Says, lets talk fb Winter Olympics. At the Winter Olympics. A very good morning to you, our viewers around the world. s take a asia let; look at what is happening around the world. We saw what happened on the markets of the United States in the past few hours. We went into the positives. Technicals are pushing that up. Lets go to the bloomberg terminal. Hasnt been, it very good. Down 7. 25 . The last time we saw these numbers was back in 2009. 11 . Y the question is whether we can hold on to the greens we saw and whether that will translate to where you guys are. Haidi this is pretty full this week. You can see the longest winning streak when it comes to growth. Well as thetion as yuan. Have synchronized tightening across global Central Banks . It was positive we saw some defense of buying and 90 u. S. Session on friday. Onin that u. S. Session friday. Nikkei ndicates the in september. Take that with a grain of salt regarding whether you will see bargain hunting. Up 3 10 of 1 for trading in new zealand. The kiwi dollar is trading at. 7251. Some of the stocks are getting underway for a brandnew week. Sydney had not suffered as much as some of their asian or global counterparts. The us and p pretty much flat s p flat. Audusd bumping above a weakness on friday. The australian 10 year yield at 2. 89. Lets go to Tom Mackenzie in beijing. An independent inquiry into australias banks interest Financial Advisors and Pension Funds begins on monday. Royalvernment sets up the Commission Accounts of public anger of misconduct amid allegations of latebreaking and Money Laundering. All of that as banks rack up record profits. A former High Court Judge will submit an interim report in september. She came under attack after agreeing a new coalition with the social democrats. Some members said it is time for a change. Angela merkel said she campaigned on a fouryear term and stands by that. The coalition has yet to become officially confirmed. A russian plane crashed soon after takeoff from moscow, killing all 71 on board. For aane was heading south eastern city, but disappeared off the radar seven minutes into the flight. It is not known what caused the crash. An inquiry is under way. Openednal case has been for alleged breach of aviation safety. Are headingran toward outright confrontation since the syrian war began seven years ago. An israeli plane crashed after being attacked by opposing aircraft. Israel said it hit seven targets syria belonging to iran four of which belong to iran. Israel said it will not allow iran to take control of syria. Jeff tom i am Tom Mackenzie. This is bloomberg. Kim jongun has deployed the olympics to fight back against the Trump Administration sanctions. He appealed to the south korean president , extending an to a summit in pyongyang. Was very hard during the Opening Ceremony not to be distracted by mike pence. Mike pence was there pretty stonefaced. I dont think he was too charmsed by ms. Kims offensive. It is a little bit reminiscent of when he was at the nfl game and walked out. Interesting, a clever diplomatic ploy by kim jongun to extend this invitation to president moon. This could drive a wedge to United States and south korea on their attitudes toward pyongyang. We knew this would be so interesting, to take place 40 miles from the dmz. It is turning out to be that. A lot of analysts are weighing not seeing what conditions south koreas president moon would give as a guarantee to talk to north korea. Say for sure he would want to have talks on the nuclear he does or notr remains to be seen and they are not sure whether kim jongun would agree. About what welk might expect from donald trump the year 2019, the budget is out on monday. Are some rosy expectations in terms of constellations, expecting 3. 2 for growth. But the median is 2. 7 . Might that be the Biggest Surprise . Ros people will be focused on the growth forecast when the budget is released on monday. Back to the debate on tax cuts. Back to the debate on tax the republicanf Congress Said we will grow our way out of this deficit. The tax cuts will not be detrimental to the economy, because the economy will grow. We possibly had evidence of that with the wage growth we started to see, the bonuses a lot of companies have been giving. Given how the u. S. Economy is so dependent on consumer spending, that could increase growth. One wonders whether the Trump Administration will be too optimistic. We think it is possible, but we will get a lead that we will get a lead on some elements of the budget. Dont quite know what we will see. The office of management and toget has been working hard revise elements of the budget after the commercial spending deal. Ramy so much to talk about. Ros, thank you. We will get more on the u. S. Budget deal with the ftn financial chief economist, chris lowe. Lets get groovy action over the weekend from the budget deal we saw. So many voices are saying different things. It seems like the world is upside down. Likesyan is saying he this as a bipartisan compromise. Nancy pelosi voting against it, because she wanted immigration but the dreamers. When you heard the data come out, what was your reaction . Chris i work in a bond shop. The first thing i saw was the deficit estimates. We have a white house that is projecting pretty solid growth, not just this year, but into the future. There is a trillionflux deficit in year two, because of the tax cuts. The omb believes we will grow gdp growth gdp will be Strong Enough that the deficit will start to shrink in the long run. That has happened in some economies. The United Kingdom comes to mind. They cut Corporate Tax rates dramatically and soft tax revenues rise. But it is a leap of faith for us. Starting with those gdp numbers. Ramy i thought i got a sense of , sayingsm in your voice it happened elsewhere. Looking at the 3. 