But it turns out that may not be the case. In the big banks launch a earnings season with a bang. Jp morgan reports of most profitable year ever for any u. S. Lender. News from south korea, were the jobless numbers for the month of december. Writings coming in at 3. 8 , which is higher than estimated and higher than the previous month of november. The jobless rate has been creeping up since the month of august and now we are seeing it shoot up to 3. 8 . Although it is worth mentioning that the economy still added 516,000 jobs in december, which is 200,000 more than in the month of november. Conflicting signals right there, but we have seen the government has tried to create jobs, they have tried to support the economy, but we continue to see declines in the manufacturing and retail sectors. Now the jobless rate coming in at higher than expected 3. 8 . Austrian markets have now open for trade. Lets turn to sophie for what to watch. Sydney a flat open in after a fresh record on tuesday. Of 1 . At a high overnight, with names like apple under pressure. Potential consolidation seen for stocks as well as currency. Lets check in on the yen which is hovering below 110 against the greenback. Ass treasuryn secretary mnuchin saying china tariffs will be reviewed only after a phase ii two deal is signed. Look at moves in either direction. The aussie dollar steady as markets assess the prospects for rate cuts from the boe as we wait on inflation data from the u. K. Later this week. Haidi lets get you the first word news from new york. The Trump Administration may restrict the media from preparing advanced stories on market moving data such as payroll numbers. Currently the Labor Department stories written on computers disconnected from the internet that are only transmitted after release time. Were told the department maybury met may announce is weak it is removing those computers. All 176 people on board the ukrainian plane died when it was hit by two missiles fired by the revolutionary guard. Iran initially blamed technical issues for the crash. President rouhani is calling for a special court to investigate the disaster, saying the entire world is watching. Qualifying begins later wednesday for the australian withtennis tournament, host city melbourne enjoying some of the worst air quality in the world. The raging bushfires have led some to question the playing of support in such conditions and the tournament organizers say their monitoring the situation constantly. One player has been forced to retire from a match after collapsing in a coughing fit on the court. That, we follow the advice of the medical experts as well as the advice of the , asronmental specialist well as the forecasts of meteorologist. Sophie James Murdoch is criticizing the coverage of australias bushfires by his own families news outlets, exposing the exposing the growing rift in his familys empire. James murdoch stepped down as ceo of 21st century fox last year. There are renewed fears that the volcano in the philippines is about to explode. 40,000 people ring move from nearby towns with police imposing a lockdown to prevent any return home. Three days of increasingly violent seismic activity have closed schools and offices and caused the pause at the airport and suspended trading on the philippine stock exchange. Global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Top story,ur bloomberg exclusive. The u. S. Will likely keep existing tariffs on billions of dollars of chinese goods in place until after the president ial election. This has just been confirmed in the last halfhour by treasury secretary Steven Mnuchin. Take a listen. The tariffs will stay in place until there is a phase two. If a president gets face too quickly, he will consider releasing tariffs as part of phase two. If not, there wont be any tariff relief. It has nothing to do with the election or anything else. Anna, what does this mean . When will we get a phase two agreement . Its probably not going to happen before the elections, at least. A question we are asking here in washington. The president said he personally will travel to beijing to start negotiating the phase two part of the deal. We will see whether or not that happens before the election, but when it comes to the trade deal and its impact on the economy, the performance of the u. S. Economy will be very important to President Trump next year as he prepares to run for reelection in november. Of lookingerms gesturehis goodfaith and tying a ribbon on the package after all these tweets and threats and tariffs and whatnot, what happens now . Are we expecting more negotiations to take us into phase two or phase three, the more difficult structural issues that critics have been asking for . Anna it looks like we will see more negotiations. The question is what will be the scope of the agreement that comes out of that. The agreement we will have signed tomorrow is much smaller in scope than what the president originally promised. He originally said it would look at intellectual property and other industrial support for Chinese Companies that is not going to be treated in this deal. So as we get into phase two, we will look to see what components will be included in that and whether they can work out some of the issues that are more difficult between the two countries. That taking care of the low hanging fruit in the phase i deal but when you get into the harder negotiations it will be more difficult for the two sides to come together. Anna edgerton there in washington with the latest on trade. Reportss are setting guest describes the news as a speedbump. From a smokyow melbourne. We will get to the bushfires in a moment but lets start with the top story, that report that the tariffs will stay in place. We heard from the treasury secretary that there will be no tariff relief. This chart illustrates the impact of what this means. It is about compliance, which goes some way to address the critics who say what prevents china from reneging on this after the deal is signed . If you look at the market reaction, there is still an enormous amount of demand for risk out there. Do the markets really care that tariffs will be in place until at least november . Care, but i dont think its going to flip the narrative in the sense that it removes one of the potential upside risks to the market this year which is that will potentially continue to see tariffs being removed. Im sure there is a segment of the market that would have been betting on further progress in trade talks in the year ahead. Tariffs would continue to fall, that would be good for the Global Economy. That looks like it is being taken off the table. Relates to the trade tensions Going Forward, its what can we pricing with some level of confidence. If its not the best case scenario, at least it will be a scenario that markets can bank in an supportive enough to see the continued unfolding of Global Growth with fewer headwinds than there were in 2019. Overall, something the markets want to take into consideration, but not enough to really bring about a bear case to funding in the Global Economy. We are in thisas cycle, we are seeing some green shoots of growth, emerging markets powering ahead, a bottoming out of startups with the recovery of the chinese economy and liquidity from the fed. All those things being equal, and trade looking positive as well, do you think equities have excuses to keep pushing higher . Kyle they do, and the fundamental matter here is, what is really driving the stock market higher is the accommodating Monetary Policy and liquidity injections from the fed. Since weve seen the expansion of the fed balance sheet, that occurred in the last quarter of last year, august and september when it lifted off. Wheret environment liquidity is well supported, the market wants to push higher. It then somewhat becomes what