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tv   Bloomberg Markets Asia  Bloomberg  February 5, 2018 8:00pm-11:00pm EST

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♪ >> it is the red sea out there. japan basing a correction at this point in time. the other big loser, have a look at the climb. falling below $7,000. struggling to improve its credentials as a potential haven asset. this is digital investment advisors. they cannot actually handle the frenzy of these websites. i am david ingles. >> i am haidi lun and said day. them, thisaring from
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is bloomberg markets: asia. it was a day for the record books. we have been constantly saying records for higher and higher. pullback thathe everyone has been inspected but this is due to the aggressiveness. this is second only to the selloff of the top credit rating. this is the severity of the cell up when it comes to what we saw after brexit. it is worse than what we saw after china devalued its currency unexpectedly. david: you hit the now on the head. we are not used to seeing days like this. ground, thek at the we had consistent
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declines of over 1%, we're looking that in the asia-pacific. look at the boards here. it took place in august of 2015. that is when china devalued its counties. these things don't happen to often. is this a bear market? no it is not, it is a healthy correction. do those conditions involved? we're watching the long end of the year curve. watch what we are seeing across the measure of volatility. a lot of people were talking about but not a lot of people were positioned for the sharp moves we're seeing across several asset classes right now. sophie, you are following the open for taiwan and malaysia in singapore, not good. this is the biggest drop for
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the index since 2013. there will be more intervention on monday. you had a government controlled banks buying shares to stabilize the market in taipei and over in singapore we have ustr sliding for the third straight day. thet of the over 2% for klci. i want to highlight what is happening across this column of red. you have the nikkei 225 sliding 4.25%. we have aussie shares sliding. this is set for the worst three-day drop since august of 2015. i want to highlight the korean -- yuan.u korean investors will only have the latest lose -- news from the capital gains tax for foreign investors. that is being delayed.
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>> let's have a look at u.s. futures. futures are also getting underway. just a quick check of where we are. silver lining we are getting some of this. the dow and usp are horrible. we are getting some more bids at the moment but nothing much to indicate that when china opens up we will have a massive turnaround. valuations i suppose. the u.s. is looking a lot more attractive now. let's get more now of bloomberg news. taking this all end in singapore. we'll settle for this 15 minute. which has been caught a flash crash for the dow. everything on the machines? a lot of people are putting the blame on machines. machines drove this higher. we have moved to a market that
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is driven mainly by uts. all of these things are part of the market dynamic. this is not something new. ballpoint of the rally has been driven by the same operation. this law is be a large part of any movement. i think there is a genuine reason for this pullback, this correction. i'll think it should be written off as going to the machines. >> yields from the u.s. tenure were down. we are giving a little it back. in any case, you can look at those as seen him entrance into the cell overnight. tell us any key takeaways from that trade overnight. >> i think we will see treasuries continue. in january, the move was really incredible. yields move.r u.s. this was in the last five months.
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especially since inflation has not take up that much. headline inflation is still very subdued. inflation continues to disappoint. the world is connected. it is unlikely the u.s. will see runaway inflation. that was kind of expected. like every other asset, treasuries get affected by momentum. a market thatg at has been structurally bullish for a long time. .he market is much fresher suddenly those yields look very attractive. it is still a safe haven hazard. you can expect this to continue to move higher. haidi: what do we get from here on? if the fundamental reasons have not changed, we saw this when there was very little on the macro calendar. the tax benefit story has still yet to play out and valuations are looking much more
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attractive. do we see another one down? >> i see another leg down. growth is still there but i think fundamentals have changed massively. are not fundamental but volatility is exploding. that will affect banks and hedge funds for the whole rest of the year. the latest how good it a backlog -- backward looking window. the defense which hedge fund back to you are out. this week will blow out those levels everywhere. suddenly leverage will be reduced versus the stable. thise same time, we have extraordinary tight and we have seen in yields and that did accelerate in the last few days. this was another really big shift in fundamentals. i think it is bizarre to center has been a change. we see that january was a record month and so many equity markets which further reduces liquidity because it shows less on the sidelines. we have seen a big change in
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liquidity. the last month accelerated in the last few days. all of this, together means there has been a big change in fundamentals. i think we have another big leg down. when we go into bear markets or bearish trading markets, there can be very powerful banks. they are chasing their tails a little bit. just because we're 3.5% benefits, doesn't me too much. -- mean too much. >> you can follow mark and all of his team portrayed transaction analysis. all of that is on your bloomberg -- mliv . a quick check of markets right now. -.2 .7%. -- -2.7%. let's get more on the sell off. partition however, he joins
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us on the line from the gold coast. thank you for making time to come on the program. your analysts looked at you during your morning calls this morning, what were your marching orders and have those orders changed? >> they had not changed. , it is longrrection overdue given the relative stability in the u.s. share market last year. into they use gains we saw all the bullish talk everyone was talking about a meltdown. so a correction was long overdue, the reality is that u.s. earnings were very strong. historically you don't go into major bear markets unless there is a recession on the horizon and i can't see that. by the same token it is way too early to say the pullback is finished. there was a lot of downside momentum. you could go for a wild edge.
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the key is to look for the by opportunity. we are waiting for the market to get oversold. we are waiting for some more bearish talk. they are saying this is a, we have had it. we are going to a bear market. at aboutoment we are 20% in cash. that is about 25% in bonds and inflation protection and so on. they're looking for opportunities to deploy that. at the moment it is still too early. >> some are saying don't get in at the moment. you get to the trading and pricing around those that don't get in. what are you guys doing now? >> we are sitting pretty tight. we are not piling into it on this point.
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those probably accelerated by computerized trading and so on. somewhere when you sit tight. the process will at some point -- there will be opportunities out there to fill in the moment to stop piling in. >> is this a nice opportunity to take a closer look at china? it is turning out to be one of the havens given we are seeing supportive blows from the mainland to hong kong. the national team is being mobilized. it is -- is that somewhere you can hide during this. ? >> it could be but there is dangerous in there as well. china's share market can be volatile. i think the real issue in all of
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-- it is the fundamentals, it is pushing into expensive territory, look around the rest of the world. whether it is china or europe or japan. there is opportunities out there and i think those opportunities are going to be realized going forward. be a lot more constrained, a lot more volatility. that is going to continue where is other countries, they are way behind the u.s.. they don't have the inflation risks that the u.s. has. i think it is a case of walking up. .ot going forward this is a very different environment than what we have seen in the past.
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haidi: a final word. sizable had that pretty miss on retail sales and the trade balance as well -- is it 18 straight months of sitting on their hands? what can they do at this point? shame: the best they can do is nothing. the idea is between a rock and a hard place. this is the downside. the markets are slowing down. the housing cycle is turning over. they still think the aussie dollar is below $.79. have record low wages.
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point to thengs reserve banking on hold and being on hold for some time to come. this is very different to bond crashes in the past. this was on the back of aggressive tightening in the u.s.. this time, a lot more gradual in the u.s.. and a still more gradual rate hike is still some time away. >> we have to leave it there. shane oliver. we will get an update to first word news. paul? paul: the acceleration in the u.s. which work doesn't support faster rate hikes.
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you back into the jobs report thought that the pavement be rising. ignored. not be average earnings rose 2.9% in january from a year earlier. that is the fastest growth since the middle of 2009. cash kerry also says wages must be balanced with inflation. we need to see what will happen with inflation. we have our 2% inflation target and our maximum employment mandate. some of those were trading off of each other. we want to see this back to our 2% target. is very welljay equipped to take this on. >> south korea has delayed a tax.on cap will gains they will draft a proposal holding as little as 5% of the south koreans company stock. and i see want it could have negative impacts on equity
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market accessibility and therefore on its own korean and emerging-market. samsung heir of jay y. lee has -- the ruling follows a familiar pattern. lee's father and other executives have been try for corruption only to receive suspended sentences. global news, 21 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries, i am paul allen. this is bloomberg. haidi: still ahead, we are live in the singapore airshow. challenges the senior vp wanted to navigate this year. is there any labor available to make them fly these claims?
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all of this, up next, this is bloomberg. ♪
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♪ >> let's get you now to singapore. this is the singapore airshow. haslinda is standing by. >> we want to talk about how asian carriers have been ordering thousands of jets. the problem is there is a lack of infrastructure to support it. manpower as well as air-traffic control power. how do navigate a situation like this well? .et's talk to the vp indonesia are trying to get into underserved regions. topice: that is a huge
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globally and particularly in this region. it is really booming everywhere which means that we need to be able to offer solutions to our customers who handle these high-density and increasing density of traffic while the business and in addition, new areas need to be the goaland obviously is to have a look at having but alsole solutions very flexible solutions. also, to operate the solutions without people looking at the right locations. and airng that mobile traffic control towers --
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pascale: we are trying to work on serving this underserved area it is toer of urgency deploy remote powers that can be withted from a distance operators located in a bigger but then they can work from these remote towers. this is being seen in the market. >> what kind of demand are you anticipated -- anticipating? we could see india requiring these. pascale: we can see significant demand in that area. what i would like to say is that need toe countries deploy these.
