tv Bloomberg Daybreak Asia Bloomberg May 28, 2017 7:00pm-9:01pm EDT
♪ >> a mixed start in the asia-pacific, dollar and the yen rising. 83 billion dollars, signs are global trade is strengthening. >> president trump's divided opinion, angela merkel hence europe and the u.s. are drifting apart. airline may leading list its shares on a foreign exchange. >> we have the world covered here on "daybreak asia" as we look forward to the sig summit n
asia. what happenedcuss on president trump's first overseas trip. we will analyze that and figure out what that means going forward. >> it looks to be a quiet week as u.s. come u.k., and china markets closed. that ninth ofring the stigma still, but a lot happening on the data front. speakers. several fed atindeed, let's take a look market reaction. markets closed on friday and unchanged on friday, a lot of
economic members straight ahead in the u.s., including housing, on friday. looking at the market so far, the only market open is new zealand, a touch lower here. to be starting things next given how thin trading is likely to be today, but heading lower when it comes to the nzx 50. let's head to australia real quick. we did see recovery after that group meeting. pretty soft open for the aussie dollar, but looking to the upside on the asx 200 today. japan, north korean concerns, , but someof risk off strength for the japanese yen,
-- 11.22 ithave seen a pause when comes to this equities rally, but it seems no surprise six weeks where stocks have surged to records. the breather we did get on friday come in indeed. let's roll the boards and how markets closed to finish the day ahead of a long weekend, no one wanting to take a strong position ahead of the long weekend. the s&p barely higher, the dow the nasdaq higher. , watchingto report the jobs report and the fed meeting in the weeks ahead, those will be the big factors for the markets.
in the meantime, let's get to first word news with paul allen. north korea has fired another missile, its ninth this year, seemingly in response to the u.s. beefing up its forces in the region. in whatnimitz will join north korea says his preparation for war. 14% inial profits rising april to more than 83 billion dollars, building on the jump of 24% in march, and 8.5% the year before. the national bureau of statistics said 38 of 41 industries achieved better profits in april than earlier thanks to strong overseas demand an investment. airways says most of its computer systems are running
normal again. the ceo says the carrier plans to operate all long-haul services into and out of london today come up at the after affects of the weekend direction will mean delays. german chancellor angela merkel has given the strongest indication yet that europe is drifting away from the u.s. under president trump. speaking to voters she said relationships torched since world war ii are "to some extent over." she was with the president at nato and g7 and said europe must now plot its own course and not rely on america and britain. president trump has lashed out at fake news after wrapping up his first foreign trip without holding a single press conference. only onedent was the of the leaders who declined to take a single question. house, the the white
president tweeted, "many of the leaks are fabricated lies made up by the fake news media." vietnam's prime minister says he is confident economic growth will meet the goal without adding to inflation. in that exclusive interview, the premier said the country is taking steps to boost the economy to keep its status as one of the world's fastest-growing economies. he will meet president trump at the white house later this week. strategye a detailed to achieve growth of 6.7%. i will give you a hint of some very good news. the data in april and may shows androng pickup in exports also agricultural production, and that will lay the groundwork for growth and third and fourth quarter this year. paul: 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. thank you so much. the week ahead on wall street will have a lot for investors to digest as they come back from their long memorial day weekend. su keenan more on what to expect. of earnings, a few reports and some headlines. let's talk about the economic reports. week, thesetes last numbers will be important. one thing front and center will be the monthly jobs report. economists surveyed say workers likely continue to be employed at a robust rate. we saw job growth supposedly expand at a steady pace in may. rate alsooyment seen as steady. is the highlight of a busy
week that includes personal spending, manufacturing. if we talk about what to expect, economists surveyed expect earnings growth to the field by spending or powering more alsoing and april, but seek factory activity expanding at a strong pace. thatd anemic growth in first quarter, so this is the expectation and any disappointment could have a negative impact on the markets. seen the market recover from that selloff wednesday, so what is ahead for the president now that he is back? su: he tweeted upon returning from the nine-day overseas trip, bashing the media for so-called fake news. when we look at his international journey, particularly the g7 meeting, was that he did not talk to the media, refrain from a lot of comments, and when he came back, it has been overshadowed by the
fact that there have been headlines about the son-in-law and russia. chart, to go into a #8821. when he was with the nato countries, he talked about spending, and that was anticipated. to the far right, you see an uptick and spending. we are expecting again trump to across alling sectors, and many on wall street say if he fails to do that, there could be negative reaction. some other trump headlines. he was concerned over increased media reports that his son-in-law jared kushner is perhaps involved in the russia communication probe. there will be more on that likely coming ahead. there is an expectation of the meeting with vietnam's prime minister, and the friday jobs report is expected to be something if positive that the
trump administration will take credit for. right. will see what happens when he comes back on. let's talk about the earnings and companies in the spotlight this week. andwe are getting detail end of the season, but being watched closely. packard is one of the severals, ryanair, and others. the auto industry is in focus because last month there was a big disappointment in the numbers, good, but not great, month is expected. one analyst from j.p. morgan is dayioning that the memorial weekend makes it a difficult month to predict because of that three day weekend and you don't know if people go to the beach or the lot. facebook and exxon also holding major shareholder meetings.
america are drifting apart has president trump refused to back the paris climate deal. this summit will be remembered as the first such meeting for four at the g7 members that was completely new theresa mayaders, of the u.k., donald trump of the anded states, and italy france. it was donald trump who became isolated on the issue of climate change. went so far as to say it was six against one around the table during the trumplate on friday when was unable to say how he would proceed on climate change and was unable to commit to the paris accords. angela trade, what
merkel said were tough, intense negotiations that lasted well into the night when they manage to come to her resolution which far official said fell back from what had been agreed in previous years. essentially many of these issues have been kicked into the long grass and it will not be before the g-20 next summer when we will find out how these issues will be resolved. and staying on that, president trump back in the white house saturday evening after a somewhat controversial his twitter which did not blowout. it was pretty restrained on his social media at the very least.