is reflected in fundamentals and markets drive higher and on what fundamental basis. With trade tensions diminished, with the fact that were seeing green shoots in the Global Economy with some signs of a turnaround in fundamental data, it gives an excuse to put the money to work and drive it to somewhere that growth will exist. Valuations are really high at , some of the most stretched valuations we have seen across the world. Central banks given the green and in anake risks, environment where growth has seemed to have bottomed, starting to turn around in a sixmonth cycle. Assets had the ability to move higher, though i would say we are not looking at a situation risk,things are without saidhe central bank has you have to dance and i think risk assets will continue to push higher. The s p 500 valuation near a cycle hi. How good do the Fourth Quarter earnings have to be in order to keep the party going . Kyle they just have to be better than expected, quite fundamentally. That is pretty much the narrative of the last 12 months and that will continue. The benchmark s p 500, which we if you strip back from price to earnings, with the price to earnings driven last year by cuts from the fed, were looking at highs that potentially have not been seen since the. Com boom. The market has that priced in. We have to expect that we will probably see some kind of earnings contraction again this quarter. We just have to see some level of improvement on that. In the downgrading cycle for earnings, if you get that then youve got the recipe for capital to flow into equities on necessity and that keeps the Party Running for a little bit longer. Im a little cynical, i dont think it is a system that can last forever. The rebound Strong Enough to justify risk, it will be relatively positive. Haidi great to have you back, r rodda. A kyle will be live from des moines later this hour. Jp morgan posting their best year for any lender in u. S. History. This is bloomberg. Haidi this is daybreak asia. Shery im shery ahn in new york. The Bank Earnings parade continues with Goldman Sachs and bank of america reporting before the bell wednesday, and both will have a tough time meeting jp morgan. It announced the biggest profit by any u. S. Bank in history. Su keenan joins us with the latest. How does this raise expectations . Bar. S certainly raises the they had very strong fixed income trading revenue, net something goldman makes the bigger share of its money from then its peers. If you take a look at how the bank stocks performed ahead of their earnings, which will be reported before the opening bell, both goldman and bank of america not a boost. But lets take a look at some of the factors at goldman, which, by the way, has a fiveyear plan to expand bigtime in china, doubling its staff there. They also see a gigantic but the relation of beers is important because the numbers may not directly aligned the relation of peers is important how they are doing visavis the other banks. Fixed income and trading should greece for goldman from a difficult prior period. Analysts surveyed expect revenuer be about of 22 billion. Shery lets turn back to jp morgan. One analyst said they hit it out of the ballpark. Su that had of billion more in their surge in fixed income trading then was expected. Not only the most profitable year ever for j. P. Morgan chase, but as you just said, of any bank. This is how they performed. Two hits and amiss is what i titled this firm because wells fargo missed badly. Lets go right to jp morgan. You can see that jp morgan really has outshined its peers since acquiring bear stearns and has just been pulling away recently. We also note that on the Conference Call there were a lot of questions about whether jamie dimon will be retiring anytime soon. Lets look at how the jp morgan stock price has been for the year. With the latest performance, he what hee years is about will be looking at. Thats what he said last year and he said it may follow with another five years but that is what he is looking at, to stick around for another five years. Fixed income was that key for j. P. Morgan chase. Inigroups trading income fixed income was up 49 . It also was a very big surge. That windfall help the ceo beat its profit target. Strength andome debt underwriting and Consumer Banking so that was positive. In terms of wells fargo, very disappointing. They not only missed expectations, but clearly the new ceo is facing legal issues in has pledged to engage more costcutting Going Forward, but the bar set very high after the Strong Performance by j. P. Morgan chase. Haidi the king of all street, jamie dimon there. Economic data down to quick change under the Trump Administration. What the changes could mean for the market and the media, next. This is bloomberg. Shery this is daybreak asia. Im shery ahn in new york. Haidi the Trump Administration is planning to change how Economic Data is released in a move that could affect access to figures such as the monthly jobs report. Peggy, what do we know about the proposed potential changes in and how impactful they might be . News porters broke the earlier today that the Trump Administration is looking at some changes to the way it releases Economic Data out of the Labor Department, including potentially taking away computers that reporters for decades have used to basically get the data on embargo ahead of the release, digest it, try to make sure it is accurate in terms of what they are releasing, then report it out. We are hearing they are considering changing that in a way that the computers would not be accessible to reporters ahead of time. What we dont know yet is whether plans are for how they would release it. Would it go straight out to the internet at a prescribed time where everyone could get it at the same time . That opens up other questions about whether there could be a logjam with the servers at the Labor Department all being hit at the same time with things like the jobs report released on the first friday of every month. Shery weve had some of those hiccups with the agriculture department. What does it mean for the Financial Markets . Peggy some of the reaction is that people are saying it could create somewhat of an arms race in the Financial Markets for people to get to the data as fast as they could. There might be more volatility is different people access the data at different times and digested. Could there be more volatility about trading of the numbers . A certain amount of news organizations digest the data and then release it to the public all at the same time. On the other hand, when the government has looked at doing this prior to the administration, they have said it is possible that doing it in this way might increase security or reduce costs. Shery peggy collins, thank you so much. We have an alert on the bloomberg. We are hearing that the u. S. Could be drafting new rules to ,lock more sales to huawei according to reuters. We saw the Commerce Department back in may put huawei on a blacklist, making it more difficult for u. S. Firms to sell to huawei, but the firms have found ways to continue to sell to huawei. Now the u. S. Could be drafting rules to block more sales to huawei, according to the reuters report. Lets get a check of the latest business flash headlines. Delta airlines is pushing industry shares higher, after reporting surprisingly strong fourthquarter results thanks to robust domestic demand. Revenue from highmargin Business Class tickets and other Premium Products increased 9 , more than a 5 gain for coach fares. From the benefited grounding of the 737 max because it doesnt fly that plane. Boeing being handeds biggest defeat in their 45 year airline history. Only is tense since 1974 when the a 300 maids commercial debut. Shery boeing said be talking to banks about a potential loan as it deals with the grounding and