Asia. Rishaad we saw some tailwinds in the asiapacific, and it does it stop here . That question after asian stocks had their best week in six months. At what isa look going on here. Equities at record highs, but analysts seeing earnings season providing a further boost. Is essentially earnings per share coming through, and they are Getting Better and better. Companies had their profit estimates lifted by an average by analysts. Sts here for the rally to be sustained. Haidi whether this sentiment story or the fundamentals, it looks like earnings season looking buoyant as that gets underway. It is a big event risk week. , whether in particular that changes the narrative of the synchronize Global Growth story. China, cpi and ppi readings out of the United States after that payrolls number disappointed. Singapore, taiwan, and malaysia coming online. Lets get it over to sophie. Monday, momentum sustained in kuala lumpur, the index adding to the 1 gain last week, that building on decembers gain, the best month for five years. Ring of charging ahead Malaysian Ringgit charging ahead. Singaporean dollar is snapping a two day advance. Extending the taiex gains, and the taiwanese dollar stronger after its biggest weekly rise in 10 months. Checking on tech stocks in taipei, catcher reported a 22 rise in december sales. Also, we are waiting on december trade data. In kuala lumpur, stocks benefiting the election this year. Companies enjoying an increase of 25 last week. Sapura adding to gains. Its turning next when we look at the kospi easing gains we saw a earlier in the session, being dragged lower by chipmakers. ,g electronics under pressure and that stock losing ground ahead of its fourthquarter earnings today. Due out later today. Lets tell you about what is happening this time tomorrow. To have ating ready look at this conversation between seoul, korea and pyongyang. Lets get that with the rest of the first word news with paul allen. North and south korea will hold talks for the First Time Since 2015, signaling a possible break in the crisis. Theagenda includes whether north will send a delegation to the Winter Olympics in the south and overall ties. President trump said the u. S. Is open to joining the discussions and willing to speak directly to kim jongun. Steve bannon has issued a lengthy apology over comments in the book fire and fury. Bannon told a political website that President Trumps son is a patriot and a good man. The president s allies have in speaking out against the book, which raises doubt about his fitness for office. President o said the understands and engages with the issues before him. An Iranian Oil Tanker has collided with a cargo ship off shanghai, leaving 32 missing. The tanker caught fire after the oneision and is caring Million Barrels of natural gas condensate. It happened about 160 nautical miles off the coast. It says the missing savers are all from the iranian ship. Malaysians opposition has named the 92yearold Mahathir Mohamad as candidate for Prime Minister. Malaysias longestserving prime year will try to topple the premier and his coalition. The opposition says if Mahathir Mohamad wins, he will remain until the jailed leader is able to take over. The bbcs china editor quit blaming an equal pay. She accused the bbc of a secretive and it illegal pay culture and facing a crisis of trust after it was revealed that two thirds of staff earning more than a certain amount for men. Global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. I am paul allen. Rishaad chinas foreign posting anserves 11th straight monthly increase under tighter capital controls. Lets bring in enda curran. Lets look at these numbers in more detail. You break them down, what did you learn . It is a turnaround. Reserves ago, chinas was unsettling global markets. Here we are now. An 11th straight month of growth. We are comfortably above the 3 trillion figure. If reserves dont go higher, they will stay stable. A weak dollar has certainly helped inflate chinas reserves, and tight capital controls against the broader backdrop of a good domestic growth story. Is, what canthing reverse these gains . We did have to be a misstep of government policy . Domestic and external. With this deleveraging campaign, if they were to go hard and trigger a slowdown in the real estate sector, that would ripple across the wider economy and prompt people to get their money out of china. Front, the u. S. Interest rate story. If it hikes more than anticipated, that advantage would prompt downward pressure on the yuan. ,t is a stable story now but there is a range of risks they face. Haidi a big theme for this year in terms of what policymakers are focusing on and growth, but it looks like six point 5 growth target is sticking around. That is what all indications are. Cognizantymakers are of what they have created on the debt leverage side of things and are committed to tackling that and we saw at the congress how it would be a nuanced approach, but ultimately they dont want the wider economy to slow down too much, and they dont want it to go below the magic 6. 