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these are countries with 250 million inhabitants. there is a growing number of revenue levels which ashley with some trouble. it iss impressive is that a postdebate multiplied by two and a biggest driver of the growth is coming from the asia-pacific region. it means that a number of countries will have to find solutions to really be able to handle these much higher and what is traffic very interesting is that new technologies actually provide very efficient solutions to address these questions in a much more efficient way. in this air-traffic consult the main, we are moving toward a sleep, connected, digital world
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and all air-traffic control operators are interested in looking at how to use the new technologies to provide better efficiency. it, adjustingve the technology. we will play out in the years to come. a very timely comments. partre playing a very big in a sellout we are seeing currently play out in the markets. you can catch up with all of our interviews from the singapore airshow. this is for bloomberg subscribers only. check it out at tv , this is bloomberg. ♪
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♪ we are counting down to the
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open up markets in hong kong. of course, we saw some of the bleeding in hong kong stemmed. we saw southbound flow supporting the markets but they're also getting this reporter and it is having some of the statement brokerages support the markets on the mainland. >> we will need every single bit of help that we get. have a look at some of the premarket pricing. we are down 1200 points on the hang seng index. that is following the drop that we saw yesterday. hood.look under the i will make a short, every stock is down. 51 out of 51. copa holdings, we are also watching the hang seng getting underway from the expected spike about 20. the other thing i want to mention, looking at future stocks, 3.1%, we are getting some inflation data out of the philippines, a 4%.
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it is not as if we needed other business to sell but we are getting them, the factors will be getting the open, the report is coming up next at the opening bell, stay with us, this is bloomberg. ♪
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♪ >> seconds away from the open up the cash markets in hong kong. we are looking toward these markets continuing to cascade over 1200 points right now on the hang seng index. 31,000 is where we are at the moment. not a single stock is up. this is because of the risk aversion we are seeing. markets are still very much freight from expectations of inflation around the corner and highways to companies.
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another downve day, hong kong and shanghai, that is the joint markets. andee south korea, japan although stocks falling the most since june of 2016. not a great setup. >> shanghai was the only major benchmark to open and closed higher on monday, that is not the case today. there are stepping a today rise, slumping nearly 2%. china's stock markets will be put to the test this tuesday. we do have the small cap a gauge sliding over 2% today, flipping toward a january 2015 low. this is the david -- daily limit . over in hong kong we are seeing the hang seng extend for the fourth straight day. watching the most since 2016. 50%,oday is still up helped by southbound liquidities.
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we'll keep an eye on inflows from the mainland. this did have enjoyed hong kong from the rest of the decline. that is not the case so far. all 51 stocks are listed on the index, sliding this tuesday. they were plunging over 9%, the biggest drop since november of 2018 -- 2008 or the chinese oil giant. we will check in with other stocks. ratings of air china and china reducingfter they were hsbc. this was after alibaba agreed to buy stake in a 2000 -- $2 billion share. the gimmicks out about the second-biggest shareholder in the operator. >> a lot to consider but also corporate news, lots of data.
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to any of these things matter? mo, you and i were talking during the break. you think this has to go. which is some analysis called the quantum timeout. that broke yesterday and is either a sharp rise in the vague. big. they are rising in volatility, has buys and volatility been in a way we had never seen happened before. there are then a lot of people over the last five years looking for income. as that reset higher, what it means is that physicians have to be taken down. we think that overall there is probably another 5% lower in this market. we are about -- watching very closely for the central banks.
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china, that will be very important in hong kong to see what southbound flow does but we think 5% lower, the markets will be looking for the central banks to react and come out with some sort of statement. >> does any of the data matter? of those days where you essentially take everything and throwing out the window, kitchen sink and the baby and just let this one settle? >> what is in point to remember is that certainly the fundamentals remain fairly on a daily today it is but justt positioning coming off the trading for right now, the funds are very calm. paddock was better to sell in japan in the morning, it has ashley turned a neutral to a slightly better buyer. i think the funds will probably be watching from the sidelines
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initially as they decide what to do. this has all happened within the space of two or three days. look at the commentary i get. people are talking about another 10 or 15% higher than even two weeks ago and now we are looking at where we are going. earning revisions ashley followed the market up as well. it will be interesting to see what happens with those earnings revisions. really, we are looking for is some indication from the central bank and i think if mr. powell was to speak, he should get a call from the white house. first day-- a great on the job. i have to wonder what has changed in the last two days when the bulk of the selloff has happened on a day when we haven't had any macro indicators. list of which ones that have surprised. #btv would to throw up g 611. aggressiveng how
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this selloff was. this is the worst about we have seen. this is worse than after china devalued its currency. in terms of not seeing these 2% is class moves. that was pretty much closed to where we had the election but what accounts for the violence on the move? is it the fact that we have come -- peak? a peek >> there is something to that. the markets feel parabolic forever. comes,e day of reckoning things are a little bit more interesting. having what is also interesting is that this move has got to be putting its appropriate metric -- we have to measure it relative to how many standard deviations it is away from zero.
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environment,tility people's positions get larger as that volatility rises. what it necessitates is for that be if you want to look at how concentrated those positions were, you only have to look at etf tong like the x iv see what is going on in terms of that volatility. moment it ise going to be very technically related. we are seeing positions being taken down. and shorten very high positions in treasury bonds. asthink some of those will well. just a bit more second section -- circumstance and into the market. we think we can get down there and present the big buying opportunity of 2018.
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been chatter of us to intervention shirley this can't be the right time for them to step in yet. >> the chinese markets has been one we have been a little bit concerned about. for us it has been the relation ship with a credit market which has been setting off for the past few weeks. we have been watching how the equity market has been rallying. the thing that would have made this a lot more bullish ironically would have been very significant placements from the chinese bank. now, i think those placements can't come before this global value for the chinese banks. what we were pushing last week was this idea that the shares could be vulnerable to a 14% correction. or percent of that seems to have happened on the open. we are watching for the southbound flow that was at the
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highest for a couple of years to see what happens with them. overall, it does seem to be the fact that nothing has changed that atquestion here is a time when liquidity is being withdrawn, the market is pricing in this escape velocity. global equities in particular. the question is whether the global economy has reached an escape velocity or whether it is the same old same old model. liquidity is the thing that keeps them there. >> we want to bring up this chart. we'll show you how we measured on the standard deviation. we are looking at a move today and when i look at something like this, that like that you -- you look at the extreme moves you are seeing on long end of the curve. escape velocity in the economy,
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we are not therefore inflation which tells me the bond markets might have overshot over in europe. where is the mispricing? view has been that the bond markets are very cheap. we highlighted that as well. suddenly we were up 3%, bonds would look very interesting. -- question at the moment this is the big question for investors. do they believe that if the central bank liquidity was withdrawn, but we are seeing is a 97% correlation between global equity markets and our measure of central banks. utrecht that on bloomberg. -- you can trackback on bloomberg. what all of this would indicate is that going forward, some of these macro numbers may start
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bowing over. you're going to need more help from the central bank. >> follow the money and fall liquidity and whether. thank you so much for coming on the program. citigroup global markets, head of asian trading strategy on the program. a quick look at u.s. futures. we saw a little bit of green, that is also turning lower. they are down about 3.7%. a lot of still happening across markets. let's get it over to paul allen and your first word news. >> thousand tones committee has the democratice rebuttal other republican memo on the rush investigation and possible links to the trump campaign. the panel voted unanimously to make the classify democratic document public and it goes to the president for review and he will decide whether to allow its release as he did with the republican documents last week. >> robo advisors have not had
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much experience and when confronted with one on monday they struggled -- the website are two of the biggest. they crashed as the s&p 500 index sank. the glitches are setback for the financial market industry that are acting to become comfortable and make investment decisions without speaking to human beings. bitcoin tumble for a fifth day, dropping below $7,000 for the first time since november and leaving other crypto currencies lower. --y're going to backlash feeling the backlash. bitcoin has erased most of its value from a record $19,511 it reached in december. global news, 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries, i am paul allen, this is bloomberg. uber is looking to grow
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after winning a victory in the u.s.. we will get back to singapore airshow. what are the applications for the company? haslinda: there is uncertainty. congratulations on the ruling. how much does that change? >> good morning. it makes a big difference. obviously, the anonymous nature of the ruling. it remote a lot of uncertainty for customers. also, the market at large. it is a big relief for the industry. competition,ry for
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innovation, the rule of law and that uncertainty that was inevitably out there as a result what is being lifted now. we are seeing positive momentum in the market. we had a lot of active campaigns, some of them were not they might have been because of the complaint and now really forward to kate dennis taking the next step forward. them -- expect >> we think the t series is a fantastic aircraft. is preciselythat the ordered from delta and the other order from air canada in 2016. that is just an example. i think it will have great
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applications in north america. expectn the ruling, do the likes of jetblue and sprint to come to you to say we are willing to place an order? >> we have a lot of discussions and we have had discussions with jetblue and spirit. we had discussions with other carriers in the u.s. and at the right time we are very confident that we will have significant breakthroughs in the u.s. market. >> you have a letter of intent signing with unnamed european customers. how is that coming along? that has only been delayed. 2017.l deadline was >> we are planning to get the purchase agreement signed. discussions are ongoing, they are continuing. they're very complex and sizable transactions and obviously there are a lot of stakeholders. we are still working on it.
