♪ this is "bloomberg markets: asia." i am haidi lun. ♪ haidi: oil strengthens after saudi arabia says oil producers want longer output curbs. opec said to expect a nine-month extension. energy lifts markets, global equities near record highs.

and, asia-pacific trade ministers concerned about rising protectionism, but no mention of it in their post-summit statement in hanoi. the start of the brand-new asian trading week. it is all about oil. we are fast approaching that meeting in vienna. the markets have pretty much priced and that nine-month extension. latest over the weekend, we are hearing that saudi arabia saying all opec producers are up for this extension. take a look at this chart in terms of where price expectations are going. that front month the vti with the nearest expiration contract, converging at $50, so whether the news has 10 baked in or there is further upside when it comes to that oil price, even if

we get that extension, and the flip side of that story is where u.s. shale production goes from here, because the biggest opecion has not been producer sticking to their end of the bargain as opposed to whether their efforts are being undermined by increasing levels of u.s. production. we have seen u.s. inventories come down gradually over the past few weeks and months, prompting the likes of goldman sachs to revise expectations for declining, suggesting inventories in the u.s. will continue for some months to come. the meantime, 30 minutes from the open in china and hong kong come up but singapore, taiwan, and malaysia coming online. but also a in focus, growing sensation that perhaps theets can withstand turmoil in washington and brazil

. global equities near record austria's asx 200 thanks to that rally in crude. it is up by 6/10 of 1%. the taiex joining the buying party. we have seen a close above 10,000. did fall quite substantially along with other markets towards the end of last week. the kospi doing well despite what is happening on the north. istory saying the kospi being driven by export data out of south korea. malaysia up by .2%. higher, atr, yields least today investors are willing to take on a little bit more risk. let's look at some of the stocks we are watching in these sessions. jumping by the daily

limit for a second day after the automaker reached that settlement, up over 15.5% in tokyo. quitecue metals doing well, up 4%, one of the best when you look at the overall regional index. this is on the back of the iron ore story. the prime minister malcolm turnbull saying the largest charitable gift being made. singapore airlines weaker, it come of lunch on friday the biggest in six years on the back of quarterly profit come the first quarterly profit in three years. we will watch cathay pacific when it comes online. we are hearing it will cut 600 jobs. for that, but potentially some upside given restructuring plans underway. thank you so much. let's get worse word news with paul allen in sydney. president trump has told

arab leaders of the war on terrorism is not a fight between different faiths. he told his middle east allies that they must not wait for the u.s. to attack militant groups, but should in short that terrorist find no sanctuary anywhere. the president has tried to ban the muslim majority countries from entering the u.s.. >> when young muslim men and women should have the chance to build a new era of prosperity for themselves, it has to be done. we have to let them do it. with god's help, this summit will mark the beginning of the end for those who practice terror and spread its viral creed. paul: north korea vows to continue its nuclear and missile programs. flew 500 columbus

across the sea of japan with defense officials saying it appeared to be a shorter range weapon rather than a recent one. on friday, north korea said it will continue to develop nuclear weapons and conduct more tests. hash korean president nominated a finance minister and deputy finance minister. a list of challenges, including rising household debt, high youth unemployment, and weak domestic demand. remainsn's jamie dimon optimistic about the global economy and the prospects of regulatory reform under president trump. speaking exclusively to bloomberg and riyadh, he said even the traditionally cautious imf sees the economy growing faster than expected. biggestamerica's corporate names are in saudi arabia to boost ties has the kingdom edges towards a diversified economy. growing more than in

15 years. europe is action doing rather well all things considered. still 2% give or take, so that is all pretty good. even the imf, which is always worried about stuff, is now saying the world will grow faster than expected. you: softbank smash announces the first round of capital commitments for his tech investment fund with more than $93 billion in the pot. the saudi of investment fund as well as apple, foxconn, and sharp are all investing. the fund will top $100 billion when it closes in six months time and will focus on startups in the u.s.. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. i am paul allen. thanks for that.

trade and the threat of protectionism dominated talks in hanoi this weekend. the postsummit statement made no mention of the pressure on ministers not to criticize the isolationist trend. haslinda amin is there for us. what was the mood over the weekend? think there was a lot of disappointment. you talked about how the word protectionism was absent. it was. we learn from the russian trade minister that that was a dispute among trade ministers. agreed onrs everything he said, but one member disagreed on everything. that oned to say who member was, but the indications suggest it was the u.s. we know that robert light hiser was here and conduct did bilateral meetings with the

trade ministers to get a sense of very fears. the members wanted to get clarity on what the u.s. policy is in this part of the world. the u.s. is looking to reshape the global trading system and once to put u.s. laws above international laws, including bt oh rules. president trump has said the wto is a disaster and he was looking to pull out of it if there is a possibility of that, just like he pulled out of tpp and looking to renegotiate nafta. it is precisely countries who act on their own that pose the biggest threat to the multilateral trading system. take a listen. the biggest threat is for countries to decide to do things on their own and to take unilateral action. and this do, temptation exists that whenever you have a sluggish economy,

the tendency to find solutions looking inward is higher. this meeting coming on the rising anti-globalization sentiment. everyone wants clarity and is part of the world. they did not get very much. robert lighthizer was to address the trade deficit, looking for free and fair trade. we don't know what that really means. he said that the u.s. maintains that it will stay out of it but is looking forward to bilateral region. the there has been speculation donald trump will backpack.

you spoke about the tpp. that overshadowed formal talks .t apec what transpired during these meetings? haslinda: the thing to note is the fact that this tpp meeting at apec is significant because it is the first meeting since the u.s. pulled out of the trade deal. unlike four months ago, where members were saying there would be no tp without the u.s., the tone has changed somewhat. new zealand has tried to come to some kind of agreement, and even japan is looking at the opportunities that can be had with the tpp. we spoke to the trade minister of japan, and this is what he had to say. d tpp is the only agreement that has in-depth coverage of things such as digital trade,

intellectual property, customs procedures, and so forth. only the tpp covers all these areas. it is highly regrettable that the u.s. decided to withdraw, but even without the u.s., trade remains hugely important. so the tpp is not dead, but negotiations will persist. some member countries are now looking to renegotiate some of the terms, but that could lead to an unraveling of the tpp itself. thank you so much for that. we will be talking about the implications for the tpp of 11, given this u.s. withdraw from the agreement. ocean's 11, we look at the prospects for the tpp without the u.s. japan urging that its remaining numbers should keep the project alive. slump inlook at a

brazil sparked by new allegations of corruption at the calls for impeachment and risk of emerging market and contagion. we speak to j.p. morgan next. this is bloomberg. ♪

haidi: this is "bloomberg markets: asia." lun in sydney. a quick check of the business flash headlines. cathay pacific has confirmed to cut 600 staff in the biggest round of drop losses in two decades. management and 18% of nonmanagement workers will leave by the end of the year. cathay pacific is under pressure from cheaper chinese rifles and middle eastern carriers six and into asia. last year, saw its first loss in eight years. transatlantic deal that would create a chemical company fight at $14 billion. ant are innd clario

talks to merge. the two companies have declined to comment so far. sharper may see its first profit in four years. it will post earnings of this much is $360 million this fiscal year. top aport says it could 10% rise from a year ago. sharp is planning to apply for a relisting on the tokyo stock exchange from as early as this july. we are watching indonesian assets, likely to extend gains after the s&p raised the nation's credit rating to investment grade. indonesia has been asia's only economy not stuck with the junk rating. let's talk more about emerging markets. j.p. morgan joining us now from singapore. great to have you. let's kick it off with indonesia.

we had a nice pop in reaction to the s&p news, extending to new record highs. jakarta up 10% year to date. this inflow oft foreign investor interest when it comes to indonesia. how do the fundamentals look, and does this ratings upgrade change your outlook when it comes to it? we had been telegraphing the possibility of ratings upgrade for quite some time. the of it was based on improved growth prospects, but importantly on the macroeconomic stability and the fact that you see fiscal deficit and current account deficit contained, pressures on the rupiah contained also. that you havect seen a year and a half where it has managed that 5% growth level

while keeping macroeconomic stability. those are the key factors we have been using to say their ratings upgrades would likely take place. part of the market had been pricing in, and clearly part of the market waited for the event to take place and is now reflecting the ratings upgrades in the asset prices. indonesia was one of the three currencies that suffered so badly with the taper tantrum. do you anticipate that again, or thisuidance been so clear time and a lot of change in terms of countries like indonesia getting their financial houses in order? look at what you used to be called the fragile , to asiana, indonesia countries have dropped out of it, and if you look at the changes indonesia has done since

