Transcripts For BLOOMBERG Bloomberg Daybreak Asia 20180220

Misleading the investigation. Were live in washington. Yvonne, good morning and good morning to all our viewers across asia pacific. Markets. Ng a look at last night, i was writing to myself, we made 66 in terms of u. S. Markets. To it seven . Hop on the board because we didnt. S p down sixths of one percent. That w down 1 , we saw huge u. S. Treasury yield, a lot of folks going into that. Billion there. Hop into the bloomberg terminal. Want to show you whats happening in terms of yields. We can see that these lines twoyear te for the treasury yield, blue, fiveyear treasury yield and yellow for sevenyear treasury yield all hitting highs not seen since five and 011 for the seven and not since 2008, as i said in the intro, in terms of yield. Year so were seeing some decent demand as weve been reporting t, but, you know with these rising yields people are higher can wemuch go. We get used to these kinds of things. Off 258 billion worth of those government bonds of days or couple certainly deluge will rock some markets. New zealand, were seeing stock gains close to 1 right now. Quwi. For the well see if it sticks. Trading in australia getting under way as well. Of e seeing stocks down 1 3 1 . Were also looking at bhp just after its half results. Were seeing those shares down and that right now 289, e 10year yield at yields slightly onbid. N japan and korea, checking futures in chicago, were expecting just a little bit of a 1 drop here after if we saw yesterday. A lar, yen, were seeing little pickup with the greenback strengthening, 107. 31. That we have lows seen, 105, we saw just a couple of days. Meantime, well get you in new p with jessica york. Thanks. Theresa may is under even more hard lineners her party set out their brexit demands. Letter from 62 tories challenging the transition deal deal ys the and says the uk must not bow to e. U. Regulations. Opposition leader Jeremy Corbyn announces labor will campaign to eep the uk inside the Customs Union with the e. U. Saying its necessary for trade and to border with d ireland. Are being questioned as part of the inquiry into an alleged 2 billion fraud. The Center Bureau of investigation says five bank staff and an employee at celebrity have been arrested for conspiring. Are being questioned as part fake bake guarantees to get loans. They fled india before the fraud month. Light last and in north korea, a spy group is seen as a global threat attacks since the report of kim just one uns military and economic interests. As jeeper, up known has now attacked japan, vietnam and the middle east after having its southern neighbor for years. Target add range of industries from electronics, automotive and healthcare. First half net income came in million, down 44 . And theys 3. 7 billion, see Capital Expenditure of 900 million. Dividend per share was 11 aussie cents. Lobal news, 24 hours a day, powered by more than 2,700 journalists and analysts in more countries. Im jessica, this is bloomberg. Jessica, thank you very much. To the first u. S. Market close in this holiday shortened week. Stocks definitely under pressure to disappointing results from walmart as well as hat big shift in focus to treasuries we mentioned earlier. Bloomberg sue keenan. It grabbed everyone attention, bond auctions. Youve got rising yields on treasuries that sparked a selloff a couple of weeks ago. On that and then there is the size of the auction, what the interest is. Lets go into the close. Mentioned, we did not make it 77. T also is a halt to that six day rally. If we go into the market snapshot the eye on the dollar, stabilized has after a series of losses, and 179 s. Treasuries, billion in treasuries auctioned off in a number of different enominations in this latest session, 250 billion plus for auction at the end of the week and surging rates clearly an issue. If we go into some of the big in stocks well come back to the bond story. What we have is as a result, disappointing, in a very big way taking a bruising blow in its battle with amazon. Get to that but investors fleeing the stock and semiconductors in a group that one of the strong spots in a weak market, qualcomm sweeping really oble energy blowing it out with an earnings of rt that was just a slew positive news, boosting their earnings projections. Cashare getting a lot more in hand because of rising price in oil. It may even put some of towards dev denied as investors push the stock higher. To 1193, still in range is what this chart is called. Talking about is the yields. They havent posted a big threat to stocks. Are , thats what invests keeping one eye on. These are 10year tips. Place, protected securities, very popular. High. Otice in 2015, it was were going back towards the high but not there yet. Pretty close to breaking that, fiveyear range. Weve seen, su. Down, tioned the stock plunging after a battle with when it king a toll comes to ecommerce. We saw those markets squeeze to a record low. Su they are reporting slowing online sales that stunned thought they were building up to go headtohead with amazon. Ets go to bloomberg one more time because clearly online, etailors like amazon. This is ecommerce takeover. Looking at in blue is Department Stores. Again, walmart, not just a Department Store because they put a lot of money into their online operations, but stocks. Ook at the what happened is, they are reporting its not really working. Expand pushing to online and cut prices, has contributed to record low operating margins slicing pricesre and having to transport as a shrinking adding margins. Walmart was down. Amazon benefiting from the pain up, but there are other discount huge retailers like target down in sympathy. Does not bode well for them in their war against amazon. At how walmart stock has been year to date and you can see the huge drop off that resulted in this latest report, which, again, was and theegative outlook, biggest plunge in the stocks 2015. Su, thank you. ll talk more about the wuerl walmart earnings later on in the show. Prominent law firm has admitted to lying to federal authorities. Ets bring in joe with a little more detail. How does he fit into this whole investigation . Well, its clearly part of paulnvestigation involving manaforte and rick gates, two associates who did a lot of work then ukraine with the russianbacked government and for both went on to work the donald trump campaign. And this relates to their work ukraine. They are both charged with money evasion and ax lobbying violations. Has to do with a very discreet act, a conversation did not disclose with gates, and another person in september of 2016. Content know what the of their conversation was, what the subject was. They have whats alleged to be a recording of it. Puzzle ant we dont even see all the pieces of the puzzle that are still in the box. It seems to be a lot of questions still regarding his contacts with rick gate as well manaforte. Where to next in this Mueller Investigation . Do we even know what direction look at next . Well, there have been four quite a few and indictments. The manaforte case will be moving along. Los Angeles Times has getting that gates is ready to plead guilty which would, therefore, cooperate with the investigation, so that may some other trails. Ut honestly, the Mueller Prosecution Team has been quite good at keeping their secrets, not indicated which way they are going or what next. Come this , stepping back from looking at midpoint lehman brotherses, can we draw a line into how this might be securing elections . Well, this is a big problem for the u. S. Officials from 50 states were briefed this weekend by homeland security, the and intelligence services, on threats, potential what they can do to secure their elections. But you have to keep in mind the elections are run by the states. All 50 of them. Oversight offederal that. They choose their methods, their eans, and the best the