Our main story this monday morning here in asia, china has stepped up its efforts to restore stability in the economy, saying there is no basis for a creationist for appreciation. Where did you go, joe . That was the question. I have been asking this repeatedly. Since august, there was not a lot of comment. He had his deputy give a press conference at two days after that in august, or is in as in 2005, the architect of the yuan liberalization was on state media within 48 hours of that big the pegging from the dollar in 2005, this time, he was kind of silence. He had maybe a few comments of the g20 meeting, he was not a davos. Double joe resurfaced in a Time Magazine article where he basically went down a long list of concerns. , there is no basis fall, theing yuan pboc has been sending it since that august evaluation. He says balance of payments are good, he says outflows are normal. Exchange rate is stable, even though it is down 1. 25 again. There is outbound investments, there is. Lso flight of capital also because there is no need to worry about shortterm decline, he says china has ample holdings for payments and for defense of stability. Noteds a quote from a economist at the university of california at san diego, he says joe is desperately trying to make sure that his work does not go to waste. Angie if everything is ok, why . Id it take so long to speak up that is the big question. That is what Christine Lagarde said, maybe this is just a promise something the chinese authorities there was a lot of turmoil in the markets before then, begging for this kind of thing. Amongst all of this noise, is basically ample liquidity at home. Pboc had been pumping cash into the Financial System for quite some time. , we that is out later today will get aggregate financing that will show an a significant uptick in basic liquidity in the market. The aggregate finance data is out today. This chart is telling. As the fx reserves have clients to a fouryear low of 3. 3 trillion u. S. Dollars, and one, the money supply has risen. Here is foreignexchange reserves. This is where liquidity is going, money supply is rising. They have been doing something right. That has been lost because nobody has been talking about it. Angie he is talking. It is the first day of the trading week after that lunar holiday. We will be seeing whether or not we will see the yuan rate. The markets open up as well. Ngie very good, thank you you can get more on all of the days top stories at our digital destination, Bloomberg Business bringing together the best of bloomberg news, bloomberg television, and new Digital Content all at one address. Russian Prime Minister claims his country is in a new cold war with the u. S. And its allies. Plus the World Health Organization says an indian i a tech company is leading the way on vaccines for the zika virus. That is on bloomberg. Com asia, check it out. Last week was one that asian investors probably for prefer to forget. With the regional benchmark closing at its lowest since 2012. The fray later, haidi lun is here to take a look at what to expect. I think we are optimistic, we have futures when he to a higher open, at least outside of china. This is largely on accounts of the yen calming down. Started to play out in the final friday session. We are seeing the yen declined so far. As such we are seeing a slight uptick when it comes to futures for japanese stocks. Lets check in on the aussie stocks. Australian and new zealand markets are turning to trickle in. We are looking at not Much Movement for the aussie dollar. But the the index was down 5 last week. Equities japanese which were the worst performer. Japanese stocks are down the most in seven years. That was largely due to the and. Due to the yen. Chances are we will see the markets in terms of japanese markets come down. In terms of other markets trading around the region, all eyes are on china. In asia they had the last week since 2012. It was down by about 7 over the past week alone. Certainly regionally tracking that bear market we saw global stocks falling last week. Angie china markets open at 9 30 here in hong kong. Haidi on the one hand, you think perhaps they miss the worst of a selloff, globally, on the other hand they have a lot of catching up to the. Up to do. One good thing to come out perhaps is that a lot of analysts are saying, with that wraps that happened last week, the Global Equity situation is not only due to china. You see why i had an editorial. Other hand, this is potentially a bear signal for chinese stocks. After last weeks selloff, it is a whole lot more expensive. Shanghai is down 22 year to date. It is still up 31 over the past year. Trading in comparison to emerging markets index, still expensive. Shanghai trading at a 34 premium. Shenzhen is four times pricier than their counterparts. That is the case of a selloff continuing. A lot of analysts saying that is embedded in. We are not quite done in terms of getting chinese valuations down to a little bit more of a palatable level. Interesting enough if you want to look at how expensive the stocks are, i want to bring in that chart that shows the rhenium, we have had that divergence. Widened to close to 50 which is the whitest widest since 2009. That is where we are now. That has shown how poorly hong kong stocks have fared. Throughsome data coming today which will be a driving how the markets feel today. Japanese gdp is expected to be lackluster. We also have china trade numbers coming out. Exports are expected to fall for Something Like the seventh month. That slowdown story will continue to play out in the markets today. All eyes on the shenzhen strata. Tradeoff. Angie thank you. Checking other headlines for you right now, movies have been a big thing in china during the Lunar New Year holiday. Box office sales were up 80 in the first three years the first three days of the festival. It feels like that sometimes. The first three days of the festival brought in a lot of money reaching 158 Million Dollars, almost as much as the entire weeklong holiday. Retail sales and restaurant receipts from february 7 onward rose more than 11 . Over and south korea markets are signaling an imminent Interest Rate cut some investors pricing in a reduction as early as tuesday. The yield on threeyear sovereign debt has dropped below the bank of koreas policy rate of 1. 