production halt of the 737 max. Were told that citigroup is leading the discussion. Boeings access to credit markets could soon be more expensive, with moodys lacing its unsecured debt rating on review for downgrade. In the next hour, William Oneill analyst andrew koestner tells us how boeing can whether the mounting storm. Carla hill joins us to discuss the latest twists and turns in the trade war. Will President Trumps paris gamble backfire . We will discuss. This is bloomberg. Hey. Hey. You must be stevens phone. Now you can take control of your home wifi and get a notification the instant someone new joins your network. Only with xfinity xfi. Download the xfi app today. This is daybreak asia. Reports from washington said the u. S. Is drafting a rolled to block text sales to huawei. The report offered no other details. And the u. K. Look set to rebuff american pressure by potentially allowing Huawei Technology in its network. Same britain deserves the best possible system at of one brand is rejected, top class alternative must be offered. A conic times square is struggling with the retail slump, with several big names looking to pack up and move out. Gap and cover girl are the latest looking to leave, the companies unwilling to accept skyhigh rents for daily exposure to commuters and tourists. Its being stoked by the increasing Consumer Trend toward online shopping. And 17 children and nine adults needed medical treatment when it airline airliner dumped jet fuel near an Elementary School as it prepared to land in los angeles. Delta airlines confirmed that one of its jets had dumped fuel to lower its lending weight. Lax en routeleft to shanghai but turned around after suffering engine problems and landed shortly afterwards. Tylan said it is ready to take centralps to cool bankers are concerned about the indications for the economy with exports under increasing pressure. The bank of tylan says government and the private sector also play a role in managing the currency. Global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. Gupta, this is bloomberg. Look at our asian markets and how theyre faring. Sophie is in hong kong. Sophie we have the asx 200 pushing to fresh highs while aussie bonds are gaining ground. This is a mid that tariffs on china when not removed any time soon. Aussie and kiwi, holding steady. After retreating to snap a fiveday gain on the as a way for details, lets jump into the terminal and show you how emerging currencies have fared. And asx pushing higher for six straight day. A rising trend, the last time we saw these conditions was back in big 2017. That was followed by abu market rally. Shery staying on trait followed by a bull market rally. Ambassador hills, i was great talking to you. Thank you so much for joining us today. We now hearing treasury secretary mnuchin saying the terrace will stay in place until the signing of that phase two trade deal. Should we just accept these duties on 360 within dollars for chinese goods as the new normal . When could we see the next phase of that agreement . Well, you would need a crystal ball. I dont think we know when we will see the next phase of the agreement, because the trade agenda is very full right now. We should applaud the fact that they have a truce and have some benefits. I think that as the president has said, he does not expect the phase two to be completed before the election in november. Will the tariffs be enough to use as leverage for this deal to become enforceable . My recommendation is not favoring tariffs. I think that good negotiations, and thats one of the things i like, that is apparently included in this phase one, is semiannual meetings among the top leaders. I think that is a positive outcome, but lets hope that we can understand what the political problems are in china, and they can understand what our political and Economic Issues are, and we can find a compromise, a harmonious agreement. Trade despite the tensions easing between the u. S. And china, which seen the u. S. , the eu and japan getting up and try to strengthen wto rules. How good of an approach is this . Thee do need to address nonmarket oriented subsidies, when china joined the wto in 2001, it committed to nondiscrimination and national treatment. But it it is in their interest. This is a great moment, because chinas economy is softening and the productivity is coming from the private sector. If they were to funnel their resources to the private sector instead of the enterprises that are losing money, they would strengthen their economy. So there is an agreement to be had. Its just, can we get there . Haidi is the biggest loser . . If the phase i deal is seen as a success, does it not suggest that this kind of bilateral managed trade as opposed to free trade being conducted by a Global Institution is more effective . Carla its a phase one, i dont think managed trade generates growth and stimulates innovation and competition the way open trade does. But lets move forward and try to get an agreement in the other areas. It isnt just state owned in her prizes that are causing problems. If the state owned enterprises would comply with the market principles, that is they were competitively neutral, i dont see that there would be a problem, but the state owned enterprises are getting lower taxes, free land, subsidies, all kind of favorable treatments, so they are we are being discriminated against. We know that the treasury secretary has been pushing for the twice yearly reviews and conversations and the markets are clearly looking ahead to what of phase two are faced three part of the trade deal would look like. Structural issues that china in a lot of ways doesnt have the incentive or perhaps the ability to be able to address without domestic pain. Carla lets talk about your word incentive. I think china does have the incentive to move forward and open up its economy. Thats the way it is going to generate growth and deliver the kind of growth it has promised its population. We ought to work together. I look forward to them meeting and trying to come up with solutions to end the phase two part of our negotiations. It wont happen overnight. I think it is accurate to say that would probably wont get phase two finished before november, but lets work on it and see if we can come up with a positive alternative. We had tough times before with other economies, including china , and we worked our way through it. Beyond november, do you expect the u. S. Approach to trade to change if there is a change in the administration . Seea well, we will have to who is elected, whether the Current Administration is returned to office or if someone else from the Democratic Party takes over. I dont know whats going to happen. I dont think the pollsters know at this juncture what is going to happen. Stay tuned, this into the debates, and make up your mind after all the talk is over. Shery Senate Majority leader Mitch Mcconnell has now said they will pass the u. S. Trade deal with mexico and canada and put it to a vote this week. How much does the president need this right now . Carla well, i think we all need it. One of the big things that we need is certainty, and not knowing what the roles are Going Forward is really a tremendous burden on our economy. Particularly the sectors that are adversely affected. We have benefited in or mislead by building economic bonds with our northern and southern neighbors. It has been very, very good for our economy and we want to build on that. The north American Free trade agreement needs to be upgraded. We didnt have rules governing cell phones, digital flows and that kind of thing in 1992, so we need to do that, but i think we want to move forward and make the north american region the most competitive in the world. It has been in the past. We need to recapture our position. Carla hills their joining us. We