2013's taper tantrum, there have been significant reforms in terms of ensuring that macroeconomic stability is the number one agenda and the policy agenda of the government, and the government was not going to use macroeconomic policies to push for near-term growth surges , and importantly also in terms as well as fx market the kind of mergers that have been an taken in support of the bond market come all that bodes well for indonesia. say that a crisis won't happen, but it looks unlikely at this point in time that indonesia will suffer from any kind of massive spike in u.s. treasuries if it does actually happen. there is a much stronger position today than 2013. haidi: i want to bring up

another chart to illustrate the momentum we have been getting behind the emerging market rally , #8336, the largest etf. there is a lot of debate as to whether this technical indicator suggests there will be further upside, but are you feeling more ocean when it comes to thistions, and has political implosion and has this political implosion in brazil, is there any sort of contagion, or is it domestically contained? holding thisen long-standing feud for about a year and a half that the reason why emerging-market assets have been outperforming developed market assets was because of the growth differential between the emerging markets in developed was widening in favor of emerging markets after narrowing for five years. that growth momentum in the countries wast

suggesting a sense of recovery and repair rather than things going back to the pre-global financial crisis. that whiting of the growth differential remains intact, and i know brazil is an important part of it, but political crises in brazil is specific to brazil. thes not push back on beenery and repair we have seeing in emerging market country since the fourth quarter of last year, which have been broad-based continuing forward, that capital flows driven by this growth differential will continue. ishink brazil's problem brazil's problem, and there's not much of a chance of the spillover affecting emerging markets in general. haidi: we have to leave it there. great to have those insights

from j.p. morgan. billion, we look at softbank's record vision fund next. this is bloomberg. ♪

haidi: this is "bloomberg markets: asia." softbank's masayoshi son has formally announce the first round of capital commitments for his tech investment fund with more than $93 billion in deposits. we have been hearing so much about this fund, who is in and who is out and what comes next? softbank announced plans for this fund in october last year. they have been fund raising. finally the announced in saudi aabia because the saudis are

cornerstone investor. investors, abu dhabi, qualcomm, apple, foxconn also investing. is larrynot mentioned ellison of oracle. has not clear whether he put money in or will join at a later stage. yes, finally they announce this $93 billion in plant to bring that up to $100 billion in the next six months. haidi: what are masayoshi son's plans for the fund? >> he has had an ambitious investment record. ,e led the investment into didi the chinese ride hailing company that competes with uber. softbank put $5.5 billion and that venture. he has been active in india,

southeast asia, and he sees better opportunities now than he has seen before, and he has made interesting investments in the past few years. he was an early investment in yahoo! also, he was one of the early investors in alibaba. million dollars and now has a stake worth $90 billion, one of the more his -- historically successful venture bets of all time. we are seeing some nosebleed valuations be at what does this do to that situation? >> there is a lot of concern about that. this is a $100 billion fund venture andprivate capital equity come us of the challenge will be finding deals

that will be profitable. softbanka risk that will drive up valuations and make it difficult for other people to make their money back from these investors. ♪ haidi: thank you so much for that highly anticipated push off. plenty more to come. ♪

9:29 a.m. in hong kong. we are counting down to the china open. we are one minute away from the open. i am haidi lun in sydney. this is "bloomberg markets: asia." this is a week where we are expecting calm after the royal and toya that has engulfed oil and last week -- r l that has engulfed markets last week. take a look at this chart

through there have been concerns that the falling over in the oil price may correlate to a pause in the emerging market rally. see a little bit of a stumble when it comes to brent crude futures has not been correlated when it comes to em. they have been pretty resilient. j.p. morgan saying valuations more run and there is to go when it comes to this rally. the question is whether opec can convince markets to go higher when it comes to that crude price. eventually 2017-2019 expectations or the price for wti, the most recent expired contract, everything converging at $50 a barrel. believe opecysts needs to do something, shock and all, if it wants to move that

price and expectations. shanghai and hong kong online. we are looking at cathay pacific. is it a tailwind or head when you are seeing? juliette: i think we are seeing a little headwind. factoredbeen widely in. shares of .7%. let's wait and see, but i'm pretty sure we are seeing gains on the stock, up by .7%. we have had confirmation that 600 jobs are to go mainly in managerial positions. they are notc said getting rid of pilots or cabin crew. about 100 90 managerial positions, and otherwise back office staff here at it has been factored in. this is a cost-cutting measure, so no surprise the market will like this. you are seeing cathay pacific rise on the open come up i 1.6%.

someer market detail comes good gains coming through across the board on the back of what you saw on friday. comb coming into these market street we had a turbulent week with washington and political tensions in brazil. a lot of thought now that we are and some greatm gains in terms of energy place, crude close to $51, energy players in australia strong, iron ore up 2% on friday. you are seeing great gains in korea as well. japan's nikkei not coming through as one of the top stronger todayso , and the hang seng up by .3% bonds mixed, most currency theets higher against

dollar. haidi: thank you so much for that. let's get to first word news and get caught up with paul allen in sydney. paul: asia-pacific trade ministers issued a deluded statement and hanoi, suggesting pressure behind the scenes to avoid criticisms of protectionism. the focus is on regulation and red tape and contrasts strongly with when ministers reaffirmed determination to resist protectionist measures. they vowed to pursue a regional trade deal without the u.s. >> there is a lot of unity amongst the countries and a great desire to come up with an allement that delivers for economies and the people of our countries, but also open to other countries that want to join. saudi arabia says oil producers are in agreement on extending output curbs for nine months to drain the global glut. minister khalid al-falih

said it will trim stockpiles to a five-year average. he said opec members and independents will make the decision later this month and the end of. >> i have not heard of any thetry that is against extension per se. everybody wants an extension because we realize we have not achieved our objective of bringing global inventories to a five-year average. paul: the brazilian president michel temer has urged the supreme court to suspend the corruption inquiry against him, claiming recorded evidence was doctored. he says he was set up during a taped conversation and recordings failed to support allegations. stocks in the currency slumped when prosecutors said michel temer obstructed a graft investigation and engaged in passive corruption. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg.

haidi: thanks for that. arabia have saudi signed deals worth hundreds of billions of dollars during president trump's visit. rainy inocencio takes us through the companies and cash involved. some pretty big deals we are talking about. >> some pretty big deals and a huge number, but i want to dive into the terminal and show our viewers how significant this can be. this is the ectr function. china is the number one trade partner with saudi arabia, but look at number two on the right side. that is the united states, and only $7 billion separate number one from number two. because of all the money flows we are talking about over the past week in between the u.s. and saudi arabia, take a listen to how that could change so easily. >> yesterday we signed historic thatments with the kingdom

will invest almost $400 billion in our two countries and create many hundreds of thousands of in american saudi arabia. talk aboutbillion, the significance of that. this is the saudi index. it popped in just the past trading day, up .75%, the highest since may, so three weeks or so here. because of all that money, $400 billion let's walk through some of the major companies on your screen, general electric, down, exxon mobil, and a couple of defense companies, lockheed martin, raytheon as well as general dynamics. probably oneric is of the big ones people are talking about.

we are looking at on the order of $15 billion in terms of the u.s.-saudi deal going towards improving the country's power grid and its new energy capabilities. that, $7 billion or so, will be coming directly from general electric itself in terms of goods and services sales, so a huge boon for the company. martin is another company, $6 billion here, that is the black hawk helicopter you are looking at. saying they will build 150 helicopters in saudi arabia. the kingdom will get 450 jobs there. ,ot only the $6 billion boon there is potentially something four times as much, $28 billion in terms of the intent to procure integrated air and missile defense, combat ships and tactical aircraft. is another company that

is establishing a new branch in saudi arabia. they don't have a presence now, but will be calling that raytheon arabia and it will be based in rio had. a localizedeate defense and aerospace initiative there. one other thing separate from all of this though is what is being termed the largest weapons deal and u.s. history. is according to secretary of state rex tillerson, citing a $109 billion arms deal and security deal between the two countries. we are talking about tanks, fighter jets, combat ships, as thaad missile system. we have been talking about that missile system when it pertains to south korea. this is also happening in saudi arabia, potentially the next several years or so. it has been a busy week, and it will continue to be busy

for the president. what is ahead? ramy: we will work our way weston terms of what donald trump will be doing over the next four days or so. the holye headed to land, the promised land. that is israel and the west bank, and jerusalem will be on the trip. he will be speaking with prime minister benjamin netanyahu as was palestinian authority president mark mota boss. first sitting u.s. president to visit the western wall, and will make his way farther west to rome and vatican city, where he meets pope francis. he called the pope's comments about himself disgraceful, so it will be interesting to see if he meant ties with the vatican. he will go north towards brussels. france's new president will be there, and they will have a lunch. he will also meet with 28 other

leaders of the nato alliance. butas called nato obsolete, last month has turned that around and will wrap up his trip in sicily italy with the g7, so the first of five. we will see if he continues on his diplomatic trend, at least for the time being. haidi: very high profile trip. the -- perhaps the president feeling a little despite being away from the u.s. thank you for that. , north korea has warned it will continue with its nuclear and weapons programs after testfiring another medium-range missile on sunday. peter pae is on this for us. -un does not giving president moon jae-in much time to get settled or trite a softer approach. making it difficult,

particularly his campaign pledge which was to have increased talks, basically a conciliatory tone towards north korea. he had talked about going to pyongyang and having direct -un.s with kim jong the fact north korea continues does not help in that regard. he has appointed several key aides who have experience dealing with north korea. some of them were unification activists, meaning that in their early years as students they were seeking peaceful unification of south korea. despite those efforts, north korea continues to launch missiles. essentially you have a that is increasingly being made up of those, perhaps being forced to make hawkish decisions.

we are talking about some of these key appointments. take us through what we have so far. yesterday, one of the key appointments was the finance , a key appointment, particularly because of south korea's economy. it is weak, high youth unemployment rate. growth has been anemic, 2.5% compared to years past, 6.8%, so a lot of economic issues. not a appointed traditional finance ministry official. he comes from a poor family background and could not get into any of the major universities because he was so , and it was often a prerequisite to these high-level .ecisions

--moon jae-inhat talked about that, saying he is more sympathetic to the economic hardships many south koreans face here. haidi: never a dull moment in this part of the world. for us.e there coming up, keeping the tpp alive, the apec summit and what it means for international trade. this is bloomberg. ♪

>> it is not only us. it is everybody that one's clarity, with the u.s. thinks about his trade policy. when there were talks about the memorandum of the form, 20 countries agreed on everything and one country did not. haslinda: have you approached the u.s. for a meeting? >> no. haslinda: do you intend to?