some of his advisers are saying this was a pretty successful that they could not have asked for anything better. what do you say? >> the expectations in the united states were rather low. was as long as cause aident did not major incident, aside from shoving aside the president of montenegro, it was a successful trip and the president managed to advance some significant deals with saudi arabia on defense spending. some goodnaged to do things during his other stops in israel, for example, so certainly his advisers will look at the trip and say it was a success. the question now is what kind of environment does he face at home as he tackles and the dishes -- an ambitious agenda. rift betweensing a
what is normally a very easy relationship with european countries, and in particular in germany. i wonder if he will regret that later. i want to play back for you some comments from richard haass and what he made of this. they see him and scratch their heads and go, this is not the united states i thought i knew. they loved barack obama. they were so comfortable. look at the difference in the between angela merkel sitting with barack obama and donald trump. it really is night and day. >> is that going to be something that will come back to haunt president trump? know that it will. first of all, president trump was going to reflect a certain withinuency certainly the republican party on the issue of climate change. there remain significant disagreement within the party.
he is reflecting a point of view that is similar to that of people he has appointed, people ,ike scott pruitt or rick perry people who are skeptical on this issue, so he was reflecting that skepticism, and there is no question trump is more comfortable with leaders in the middle east then he was in europe, and that reflects a change in tone from the previous administration. the substancejust with europe and the middle east, but also the mannerisms and the way in which the president conducts himself. political have the leverage to tackle what is happening at home, this crisis that seems to have only grown while he was abroad, talks of a private legal team, a war room, similar to bill clinton in his scandal. should we expect a different way the white house communicates with the public moving forward here? if it will bew
different so much as they will be taking all of this overhang from the russian investigation much more seriously and confronting it much more ahead on, which from a crisis communications point of view is probably the right thing to do. and theya is crowded will be competing for time and space, tax reform, health care reform, infrastructure reform, all significant issues that have big impacts on markets and issues the president has committed to handling. will he be able to do that while also fending off special investigator investigations? >> you see optimism fading when it comes to tax reform. , actual tax reform coming into question now. haidi think republicans are
viewing tax reform in this russian investigation, robert mueller and his probe into russian interference? i think paul ryan and mitch mcconnell and the senate leadership would do their best to keep the focus on issues and do their best to move the ball forward in the senate on health care reform. that will be the big issue during the july for holiday, and resteform is next up, and assured that paul ryan and mitch mcconnell and all the republican leaders in the congress desperately want to make progress on tax reform because they recognize that is an issue that for the most part unites republicans. some other issues, and for structure or health care, divides the party comes of get tax reform, better. >> i want to bring you back to some news that happened a few hours ago, north korea firing yet another missile test. i have not cap count, but this
is certainly the most i remember in such a short time that we have seen from north korea than in previous years. north korea clearly sending some signal here. reallyh longer before we need to see some action from the u.s. on this? anticipate we will wait much longer before there's going to be something definitive from the u.s.. meanis not necessarily military engagement come up at the u.s. has to figure out how they will directly engage north korea. this is something donald trump said he would do differently from his predecessor, and then he went on to have a direct -un, asion with kim jong lot of back-and-forth, no action yet. it is clear the north korean regime is trying to test u.s. and president trump domestically will have pressure
to act with respect to north korea soon. >> that's right. we have not talked on the other ther storm -- firestorm, firing of james comey. now there are these reports about jared kushner and his alleged ties with russia between the campaign and russia. do you expect that this will now escalate even further into involving jared kushner? >> it is hard to say. with respect to the investigation, this is one of the challenges the white house faces now, which is that a special counsel has been appointed, so in some ways the pressure is off them. u.s., these special counsel investigations can start a and wind up someplace completely different, so we will have to see where this investigation goes to that is of concern to this white house. it is like a cloud that hangs
over the entire effort of president trump to advance a conservative policy agenda, and submit to republicans around the country as well. >> great to have you. joining us from mountain view, california. one feature we like to bring to your attention is our interactive tv function, tv . you can watch us live in see previous interviews and dive into securities are bloomberg functions we talk about. you can also become part of the conversation when you can ask a question to our guest. this is for bloomberg subscribers only. check it out at tv . this is bloomberg. ♪
it by waiting several options for its shale unit. they will carry out a white a review of the energy operations. bhp has been claimed to have destroyed $30 billion of value. andrew mackenzie told investors that it will consider selling part of its energy portfolio. tosoftbank has declined comment on the fact it may raise its stake in nvidia. in's fourth largest shareholder with a holding valued at $4 billion. the ceo masayoshi son says he believes it is a leading tech investor in the world. and oh sockocasino from tokyo when japan legalizes gambling. to sayernment has yet where casinos will be allowed to
operate or who can run them. it estimates the japanese market could be the most lucrative in the world. prefer of it would osaka. fun, and we are a company that focuses on fun, entertainment, and attraction. we pride ourselves on having the hotel, restaurant, and topic top amenities. we have the most michelin star restaurants comes of these are the important elements we want to bring anywhere globally. >> i wonder how people in tokyo feel not being as fun? much more ahead. the latest numbers live from beijing straight ahead. this is bloomberg. ♪
yvonne: 7:30 a.m. monday, starting off with a beautiful weekend in the city. we are a few minutes away from the asia open. betty: it is a better weekend in new york, although it is hazy on the skyline. it is better than it was with the rainy weather the last 48 hours. p.m. in the big apple. yvonne: you are having a long weekend. first things first, first word news with paul allen. embattled south african president jacob zuma is said to have survived a bid to force him
from office. votedecided not to call a of confidence despite the president facing increasing pressure to step down. the decision to finance -- fire the finance minister in march sparked public protest and the credit rating to go down. police have arrested more people in the manchester bombing with 30 people in detention. they are working on the bombing, trying to determine if he was acting on his own or part of a wider terror network. the ariana grande concert killed 22 people and wounded 100. just downgrading the city debt rate was based on shallow evidence. hong kong schools relationship with china cannot be considered negative as the mainland has global growth.
