absolutely. interestingly, i as an emerging market person over the last 20 years, i don't think anyone would have seen this, local currency bonds in emerging markets have been the best performing asset class in the world. so i think this comes as a big surprise given the fx in emerging markets have been stable if we were to get a big turn in the dollar you would see hits on the fx side in emerging markets. >> where would you be looking for exposure when it comes to em debt >> given that the u.s. is in hiking mode, monetary tightening mode, same in the eurozone, probably at some stage in japan, we're saying be a little bit more cautious on that side, on the local currency side, b

cheapness in the u.s. dollar has helped. in digital advertising, movement towards the cloud, really strong support for the tech sector. with that comes an increase in price and expectations. people start looking at the price, the expectations, they look for some indicators. , will thatse factors be enough to excite the market? these are the questions that are out there. we have faith in the tech sector. anna: rmb versus m&a. we see some of these companies bringing back money to the united states. how much of a driver is that move going to be? >> good news is bad news. that leads towards the tax bill and a big decision what to do. going to be interesting and i think it is an indicator of potential success. does it look at the company in terms of buybacks or dividends? do they actually start spending the money? if they investe in the top talent, invest in the to someat could lead really in the project range. manus: shell quarterly earnings are back to where they were when oil was trading at $100. everybody's fawning at the alt

the euro-dollar down. composite pmiaker coming out of europe, and the pound also getting hit as well. 10 year yield pretty much goes nowhere, standing firm into the five-year auction. crude a little weaker because of that stronger dollar story. david: at 10:00 this morning eastern, we get existing home sales data. at 1:00 the u.s. treasury is auctioning $35 million in five-year notes. now the turn to our first take away, these are big stories. that great treasury sale continues with two-year yields in the option yesterday the highest in 10 years. continues toconomy struggle to get wage increases to keep up with inflation. glencore reports earnings with catholics flow and earnings -- the turnaround in that company is so dramatic. it was on deaths door just a couple of years ago. >> come inside the bloomberg. we had all those auctions yesterday, and this is what we saw. yields rising to the highest level in 2008 print much across the board. ira, what did we learned yesterday? we learned demand was maybe a lit

throughout 2017, the dollar weakened. n people who inn money and dollars. -- dollars. broadly, if you have a weaker dollar, you might expect to have stronger practices, and that leads to higher inflation and higher interest rates and a rotation within the stock market. people now expect the dollar to weaken further. long-term, weto are making assumptions that. -- the dollar should weaken further. people are very sure of the dollar, it is possible to trading rally. if you get that, you need to be careful because a lot of the trading salt that invert. that invert. we are very sensitive to that. matt: what is your call on, where do you see the euro right now going? do we eclipse that and go even higher? i have the same question on the pound, what level do you expect? >> i'm not a currency strategists. from a currency put of you, i think it would be reasonable for the euro to strengthen further. strengthening,s particularly relative to the u.s. the second thing is that the deficit anding a that means that natural flows are int

suffering on the back of that. i think dollarwatch. we have seen a site reversion of the correlation they had in interest rates to the extent to get the good number, you will see dollar-yen react to that and the rates market. david: has the market, the fx market discounted the tax cuts? brad: i believe so. the tax cut is somewhat deflationary if you think about it because it gives the corporations the ability to steal market share in price, which could be a deflationary weight, but it spurs growth. it is a double-edged sword a little bit. i do think that the fed is still a little bit underpriced, and the tax cuts will probably impact that at some point. that will be a dollar positive in polls. right now, we are not seeing that show up. alix: are you short for the next 45 seconds? brad: i am long dollar-yen, that is about it. sure dollar everywhere else. great to see you. thank you. here is with the markets stock up, 30 seconds away from the jobs report. teachers under pressure, though off the lows of the session. in the fx market

