Daybreak asia. It is after 8 a. M. Not a lot of guidance for asia given the fed left rates unchanged. No indication of where to go next. Investors are wondering what will come out from the white house. Fors interesting as we wait developments. In asia it seems like we are on the way for another event. We do have the fed out of the way. We are seeing one of the best januarys in years and the data, we talk about chen yet china manufacturing, the cpi for korea came out last hour was pretty good. Lets look at how things are working in the asian market. Tepid start fraser. N pick upe the ye slightly after seeing swings overnight. It did track closer to 114 in the wake of the fomc update. Looking still around the 113 handle and the aussie just around, below the . 76 level. E surplus is forecast to rise to a fiveyear high which could the aussie to that 76 and mark. The kiwi is falling although pa ring its earlier drop. Traders are saying this is coming on the back of a media cattle a breakout of disease. The case isolated so we will see. Betty how is asia shaping up after the fed update . Sophie it is. 1 of 1 higher and the kospi is flat. Out of south korea. 200 asxng the ask 200. The Infrastructure Companies surging by the most in 15 years. We have [inaudible] after profit dragged. We have been watching this stock. This is afocus group, vice and data network operator. Thank you. The fed has given us a nod to the to confidence, leaving rates unchanged. Here with more. You are in tokyo but lets talk about the fed. It is all about what the fed said. Kathy they did not say much. The give us one sentence to understand what they are saying out there. Since donald trump got elected. We have seen sentiment measures improving. They did not change the key rate. [inaudible]ep it at this is a sentence they added compared with a december meeting. Measures of consumer and Business Sentiment have improved of late. In yourok at 4109 bloomberg. You can see how Consumer Confidence has been rising and if you look at the three lines at the top the top line shows expectations, it is higher than that broad measure or the present situation. I want to show you a measure from our Bloomberg Intelligence team showing how economic certainty if you look at the last year, this is moving higher because people are not sure what donald trump will be able to get through congress. Bloomberg intelligence saying with this the fed chooses not to rock the boat. That the fed is tolerating and validating the markets patience on Interest Rates. Guest said we have to wait to the march meeting to get any inkling from their policy statement. To know what they are thinking of doing. Nothing expected by economists on wall street until june. Continue to hear this fertile intervention from donald trump and his team about how they prefer a weaker dollar. Fed officials are downplaying the impact of a strong dollar on the economy. If this going to be a concern for the next fed meeting . Kathleen i would start by this is what the index is indicating. 56 up from 54. 7. A steady climb for the last few months. Maybe it is a temporary boost. It is moving in the right direction despite the stronger dollar. That may take time to take hold. A lot of his policies are expected to help. Certainly tax cuts and spending boosts. Aid we still need see moves on the fiscal side. One trump talks about specific companies and specific indices and bringing growth back to the u. S. , it is very much of a positive for those individual companies and industries but it is not a positive fifth it results in a strong dollar. We need a weak dollar for Global Financial markets and the Global Economy needs a weak dollar to keep the system going. Side upside economic prices could lead to a rate hike in march. This is an interesting one. The number on adp private employment. The number jumping. The last few months the correlation between adp and the government jobs figure coming out on from it friday, february 3, we may get a strong jobs report. I am wondering if things are holding up quite well. We will be listening to fed speakers over the next weeks and months and watching all the economic reports. No move today but who knows, you have to watch trump and watch the economy. Thank you. Lets get to the first word news with courtney collins. Isrtney resident trump [inaudible] trump accused the mexican military of being scared of what he calls bad hombres. He might send the u. S. Army across the border to take care of it. Rex tillerson will be sworn in charlie a secretary of state. A 6343 senate vote so lawmakers split along party lines on his choice of a oilman with no government experience. Republicans supported the view that his background gives him the connections and skills needed to promote the u. S. Interests abroad. The bill to take the u. K. Out of the European Union has passed its first test in parliament. With lawmakers agreeing to allow the premise do to start negotiations by the end of march. By mments theresa may theresa may. Will publish an outline of its plan later on thursday. Most u. S. Automakers reported declining sales in january despite manufacturers piling on discounts to keep showrooms busy. Fiatery sell 11 for chrysler