As you mentioned, it is becoming a little more inflationary for the boj. It will only get stronger. The u. S. ,ets without expanding gains. Hong kong fighting back in the final day leading up to the new year Lunar New Year holiday. It is the biggest threeday gain since october 2015. Remember the hong kong and china had the losses last week. For now lets get to the first word news with haidi lun. Florida now say 17 people were killed in a school shooting. State Authorities Say the suspected gunman has been arrested. He is said to be 19 years old and a former student at the school. A catastrophic day. President trump offered federal assistance to the state and offered his condolences to the victims families. Magazines,ountless multiple magazines. At this point we believe he had one ar 15 rifle. I do not know if he had a second one. Haidi President Trump told he supports . 25 per gallon in federal gas and diesel taxes to help fund in proven in roads, bridges and public works. The democratic senator was surprised that they president that the president raised it. Line tax has not been increased since 1993. The aussie dollar is changed after unemployment edged higher in january adding to funds they will hold rates. 16,000 jobs are added above estimates. Almost 60,000. That saw the unemployment down to 5. 5 . Growtht reach raise and inflation. Is confident it will become profitable. They told the Goldman Sachs tech conference that his company was in crisis and he has seen no lack of surprises. He wants to partner with more ridesharing companys and that over has more people than the aviation industry. Global news, 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Dollaryen is to watch. Pushing through 107. I want to pull up a bloomberg chart. 9511, you see the movement of the dollar yen. The correlation between the thread and the yen has pretty much been broken. The yen may see some freefall. Where does it go from here . Our next guest says it will be pretty quick. Global markets, he joins us. Youre saying it could go to 102. We had valentines day yesterday and a lot of the iflaryen remembers that every 14, 1994 we did 5 on the dollaryen. Based on the things we have with u. S. Rates moving higher. He did not have to say it. Is that a green light for them to push . Absolutely. I think you take a step back. For dollaryen, wanting to yen to weaken, you need bad problems in japan. We are Economic Data, going into the eighth consecutive quarterly growth. Manufacturing is out for your highs. This is not factoring the boj for any qe at all. I think that you will see a much stronger yen as we progress. What will we see by the end of the First Quarter . Kay we have been short on dollars as a whole. Dollaryen is the last bastion of u. S. Dollar out there. The last stronghold. When that starts to capitulate, it could move quickly. Haslinda do you share the view of the yen is cheap . Yes, on many different factors. From my perspective it is in the positioning and the side of the trends that are going through, rather than a value play. That is an icing on the cake. Thanks for coming on the program. I want to bring in over the past couple of weeks in the index. That it shown is becomes much more expensive to hedge. How much of that has forced a lot of them out there to move and exacerbate the move . Kay it is a really good point. Before, andot hedge we were talking about the money for the start of the year. Given how quickly we have made the gains in equities, stuff like dollaryen says a nice hedge. Things like looking through energy is potentially a nice hedge on the perspective of, if we do sell off more than the bigger moved to the downside than if we rally. Ont is why your proxy hedges stronger yen, lower energy make sense. Need tohen does the boj act . I say that from the context of one of the reasons why the yen is not strengthening. Just Market Participant talking about tightening their policy. Do they need to act soon . You think it will stem the strength . Kay i do not think so. We saw the statement that it is not a concern. It is always level and magnitude and the move to that level. Hey can get into 3 grinding out first is a certain move. I think we need to be closer towards 100 before i would start to get concerned. This is what happens in the Economic Data fund. Haslinda we have seen a rebound from the dollar. Is moment them on the downside . List seems to help the dollar. Kay i agree. The dollar has faced strategically, longterm is done. It is not the only game in town when it started to rally in 2014 and 2015. Now you have another Central Banks that are rallying. Get some bounces. If we were to have a lot of liquidity, it does seem to favor the dollar. Haslinda what assumptions are you making about whether the fed will move are not in march . Kay they are definitely moving. I would stick my life, almost, on that. Haslinda be careful. Kay it will be language here. Fed will realize. I saw something that blew my mind that said there are no fed officials that expect inflation to be higher than 2. 1 this year and 2. 9 next year. That is astounding. Going to be. Ely they need not to spook the market. They will have to adjust upwards, but walk the fine line of not spooking the market. That will be interesting to watch. This has been the biggest risk this year. Of magnitudeng here, it took us about five months ago from just above 2 on the tenure to where we are now. Next move up, this next five months, do you think we will get the same magnitude or a flattening in the upward slope . Kay the honest answer is i do not know. It really depends how powell approaches this. If the market gets spooked, we could be three to five to 350 really quickly. 