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confident that a number of transactions will come through in europe and elsewhere. it is progressing on a number of fronts at the same time. we expect 2018 to be a very good year with a positive outcome. >> >> i want to talk about your partnership with airbus. what is the biggest challenge in that partnership? quite it is fairly straightforward. it is proceeding fairly well. theprimary driver is regulatory process. we are very satisfied with the in theis progressing various countries they are involved. otherwise, it is just a matter of working through the logistics. to be honest, there are not any major hurdles. this is straightforward, there is very little overlap between
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what we do with the series and what airbus does. straightforward and adding the asset and benefits of the two products. >> we thank you for your insights tonight. show -- weme on the will be speaking to you next. this is bloomberg. ♪
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♪ let's get you a damage report across the equity space. look at the chinese markets right now. if you thought things could not get worse, they are. 3.2% down. not a single stock was up in the hang seng. it doesn't look like it is. 1.7% lower portion high.
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look at the big markets across each asia -- east asia and australia. you could have together right now and you are actually looking at more than a three sigma move down on the benchmarks. in other words, you don't see this happen quite often. this happens less than 1% of the time when you go back statistically the five years or so. a very quick check across south markets. this is the latest market to open up, the philippines. the next one to open up, indonesia. plus, vietnam. that crashed 5%. dr. surprised if that specific market entered a technical correction as well today. check of your markets, let's get it over to singapore. the aircraft business has been booming in recent years, fueled by the insurgent travel demand. but get back to the singapore airshow. haslinda is standing by.
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will chinese players affect what we are seeing from their rivals? haslinda: according to the air cap, no. not anytime soon. why are you confident that the chinese will not squeeze you? we are the biggest owners of commercial aircraft in the world. also, the biggest commercial buyer of airplanes in the world. we did that competing with the rise of all of the chinese letters and others. how do we do it? that is the key difference. yields,orld of low banks have been looking for how to get into the industry. that is relatively painless at the start but can cause painless.
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this is an airline -- airline buying airplanes and then put it out to sell to a lease or and gives it back at it. time. a lot of chinese banks are setting up companies to do that. it doesn't take any real knowledge of the asset to do that, it is just a price. if you don't understand value, one of my countrymen said a cynic is someone who knows the price of everyone -- everything but the value of nothing. people can get in very quickly by the problems that arise later on, they do it without a platform for global presence and what we are starting to see is if you of them are starting to struggle. when airplane comes back? how do they move it, refurbish the engines and interiors. chinesete the fact that investors are willing to go into the profitability, that is not going forward. >> they have done that over the last four years. it was the same in the 1990's
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when a large number of japanese entities came into the business. they were looking for near-term yields. they found there is a lot more to this business then spread. the same thing happened to morgan stanley. by german banks did this as well. what we are seeing is nothing unusual. we see banks coming to an industry. historically they run for the hills. of m&a's.seeing a lot do you see that continuing? >> slowly. we have done a lot of it and we had a consistent history. we understand that we do very well but every time we buy a business, we don't understand. we will try to do the former, not the latter. you have to be careful about it. of these businesses, they know these businesses produce very stable, steady return. the most successful business, ge
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ever set up was the capital business. 25 years of uninterrupted profits. cic was the same. unless their stress as a parent, you will not see a huge amount of selling of businesses, there will be lots of talk and bankers trying to generate activity but unless the owner, the pound is under stress, i don't think we will see that much in the way of m&a. know these are good businesses and they don't want to sell them unless they are under real pressure. >> are you interested? are you looking at acquisitions? >> we had our shareholders money every day. do we buy another company? our own shares in the market? do we buy airplanes russian mark there are only a few things we can do. we do all of them. we have done more m&a's than anyone who has ever done. of course we're going to look at it but the crucial point is we
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can never lose our discipline. ands our shareholders money we have to become of that money. if the right transaction isn't there and we have looked at all of the ones, the right one is there sure. of course we will work at it. we have a responsibility to our shareholders. >> i want to look at your customer list. when you look at it -- are you concerned given development? >> we are working very closely. these airlines are-making significant cash. the initial rent airlines is not the airlines themselves. they are viable business models. we are willing to work with these airlines because there is a viable business in those. customer we are always looking at what is our exposure, how we manage it and a viableieve they have
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business model, we will always work with that airline. is where doesbout the viable business model -- the airline come throat? we would take the airplanes out but with a high nine airlines at the moment, we see a viable business model before you. we are coming back to you guys. >> we will continue looking at in thearkets plummeting u.s. and playing out in asia but we will talk about where the fundamentals have really changed. this is where i ask you. this is what it was suggest, we are seeing a bit of a show. -- shift. this is a gauge of the u.s. financial indexes. look at the bottom section here. we see the rate of change, we had the sharpest today tightening and financial conditions just short of two
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years. selling pretty poorly compared to that today average. we are looking at these lines coming in, the hedge fund managers are saying that inflation is back with a vengeance and that they will really pick things up. >> we are really starting to price that in. just looking at the moves over the last 36 hours, you go back to thursday, it doesn't seem people were positioned. we talked about it but not a lot of action going into that and we are adjusting. look at our other bloomberg chart. if you are looking for a signal, this is one of those -- whether or not you will keep active -- he that advice. we are below our 50 day moving average on the original benchmark. we have this decision and it was very less -- very much lost in the noise. they're unlikely to move the needle. we look at the private jet
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markets next with a golf dreams. you're looking at demand, particularly when it comes to the asian market. all that to come on bloomberg markets: asia. this is bloomberg. ♪ >>
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am haidi lun. this is bloomberg markets: asia. ♪ will japan-based a correction. than aocks have more trillion dollars wiped away. metal is getting dragged into the selloff as investors pay risks. from materials have been supported by global growth.
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the wall street round hits the robot. they cannot handle the frenzy. all of part of that 15 minute plummet. this could be done to the machines. there is part of that volatility. they're having quite a time of it. let's look at what we have ahead of us. this is the medication, this is what we have, 2.9% of the downside. 61 points lower when it comes to the s&p futures. -- the nasdaq is the least attacked of that bunch. we have seen wholesale selling when it comes to the u.s. embassy here in asia. that is being carried through when it comes to korean stocks. japanese equities all trading.
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there's in the biggest supply in 1.5 years. look at the damage report. >> the struggle israel. we are seeing the vix on mondays fight. we are seeing a move in the yen. we see the yen back below that one of nine handle. as you pointed out earlier, we had japan -- the nikkei 2.5 set to enter. this is the worst drop since august of 2015. this is a june of 2016, the local paper shows no plan in place. the hang seng, that is a fourth day of decline. plunging the most since november
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of 2016. that is something compared to what we saw on monday. this is a good buying opportunity. let's look at the bond space. we'll check in on what is happening. bonds are taking a breather. the losses are now down about five basis points. this is under to look forward to. see the 10 year yield fighting over 13 business points. >> getting lost in the noise. be wheres inspected to they are. let's get more about this asian. the question we have been asking
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him everyone, the enters have been quite different and interesting. as anything fundamentally changed? these aggressive moves for both the u.s. and asia on days when this is not really that much in terms of what has been on the macro calendar to move things and change things. what is really driving this? does appear to be turning into a much wider risk aversion event. if there was one single trigger it appears to be a wage increase numbers on the united states. we have been told the inflation is nothing to worry about. starting -- starting to go up in a tight u.s. labor market, it can't be very long. there's been some overextended positioning. it is not unusual in the early days of the newsday chairman for
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that to be a little bit of uncertainty. investors to be a little bit cautious when they hear from the new purpose -- person in charge. all of those things are coming together at the same time. that is probably what is adding to the anxiety we are seeing played out in the markets today. >> they're playing out in the japanese market. we see that 10% lower. around what we saw in 2016. you wrote other note about what happened in the dollar yen. >> that is often one of the things that we see. risk aversion becomes very serious, the dollar-yen tends to go down. the fact that it has been fairly steady recently is not a good sign. if you get a bit of a push on the downside, there is only a few days ago.
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the bank of japan is offering to do on limited bond buying. that has been lost in the noise as well. for the not take a lot dollar-yen to start tumbling. we are seeing early signs of weakness today. tomorrow, it would come in and the while seven handling dollar-yen, there could be panic spreading across the market. equities are going but if the dollar-yen follows, we could be looking at widespread risk aversion going on right here. haidi: thank you for that. let's get to our economic correspondent. you have president trump is very conflating fund of the economy with the stock market. but it has been a great day for jay powell. what is he taking on from the yellen area? the fundamentals are pretty
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good. they were taken over in the terminal markets. it is a question of how sustainable they become because when you look at the bond, you have inflation's that are contained even though the labor market has good growth, a very strong manufacturing sector, the real estate sector has the price of 10 years ago. of course, this could u.s. growth story with a global economy having his best growth since 2010. the question about how long that economy is inro pretty good shape. >> we just got access to this note from paulina jones.