u. S. Government can do at this point is provide some advice and protection and warning. I want to switch gears really quick before we let you go. A couple of hours ago President Trump made a move on gun control hes going to address bump stocks. Tell us about this and what he talks about. Right. Are the devices that are attached to semiautomatic rifles an onvert them to fire like automatic weapon. Las vegas sed in the massacre, and there was some talk at the time about regulating them. So hes asked the attorney eneral to draw up some Legal Framework that would classify those modifications under the the ownership and use of machine guns. Administratively, the bureau of alcohol, to come tobacco and Firearms Agency had said they authority to regulate them, so now hes asked the attorney general Jeff Sessions out a way to make that work and make it stick. Very interesting that there some move on that, especially coming from republican administration. Editor in ongress washington, thank you very much. Optimism in the oil markets as the glut drains than expected. Were ask if higher prices are here to stay. New world of higher volatility, lower stock prices, prospects for he a power led fed. This is bloomberg. Were counting down to asias first major market opening. Futures are falling further from down, 1 s fall of. 7 down for the nikkei. Futures looking further down, percent. Erly a half a this is day break asia. Coming to you from new york. Coming to you from hong kong. Bond markets around the world for release of the feds january meeting minutes. Looking to hike Interest Rates more aggressively this year. Lets go to our policy editor, with a preview right now. Kathleen, word in that january further. T was what was the message that they ere trying to send with that wording tweak . Of course, with the markets it must mean they are four hikes instead of three. Policy janets final statement. The next fed chair taking over. They add and in what context . They expect with further gradual monetaryts in terms of policy, see that work further, atnomic activity will expand a moderate pace. Later, it states, economic onditions will evolve in a manner that will warrant further gradual increase in the federal funds rate. That, in or so afternoon asked, why did you guys add that word further . He said to me it just means we more confidence in the economic outlook. Speaking of more confidence in the outlook, i think in these looking to see tax cuts, how much are they mentioned. Last year, maybe they are going difference. Bill has raised his forecast by a half to 3 4 of a percentage point. Of that increase is due to tax cuts, so it makes a big difference. A lot of people are talking about stalemate because there is a new fed chair. Occurred after the minutes and we got a big jump in earnings two days after is fed met so all of that adding up to saying, maybe they are not that important. We know there is a big day oming up that will be very important. Well talk about that more in a minute. Stick with us, because were bring in our economics editor peter. Thank you for joining us. Looking ahead at the minutes, what are you looking at . The same thing kathleen is looking at, which is putting some color on what we got in the statement. For,s what the minutes are is to dig deeper into. We dont have names of the what, but, you know, with a majority of people that, its , saying also true, of course, that the minutes are stale to a degree. A lot has happened since then, but in the same way historians data to get an idea of where things stand. I think thats what economists these doing with minutes. Terms of inflation, of ourse, weve got a surprise number recently. In terms of the ceiling of 2 or ceiling what oft kind of wording might you be looking at in terms of that . Right. Ceiling, nically not a right . Its a target, and yet, a lot of ceiling. Erceive it as a they are afraid as soon as the mean, as soon as the inflation hits 2 , the feds will do everything it can to it from shooting past that. You know, if its truly a target, then they would be equally worried about going over s going under and yet the history is, they have been fine with it being under for years and years. You know, peter, thats nteresting because is a former fed economist, very well known currency watch, he put in note saying that this is the surprise he doesnt expect although he thinks it would be do see that inwe the minutes. Hes also talking about the ossibility that these minutes are going to show more, you know, not just a few but more policymakers e looking for inflation to hit the 2 target faster. Tough thing is, that this is 16 pages of wording and and so hard to parcel it come up with conclusions that are definite. Oh, yeah. Its not like there is a bell when you read the minutes and say, oh, now we know what they meant. Draw ifferent people that different messages from them by emphasizing different statements. Else. Like anything its like reading the quran. You can find anything you want in it. An interesting analogy. Bible, many religions. Just real quick, i have a chart that shows the dilemma, getting closer to that neutral rate. See the federal funds target rate inching that much closer. That icymakers increase estimate, the neutral Interest Rate, now that we see fiscal stimulus in the u. S. . Yeah. I mean, the neutral rate, of course, is not necessarily a thing. It changes with economic conditions. That you one thing would expect the members of the really, wheresay, are we on the neutral the real Interest Rate . One thats neither overly stimulative or overly restrictive . Is there a thing as a powell put . From ent heard too much him yet but does that translate from janet when he took the helm . Always going to be a bit of a fed put because the fed, indeed, doesnt want to see markets crash. They will argue that they are not focused on markets themselves, that they are the real economy, but ecause markets affect the real economy they cant ignore markets. Were not were just trying to preserve financial stability. I want to come back to the bond market because this is something reserve is eral obviously watching in addition to the stock market. The 10 year yield over a very long time. 1980, 1984, 16 , right . Down to 1. 4. 1. 6. Now were at 2. 9. Held pretty s steadily. How is this, when you look at cocktail of the bond traders, fed trying to make its next step, how is that part play out . Yields, true that the where they are at now arent super high. They got as le as just over 2 , september. As last thats a pretty big move over year. So, bond investors, you could i think there is a desire to see there is a push in the market to sell off the bonds and past three ds push and i think that there are traders out there who are ooking for any excuse to sell bonds at a time like this. There will be that push in the market. There will be a push back in the other direction. Its an interesting contest. Talking about these yields, up ourse, i want to bring whats been happening, the massive 179 billion bond auction there. In terms of seeing any, you know, push to the yield there or any demand . Yes. That was a lot of shortterm months, old three sixmonth treasury notes, the yields came in higher in many since they have been in 2008 but only marginally first all. Secondly, as big and deep and u. S. Treasury bond market, the most liquid in the world, on they can sometimes digesting le trouble such an enormous issue that ere getting, now that weve gotten past the debt ceiling, the feds putting a lot of issuance out there. All right. Have to leave it there. Peter, thank you very much. Ur Global Economics and policy editor. Here. En hays lets keep on going here. A roundup of the stories you to get your day going in todays edition of available on mobile, in the bloomberg anywhere app. You can customize your settings get the news on the industries and assets that you care about. This is bloomberg. Youve now had to follow bill message. Nding a clear dont try to be like us. If you do this well, beal happy. Good job, you do a maybe youll have another job. If not, you wont. A quick check on the latest business flash headlines. Wider news industry is being hurt by the climb traditional advertising and circulation. Theatar airways used handover of its newest plane to attack the arab states that have isolated the country, saying those measures have failed. Taking delivery of the new it posted0 once, annual loss with the diplomatic standoff. The ceo denounced saudi arabia and its allies, saying they have achieved nothing. The main purpose of the blockade has failed. Yes, it has increased our operating costs. It has also put financial strain on the airline, and this is why i mentioned to you last november that our bottom line will be effective, and Qatar Airways will post its first loss from the last seven years. Sprint is selling junk bonds for the first time in three years to fund a wireless upgrade. It is selling 1 billion of unsecured junk bonds and we are told that yields may be around 7. 