>> no. we have set with respect to nafta, minister trudeau has been clear, this is an agreement negotiated more than two decades ago, has been amended 11 times, so we said we are happy to sit at the table. why weof the reasons decided to be part of tpp was access of the potential to the american market, and if that does not happen, then one of the major motivations for the tpp will be removed. that is our position. apec ministers speaking about trade under the trump administration. our next guest says tpp can and will continue. the executive director of the

asian trade center in singapore is with us now. you have been looking at the tpp for a long time. we were talking about this in places like singapore during negotiations. is it time to move on? the u.s.ment is that had committed relatively little, so we just get along with the rest of the countries to fill-in. >> that makes the most sense. it is a little confusing to people because they assume the big prize out of the tpp was access to the u.s. market. you heard the malaysians make that market. other than textiles, footwear, and some agricultural products, the u.s. committed relatively little because the u.s. market is quite open and they wrote the tpp to accommodate existing u.s. rules, so what have you lost, surprisingly little. among the 11, the tpp opens up markets among the 11. access,ng that

preserving those benefits, quite important for the 11. haidi: to your point, just to show trade flows to the u.s. #6983 does show we are off-peak volumes where we were a few years ago. another thing that confuses some people is a reference to this 85% gdp requirement. isn't that complicated to change that? >> no, not really. you need an exchange of letters to fix that one sentence. the rest of the agreement, i think it stays basically as it is. anything u.s. specific and stay dormant. you might argue the australian constitution refers to new zealand in it, and that piece of the constitution has been dormant. thing can be done with the tpp, and if the united states does not come back in, that heart of the agreement stays dormant.

i would say just keep it as it is as much as possible. ?hy renegotiate the trade ministers gave themselves a tight deadline and expect to have a concluded tpp of 11 by november. that is extremely short for major changes and suggests there and is to do very modest changes and have this agreement come into force by quickly. deal: how do you rate the as it stands with no changes were minimal changes? of reason why so many rounds negotiations through so many years happen because a lot of them did not want to concede sensitive areas, but they wanted to reach a high level of standards. is it a good deal the way it looks now? an extremely is good deal. the reason why it took so long is that this is a comprehensive agreement. the main reason why you don't want to do it -- want to undo it is if you start pulling it apart

, this provision, that provision, the whole thing unravels in the benefits get lost. one of the reasons why this agreement is hard for people to grasp is that the benefits are not found in one chapter. it is throughout the agreement. if you try to explain to a company where the benefits are in a tpp 11, they are literally everywhere, even small companies get benefits everywhere. it is not just tariff cuts. it is the movement of goods across borders and customs, the way services move, the provisions on investment, the way intellectual property rights are protected, the provisions on labor, and the environment. it is 30 chapters come and probably for most firms and consumer benefits, the benefits are across that entire agreement , so you want to hold all of those provisions as they currently are to keep the companies,r big small companies, consumers, workers, the whole thing is

important to keep it as it was negotiated. haidi: a lot of critics are saying that without the u.s. and relevant. it is not you think now is a time to get china involved, or is there not enough time? to have theou need tpp in place before you bring anyone else in. the goal now is to have it, start it, and then once that happens, you bring other people on board. it is important to expand it in the future, but it is important to have a framework locked into place and bring more players in. forward,of 11 goes there will be a lot of interest in adding on, and it will be of interest to small countries, big countries, china could come back in. i think the u.s. will come back in. this is the kind of transformative agreement we have not seen before. haidi: great to have your insides as usual on the tpp.

up, always optimistic, jamie dimon talks about financial reform under president trump. our exclusive interview is next. this is bloomberg. ♪

morgan as confident about the bank's ability to boost market share despite growing competition from rivals. we spoke exclusively to jamie dimon in riyadh. will double in size and the next 12-15 years. there are plenty of opportunities and threats, but we have spent a lot of money in technology could we know what we are doing. we operate around the world. emerging markets will grow twice as fast as developed markets, so we are comfortable with our future. >> can you break down the areas where you trying to grow market share.

>> i want to grow everywhere. and suppliers,s that is completely understandable. certainnt banking, areas may be harder to gain share, but it does not mean you can't gain share, so we have not given up. we know it will be a little harder. >> what about fixed income as your competitors are trying to beef that up? >> we have good share, and hard to gain, but if you look at the buter of the share, yeah, there are things we can do better around the world. a lot of it go to technology. we have build it to maintain our share. competition is a good thing. i have never been worried about competition. you want a competitive world. >> as long as you are better than them. >> that is our goal. that's what we try to do. >> we talked about regulation in paris. what is the mood now?

are you so confident in the future for wall street? >> yeah, when i talk about regulation, the trump administration wants to deregulate things. it has hurt all citizens of these countries, not just j.p. morgan. i am still optimistic we will have some regulatory reform. after years of regulations, it makes sense. say my democratic friends it makes sense to make it better and simplify the burden on businesses to help people expand employment and grow the economy. no one is asking for a wholesale throwing out of regulations. just improve what was done. our exclusive conversation with the ceo of j.p. morgan, jamie dimon, optimistic about regulatory reform. for is on the agenda president trump been derailed or sidetrack amidst the turmoil

going on politically in washington. coming up, we will be live in hanoi to assess the outcome of the trade summit and ask what is the future for the tpp? this is bloomberg. ♪

kong,almost 10:00 in hong 10:00 in new york. this is bloomberg markets: asia. >> cathay pacific takes off in hong kong after concerns of job oil and energy giving markets a lift with global equities nearing record highs.

asia-pacific trade ministers are worried about rising protectionism but there is no mention of it in their post summit communique. we'll be live in hanoi. a calm her start to trading after the turmoil of politics in washington last week driving to we have balanced back, seeing nice gains. has been a lot of question as to how much further to run. 8501 on your terminal. a little bit falling over when it comes to crude. you can take a look in terms of accents. stocks and bonds -- they have correlated. the question as to whether this reflation is going to play out when it comes to ems. that doesn't seem to have been correlated in this pattern. we also have upside when it comes to positive news.

outa getting ready to roll the tax reform plan before the united states has gotten there to see what tax reform in the u.s. looks like. particularly here in asia. indonesia trading is getting underway. let's go to julia to look at the record highs. >> a great start. 1.3%, adding to the positivity across the region. we have seen stronger oil prices playing into market sentiment. 0.8%.n see the asx 200 up you are seeing a little bit of flat movement coming through at the moment. 0.3%.up

we were just two points away. a bit more of a rally to go. we are still seeing multi-months highs did we had the trade data coming through japan. exports rising in april although they were shy of estimates. seeing some positivity coming through the hang seng index and 300.round on the china csi things are looking pretty positive on the back of what we saw on wall street. a lot of commentary that perhaps markets are starting to be less concerned with what we are seeing in washington and brazil. let's have a look at some of the stocks we are watching in the region today. one.y pacific is the big we are seeing some gains coming through.

it does appear that the market is getting rid of back office staff. takata rising for the second consecutive session. carmakerster we saw agree to that settlement. 4.5% in sydney. we heard the founder twiggy forest giving money to malcolm is thel saying that biggest donation from a living australian in their history. aussie's.te, go >> let's get over to another -- heidi is one of our own. >> president trump says the war on terror isn't a fight between

fates, easing concerns that america is at odds with islam. he told allies that they must not wait for the u.s. to attack militant groups. banpresident has tried to people from entering the u.s. from muslim countries. >> when young muslim men and women should have the chance to build a new era of prosperity for themselves, it has to be done and we have to let them do it. summitd's help, this will mark the beginning of the end for those who practice to ever and stride -- sprad its creed. a north korea fired medium-range missile on sunday similar to the one fired in february. young yang vowed -- pyongyang vowed to continued their weapons program. approvedil reportedly

of the deployment of the weapon. the missile flew 500 kilometers across the sea of japan. moon jae-in has nominated a finance minister and deputy prime minister. kim is a former vice finance minister. he faces a list of challenges including rising household debt. dimon remains optimistic about the global economy and the prospects of regulatory reform. speaking exclusively to bloomberg, he said even the traditionally cautious imf sees the economy growing faster than expected. some of america's biggest corporate names are in saudi arabia. growing more than it has grown in 15 years.