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the new fed under jay powell will really pick things up. quite it is interesting, i saw that note. it was out there with the global labor market. bigplummet and all the ones. the roast story, that inflation was sent to celebrate. in the rest of the world, it is pretty subdued with weak dollars playing a big role. we did get some fairly tasty inflation. this is tightening this week. i think that the inflation story right now is still one with no real sign of rapid acceleration. the question is whether or not it can. -- continue there.
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these are growth profiles. >> this is the fed rate hike as a result of this market turmoil. there is a cap that says this often happens at the head of the fed. it is testing how market from age of how will be. policymakers start taking market volatility into consideration in their policymaking? >> they say they are not responsive for the spillover effect in terms of triggering volatility around the world but they are very cognizant of it. if you think back to the g20 and shanghai a few years ago when they were making sure they were communicating very clearly with each other -- there is a spillover effect.
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it goes back to this question of how durable and how long lasting the selloff will be. if it reaches a point where it starts to impact confidence, business confidence, consumer sentiment than the fed would have a different outlook. that goes for other central banks around the world. i suspect right here, right now they're happy to stand back and see how this washes out. markets have had a big run-up over the last couple of years. it is a question of where it goes from here. there is no doubt that it will keep it under volatility. lots of people saying this is the healthy correction on the blood price we have had. this is the current chief asian economic in hong kong. let's get you to first word news. >> deceleration annulus wage growth doesn't necessarily support the faster rate hike. the jobs report indicated that
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they might be rising. this could be a blitz and should not be ignored, average hourly earnings rose two point absent percent in january from a year earlier, the fastest growth since may 2009. kashkari also says wages must be balanced with inflation. we need to see what will happen with inflation. we have our 2% inflation target and our maximum employment mandate, sometimes those are seesaws trading off each other. we need to see inflation go back to our 2% target. i think it with his five or six years of experience at the federal reserve as a governor is well-equipped to take this on. >> south korea has delayed a plan to impose capital gains tax on overseas investors from july. a draft proposal targeting owners holding as much as by percent of south korean stock -- have negativehink impacts.
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the unaffected release of heir jay y he was caught in a corruption investigation that brought down the former president. the ruling follows a familiar patent. his father and other executives were tried for other corruptions. global news, 21 hours a day, powered by more than 2700 journalists and analysts in over 120 countries. i am paul allen. we will take a look ahead to the reserve bank of australia's first rate hike of 2018. scott neal will be back at the singapore airshow. this is bloomberg. ♪
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♪ look at thee a
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damage report if you will. they are trading over to hong kong. yesterday we saw some limit on the selloff that we did see largely due to the southbound flow. we are seeing some extended losses by 3.5%. this is the market that push through 21,000 in january. we are seeing that correction play out in hong kong. this does not look like this is a time for intervention. at the hong kong a share. the companies are listed in hong kong and we see the downside of 4% there. very a place of safety to be found. is the tablets as well as
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the downside of about 5% that we are seeing the big selloff in 1.5 years. a lot of this concerns coming around from the retail segment. we could see greater outflows. this is the head of that reserve bank of australia policy decision where they are staying on hold for 18 straight months. this was indicated by all the forecast for the asx 300 down by 3% there. asia-pacific and should be approached latest selloff by the past few days into oversold territory. let's stick to china. the market is showing signs of recovery. jet market will definitely take
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it back to the singapore airshow by.e haslinda is standing >> you are right. there is optimism that it will pick up after the climb down two years ago. let's get perspective. >> china has been a great market for us for a long time. the asia-pacific region in china was our second busiest market outside of the u.s.. we are seeing exciting growth in the china market. >> how good? what are you expecting for 2018? >> good activity in china and growth in sales. it is hard to predictwhat are y? >> but we have invested a lot in the
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region, we have sales offices that support people in the service and in beijing. we have a tremendous market share in china. we have about 70% of the large-cap market in china. the dust rebrand is really strong. i think that will support further growth. >> what kind of jets are you selling in china? rangemarily the longer ones that allow chinese companies to go nonstop to many destinations around the world. as chinese businesses expand around the world, they have seen the utility that a business jet like a gulfstream can provide. i think that is driving a lot of our success. how is the profile changed in recent years? reports, they say the standard age of your customers are about 50 or 55. has that changed? >> it has but through expansion
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in the market. our is probably getting a little younger. we see growth continuing to expand around the globe with the younger generation -- we are seeing more younger buyers. >> in terms of competition, you had an impending competitor coming -- what do you make of the competitions that you will be saved by the end of the year? have are very pleased to the juice x50 and 50 pr at the top of our product line. you can see they are the only two super large, long-range airplanes at the show. we have delivered nearly 300 of these, we are at the top of the market. it is the largest range large-cap embezzlement can take today. i think you will see the 650 remaining at the top of the market for a long time. one of the things that sets ghostwritten part and has given
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us such great market share is that we have proven we can deliver airplanes on time. we are proven that the airplanes that we don't will meet what we said it would do. customers want to have the confidence that what we predict and promise we will deliver and we have a long track record of doing that. >> ghostwritten has announced a demand for larger aircrafts, larger than the 650. a looking to meet a demand? >> we are always looking at different product across our product line from the super midsized up to the ultra-long-range aircrafts at the 650. we invest nominally in some research on supersonic. we have a great long-term product strategy. we will continue to compete in every market in the business. sothe morning has been preoccupied with the selloff in the market. gives back the negative sentiment to impact your customers sentiments? twice it is hard to predict.
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there is good news and bad news all the time. i think the corporate tax reform in the u.s. is actually going to be positive for us. we have already seen some good response to that from not only corporations in the u.s. by corporations overseas as well. they can see the impact of good economic conditions in the u.s.. we will continue to watch but we are focused on the long-term. >> scott now, thank you so much. heidi, optimism, never mind selloff in the markets. we'll take a positives where we can find it. that was haslinda from the airshow. one new feature we want to bring to your attention, you can find the new function at tv . andcelebrities interviews you can look into any of the securities of the bloomberg function. become part of the conversation
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as well, send us an instant messages during our show. this is bloomberg. ♪
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♪ a quick check of the latest business flash headlines. mitsubishi motors is raising his outlook for 2017 after projects more than doubled in the third-quarter. higher sales in asia and the week again hoping the company will cover from the scandal. it should be she is saying april profit of $460 million. jaguar and land rover sales in the u.s. and europe have pulled down profit at its parent. net income was $187 million. that is half the average estimate. -- 200 and $1
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million. they are expecting a milestone year as they prepare to launch their first electric car. as well as the range rover plug-in hybrid. laden -- they have domestic rivals -- sources say they could value this company at about $4.7 billion. the new indian bankruptcy law will clear out distress after they set up a contest promoted $26 billion to keep assets during worldwide interests. not a great deal of interest in the cryptafter the recent selloff. we are checking in on bitcoin prices now. prices dropping below $7,000 since the percent since november of last year. looking at where we are with bitcoin, this is over 9%, leaving other digital tokens low as well. let's go to our assets reported.
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what is driving sentiment. it is really hard to have this discussion on bitcoin when we had a tenuous grasp of fundamentals and what is driving the market. griese it has never really been an easy conversation to have wen jiabao trying to find fundamental value for bitcoin and other crypto currencies. i think in this case of what the latest that we are seeing is accommodation of some of those long-term things we have been discussing for most of this year in terms of greater regulatory interests and potential for greater regulatory oversight. also, that we are seeing a flight from risky assets across the board. obviously we had the big selloff in the u.s. equities overnight. we have seen stocks selling off around the world of the last couple of days, starting off from last week. bitcoin whicheen people often compare with gold but the behavior we have seen from this year, it doesn't behave the same way as gold. gold has been flat.
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bitcoin obviously has been done quite a bit. it is not behaving and same way off. christ we have not seen behavior in this market at the moment. to have any update on the regulatory? >> we will be expecting overnight or going into tuesday, some testimony from two top regulators. they will be looking for more action from congress. this is continuing on the line of more regulatory oversight from around the world, not less. that this is going to be the end for the end of the tunnel for that right that -- that crack we are talking about, that doesn't seem to be the case. >> thank you for that. australia's central bank is inspected to keep interest rates unchanged for energy straight month. we will be looking for guidance when it comes to the currency. theres the inflation and
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is a company market filling in australia. we look at some of the challenges facing the reserve bank of australia. this is bloomberg. ♪ we use our phones and computers the same way these days.
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and now, get a $200 prepaid card when you buy an iphone. it's a new kind of network designed to save you money. call, visit, or go to >> it is 10:29 in hong kong. one confident in sydney. i am haidi lun. let's get the latest on these markets. is happeninghat with the hong kong scene. today, thispushback is the biggest one we have had since july of 2016. asian stocks are trading in this territory. >> this could be the buying opportunity for those that this -- missed out on the rally.