5 . Interest rate forward sale after exports slump the most in six years. Most economist we spoke with seem to be ok staying on hold this week, tomorrow after lowering the benchmark four times since august 2014. Australiae betting on easing, despite the governor signaling he a has been in watch and wait move. Mode a Bloomberg Survey shows there is a 20 chance the rba will lower the benchmark in march. They expect rates will drop to 1. 66 within a year. Asy say the rba might act the aussie dollar strengthens. It is currently one of the weakest among t10 currencies. Indias sense that Central Bank Governor says the ruby might have to depreciate until inflation is under control his main focus is on bringing prices down, they say the room review must weekend to remain competitive. He is watching double spending and inflation to determine if he can add to the forecast made last year. This is a story where monitoring in asia, hsbc says they are staying in the u. K. , and will keep the local headquarters in london after much buzz that maybe it would move here. We have background. That is right, they say the signature decision was unanimous, it will stay in london. It pointed to the factors it was the redat, including dust regulator environment, future growth, and financial impact. It pointed to the uks respective framework and legal system. Inmentioned in meant express handling complex international affairs, and also the u. K. Important and globally collected economy areas which it highlighted that in the u. K. , treasury said it welcomes the hsbc decision. Hsbc was keen to underline that u. K. Asia is important. They said asia is at the heart of its strategy still, and it mentioned the strategy they revealed in june hsbc makes most of a profit in asia. It is very key to hsbc. They have been headquartered in the u. K. For 23 years. In discussing this move for in the months, beginning they were looking at several areas but as time went along it seemed increasingly more likely they would stay in the u. K. As an example of how difficult it was probably before the decision was made, they must a selfimposed deadline to decide. The reason why hsbc would have been looking at moving outside of the u. K. , for example, we looked at tax issues, regular issues, and the u. K. Government did make concessions that made it clear to stay there, including cutting a proposed levy on hsbc. Angie it was seen as a threat to get those regular season up regulators to ease up . They have eased up on some regulations on banks and sort of moving forward the hsbc has put has said it will no longer review where it will have its headquarters every three years, which it had been doing. It will only revisit the matter if it sees what it calls a material change. Angie thank you. Challengesext, the and opportunities facing asias airline. Live at the Singapore Airshow we go, coming up next. Stories making headlines around the world, taiwan has into the search for people after the earthquake. All that to a be done were found and an apartment complex which collapsed in the 6. 4 magnitude quake. The developer and two architects have been arrested on suspicion of negligent homicide. Called on the u. S. To formally and on a situation with mark north korea. End threed in 1953 to years of fighting, but the two sides are made technically at war. The head of chinas Foreign AffairsCommittee Said he is concerned about the program, but its more concerned about american response. India says it is disappointed with the decision for the u. S. To sell weapons to japan. Washington has confirmed the 700 million deal includes planes, radar, and or fair equipment. Those worried that giving pakistan advance in more play, would tip the balance. Powered by over to under 40,000 generalist and a 50 bureaus around the world, this is bloomberg news. Angie Southeast Asian airlines may have overdosed during a decade of booming growth. The International Air transport Association Says carriers may need to push back delivery of jets in the face of overcapacity and soaring competition. The longterm outlook remains positive with passenger traffic across the asiapacific forecast to raise rise 5 here for the next today gave next two decades. The largest defense show took place in asia. Has Haslinda Amin was there for us. Amin in the airline space, china is going to investors. They are expected to order more than 6000 planes over the next 20 years. 