europe is doing rather well. america took longer, 2% give or take. even the imf which is always worried a saying that the world is going to grow faster than expected. leadersoft bank announced the first bank -- more than $93 billion. backers including the saudi investment fund, apple, foxconn, and sharp. atop $100 expected billion and it will focus on startups in the united states. news 24 hours a day powered by more than 2600 journalists and analysts, this is bloomberg. >> thank you for that. trade and the threat of protectionism dominating opec talks in hanoi.

the post summit statement made no mention of the subject. that tells us about the increasing pressure on trade ministers not to criticize isolationism. our correspondent haslinda amin is there. what was the mood? some disappointment. opec ministers fell short on the commitment to resist protectionism. no mention whatsoever. it is pretty reminiscent of what happened at the g 20 summit with the u.s. put a lot of pressure on leaders against any strong wording of protectionism. we heard from the russian trade minister. he said it was a dispute on the final statement leading to the diluted one that we saw released yesterday. the u.s. is represented by the newly appointed u.s. trade representative, barely two weeks on the job.

he provided little guidance on the u.s. trade policy in this part of the world. all he said at that the u.s. -- we do not really know. he also maintained that the u.s. will pull out of tpp and what it wants from the asian partners are pretty much bilateral trade deals. precisely such an arrangement worries the wto chief. he said that is the biggest risk to the multilateral trading system. >> the biggest threat is for countries to decide to do things on their own and to take unilateral action. once they do, and this invitation exists. whenever you have a sluggish economy where you have stagnation, the tendency to find solutions looking inward is higher. the fact that the ustr was

present at the meeting a significant. he is newly appointed an effect that he is here show some kind the apecss to trade in region. >> was there any progress made over the weekend? we knew that tpp talks were taking place. there has been a lot of dark clouds over the future of this deal. >> you are right. talks thatst the tpp took place. this morning, some trade ministers discussed the alternative trading arrangement. what is significant is the fact that this meeting is the first meeting held after the u.s.

pulled out on my four months ago where malaysia, vietnam, and japan questioned the validity of the trade pact. this time around, there seems to be more consensus of bringing it forward. the question is, how? take a listen to the new zealand trade minister. >> agreements could enter into force. if we have time and the desire to work in detail to see what it should look like, aren't ministers could make a decision. i am not optimistic -- i am optimistic. [indiscernible] a senior tradepec -- senior trade apec officials will reassess in november. >> thank you so much for that.

we would like to bring one feature to your attention, our interactive tv function. you won not only be able to watch us live by catch up on previous interviews like our conversations with dimon. you can dive into securities and functions. become part of the conversations by sending us instant messages during our show. this is for bloomberg subscribers only. still ahead, the biggest mystery of all. we analyze asian central bank policy revealing which policymakers take the markets by surprise. next, supporters of president uhani celebrating. this is the break. ♪

-- this is bloomberg ♪

this is bloomberg markets: asia. a quick check on the latest headlines. we may see a transit and a deal to create a chemicals company. sources say the texas-based companies are in talks to merge. the companies have declined to comment. profit, $360 million. -- a 10%t also says rise from one year ago. sharp is planning to apply for a relisting on the tokyo stock exchange.

subaru may make an electric version of existing models. the company plans r&d this year. the ceo says that would let subaru recapitalize on its reputation for safety and eliminate the need to find a partner. presidentlected strengthened his position on sunday. the victory comes while president trump bolster ties with saudi arabia. yousef gamal el-din is in tehran for us. >> a resounding victory for the incumbent president hassan rouhani. turnout at 70%. 57% of those voted for him.

for thedorsements policy of opening up to the west. congratulations have been coming from the likes of the russian president and the eu foreign-policy chief. there are some challenges ahead. the first challenge will be on the domestic front. the country's highest political authority remains the supreme leader ayatollah which my keep some of those ambitions in check . on the domestic front, in terms ofthe in pact -- impact sanctions and unlocking those with the business of the donald trump to riyadh and that aligns with saudi arabia strengthening it could mean that a-rod has his work cut out for it over the next two years. yousef gamal el-din, bloomberg tv, tehran. next guest says that the violation of the nuclear deal may mark a new era of u.s. and

iran confrontation. joining us as the president of the national iranian american council. the rhetoric that came of the week and was extraordinary. you are saying it is more than rhetoric signifying a more sinister strategic positioning of the donald trump administration. >> i certainly think that it is leading in that direction and i want to be clear. thatnot necessarily saying is the long-term intent of president trump did that is because i do not think he thinks in the long-term. when you look at what this saudi arabia's have been pushing for, when you look at some of the things that general mattis has written in the past, it does seem to indicate that there is an effort to move in a direction of isolating iran once again and confronting iran. one can make the argument that there is a lot of policy that the iranians are pursuing that

are problematic and it would be desirable to see them change the we have a clear example of what works when the west tries to change iran policies and that is in the negotiations that led to the nuclear deal, through engagement there is success. isolation confrontation has three decades of failure. that is why i think it is quite worrisome that the trump a pathtration has chosen that clearly will lead them toward failure. there isve pointed out historical precedents for what happens when you combine these elements of isolation with a call for regime change. >> certainly. what we saw in the 1990's is that the iraq liberation act was passed in congress which made official u.s. policy to change the regime in iraq in baghdad and getting rid of saddam hussein.

that was combined with and isolates and policy. that laid the groundwork for the iraq war later on. spark andeeded was a the desire of the bush administration to use that 11 to justify war was all that was needed. is dangerous territory particularly mindful of the fact that we know that diplomacy works. two days ago, you ron overwhelmingly went out and they elected a person who had promised more engagement with the world and wanted to have better relations particularly in the u.s.. was that president trump clinched his fist and called for a isolation. of and clearly run on the honey -- president ronnie -- ability to make his election promises of opening up more to the west and

potentially securing nonnuclear sanctions to be listed -- is that really dead? >> i do not think so. what is very clear is that europe and the united states are going in different directions. europeans the nuclear deal was necessary to get rid of any opportunity for the iranians to build a nuclear weapon and be able to lay the groundwork for a more inclusive regional security dialogue to include iran and saudi arabia. that is the path that they want to continue to go down on. the united states is going in the opposite direction. you do not have unity in the west when it comes to the middle east and iran. that gives the iranian president an opening in which you can further iran's relationships with the united union --

european union. the iranian people would like to have a better relationship with the united states as well. >> does this also provide more fuel when it comes to iranian hardliners, their argument. you are saying this is going to be more carrots and sticks for them. >> the hardliners are going to say that their narrative has been vindicated, that the united states does not want to have that are relations with iran. there is little the iranians can do. at the same time the iranian people have chosen a different path. cast a vote for someone who despite what donald trump said -- [indiscernible] they decided to go for moderation.

they are hoping that the united states would reciprocate. inside.nating thank you for coming on for us. coming up, reaction to cathay pacific's plan to add hundreds of jobs. this is bloomberg. ♪

shares areacific soaring today after cutting staff. the carrier says 25% of management and 18% of non-management will leave by the end of the year. let's get some background on this from our equities reporter. i want to pull up this chart showing you how difficult it has been for their ceos to maintain

any kind of investor return. the best performing one was actually tony tyler, with the return of 0.4%. 0.8%, i should say. the others were in the negative. is this going to be the turnaround in terms of the restructuring that investors have been looking for? >> it might be and certainly analysts and investors seem to believe that. if you look at the first time when these speculations came into the market, cathay upific's stuff -- stock was 15%. be adding --to rewarding the shareholders. the market cap has improved by $600 million. cathay pacific trades.

had an official impasse which talked about cathay pacific looking at cost savings. they are on record talking about 30% of cost savings. how these cost savings flow to the net profit or the earnings level, that is something that needs to be washed out. markets are probably trying to earningsckoning multiple to cathay pacific believing that the turnaround might happen. the ceo said that this is the first step in the transformation plan, which might include more staff cuts. using pacific may look at narrowbody aircraft in the future to make sure that it turns profitable.