with gm ford down. Than threespent more point 5,000 on discounts per vehicle at the start of what they hope will be another record year. Asian automakers are having a mixed day of trading so far. Global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. I am courtney collins. This is bloomberg. Betty facebook shares edged higher after user growth beat estimates. A solidified its position as number two in mobile advertising behind google. Our analyst. N this was supposed to be a concern for facebook. This was a very solid quarter. The user base, the growth accelerated. It is amazing how they are able to go forward. What we saw is consistent with facebook. Instagram and video are good Growth Potential for this year. The concern here is the issue growth might slow down in the second half. What we see here is instagram has a lot of Untapped Potential that can counter some of that. Could that be a way out there, is instagram the only answer . You do notam have enough ended inventory. Price. Nter is they have 400 million daily active users. And 50 growth in 2016. They have advertisers where his facebook has 4 million. There is a lot of Untapped Potential that we see that could be an offset for the ad load issue. Betty they want to diversify their revenue base. What about the messenger, what are we going to see when are we going to see that hit the top line . Guest not this year. They are in pilot phase with messenger. They explained that three phases of the monetization and they are at the second phase. Privacy issues and things like tot, it will take some time hit the top line. Avenue also longterm for facebook. Focus remains on instagram and video. They are going the you to route youtube route. And trying to double down on that strategy. Etty thank you on facebook. Snapchatter . I have not gone on to snapchat. Betty i just got on but no one is following me the new u. S. Fed secretary heading to south korea for his first overseas business trips. We will find out what is on the table later in the program. Vonne our next guest tells his clients to his ignore the noise when it comes to trump. This is bloomberg. Betty th Bloomberg Asia. Japanis is biggest Pharmaceutical Company beat thirdquarter estimates and raised its profit forecast for the second time in recent months. They saw a revenue of 4. 1 million in the three months ending december. They got a blister higher sales of gastroenterology drugs, using raising its forecast. The wall street journal reports the bank is adding baby formula makers to its suite of products. Shares have fallen from their 2015 peak spurred by a resurgence of interest in resting in china. Pay claimsen has to over cheating emissions tests. The post settlement is with the 78,003 the drivers of liter diesels. More on the feds decision. Is our guest. He manages over 7 billion and asian equities. Happy new year. We did not get too much uncertainty in the fed. Because we did not get much certainty when it comes to fiscal policy and it is interesting in asia. We have had a strong month when it comes to flow. The besteen one of generation years. Based on firm ecodata. We have the china pmi and korean exports continuing to rise. Can we focus on the earnings and the ecofear . Guest i hope so. It has been all about china. China has been week for a long time and has been in a recession, you can argue. It seems to come out of recession when things are stabilizing on the industrial front. There is more debt being issued. And on the consumer side we were worried for a while that income was slowing dramatically. It seems to pick back up again. On the industrial side and the consumer side you see a pick up in china. That is what matters to the whole of asia and not so much what happens with u. S. Data. There is a little bit of political noise and markets are not as focused. Can you ignore the noise when he is tweeting about companies and talking about the dollar and how he prefers a weaker dollar policy and we do see there is a reaction when it comes to the dollaryen and the dollar china as well. Guest the strength in asia was given by weakness in the dollar. Twitter. En active on since donald trump is back on, i am on it again. He attracts a lot of attention. And his policies may be very damaging to asia, we do not know exactly what will happen. We will see that he will take on china probably and what will china do . The u. S. Is in no position to attack china because china will retaliate quite dramatically. Not so much militarily but economically, it would hurt the u. S. Quite badly. , is will be the showdown trump going to hurt his own economy by taking measures against china which is not in his own interest. It is interesting. Despite his hammerhead approach to mexico, it has not affected the markets in the u. S. That much. To a fullblown trade war with china, is that going to be a market moving affect . Guest of course that will be a market moving affect. What i am saying is what we have seen of the last six months is not driven by Donald Trumps election. It is driven by a wave of optimism going around the world. After eight years of expecting low growth and low Interest Rates forever. Suddenly postbrexit the Market Sentiment changed. Nothing