appreciate your time with us. Staying with trade, hong kong could end up being the loser from the u. S. China trade deal. Its a good thing that hong kong has no other headwinds for its economy at the moment. Indeed, but it is worth bearing in mind, hong kong has traditionally profited from trade with china and the u. S. There are some risk involved in the trade deal. Bear in mind hong kongs role, a itsf people would say finance and logistics, 1 5 of jobs. That is dependent on his role as a bridge between the u. S. And china. The u. S. s biggest trade surplus economy. About tended and dollars of that is goods on their way into china. Increase itsask to imports from the u. S. By about 100 million a year. Instead of disembarking your ships in hong kong, go up river and in one fell swoop you have done it. Shery but is not just about shipments, its also about the calls of the u. S. To continue to open and liberalize chinas economy. That is another place there are unintended consequences. Hong kong profits from the fact that the broader chinese economy is somewhat closed to the world. Because of some chinese rules about foreign flagships, its able to move a box if you stop up on the way. Its all going to affect hong kong. Its the largest container port in the world, has been overtaken by several others. It will soon be out of the top 10. Connectivity is very important and it is losing that connectivity. That posed a big problem for an industry that has been the bedrock of workingclass hong kong since the decline of manufacturing a few decades ago. It comes at a moment where we see an existential crisis for hong kong. , thesm is at a record low chinese economy is unlikely to recover to a point where we see it make up for the effect the protests are having. I think that is right. Hong kong is being hit from multiple directions. As the chinese economy closes off more, that is not great news for hong kong. Kong opens up more, hong depends on being that gateway. If there are other gateways opening up, it doesnt help one city that has depended on its exclusive role as a gateway. Shery thank you so much, our Bloomberg Opinion editor there. Lets turn to hong kong for market update. Moves toore risk off stock futures for the s p as well as futures in singapore under pressure. The yen picking up momentum, advancing further. Not far off an eight month low for the dollaryen. Markets digest the latest lines regarding the tariffs on china. Treasury secretary mnuchin saying that would only come under review after a phase two deal is signed. Learn whenl a lot to it comes to the details on the trade deal. Were getting some development on this story regarding the tussle between the fbi and apple. President trump on apple to step up and unlock the killers phone, saying the u. S. Is helping apple all the time when it comes to trade and they should reciprocate. This is in relation to the fbi investigation into a terror attack at the florida navy base. Criticism from the attorney general saying that apple is not doing enough to assist them. Apple saying that it is helping in the fbi investigation earlier this week. It did not comment on the assertion that they provided no substantial assistance when it comes to unlocking two iphones belonging to the terrorists. Were hearing further pressure from President Trump saying apple needs to step up and unlock those two phones. Also saying it is reciprocal because a government has done so much when it comes to trade. Coming up next, the democratic president s raised heads to i way before the final debate before the state caucuses. This is bloomberg. Shery this is daybreak asia. Democratic president ial candidates are in iowa as he gets had to square off in the final debate before the state caucuses. Joining us is kevin cirilli, our bloomberg chief washington correspondent. Tell us about the candidates, what are we expecting . Kevin three things im watching, first how do senator Bernie Sanders and Elizabeth Warren go back and forth with each other . Their campaigns have been increasingly attacking one another over the past few days. Ive spoken with several sources in the past couple of hours connected to both campaigns and they say they will try to deescalate some of that tension. Theer way, they are clearly two occupants that have to take out one or the other in order to get to the front status. The second issue will be watching, front runner joe biden. How will he be able to continue with his front run or . . Status and finally, on policy, its the first time we will hear from the candidates on the issue of iran following the escalating tensions in the region. Thehow it relates to u. S. China trade war. He comes on the eve of a phase i trade deal being signed at the white house in just a few short hours from now. It all takes place here in iowa, which is a battleground state in the heartland of america, and a so agricultural sector, there is a lot at stake there. Its an opportunity for some of the candidates to try to suggest how they would be able to win back a state that President Trump carried by 10 Percentage Points in the last election. Haidi how does next weeks impeachment trial in the senate way in and raise the stakes for the candidates . Kevin were getting some new developments on the impeachment front. Were hearing that at 10 00 a. M. New york time, nancy pelosi is set to announce who the impeachment managers will be. The opening parts of the trial could begin this week. For several of the candidates, Elizabeth Warren, Bernie Sanders, Amy Klobuchar, they will have to split time between the campaign trail and the Senate Impeachment trial because they are required to be there. With just 20 days out until the iowa caucus, it could pose some scheduling conflicts for their campaign strategy. Shery in the meantime, President Trump is busy tweeting this evening, taking a shot at apple, saying the u. S. Is helping apple all the time on trade and other issues, yet they refused to unlock the phones involved in the terror attacks at a navy base in florida. How is this going to play out . Previous administrations including some democrats have raised concerns about large corporations and working with Law Enforcement and the intelligence community. This is something the president has tried to pressure apple on before. The president has died and played golf with top executives at apple in the past. Especially now as Big Tech Companies are working with the state department as it relates to iran, this is the latest development of the administration and the government one to see if there is an ability to work with private Sector Institutions as it relates to national security. I dont think the story is going away anytime soon. Shery the usmca will finally be passed in the senate. How does this play for democrats and republicans alike . By this,m struck because in a few short hours we will hear from the progressives in the Democratic Party, Elizabeth Warren and Bernie Sanders in particular. They have said the usmca is not aggressive enough. The Warren Campaign unveiled this afternoon folks who voted for trump and are now backing warren because theyre trying to show farmers transitioning to progressive in this cycle. However, then we talk to the Business Community there saying whether a phase one trade deal is near the finish line, its a new economic trade deal that President Trump can hit in states like michigan, wisconsin, and ohio. Those issues are so important to swing voters. Shery kevin cirilli, thank you so much for that update. You can always find indepth analysis in todays big news breakers newsmakers on bloomberg radio. This is bloomberg. Shery this is daybreak asia. Haidi im haidi stroudwatts in sydney. A quick check of the latest business flash headlines. Next on gaming on mgm resorts, part of a consortium and in a deal valued at 2. 