the dollar, good math, this is the bloomberg dollar index. er by our team with michael rosenberg. it is a gorgeous chart. this is beyond elegant, how the index rises stronger dollar, up to the moving average, we are now at support. no other way to do it. this morning we are at a critical point for the mnuchin weak dollar policy. i say that with respect to the secretary of treasury. this is television. chart.e: a good-looking tom: elegant chart. francine: mine is a very tom keene chart. profound disruption of long-standing correlation. this is a simple chart. i charted the yen against the dollar versus the 10 year treasury yield. it breaks away, a couple of weeks ago, it goes the other way. saying a media, profound disruption, you can see the moves as you look at dollar-yen and the 10 year yields. so much for higher inflation spooking the market. kse rally in global stoc despite cpi hotter than expected. higher than the 1.9% expected, , thank younow, viraj for joining us. why the correlation not correlated anymore? viraj: the dollar has been tr

the dollar is an upward force. night, the fed says, we are thinking the economy is a bit stronger. but it is not all over. there are forces in both directions. the fed was not going to raise rates. but that is not so. tom: david bloom with us from hsbc with some enthusiasm to get briefed on a friday morning. we continue that conversation. speaking with you on friday, carol weinberg will join us. us, paul weinberg. watch on the global wall street. ♪ taylor: this is bloomberg surveillance and i am taylor riggs. the royal bank of scotland has posted the first full-year profit in a decade, but not much celebrating is going on. rbs still has not settled the u.s. investigation into mortgage recovering's and until that deal is done, they cannot sell the british government the majority stake. she has agreed to sell the insurance business, the prize, $4.5 billion. it includes a 20% stake in phoenix standard life. aberdeen wants to focus on life management. jay powell is talking to goldman sachs about returning to the firm an

the dollar is steady. ♪ . ♪ francine: a hawkish exit, the fed keeps rates on hold but since the state for a hike in march. changes to its news feed has cut the amount of time users spend on it by 50 million hours per day, ken mark zuckerberg turned it around? goldman sachs felt rushed by the rollout quickly of bitcoin futures, knocking $44 billion off their market value. this is bloomberg surveillance. i am francine lacqua in london and michael mckee is in new york. we will look at strength and europe. michael: we are seeing the markets ignoring everything in the u.s., the u.k., and around the world. janet yellen having more effect than anybody else with strength from central banks. janet is gone he had to take the day off to recover. francine: he is crying in bed. let's get to the first word news. >> federal reserve officials have set the stage for an interest rate increase in march, wrapping up their final meeting after shannon yellen by leaving borrowing costs unchanged. janet yellen is being replaced b

seen thatill continually, even when they try to talk up the dollar. k the differential favors the bunds and the european banks as well on the back of it. juliette: speaking of favoring some of the asian equities, particularly when we look at some of the em's, we have a chart on korea. we know that south korean stocks have been propelling or holding your these record highs. when we look at the kospi 200, most stocks make up 93% of the overall index. you say you could see a breakout andhe kospi 200 at 350 360, we are currently at a level of 333, so when does that happen? microanalysis, you can see a descending wedge that has broken higher. what is interesting is the yellow line is one you broke through that, that is a multi-year breakout, a decade breakout without a break in the 2008 level. i think you are going to see that curtailing through or following through leading into the hong kong and asian stocks. i can make a case for the philippines, indonesia, and some of the smaller markets. where you wantet to be selling japan and buying korea. david: the

the dollar tumbled. adlines that followed were on strong economic growth, higher inflation, exactly the opposite. a bevy of headlines were in that category. this dollarent, is reversal or four day winning streak real right now? vincent: at least in the short term. u.s. yields are finally at levels attracting foreign investors. life insurance companies coming in the last 24 hours, buying u.s. treasuries on hedge, which suggests they are comfortable with the level of the dollar. neither will the dollar erode further nor capital losses continue in the bond market. looking for safe returns on the dollar. the bottom may be in. yvonne: we have been talking about synchronized mobile growth, we usually see the dollar weakened. if you see better prospects in europe and japan, is the dollar still oversold at the moment? vincent: we are trying to find where fair value is. people worry about the dollar tumbling, how that feeds into inflation. -- 10% seen a 10% to 10 to 12% drop. they would say that is worth about 0.7