moody's cut them for the first time since 1989, going with hong kong hours later. googles gameplaying artificial intelligence program created a three match sweep of it human opponent. this chinese player has been playing since he was 10 and said not a machine could be him. -- alphago is is perfect. veterans say it will be years before computers could master the game. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. ♪ thank you. we are counting down to the major market open in the asian fake. let's go to markets reporter adam haigh joining us from sydney. good story -- good morning to you. starting flat, seems like markets in asia are pointing to an uninspiring start. good morning.
fairly mixed start in 20 minutes or so with the japanese and australian and south korea sessions get underway. we have some news in currency with theith the rand development around zuma, looking at the rand as negative. going later on into the trading, we have china closed, the u.s. and u.k. close, but we are looking out for john williams' comment speaking in singapore. and into friday's jobs report in the u.s., that will be the latest review from the fed meeting next month. it is quiet for equities. the key fed policy. betty: related to that is the reaction of the bond market. we have seen yields continue to fall.
it is like investors are getting complacent volatility wise as in the equity markets. what is going on? just jump into the terminal and have a look at this chart, it shows you the reticence of the bond market to move further away with the 2.25 atn the 10 year at the moment. hike, 8%june fed rate chance of that happening, the disagreement is around the pace of that policy tightening over the next 12 months and how that balance sheet gets reduced in .ize there has been a lot of disagreement around that. expectations were made fairly weak.
numbersh and april cpi were weaker than expected. so the key thing will be the fed policymakers speaking, starting with williams in singapore today, and a few others. ,oing into the u.s. bond market that is the last piece of data before the fed goes into their quiet time ahead of the mid june rate meeting. although the u.s. bond market is closed for the holiday, we are keeping an eye on treasury futures tomorrow. much with a you so look ahead at the markets trading. , china'sabout the data industrial profit up 14%. global trade is increasing. tom mackenzie has more on what
the numbers mean for the chinese economy. china's exporters are humming along quite nicely in the month of april, up 14%. shows whathart that has been going on over a longer time. team just 2015 were falling, but they started to pick up in 2016, and december last year started to store -- soar until you had the increase in march. so it is still strong of course, but it will now be strong going forward given the data about the credit suisse -- squeeze. they benefit from the global demand we have seen in europe and the u.s. for chinese products. critics are starting to mount. looking next month it will be interesting to see if they
continue to keep down. over the weekend, we got a survey giving us a look at what we might expect from a. -- for may. a report that suggested investors are turning more sour on the sentiment regarding china. and the chance of small and medium-sized survey, pointing to eoncerns among china's s and and the cost of credit. we have sales managers as well. there were some divergence, more optimism not just in the service side of the industry but the manufacturing side. people still have relatively strong house prices. we have relatively strong consumer demand, and prices at the factory gate continue to
, but itelatively robust does suggest the second half we will see a slowdown. more indication on wednesday with the pmi manufacturing data and nonmanufacturing pmi data wednesday this week. yvonne: similar fashion, we might see some of this data ebb as well. looking ahead to the chinese premier, he will be heading to europe. what is expected to come out of this trip especially with the bold statements from angela merkel? tom: angela merkel pulling her punches in terms of climate change, talking about six against one in terms of the paris climate change. we are expecting a strong statement after the e.u.-china summit on june 2 from both parties when it comes to that climate change, pushing ahead with whatever the u.s. to -- does. trade will be very important for
both sides. the chinese wanting to build on the momentum they see they have gained from davos when president xi gave that speech about the belt and road initiative, try it -- trying to be the flag of the new global image. the chinese want to push the europeans on the market economy state that they feel should have initiated last year. the europeans are in fact looking at new measures to project -- prevent dumping, focused on's do -- on steel and aluminum. china and the european union are more online with trade in the u.s., so it is increasingly important. the new have foreign affairs questions around the south china's he but also more importantly -- the south china europeans wante
to get clarity what the chinese are doing to try to mitigate pyongyang's nuclear missile program. yvonne: thank you. up what we are looking for ahead of the data out of china. and a big week for the u.s. data front as well. facebook, jobs report, what to expect next from the singapore economist. this is bloomberg. ♪
i am betty liu in new york. yvonne: i am yvonne man in hong kong. the latest jobs report, a piece of data the fed watches to determine policy. , and forecasts, 185,000 the unemployment rate to hold at 4.4%. it is not just u.s. employment, japan also seeing the lowest jobless totals since 1994. let's look ahead. great to have you. we see the fed going to look at the we have seen for june, but we are seeing data in the second order, china and the u.s. going soft, money refusing to roll over. is it getting difficult to overlook the weakness in the data? thatrd: you are right, data has been solved. we have been telling people this is as good as it gets, looking for some slowdown after that to
help in growth. we saw in the last six to nine , i don't think it was dangerous or worrying. it is getting harder to find people that can use it. mentioned hard data. we have the expectation for soft data the husband -- that has been too soft as of late. we are showing breakevens across the board with u.s., japan, and germany going down since march. the same for real deal as well. -- yields as well. is there a higher risk that they will be making policy mistakes after june? june looksthink fairly safe. the jobs numbers have been terrific, averaging 185,000 this year.
the inflation numbers and the market, you have got a couple of disappointing numbers out of the u.s. to figure outing a technical slippage in numbers, or is it something they don't understand. start the focus on accelerating inflation. you should be skeptical of information that shows it as decelerating. inflation,un of soft but you will have to rethink, and that is with the breakevens are telling you. betty: we will see a lot more projections.ash we have seen that with the you say could but tighten every quarter until it hits neutral. any talk about how that is possible that the fed will start unwinding the balance sheet?