3 . The collapse of talks alone in an increasingly competitive market. Coming up next, walmart is feeling the bite as amazon gobbles up customers. More on that just ahead. Plenty more to come leading up to the market open in japan as well as south korea. We did see a pullback inequities and the s p snapping at six day winning streak, and we are seeing continual losses in nikkei futures here this morning. Plenty more. This is bloomberg. We use our phones and computers the same way these days. So why do we pay to have a phone connected when were already paying for internet . Shouldnt it all just be one thing . Thats why Xfinity Mobile comes with your internet. You can get 5 lines of talk and text included at no extra cost. So all you pay for is data. Choose by the gig or unlimited. And now, get a 200 prepaid card when you buy an iphone. Its a new kind of network designed to save you money. Call, visit, or go to xfnitymobile. Com. ; 30 a. M. Wednesday in hong kong. A soggy morning. We are 30 minutes away from asias first major market open. David it is this ramy it is 6 30 p. M. In new york on a clear night in manhattan. Markets close down. 6 . Positivity in the weather, yvonne, up 16 degrees fahrenheit. I will take it. I am Ramy Inocencio in new york. Yvonne i am yvonne man in hong kong. Youre watching daybreak asia. First word news with jessica summers. The u. S. Treasury has full 100 79 billion worth of securities to rebuild its cash balance with your that auction rise yields at auction rising. The offerings with decent demand given the market facing a daily use of sales. The treasury will sell fiveyear and sevenyear maturities in the next two years, but both larger. S bitcoins recovery continues as regulators and south korea signal they will support what they term normal crypto currency trading, having hinted that an outright ban hinting an outright ban. The latest rise takes bitcoin to almost double its low of 5,992 on february 6. s boss isler delivering the best returns and has been compensated handsomely as a result. The annual report says he earned 12 million in base pay and bonuses last year and collected stock valued at 36 million last march. Takeover ofts chrysler in 2014 and oversaw for mollys game po in 2015 and its spinoff the following year. Has directed the Justice Department to ban socalled bump stocks. The decision comes after the killing of 17 students in florida. The white house declined to rule restrictions. A new poll shows 97 of americans now want universal background checks on rifle purchases. Hours a day,24 powered by more than 2700 journalists and analysts in more than 120 countries. I am jessica summers. This is bloomberg. Yvonne we are counting down to the market open in tokyo seoul. Market jitters. We see this renewed focus on these bond yields after the treasury auctions, but pretty much risk off for asia as well. Sophie we have those shocking earnings from walmart to add to this fog we are seeing that might left for now. When you take a look at the futures set up in japan and korea, we are looking at a subdued start for the markets. In seoul, we will be watching for reaction to south korea, watching a dispute about what it sees as the u. S. s unfair safe measures. We are seeing minors and tech stocks drag, putting the asx 200 on course for a second day of losses. Bhp falling almost 4 . Fortescue fighting after its profits took a tumble. Morgan stanley reminding investors that we are seeing the appetizer. We have to wait for the main course as to what we might see when it comes to potential jitters continuing in the market. Happeningk at what is in the dollar, tracking and him uptick. An Gold Holding Steady after posting the biggest drop since july, remy. Jessica australian ramy australian policy makers will be holding their breath to see if that shows signs of inflation, expected in one hours time. What are we expecting . Sophie the estimate is putting a 2 on your rights for wage losses for the Fourth Quarter. Rba could have the considering a rate hike sooner than later. That could push up the aussie dollar. Should the data come in softer than anticipated, that could dent the currency. That could compel the rba at a record low. The aussie that is holding below that 17 handle, a bit of a head because offor some the vanishing yield premium against the united states. That was back in 2000, and it was below the 50 handle. When it comes to what this means, macquarie has won has one view on that. Of trade are up 60 percent. I want to show you this chart. G btv 8394. Is australiaste commodity export prices. 180 are up about 108 since 2000. They have been going falling yields, the line in yellow. Downturn,y face a mccourtys case is to approach 85 by 2019. Ramy thank you very much. Lets stick with australia. They are gaining by the most. Up 2. 74 . Australias biggest privatesector employer announced a plunge in firsthalf profit. Paul allen is joining us now. Make heads or tails of this. An interesting market move from wesfarmers considering the following. As you mentioned, first half profit down. Mostly due to the poor performance of bannings in the united kingdom. This is a hugely successful hardware chain has not enjoyed this and success. There has been a 1 billion writedown. , the Supermarket Chain here in australia, up profit down 14 due to customer investment in lower poverty earnings. These. Ibed one hour ago markets prepared to ignore all of this and liking the turnaround strategy which is , seeing a gain of 2. 7 at the moment, ramy. Jessica a very bit ramy its a very big earnings week. I am seeing the stock price down by nearly 4. 5 , so what is the headline there . Paul the earnings from fortescue are not too bad, really. 681 million dollars. That was a beat. Fortescue, its only product is iron ore. Its biggest customer is china. We have seen this preference over the winter months and chinese new years for steelmakers to favor the iron ore. You need to burn a lot more to get the same result. Fortescue seized the trend of turning around as the winter period ends and steelmakers look towards better deals. There was some disagreement among analysts about whether or not that will actually happen. Yvonne a different story from we are seeing for the rivals. We are seeing shares down close to 5 in early trade after the earnings miss. Break it down, the earnings risk, too. Paul shares here in australia are following the experience of shares in london, where we saw losses of more than 4 . Net profit was up 25 out of 4. 1 billion. The market expecting more from bhp on surging oil and copper prices. It was coal and iron ore that disappointed for bhp here. Ceo, andrew mackenzie, says the profit is going to be redistributed. Shareholders will get a dividend of . 