>> could be the first of many rounds, i guess. boss has closed the first round of the vision fund. we will be live in tokyo. ♪

♪ i am paul allen with the first word headlines. ministersic trade issued a diluted statement suggesting pressure behind the scenes to avoid criticism of protectionism. it focuses on protectionism red tape and regulation. in peru, ministers reaffirmed their determination to resist protectionist measures. the annoying meeting -- high noise -- under weigh khalid al-falih said maintaining

restrictions will trim stockpiles to a five-year average. he also said opec members and leading independent will make decisions in vienna later this month. >> i have not spoken or heard any country that is against the extension. everybody wants the extension because we realize we have not achieved our objective of bringing global inventories to five-year levels. has urged theemer supreme court to suspend a corruption inquiry against him, claiming evidence was doctored. he says he was set up during a taped conversation and the recordings fail to support allegations against him. stocks in the currency slumped when prosecutors said michel temer engaged in passive corruption. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg.

haidi: thanks for that. let's get the latest on the markets. it is looking pretty good. we have that positive sentiment from wall street friday night. analysts arer saying that investors are taking the turmoil in washington and brazil more and stride than what we saw at the end of last week. crudeo have that firmer price lifting players in asia. hang seng leading, up .9%, australia also looking good. a rally in oil players, but iron in had its biggest gain three weeks, up 2%. jakarta up by .8%. for jakarta has been up to 6300 after s&p upgraded the country's rating to investment grade, and a record

high for the indonesia jakarta composite. some solid moves from emerging-market currencies. weakness, taiwan and south korea doing well. sessions,e last three up .9%. the oil price driving momentum in asia. a three day chart shows crude continuing to rise, close to that $51 a barrel mark after saudi indicated that everyone will join in with the opec cuts. , energyok at that players right across the region rising. sharply, origin in sydney up 4.5%, and malaysia looking good. the oil story plays into the airlines, but there is a lot of news around the airlines as well. cathay coming off the morning session, up 3.5% early, but

firmer by 2% after it confirm 600 job cuts. falling by 7%ines on friday to a six-year low after posting a quarterly loss in the fourth quarter, its first quarterly loss in three years. airport one to watch, down slightly in the sydney session. there had been a malfunction at sydney airport which saw a lot of flights delayed. the rating also cut to neutral by macquarrie. pretty positive sessions region ons across the the back of that rally in oil and after wall street. effortsespite your best by being in red today, thank you for that. the fed reserve clearly signaling policy moves, but asian central banks continue to raffle in the element of surprise. a review of policy reveals that

the pboc and perhaps more surprisingly the nas have then least predictable. what with the findings? no surprising the pboc is erratic, but singapore you would expect a greater degree of communication. >> yes, you would think so. pboc monetary authority, singapore, and the reserve bank of india topping the list of the hardest to predict central banks in asia. spectrum,end of the the smaller economies in the region, taiwan, philippines, thailand, central banks that are the easiest to read. strange takeaways, surprising takeaways, was there does not seem to be a brilliant correlation between transparency and predictability.

ok banks like the pboc are difficult to read, but transparent banks like the bank of japan also scholarly -- score highly in terms of their ability to surprise investors. is quiteat interesting, that lack of correlation between predictability and transparency. you are talking about surprises from the major central banks. of the a sense resilience in the markets and their ability to deal with any sharks that come from the surprising decisions? that come from these surprising decisions? >> if we look at a market like japan, a deep, liquid on the market, and that means in the event of a central bank surprised, yes, an impact, but an impact which perhaps the more easily.sorb one of the smaller banks in the region, a much more thinly traded market, a surprise there

would be more difficult to absorb and could be one reason why the smaller central banks do tend to provide clear guidance to the market on the direction of their decisions. the pboc though, despite its efforts to be more be morerent and community cap, the language -- more communicative come the language is difficult to parse. clear, we have to be about the trajectory for the pboc. the trajectory is fairly clearly away from opacity towards transparency. we saw that last year for example with the governor and others coming out and providing clear steer on where the pboc wants to be in terms of the exchange rate. said iname time, comparison with other major central banks in the region, the pboc still looks pretty ok.

they don't have scheduled -- pretty opaque. they don't have scheduled meetings. they don't publish the minutes of the deliberations on monetary policy, and so it main's -- it remains difficult to understand the thinking of the pboc. haidi: thank you so much for that. soft thanks masayoshi son has formally announced -- softbank's announced $93has billion contributed to its vision fund. , so much speculation over the last few weeks over when this fund closes. who is in, who is out, and what comes next? fund has taken a while to close. softbank announced plans to raise the 100 in dollar fund in october last year. they had a signing ceremony in saudi arabia as the government

there gathered with donald trump among others, and the cornerstone investors will be softbank itself, the saudi sovereign wealth fund, abu dhabi , apple and qualcomm coming in. one name that is not mentioned that we heard early on is larry ellison. it is not clear whether he will invest at a later time, but now masayoshi son has this war chest and he's ready to go out and hunt for more deals. haidi: what are the plans for the fund? softbank has been an active investor over the years. chipmaker, arm, the acquired control of sprint early on, and have been making venture capital investments around the world, including didi, the right hitting company in china. now masayoshi son says cc greater opportunities ahead to invest in cutting edge

technologies like artificial intelligence, the internet of things, to have this capital to cut deals. most of these deals will be in the $1 billion range, which are big for venture capital, but small for him. he will probably do some bigger deals in addition to that sort of on the scale of sprint or arm. haidi: we have been talking about these pt evaluation -- peak valuations, so what does this fund due to valuations? >> it is fueling concern about that. a private equity market that appears to be overfunded with returns going down. there is to come much concern about to much money chasing too many deals. you have the largest investment fund coming into chase deals in addition to that, so there is concern he will drive up valuations, pushed down returns for other people. he seems focused on what kind of

deals he can cut and what kind of investments he can make himself and for his investors. an extraordinary number we are talking about with the vision fund. thank you for that. our managing editor for technology, peter elstrom. trump told leaders that the war on terrorism is not a fight between different faiths . he spoke during his inaugural foreign trip. trump told leaders our white house correspondent has been traveling with the president. >> president trump means business. in his first foreign trip to saudi arabia as heart of the president's first international trip, the president announced a multibillion-dollar deal with s, including a $109 billion defense deal. he said the deal will help the united states and saudi arabia defeat terrorism. the president delivered a conciliatory tone different than

the one he delivered on the campaign trail. he said the battle against terrorism was one against "good versus evil" and called on leaders of all muslim nations to work together to defeat terrorism. he also criticized iran, accompanied by members of his family including the first lady, the first author, and senior administration officials, president trump received a warm welcome from the king and the saudis. he will travel to israel to meet with benjamin netanyahu, then the vatican city for a meeting with the pope, concluding the religious portion of his first international trip. then he heads to brussels, where he will attend the nato summit, dentist to sicily for meetings with the g7. a busy week ahead for the u.s. president. coming up, rising protectionism was one of the main topics at the apec summit, but no mention

of the meeting or a threat in a post-meeting communiqué. more on that, next. this is bloomberg. ♪

haidi: this is "bloomberg markets: asia." i am haidi lun in sydney. u.s. protectionism was one of the top topics at the apec at the weekend. we spoke to the wto on the event and thehe director said the biggest risk to global trade is one country acting alone and disrespecting the acknowledge system. has been a modest improvement. numberspect for 2017 for trade that will be higher than 2016. in 2016, 1 .3% growth. 1.8% tor, we expect

three point 1% depending on the environment, so we will be better, but still below the historical average of trade growth. treating --the u.s. retreating, what message would you like to send the u.s. administration and the newly appointed trade representative. >> the messages trade is not easy. it is a very complex equation. you moves something here, something else is affected somewhere else. the devil is in the details. you have to look at all of this and a very careful manner because all those dots are connected somehow. new administration is new on the job and just took office, and they are thinking about all of this very carefully. >> from your perspective, what is the biggest threat to the multilateral trading system right now.

>> for countries to take unilateral action and do things on their own. and this tim tatian exist that whenever you economy,ry sluggish near stagnation, the tendency to find solutions looking inward is higher, and if people do that, look inward and take unilateral actions and disrespect everything before, the tendency is to have a domino effect where you do something and someone else says, i will do this, then you get into this downward spiral which will be extremely negative. that happened in the 1930's, and we know the result. at that summit, pressure called on the u.s. to provide more clarity on its global trade agenda. the russian economy minister discussed his concerns about u.s. policy. >> i believe it is not only us.

it is everybody in the form that once clarity. they want to know what the u.s. thinks about trade policy. when there were talks about the memorandum of the form, 20 countries that agree on everything come and one country that doesn't agree on anything. >> have you approach the u.s. for a meeting? >> no. >> you intend to? >> no. >> have they approached you? >> no. we can get into the politics. there are a lot of u.s. companies working in russia, and we were not putting any pressure on those companies and they were doing perfect business in russia and continue to do so come so we look at the situation from an economic angle and continue to work with the companies. >> globalization, the impact of that? >> what we have heard from this form is that all the countries

are supporting free trade and supporting development imitating barriers, strong position from china. the u.s., does the pivot to asia make sense? >> we were working with asian countries before this and will continue to do so. job indoing a great terms of trade relations with japan, and are working with the asian countries. we are always open. you see as the biggest risk to global trade and growth right now? >> the section this in. everybody was mentioning this story today, more barriers, higher tariffs, so all this stuff will be having a negative impact on trade growth. trade is not going that fast in , so if thisr

negative trend will continue, it will negatively affect global growth. haidi: does the russian economy minister -- that was the russian economy see minister. bloomberg has been told that an investment consortium made up of goldman sachs private equity and china -- has agreed to buy icon cancer care. the group has agreed to pay more than one billion aussie dollars, seven hundred $50 million, for the company. sources say the announcement may be made sometime this week. agreements with dealers in china, ending a dispute to start producing audis. previously, vw made audis exclusively with sa w group. the tie up sparked concerns amongst audi dealers that the profits could be under threat.