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the stronger growth -- growth momentum in asia as well as economies like the u.s. and europe. we are not seeing that as soothing investor nerves. it has been an ugly morning for japanese stocks, plunging the most since november 2015. the nikkei 225 is set to interact correction from the peak we had back in january. earlier it lost over 1200 points as a market priced in concerns around inflation. compare that to the slide we saw on the dow, exceeding that decline right there. inflation watchers in asia may be strapping in for a bumpy time ahead with central bankers facing pressures to tighten in the coming year. philippinesl in the being bolstered by that report
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coming in, shares in manila sliding for a second day ahead of that. shares in vietnam down over 2%. the worst of the losses in asia not only by japan but also taiwan. the taiwanese government saying have no plans to shore up support in the equity market. when you look at the currency space, the korean won leading the drop among the regional forex. the yen ground, up about .4% amid the rush. just want to show you that bit in safe havens, the yen gaining ground as well as the dollar. investors will likely pay close attention to what the governor had to say during his address to parliament later this afternoon.
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once again, looking for reassurances that stimulus will remain in place which the boj has said time and again is the case. will watch for what he has to say this afternoon in tokyo. opportunity to talk about that powerful -- ample opportunity to talk about that easing program. ahead to the u.s., which sparked the entire thing we had the plunge to the dow. the s&p wiping out all its gains for this year so far and in negative territory when it comes to u.s. stocks were having that , the s&p 1.8%. , little bit of improvement nasdaq down by 1.6%. this is coming off the market that was the worst selloff since
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we had the u.s. lose its thetine credit rating over past few incidents at rock the and evencluding brexit worse, the selloff that happened just ahead of the u.s. election. the skin caught up to date with the first word headlines in sydney. a hedge fund manager saying inflation is about to appear the newengeance forcing boss to step up the pace of rate hikes. growthtime of economic that will have painful consequences. thatd storyline of bubbles has been played many times before. the house intelligence when he has voted to release a , the panelrebuttal voted unanimously to make the classified democratic document public. it now goes to the president for
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review and he will decide whether to allow its release as he did with the republican document last week. ecb president mario draghi has told the european parliament that the bank must brace for a hard brexit. speaking to lawmakers in strasburg, he said the bank is always preparing for a range of outcomes but the possibility of the u.k. leaving without a transition is there. he also said the ecb is working closely with the bank of england to smooth the impact of brexit on the financial industry. coalition talks are expected to come to a head in germany today with negotiator saying they want a simple yes or no decision. talks were extended as they back more than performance months after in collusive election, she may have to offer more issues to win a fourth term. elliott management calling on bhp to review its structure with
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a view to creating unified company. rise in value if it restructures is one company headquartered in australia. the hp carly operates as to entities, one based in melbourne, the other in london. global news, 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. i'm paul allen. this is bloomberg. that, justks for about an hour from the first cash rate decision of the year. economists are expecting no change for an 18 straight month. everyone is crying out about inflation being just around the corner. >> with mobile market turmoil around the world, it will be interesting to see it they can do anything but leave rates on hold today. the message we will get is one of continuity.
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inflation data has been well behaved in australia and pretty subdued. there's no are in the does for them to hike rates in the short-term. retail sales data was also on the weak side. the bubble in sydney and melbourne is starting to cool down. it really is no reason for the status quote to change for the rba, at least in the short-term. for a rise of about 50% by the end of the year. heidi: you talk about this up against the wall type of situation and we still have incredibly high household debt and wages are not going anywhere. are they just going to wait and see? >> the interesting thing is, we saw strong u.s. jobs data. it has been robust in sydney, but generally speaking, it has not been as strong as it has been in other places which is
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why the rba has not been ever do much at the moment. it's not achanges, good picture. heidi: how about aussie dollar? >> it's a little on the weak side. getting a new inflation forecast at the end of the week and that could be more of a domestic boomer but in the short-term it's the same story all over. thanks so much for that, james. first ratehat decision from the reserve bank of australia and about an hours time. thea financial crisis on kashkari said while some valuation seem on the high income he doesn't see a bubble. he also spoke about with the fed is learning on monetary policy.
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>> one thing i learned from japan is how powerful low inflation expectations are when they become embedded in a society. the central bank and raise inflation by 10% or 100%. we don't know how to raise inflation expectations by .5%. that is the trick and japan has learned that. that taking extraordinary measures to boost inflation in their economy they want to still maintain credibility. we at the federal reserve you to continue being humble. we certainly should not declare victory too early on inflation. we've seen a painful it is if one does that from japan. >> it is in our shop, going from zero to one is harder than going from one to 100. corona has a tough job ahead but he said specifically were to keep our foot to the pedal and continue. how do you think japan gets out of this low inflationary environment?
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>> i wrote about this in an op ed. population growth, americans are challenging japan for much worse. japan does not have a history of immigration the wave united states has. challenge for japan is, can they open themselves to immigration and boost that fertility rate? either domestically or by bringing in workers from abroad. immigration has been a source of strength for our country in needs to continue to be going forward if you want to overcome our own domestic demographic challenges. >> some of the challenges for these asian economies has been their own rising currency. it's been such a mystery, or confusing or confounding that the dollar has fallen in the rise of rising rates here in the u.s.. ,o see that trend continuing and what kind of impact is it going to have in asia? >> it is hard to know. i talked to our on economists and they say we have no idea, we
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are all terrible at predicting currencies. the currency markets have their own mind. i'm hoping just a strong global economy will help all of us, the u.s., asia, and europe. whether the dollar goes up or down from here, i don't know. a falling dollar makes it easier for us to hit our inflation, harder for japan to hit their target and europe to hit their inflation targets. andng strong productivity strong real economic growth can boost all of our economies as opposed to just one time currency movement. >> is there risk of a real separation between what the fed is doing and what other central banks need to do to keep their currencies down, which is staying on stimulus? quick as possible there could be a divergence in monetary policies. we look at arqule mandate to prices and maximum employment. i would be surprised, our economies are interlinked enough
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that i would be surprised if at the end of the day, there are wildly different monetary policies. there will have to be some alignment, otherwise we will see huge movements in the currencies which will end up working against us. the minneapolis fed reserve president, neel kashkari speaking with our betty liu. and talko singapore about opportunities in asia. that conversation coming up next. this is bloomberg. ♪
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heidi: a quick check on the state of play when it comes to markets across the region. wiping out overnight their games for 2018, hoping to start afresh. racine that contagion play out when it comes to hong kong market.
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with that trying up more than we saw in review session. hang seng all five 4.5%. the damage is considerably less. elsewhere around the region were seeing south korea, australia and in japanese equities falling the most. japan particularly in focus, the heavy retail component there. that forecast will be steepening, looking to fall into correction territory with that 10% klein now. spi down by 3%. dollar also seeing a bit of weakness against the u.s. dollar. a quick look ahead to the rest of the day straight. asia,off within here in
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barely sheltered from the extent of the selloff we been seeing elsewhere. indian shares seeing the biggest loss in more than a year on friday last week. news ont -- domestic the cello equities announced by the government there. an interesting note, i guess a recommendation are little bit of comforting note from jpmorgan tantrum, thiser is not what we had in 2013, but this rising rate environment on the u.s. fed. let's get you a quick check of the latest business flash headlines this hour. alibaba buying and 8% stake, making it the second-biggest
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shareholder. it's a stake of just over 5%. the founder is selling off assets from real estate to pay down debt. , after thelululemon athletic well -- athletic wear said his behavior did not live up to standards. no specific details about his alleged misconduct that a statement says expect all employees to exemplify the highest levels of integrity and respect for one another. singapore airlines indian affiliate is said to be talking to airbus and boeing about orders worth more than $8 billion. order 50 planes.
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we're told her final decision may come by june and conclude 10 wide bodies to enable expansion in south asia and new york as well as london. let's get back to the singapore airshow and turn our attention to helicopters. bell is looking to expand into air taxi service through partnership with uber. haslinda amin has the story. >> it's about the next generation, a new web using the helicopter. good to have you with us. a very unconventional time between uber and the helicopter company. what is this all about? >> air taxi is the next wave in our industry. it's important for us to make sure we're not -- that we should
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think about what should be tense -- transportation in the next 10-20 years. we announced a few weeks ago with uber, just two weeks ago we were at the convention in las vegas showing our viewers the concept there. were not want to see a taxi flying tomorrow, but it's much closer than people inc.. -- than people think. it exists in countries like indonesia, close to where we are today, or in new york they would some customers are already using apps to book their helicopter flight. byé for the air taxi, mid-2020 or 2025, we will be there flying. >> let's talk about the commercial helicopters. for a long time, demand was sluggish, challenging. has that turned around? >> the last three years and then
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a bad cycle for the industry. we all been suffering across the board. but business in china in particular is booming. we been talking about the chinese market for many years now and let the say that 2017 was an incredible year or bell helicopter. we booked more than 200 helicopters in china alone, more than the region combined. we've seenthe boom in the asia-pacific and china in particular, on the whole the industry is recovering. >> so would you say the growth in asia can compensate for everywhere else? >> it does. with taken more order some china than we have taken from the u.s. market. it's something we did not anticipate a few years ago. because of china, the industry is doing much better than before. how withind about the span of just two days, the u.s. markets have given up all
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the gains it saw for the year 2018. do you think investor sentiment will change? >> i don't think so. i think the foundation for the industry is still there. people are buying helicopters because they had a mission to fulfill. i don't see the connection right away with the stock market. we've seen what happened in the last two days but we feel our customers have a mission to fulfill him a need helicopters and the have a long-term need so they're not impacted by the short-term you might see on the market itself. >> you heard it from patrick, you can call for your helicopter . i just need to buy a house that has a helipad on it, right? talking about the future transportation there. coming up, i get out of jail free card.