55. That was a beat. Then money will be used to pay down debt. From thesh proceeds investments that go into that know, the way things arform, you would expect significant proportion had to fight its way back to shareholders very quickly. Bhp of course also dealing with its activist investor. To that regard, bhp says its not going to end that dual listing structure it has. Put a stop to bhp as well. It is pushing towards a faster exit for its 10 billion u. S. Shale business. The deals could be reached by the end of the year. We will be keeping out for any more news on that. Yvonne it seems like that earnings disappointment slowing online sales. That rattled investors. Take a look at what we have seen. He covers consumer and retail industries. Sarah, it seems like investors are starting to learn patient lose patience in this battle with amazon. Strong got such results, 50 on stronger growth, and then we really saw that pullback to 23 growth this quarter, and i think, previously, the message had been walmart was really starting to get this with amazon figured out. They are questioning whether that is really the case. Yvonne any chance that walmart actually can actually catch up . Sarah it is definitely going to be an uphill battle for walmart. There will be interesting things afoot that can make a difference. One for example is thereby online and pick up in store is their by on mine and pick up in stores buy online and pick up in stores service. If they get customers to make that choice, that could be a powerful lever for them to pull. Ramy they were disappointed in walmarts profitability this quarter. What happened there . Sarah a couple of things. One, they were investing in lower prices. That that is a way they can really set themselves apart, so they were just making investments. Also, this is their lowest operating margin on record. I believe. I think this is Doug Mcmillon making a longterm play here, saying we have to profit in the shortterm if we are going to get this thing together over the longterm, and investors just seem to struggle with that rationale today. Ramy in addition, walmart delivered a disappointing earnings forecast for the coming fiscal year. No doubt, compounding all of those problems. We will leave it there. Sarah hall zach in washington. The Oil Market May be rebalancing faster than expected. Jeff brown joins us next as we assess the strategy so far. This is bloomberg. Welcome back. Asia. Daybreak i am Ramy Inocencio in new york. Yvonne i am yvonne man in hong kong. Lets get to my jefferson houston. You are thinking this is more of a demand story or supply . At think it is more supply driven today. With opec seeing the Global Supply glut balancing earlier than expected, i think thats what drove todays demand. Demand is healthy and the Global Economy is healthy. Think that will affect the announcement today. They pushed up the forecast for the oil demand. Ramy what are the biggest drivers of Global Oil Prices through the rest of 2018 . Want toonder that, i hop into the bloomberg terminal. G btv 1989. In terms of the white line, u. S. Crude production relative to the fiveyear average. We see wti and brent rising and then falling and rising a little bit here. Biggest drivers as we move ahead, mike . Jeff one of the mike one of the biggest things will be to see if they can Work Together to cut back into the supply glut. The big elephant in the room is the american shale. The production continues to hit new records every single month and every single week. The firstrday, we had crude carrier export a load of american crude on its way to china. Been an import. Those two things are going to really determine oil over the next year. Ramy we are going to be looking ahead to that for sure. Mike jeffers in houston. Keep on talking about oil. It rose to a twoweek high in new york. The demand for u. S. Crude is there. Oil at 70 a sees barrel by the Fourth Quarter. All right, so youre looking ahead to the Fourth Quarter here. We are seeing this new report saying that we are seeing rebalance happen in the Second Quarter or the third quarter. Upwant to move the timeframe a little bit in your forecast . We would actually say that we saw a rebound roughly once in january, so in terms of just looking at inventories, i would agree with the previous person on their that its all about supply now. And all focused on opec what the saudis and russia do, and they seem really determined to push the price over 70, and if they stayed the course, we fore. See 70 in the we could see it pushing up to 75 and even 80. This depends on whether they continue the present strategy. It will be very tight. Ramy Something Interesting i saw that you had said back in november. You said, certainly, if we crossed above 70, you would see the start of opec falling apart. He said maybe we might go to 75. Are you forecasting opec falling apart . May have been incredibly well. If you look through history, what you would have is slippage and cheating. As it is right now, they have been helped by the fact that venezuelan production has dropped and demand has surprise to the upside over the Fourth Quarter, so it has tightened up the market really quickly. If you look at how we could increase production, they are getting along very well. And russia are getting along. As long as that states the course. They should be in pretty good shape. Yvonne that could be interesting. Wti up. Rent falling. The spread has contracted to the smallest discount of more than six months when it comes to new york crude. This is largely driven, as you mentioned, on opec cuts, increased manned for u. S. Exports. We saw the third start during the red line, which is after hurricane harvey, so are you expect that spread to narrow more . We would expect that spread to widen out again, and this is partly because we see so much u. S. Production coming in, and we will start to get constraints in terms of pipeline pipeline constraints. Not as much export infrastructure, but in terms of pipeline constraints. Those will start to resurface. The spread is largely driven by internal dynamics, transportation dynamics in the u. S. , the real big driver. We have that widening out again to four dollars, five dollars. Yvonne its interesting. You mentioned the elephant in the room, the u. S. Crude production, which reached a record in january. Hitting 11 Million Barrels a day, sooner than expected. Is this still a market where there is a lot of oil out there still, jeff . Is a lot of potential Oil Production out of the u. S. I mean, if you look at the market, the inventories have tightened up incredibly quickly, so that is there. Year, u. S. Oil production is going to grow roughly in line with Global Demand growth. So it does not leave a lot of room for opec as we start to look forward. Probably the biggest question as we start to look out towards continue . An the u. S. Especially out into 2020. If the u. S. Keeps rolling forward like this, opec will eventually run into troubles again, frankly. The same courses that were played three years or four years ago can come back. Ramy your thoughts on the new, possibly new, cartel . Opec and russia some are calling it ropec. Bit abouted a little this already in the sense that they seem to be getting along really, really well. Investments across the Different Countries to keep the relationship solid. Again, through this year, we dont actually see reason why they should start to argue, necessarily. You on a surcharge you start to have to actually cut back and lose market share substantially. So far, so good. It looks pretty good through 2018. Ramy good stuff. We will leave it there, jeffrey brown, talking about oil futures. Russia as well as opec. We will continue our chat on oil and what is ahead for Energy Companies in asia. Stay with us. This is bloomberg. Ramy this is daybreak asia. I am Ramy Inocencio in new york. Yvonne i am yvonne man in hong kong. We are discussing Oil Prospects with jeff brown. Lets bring in Bloomberg Intelligence Senior Analyst oil prices are much stronger these days. With oil prices being around 70 per barrel, it seems like its a very good it i think it will be a divergence happening. You will see him hes doing really well this year, and refiners in petrochemicals struggling because oil is an import cost for them. Refiners would be doing well. Look at oil prices, even despite the correction the last couple of weeks, you have seen about 25 average increase. Rising emps rising if Oil Prices Remain where they are. Yvonne in terms of valuation, do you think the space still looks attractive . Kunal it is relatively extensive across the board, but if you break it down to the month of sectors, refiners are trading at 2. 