. 135 is not unreasonable for the euro dollar exchange rate. yourn: at the moment, thoughts. the way, is that what you are advising were doing? nick: we like the dollar assets yields, butke high critically we want that currency hedged. net, kathleen, and jeff rosenberg, sticking with me. coming up on "real yield", auction blocks, a good sell to hold the stop sign in the us markets. this is bloomberg. ♪ jonathan: this is bloomberg "real yield" and i went ahead to the auction block were inflation and raising rates showed up with high-grade u.s. issuance of all places. on wednesday there was places with zero issuance, and there is a $2 billion offering which 50 years, and inflation was the highlight of their covers 2.31,et, it which is less than a previous sale and a sign that investor is stillfor risky strong -- egypt raising from international investors sitting $12 billion in orders. still with me, jeff, kathleen, and nick. kathleen, i want to get your thoughts on credit over the last week or so. kathleen: we had some big headlines. jonathan: you

but the bigger picture i think is a story that was drawing money into the dollar was it was just the.s. alone. growth everywhere i think caps the potential for money to keep coming in. the 10-year did hit to 95 and come back. -- 295 and come back. i think rates will rise and the influence on currencies, your point about hedging is a good one. jonathan: jeff, you have done a lot of work on this. about how you balance away from dollar-denominated assets. i have heard arguments as to why loose fiscal actually ends up with a weaker currency and one of the arguments is, forget the insurance debate about loose fiscal, strong monetary policy, the argument now is the fx channel needs to adjust radically to attract foreign capital back into the united states. you put it the other way around, foreign capital fleeing the united states leading to a weaker dollar. this is a notey: we put out about repatriation. the attack still -- the tax deal is a nonissue. you have to look at the data. and what most people, ourselves included, have been talking about for a long time is interest rate differentia

dialsn't even pushed the on dollar-yen. se, continuing its current trajectory? >> for now, yes. we would be very surprised if there were announcements in the next few months, but we have been hearing for a while that this year, there could be some rearrangement of the monetary policy, some increase in the target on the 10 year yield. nothing dramatic. one of the reactions -- one way to understand monetary reaction on central banks, we can have no direction of trouble everywhere. some central banks will take more time to start normalizing. to bucks really going the trend. manus: by the way, more from suga. marketstching the fx with a greater sense of concern. fx -- aware of one-sided there is the important line. we are aware of one-sided fx moves. it is important to watch the fx. you thatised are christine lagarde, mario draghi recent on the pronouncement in terms of the fx market, which had the direct impact on the world uss, which is europe. there was a deal within the g20 seven that, let's not talk about the currency. a su

that, you have seen a shift in the dollar. anted to bring up the wei screen, which is a simple look at equities. i have put the u.s. dollar in the drop-down box. look at what happens when european stocks fare poorly. right now, the live trade across the board there. date, european stocks have not fared well. for u.s. investors using dollars, they have done quite well. does that continue throughout the year? if you were to short european stocks, isn't a weakening dollar a real disadvantage do you? -- to you? simon: you've touched on a central point, which is a lot of the reforms of equity markets, you can tieback to what is happening in the currency side. that is a mid-80's kind of thing. the member how well u.s. equity markets did. the dollar declined and 85 -- 1985 through 1987. look at the yen going up. is there a fairly direct relationship between competitiveness of the currency side and how equity might -- markets are doing, that seems to be the way it is playing out. given the way the euro is performing and how little ther