2 expectations for gdp growth, it does seem too rosy. My forecast is 3. 25 , right in the same wheelhouse. Had 3 growth the last three quarters. We fell short in quarter for, because inventories unexpectedly fell. Back, that wast literally companies struggling to keep up with demand, a good thing. In the last several years we have had weakness in the first quarter. That is the key. If it was caused by things like tax increases and regulation, which we have had year after year, maybe we will get a bye in the first quarter. Even the atlanta fed is talking about 4 growth, a very preliminary forecast. I think isis week really going to inform ofs fullyear forecast. We get january retail sales. Consumption was quite good in the fourth quarter. It holds up. Solid,are one gdp is a this will look more realistic. If we fall short in the first quarter, they will go right back to the drawing board. Haidi i want to tell the bond a side of the story, go to the equity selloff, and then talk about what we have seen over the past few days. I am looking at this chart. Is whereve said 2. 63 equities will be. Do you think these yields have moved up to quickly . If inflation doesnt actually actuallyze, bonds are pver oversold. I think thats, but i wouldnt be surprised if we test 3 before the market comes to that conclusion. There is not that much Technical Support for bonds from here on toby get to three. It makes sense we would test that level again. That, inflation fear is mounting. It is only going to get worse as the economy strengthens. , ifs not until traders see inflation doesnt show up by march or april, that they begin to brief easy again. It is going to be a tough road for bonds for the next month or two. We havent even talked about deficits in the United States. I have clients focused there for thefirst time, really since huge stimulus deficits after 2009. There is a lot to come to terms with. Is the idea of one of the many explanations given for the selloff last week we have the removal of a ben bernanke push, followed by janet yellen, and we dont know what jay powell is going to do. Era of thethat the essential bank bust for bonds and equity markets is now over . Chris yes. I followed kathleens interview with bill dudley last week. It was excellent. Compared this selloff with the one in 2016. In 2016 the chinese economy was in trouble. We had recessions in the emerging market economies. Tumbling. S were the u. S. Economy weekend to weigh 1 growth on a yearoveryear basis. None of that is happening now. To termsare coming with economic strength and the possibility of global Central Banks were moving accommodation, and they have to figure out where prices ought to be in that environment. That is what we are doing. I saw a very relaxed new york fed president. If there is a safety net, it is lower than what we are trading now. Haidi we will be back for now and get back to you in a moment. The ftn financial chief economist is sticking around. Taking a look at how your markets are faring. The upside a quarter of 1 in new zealand. 247. Kiwi dollar,. 7 a sharp dip in the half hour of trading for the nzdusd. Comes to thehen it banks on day one of the real sector into the financial commission. Utilities as well as energy names are dragging the asx lower. Volatility is back. We will hear what is different this time around. Next, the bank of japan governor is set for a second term. We will look at that. This is bloomberg. Ramy this is daybreak asia. The bank of japan governor may be one step closer to his reappointment after reports in leading newspapers over the weekend. Our Bloomberg Economic and policy editor Kathleen Hays is here. We were talking about this with chris low. This is an environment in which we think the fed may be changing itself. One of the reasons why governor kuroda will be , one of the best advertised reappointment of the federal bank of a federal Bank Official in many years. Everyone in japan expected this. Japanime minister of wants to keep stimulus in place to make sure inflation continues to move higher and the economy keeps growing. That is what the governor is committed to. In addition, this will talk the markets the boj is going to keep its stimulus in place, even if the fed starts pulling it out by raising interest rates. Haidi stock market volatility is another reason to reappoint kuroda now because it shows markets have a steady hand at the house. But i learned so much in my reporting in tokyo, the two boj governors terms expire on march 19. People have been expecting that the government would make this announcement in early february. Here are the two new deputy governors. I want to switch focuses. While in japan, it is not enough inflation. It is too much inflation. What should we expect out of cpi . They might kathleen they might want to change inflation numbers. They held inflation steady among of the budget deficit. Their Inflation Forecasts for april to september of this year. 4. 6 , bettered than what it was. The blue line is the cpi yearoveryear. Yellow shows you 43. 98. The target is 4 . In terms of the number we will get in than next couple of ,ours, the yearoveryear cpi 5. 1 in january. 4. 