5 times growth. If you break that down, you see them being relatively more confident in valuations. Refiners are the most expensive, and refiners create the highest amount of earnings risk going into 2018. I would like to pull a chart in terms of refinery earnings. What happened in 2017 in the second half of last year was you saw a lot of inventory gains coming in for refiners, and you see the green bars there. Prices ralliedl substantially. Now, the Oil Price Correction in losses for refiners. What we see that oil prices would probably remain stable or the lower over the next couple of months. That would mean the losses would probably vanish. Valuations aree the highest in the sector. Ramy one other risks moving ahead for earnings in the Energy Sector as a whole here . Kunal right, so oil price is obviously the biggest risk. Takes a on the mps turn. That would take the uturn. If Oil Prices Continue to fall from here, then refiners we are negative on refiners, and they would seem more losses coming in for 2018. ,f oil prices go up from here we could see price regulations coming back into the space, my china, india, where Higher Oil Prices kicks off inflation. And they are forced to do gasoline and youll prices. Seee are couple of risks we on the oil price move. Ramy in terms of subsectors. Subsectors, what is your pick . Kunal something in between that should benefit this year because of Stable Oil Prices in being able to pass on cost to the consumers. Ramy Bloomberg Intelligence analyst Kunal Agrawal in hong kong. Thank you very much for your analysis. Coming up on the next hour of daybreak asia, we are counting down to the open of asias major markets. We will get Immediate Reaction and investment tips from a cio. Yvonne do not miss our exclusive interview with ralph 8 40 a. M. Hong kong time and 7 40 p. M. In new york. Will bring us that conversation in the next hour. Plenty more to come on daybreak asia. The second hour in the open, coming up. This is bloomberg. 8 00 here in hong kong, live from bloombergs asian headquarters. I am yvonne man. Welcome to daybreak asia. Asianpacific stocks expected to fall. U. S. Equities were dragged down by disappointing results from walmart. The stock fell the most in 30 years. From bloombergs Global Headquarters i am Ramy Inocencio in new york. The dollar rose as the treasurys sold security to rebuild its trash balance. Rates not seen since the financial crisis of 2008. Barcelona tells bloomberg there is not enough money in the world to buy. We have an exclusive interview. Yvonne ramy, you can see this turbulence reignite a little bit when it comes to bond yields spiking up, given the treasury options. Given this turmoil, we could see the way people are shorting the dollar right now. 2952. Look at g btv we have seen more people betting on the yen to rally, versus the euro, given this long euro trade has been crowded. And the best we saw in 2017. 2018 will be the year of the yen. Still one of the cheapest currencies in the world. With a weaker dollar, the yen could easily be the best performer among g10 currencies. The boj could be dovish for now. They are saying the next policy shift will seem hawkish. Ramy especially as we see other Central Banks go from qe to qt. At least we can see who is investing and going long. Meantime, lets get to first word news with jessica summers. Is repeating its plea for an end to what it calls the war on children. Its regional director from the middle east says it, they can no atger express their outrage the deaths of so many young people in syria and yemen. Bashar alassad forces killed 20 people, most of them, children. The words toave describe the suffering these children are going through. I do not have the words anymore parents,ow deeply grandparents, loved ones are against suffering the loss of innocent boys and girls. Jessica officials from Punjab National bank are being questioned after an inquiry into way it to billiondollar fraud. Staffay five that bank and another have been arrested for conspiring to cheat the lender. They used fake Bank Guarantees to secure loans. He and his family fled before it came to light last month. The u. S. Treasury sold securities to rebuild a cash balance. And six month debts arising to levels unseen since 2008. Demanderings grew decent following the recent debt ceiling suspension. The next two days, both offerings larger than last month. Recovery continues as regulators in south korea signaled they will support what they call normal cryptocurrency trading, having hinted on a ban, they now say they want to be open and transparent trading. Bitcoin almost double its intraday low on february 6. Global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. I am jessica summers. This is bloomberg. Yvonne lets take a look your market open. A little bit of nerves in the market. Bond market and treasury options, but also a letdown in earnings when it came to walmart. For the latest, with sophie kamaruddin. Nerves, indeed, when you see the open and seoul and tokyo. 0. 2nikkei 225 losing percent. When it comes to the recent yen strength, that is a concern, should it remain persistent, given it raises the risk of an earnings shortfall compared to what japan ink inc provided. Set to be the best performer in 2018. Financials drag to the most on kospi, down 0. 4 . Aussie stocks, amid this earnings data. I want to highlight what is happening with the aussie dollar, ahead of australian wage pricing. Which will be of interest to rba watchers looking for signs of inflation. Here is a look at the stoxx pushing the dial. Ks pushing the dial. Tescue indicated it is losing out from chinas race from china suisse on raw materials. Coal took a hit. A bit of a mixed picture in sydney. Ramy thank you very much. Here in the united states, details on the rush investigation. A former associate at a firm is noww admitting to lying to authorities. Lets bring in jodi schneider. What is the significance of the guilty plea . It is the fourth guilty plea in this investigation and there have been indictments, as well. It shows it is widening and Robert Mueller and investigators are collecting more information. This one is also connected to an individual, people in the campaign, he is pleading guilty that he mislaid misled investigators. Into that. Ng closer more individuals, more people involved in the campaign. That has to be worrisome for President Trump and his administration. Yvonne Sarah Huckabee sanders tried toged russia interfere in the 2016 election. It is the first time we have heard the administration acknowledge that. Over the weekend he had been tweeting a great deal about shows he wasthis not involved. Yesterday the press secretary said russia did meddle or in theed to meddle election but did not play a role in President Trumps victory. It is somewhat of a change from what the president said in the past when he did not acknowledged their meddling. Said there was no evidence the russian president and his associates did meddle. It is a change, yet the president is sticking painting this as, it shows i did not have a role. This did not connect me or hand me the election. There is somewhat of a change in tone. Interestingly, the press secretary seemed to indicate there would be something happening that would show President Trump in the administration were taking action against russia. We will have to see what that is about. Yvonne we have seen several guilty pleas from mueller and inquiry. Where do we go from here . Jodi it is not the end. Andhey get more pleas indictments, there is more information that is gathered, obviously. We have to see where we go from here, but it appears to be ongoing. We have not heard from congress or much from republicans in congress about the about this. It will be interesting to see if the Republican Leadership will take action in the hearing. We will have to wait and see. Im certain President Trump will be tweeting more about this as more information becomes available. We will probably be hearing more from him and beyond the press secretarys comments. Yvonne we saw an outburst out there from florida. Jodi, thank you, joining us in hong kong. We speak exclusively to Microsoft Asia on transferring their organization and the Economic Impact of stabilization. Ramy and Market Strategy from Virginie Maisonneuve. This is bloomberg. My this is daybreak asia i am Remy Inocencio in new york. Yvonne asian markets opening lower in trade, the regional benchmark down 0. 