5 billion, mgm would receive most of it in cash and continue to upgrade the casino after a longterm lease. Blackstone will own a stake in the venture by Real Estate Investment trust. In hongocial unrest kong and chili caused heavy damage or swiss Insurer Chubb last year. It said protest contributed to 353 million of socalled catastrophe losses during the Fourth Quarter. Thats in addition to damage from tornadoes in texas, wildfires in california, and a typhoon in japan. And months of protest in , so they plan to shut 15 stores after their lease expires this year. This is after months of sometimes violent demonstrations that have driven tourists away. They expected to continue to have an impact this year. The latest in a string of chinese listings in the u. S. As Credit Suisse and other global banks have dropped out as concerns grow about the level of investor demand. 23 companies have dropped by an average of 13 of their ipo price. Markets opening in seoul at the top of the hour. So if you seeing Market Sentiment turned risk off as we digest the news that the tariffs on china will not be removed anytime soon. You see the yen advancing on that this morning. Pressure,ures under and there could be some incentive to sell stocks in the region with the asia and japan index shares valuations at 10 year highs. To a fresh climbing record when it comes to prospects for earnings down under. Lets get a quick snapshot on the latest jobs data out of south korea. The jobless rate rose 3. 8 percent in december. For 2019, the employment rate rose to a record 60. 9 , due largely to the increase in parttime work. Up government ramps spending, but for now it could be a boon ahead of the april elections. Up on the next hour of daybreak asia. The former fed governor joins us with his outlook for Monetary Policy and the trait headwinds. William oneill tells us how asing can whether the storm the 737 max problems continue to mount. And we have market opens in tokyo and seoul. Up next is daybreak asia. This is bloomberg. Sometimes your small screen is your big screen. And with the Xfinity Stream app, which is free with your service, you can take a spin through on demand shows, or stream live tv. Download your dvrd shows and movies on the fly. Even record from right where you are. Whether youre travelling around the country or around the house, keep what you watch with you. Download the Xfinity Stream app and watch all the shows you love. Good morning. Im haiti stroud watch in sydney. Shery good evening from Bloomberg Global headquarters in new york. Im sherry on. Sophie im sophie cameroon and in hong kong. Welcome to daybreak asia. Our top stories this wednesday, china wont face u. S. Tariffs until at least the election, with any relief reliant on beijing compliance with trade deal. At the appropriate time if china signs a phase two, we will consider appropriate tariff reduction. A philippines volcano was about to explode. 40,000 have been evacuated from the danger zone. Shery melbourne chokes on the worst air in the world as bushfires threaten the Australian Open tennis tournament. Scott morrison says the crisis may last for months. Japan and south korea are coming online. Lets get to market action. Sophie we are seeing equity markets with fresh lines around trade, stocks lowering opening off,kyo, the nikkei 225 others record highs. Lets check in insole, the cost kospi down, and we are seeing treasury futures to cairo this morning, this after reports that the u. S. Is drafting rules to block more sales to huawei. We are seeing australian bonds gain ground with the yield curve flattening when it comes to australian note sellers. Thats jump in right now to show your reaction and marts, this pushing lower as we digest trade, the young at 10988, gold picking up about 2 10 of 1 while the offshore yuan is back up this morning as offshore traders bet for moves on the currency in either direction, anticipating more volatility ahead. In hongophie cameroon kong. Lets get you first word news from new york. the Trump Administration may restrict the media on stories on market moving days. Currently the Labor Department hosts markups where analysts receive the data in a secured room disconnected from the internet and only transmit them at official release times. The department may announce this week that it is removing those computers. Proand antigovernment protesters are demonstrating in tehran over the shooting down of a passenger jet last week. All 176 people on board the ukrainian plane died when it was that two missiles fired by the revolutionary guard. I ran initially iran initially blamed technical issues. There is a call for an International Court to investigate the disaster, saying the world is watching. Host city melbourne of the australian tennis tournament is enjoying some of the worst air quality in the world. Australias raging bushfires have led some to question the playing in such conditions. Tour organizers say they are monitoring the situation constantly. One player has been forced to retire from a lead up match after collapsing on court in a coughing fit. We have measuring devices on site for air quality. On top of that, we follow the opinions of the medical experts of the as the advice environmental specialists and thentists, as well as advice on weather forecasts from the bureau of meteorology. Media executive James Murdoch is criticizing coverage of the bushfires by his own family media outlet. A statement said he and his wife take issue with fox reports a new score reports that have promoted denial of climate change. Stepped down from 21st century fox after it sold most of its operations last year. A volcano in the philippines is about to explode. 40,000 people are moving from policetowns, with imposing lockdowns to prevent any from returning home. Three days of violent seismic activity have closed offices, caused a halt at the philippines airport and suspended training on the stock exchange. Thailand says it is ready to baht. Teps to cool the the central bank is concerned about implications for the economy, with exports under increasing pressure. The bank of thailand says the government and the private sector must also play a role in managing the currency. Global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. Gupta. Ika this is bloomberg. Shery thank you. The u. S. Will keep existing tariffs on billions of dollars worth of chinese goods in place until after the president ial election. This has been confirmed by treasury secretary Steven Mnuchin. Take a listen. Stay in tariffs will place until there is a phase two. If the president gets to face too quickly, he will consider releasing tariffs from phase ii. If not, there will be no tariff relief. It has nothing to do with the election or anything else. Shery lets go to our Bloomberg News editor in singapore. Secretary mnuchin says the tariffs will stay in place until the signing of the phase two , tariffs on 360 million worth of chinese goods. Lion worth of chinese goods. It certainly pushes tariff relief way down the road, and by way down the road i mean, if Steven Mnuchin sticks to that timeframe, you are talking possibly post election. Because remember, we havent been talking about any sort of phase two negotiations yet. They are not set up. The contours of them are not set , any of that sort of stuff. That is all in the future. Add previous reporting was suggesting that even though the faceone deal, which i like to consider more of a truce then a deal, this faceone truce is all set and ready to be signed tomorrow. Existing thoughts were that phase ii wouldnt really get going until this year, and that the signing of that could come optimistically after the election. So you are looking at the possibility of the tariffs that are in place being extended a while, conditions may be on noncompliance, on phase two going well, so you could be looking at the status