richard: we are thinking tightening every quarter would include announcements about the balance sheet as well. a rate hike every quarter, like december, maybe september this year they will outline measures for the balance sheet. you have to factor that in. if you are full employment and clearly going below full employment the next 12 months given policy settings, the fed has to start to shift the balance risks toward learning about inflation and normalizing interest rates. they say around 3%, but whether it is 2% or 3%, does not matter. it is a long way away. there should be a fairly steady flow of rate hikes. but with the employment situation like this, i don't think you want to sit and wait and see what happens next. you need a fairly standard program. betty: it is a conundrum.
the jobs market is so hot, but last week the inflation is not. it is nowhere to be seen for the fed, and it keeps confounding the market. i want to bring up this chart. this is going to my terminal here, which shows you how it is not only bond yield that is falling but mortgage rates as well falling in tandem with that. you might expect that, but it goes to show you these are the real world consequences with mortgage rates drifting lower. this could be good for the housing market. it could filter through into the economy, but it goes to show you despite the conviction that economists have with the rate hiking path, the fed saying we are on the path, it is not translating to the real world. this is quite right.
ratesevitably mortgage will come down with bond yields. the fed will be more concerned , thatinancial conditions shows conditions loosened over the past six months or so. that is the exact opposite of what you want. you put up rates to try to slow down the economy, but you have volatility is low. then the situation is more stimulative. i thought they would worry about that, another reason why many to keep on the tightening, until they get traction and see some slowdown in the job growth. the economy cannot tell just you creating all these jobs every month. they don't exist to do that, so you need to slow things down. betty: this is the $1 million question. why is the jobs growth we are seeing, why isn't it translating
into inflation? one thing that is going , wages are growing up shortly. -- slowly. i think the other factor is if you look at economy, the margins are going down. so the economy will pass on the increases through higher inflation. margins. accept profit economy wide, profit margins are falling. the company will say we cannot accept this, we have to push through price rises. when that have you get more traction in the inflation numbers. so far it has been surprising. go,ne: before we let you i'd ask you about china not just with the moody's downgraded but also the pboc confirming they will be tweaking the renminbi
exchange rate. do you think that will change how the market views what determined where it will go? what was the rationale? richard: i don't know what the rationale was, but i am not sure what the market thinks they will get out of the authorities. it has been clear the election in the u.s. they have been and theg the dollar basket has gone out the window. i would not worry too much about this. they are interested in whether they will keep on squeezing domestic liquidity and the domestic economy because movies illustrate the basic problem with this credit buildup. they will have to pay for some of those. ,he cost, behind the downgrade not just more downgrades the in thedisruption economy, they need to do something about it. it is more important.
great to have you. the chief economist at bank of singapore. you can get a roundup of the stories you need to get your day going with today's edition of daybreak. subscribers, go to dayb . can customize your settings and look at the news and industries you care about. check it out. this is bloomberg. ♪
we got the exclusive interview. we have been approached by some foreign stock exchanges including london, hong kong, and singapore which expressed their interest in our stock. we don't want to hide our hopes to become the first vietnamese company to list shares overseas. reporter: what advantages are there for vietjet? listing overseas from this would help us increase access to fund sources, boost trading of stock and expand the list of our investors, so we had -- hope to explore information to study thoroughly and select better. reporter: do you anticipate anymore purchases in the next few months or year? there is a big demand for
more airplanes in vietnam, and the population is 100 million people. we have just about 130 planes. that is quite low compared to other regional markets like singapore, malaysia, or just timeline -- thailand were there are 450 planes on 75 million people. looking at the numbers, we have ordered from boeing and airbus. we will need to order more aircraft. we will consider which type of planes and when to buy. reporter: do you have any future plans of having a long-haul route? long-held -- long-haul routes, it is the ultimate goal and dream of airlines especially budget airlines. for vietjet, we have a plan to develop long-haul flights with increasing cooperation through
kosher and interline with other airlines that have long-haul flights and written -- good services for the clients. we are actively increasing cooperation as a way to expand the road. developedyour airline international fame for one particular flight you had some time ago where the flight crew wore bikinis. do you have any future plans? >> the bikini show was done to bring droit, it -- joy, excitement to passengers on a city in summer. we want to send the message everyone is real -- free to wear whatever they like. our goal is to satisfy our passengers, so you asked me if i would do it again? yes. we will do everything to make passengers happy as long as it complies with aviation safety rules. betty: let's get to the business
flash headlines at this hour. the italian flight carrier alitalia has been hit by industrial action with hundreds of flights canceled on sunday. unions demand they nationalize the airline after years of losses. alitalia bases the second bankruptcy in 10 years and has lent more than half $1 million to keep flying while searching for a buyer. yvonne: west australia could raise millions of dollars by asking lenders for an iron or levy -- ore levy. warmroposal has had a loop response from bhp and rio. they want to reduce the $22 million debt pile which the government second take decades. betty: we have more to come with the market open in seoul, tokyo, and sydney.