2 . The u. S. Session snapped after six days of gains. Joining us is eastspring cio, Virginie Maisonneuve. They have a 150 billion of assets under management. Good to have you here in hong kong. Last time i spoke to you was in jakarta. You said goldilocks and the three bears is what we are expecting. Is goldilocks still around or gone . Virginie it depends on how you define it. Clearly, we still have synchronized growth. We still have earnings growth. Do we have low inflation . But rising, yes. Do we still have important structural trends underpinning global shifts that are going to be there for 10, 15 years . Yes. Clearly, the three bears, liquidity, inflation and rates, are there. The key thing is to address the changes of the three bears and where that stands for expectations. Known normalization of Monetary Policy was coming for a long time. That the fixed income team has had the forecast increases. Ncome the gap between expectations and where we are going to land, as well as potential aftershocks. If you believe you stay within 3. 3 ealm of 3 inflation, on yield, etc. , i think you are using the volatility and air pockets of buying opportunities to reposition portfolios. We are longterm investors at eastspring. But market volatility is can replace your portfolio. I think that is what 2018 is about. Clearly we are getting closer to the peak. We are in late cycles. The positive is about, is about capex, which is good for asia. It is back to send a mentals. It is about sentimentals. You have to be anchored. Yvonne it is not as easy. Asset classes have been at war with each other. They are adjusting it. Equity investors the past few fromwere rebounding discretion we saw and shrugging off this inflation. The dollar, still quite unloved. What asset class d look at now . Do you look at now . Virginie seeing the difference between consensus, that is the key. That is what Asset Management really is about, right . Overweightare still equities. In january, we took a little money off emerging markets. We added it to the u. S. , which was quite weak. That was a tactical move. Clearly in the fixed income space we like highyields. To like less correlated Asset Classes like infrastructure or private equity when you think about it i am talking about a multiasset perspective. I think that continues. All that said, they will have to prepare to be more tradingoriented. Every time the fear in the market is going to be about, is this a Tipping Point . People are concerned and they should be, because we have had a long cycle. We are in a late, late stage of the cycle. That does not mean the party is done this month. Ramy you talk about this Tipping Point. What might bring that Tipping Point actually fall over, in your view . Virginie clearly, inflation. If you have inflation above expectations, much above expectations, a big surprise this is what the market is talking about. They dont really know, there is a lot of uncertainty. If you look at the wage numbers that came out in january, there are technical factors in terms of the number of hours worked. There is sensitivity globally over what happened with the ecb. Who is going to replace mario draghi . That is important. We are in an Election Year for russia. Russia loves the higher oil price. Linking that to conflicts in the middle east is maybe a bit for the french. We know oil prices helped russia during election times. Other factors. We have to remember longterm trends are underway. Variousnology, deflationary. The risk in the market, some of the key members, these Companies Miss to their earnings m issed their earnings. It is focusing on the Earnings Companies can give you, and make sure you position properly. Japan for example, we still like very much. You have the restructuring story, as well as exposure to global cyclicality. We think the japanese market is still effectively valued. If it hurtsthing, during volatile times, you want to look at. Ramy you were talking earlier about what is happening with the japan. I want to look at what is happening with the yen. We thought weakening of it. It is now 107. 39. About,ne was talking what are your thoughts about forecast for the yen . Virginie that is really difficult. X expert so ire dont think my views would add value. The one theme i think is important to the multiasset perspective is, we will see volatility in currency this year because people go backandforth from rates level to rates move. Deficits as we see in the u. S. , and this ongoing round of focusing on different things, will actually put volatility in the currency markets. Again, that is not a bad thing. You go back to angering the dollar. It was weaker than expected. That is the anchor currency. Postmarch, we have a base affect post march. The fear of more rates rising will continue. Will the markets focus on the twin deficits or the absolute rates . That is the question. Because there is no magic recipe, you will see volatility. Yvonne you mentioned fundamentals. I was reading your notes. I thought this was interesting, there is reluctance in the market for people believing the u. S. Market can return to levels of nominal growth before the financial crisis. Take a more macro view. Can we say the same with earnings, as well . They are bumper this year. What have we gone back to those levels . Virginie it has changed a lot. Even if you talk about general numbers, which you have to see in the making of those numbers, think about the earnings contribution versus where we are now. Think about the technology sector. Think about materials and resources and the changes in the making. To me, that is really what is important. And is it sustainable . We are entering this capex cycle. It is late. People were concerned the cash is being used to buy back. Finally it is used for investment. We see capex in the u. S. Two quarters in a row in the double digits, which is really good. We have plus investment. Were back to currency and twin assets. I think of that will offer interesting opportunities for specific companies. Willes not mean the tide raise all boats. If you have a volatility it gives you an opportunity to add value. This is really hard. Again, we have transformations on a global basis with china and advancements. Gy the definition of what is successful is changing. It is understanding what companies in that context will do well, and not go to the pregfc model. ,vonne Virginie Maisonneuve Eastspring Investments cio in hong kong. Catch up with us on past interviews that we talk about. That is all on the right side of your screen. This is for bloomberg subscribers only. This is bloomberg. A quick check of the latest business flash headlines. Berkshire hathaway has more jobs at its media empire. The omaha world herald is losing its position. That with rising costs and losing ad revenue. The wider news industry is hurt by a decline in traditional ads. Selling junk bonds for the first time in three years despite a wireless upgrade. They are selling a billion dollars of unsecured junk bonds. The debt yield may be around 7. 