quote for a while. The good news is that the u. S. And china dont appear, with phase one, to increase to be increasing hostilities anytime soon. More about overall confidence and sentiment in terms of the relationship being a bit more amicable, but this is all sounding very messy, derek. Because in an election year, holding these tariffs as a way to get compliance from beijing, and then what happens after the election, if there is a change in administration, to trade, there is so much in certainty uncertainty. Derek there really is, and you are seeing a Little Market reflection in that. There had been an assumption a lot of tariffs were going to come down, and you are saying the market reacted to that not being the case. But certainly there is uncertainty. There very much is. And compliance is something, you and i have talked about this a lot, compliance is one of the things the United States has been worried about from the chinese side. This has been one of the key questions, how are you going to ensure compliance with any sort of deal, and remember, when you look through u. S. Allegations and problems that they have with china, that they report with china, one of the biggest problems they report is that if you get something signed, you cant necessarily ensure that it is going to happen all the way, and that deals are broken along the margin. So this does keep up a certain amount of pressure, but does not provide for that full relief. And the difficulty you have if you are trying to assess the certainty is that you are coming up to the president ial election. As you mentioned, it is possible donald trump might lose. And in any case, this kicks the can down the road by months and months. So there is a little bit more risk, as traders are waking up today, than they thought they had when they went to bed last night. Meantime, in the aside from all these trade negotiations, we still have the tech war ongoing. There are new reports there could be fresh efforts to curb sales to huawei. Very early data reported, that just coming out moments ago. So we are still waiting to see the details of that. Whens you point out, aawei comes up, it is difficulty because in the United States, these things are not necessarily linked, the concerns someone might have, national securityrelated concerns with Chinese Technology and huawei being very high upon them, is not necessarily a trade issue, but it does get linked in their linked in there. So in terms of the risk that you have, that is certainly increased right now because when you add that sort of volatile thing in there, china has made very clear that huawei is a big part of the whole. So even if it is considered a separate tissue in the United States, it is one in the one and the same in china, and that adds to risk sentiment Going Forward. Haidi derek wall bank, we appreciate your time. Lets talk about the market aspect. Our guest is in singapore. Risk how do you gauge how sentiment is going to be affected by the fact these tariffs are staying in place, really indefinitely. Good morning. Investors already have pretty low expectations on the removal of the further tariffs, so i dont think that is a big deal this morning. But the risk off sentiment you are seeing is much more related to this huawei report, even though details are sketchy. It comes as a new piece of information. Traders will respond in a kneejerk reaction to something new. They are hearing that the United States is considering putting on more restrictions on sales of items from huawei. That is something they didnt know 24 hours ago and that is why you are seeing some risk off this morning. As far as tariffs, Global Companies have plenty of time to adjust to existing tariffs. They have found ways around supply chains, business is still getting done. You can see on the china trade data this week that china is already adapting to this new situation. They are finding ways to get business done, as are many other countries. So the fact tariffs are going to stay on is not a real surprise to people in the investing market. It will be a bonus if tariffs were removed, but i dont think anybody was really hoping that was going to happen in the immediate future. So for now they are reacting to other issues, not particularly the tariff situation. Shery when bloomberg broke the u. S. , bigry in the futures, cotton futures took a hit. Which assets will be most affected by these tariffs staying on indefinitely . That will be front and center is the chinese yuan, because if you look at the performance of it over the past two years, against the dollar, the big part of it is the tariffs priced in that were imposed against china. And you could see what was happen when what was happening when the u. S. Was threatening additional tariffs. 8 aw the dollaryo the dollaryuan spike to almost 120 at one stage, and that was the chinese currency adjusting to the additional cost of the tariffs. Hasou have seen, the yuan gotten stronger, but we are at the equilibrium point where the dollaryuan is more neutral. And looking ahead to china data, it is starting to look better. And wemore data on china get gdp, industrial production, so the yuan is the key asset as far as existing tariffs, and tariffs in the future. Mark, our markets live strategist. Todaysfollow more on trading action on our markets live on bloomberg. Asia, theon daybreak latest on the philippines volcano with an expert from the institute of volcanology joining us, as we get more warnings that an eruption there is eminent. This is bloomberg. Shery this is daybreak asia. Im shery on in new york. Haidi im haiti stroud watts in sydney. The australian bushfire crisis claims are edging close to 1 billion in the season is far from over. Johnson joins us, our australian managing editor. These numbers are climbing steadily, every few days there is an update and we still have a couple of months left of the bushfire season. To 1. 3rance claims rose billion australian dollars late yesterday, the good news is we expect rain later this week. It might upset my holiday but i can live with that. It has been so long since rain in the New South Wales state. A tweet was put out this morning with a photograph of an umbrella and Windscreen Wipers on the car and said remember these, you might need them soon. It is great news. It will help the authorities get on top of some of these fires. And we start to see the impact of Colder Weather coming through. 100 35 in New South Wales state, and starting this week it was just over 100, but with summer in full swing we still have a long way to go before getting them under complete control. Haidi in terms of the smoke pollution, we have seen the xers of the iconic bridge, and now it areoved to melbourne and we seeing this play into the Australian Open and wreak havoc there. The early grand slam tennis events in asia are feeling the impact of these devastating bushfires and the smoke blowing into melbourne. 