320 52 350 really quickly. We have seen the move with no headlines. Tohink we and up closer 350375 by the end of the year. What is clear to me is we are moving to the upside in rates. One of the stories last year that were flat will be a steepening story this year. Haslinda kay of saxo joining us later on. The ceo joins us live later in the hour. Games give policy makers more options for a bit of a confusion there. That is next. This is bloomberg. David this is Bloomberg Markets asia. Authorities consider the consequences of the yuan nearing its strongest level since may 20 15. Lets get and bloombergs chief Asia Economic correspondent who joins us from hong kong. What are the policymakers aiming for with these changes . Good morning. The back story here is that the strength of the yuan has probably gone too far for monetary policy. They want to get a two way a twoway flow. They are tweaking a little bit with the capital controls. For example, we had the head recently say that they are in neutral mode when it comes to capital control, hinting that it wont be necessary tightening around the edges with expectations of tweaking to allow more money to flow in and out of china. The whole point of this is that it might result in a more twoway trade in the yuan, which would be no harm for the chinese exports story. That is not to say we are close to an opening, just as a window opportunity for policymakers to tweak around the edges. Haslinda what is the Bigger Picture . I guess the story is it is not like china will step back and let go of control in a hurry. Difficult very experience in 2015, 2016, when we know that the reserves were going at eight record rate. They lost one billion in total. They are now slowly recovering from that. The reserves are ticking higher and they are on the moving currency that is not stabilizing. The big leap would be to ease restrictions, taking money out of atms overseas or carrying money with them overseas and letting companies go on a spending freeze overseas. Those two big factors are highly unlikely. Increase amount of money you can exchange in a given day. It is the chicken and the egg that where does the yuan go from here . Can there is a lot china do, which is stabilize the economy, which they have, and forced capital control, which may have and keep policies generating, which they have. They got lucky last year with the week dollar. You look at the factors like core inflation traveling at a decent clip. Expectations will at the least the liver, if not more deliver, if not, moore. The stronger u. S. Dollar put standard pressure on the yuan. They do not want to much downward pressure, because then we go back to where we started. David we dont want to go back to that. The hongus here in kong studio talking about a prospect forward for renminbi. Lets get back to our guest. Lets get it graphic up your of your tactical book as you lead to call it. Here are your calls here. Long aussie, kiwi. Short old and silver. Yet on u. S. Treasury. What is the thesis behind the first one . I think that long aussie kiwi is about rba more hawkish. Economic data has trumped Economic Data out of new zealand. More importantly, we had quite a big miss in new zealand inflation a few weeks back. Technically, it feels that the aussie dollar has been underperforming versus the kiwi. Technicals, but where the trend and Economic Data is going in the Central Banks as well. David in terms of the third one, long treasury, i would imagine that comes down to this widening spread. Do we get a reversal of flow only hit 3 in the tenure, and the third one starts to make a lot of money . Kay that is the rightthinking. Talked about one treasury close to two years now. Obviously, a crowded trade and everyone is in the same room. We were lonely for a wild. This is something where you may be shorting a potential pullback for u. S. Treasury, especially once week get tours 3 . There towards 3 . There is a lag affect in eurozone yields. Haslinda but they are still playing catchup . Kay it is. I have spoken to the commodity strategist, like, what is going on, why the underperformance . Sure, especially with silver and its industrial use. All i know, its that the tactical play where there are extremes. I think gold will really struggled to gain with yields being as high as they are. Haslinda before the inflation data came out the other night, it was the key focus. Now that it is out, how will that influence your portfolio and you Going Forward . Kay it is the same. There is no delta because it is the thesis we have had for a while and it is playing out. It is weird to be in because, normally, your views are not working out. You are wondering what could be missing. That is a great thing about macro. You find the trend and write it ride. I think it will continue to go on for a while. Areink now, technically, we trying to bounce as we are seeing from u. S. Equities. It is looking for interesting plays, short dollaryens, in case we get the yen and the rally wrong. Haslinda you have to take a look at inflation, what path you see inflation taking . Kay only going up. The markets are finally waking up. I have been pinging the deaths for close to two years. It goes back to the fed. Where did they think how much do they think we need to hike . Haslinda d. C. See the fed going more aggressive . Do you see the fed going more aggressive . Kay they definitely have to hike this year. I think there is only one priced in for 2019i think that has to be skewed up. There is no doubt in my mind. The question is, how will they communicate that across . We are coming on valentines day. We have all had our hearts broken. The next day it is, can we trust again . It was telling me that i could not trust what it was telling me. When you look at the v vix, it was telling you that it was a bit misguided, if that makes sense. Can i trusted again . Trust it again . Kay you just made my day. If you look at it, you will see there was a divergence as we got towards the end of 2017. When it was going up, where as in vix was making lower lows. And traders were not as complacent as may be stock out there at the end of the day. The take away from he is, keep a look at the skew of volatility out there. I see it as a rise and the vix as a whole. Vvix are still high. But they are have to be higher than the 10 or 11 that we were last year. David after last weeks dislocation, something is bound to be off. Where