u.s. and europe are drifting apart. >> this is the second hour of "daybreak asia" live from bloomberg's asia headquarters. >> it is just after 8:00 p.m. here in new york on the long holiday weekend. but feel like we have a sluggish start to the trading week in asia, in no small part to what we saw on wall street friday, hardly any movement, right? there will be are to digest this coming week and a lot of people don't want to take any big positions ahead of that data, including the jobs report. >> we do see china and taiwan closed here today. we will be hearing some fed officials before that blackout period in june. take a look at the market open, a muted start, mixed, so let's
get the latest with juliette saly. lowette: we did have that volatility from u.s. equity markets on friday, so not a lot of direction to markets in the region. when in doubt, it seems people do sell down in volatility. some more upside and south korea's market come one market not getting the memo about low ofatility or staying out equities. another record high in early trade come up by .3%. .25 percent,own and a muted start in japan and australia. lot for you to digest this week with the number of fed speakers. market at the moment, a lot of these commodity currencies still coming under pressure similar to friday, the kiwi off by .2%, taiwan up by .25%. at some eventsok
investors will be focused on. fed speakers,y including john williams, speaking in singapore today ahead of the june 13-14 fomc meeting where it is priced and we will see another hike from the fed. ecb president mario draghi will be speaking to parliament on monday. that's another one to watch in terms of european sentiment. and, the u.s. jobs report on june 2, a key one for markets. another big development in terms of the forex space, the rand, news of jacob zuma's future. the rand strengthened by almost 2% against the dollar late in johannesburg sunday. this is on reports that perhaps , but zuma would be ousted the rand has now paired a lot of those gains. this is as we hear news that
jacob zuma has sufficed this bid to oust him as president. >> thank you so much. juliette saly there on the markets. several closed today. let's get to first word news with paul allen. strengthening global trade helped china's industrial profits to rise 14% in april to more than $83 billion, building on a jump of almost 24% in march, and an 8.5% rise the year before. the national bureau of statistics said better profits were thanks to stronger overseas demand an investment. ba says most computer systems are running normally after a week in crash that disrupted hundreds of flights. the ceo says the carrier plans to operate all long-haul services into and out of london today, but the after affects of weak interruption will mean delays.
german chancellor angela merkel has given the strongest indication yet that europe is drifting away from the u.s. under president trump. munich, to voters in she said the relationships forged since world war ii are "to some extent over." she was with the president at the nato and g7 meetings and said europe must plot its own course and not rely on america and britain. president trump has lashed out at fake news after wrapping up his first foreign trip without a single press conference. and thehed with the g7 president was the only one of the leaders who declined to take a single question. at the white house, the president tweeted many of the leaks are fabricated lies made up by the fake news media. vietnam's prime minister says he is confident economic growth will meet its goal of 7.6
percent this year without adding to inflation. in that exclusive interview with bloomberg, the premier said the country is taking steps to boost the economy to keep its status as one of the world's fastest-growing economies. he will meet president trump at the white house later this week. we have a detailed strategy to achieve growth of 6.7%. i will give you a hint of some very good news. the data in april and may shows a strong pickup in exports and agricultural production, and that will lay the groundwork for growth in the third and fourth quarter this year. paul: 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. thank you. north korea has fired another missile, the ninth this year,
seemingly in response to the u.s. beefing up forces in the region. we have been tracking developments of the story this morning. great to have you. we have seen the frequency ramp up quite a bit in the last couple of weeks. do expect this to prompt any kind of reaction from south korea, china, or the u.s.? >> we have seen statements condemning the missile launch. these are typical. they happen every time. this was a short-range missile. what would really ramp up tensions is if kim jong-un fired an intercontinental ballistic missile that would be able to hit north america, and that is what the u.s. is concerned about right now. that officialsd and leaders in japan, china, or south korea are stuck between ing a breakthrough or peace in the region.
u.s. is claiming some credit, saying china is doing something by the fact that north korea has not conducted a nuclear test for fired an icbm sense trump took office, but at the same time, there is no progress on talks. south korea's new president wants more engagement with the bith, so there is a little of movement where they are trying to engage through humanitarian exchanges across the border. it is moving in that direction, but we have not seen a real breakthrough there. >> is it just a matter of time? what do you think is the holdup in a sense? been for years basically stuck with north korea not at the table, but the last time talks took place was 2009, so we have been and this period where they have been
accelerating their missile program. day northelieves one korea will obtain the ability to develop an icbm to deliver nuclear warheads to the united trying to they are stop that process right now, but want north korea to show some good faith, some confidence building come before they get to the point where they are ready to hold negotiations. whether they get to that point, we don't know right now. >> thank you so much on the latest provocation coming out from north korea. let's turn to tom mackenzie, who has more on the weekend data. industrial profits in china up 40%. what does that say about the outlook on the economy? moore double-digit growth for china's industrial sector, those profits rising 14%. we are talking about and porters who have benefited from investing in production lines
and warehouse is because global demand has remained relatively robust, particularly the u.s. and the european union. riskts were a key area of leading into 2017 because there was concern the u.s. under trump would slap tariffs on some of these exports, and that has not happened. at the same time, you have stronger household demand in the u.s. propping up some of these exports. 813 zero shows what has been happening to industrial profits over a longer time horizon. 2014-2015, you saw industrial profits take down, then they start to pick up in early 2016 and kick off in december of last year. they have strengthened to that point where you get this 23%, more than 23%, increase in industrial profits for march. the 14% increase is healthy, but an edge down.
we did get some indications of the concerns going for that the pressures of some of the exporters may face in terms of credit, because we are going to a deleveraging campaign and these and now some of exporters are saying the cost of credit is rising, so that may be a drag on profits going forward, but the 14% clearly a relatively healthy number. >> healthy industrial profits, but how long is the question? what are the ford indicators telling us? it confirms there is a bit of a slowdown amid this credit tightening. >> absolutely. this idea that we peaked in growth in the first quarter for china in 2017, and that we will see the slowdown in the second half is starting to crystallize now. we got all the surveys at the weekend whether that was international investors looking at china, a survey here, that there sentiment towards china
and the second half is starting to weekend. at smallchartered look and medium-sized enterprises come again, a weakening of confidence, particularly the credit and the expense of credit. take up, the interbank money markets, yields taking up, that is starting to filter down to smes who pay more to borrow. sales managers come a diverse picture with sales managers involved in the manufacturing side of the economy are more bearish, those and services are more positive. in terms of bright spots for china's economy, we are seeing pretty healthy prices around real estate despite the curbs that have been put in place. chineseimportant consumer remains relatively positive for now, and then of course you have factory gate information that was so we can 2014-2015, started to pick up in 2016, those numbers still strong and that helps profits. wewill get a clear idea when
get manufacturing pmi data on wednesday and nonmanufacturing pmi, that will give us a clear indication of where we are going from here in terms of china's economy and whether or not we will see a continued slowdown. >> thank you so much. tom mackenzie in beijing. we have been speaking about the fed speakers that we will be watching for. jamese one in particular, bullard, the head of the st. louis fed, yes, he will be joining us exclusively here on "daybreak asia" to talk about all the news ahead, including the jobs report and what is on his mind. are we going to get three rate hikes? >> that's right. we heard from james bullard on friday during a lecture in tokyo , saying he is concerned about the u.s. falling short on its 2% inflation goal. he said it was worrisome, so plenty more to ask him tomorrow from the st. louis fed president.