1 00, but there are real concerns if this hazard is air quality continues, what impact it is going to have as the event gets underway monday. It is the latest in this economic and reputational hit to australia, as images of these devastating fires and the poor air quality, scorched wildlife, etc. , get beamed around the world. Shery ed, it seems the controversy over the link between push fires and the climate between bushfires and the climate continues. James murdoch criticizing his familys coverage. An extra ordinary set of events overnight, with James Murdoch putting out his statement, his wife saying they are particularly important particularly disappointed with ongoing denial at news outlets in australia, given all the evidence to the contrary. He is referring to the National Broadcast of australia, the flagship of the murdoch empire here in australia. Their newspaper has been criticized for its approach in coverage. Several commentators and been downplaying links to Global Warming and climate change, and there has really been an outpouring of support on been an outpourinf ofticism on social media news stories where they played up incidents of arson as being responsible for these bushfires, rather than climate change. Johnson, our australian and new zealand manager, thank you. Coming, the democratic president ial debate heads to iowa for a final debate. We go live to the debate stage next. This is bloomberg. Shery this is daybreak asia. Im shery on in new york. Haidi im haiti stroud watts in sydney. Lets check the latest business headlines. Delta Airlines Shares pushing higher after strong thirdquarter results thanks to robust domestic demand. Tickets and other Premium Products increased and outpaced gains for coach fares carriers have generally been hurt by the grounding of the 737 max, although delta has benefited as it doesnt fly that plane. Shery airbus seizes the title of Worlds Largest playmaker, handing boeing its biggest defeat in their 45year airline duel. Boeing delivered 380 jets last year, less than half of airbus tally of 863 planes. Claim is its first 10th 2011, and only its since 2004, when the a 300 made its debut. Haidi boeing is said to be considering a potential loan as it deals with their production halt of the 737 737 max, and we are told citigroup is leading the discussions although the timing and amount of any loan is yet to be determined. The boeing access to credit markets could soon be more it is beingnd reviewed for a downgrade. To analysttalking andrew kessner, the impact i on the impact on boeing on whether it can weather this storm, in the next couple of minutes that conversation. Shery investors are awaiting more details of the faceone trade deal between the u. S. And china. We are getting fresh reports there could be more sales blocked for huawei, so at the moment asian markets are a little mixed. Lets turn to sophie to check on markets. What are you seeing . Sophie let me show you what is docg on, a snapshot, u. S. Futures under pressure and off to tenths of 1 while regional stocks look mixed, losses being seen in tokyo. This follows news in the u. S. Drafting rules to block the sales of huawei products. This pushed down the offshore offshoreean is leading and the kospi is set to snap a fourday gain. There is job data to consider out of south korea, the jobless rate ticked higher in december but the annual employment rate, that did climb to a record for 2019 on the pickup we saw in parttime work. Haiti. Haidi. Haidi democratic president ial candidates are in iowa getting set for the final debate before the caucuses. Is kevins for more surreally, our chief washington correspondent. Everybody will be watching the dynamic between Bernie Sanders and Elizabeth Warren after he apparently said in a conversation that he didnt believe a woman could be elected. Kevin precisely. Sourceseen speaking to from Elizabeth Warrens and Bernie Sanders campaign in both camps predict a deescalation of tensions that have dominated the chattering class ahead of this debate. It has roiled and rocked the dynamic of this race, because up until this point, senator Bernie Sanders and Elizabeth Warren, while they disagreed on a couple of areas related to policy, have largely been teaming up against former Vice President joe biden. So it is likely going to come up at this debate, but how the other candidates react, joe biden, Amy Klobuchar for example, how they respond to this moment is really owing to be something to watch. But beyond that, dive into the policy because there is a host of different policy arguments that will be on full display as well. Shery how is the impeachment trial in the Senate Next Week going to play into the debate . Kevin from a scheduling point of view, it is definitely going sanders andrren, Amy Klobuchar. They have to do double duty, and possibly the president also participating in that trial. House Speaker Nancy Pelosi announcing in the past couple of hours that at 10 00 a. M. New york time, she will announce who the impeachment matter impeachment managers will be in a dynamicatic caucus, very much developing here, and the impeachment trial is likely going to start the first half of next week. Shery kevin surreally, thank you for that, joining us from des moines on the latest on the democratic debate, our chief washington correspondent. Plenty more to come on daybreak asia. This is bloomberg. I dont know why i didnt get screened a long time ago. I kept putting it off. What was i thinking . Ok, mr. Jones. Were all done. I told you it was easy. With life line screening, getting screened for unknown Health Conditions is so quick, painless and affordable, youll wonder why you hadnt done it before. So if youre over age 50, call now and schedule an appointment near you. For just 149 a savings of over 50 youll receive a package of five screenings that go beyond your doctors annual checkup. Ultrasound technology looks inside your arteries for plaque that builds up as you age and increases your risk of stroke and heart disease. After all, 4 out of 5 people who have a stroke, their first symptom is a stroke. So call today and start with a Free Health Assessment to understand your best plan of action. So why didnt we do this earlier . Life line screening. The power of prevention. Call now to learn more. This is daybreak asia with the first word headlines. Tariffs ona u. S. Chinese goods are likely to remain in place in month and lowering them will depend on phase one of the trade deal. The u. S. Will review progress tantamount after the deal is signed and only then potential duties on imports. These tariffs will stay in place until phase two. It has nothing to do with the election or anything else. Say the u. K. Huawei allowing technologies on his five g network. Prime minister Boris Johnson says the u. K. Deserves the best option. It new yorks iconic times square is struggling with retail sector. To go towardsest online shopping. Part of the year [no audio] attention as dong china is set to overtake the u. S. As the Worlds Largest market. Global news 24 hours a day, powered by more than 2700 journalists and analysts in over this istries. Bloomberg. Thank you. We are getting more details come of this from a New York Times report on exactly of the phase one trade deal that the u. S. And china are set to sign this week. The trade deal reportedly includes protections for u. S. Firms. That is according to the New York Times and several people that have knowledge of the deal. The trade deal is said to be a reacting to american complaints complaintsviable ip to chinese phones. Success hinging on compliance which goes with our top story and we will tariffs in place as concerned by confirmed by secretary mnuchin. We heard that china will include ip protections, but we did not know it would punish fridges. Bridges will they go carry out the promises, they promised but will they actually carry out a check of the movers. A we wait on the signing of phase one trade deal. Bonds largely gaining ground. Reports that the u. S. Is releasingks to more blocks to drop the sales of oneway huawei. Will s a few months 90 on tuesday. Thank you for that. Oeing shares Rose Bloomberg reported it is talking to banks as it deals with the 737 max crisis. What it does next will be closely. Williammueller neil oneil joins us from new york. When this started, people said boeing is a giant, they have enough cash, they will get over this. Financiali will strain has put them over . Most of the money they get is ispaid, but the bulk of it paid upon delivery. This one, they are supposed to 57 of them per month, now it is zero. Theyve had to maintain the same infrastructure to build these planes. They have not had mass layout because they need it to be scaled back. They lost the title of next to