should they still be looking . That i am playing thoughts on, not that i will deep dive, but i will share it. You have all of these lowball that have been out there and have pummeled. There is probably a trade there and work to pick up a basket of these and say, i will allocate 50 basis points, when hundred basis points of my portfolio and treated as an option. Some may get wind it down, some may come back, you only need one to come back to make it 35 on that idea. I would look into Something Like that. Haslinda we thank you for your insight. We have to see whether he stays alive, but he said he would put his life on the line. You know what we will be after, right . Thank you. Kay happy chinese new year. Haslinda if you are a bloomberg subscriber you can catch up with our interviews by using our interactive function tv. You can join the conversation by sending instant messages to our team and our guests during our live shows. Check it out at tv. Haslinda this is Bloomberg Markets asia. I am david inglis, a quick check of your business headlines. Most in 19 months in tokyo after it was selling 1. 8 billion in the company after pressure from an activist investor return to move it back from an investment that the company made and held for more than a decade. It reduces its stake in the Japanese Company by 7 . The most since 2016. Haslinda they are being warned it faces a funding fee, having delayed spending on its fleet for suit for too long. Before the amount required becomes too high and says shareholders may have to be cut. It also says the average age of a plane is about 10 years older than a typical aircraft at typical airlines and almost double the figure at emirates. David we are watching the Credit Switch after a jumper. Trading revenue rebounded along with market volatility. The bank said that the first six weeks of 2018 showed a strong market with revenue gains of 10 in its Global Markets unit, and 15 here in the asiapacific. Haslinda david, i know it is up because we are leading up to the Lunar New Year holiday parade celebrations and partying is beginning. I want to be a party pooper. I want to bring out bloombergs misery index. There are some really miserable people out there, miserable economies. Take a look at the 2018 worst economies. We have venezuela and number one, south africa, egypt and greece, greece tying with turkey. We take into consideration inflation, as well as. Nemployment the two indicators suggest that these economies are in dire situations, therefore, they are the most miserable economies in the world at this point in time. David absolutely. Youhave higher prices and do not have a job. That is not the most ideal situation. I would just look at the bright side. Go toes miserables lets the lease miserable. Thailand. Is list is as you mention here, this essentially is a function of the Unemployment Rate. Then you add the inflation rate. There are questions around me of why thailand is number one because the Unemployment Rate has been steady at 1 , inflation is at. 6 . Do see inflation coming back up the world will be a little more miserable. As far as markets are concerned we have been craving for them. Be careful what you ask for and be thankful. Earningst up, reported in the ceo joins us in a few minutes. Stay with us, this is bloomberg. Its almost 11 30 here in the lion city. It is gains pretty much across the board in line with the rest of asia. And among by 1. 1 , the biggest gainers today, ocbc. This is the lender that announced a 30 increase in earnings just yesterday. I imagine as we approach the Lunar New Year, the lines are getting longer. The story has really been about the strengthening japanese, and up again, every single one of its major peers. The boj governors saying that up this point, its not yet needed for them to actually step in. In a lot of ways, them talking about it says they have been thinking about it. That is the story across the japanese currency market. I am david ingles here in hong kong. Haslinda i am Haslinda Amin in singapore. You are watching. Bloomberg markets asia haidi lun Bloomberg Markets asia. Haidi lun. Zumba has bowed to pressure and resigned. With disagrees with the decision forcing him out. His years in office have been marred by scandals including selling influence. A newre expected to name acting president until next years election. No lives should be lost in my name. Anc should never be divided in my name. Come to thefore decision to resign as president of the republic with immediate effect. Haidi the taliban is offering talks with washington to end almost 16 years of fighting in afghanistan. A letter from the leadership says the war was imposed on the group and the choice is to resolve the situation through peaceful dialogue. The letter says the u. S. Must end its occupation and accept afghanistans right to form a government consistent with the beliefs of our people. Oil rose strongly despite new Research Showing compliance with the opecs upward curve has slipped. Fell in january to 79 , the lowest since july according to bloomberg tabulations using iea data. Russia is responsible for more than half. They exceeded 100 . It is eager to be part of the anticipated saudi aramco ipo. It could be a record listing. Centerpiece. The government says it could value aramco to 1 trillion, although some analysts have offered lower estimates. Iselebrity indian jeweler being accused of links to a 1 billion fraud that could embroil some of the countrys biggest banks. Modi and others illegally obtained guarantees that could for money abroad. The bank says modi worked with some junior officials to win those guarantees. Global news, 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. I am haidi lun. This is bloomberg. David thank you so much. Lets pivot to earnings. Just to give you a quick sense of what the consensus view on the stock here is, have a look at our bloomberg chart. What this actually shows you, the green line, the percentage of analysts saying you should buy the stock. That has come down. The target price for the stock