let's talk about the dollar -yen. encyg yen, japan's still in demand, even as the equity story begins to recover. you are looking at here, the bloomberg correlated weighted index with the yen versus nine other currencies. that is at the highest level since december, as you look forward to the scenario of another term by mr. kuroda. does your view on the dollar-yen trade change? like on: so, it looks several major medias, in japan, kuroda has a very good chance of becoming reappointed. our view on the dollar-yen is th at -- the sense that it grow to stays in place, he would not necessarily change the status quo. ycc in place.the but they should not be so easy on monetary policy because inflation is rising. economic growth is the highest in almost a decade. at some point, they should be reversing the extreme accommodative monetary policy. there could be a downside risk, but it could hang around 108 to 110, but when they move towards a policy issue, we will be looking at the 105 level. yousef: what about some of the other

terms in the short-term if dollar is goingo rise. manus: our strategist joining us from singapore. ifittle later in the show, you are wondering where guy johnson is, he is sitting down for an exclusive interview with the bank of latvia governor. there is a man we want a few questions and answers with. this is where you get that conversation, on bloomberg, 1:30 u.k. time ♪ manus: 7:44 a.m. here in the city of london. let's get your business flash. dubai.joins us from yousef: anglo american will pay an annual dividend of $1.02 per 2015, the first since after the global mining giant eported earnings per share of $2.57. they say the improving macro economy remains supportive. rising earnings as they invest in germany after failing to clinch a merger with t-mobile in the u.s. year,illion euros this ahead of estimates. deutsche telekom says it is looking to germany and operations in the netherlands and austria for fresh growth. that's your bloomberg business flash. manus: barclays, one of the top corporate stories this morning. we h

the u.s. it is going to be a weaker dollar environment for the year. te positive when it comes to euro dollars. you are expecting 132 by the end of the year. it seems 2018, a lot of people are saying, if you are going to shore the dollar, it is going to be the yen, given how cheap it is. divya: actually, we disagree on that. we still think there is a significant upside for the euro. had was awhat we reallocation toward european equities. we saw almost a half trillion dollars going into european equities. what we have now is a full picture for the euro area has turned quite positive. we are looking at a situation where central-bank resolve, allocation for the euro, is still quite low. from about 20% six years back now down to 20%. that will provide another to hundred $50 billion of euro buying. the euro has more upside. yen, they are getting ahead of themselves in terms of expectations from the bank of japan. we do not think the bank of japan is close to changing its policy. they are very comfortable with the way things are. inflation is picking up. but

the tax deal is a nonissue. those moneys are in dollars. e repatriation that is happening is you have to look at the data. and what most people, ourselves included, have been talking about for a long time is interest rate differentials drives inflows into the u.s. since the second half of the year, if you look at the data carefully, look at the information, it has flipped on its head and is the opposite. what is that telling you? you talked about hedging costs, that argument is over with. if you take hedging costs, the u.s. is no longer attracting the world's flows. it is the unhedged flows we are talking about that have currency impact. the u.s. has been the beneficiary of the carry trade. you are only willing to bear the risks of an unhedged dollar position in carry trade if you are comfortable with the currency. as soon as you lose the confidence of the currency, the carry goes away dramatically because fx returns are in bigger component of that. if you see the dollar lose the international attractiveness, because international returns st

you have the dollar moving down. other people,nd there are massive outflows out of the u.s. dollar. me way dollar-yen's chart looks like this, there is nothing there. it is hard to imagine where central support comes up next. have a look at that. we have the jobs number out of australia, u.s. inflation. put everything together and what you have is inflation expectations in the u.s. outpacing that in australia. that shrunk the yield premium. something to watch. this will also have wide-ranging implications on where the aussie goes from here and what the rba does and whether or not they should move earlier than expected. ramy: david, thank you very much. a great look at the charts. let's get first word news with courtney collins. >> police in florida now say 17 people were killed in a school shooting in southern broward county mayor. state authorities say the suspected gunman has been arrested. he is said to be 18 years old and a former student at the school. broward county sheriff scott israel says it was a catastrophic day. president trump has offered federal assistance to the state