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we will be live in seoul, next. ♪
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heidi: let's look at markets trading in the asia-pacific. there's really not much good news to be had. no big havens to be found. some buying when it comes to the end but elsewhere in comes to
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equities, the selloff is intensifying. this is a market that reached in crucial 31,000 level january but has given up those levels. it doesn't look like the plunge protection team has stepped in just yet. let's get over to south korea are markets are also trading lower. let's get to one of the companies, some questions about the korean governments commitment to reform the business. the suspension of his sentence for bribery caused doubt on his pledge, the kevin plank -- .ampaign pledge stephen engle is in seoul. you've been covering this for sometime. how much of a surprise was it and has there been a reaction? because westunned,
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weren't necessarily expecting this type of reversal, if you want to call it that, or lessening of the sentence. if you go back and look at it, it shouldn't be too much of a surprise because the president chairman go.t the even his father was twice convicted, and both times he was given suspended sentences. if you look at other big bosses here, it's a similar story. you have the parting of these hyun day motor chairman -- dai motor chairman. others also given suspended sentences. along list have gone the same way now. heidi: what does this tell us about their commitment, i'm sure we will hear the investors come out and say something about it.
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stephen: that's right, because we are hearing that if indeed he goes back to his position as vice-chairman and the de facto air, of course, it could go back to business as usual. the we are hearing from likes of bloomberg intelligence, our analyst community, saying that the minority shareholders, this could be a loss for them -- especiallylly the activist investors who want to see reform from within. this could take a backseat to perhaps more and aggressive m&a like the $8 billion purchase last year of harman international. could spearhead more aggressive m&a as well. heidi: stephen engle there in seoul talking about the prospects for chaebol reforms. will be aroundid
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to update the one big story of the day. david: it's down, when you look at markets, fairly risk-averse. that's something you don't normally see. when it did happen, so most like leather pants, there's never a good time to actually talk about it. when you look at the losses across markets right now, it's no joke with these losses. we have a few guests coming up and will get their views on what is happening. lots more to talk about in the next hour on bloomberg markets asia. ♪
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>> it's almost 11:00 in sunny sydney.e, 2:00 p.m. in david: it's almost 11:00 here in hong kong. welcome to bloomberg markets: asia. ♪ on.equity route rolls benchmarks plummet more than 5%. the biggest loss in six years. >> dollar yen could beat next.
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to the selloff turn to panic? is already erased the gains from last week's boj announcement. been: all materials have lifted are supported by solid global growth. >> and the shifting sands are changing the betting on rate hikes. it has slipped back closer to 70%. that's get you a damage report across equity markets. we did think that things could get any worse, those people were wrong as we went into this morning. overall, global equities from about this time yesterday have lost over $2 trillion of market cap both developed and emerging markets. southeast asia down about 3%. overall 3.5%. u.s. 10 year yields, 3% at the moment. if you think things are going to
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get better later on, have a look at futures in the next few minutes, or 40 minutes from now. 3.4% decline there on the nifty. how thehis has changed winds are blowing on expectations of where the fed goes in march. have a look at this chart, we put together and track the probability of a rate hike in march, as early as a few days ago, three or four days ago. that was close to 100%. the selloff recently has driven , 80% atwn closer to 70% the moment is where the markets pricing is on the move from the fed in march. haslinda: and the question really is whether that will turn to panic. when you speak to people in the theet, they say despite
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last few days, not yet, no panic just yet. that is what is key in the market now. let's get to the first word. minneapolis fed president neel kashkari said the accelerated -- accelerate in u.s. wage growth is not inspire rate hikes. he said it could be a blip and should not be ignored. it's the fastest growth since the middle of 2009. he also said wages must be balanced with inflation. need to see what going to happen with inflation. inflation target and are maximum employment mandate, sometimes they trade off each other. we want to see inflation bill back to our 2% target. i think he's very well-equipped to take this on.
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>> one hedge fund manager says inflation is about to appear with a vengeance. he said policy has concentrated on low inflation and years of near zero rates in a time of economic growth will have painful consequences. saying this has been played many times before. we have fronted with the market rental monday, they struggle. index sank. the glitches are a setback for a market industry that has boomed. global news, 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. thank you so much. a quick check of where we are across markets. they are getting a little bit
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worse, getting thailand up and running as well. the other thing i want to mention and this is more broadly, something to watch. shows a record amount of money coming through the stock connect from the chinese mainland. we have put together the net amount of money, the green line ,ou see, 10 billion renminbi the maximum amount allowed is 21 billion. in that context, not even half, although what it tells you is there is money ready and waiting to be deployed here. will that be enough to stem the tide? not quite. what we are seeing today is about 4.5 billion so far.
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something to watch here as we make our way throughout the trading session, whether or not there is hope for a rescue from a lot of the funds coming of the chinese mainland. the move things along and have a look at the fed, the minneapolis fed president said he does not see a financial crisis looming on the horizon. hel kashkari tells betty liu doesn't actually see a bubble there. he also talked about what the fed is learning from japan. >> in america, people are quick -- bankcize the bank of of japan saying they should have been more aggressive trying to do with inflation. it's also easy. we may be in a low inflationary environment for a long time and we've seen the struggles with japan. it's how powerful low inflation expectations are in a society. a central bank can raise inflation by 10% or 100%. we don't know how to raise
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inflation expectations 5.5%. that is the trick. japan has learned that. they take an extraordinary measures to boost inflation in their economy but overall they want to still maintain credibility. toh the federal reserve need continue being humble. look at the japan experience. we should not declare victory too early on inflation. we've seen a painful it is if one does that. >> he said were going to keep our foot to the pedal and continue. how does japan get out of this low inflationary environment? >> i wrote about this in an op-ed. population growth. americans are challenging demographics, japan's are much work -- much worse. a challenge for japan is, can they open themselves to immigration and boost that fertility rate? recognizeu.s. need to
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that immigration has been a real source of strength for our country needs to continue to be a source of strength for our country going forward if you want to overcome our own domestic demographic challenges. >> some of the challenges for these asian economies has been their own rising currencies. , or been such a mystery confusing or confounding that the dollar has fallen in the rise of rising rates here in the u.s.. do you see that trend continuing, and what kind of impact is it going to have in asia? >> it is hard to know. our economists say we have no idea. we are terrible at predicting currencies and the currency markets have their own minds. i'm hoping just a strong global economy will help all of us, whether the dollar rose over down from here i don't know, but a falling dollar makes it more challenging, harder for japan to hit their inflation target and for europe to hit their targets.
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hoping strong productivity growth and strong will economic growth can boost all of our economies, as opposed to just one time currency movement. that was neel kashkari speaking with our betty liu. 80 unions by two years from now -- units. the aircraft is actually on display for the very first time. i'm guessing that is a significant step in terms of marketing that and other things across southeast asia. this is a private jet, if i'm not mistaken. right, andou are there is optimism, demand is there in this part of the world. let's get perspective from our guests who joins us today.
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talk to us about the demand you are anticipating. what kind of demand are you looking at here in asia? >> it has huge potential. [indiscernible] haslinda: it is tough competition. how do you expect to compete and what is the strategy going forward? technologybring new and a new customer base. we will try to produce the best product and create new markets. haslinda: how are you leveraging technology? what do you bring to the table that current manufacturers are not bringing? [indiscernible]
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jets fly fastest and highest" -- and most fuel-efficient. give us a sense of when you expect the first deliveries to take place. the first plane was delivered in southeast asia last december and we are anticipating we will have more orders. haslinda: what challenges do you anticipate? when you see the market selling off in the last two days, can investor sentiment be sustained, despite what we are seeing? businesses are solid in southeast asia. there are many ways the jets can be used.