summit look ahead to the , what some are calling a watershed moment from angela merkel, saying the reliable the u.s. are to some extent over and we must take our destiny into our hands. can they actually work together on the world stage? is a good question. there are some areas where europe and china sea i to i, but eye, but that to is not true in all dimensions. the three major polls of the world economy are trying to figure out what europe still has in common with the u.s. and in which areas do need to start towards china in terms
of trade and the approach to globalization. it looks like europe has more in common with china than the u.s. at the moment. from one backing away belt, one road come as that going to be a big steppingstone as well on where trade relationships go? belt, one road is one aspect of a broader picture. the idea of do we still believe in the current trading system, the rules bound trading system, and are we willing to support it , or are we more interested in ad hoc bilateral approaches? >> i want to throw a question out here. seems there are more frosty relations between the u.s. and europe, how might that change the way china or europe approach the relationship between the two? week we willhis see more talk about globalization, openness of
trade, and of course we have a lot of positive things coming out of china when it comes to market opening and freer trade, but from our point of view, we hope this week will see some concrete results. for example, that we speed up the comprehensive agreement on investment. that would show china is serious about all the talk. what kind of investments are you talking about? what would you like to see? we would like to see a reciprocal relationship between europe and china with access to the chinese markets as chinese companies have access to european markets. there was a lot of talk about the paris climate accord, right? give thep did not
blessing that some of the eu leaders were hoping for. how might that play into this summit between the eu and china? might we see an attempt to forge more common ground on policy and initiatives like the paris climate accord? >> i think so. if you think about the two main areas where europe and china eye, it is globalization and climate change. there are also important areas where china and europe do not eye, at least where europeans are not pleased with what is going on in china, the asymmetry with respect to how easy it is for chinese companies to buy european companies compared to how difficult it is the other way around, but
clearly trade and climate change are areas where europe used to eye with the u.s., less out nowadays and more so with china. >> you talk about some of the thorny issues come this bilateral deal with china and the you, and capacity seems to be a sticking point when it comes to the eu as well. and chinalitical year this year, but i want to get your take after the 19th party congress come and you see the government under president she pursuing reforms on that front or do you think it will be more of the same set that is quote? -- the same status quo. ? ? >> i just talked about the comprehensive agreement on investment because what china
needs to deal with really in 2018 and 2019 is the state owned enterprises, and the way to deal with that is to open up for foreign capital to come in and do acquisitions and buy up companies. it is important china opens up. the more china opens up, the more likely it will succeed with these reforms, and the chinese government also realizes this. we need to see china go from rhetoric to real action, and now is the time to speed up the comprehensive agreement on investment. that would send the signal that the government next year is prepared to take a deeper steps. >> what happens if you in-depth getting as we often do with these types of summits more rhetoric and then action? what is the downside here? well, the downside is we have european companies that would like to continue to invest in china, the right now half of them are saying we won't
continue to invest in less we see the conditions are getting better, and i think we talked about the asymmetry in investments. andpotential for european foreign investment into china is much bigger than what we have seen today. take european investments, we are down to a billion dollars, but normally around $10 billion to $12 billion, but it could be $50 billion if you look at the size of the chinese economy compared to the u.s. economy, for example. >> i may be want to add something, and even bigger point , china has been a major beneficiary of globalization, and we all are very much in favor of china continuing to benefit from globalization, but the point many european politicians and this is people make is we are dealing in europe with a backlash against globalization. populists have not taken over governments in europe, but the issues that many people have
with the downside of globalization and people who have lost out, i think what china needs to make sure of is accentuate that back latch, and the more china can be open to european companies and the more europeans and americans feel china is a responsible stakeholder in globalization -- >> with that the us stumbling block given they have been relatively supportive of chinese investment? >> it matters, but i don't think it matters enough. especially and a lot of continental countries, germany, france, that we have seen those investments and where people are wondering, why can we not do that in china? >> great to have you. oxford economics of asia. the european chamber of commerce in china as well. one feature we would like to
bring your attention to is our interactive tv function at tv . you can watch us live in screen through the interviews and functions we talk about on the right side of your screen. you can click on it and say that chart. you can also be part of the conversation as well. send us an instant message during the show. this is for bloomberg subscribers only. check it out at tv . ♪
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♪ a gloomy picture out of the lion city to mark this monday morning. we are half an hour away from the open of trading they are. i am yvonne man in hong kong. >> i and betty liu in new york. let's get to first word news with paul allen. africanbattled south president jacob zuma is said to have survived the bid to force him from office. nationalf the anc executive decided not to call a vote of no-confidence despite the president facing increasing pressure to step down. the finance to fire minister and march sparked
public protest that cost south africa its investment grade rating. british police have arrested two more people suspected of links to the manchester bombing with 13 people now in detention. police say more than 1000 people are working on the investigation to determine whether the bomber was working on his own or as part of a wider terror network or did exposure and killed 22 people and wounded about 100. hong kong has criticized moody's , saying the decision to downgrade the cities debt rating last week was based on "shallow evidence." moody's cut china for the first time since 1989 on wednesday and lowered hong kong hours later. o has completed a three-game match.