mark: it is best to look at the dollar-yen. he miss of the downside, a weaker inflation number is what we can expect today. bloomberg just ran a story saying that a weaker number could see the dollar-yen at 1.05. we saw a break yesterday which was a technical factor as well. so this is telling us that traders are probably leaning toward a soft number on inflation. haslinda: mark, thank you so much for that. we are waiting on the important inflation number. bloomberg chief asia correspondent, a macro strategist, martin crane filled in the lion city -- cranfield on the line -- in the lion city. coming up, why the bank sees overall loan growth in high single digits this year. david: and credit suisse says china is the standout among the emerging markets, cio for the asia-pacific joins us later this hour as well. this is bloomberg. ♪ haslinda: this is "bloomberg markets: asia." haslinda: i am haslinda amin. david: i am david ingles. david: let's talk about earnings out of singapore. the past two or three days, we look at a summary o

and because it was president's day yesterday, and because we work in the united states, we put the dollarpot index, up by .3%. manus: welcome back from president's day. let's have a look at what all of that richness means in the bond market. will they show up and buy the bonds? is it getting rich enough? this could be the battle royale between the asset managers and hedge funds. do we have gathered for you here is a difference of opinion. we have the asset managers and funds, the third widest in 10 years. you've got 2017, middle of 2010. this is where the real money wagers were, they came out on top. so tonight we have three months and six months. the yield you are getting is the highest in a decade when it comes to the spread. 10-year note in the united states are offering 1.6% more than their g7 peers. that is the fattest, lobbyists spread you have had an 18 years. is it enough to draw in the buyers? two-year papers offering more than the fed, three times the average over the past 20 years. a veteran of tutors saying more inflation could rock these bonds. will they show up, will they ro

the dollar could behave independently of the yields.n see the ebb and flow but for now, the link between the yield on the dollar will remain relatively weak. your outlookchange at all, and today, 110. >> yes, we are not immune to the processes. a dollar higher, which is pre-much where we are at from 120 previously. the overall story for the dollar though is we do not think 2018 will be a terribly exciting year for the dollar. most of what the fed will do is in the price. no great drama we expect to come from the dollar-yen, we have a year-end forecast so there is a pretty persistent strengthening of the end that we believe will extend. >> it is a pretty big move from here. >> it feels that way. but think is because we are used to it not doing very much and we have gone all the way to 125 and 126. is interesting because it is happening him not necessarily against a weak equity market here. about the exit from the boj among other factors. saw nigeria and egypt, frontier market, really. emdering about the impact of more than frontier marke

and the dollar continues to weaken. erg. ♪ we use our phones and computers the same way these days. so why do we pay to have a phone connected when we're already paying for internet? shouldn't it all just be one thing? that's why xfinity mobile comes with your internet. you can get 5 lines of talk and text included at no extra cost. so all you pay for is data. choose by the gig or unlimited. and now, get a $200 prepaid card when you buy an iphone. it's a new kind of network designed to save you money. call, visit, or go to xfnitymobile.com. ♪ >> higher yields don't throw a lifeline to u.s. currency. a third of prices on deck. 3% watch. the bond selloff continues, pushing 10 year yields to surprise levels. it is 3%, plus, volatility, dealmaking. welcome to "bloomberg daybreak." producer price index, a surge in inflation, equity prices down. david: we see what it is for producers. alix: let's look at the market --minutes before the producer f the bond selloff is pre-much all across the board in europe as well as here. oil

they got lucky last year with the week dollar. u look at the factors like core inflation traveling at a decent clip. expectations will at the least the liver, if not more -- deliver, if not, moore. the stronger u.s. dollar put standard pressure on the yuan. they do not want to much downward pressure, because then we go back to where we started. david: we don't want to go back to that. the hongus here in kong studio talking about a prospect forward for renminbi. let's get back to our guest. let's get it graphic up your of your tactical book as you lead to call it. here are your calls here. long aussie, kiwi. short old and silver. yet -- on u.s. treasury. what is the thesis behind the first one? i think that long aussie kiwi is about rba more hawkish. economic data has trumped economic data out of new zealand. more importantly, we had quite a big miss in new zealand inflation a few weeks back. technically, it feels that the aussie dollar has been underperforming versus the kiwi. technicals, but where the trend and economic data is go