5 level. Be the themewill as we go forward this year. We will exceed them tackling the shadow banking sector, getting a grip on the Wealth Management shutdown but no mass of some be companies or putting tens of thousands of workers out of work, so it is a good example of how nuanced china will be. They are aware of the risks and are tackling those risks him up but dont want to do so to the extent it would destabilize the wider economy. Haidi this is a big week when it comes to china data, inflations, credit data, so when it comes to the story do we expect a change to the narrative . The view is ppi remains in positive territory, important for profits and servicing that come up debt, but they will probably trend downwards. Would not expecting too much on the cpi side of things. China was a big part of the global reflation story, but does not seem to be as much of a force as it once was, but the feeling right now is we are not ready for a price break out yet. Haidi thank you for that. Marketsead, emerging and another stellar year. Could a busy calendar year put a dent in the momentum . Rishaad breaking down u. S. Jobs data and what is in store for Global Investors this week. Our guest joins us next. This is bloomberg. Rishaad i am Rishaad Salamat in hong kong. Haidi asian equities extending gains as earnings season ramps up. Investors betting the outlook are Strong Enough to support record high stock prices. Our next guest expects the rally to keep rolling. He is with kapstream capital and joins us now in sydney. The Party Continues . Are you picky at this point in time . The Party Continues. Technological change affects every industry, financial, health care, pharmaceuticals, farming, anything you want to take a look at. Demographics is a big change as well. Every 12 years you have one billion people on the planet. Savings rates have changed. I dont see how the rally can rally canem stall. Haidi this environment has been good for equity traders. If the fed and other Central Banks converge in terms of tightening has guided the markets really well. They are saying maybe 23 in 2018. 2017, 75 basis points, and what did you see . Banksn though the central you always have the central bank put. Aboutly, if you think valuations and earnings, you would have to be more bullish risk assets because of the growth in population and the growth in demand for goods and services. Yes, you will get a hold back, but it is hard to imagine the risk really not continuing. Rishaad in your notes you say that views on the u. S. Dollar are confused. This is chart 3710 on the bloomberg. We had a number of economic surprises over the past couple of months, but you see the d correlation and it comes to decorrelation when it comes to the u. S. Dollar. In 2017 you said that i know, trump coming to office, republicans controlling the house and senate, massive stimulants, the fed will not raise rates, so the u. S. Dollar should be stronger. In reality, it was not because a lot was already priced in. The currency valuations are not driven symbiont growth or Interest Rate differentials, you have a budget deficit and the fiscal deficit, current account deficit as well, so trade matters to the u. S. , and the u. S. Is probably one of the , so walkingnomies into 2017, i am surprised the dollar was not stronger. Argue would be similar as well. Currencies therefore a little bit harder to predict and rates or credit. Markets,why are equity bond markets, and other markets telling us different stories . Equity markets are basically telling you that you will get stimulus trump the u. S. Government in tax cuts, the only reform that trump has delivered, and that is good for corporations, individuals, and spending and corporate earnings. Granted the level you might argue is not where it should be. Bond markets are basically telling you there is no inflation and the fed will be slow in raising rates. In a globalized world come consumer inflation does not exist and Wage Inflation is questionable. Most manufacturers use overseas to produce their products. There is no inflation. It tells you that yields will be low and it is good for the economy. Currencies are more confusing because you have the fed raising rates and qe in japan and europe. Flow ord argue it is deficits. Rishaad you say you are a bond guy, but would buy equities right now. You didnt say why. Flesh that out for us. I dont think it is timing the market you get anywhere. The famous quote that says time in the market. I use 45 Bigger Picture thatsis that says simply technology and changes in technology this time around will have a massive impact globally compared to industrial revolutions, communications, telephone. One billion people on the planet every 12 years says if you have 200 Million People that move into the middle class, that gets you the buying power of the u. S. Consumer. Technology changes access to markets. More people can use savings to buy and sell assets. , even thoughput they say they dont like to bail you out, they will bail you out. Even though earnings ratios are 18 or 19, i dont see how the dow cant to double in the next 10 years. Hink Warren Buffett said double in 10 years is not impossible. Rishaad dont bet against that or the fed. One other aspect of all this is inflation. A point we bring up often, technology, the sharing economy, is it really factored into inflation . Is that why inflation is not the gauge it was . Think whatportant to the Consumer Price inflation basket is. Basketds and services consists of things falling and prices. sergy in a globalized world simply says your shirts, shoes, clothing, milk, and Food Products will be produced where it is cheaper, therefore cpi made the a concept in yesterdays game. In aroblem you have globalized world is Multinational Companies go to countries where wages are cheaper than to manufacture in countries where they are higher. Aspect thatther came out of the last boj companies mayese not be raising wages, but they are investing in robotics and ai. Artificial intelligence and technology eventually takes over for human beings. Therefore what you could have is a rising Unemployment Rate because people are replaced by technology, but wages will not go up, so you have to balance how much you put into Capital Investment versus labor. I find it hard to believe we will get any surprise in inflation on the wage side or cbi side. North korea, geopolitics, chinau. S. Trade risks are hard to protect. The risks are there. Haidi they didnt care last year. They didnt care, but we keep worrying about north korea firing a missile here and there. East,ms in the middle that is always a challenge for u. S. Shutdowns, but these things are factors you cannot price into the market or price with the optionality will be because you dont know the consequences. Haidi what happens to the aussie dollar . See the rbaple stuck between a rock and a hard place. Interest rate differentials matter. Now the differential is close to zero in the short rate. Aussie dollar has done well because Commodity Prices went up. Probably . 