has gone wrong. Maybe it is time to start investing and growth can accelerate from here again. Trump can upset the apple cart and things can deteriorate. I would say that for now the sense of optimism is the overhauling factor and there is fear but the markets have spoken they do not fear to much about donald trump so far. Volatility is so low these days in the u. S. , markets, we had a guest in the other our that mentioned he definitely sees more value elsewhere particularly in europe. He sees more value. In the u. S. , the markets seem to be in his words stretch store long in the tooth. Not just the markets but the economy itself. What do you think of that . I am thinking why about asia. Valuations are not stretched in asia. The recovery is starting in china and other markets like korea and taiwan like yvonne mentioned will be following in chinas footsteps. You have both an economic acceleration which is also underlined by accelerating earnings growth. Which is another important factor that is driving markets. Earnings growth will recover quite nicely in asia and asia is expected it looks pretty appealing to me. If we are Getting Better data, we see that in the u. S. As well, why is yellen being so quiet, is it because of the uncertainty but she could at least signal something. Guest i guess she doesnt want politicalolved in a debate. So she sticks to the data and says ok, whatever, we will see it in the data. Please dont speak out on the guy that wants to fire you. I think she is doing that and do dovishget she is a inclined person. She is not the first to raise Interest Rates although many people would argue it is time to do it. You are eyeing that . I think that is the whole sentiment change. How high can Interest Rates go . And people are still expecting the fed will disappoint on its dot plot. Three interestrate hikes will never happen, they say. It might live up to their expectation this year. Relevant from be a global macroeconomic perspective that with all that money being printed over so many years and no inflation, are we going to see that that money will lead to inflation and interest needs to rates need to pick up . Thank you for joining us. Next, the Indian Government promises of tax cuts and spending. We will look more closely at the latest budget next. This is bloomberg. This is daybreak asia. I am betty liu in new york. Yvonne i am yvonne man in hong kong. The indian finance minister and budget aimed at boosting consumption and investment. Ruralnners will be the and real estate sectors. It is that they dont balance between prudence and spending. They did outline a budget which looks at it will directly help rural people in communities. He promised things like increased spending on infrastructure, increase social welfare spending. Boosting job training and loans. He said there will be tax cuts for people earning under 5000 rupees. That is 96 of all the companies, a tax cut with 500 million rupees turnover. And beyond that, the housing phase will get a boost because it increases spending for housing especially for the poor communities. You have to remember, this is what got him into power. It is the Rural Communities that have been hard hit by the ban on high denomination notes that can into place last year. Election coming up the first of which is on saturday. There is an eye on that as well as well as the possible election as per minister in the future. Betty what about that budget deficit, how is spending going to be funded then . Inessentially by an increase taxes. The forecast that they will get cautionsrease in tax through nontax revenue. Although nontax revenue will dip and that will increase spending by 6. 6 according to the governments calculations. Betty you see at the bottom of your screen, this is confirmation the wall street journal had reported this earlier but the u. K. Consumerproducts Company Reckitt Benckiser is in talks to buy mead johnson. The infant formula maker for 90 per share in cash. Share. Offer of 90 a mead johnson shares have been trading higher in the aftermarket based on this news. We will watch to see tomorrow how the shares trade as we get more confirmation on this deal. Much more ahead after a record 2016. Carmakers have to brace for a week start to the year. We will break down the latest u. S. Auto sales numbers. This is bloomberg. It is 8 30 p. M. In singapore 830 a. M. In singapore. Watching daybreak asia. We have some breaking news right now out of australia with the release of the december trade numbers, paul allen watching those data for us. Paul we have a big beat on those trade numbers, the balance 3. 5 billionis balance for the december trade surplus. Better than the 2 billion estimated by analysts. That was the the latest november figure was the trade surplus and look at the aussie dollar go. It is climbing on the back of those betterthanexpected numbers. Commodity prices have been rising pretty strongly over the past few months. Iron ore above 18 per ton propelling australias trade balance very nicely. This will have implications for the reserve bank of australia. Which will hold its first meeting next tuesday. They did have a weaker cpi read to have a look at last week, cpa cpi coming in and these trading numbers will be encouraging. We have one of the 26 economists surveyed thinking the rba will move next tuesday. To recap, the trade balance for us still yet in december a very impressive 3. 