75 . Left to alone in an increasingly volatile market, behind at t and tmobile in terms of subscribers. Ramy Barcelona Football Club says there is not enough money in the world to buy star player leo messi. They are they are to say it to face chelsea. They are on course to meet their targets off and on the pitch. He is the best player in the world. 200 million in value. Something to did renew his contract. 300 million. Cost. Reased of the when youre the president of the club, the balancing act between the best playing squad in a financial decision, if someone came in to offer you 700 Million Euros you still would not sell leo messi . No. Not even if it is secure . No, we want to have good futbol. Is our key player. Doesimportantly, leo messi not want to leave. He likes the city. He came from argentina when he was 12 years old. If a player does not want to leave, like leo messi, he will stay forever. Yvonne we will go through earnings with mgm china, its prospects for a casino. This is bloomberg. Yvonne it is a 30 in singapore. 8 30 in singapore. I am yvonne man in hong kong. Ramy inocencioa in new york. Youre watching daybreak asia. Breaking news out of australia. Wage price index numbers coming in. Quarter,n corner, up. We are getting an unexpected uptick. As for year on year, that is 2. 1 . The survey was for 2. 4 . This is ticking up over the last year and a half. It had been lower at 1. 9 since september of 2016. If you look at it since 2008, it has been falling lower. Yvonne we have been at record lows when it comes to wage growth in australia. Any big uptick could be risky when it comes to bonds. Especially with the wage data on the u. S. , really send bonds tumbling. The aussie dollar, you can see that pop, popping higher after we saw the 0. 6 uptick when it comes to wages. Not exactly going to move the needle for the rba when it comes to turning hawkish. We are thinking they will not talk anytime this year. We did hear from philip lowe on friday that he has been hearing pockets where the labor market is tight, trying to find the right workers with the right skills. We are seeing those rates pressures rise. We could be getting back to that 80 handle soon, perhaps. Lets get to first word news with jessica summers. Londonbased lawyer has pleaded guilty to lying to u. S. Officials, pursuing alleged russian meddling. Alex van der zwaan admitted misleading investigators with a paul manafort. E, he was the fourth person to plead guilty in robert muirs inquiry, Robert Muellers inquiry. U. K. Prime minister theresa may is under even more pressure as hardliners from her party set out brexit demands. A letter from 62 tories says the u. K. Must not bow down to e. U. Regulations. It keepingyn says the u. K. Inside a Customs Union with the e. U. Is necessary for trade and to keep a hard border with ireland. President trump directed the Justice Department to ban socalled bump stocks that allow semiautomatic rifles. This after the killing of 17 students in florida. Restrictions on the sale of ar15 rifles or similar. Many americans now want universal background checks on rifle purchases. A north korean cyber spy group seen as a global threat, under kim jonguns military interest. Fireeye has now attacked to japan, hong kong, the middle east. Attacked automotive, aerospace, health care. Global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. I am jessica summers. This is bloomberg. Yvonne jessica, thank you. Time to see how the asian markets are shaping up this morning. We saw wage growth and australia the highest, according to david inglis, since 2016. We dont look at the data front as much. Everyone is looking for a catalyst. Rba watchers have been looking for signs inflation will be coming through. We had strong jobs growth of data and whether that hold, give a boost to income. It looks like the wage price income is lending to this. The 10 year yield rising along. The aussie dollar up 0. 2 , moving higher in the wage price index for the Fourth Quarter. Aussie stocks are looking fairly unchanged. You have an earnings story playing out in sydney. Bhp falling. Over 22 after a Solid Earnings report, announcing its tie up. A reversal of the losses we saw earlier, up 0. 1 . Investors have the latest polls check on exports. 3. 9 year on year in the first 20 days of this month. That is likely seasonal given the chinese new years holiday. Price growth is in january to 1. 2 , according to the bank of korea. I want to highlight what is happening with the korean won, down, continuing to slip from a twoweek high. The yen now on the back foot, sticking above th 107 handle. Stock movers and seoul. Lotte holdings ceo will be resigning from the Japan Lotte Holdings board. We are seeing the stock under pressure in seoul. Check out what is happening with korea colmar kolmar. They say it will create synergy in their pharmaceutical business. Ramy thank you very much. Intots trying to eke out the green. We will be watching mgm china, after their Parent Company beat the highest analyst estimate in its fourthquarter earnings. Revenue rose 2. 6 billion with mgm china net revenue jumping 10 548 billion. Ands bring in our gaming marketing analyst, margaret wong. When we talk about Fourth Quarter, we had strong business across the mass segment. Luckier quarter compared to last years Fourth Quarter. Still, it is optimistic and good in terms of business, overall. Even without the property they debuted last week. Speaking of the resort, opening just in time for the lunar new year. I understand you got a sneak peak. What are your thoughts on the property after heading over there . Beautifully is a done property, a premium, mass modern, contemporary, with chinese flair. Beautifully done. But when you walk around the property and get a sense of it, you know they are not quite ready. A reached a series of delays. That900 rooms open during period of time. It is critical in terms of raising that ramp up in Revenue Growth for a particular property. Yvonne what about the other macau casinos . Earlyre booked out, booked user grade. How did it turn out . Margaret it is true. It is interesting when you walk around each property and region, the older parts of cotai. Are fullyll rooms booked the third and fourth day of chinese new year. We dom particularly, think because of the fact they were so late to open and did not have the time to fully promote themselves, that may have been a ins in terms a miss, terms of their ramp up. Theirtime to optimize rooms and bring Good Business across the board. Yvonne in terms of mass market ip visitors, will the vip lead the pack for the cotai area . Margaret the vip will always make the headlines, they are the revenue drivers. What segment say of the business. Vip swings everything. Overall, there was a lot of traffic going around these properties. Is still central in offering premium accommodation for these players. We do feel with january numbers vip was upame out, 41 in january. Overall, business is a boom for both segments. Yvonne a market we have heard a lot of noise, which could hamper the rebound in macau. There were some reports about, they could be legalizing gambling. How does that impact macau longterm . Margaret with every news that comes out, there is some volatility across the board for these operators. Particularly for wynn. In asia we do see him more as a businessman who is reputable in the u. S. But in asia, most clients think of wynn as a highend product. It is difficult to say that will certainly impacted the company. For now for asia, it will be business as usual. It is still one of the best in cotai. That is certain noise. Longterm Growth Drivers are still there for macau. Lly. Omes up periodica we see why china