the human player once boasted no machine could beat him. after his latest defeat, he said alphago is perfect with no flaws or emotional weaknesses. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. >> thank you. it's time to see how the asian markets are shaping up. ready light trading with the holiday weekend in the u.s., u.k., and china now closed. the markets trading, a mixed picture. once again, south korea and ignoring everything that has happened in the north with that other missile test, another record high on the kospi, up .4%. though you are seeing
downside from some of these commodity-based markets. the asx 200 and the new zealand market weaker today. the nikkei 225 flat in the first half hour of trade. the yen little changed at 111 to the dollar after it did strengthen quite significantly over the weekend. see these you can commodities-based currencies are coming under pressure. it is probably going to be a muted trading week with u.s., u.k., china, taiwan markets closed today, and we are awaiting the jobs report on friday at of the u.s. and the number of policy makers speaking as well, including john williams. samsung electronics lifting the up .6%. toshiba also in focus come up by 3.8 percent, and nintendo elsewhere in the japanese session under pressure coming off that seven-year high we saw
on friday. 1.7%, sources saying it could be lifting its nvidia stake, but no confirmation from softbank. of movement coming through, but generally what we are seeing is a mixed and muted start to the trading week. >> thank you so much. juliette saly there on the markets. up the weekend with clear division between the of that between president trump and the other g six. su keenan has more with a look ahead on what to expect in the markets. su: it is perhaps no surprise that at the end of president trump to nine day trip, his first international trip since becoming president, that there are some ruffled feathers. the full impact is just starting to be felt as german chancellor angela merkel has said that the visit has made it clear, she says come of that europe must
now take its own destiny into its own hands, and other words, she believes that post-trump that there is a drift between the u.s. and europe. not an insignificant statement. it came over the weekend. sees europe seizing its own destiny. if you look at the bloomberg spending undere various administrations, it fell into a trough in the clinton administration and the middle of the chart, but on the far right bouncing off the bottom with obama and president trump is expected to boost spending to a level not seen since the nixon era. now that he has returned home, he was quick to take to twitter and send out some tweaks bashing .he media notably throughout his trip, he was media shy, not joining in on any press conferences and breaking protocol and that regard. back, there are
fresh reports about the probes into possible ties between ,ussia and the trump campaign and his son-in-law jared kushner has been targeted as possibly a subject of those probes. president trump was quick to criticisms of the medium what he calls fake news. in the week ahead, he is expected to continue to meet international leaders, including vietnam's prime minister, and likely to focus on the friday jobs number should it be positive that a sign that the trump white house is in the right direction. moving on to casinos, the owner of melco resorts says he prefers to build a casino in osaka rather than tokyo because it is more "fun." lawrence ho said he is not sure tokyo needs a new gambling complex.
>> in my opinion, the region is we are arelated, and company that focuses on fun, entertainment, and attraction. theride ourselves on having hotel, restaurant, and amenities. in macau, we have the most michelin star restaurants on our theseties, the most -- so are important elements that we want to bring anywhere globally. from christ more now sign horn who did sit down with lawrence ho. great to have you. people in tokyo are like, what? osaka?n in o >> he's not ruling out tokyo. he is still interested in tokyo if that swear the chips land, so to speak, but if he had to
choose between the two bank, he says he prefers the region and osaka. tokyo like new york and london, global center, everybody will be going to that city regardless of whether or not it has a casino. it is not the place you go as a destination to get away from it all, so to speak. >> competing with more eyeballs. the sense that he compared macau to hong kong. hong kong does not have casinos, maccallum does so. macau is like the second city comes so he thinks osaka is more like that place you go after going to visit a big destination. >> bruce, is it going to be a different story. we know melco has done well and the philippines, some of that owing to how many chinese have gone to the philippines to gamble because of the restrictions in macau. how is that story going to be different for milk in japan --
melco in japan? know how manyn't cities are companies will be getting licenses. the whole procedure has yet to be explained by the government in japan. argument is that japan relies so much on chinese tourists, so having a company melcoilk oh -- no coat -- would give them an advantage. japanese feel about this, this opening up of gambling in their city? we know they love slot machines and are big fans of all sorts of addict of games, but how do they feel about this? is a good question. there is not consensus in japan that opening to casino gaming is a good idea. it is a very controversial proposal.
prime minister abe pushed it through in december. there is still more legislation that has to be passed that will likely be sometime in the second half of the year. that thata sure thing will be passed. there is a lot of opposition, so we still have to wait and see. much.ce, thank you so bruce einhorn waiting to see what lawrence ho has up his sleeve there with casino gaming in japan. up next, vietnam's prime minister is confident his country will hit its 6.7% growth target this year. that exclusive interview is next. this is bloomberg. ♪
the prime minister remains confident the annual target will be met. he spoke exclusively to haslinda amin ahead of a trip to washington to meet with president trump. true that first-quarter vietnamese economy is slowing down, but there are a few reasons for this. we have a detailed strategy to achieve growth of 6.7%, even in this scenario. concrete steps and measures at each industry down to the product level. the main goal is to create a and enablingen, business and investment climate. i will give you a hint of some very good news in the data in april and may that shows a strong pickup and exports, and also agricultural production, and that will lay the groundwork
for growth in the third and fourth quarter this year. >> if growth were at risk, would you sacrifice your inflation target? >> although we set the target for growth that 6.7%, we also have a mandate to fulfill in keeping inflation at the rate that we have committed with the national assembly. is capped at 0.9% in the first quarter, however credit growth was good during the first quarter, 5.9%. spoke, youlast talked about the liberalization of the banking sector. can you give us an update on that? we are submitting to the national assembly for consideration of a resolution on restructuring the debt and the banking sector in the economic. we will allow for foreign
investors and institutions to take over commercial banks in vietnam if they express interest , and for the commercial banks in which the government, the state, holds a significant stake , we will also advise strategic investors to come in. that was the vietnamese prime minister speaking exclusively to haslinda amin in one all right. let's take a look at the anonymous efforts to revamp its economy with enda curran. vietnam has been an exciting frontier market, but first quarter growth was disappointing to what is the current state of play in vietnam? >> it wasn't disappointment, but a lot would in greek with the bullish outlook. it has tripled in size in the past decade and the economy is projected to grow 6% up to 2021, and there are a number of reasons for that.