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realize -- i want to educate and make them understand that it can really boost their business. haslinda: you seem to emphasize southeast asia, how about china, a huge market? is almost the same as the united states, but not only businesses conquer the united potential in china. haslinda: what kind of potential are you looking at? can you quantify that? it is a good time now that the clampdown seems to have seen the worst? >> for example, western countries like the united states , 18% people are using our
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owning businesses. in china, 2.5% now. should bentage gap less in the future. haslinda: do you see the profile of your customers changing? are they now younger? conversations, they are saying the consumers are now younger. >> our current commercial -- like a young , their focus is not productivity or efficiency. aware of ant to be , is more, smaller jet
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like productivity. potential forge young people and young businesspeople as well. we are a new manufacture. haslinda: new kid on the block. >> unfortunate, in the united --tes or europe, fortunately, the jets are very popular. [indiscernible] haslinda: what challenges do you foresee? if you look at where oil prices are now, if you see the industry likely to risey 10%. productivity of
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performers and is some to distinguish ourselves. haslinda: what is your long-term plan? what kind of market share are you looking at? share.rdered a 40% our target is to get more shares but my first priorities are to produce the best product and offer our best service to the customer. target. not my main haslinda: we thank you for your input and time today. the new kid on the block they're trying to make its mark. you have to root for the underdog, and these most of the
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time. a quick reminder for our bloomberg clients, you can catch all those interviews that you may have missed and interact at bloomberg.your we have a lot of other guests coming up on the show so if you have any questions for them, send instant messages to our team and producers. .heck that out at tv this is bloomberg. ♪
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haslinda: this is bloomberg markets asia. i'm here from the singapore airshow. david: let's look at bitcoin prices, nowhere to hide, really. 62.50 right now on the bloomberg model. down about 12% at the moment. 7000, leadingw
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other digital tokens lower as we speak. guest is here to tell us what is driving sentiment lower at the moment. >> it's a combination of things. we have the ongoing concerns about regulatory scrutiny that we've been talking about all year, really. we are hearing overnight that two of the top u.s. regulators will be speaking at a senate hearing on tuesday and calling for more action from congress there. just emphasizing the ramp up in regulatory scrutiny. also a slew of credit card issuers are talking about banning purchases with bit -- bitcoin on their credit cards in part to protect consumers. and also hearing from china that they are stepping up efforts to crack down on cryptocurrencies, trying to stamp out speculation they been working on for months now. so it's really a whole slew of things, more than enough to choose from if you're looking for reasons. david: you mentioned a few of
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these reasons and were getting more details of that. is nothing new. what would you say would be the strongest force coming into the market? >> i think the u.s. news is pretty significant. obviously the u.s. is a big market. we seen in the past that south korea and japan are the hotbeds of cryptocurrency trading. we've seen a lot of news coming out of south korea over the last few weeks will not hurt as much from the u.s. we are starting to hear more from the u.s., so that may be where attention is shifting. david: give me a reason to be bullish. >> one we talked about the regulatory issues, if we do see an overhaul in the industry, there's the potential to be that are regulated and more confident in the markets. that may be a reason to get back into could to currencies. downside50 to the
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right now. there is plenty more coming up on our program. stay with us. this is bloomberg. ♪
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david: this is bloomberg markets asia. i'm david ingles. haslinda: i'm here live from the airshow. raising questions about the current government's ability to perform big business. the suspension of his sentence for bribery cast doubt. the presidents pledge to cartel -- how much was this a surprise for us? not expectingre it, that is for sure. we were expecting the high court
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upholding the sentence, possibly extending it. we did speculate if it was below three years, which it ended up being, that he could potentially walk free, and that is what he did. he left the seoul detention center and went home yesterday. a bit of a surprise, but if you look back at the history of the table and the leadership that fairiesn convicted of crimes including bribery and embezzlement and other malfeasance, they pretty much all either have gotten suspended sentences or pardoned by presidents in the past, even jay y lee's father was twice given suspended sentences despite a couple of convictions on bribery in 1996, tax evasion in 2008, and the history of a long list. chairman wasotor convicted of embezzlement and pardoned.
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another was given a suspended sentence despite being charged with embezzlement. the cj group chairman, also embezzlement in 2014, suspended sentence. and the nsk chairman, twice sentence and also twice pardoned. you can see this is par for the course, if you want to call it that. david: not to question the course decision or the merits of the case for the prosecution, but this was supposed to be sort of a poster case for reform in aebol sector there. what does it mean for activist investors? good forit's not activist investors. bloomberg intelligence saying this wave that was supposedly gaining strength over the last six months since the conviction in that court in august,
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giving him a five-year sentence, that wave of reform or at least the will to reform that was launched by president moon, which he campaigned on cleaning up the business as usual at the chaebol, that losing quite a bit of momentum with this reversal from the high court yesterday. see, are going to have to those activists investors perhaps will not be pushing for the types of reform internally now as hard as they would. stephen engle, thank you so much for that unexpected development out of korea. quick check of the latest business flash headlines. an indian affiliate said be talking to airbus about orders worth more than $8 billion. they want to tap into the travel plans of india's growing middle
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50ss and they ordered about planes. were told a final decision may come by june. the ceo of lululemon has abruptly resigned after saying behavior did not live up to standard. the vancouver business did not give specific details but said in a statement expects all employees to exemplify the highest levels of integrity and respect for one another. alibaba buying an films, makinganda it the second-biggest shareholder. paying $496 million for a state of 5%. it's the first major share sales since listing in 2015.
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selling off assets from real estate and hotels to pay down debt. more on the market story, next. this is bloomberg. ♪
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>> we are in the middle of the trading day. i want to take a look at the index. taking our cues from the u.s. overnight. the banks falling not much more thatn 2%. blue chip stocks, dragging th e index. wilma, down 3%. and david, we keep talking about how we want to see the vix spike up, well, we had the vix spking up for the first time in a long time.
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be careful what you wish for. david: mining, trading up. only six stocks are up on the asx. have a look at the aussie dollar. not a lot of movement. watching for any moment we should be getting the rba's decision. out with theba is latest rate decision and unexpected here. they are leaving the rate unchanged at 1.5%. that was expected by all 28 economists. let's get more details from sydney. the: yes, david, perhaps least anticipated rba meeting since the last one, or perhaps the 16 that preceded that as well. the cash rate remaining
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untouched at 1.5%. a few headlines crossing the bloomberg now. the rba saying, low rates continue to support the australian economy, a rise in the australian dollar, and unchanged policy stable with economic growth. that is in line with what we have seen in almost every statement and unchanged policy consistent with meeting the cpi target. the rp a a mounting inflation is likely to remain lower for some time of if we take a quick look weakeningssi dollar, slightly on the back of this news. not a great number of surprises there. the rba is a knology inflation is likely to remain stable at some time. 188% of income, that is all stopping the rba from moving right now. i guess the question is, what does it mean for the rba? is it likely to move at all in
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2018? paul: that is what we are waiting for. we knew the rba would not do anything today. so, what is going to happen down the track. as long as these persist, it is hard to make an argument to do anything. we had shane oliver on the show earlier today. he was saying the best option for the rba at the moment is to do nothing. that not withstanding, there are a couple brave economists who expect to see some tightening next month to 1.75%. and another expects to see some easing. as we get better clues from the swap starter, traders now pricing in november. all the way to the end of 2018 as the likeliest month for tightening, a. 78% chance. stil some of thosel -- still some of those key metrics.
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it is hard to see the rba doing much in 2018. david: lower for longer there for the rba. let's get an update of your first word headlines with rosalind chin. reporter: elliott management is calling on bhp to review the structure to create a unified company. there was a $22 billion rise in value. 00. currently operates 2 and a new study shows central funds in australia has grown in the fastest pace of the world. 12.1% on average, outpacing the u.s., the u.k., and japan. assets were the key drivers of this growth. mario draghi has told the european parliament they must prepare for a hrder brexit.