the deal now means that any cars will be distributed through the existing sales network. new installment in ridley scott's science-fiction aliens series snatched the top spot, toppling guardians of the galaxy. the movie made its debut with sales of $36 million according to an estimate. -- guardians of the galaxy came in second. falling that is everything, everything, and diary of a wimpy kid, the long haul. pan,ng the dice and jim gambling giants ready to raise the stakes and local governments criticizing the bidding process. that is next. this is bloomberg. ♪

haidi: this is "bloomberg markets: asia." i am haidi lun in sydney. casino operators prepare to gamble on japan, some parts of the country might he out of luck , rural areas and smaller japanese cities that could be overlooked by investors. latest the filament plans, and is at the fact that they are only interested in the major cities? latest plans, the newest guidelines released by

the government about the bidding process to obtain a license to operate casinos in japan say international casino operators must partner up with the city government and submitted this is proposal to the central government to receive a license to operate. some of these local governments have not been very happy about this because a lot of these big operators like mgm and sands have indicated they only want to build out in a big city like a big city like osaka, tokyo, or yokohama that has the high populations and access to the international airports to justify their investment. are we talking about here in terms of the local governments that have been unhappy? what are they unhappy with? is it the fault of the developers? i think they are unhappy because this bill, the

legalization of casino gambling in the building out of these resorts, was sold as a way to grow the japanese economy and to bring more tourists in, especially to these smaller cities and rural areas where they said a potential casino resort may be located. now that they have two partner first, they are worried that some of these big operators were only want to go to these big cities and not them. haidi: what are some of the other concerns around the new framework? there are a lot of concerns for something that hasn't started to take lace yet. you are right. some of the other things, the details are not fleshed out, so when knows what the tax rate will be. a lot of the operators need to

know this in order to do their own numbers and see how much they may invest. one other issue is that any in the nation -- any implementation will have to address the issue of problem gambling in japan. low support because people are worried about gambling addiction, so any new framework will address this and it has not been many details about it. haidi: do we have a timeline we are looking to at all? the implementation bill is currently being written and expected to be finished this summer. in the fall, it will be debated and voted on by japanese parliament, so the ideal timeline for them is that it will be finalized by the end of this year. haidi: thank you so much for that. let's get a quick check of the state of play when it comes to trading the region.

a brand-new trading week in tokyo, some canes -- gains on the 225 being held hostage by that stronger yen, saber rattling and missile tests out of pyongyang. taking a look at sydney, asx theed by this bump up in oil price going into the opec meeting, expect haitians of a nine-month extension for that -- expectations of a nine-month extension for that supply cut. bring updities complex those materials names. singapore, a gloomy day, unchanged when it comes to the markets there. this is bloomberg. ♪

>> it is almost 11:00 in hong kong. i am angie lau. david: we are in the middle of the first trading session of the week. welcome to "bloomberg markets: asia." ♪ angie: oil and energy give markets of the with global equities new record highs. the yen has given up early gains. david: cathay pacific one of the winners today after confirming the loss of 600 jobs, 25% of management. the saudi energy minister

tells bloomberg that everyone is on board with new output cuts. khalid al-falih expects a nine-month extension. asia-pacific trade ministers are concerned about rising protectionism, no mention of it in their post-summit statement. , have a look at markets, a good day to be singing a song when you look at markets across the region right now. have a look at my gmm function. we are close, a fraction from the recent high, which would take us to levels last seen two years ago. session highs at the moment. ofumes on the lighter side 30 day averages. fx, the did for emerging fx, sterling under pressure, oil all ahead of the big

week in which may well determine the markets narrative on what the fed will do. have a look at the bond markets, a big did following the upgrade of indonesia. there we go. a lot of the sovereigns, u.s. 10 year there. angie: singing a happy tune, but perhaps in north korea, causing consternation amongst doves as it were, and windows cry, i guess you could say, but north korea firing that other ballistic missile. it is the second one sense moon jae-in one and south korea's presidential election, and that has south koreans talking about it and whether or not that dovish tone it should be extended. if you look at the bloomberg at , no worries.

that is because growth is holding up well. global demand is positive for south korea. , dive into331 your bloomberg with me right now on tv . the price of the korean won in terms of insurance is more risky. the price of the korean on protection is the same as thailand's, david. moody's saying likely to keep key rate steady due to weak domestic spending. aat all-time low of 1.25% for 10th straight month. let's get the first word news. thanks.

cathay pacific shares rising after confirming that nearly 600 staff will be let go and its biggest round of job cuts in two decades. 25% of management, 18% of non-management, are to leave by the end of the year. cathay is under pressure from cheaper rivals. last year it saw its first loss in eight years. president trump has told arab leaders that the war on terrorism is not a fight between different faiths, easing concerns that america is at odds with islam. he told middle east allies that they must not wait for the u.s. to attack militant groups, but ensure that terrorists find no sanctuary anywhere. the president has tried to ban people from muslim majority countries from entering the united states. >> when young muslim men and women have the chance to build a new era of prosperity for it themselves, it has to be done,

and we have let them do it. this summit will mark the beginning of the end for those who practice terror and spread its vile creed. itnorth korea has confirmed has fired a surface to surface medium-range missile, similar to the ones that first fired in february. pyongyang criticizing the u.s. for caring out more games with south korea. then the soul flew about 500 kilometers across the sea of japan. asia-pacific trade ministers issued a diluted statements, suggesting pressure behind the scenes to avoid criticism of protectionism. it focuses on regulation, red win, and contrasts strongly ministers reaffirmed their determination to resist protectionist measures in peru. the meeting also going to pursue a regional trade deal even without the united states.

is a lot of unity amongst countries and a great desire to work together to come up with an agreement amongst the 11. it is also open to other countries who wish to join. >> global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. angie: asia-pacific markets extending gains we have seen on wall street last week with equities lifted by oil and energy producers. it is a different mood to the one we saw when president trump's announcements were unsettling investors. guest joins us now from singapore, mark, i want to start off with japan. we have some trade balance figures. week on the export side, how do you feel about japan as part of the global story? >> angie, i love japan.

market, it is a one trick pony. it is very much about the yen. i don't see a lot of yen weakness in the future, therefore i can't really get excited about japan. angie: not helping is this talk about the fed raising rates, and when they do, that has a detrimental effect on the yen as well and its ability to help exporters in that country. out thisre coming week. how do you think that conversation at the fed is changing based on the recent activity in the white house? i think what they pay a lot of attention to is the stock market. it is the only central bank i know which is so sensitive to the stock market, so i had been

expecting that we would be falling more now after all the kerfuffle last week and talk about impeachment. all beers inre not favor of a rate hike. what i'm trying to say is that if the market had continue to fall and the fed thought we june,need to do it in that on balance, we are looking for two more rate hikes this year. i don't know if it is june or later, but that is how many we are looking for. angie: where do you see the data track coming in from the united states as it helps with the fundamentals of that rate hike? do you think that the fundamental support that continues? >> the philadelphia fed manufacturing business survey was out on friday, and the number is not on the tip of my

tongue, but it was a strong balance and that is generally thought to be a good window on the isn purchasing managers index, which will come out next week. that is the first major may data point we have had, so then if i look at the atlanta fed gdp now forecast, it is also looking like the second quarter will be a big improvement on the first quarter. what we are seeing so far is indicative of a better second better, a significantly second quarter, then the first quarter in the united states. upid: rates are going to go to that is some us certainty. the question is when. when i look at the spread between the two and the 10 and the inflows into emerging market doesn't seem like anyone is in position for this.

i'm wondering if the bond markets are getting this one wrong, and whitey think we are seeing what we are seeing here? >> i think it is politics. that if youidea was had tax cuts and infrastructure spending starting to at least we outline of them coming and right now, then that would be supportive for an acceleration of growth in the united states versus the rest of the world, and therefore there was a case to be made for rates going up. you are right. we have given it all back, the speculative positions are now long treasuries. they are the longest they have been since 2008, and the curve has totally changed. i looked at the largest companies with the hefty us -- hefty us to tax bills, the companies a pay the highest present of corporate tax, and

there sure prices which initially popped, came all the way back down. the market is pricing in a very low chance of reform because all of all of the noise around russia and the fbi. i can't really forecast the future on that, but i think we are back to the beginning and the idea that rates are going to go down, the dollar will go down, i find it hard to believe. is in a lot of ways unbelievable when you look at how the market is positioned for this. i want to pivot to china, you are still constructive on equities there. we spoke to some people less week who started reducing their exposure to china because we have come up a long way. i wonder what makes you still constructive on chinese equities? mentioned the h-shares, one thing i would start with is saying that the to a-sharesh-shares

is still around 17%, and the a-shares should be included in the msci emerging market index next month, progressively of course. the fact is it will be the beginning of a process that that gap fade away, the discount between the h-shares and a-shares, and looking forward, we will see a inna-hong kong bond connect july. apparently authorities would likely to coincide with the 20th anniversary of hong kong returning to china, and to my mind the data is good. it's not too hot, not too cold, just nicely in the middle. if i look past the high-frequency data points, i noticed steel and coal production in china are decreasing. i noticed that wages are growth iso, wage

starting to gradually accelerate as a function of the aging demographics. notice wealth management products are being brought under control. , noticed the third tear cities inventory levels have collapsed, so that the oversupply is ebbing a case forere is being bullish on china. the renminbi is up this year, a sign of confidence. all of those reasons, david. david: right, stick around. we will be fleshing out your investment ideas across emerging markets and i want to ask you about china. butking around with this, later on, north korea fallowing to continue its weapons programs after another missile test on the weekend. we will see what that means for new leadership in seoul, korea. angie: more reaction to the shakeup announced by cathay pacific with the biggest round of job cuts in two decades. this is bloomberg. ♪

david: welcome back. this is "bloomberg markets: asia." a quick check of the business flash headlines. shark may see its first profit in four years, posting earnings of as much as $360 million this fiscal year. top 19.8 billion dollars, which would mean at least a 10% rise from a year ago. nikkei says shark is planning to reapply for listing on the stock exchange in early july. david: bloomberg has been told an investment consortium made up ic, pagoda have agreed to buy icon cancer care. anrces close to the deal say announcement may be made at some point this week.