would want back control and oversee the business that happened in the gaming sector. But in the near term we do not see any impact for macau. Yvonne they say, never trust their sources. Sogaret wong, thank you much, our gaming and lodging analyst. Digital transformation a major contributor to asias economic growth. Exclusively in interview with the regional head of microsoft. This is bloomberg. This is daybreak asia. I am Ramy Inocencio in new york. Yvonne i am yvonne man in hong kong. Thousands of fans gathered to watch gamers play. A serious opportunity. Phenomenon isg e good for business. It is a big deal. We sponsor and we do it ourselves. Industry, the biggest the worldwide tournament. Most importantly, the final. Onsite, 60,000 people paid to watch that full five hours. It is almost bigger than a concert. It is enormous. I like people to watch it. Last year, it was more than 100 Million People. Incredible type of numbers. So many people are excited about that. We have to make sure we do not miss that opportunity. [indiscernible] last year, eight countries. This year, it will be more countries participating. Withp of that, we work sponsored teams. Itself is coming he coming such a big ecosystem. There are systems, training in their schools, college. We provide the right type of gear. It is interesting for people in my age to watch what . You majored in gaming . What do you do . They say, we are like you. They write a script, they analyze the game, they come up with strategies. [indiscernible] people like me will not be able to do so. I dont play games. It, will be able to see how the teams strategized to win the game. Very exciting. What is the potential of esports, do you think . The sky is the limit. Alreadysports is bigger than the nba in terms of total value. The only sport bigger than esports is gambling. Eventually, i do not know. Growing. T is still [indiscernible] 100 amazing numbers, Million People watching esports. Maybe they will do the eo lympics in the future. Digital transfer in it transformation seen by Many Companies as a boost to their business. Haslinda amin is looking at the Economic Impact of change in the asiapacific. , this Digital Transformation is happening much faster than we think. Microsoft says 85 of jobs in the asia region will be transformed and have Significant Impact on gdp. To being lets speak quantify the change to gdp. It is really on agenda. We are interested in understanding, what does it mean for the economy and businesses . And askstudy with idc more than 1500 decisionmakers in 15 markets in asia. There are two Interesting Data point. 15 believe they are getting benefits. , 50 n the next three years expect it. Expecting 1. 2 trillion impact on gdp with products and services, which is massive. It is a 0. 8 increase on gdp, which is exciting for the industry and decisionmakers. Haslinda but that is the potential. Our companies, our governments on board . Dont know where the next technological investment should be. Areh i think the ceos really setting up for a tough problem but a big opportunity. 60 of gdp three years from now will be based on digital technology. Now, three things need to happen. Ceos need to take care on ai, that is a big changing product. Rescaling the company and ecosystem. The third one, focusing on micro revolutions in the way they develop products. Haslinda how are you capitalizing on the huge potential in ai . Ralph we are focusing on two things. Number one, ai we believe is in everyones product interest. We are more than 25 years in the business of building ai technology, which has made a major break point. Machine reading now has the capability of human beings. Text can be translated and answered from machines. Weis the spirit of ai where cooperate with human ingenuity. That is our thinking on what ai is doing. With thehe reason taiwan government, we have jointly come together to build a platform in taiwanese markets for the industry. We know taiwan has a leading technology industry. The government wants to make sure the industry makers can benefit from the ai technology. They are investing 500 million more in the next three years. Haslinda taiwan shows great potential. What others . Ralph china is a leading marketplace for ai. We see great initiatives also coming out of india. And here in singapore we see a lot of initiative supported by government, bringing sources to the market. Haslinda china is also an important market for you for cloud. What is the pickup rate and the potential of cloud . Ralph cloud is the platform for Digital Transformation. A cloudcrosoft have background we call azure. Thatve been growing on one, it is going strong. We are investing heavily in that technology. We are leading in the number of markets we are serving, 140 countries, 140 platforms. Is the strategy, what is the momentum you are seeing . Ralph we are focused on the momentum on the cloud side. Focusing on the technology on the ai side, focusing on Industries Like manufacturing, which is heavy on taking on the cloud and ai technology. We have real estate, very important for asia. Coming. Health care even governments building platforms, more and more coming. Ai is relevant for small companies. Let me take the example of a Hong Kongbased real estate company. They are a midsized company, focused on selling real estate products. But now they have aia asian aiport now they have agent support. It shows where Real Estate Opportunities will show up. More impact on their products, going forward. Haslinda i want to look at the space going forward. Consumers are moving away from windowspowered computers and relying more and more on gadgets, mobile appliances. Where does that leave you and how are you preparing for the future of that . Ralph users are having multiple interactions with cloudbased and aibased experiences. Your car will support you, how you travel and commute and what information you get. From the manufacturing side, it is the every to you get recommendations. This will come in all kinds of experiences. It will come on mobile devices, pc devices, display devices. Ai isxpecting clouded to getting the opportunity of all sorts of experiences we have as human beings. Haslinda what will that translate into earnings . Revenue topped analyst estimates for microsoft. But how did asia do as a region . Ralph as you have seen, we are along the line of them azure teh the azure growth. Had great feedback on the Digital Transformation here in asia. Customerse, we get and our partners here in the region taking the technology to customers. Haslinda thank you for your insights today. Yvonne, back to you. Yvonne great chat on the digitalization we are seeing here in asia. Find forget, you can indepth analysis from the big newsmakers on Bloomberg Radio. You can also download the app, Bloomberg Radio plus, or access it via bloombergradio. Com. This is bloomberg. Frome that is almost it daybreak asia. Lets see what is coming up on Bloomberg Markets. What are you watching . U. S. Bond yields, Interest Rates going up higher. That will be discussed. He has a fund which since the beginning of december is getting returns. He will be joining us in an hour or thereabouts. He will benett, talking about why he is bullish on the yen. He also likes the new zealand dollar. He is bearish on the dollar overall. Marshall. Rther, david all these bank fraud taking place in india. That is the flavor of what is to come. Ramy thank you, that is it from daybreak asia. Our asian market coverage continues. This is bloomberg. Rishaad weve got markets reflecting on late declines on the u. S. The yen weakening towards 108. China is one to watch here in hong kong. The gaming companys topped estimates in its Fourth Quarter. The dollar rising. The treasury sold securities. Rates not seen since 2008. Im Rishaad Salamat in hong kong. Haidi and im haidi lun in sydney. Playing the game in a digital future. Esports are exploding. This is Bloomberg Markets asia