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the fake is always preparing for a range of outcomes, but the possibility of the u.k. leaving without the transition is there. they are working closely with the bank of england to smo oth the impact on the financial industry. global news 24 hours a day, powered by 2700 journalists and analysts in more than 120 countries around the world. reporter: thank you for that. now back to the top story. asia-pacific stocks are tumbling for a second day. traders braced for more pain. here's some of our guests today. >> i think that is taking it a little too far. valuation does seem on the high end. maybe the tax cut will lead to stronger earnings growth. >> the trigger, at least in my mind, is what is the fed going
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to do with rates in 2018? will they make a mistake, hike them too high? i don't think there will be a lot of inflation, but this is the central bank's year. >> there are a lot of fundamentals around the market. the recovery we see around the world, that continues to be on the right path. so, we do believe that fundamentals will be recognized by the markets. hopefully trading opportunities for investors as well. >> if you look around the world, the u.s. and europe, and in asia, you still see robust economies. we expect growth. what you see now is digesting in the industry. let's look at the
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selloff here across equity markets. we are joined by the equity strategist, jonathan. jonathan, thanks for making time to go in the program. i was looking at your report. it was dated this time last week, january 30. you stated 10 reasons why the hang seng would have a recovery. you saw this coming? reporter: we have been worried since last november. the global economy is in good shape, that's fine. we were at valuation levels that were exceptionally high, particularly for the nonfinancial part of the market. japan, the most expensive in 20 years, just before this setback. estimates had gotten too high, and we had a really big batch of investor euphoria. in january we saw an all-time
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high inflow week. specifically in hong kong, we saw that explosion in january. all signs were coming that this was an overheated market. i guessrice drops, that is the positive side to this selloff. is today or the next few days a time to bother with rate fundamentals? should we wait this whole thing out first? jonathan: there is a lot of talk around a healthy correction. you need to be specific about which markets and look at how valuations adjust. we are just moving below our best case target for japan today, which is adjusting more quickly, the topix. it's selling off heavily now. again, just turning to move below our best his target. we need to see a correction that
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will establish a 5% to 10% upside. strategies are starting to unwind and just how extremely investor euphoria was going into all of this. i doubt this will be a one or two day phenomenon. i expect it will be more longer-lasting. reporter: jonathan, that's hong kong. how about the rest of asia? how deep will the correction be? this sell off will be short-lived. yousef perhaps that is not the next few days, but how deep will it be? touched on the idea that japan is moving faster to this correction than elsewhere, but the deeper issue for asia, the tech space. last night just before the u.s. open, and our u.s. strategy team did something similar -- we downgraded tech. valuationswhere the
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have been at their most extreme and where we start is the earnings revisions moving south. that speaks to the idea that this will be quite a long-lasting correction. so, i think where it is defensive, you were covering the markets in singapore. it's not tech heavy. it speaks more to the upstream energy sectors. i think those markets can be somewhat defensive. we think north asia is where the price action will be most severe of ththe areas. reporter: i want to touch on the vix. me people were saying, where is the volatility? now we see the volatility spike the most in a long time. what do you make of that? jonathan: you look at the one factor model -- it has moved to the high 130
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given everything else we have talked about during the interview, i would not view that as a single factor. we do not know the way in which these current volatility suppression strategies, these quantitative strategies, get into difficulties. there are some signs around that. so, yeah,the vix is high, but i would not use that as a re ason to say, let's buy the dip. it is a far deeper problem around earnings. david: how does that translate to levels? people want to look at levels. the hang seng is at about 31,700. where do you think the money will come in? when do you think that will happen? jonathan: i said early in his interview i would like to see 5% to 10% clear up. 120.ase case target is offcould knock 5% to 10%
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that. respecting the problem, which is that the earnings outlooks were too accessive. and the valuations were high going into this. the starting point was markets that have gotten way ahead of themselves. david: in terms of valuations, you are looking at the banks. what is reasonable valuation for the banks, just in case the dust settles, so i know what i am looking at? jonathan: i am not sure if you are asking about the hong kong banks or the hsci. david: chinese banks. jonathan: about .65 price-to-book. again, they had re-rated. not as much as the nonfinancial part of the market. they are a sector we would be interested in a cumulative on weakness, given the overall thesis on china. jonathan, thank you for
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making time to go on the program today. a busy day. jonathan garner, em equity strategist. let's look at a chart of where we are. a few minutes time, we get the open, in four minutes to be exact. it doesn't look very good there, 3.5% declines there. on top of what we had yesterday. suffice it to say, we will see another lag lower in equities. reporter: still to come, the potential available in tech and china. the chairman and ceo joins us next. this is bloomberg. ♪
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david: look at that. look at that.
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could somebody clean the glass out of that window? that is likely what you see. you know what? the selloff is not the problem in that market. i say that every day. that is the problem. they heavily polluted day over in mumbai. we're looking at markets and futures, 3.5% lower. dear just about at the open of cash markets there. damage reports. sophie: we do have stocks continuing to slide. extending losses for a sixth consecutive session, joining that broad selloff. theas the rba knickicks off policy decision, oil prices lending support here, given easing worries over inflation. we have seen heavy losses in indian stocks for some time here.
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insurance over the long-term capital gains tax in the federal budget. we were told the indian stock market has not yet topped out. this is a correction in the gold market. ray dalio said the stock climbs are a blip. reporter: you know, the bleeding we see in asia, it is really difficult to ignore blackstone's warning. sophie: you can see losses being led by japan, as well as taiwan. virtually all the southern stocks. there will soon be nowhere to hide. volatility is jumping as investors are looking for the bottom. asian stocks have wiped out the year's gain. the nikkei 225 will enter a correction on today's slump, a fall from january's high.
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and even as we see mainland buying of hong kong stocks continue from what we saw on monday, that is not preventing the four day slide on the hang seng. chinese stocks could add to their holdings, which are cheaper than the a-share counterparts. the korean won leads the regional losses. the yen, back below the 119 handle. let's take a look at the bonds. the aussi debt, leading the rise. and maintaining gains after the rba held rates for a record 16th meeting. you have rates below the 2% level. david: just looking at those -- shades of red. so, yeah, i mean, three sigma moves across the market spread, but maybe we will revisit
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fundamentals. let's look at the broader view across tech and china. when you look at the deals space, you are seeing more asian investors leaving their big-name employers to establish their own firms. you probably recognize paradigm advisors chairman ralph parks and ceo diao yang, both joining us on set. making time to appear on the show. we measured during the interim that more bankers are setting up shop. why do you think that is happening. generationat of bankers they run on 15 years ago is more mature. hand, on the client's side, they are demanding more direct access to deep domain knowledge on the
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part of senior bankers and consistent service. there is an intersection of these two trends, and we find it gives rise to firms like paradigm. david: and it does not allow you to do that, having the backing of a larger firm? >> most reckitt firms have changed, probably for all time. and they have changed because of regulation, scale, large loss of numbers, and the demands that the firms place on their own independent business lines and silos of business inhibit this sort of experience i spoke about. enough tounate experience this over the duration of my long career. this --et's look at what are the big transactions you guys are working on? in a you cannot get into names, but what are the areas of excitement surrounding the tech space in china? >> we have focused on the chinese economy, the internet,
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artificial intelligence is one of the areas we are focused on. we did a transaction for a $415 million raise for an artificial intelligence company based in beijing. they are a leading computer vision company with the open approach. it was started six years ago by two young scientists in china. david: what are the applications, though? soould imagine there is much excitement surrounding the space, there is not enough application. competition is always there. last year 25% of all the artificial intelligence startups are in china. that is a phenomenal number. david: a crazy number. i was about to ask, actually. i think it was tencent a few weeks back. they made an interesting comment
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two years back, they have a lot of money to spend on their future because they are diversifying revenue. he said he almost had no choice but to bet with all forces, because you never know which will be the big winner. as it made it more difficult or easier for you guys to do what you do now that you have that money coming from the big tech space, being thrown in all directions? >> the investing activities of nies isa compa undeniable, but there are tremendous capital flows from around the world, as well as china itself, into venture investing. interestingly, in 2009 -- let's go back to a time when markets risis,eemed to be in c there were 150 venture capital deals done in china. 5000years later there were deal done in china. today china represents about 65 billion of venture financing. not all of that is coming from tencent and baba.
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a lot of that is coming from multiple sources around the world. david: in terms of the talent we are seeing, we have seen an exodus out of silicon valley into china. has that helped? the level of expertise and management expertise that chinese managers can now bring to the table compared to 10 years back. diao: you do see a flood of overseas educated entrepreneurs returning to china. we also see a greater number of homegrown, very innovative strategic entrepreneurs prospering in the chinese technology market. in addition, we also see an increasing number of young talents from the banking and equity worlds joinging the start of companies. siliconto the wave of valley 15 years ago. their experience and domain
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knowledge and competitive spirit are in high demand by the young startups in china. we think this trend will continue. david: what is the dream? that at some point there will be an ipo somewhere? is it hong kong, new york -- what are we seeing now? ralph: a lot of these decisions are honestly, ego-driven. -they are valuation -- they are valuation-driven, but also ego-driven. the outcomes will be determined by the investors that invest in these companies, or guide them to these markets. reality is the markets want to attract these ipo's. they want to serve their investor base and attract ipo's by making the markets much more accommodating. we see that recently, little changes in the stock exchange. you will continue to see market accommodation on one hand and refined expectations by
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companies on the other hand, givening rise to the ego-driven aspect. david: we have got to leave it onre, but please come back the show. this is evolution, if you will, of the regulatory framework to attract a lot of these companies. thank you so much. ceo of paradigm advisors, diao yang and ralph parks. banks in india are hurting from bad loans. counting rules -- new accounting rules could add to the pain. coming up next. this is bloomberg. ♪
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david: this is "bloomberg markets: asia." i'm david ingles. haslinda: i'm haslinda amin.
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a quick check on the headlines. india is said to have attracted bids from suitors including domestic rivals gsw. $4.7 billion.ean the bank is designed to clear out the stress assets and has set up a contest for steel assets stirring worldwide interest. david: the bank of india is transferring assets. regulations would require banks to make provisions for suspected loans, instead of the current system, where they cover the actual losses. the idea is this what double the -- is this would double the number of assets. a quick check on your markets as we make our way into the lunch break here in hong kong. it does not look very good. look before quick
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we get into the open. has, quite a bad day. day, dave. great
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>> asian indexes fall further after the dow jones suffered its first single plunge ever. driving fears. polesitter jones says it is about to appear with a vengeance. neel kashkari says the fed is watching. >> i do not see a financial crisis on the horizon, but we are paying close attention to it. >> how will middle east markets


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