airbus. How long to the take to get started and going to again . It seems like once the plane got certified, they would ramp up quickly. Now, that means gradual with long of their entire cast laying 20 of their workforce. It will take suppliers time to rent back up and allow blowing plane isck once the recertified. Even if they get the recertification, get underground is the brand salvageable. Can they rebrand it or how to do get past this reputation . That is an incredibly important question and one not. Hink talk about enough on wall street, the general view once they get back could be production, 25 to 30 per share, in a few years and normalized rate for the real question is what about the reputational damage, the branding, our people want to going to get back on this plane . I think that could be one change we see with the new ceo. It seems difficult for them keeping that brand at this point. Criteria onng your what to do for things to be a buy again. It looks pretty insurmountable at this point. It is certainly not nearterm. We think it will take longer than expected to get decertified. In southe surveyed america and europe you will be as careful as possible. No one wants to rush the process was with everything that has happened. Reaction,consumer . Hat will it be are kind of so both compensation and will impact future orders . I think that is the big question. For us to be comfortable, we clarity. D to see more that will take a while. Is the dreamliner did . Good . They have that, they have some other models and do a lot of business with defense contracts. In terms of boeings legacy commercial, the aircraft business, the 737 max was supposed to be the future. I find it interesting the politics of this. We have heard from secretary mnuchin talking about potential thects of the grounding of max to gdp . Last summer. At was they might move quickly. At this point given everything that has happened, even with the internal messages. Up innior members going front of congress. With everything that has. Appened again, secretary mnuchin said this could impact the economy by 50 basis points. Not sure what assumptions are , but that is significant. I dont think it will impact speed in the process. Andrew witty road ahead for boeing. Coming up next, the threat of a remains asaction nearly 40,000 people are evacuated. Hearing this is bloomberg. This is daybreak asia. Check of the latest business flash headlines. Whetstone is gambling on ngm. Esorts ngm will receive most of that in cash and continue to up grade the casino. Ofckstone will own a 49. 9 real estate by a venture company. 53 million of socalled catastrophe losses during the Fourth Quarter. That is in addition to tornadoes in texas, wildfires and telephone and a typhoon in japan. Disneys new streaming service is off to a recordsetting start. The app hass that been downloaded more than 41 million times, generating almost 100 and tuning. The report was by investors who already have a lot to elevate. China has become all it was and china has is expected to overtake the u. S. Starting from the chinese new locating neup is is looking, pretty promising. The Chinese New Year is the first major holiday of the year chinese arethe either based on unusually partssful formulas or are of these franchises in the past. When important thing to note is that all those blockbusters to be released in china new year are made in china movies, so that is in line with the trend is over taking hollywood movies in terms of market share. What are the challenges for the market when it comes to regulators that are traditionally quite different for these movies to get green time in china . That remains a challenge, increasing censorship and we know for example, the Chinese New Year is a National Holiday that traditionally will block hollywood movies from being. Eleased during that in thehallenges remain coming one or two years and another challenge is the rising chinese language movie and a large part comes from Chinese People increasing nationalism in the middle of the trade war, so theres a broader trend consuming more made in china good and that poses a huge challenge for hollywood movies as well. Thank you for that story. Lets get you live pictures. Lets listen in. [no audio] recovery grants of up to 75,000 have been extended to farmers to help communities recover and we are working at a system for Small Businesses and seeke working today as we to bring forward for further consideration. Another byannounce programs under category c that includes Additional Mental Health support and that is in addition to what i announced earlier this week. Some 15 million, up onestop shop Recovery Service Program Support community locally and develop which we can then support through our broader efforts. Recovery community that will assist Community Connection and these programs government. By the between themillion victorian and [indiscernible] governments. They have been working closely to confirm those arrangements and we are moving quickly to some or them. , we have agreed to and. Ate category three listening and bloomberg subscribers can continue listening at l. A. The live. This is bloomberg. This is daybreak asia. On chinal the optimism trade, hong kong could end up a loser. Part of it is potentially some agile logistics. I think we forget that the. Rade business is there there in mind, while china is the largest account deficit, hong kong has the largest surplus and a lot is trade with is imported. If you think about this trade tol, china has pledged increase imports and a very easy. Ay to get to that target this trend is not something new. Has been continuously losing for some years now. It is really striking. Mid2000,k to the may 2000 ok s, shanghai overtook. When you lose the connectivity, and a lot of things happening. Ith the trade deal one is the domestic shipping industry. As a shipment point. Singapore. To i think that is right, especially in terms of finance. We are seeing that happening. You see what is happening and. Hey are very keen to that that is really going to be a problem. It is really cutting both ways. s look at a previous lets look at a preview. We still have to watch here and we are keeping an eye on ct may beon reports that it working on a mixed develop project. We are also watching that the that willafting rules further block huawei and just a quick reminder that we could get to deepenedit data [indiscernible] before we hand over to Bloomberg Markets, we are seeing a bit of a mixed picture. Hurdleslly fresh against the signing of that phase one trade deal and now we have heard from secretary mnuchin the signing of a face to deal. This coming after four sessions of gains. Pressure. Still under the imminent signing of the. Hase one trade deal that is it for daybreak asia. We look ahead to the start of trading and hong kong and shanghai. Do stay with us. Analysisre context and with the trade deal in china. This is bloomberg. When you move homes, you move more than just yourself. Thats why xfinity has made taking your internet and tv with you a breeze. Really . Yup. You can transfer your Service Online in about a minute. You can do that . Yeah. And with twohour Service Appointment windows, its all on your schedule. Awesome. So while moving may still come with its share of headaches. No kidding. Were doing all we can to make moving simple, easy, awesome. Go to xfinity. Com moving to get started. Welcome to Bloomberg Markets china open. We are counting down to the open of trade as hong kong [indiscernible] base uris tariffs until at least the president ial election with any release contingent on beijings compliance of phase one. One of hong kongs most closingt retailers is 15 Stores Across the city. Towing is back in the headlines with reports that it is talking to a bank about a loan in los
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