2 in december. Not a big move. Mattel has postponed a meeting with his finance ministers. It is not a good time to be easing or making moves, even if inflation eases. Ramy we will bring an in chr is low into the conversation. Thes get your reaction to news about kuroda, very likely staying at the helm of the boj. Kathleen chris and the United States, investors are grabbing grappling with such a rapidly changing environment. It is quick to take one of the big variables and keep it onlyant, to know that not are we going to have the same policy in japan, but the same person executing that policy is a huge relief. Ramy looking at what is happening in terms of the divergence of the United States, possibly in europe, and the lack of change in japan, what kind of risk mechanisms might there be . Hris a globally stronger economy is allowing the fed to remove accommodations. It is allowing members of the ecb to us mario draghi to remove accommodations there. Is relativelys the easing in japan now is even easier still, because it showed that the yen can give a further boost, and maybe they will start to see inflation. It is hard to be easing when the whole rest of the world is doing the same thing. Governor kuroda is committed to yield control and seems to have it down. Why is the dollar not strengthening with all these rate hikes . Chris the dollar strengthened intorms of the submission of the shift in policy. And there is an expectation that there will be a ceasing of buying bonds. Global qe is quite positive even though the fed is winding off bonds. Europe and japan are accumulating even faster. Wednesdayok ahead to two when that turns the corner. The chaoticic nature of washington politics is undermining the dollar as well. It is a group effort by the treasury secretary and the president. Kathleen everyone gets credit. Chris, always a pleasure. Plenty more to come. This is bloomberg. The 2018 volume guidance has been cut by a bout 5 million tons. Competition is hitting contract prices. Seesail Freight Companies 220 million tons. Zon is now looking at earnings at 960 million aussie dollars. Ramy alibaba is moving into. Ome improvement it bought 15 of beijings easyhome. Has recently been expanding into brick and mortar be a chilling and combines its expertise in the cloud with physical stores. Alibaba raised its growth forecast last week and said it is buying Financial Services. Next, we will he or why fundamentals have changed and what to do about it. This is bloomberg. 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. Monday. 30 minutes into the session. Shares comes to sydney we are 30 minutes away from the market opening in korea. Seeing some defensive buying resulting in a positive finish on wall street on friday. Six 30 p. M. Sunday in new york. The market closings, surprisingly up. We are taking a look at midtown manhattan. A little bit foggy today. Overall, it is up a little bit warmer than normal. You are watching daybreak asia. Just getting into the start of this trading week. Lots of caution after last week. Lets get you to be first word news with Tom Mackenzie in beijing. North korea has confirmed the divisive south korean president moon has invited the south korean president moon to talks in pyongyang. The invitation was extended during a weekend visit to the Winter Olympics. Found manys sister things in the south to be similar to the north. She says she hopes to meet again in pyongyang. The boj governor kuroda is to begin a second term. Kuroda and nikkei says Prime Minister abe will point the governor for another five years. That indicates the Prime Minister wants to continue with the bojs unprecedented stimulus program. Asx is looking at allegations two revealo materials in 2015 and 2016. Theredit suisse says allegations it failed to reveal materials in 2015 and 2016 are without merit. Officials in new york cap get to make a decision about a lawsuit being filed. The anc leader told supporters the party must resolve its problems, including accusations of corruption , before powerzuma is transferred. Global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. I am Tom Mackenzie. This is bloomberg. Haidi we are counting down to the open in seoul. Asian markets were whacked l t week. We started off the week talking about support of buying from china, that was the hardest hit by the end of the week. What are we expecting . Should discontinue this c ontinue . Testvestors should tepidly the waters after the worst week for asian stocks since 2011. At macro risk thesors is saying this is time to expect markets are settling down. Stocks in sydney are extending fridays losses. Jp hifi is the worst performer so far on the asx 200 after reporting an industry wide inquiry and missed estimates. U. S. Stocks took a more positive turn on friday. Japanese markets are looking at a hall today. Fourth quarter gdp data is due on wednesday. Payment potential real comes at a critical time for the stock market and yen. Pointed out earlier. Much on the data docket that could change sentiment. Inflation updates are going to be key this week from asia, as well as the confirmation as to where Central Banks will take Monetary Policy directions. Ramy what is interesting is the flight to save haven, particularly gold. Flat, 0. 1 down. It is not going anywhere. There is several reasons for this. One potential reason could be that etf investors may be selling gold to offset their losses in the stock market. Check out the chart. Funds. Both back in etf the most since july. Back in 2008, during the crash, told also fell. Investors covered their margin call. Taking a wider look with another chart, gold haven appeal remained evidenced on a relative basis. Gold turned higher in later phases of the Global Financial crisis. Ramy keep it in the pocket. Thank you, sophie. Lets get the outlook for wall street after fridays close brought a positive end to the worst week in two years. Twote rally in the last hours. The plunge was only by. 2 . What happened . In two years. Eek we were mostly in the red throughout the day. There is a positive in terms of technicals. The vix, lets go right to the first chart. The biggest fiveday spike,