audi has reached agreement with its dealers in china, ending a dispute sparked by volkswagen's plan to produce audis with fdic. previously, they made audi's in china with an exclusive group. the tie up sparked concern among dealers that profits could be under threat. the deal now reached means that any produced cars will be distributed through the existing sales network. let's continue our conversation with mark matthews. in the previous segment, we talked about your investment strategy. big tech ask you about names. most of the rally in the nasdaq and hong kong have been fueled by big tech names. would you touch any of these names right now? somethingg you that because they gotten so big that any index fund that tracks china

or global equities will need to own these stocks. with these stock prices be supported from here on? you have i think answered your own question because technology and the market have become the same thing. the five largest stocks in the s&p are all technology stocks. as i said earlier, i am surprised that they were not weaker today and on friday. backught we would be the of what was going on in washington and i thought the markets were looking for this excuse in may is a pretty lousy , to quote john kane, when the facts change, i change my mind. the markets are binary. either we take out 2400, and go up 20% or 30% quite quickly

because it would prove to be a teflon market, or we try and fail and roll back down and 5% of the 200 moving day average,. yes with the tech stocks, i would own them. that tech stocks in china are cheaper than the u.s., but they say -- they have the same double-digit growth profile. angie: where else do you find value. emerging markets that you presented in your research to us . take a look at 2017. i think that there is a lot of value in china. it is not in the stocks i talked about. those are expensive relative the rest of china, but china has lagged asia. it is a country that will be

perennial guilty until proven innocent, so there is always a wall of skepticism, but that gives it the valuation, and i do like china here. i think it would be one of the better markets in asia to own going forward. india, andan, korea, now indonesia, all piping hot markets. pick your favorite. >> oh, gee. that is a tough one. i think i have to say i like taiwan the most of the ones you mentioned between now and the end of the year because i used to live there in the 1980's, and i remember when the taiwan stock exchange was a 10,000, quite a bit about 10,000, in 1989 come and we are just about to break that now. we try to break it three times over the last two decades and those threeeach of

times, the market subsequently tumbled at least 20%, so most people in taiwan think we try 10000 and go back down. we just talked about tech and the strong earnings, and tie one is at tech market, so i think taiwan has some good likes to bring 10000 and go up quite a lot more. to leave it we have there. that was mark matthews. thank you for joining us. coming up on the show, change of direction, global trade ministers planning as the u.s. pivots towards tension is an. we will bring you a range of views from the apec forum. that is next. this is bloomberg. ♪

>> it is not only us. it is everybody that once clarity, what the u.s. inks about its trade policy. when the world talks about the memorandum of the forum, there

were 20 countries that gave everything, and one country that did not agree on anything. haslinda: have you approach the u.s. for a meeting do you intend to? have they approach to? >> no. discussion start the , we have said with respect to nafta, prime mr. trudeau has been clear that this is an agreement negotiated more than amended 11 ago and times, so we said we are happy to sit at the table. the u.s. side will have some things to propose. david: some of the views there hanoi.e apec meeting in pullingespite the u.s. out of tpp, japan says it can still work. speaking at the apec in vietnam, the trade minister urged unity amongst the 11 remaining tpp members despite president's decision to withdraw. the tpp is the only agreement

that has in-depth coverage of things such as digital trade, intellectual property, customs procedures, and so forth. only the tpp covers all these areas. it is highly regrettable that the u.s. decided to withdraw, but even without the u.s., trade remains hugely important here at -- important. david: we also spoke to malaysia's trade minister and asked about policy under president trump. >> we have read quite a bit about his contributions to america in his previous life. we have been following statements by mr. trump in the last few months. first, themerica and the to review nafta decision to pull out of tpp, so those are very important statements made by mr. trump.

clarity can you expect when the trump administration reverses policies pretty often? >> in a way, you are right. have a few months, there been some reversal of policies with respect to china. china is no longer a currency manipulator. in which the two countries will sit down and discuss how to narrow the trade deficit. so, yes, there has been some reversal with respect to mexico, with respect to nafta. they are going ahead with this review of nafta, and this will of the newation administration's trade policy. expect to rekindle

bilateral trade talks with the u.s. now that the u.s. is out of the tpp? >> firstly on tpp, we would like some clarity on the american position. we are still keen on tpp, but the level of keenness differs between countries. >> malaysia has been less keen without the u.s. and the tpp. record i have been on saying that because one of the reasons why we decided to be part of tpp was because of the potential access to the american market, and if that does not happen, then one of the major motivations to be part of tpp would be removed, so that is our position. angie: all right, some gains across the region, including right there in japan. we are looking forward to

business in tokyo, energy one of the biggest gainers as food and oil prices rally. we will get the latest on japan's reopening, coming up next. this is bloomberg. ♪

am stephen engle with the latest first word headlines. namedent moon jae-in has a finance minister. he faces a host of challenges, including rising household debt, youth unemployment, and weak domestic demand. softbank's masayoshi son announces the first round of capital commitments for his tech investment fund with $93 billion in the pot. backers include the saudi public investment fund, i'll go dobby, dobby --xconn -- apple

abu dhabi, apple, and foxconn. producersia says oil extend out could -- output curbs for nine months. says maintaining restrictions through the first quarter next year will trim output to a five-year average. he said opec an independents will make the decision in vienna later this month. brazilian president michel temer has urged the supreme court to suspend the corruption inquiry against him, claiming recorded evidence was doctored. michel temer says he was set up during a taped conversation and the recordings failed to support allegations against him. stocks and the currency slumping last week when the prosecutor said that michel temer obstructed a graft investigation and engaged in passive corruption. global news 24 hours a day powered by more than 2600 journalists and analysts in more

than 120 countries. this is bloomberg. juliette: mid session monday in asia, pretty good, thank you very much. the lead from wall street. and the wti rally oil contracts heading towards $51 a barrel, some solid support to energy players in the region. hong kong hang seng up .8%. price supporting all strays asx 200 as well. rise byhad iron ore 1.8%. indonesia's market meanwhile at a record high, the jakarta composite up .7%, the s&p upgrading indonesia to an investment grade market. philippines market also looking quite good.

some downside in some bonds coming yields rising higher, but generally strength coming through in equities and in some of these emerging-market currencies as well. that is the state of play across asian markets midsession on monday. david: thanks. there is a lot of love to be thrown around across emerging markets. just to pick up on what juliet pointed out, indonesia to take a look under the hood. #8751 on your bloomberg, we are theecord highs, poised for best on this market going back to december this year. is theond panel advance-declined line, still supportive of this narrative that the market could go higher. 6300 is the target for this index, some rough math, 10% higher from where we are. break, the range

in the rupiah, which has been stuck there since the february. bondinflows, specially the markets, but does it move the needle with respect to the currency? angie: the needle seems to be turning higher when it comes to emerging market equities over all. 8475, basically showing you that little blip above that the klein trend compared -- the decline trend is adding strength to this argument that we are seeing emerging-market stocks ,ould the on the rise definitely in the long term, and that is what mark matthews confirmed, a lot of analyst feeling some optimism when it comes to this region. absolutely. hopefully that trend just beginning to get broken there. cathay pacific shares higher

after confirming it will cut 600 staff in the biggest round of jobs losses in decades. 25% of management, and 18% of nonmanagement workers by the end of this year. of theet a background troubles of the carrier from our asian equities reporter. cuttingyeah, they are jobs, but that does not mean they are turning to business around, are they? >> this is the first step in the transformation plan that the new ceo has planned for the company. most of the restructuring will be completed by the end of 2017. if you look at how markets are reading it, they are awarding buying into the argument the company may be turned around. china air officials saying the company may save $500

million in costs. cathay pacific has said they are looking to cut costs by 30%. pacific travels at eight ebitda. , the the speculation market cap has increased by $600 million, which means some markets are trying to ascribe them earnings multiple. angie: how much is it specifically that bad fuel hedge it made, and how much is a broader industry malaise? >> that's right. pacific is out from the

expensive fuel hedges pacific, e long fuel costs as well, they increased by 4% to 5% in the ,atest reporting, which means and this is happening at a time when passengers are falling. there margin of revenue is lower than the margin of costs, so as long as that situation remains there, any airline would be making losses, so cathay pacific is actually looking to correct that. we are expecting more actions may follow suit. the airline might look to rationalize its cost structure, probably nationalize the routes, use narrowbody aircraft instead of wide-body aircraft. there are more actions expected and more news in the coming weeks. david: that is the hope really.