5 billion surplus. Back to you. Betty lets get to the first word news with courtney collins. Courtney the longtime front runner for the french presidency is under increasing pressure to hdraw as concerned growth as concerns grow about his employing family members. Call three months out from the election find support is draining away. He denied giving his wife and children nonexistent jobs. Iran has confirmed it is carrying out a missile test at the weekend and warned the world not to meddle in its affairs. The defense minister said iran had no aim to defend itself. And would neither seek permission or allow others to interfere. The launches the first of a medic test of the Trump Administration diplomatic test of the Trump Administration. Shares in Mead Johnson Nutrition climbed as much as 21 in afterhours trading with record with making a bid. The offer values the babyhood maker at 60. 7 million. Billion dollars. Mead johnson shares have fallen from their 2015 p. Our in part by a resurgence and interest in rest reading in china and elsewhere. Tech billionaire and president ial advisor peter thiel won citizenship in 2011 despite visiting four times. Official documents show he was approved for his entrepreneurial skills and for life to be philanthropy. Deny claims of selling citizenship to wealthy foreigners. Global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. Im courtney collins. This is bloomberg. Betty i am taking a look at the trade surplus in australia. The biggest on record. Billion at 82. 2 3 billion reach. And the aussie dollars flying. Sizable beat and that is helping the aussie dollar break through the level. You see the spike your ahead of and when that data dropped this morning. Technical indicators we are seeing, little in the way of resistance when it comes up to that mark. Another currency i want to focus on given the data out of south korea, we are seeing the yuan picking up stronger pace the a stronger pace. We had a january inflation of her in rising by the most since october 2012. That see how that is playing off out in the equity markets. We have the kospi higher and the asx 200 gaining. A third of a percent falling for the third session. Some highlights we are out of tokyo, we have the likes of [inaudible] industries falling after its earnings report. Nippon sheet glass falling 8. 7 earlier. This after the nikkei reported that the company is planning a 350 million private ship placement. It said it is not the source of that report. We have ihi on the rise. Mulling the sale of [inaudible] we have new zealand stocks marginally lower. We did have a drop in the kiwi on the back of a report of a cattle disease incident. We see reports that isnt isolated case that is an isolated case. What about the markets in the u. S. And how they are trading . Most of the sectors were in the red. Joining us on set is su keenan. We ended up higher. Su it shows for this weeks that the bulls have snatched control back from the bears. Littleough we are changed in relatively flat after up, fed kept Interest Rates lets go into the movers. Apple up from yesterday, having a followthrough of more than 7 . Amz a positive forecast, it was up double digits. Lets take a look at the bloomberg. Bloomberg, jobs were the story. Chart, youk out this can go all the way back to 2007. Job openings are greater now than they were in 2007. Hiring and job quits are lower. Interesting perspective. Stocks rebounded, oil did too. Now at a one month high. Su the dollar citing played a role. When you see the dollar dropped that will reduce the games gains. Even though we had a buildup in the u. S. Supply it was offset by the opec cuts. There is a correlation between oil and Energy Companies that there is a disconnect. A lot of the earnings from these companies, exxon yesterday, chevron two days ago have been a big disappointment which shows perhaps some of the pressures on the market. Both stocks have been under pressure in the final months of 2016. Sentiment was driven back by the close. What did that mean for the next session . Su that is a positive going into thursday trading. Lets see where the bears were in control. They started off in a big downdraft and then you saw ,ks, for low yesterday off the low yesterday until finally in todays trade we ended with a positive. Mentality remains strong. Also that 2270 market in the s p is a big technical magnet, bringing buyers toward that level. You also look at the big picture in the last couple of months, we have been in a range that rewards those that buy. We will stay in that range for the near term. Thank you. U. S. Auto sales slowed in january after seeing eye december that was the best in a decade. Here are the numbers. Big loser and we have seen the shares falling but lets stop with the top line first. The prevailing theme is big trucks, cheap gas. Lets go to those numbers. At january 2017, the sales that came in with 17. 6 million, the expected was 17. 3 million. That was a beach in it beat in itself. As you mentioned, december a month ago, it was 18. 