75. . 81, the low is 70s sense, but there is nothing exciting one way or the other. Haidi thank you so much. Happy new year. Thank you for joining us. You can catch all our interviews on our interactive function tv. Live or dive us into securities or functions we talk about. You can join in on the conversation by sending us instant messages during our shows. This is for bloomberg subscribers only. Check it out at tv. This is bloomberg. Ck it out at tv. This is bloomberg. Rishaad this is Bloomberg Markets asia. I am Rishaad Salamat in hong kong. Haidi i am haidi lun in sydney. Bloomberg has been told that chinas hma group has approached another company about the possible sale of buildings. Sources said units of age in a missed payments due to chinese banks, prompting lenders to freeze some of the unused credit lines. Sunday times says tencent has held talks with a myanmarbased social network about commercial partnerships and investment. It sides unidentified bankers saying tencent has not tabled a formal bid. In an Exchange Filing last week, it received an offer that may or may not lead to take over. Say talks were focused on a deal with airbus widebody jets, although the size of the order is not final. China purchases jets collectively before distribute in them to various airlines and now accounts for about a quarter of all airbus deliveries. Rishaad this is the premarket ,n hong kong come up by. 25 tantalizingly close to that psychological 31,000 level. Looking also at the futures contract suggesting we will have that higher open. Asian equities suggesting the best trading week in six months last week, edging higher again at the start of the regions earnings season. And japanese retailers out with numbers as well. It does support the view that we well have support for these record high stock prices. Igh stock prices. Retail. Under pressure like never before. And its connected technology thats moving companies forward fast. Ecommerce. Real time inventory. Virtual changing rooms. Thats why retailers rely on comcast business to deliver consistent Network Speed across multiple locations. Every corporate office, warehouse and store near or far covered. Leaving every competitor, threat and challenge outmaneuvered. Comcast business outmaneuver. Kong,d just 9 29 in hong a very foggy day has we look towards the peak there. The nonfarm payroll report expected, butthan traders betting on those republican tax cuts to engender higher earnings. The earnings and season likely to start this week with samsung and a variety of japanese retailers out with numbers. U. S. Inflation data important as well, so, ppi as that inventory drawdown is going at the moment in china. Inflation front and center, whether this comfortably low inflation environment will continue. , highyou politically stakes as a meeting between north and south korea takes place tuesday, discussing plans for the Winter Olympics has continues between the u. S. President and the north korean leader. Seasonmeantime, earnings , all signs looking positive for this asian bull market. Lets get over to sophie now. Picturewe have a mixed when it comes to mainland markets, the large cap gauge higher, small caps under pressure, and the composite stalling after a sixday advanced, but the hang seng is day of. 2 , so a 10th gains. Rising after the best week in three months for the index. Chinese auto stocks after reratings. Weight, whilequal another was raised to overweight. Clipping the board to check on Chinese Airlines stocks as the government removed caps, paving the way for higher prices for flights on the mainland. Composite, those stocks leading gains when it ines to the best performers terms of index points, air china rising 4. 5 in shanghai. Coal and Power Producers as the government is supportive of industry consolidation and restructuring. A report says the northern province will cut coal and steel capacity in 2018. The big drags in shanghai, andochina falling. 4 Kweichow Moutai on the back foot. The hang seng led higher by real estate and telcos stocks. Real estate in focus given a the newt that said stamp duty will exceed expectations thanks to booming property and stock markets them so stocks getting another boost on the back of fat. Better sentiment is part of the catalyst for real estate helping shares to build on the best start of the year. Hsharecomes to the index, lets look at the breakdown. That share market led higher by real estate, gaining over 6 so far this morning. Oil ands go overweight gas, health care, consumption stocks, banks, and insurers. One chinese insurer on a tear. You can see that on this chart. The line in white has climbed , keepingion last year pace with highflying tech stocks. Rishaad thank you for that. Lets have a look at the monetary possibly monetary tightening policy in beijing. Here is paul allen. Pboc official has said there is room for an increase in Interest Rates in the shortterm because prices and corporate profitability have improved. Says the central bank thanks higher Interest Rates would help squeeze asset bubbles and restraint expansion. Expects a 25 basis point hike this year. Saysellor Angela Merkel germany needs stable government as she begins make or break with to renew her alliance social democrats and open the door to a fourth term. The coalition began exploratory