none have a buy recommendation come a not that we have seen that have managed to convince 1-5-14.es to go from that being said, do have a sense of what comes next in terms of restructuring? are we going to get anything has far as the marketing, positioning, or are we scaling down operations of the airline? about the sure marketing, but costs will be under the radar of management to be reduced. are looking for more revenue-generating opportunities as well, but they are expecting that would be more rationalization in terms of routes, unprofitable routes. they might be stopped or look to use different aircraft, and there might be more cost-saving measures.

the ceo is on record saying this is the first step in its transformation plan for the next three years. yes, analysts are not that if you look over the last four days, may 16 was when the stock made a low. the market,that to market cap has increased, so people are buying into this and investors are betting on the airline seeing a turnaround in the coming years. it is giving hard, that management is looking to correct that. angie: thank you. on to north korea, warning it will continue with its nuclear and weapons programs, warning south korea and the world after testfiring another medium-range missile on sunday. our asian government editor is here with more. notooks like kim jong-un is

giving president moon a chance for a softer approach here. >> this is the second test since moon won the election earlier this month. another medium-range ballistic missile. ift is not as provocative as he were to fire the icbm, which is what everyone is waiting for, which would trigger ramifications, but still causes unease and leads to questions about can the two sides cooperate. david: what is curious is the timing as well. i'm looking at some of these lines on the bloomberg. 9:40 one, we heard from the unification ministry spokesperson, and they are considering more ties with the north. what is that about? >> moon himself campaigned on greater engagement with north korea. you can see that in his team,

chief of staff, national security adviser, these have been people who have arranged meetings with the north over the years, who have pushed for greater engagement and dialogue with north korea, and moon is showing he will stick with that path. yes, despite these medium-range missile launches, we will press ahead with an gauge meant because that is how they think ultimately they will convince kim jong-un to drop his nuclear weapons program. much credence should we be giving these plastic missile firings? risk muted, the won equity markets in south korea the same as people on the street, just another day. so how much credence should we lend to this saber rattling? >> it is hard to say. threats a persistent

with north korea, and south korea have dealt with this for years. they are saying, we have seen this show before. a lot of times equities investors will follow that. there are times as city pointed out earlier this month, that this thing could get out of hand ready quickly if there are some miscalculations. if the -- there are a lot of moving parts with china. moon doesn't, if remove the missile shield, did they react again? does president donald trump to something it north korea fires in icbm? there are a lot of unknowns, and that is a potential risk down the road. angie: thank you so much for that. coming up, president trump's message to arab leaders on his first overseas trip. we will have all the details from riyadh next. this is bloomberg. ♪

david: welcome back. you are watching "bloomberg markets: asia." i am david ingles. angie: i am angie lau. we could see a deal to create a transatlantic chemicals company. huntsman are in talks to merge with clariant. companies have declined comment. produceubaru may electric versions of existing models in a drive towards battery-powered cars. the company plans a record investment, putting electric motors in current models rather than designing new ones from the ground up. says this would let the company capitalize on its reputation for safety and

eliminate the need to find a partner. inie: the new installment ridley scott's science-fiction aliens series snatched the top spot at the north american box office. it toppled guardians of the galaxy. the 20th century fox debuted with sales of $36 million. walt disney's guardians came second with $35 million. following that everything, wimpyhing, and diary of a kid, the long haul. david: president trump told arab leaders that the war on terrorism is not the fight between different faiths, easing concern that america is at odds with islam. correspondent for bloomberg is traveling with them. trip tos first foreign saudi arabia as part of the president's first international trip, the president announcing multibillion-dollar deals with the saudi's, including a $109

billion defense deal. he says the deal will help the u.s. and saudi arabia defeat terrorism. leaders of to the predominantly muslim nations, the president delivered a conciliatory tone different than the one he delivered on the campaign trail. he said the battle against terrorism was one against "good versus evil" and called on leaders of all muslim nations to work together to defeat terrorism. he also criticized iran. he was accompanied by the first lady, first daughter, and senior administration officials. president trump received a warm welcome from the king and the saudis. from here, he will travel to israel to meet with benjamin netanyahu, then to the vatican to meet with the pope, concluding the religious portion of his first international trip. then he heads to brussels, where summit,attend the nato soften d

then sicily, italy for the g7 summit. angie: saudi arabia and the u.s. signed deals with hundreds of billions of dollars during the president's visit. ramy inocencio walks as to the companies and cash involved. ramy: i want to show how significant this money is in terms of the possible trade between the u.s. and saudi arabia. function,e ectr the trade that happens between saudi arabia and its top partners. , $45 billion,ne but number two is the united billions.37 p we are talking about hundreds of billions of dollars when it comes to potential money flows between the u.s. and saudi arabia. let's take a listen to president himself about the actual number. >> yesterday, we signed historic

agreements with the kingdom that will invest almost $400 billion in our two countries and create many hundreds of thousands of jobs in america and saudi arabia. you were talking about the bullishness we are seeing on the markets. we are also seeing bullishness when it comes to saudi shares. index hastadawul jumped largely because of what has happened here. you can take a look at my terminal, that pop on the last trading day, 2% or so. saudis the inaugural huge affair to modernize the economy of saudi arabia to diversify away from

oil. let's look at some of the companies that are involved. ,he likes of general electric lockheed martin, raytheon, general dynamics, as well as honeywell. what we areion is talking about, in proving the country's power grid and energy capabilities. half of that will be coming from goods and services directly from general electric into the kingdom there. market, six billion dollars there to build 100 helicopters within saudi arabia. supposed to make 450 jobs in the kingdom there. martin says the kingdom has expressed an interest in doing more business, but $28 the $6 billion, billion more in terms of air, defense, and combat ships. raytheon was to establish a new branch in saudi arabia called

raytheon arabia. general dynamics wants to make tanks to look allies the design and engineering as well as the manufacturing there. that all is a huge number, but it is not all that there is. secretary of state rex tillerson $109they have inked billion just in terms of defense and arms spending. this is the biggest arms deal in u.s. history. we are talking about tanks, fighter jets, combat ships, as well as the thaad missile system. ceos from all these companies were present in addition to lockheed martin and dow, so a huge boon for all these companies as well as saudi arabia. successoming up, more for iran's reelected president. more from tehran, next. this is bloomberg. ♪

david: welcome back. this is "bloomberg markets: asia." i am david ingles. angie: i am angie lau. , gains what we see across the board in the apec region. nifty 50 little change, but now up .5% along with the sensex. the oill-falih says all producers he has talked to are "on board for a nine-month extension to output cuts" scheduled to end next month. he also said saudi arabia won't cover for any producer who "deviates" from agreed limits. i have not spoken or heard of thecountry that is against

extension per se. everybody wants the extension because we realize we have not achieved our objectives for bringing global inventories to the five-year average. >> are you concerned the market is pricing the production cuts in? a specificlooking to price print i have said that repeatedly. what we are looking for is an agreement, consensus, and clarity for the market that we are steady as we go, committed to getting inventories to the five-year average. there is stewardship of the , opec by a large group and non-opec, working together, and that should encourage investment. claritytive clearly is on where the markets going, so that people invest. i am less concerned about prices and markets over the next 12 months than i am after three

years come into this decade, short andies may be demand approaching 100 million barrels and we have the annual decline taking place, and unless we invest and overcome this with new significant capacity coming in, we will face a shortage, and we and saudi arabia don't want the market to be squeezed. >> i understand you are not targeting a price or want to talk about a price, but the shale producers are now part of the equation. let's say your production cut extension does not have the effect you want longer-term, would you think of overpumping so that the price goes down and you squeeze the americans out? been part ofever the calculus. we have never over pumped to squeeze anybody out. supply and demand he to balance, and we have said saudi arabia

has spare capacity, opec would do what is necessary, and we feel the market was fractured, ago witha few years the detergents between supply and demand, and any opec action in 2014 would not have done the so witherms of cutting, the restructuring of supply-demand trajectory that took place over the last two years, opec is now able to calibrate its supply with our great partners from outside to supply-demand balance together, bring inventories down, and give clarity for investment to flow back into the industry. david: iran's reelected president hassan rouhani strengthened his position as candidates won all seats, but came as president trump ulster ties with regional rival saudi arabia. a resounding victory for the

incoming president hassan rouhani from the iranian electorate, turnout at 70%. some 57% voted for hassan rouhani. it is an endorsement for his policy of engagement and opening up to the west. congratulations have been coming in from the likes of the russian president and eu foreign-policy team. bear and mind that there are key challenges ahead as he begins this second term. the first one will be on the domestic front, the country's highest political authority remains the supreme leader, which might keep some of those ambitions in check. on the domestic front in terms of the impact of sanctions and whether he will unlock some of those with the visit of u.s. president donald trump to riyadh , and that outlines strengthening, it could mean i ran has its work cut out for it over the next few years. yosef gilding angie: that is it for this

edition of "bloomberg markets: asia." david: a

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