4 million which was its biggest and best in more than a decade. You mentioned toyota. Lets take a look at how bad that number was. Turns out that for toyota as well as Fiat Chrysler, sales for january both fell in the order of about 11 . You can see that it missed its estimate because it was supposed to be down 2 . Although not beach much. The estimate was still down by 14 . With toyota, i was talking about how it is about big trucks, big suvs versus cheap gas. We are taking a look at toyota as the brand doing pretty well but in terms of trucks interment and suvs. 2. 25 for regular unleaded. That is about a dollar less than a couple years ago. People are going for the bigger things there. Also looking at Fiat Chrysler, all brands are down except for the ram truck brand. Up 5. 5 . Lets take a look at other losers, not as bad as Fiat Chrysler and toyota but still down on the order of a couple of percentage points. Gm down nearly 4 . Was just 42. 4 . For down by less than 1 area that was a beat because the estimate was down your 3 . Big trucks, cheap gas. It was not all that in u. S. Auto sales. They were companies that saw bump as well. Interestingly and maybe it was time. Volkswagen saw a rise. Theyre coming out of that diesel emissions scandal that has been haunting them for the past year or so. For volkswagen, it was up by 15 year on year. That still was not as good as analyst expected. They thought it would be up along the order of 20 . Nissan and honda by 6 or so, both of those eating targets, also helped by crossover utility vehicles for sports utility vehicles. Thank you. Much more ahead on daybreak asia. On a diplomatic mission. The first member of President Trumps cabinet to make an overseas trip looks to ease concerns in asia. The newly confirmed secretary of defense. This is bloomberg. This is daybreak asia. The in a u. S. Defense secretary will be seeking to us was relations with americas asian allies as he tours the region in the first overseas trip by a member of President Trumps cabinet. As Bill Reynolds joins us from tokyo where he will be visiting. Mattisstant is james trip . This is extremely important as you say. As the first cabinet member to go overseas. Already leaders in japan and south korea are partly relieved they have chosen this region. To look back at what has been said, by President Trump or became that before he became the president about japan and south korea, he has been highly critical and accuse them of having a free ride on defense, of not paying enough for the presence of the u. S. Troops and he has threatened to remove those troops and on one occasion said he would be happy to see south korea and japan go nuclear and have their own nuclear determined. Thata great that caused a great deal of concern. Are highlythey reliant and will remain in place and will remind does remain largely unchanged. You mentioned about the defense issue. That is one of the key focus is as well particularly for south korea and japan. Right. Donald trump has also changed direction remarkably on trade. He has pulled out of the transpacific trade agreement which is a great disappointment to japan especially to the primaries to who had been backing it strongly and had sought to dissuade President Trump that this was a good idea. They will be looking to strengthen ties and this will be a first step toward that. On this occasion what they are looking at is the real nuts and bolts issues. They will be looking to have him reiterate commitments in having Japan Security Alliance cover the islands disputed between china and japan, that is a key issue. If that is not forthcoming that could ratchet up tensions. Etween japan and china this is the Biggest Issue for south korea at the moment. The issue of whether america will affect will go ahead with the positioning of a new Missile System and south korea. What we are how we see it is former general mattis has been a conservative person on this issue which will continue with the alliance with the obama administration. What he says will reflect what policy will be, that will remain a concern until the primer minister meets donald trump in washington later this month. There is the timing for these trips. They chose to go to korea first so that shows the priority that the administration is piling up in these issues when it comes to asia. Right. President trump has made china and the threat from china big issue in his leadership. If you look at the people he has as his advisors in his cabinet, they are people who are wary of china. That is something he has in common with promised her be. Me minister a great to have you. A quick check of the latest business flash headlines. Affiliates have agreed to pay a must 800 Million Dollars to resolve all remaining litigation from the lehman others bankruptcy. The bank handed over 1. 