doingcturing exports are well, not just low in stuff like cars.ts, but smartphones, we saw manufacturing grew 12% last year. international tourism is going off the charts in vietnam with more than 20% in the first quarter. we are seeing high in brand-name hotels wanting to build or open a hotel in vietnam. of course, we are continuing to see exports do well in vietnam on a consumption basis. all the signs of a classic emerging economy when you have growth. despite what happened first quarter and you consider those strong three pillars of growth, that is probably why the prime minister is confident. i think it is probably why the broader investor base considers vietnam to be an emerging market star. >> what about the export base? tell us how diversified that export ace is?
vietnam was among the most disappointed when the u.s. pulled out of tpp, because that deal would have opened the u.s. markets for their electronics exports and textile exports, so it will be interesting to see what the prime minister races with president trump in their discussions in terms of where they go forward with trade, but growingess, vietnam is in a reasonably good way. the u.s. is already its largest export market. it has a new deal with the eu waiting to be ratified i the eu parliament this year, and of course it continues to grow its that go beyond tensions with china and world economics, but vietnam is learning that it can't keep all its eggs in one basket. >> you mentioned that growth target, difficult, but possible. what could be the biggest risk
going forward to the vietnamese economy? >> there are many. i suppose the most obvious would be if china were to slow down dramatically. key part of driving the manufacturing exports story. know the chinese authorities are trying to slow things down there. a chineseas to be shock, that would harm vietnam dramatically. right here, right now, vietnam seems to be in a reasonably good spot. >> great to get your perspective. sticking with the vietnamese is looking at a listing, and that is just a start of their international ambitions. the founder and ceo of the carrier which controls half of vietnam's domestic market spoke to bloomberg's bureau chief in this exclusive interview. we have been approached by
some foreign stock exchanges, including london, hong kong, and singapore, which expressed their interest in our stock. we don't want to hide our hope to become the first vietnamese company to list shares overseas. >> what advantages are therefore vietjet to list perhaps in new york or london? listing overseas on big markets will help increase our access to more fund sources, boosted trading of our stock, and expand the list of our investors. informationet more from foreign stock exchanges so we can study thoroughly and select better. >> do you anticipate any more plane purchases in the next few months or year or so? there is a big demand for more airplanes in vietnam as the population is nearly 100 million
people. .hile we have just 130 planes that rate is low compared to other regional markets such as singapore, malaysia, or just take thailand, where there are 450 planes on 75 million people, so from our development plan and looking at the numbers of planes, we will need to order more aircraft. we will just consider which type of plane and when to buy. >> do you have any future plans of having long-haul routes? >> for long-haul routes, including the u.s., it is the ultimate goal and dream of airlines, ashley budget airlines. , we have a plan to develop long-haul flights, and the first step is increasing cooperation through kosher with other airlines -- co-share with other airlines to sell long
route tickets to our clients. we are actively increasing such cooperation as a way to ask and at present. >> your airline developed international fame for one particular flight you had some time ago in which the flight crew wore bikinis. do have future plans for such a flight? >> the bikini show was done to bring joy, excitement to our passengers on a flight to a beach city in summer. we wanted to send the message that everyone is free to wear what they like, what makes them feel good and confident. is to satisfy our passengers, so you ask if we would do it again, the answer is yes. we will do everything to make our passengers happy as long as it complies with aviation safety rules. was our hanoi bureau chief speaking with the founder and ceo of vietjet.
>> a quick check of the business flash airlines. the struggling italian carrier alitalia has been hit by industrial action with hundreds of flights canceled. they are demanding the government nationalize the airline after years of losses. alitalia is in its second bankruptcy in 10 years. western australia could raise billions of dollars by asking rio tinto and bhp billiton to on iron ore. has had a lukewarm response so far from bhp and rio. western australia is looking to reduce its $22 billion debt pile of which the government said could take decades. >> that is it from us here on
"daybreak asia." haidi has been tracking developments out of north korea. we are seeing market reaction limited, but what is the reaction so far? it takesu wonder what for these korean equity markets to have any sort of reaction that is anything more than just sanguine. this is the ninth missile test from pyongyang, so certainly up the saber rattling out of north korea and creating a headache when it comes to the incoming new president, moon jae-in. this may force his hand. we are continuing to monitor statements coming from south korea and japan. also, what china can do about the situation, because they have been under pressure from the u.s. to do more to curb north korea. >> indeed, right, and ending on
china, china's central bank said to be changing how it calculates the daily reference rate. it has been slowly creeping up here it is this a sign we are seeing intervention from the central bank to prop up the yen? >> you and i both know there have been some behind the scenes maneuverings to keep the yuan stable, stability key for this equivalent of an election year for beijing right now. we will be getting more insight from bank of tokyo mitsubishi ufj, it's asian head of global markets research come and he has covered china extensively. counter cyclical adjustment factor, what does it mean in terms of liberalization moves towards an eventual free float. this is a massive step backwards. we will talk more about the outlook when it comes to chinang markets,
suffering that shock downgrade from moody's last week, what that means for foreign investor interest and this trend? we will speak to mark mobius. we will be getting his insides on how he feels about china. weo, other emerging markets, are talking about vietnam after that exclusive conversation with the prime minister. mark mobius is super excited about vietnam, one of the best prospects for 2017, and we will see if he still feels that way given uncertainty over policies. we will have all the action and great interviews up next. this is bloomberg. ♪
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