all of these currencies falling against the dollar. sovereign bond yields are declining. t's get to the corporate news. spain's biggest oil company reporting the highest earning since 2015, beating estimates. the chemicals and refining side of the business bucking the industry trend. waiting for clues about growth. big data out of china. toufacturing pmi falling 50.3, the white line in february. the biggest slump in five years. services pmi flipping to 54.4, the blue line. the weaker reading signaling that china's economic growth and global trade might be starting to cool off. this comes as china top -- china's top official heads to washington and communist party officials gather to set economic goals. and. -- economic goals. the rapid change in fortunes for chinese stocks in hong kong has turned them into the world's wildest. chinese shares listed in hong kong after rallying 50% in january. the biggest decline amongst global benchmarks, driving the 30 day volatility gauge to an almost two-year high. withuations may continue mainland investors turning bearish over u.s. mon

we are at the dollar index and be the intentions of the federal reserve and move the dollar? twin warnings with benjamin iranianu describing aggression as the cursor to our world. iran has been said they need to pay a price. israel has no diplomatic relations. of informalare kind alliance. the munich security there was relief that no major war broke out under trump and anxiety about emerging risks and hotspots around the situation with north paid and israel has some of the damage coming off of the back of that. so far, they have not torn up the deal, but the rhetoric is heating up and it is something to look at. is where they want to go. can they look at the policy? basically, you have saudi it is becomingnd a bit of a hardliner and the minister says, if we have to over-balance the market a little, so be it. that is what he told reporters arabia story from saudi is you need expenditures and buffers with a need to move the goal post and rebalance a little bit. there are other metrics to measure success and it looks like we are in for an interesting few months to match the opec

certainly the dollar is preeminent in its role in financial markets and the role of the fed.he factors matter. it is a reflationary environment, not just from the u.s. perspective. u.s. is in the league, but it is fueled by global growth. jonathan: let's think our teeth into that debate. the global flow story from one areas bond market to another. we have been told that if we get up to 290 on the u.s. tenure it attracts a foreign capital. does to 95 do it? it for the do deficit? nick: i think it does. 305 becomes very attractive if you're sitting in europe and japan. they do not just focus on treasuries. when you look at the investment-grade index in the u.s., you have 375 or something like that. both ina big pickup, terms of credit spread if you are coming out from europe or japan. remember, globally, there is still money until the end of the year. kathleen: i think you can watch those near-term movements, you will get more inflation data coming out of other areas in the world, but the bigger picture, i think, is the story that was drawing money into the dollar was that it w

the dollar has been -- francine: james, tom and i were in davos, the treasury secretary shows up and dollar advantage, or at least that is what they want, what a weak dollar policy. his boss, donald trump, 24 hours later denies it. i have never heard that before. james: they have said a lot of things you have never heard before. i think they want to signal they care about the trade balance perhaps in ways that other administrations in the past have not. i don't believe they are about to embark on any kind of actual policy measures designed to weaken the dollar on purpose. i think the dollar has weakened before the market is expecting the rest of the world to tighten monetary policy in line with recent growth. tom: we will get to many of these themes through the hour. i want to jump forward with james sweeney and the fiscal policy. ring up the chart, anthony. it is the deficit to gdp and we are beginning to see people really model what -- was talking about quarters ago, bank of america, james sweeney, down to a 5% deficit to gdp. then wet tax cuts and got fiscal follies. the two combin