4 billion last year. The new deal requires Bankruptcy Court approval and a hearing is set for february 16. Lehman was the biggest in group c in u. S. History in september 2008. More than 600 billion in debt. It appears a ruling that endows plants on medicine the was denied as unwarranted. A Broader Alliance could be on the way after announcing an agreement on catering and aircraft maintenance. The 216 Million Contract will see that the taunts a lufthansa provides [inaudible] step and moreor types of being discussed. We intend to look at the next phase of share. Our teams met and there are a range of opportunities in information technology. How we work with our other Equity Partners in regard to network corporation. We are keen to continue that dialogue. Metlife is poised for a Value Creation with the prospect of higher Interest Rates and what it calls a more favorable regulatory environment. Shares dropped an extended trading after fourthquarter profit of 1. 28 trailed estimates. A reduction in the value of its derivative book produced a net loss of 2 billion on generally accounted excepting accepted accounting principles. Numbers. Eleasing its that is next. This is bloomberg. This is daybreak asia. Quick look at what is coming up. It is all about the fed. Rishaad a bit under the radar given what has been happening in the background with donald trump asserting his authority on the presidency there. That has been playing out. It did not the fed did not talk about fiscal policy. That front have been scant. Bank,ropean central looking forward to that meeting. And hawkishness and a tightening cycle in the u. S. We have mark carney from the bank of england looking at what is happening to the cost of growing. They are likely to raise rates in the future than to [inaudible] macau casinos in focus. They were pretty much showing a recovery for six months but it was shy of analyst estimates. They looking at whether have turned the corner as many assumed it has. Looking at that and mastercard. The chief operating officer will be joining has linda hasl inda. Of what islavor coming up for the next couple of hours. Sony set to report its thirdquarter earnings. Trying to revive its movie business. What are we looking for this quarter with sony after that news about the right down . Writedown . The key thing to look for when the numbers come out, that will be negatively impacted so do not worry about the net number. Look at the operating number. That is the key this quarter. People have known that the films are not doing very well. Sony warned about it in june. Business ise film not doing that well, they lowered their projections. The has been priced in but when investors want to know is last quarter is the holiday quarter. Huge for video games. People want to see how the playstation is doing. Sony has even preliminary numbers. In the to be the best quarter for playstation yet. They have not given out all the details and that is what i have been looking for. They launched a Virtual Reality headset. If sony gives any numbers for that it will draw a lot of attention. They upgraded the power of the playstation4 with 4 pro. They have not upgraded their consul. The usually release a new one. This time they are releasing a more powerful one. Very unusual. People want to see numbers there. It will be about video games. I look at the operating profit and see how well that is doing and see if they change the forecast and see how the Games Division is doing because that is their biggest and most profitable division so i think that will be the focus. Do not focus of much on the net income because that would be negatively impacted by the films right now. Is the focus and something to be excited about but it seems like there is always something at sony, something biting at sonys heels. Last year was the earthquake and then the battery fail. And then the 1 billion writedown. Sonyere frustration that cannot have 2 seem to have a clean quarter . Definitely some apprehension. Every quarter before the Earnings Release a day or two, sony will drop some bombshell. Last time it was the battery sale. And that impacted quarterly earnings. Wn like the film writedo you said. Every quarter they are struggling to get a clear picture. They have been restructuring for so many years, they seem to be coming out of the hard part of restructuring. See the healthy, new sony. Every quarter it seems that we are getting dragged down by something. There is some hope i think for thattors next fiscal year begins in april that will finally get a clean quarter where it is not impacted by any external thing. We get to see what they have been doing with sony. It looks like this quarter we will not get that so focus on the operating profit numbers is what i would be looking at. Thank you for joining us. We will be watching out for those numbers and what they might say about that turnaround. That is it from us. Putting more still to come. Bloomberg markets asia is next and we are counting down to several more major market opens. China the only market closed now for the lunar new year. So grating allll week. They have 20 more days to go. Hong kong is opening up soon. Looking pretty positive except for japan. We saw some up the data and korea. Inflation highest in five years and the aussie, record trades reached. This is bloomberg. In singapores 9 00. Coming from you from the Bloomberg Asia headquarters in hong kong, this is bloomberg markets. A late start for the asiapacific. The fed keeping great on hold. Now, turning to fridays payroll numbers. 11 last month, despite