can see the dollar act as a safe haven and trade up more than it has. day it's down a half percent by the yen up a quarter percent against the euro 0.4% against the pound let's talk mror about the curre currency market. the dollar, let's talk about the point of a safe haven, is it no longer a safe haven in moments of volatility? it hasn't traded higher by a significant margin despite extraordinary levels of volatility >> you're still seeing it act as a safe haven this morning you are seeing the u.s. dollar higher against the euro, the british pound and many other currencies it's not getting the same type of enthusiasm because you have bond market selling, stronger global growth prospects, but investors are inwoundiare unwin those bets, going flat and taking profits as they wait to see if yesterday's recovery was a fake out or a true bottom. i think it's far too early to tell >> how strongly correlated is the dollar to u.s. interest rates and the longer end of the curve? strangely it's almost been correlated in the opposite direction than we'd expect >> i

thought of weeks ago, i the dollar was a bounce. rapidly in the dollar's favor. gher real yield, the growth story is taking off. even though i believe in the secular bearish dollar story, i thought there was an excuse for a tactical bounce. it hasn't materialized at all. in fact, the dollar down move has accelerated. this is a worrying sign because it shows people are starting to buy into the narrative that they are giving up on the dollar, no longer believe the dollar is the ultimate reserve currency and they want to strategically cut down allocations there. if that narrative continues to take hold, this could be worrying. currently, the dollar makes up over 60% of the world's reserve -- fx reserve and yet, the u.s. economy will still fall to being less than 20% of the world economy. it seems there is too much money wrapped up in dollars. i thought this narrative would play out over many years, but it looks like everyone wants to accelerate the story and that is a concern. guy: great stuff, thank you mark cudmore. joining us from the mliv team. , the letters

do you think if the u.s. dollargthens maybe you want to , by u.s.ite more hikes stocks because that is a way to cash in on the increasing currency? i think you just buy the currency rather than the stock. the way i would play it, i would not want to be significantly short in the u.s. market, but within the u.s. market i would want to be long domestically focused stocks versus export sensitive stocks. guy: thank you very much, bob parker. he is going to stay with us. up next, we are going to take it a look at the movements we are watching this morning. we have the numbers from itv. stability returning to the u.k. advertising market this year. the stock market is not taking that view. the market is trading down by nearly 5% this morning. this is bloomberg. ♪ ♪ welcome back to "bloomberg markets: european open." we are 15 minutes into the trading day, with equity indexes down across europe and in the u.k. our top stock stories, what is moving those markets we go to nejra cehic. businesses may sell on closing the monsan

you can see the dollar on the rise broadly up by 0.2%. a little dollar, euro, and pound weakness. morning, we will get an update on the german economy with the release of the final gdp data which is expected to show expansion of 0.6% in the last three months of 2017. and european union leaders hold an informal summit in brussels to discuss the formation of the --. conversations around whether certain top jobs at that you level should be merged and how to they should be appointed in the first place. and the fcc will publish an order rolling back obama net neutrality rules tomorrow. said to like asia is definitely close up in the green on a positive note. asia-pacific index up about 0.9% tokyo ands climbed in hong kong. you can see this ocean of green. the moment did not -- the momentum did not come from the u.s. the s&p 500 closing just barely in the green. gains it sawf the in the afternoon session. we got some data overnight. japanese cpi came out with inflation that failed to pick up last month. gauge rising at the same pace in january that we saw in december. seeing that the ba

suing european union regulators for one point seven billion euros over two point one billion dollars over the denial of a merger with dutch delivery company in two thousand and thirteen u.p.s. abandon its seven billion dollar bid for t.n.t. express in the face of strong objections from the european commission and after three revisions aimed at addressing the commission's concerns rival federal express acquired t.n.t. in two thousand and sixteen for four point four billion euros now u.p.s. is taking that commission to court in the e.u. in the wake of some rare court defeats for the regulator the european courts generally only look for a legal errors and commission actions while u.s. regulators are only a few of their merger denials have been overturned. general electric has announced it will overhaul its board by reducing the number of directors to twelve down from eighteen a year ago the changes that g.e. are happening as c.e.o. and chairman john flannery is planner planning majoring restructuring as we've reported before that could include breaking off some major divisions flannery has pledg