950 billion worth, double the amount of the gdp, that is a big amount. Not the same story for the rest of asia. You talk about Southeast Asia. Some airlines have gone bust. We heard about king fisher. Others have delayed deliveries of their planes. Inre are those mired financial problems, the likes of Thai Airlines as well as tiger. Andrew joins us this morning. What is the story here . Of what iscrepancy happening in china versus what is happening in asia. We have to recognize the air travel demand going steadily. I think it has been boosted by affordable airfares. Going forward we expect demand to grow 5 to 6 among across the region. Within that rosy picture, it is a competitive market. We do see failures. There are winners and losers. With the compared carriers in north america, they honored it by 21 per passenger. This is a Competitive Industry worldwide. We have seen profits take out strongly in the last two or three years. That has been led by the u. S. Carriers. European is behind. Asian carriers are growing strongly. It is a mixed picture. We have very profitable carriers in north asia, japan, china, from parts of the rest of the region. By the same token as you mentioned, there were some carriers that have to restructure because they are not competitive. Haslinda does it have to do with the u. S. Dollar . It is weighing on carriers and is part of the world. It is a fact that the dollar is strong so other currencies are weaker. Carriers are weaker. That does affect some traveler behavior. In general, we see strong travel demand despite slow Economic Growth within the region. One thing airlines have to worry about is balance sheets. The translation effect of a stronger dollar affects the balance sheet. Haslinda we have seen how oil has been slumping. Yet airlines have not managed to bring down the prices. Is this a story of that hedging to my airline . Done by airlines . Wethat is one of the reason are seeing growth above trended 8 because price has come down. It is true that airlines have hedge a lot of fuel. When you hedge at higher prices and the prices fall, it is a losing bet. The ones who did not hedge so much for one reason or another, are clearly benefiting. In the end, it all evens out. In the end, the price of fuel is in the ticket price. Haslinda tony has said he expects asian characters carriers to delay plane delivery. What trendy is the . Whats trend do you see . I think you see a number of airlines growing rapidly. They obviously anticipate. Urther growth they will be delivered over the next 5, 10, 15 years. Overall i dont think so, boeing and airbus have massive order backlogs. The rate at which new aircraft are coming to market pretty much matches the growth in demand. They will shuffle and defer, that is part of the normal way in which the industry works. Haslinda in Southeast Asia there was euphoria because of the agreement taking place last year. That has not happened. Some countries yet to rectify, including indonesia. Is there reason to be optimistic . They have a number of milestones, but it is a process, not a big bang event. What happens is you have a succession of liberalization moves. It certainly helped broaden conversation. Some countries are faster than others to about new terms. Overall it has been beneficial, i expect that process to continue. Talk aboutow do you open skies, the unlimited lending . You can have open skies, but if you do not have enough terminal and runway capacity, it is a problem. The growth has outdone expectations in many markets in asia. We do see a crisis of interest structure. Crisis of infrastructure. One thing we will be talking about is how they Work Together with the government. Has linda a journey, not a destination. Angie there for us all day today. Thank you. We will have more from the Singapore Air sure this morning show the morning. We have tony tyler joining us to discuss the outlook for aviation and 2016. And then an extended issue of asia edge, Christoph Mueller talk to us nine months into his turnaround plan. Biggestp, australias gold producer takes a hit to the bottom line. We take a look at new crest mining, when first up continues area angier australias largest gold producer is reporting a steep decline in first half profit, down 55 . Lets take it down to paul allen in sydney. Goals recent rally has come a little too late . Paul it has, angie. Ony are blaming the result the gold prices, they had been low. Australian dollars, the gold price has been strong the last few months. The firstt profit for half, down 55 to 81 million. Revenue was also down to 1. 5 5 billion. Down from 1. 7 8 billion for the same time year earlier. Production was a bit of a mixed bag. Gold production of 6 to 1. 2 million ounces while copper down 23 to 38,900 tons. Angie thank you. Foxs latest offering, dead coal has hit a Box Office Record in north america, based on one of marvels lesserknown characters. The Ryan Reynolds film took 135 million over the weekend. That beats the previous 85 million record set by 50 shades of grey. Dreamworks, kung fu panda three false the secondplace. Falls to second place. A programeasing is grinding to a halt. Gdp fell in the final months of 2015. The slowdown in china has hit demand for japanese products. Adding to that, the yen has appreciated 6 this year, even as the bank of japan boosted stimulus. Coming up next, talking trade indonesia, the Transpacific Partnership, and the drive for change. All of that coming up next, youre watching first up. Back to you in two. Angie it is 8 30 in tokyo, a big day today. Gdp figures coming out of japan. 30 minutes away from the open of trading there, as was south korea. You are watching first appear up. First the governor has broken his silence on the yuan. He told tyson magazine that chinas balance of payments is good. Capital normal. Exchange rate is basically stable against a basket of currencies. As suspected, china will tighten controls, and s suspected there are ample holdings for payment. Valuations on the shanghai are looking more expensive compared to their peers. Global stocks were beaten down last week. Japanlia, india, and entered a bear market. Japanese stocks and particularly had their worst week since 2008. Hsbc has decided to keep its Global Headquarters in london, saying the u. K. Is an important and globally connected economy. The decision was passed unanimously at a Board Meeting on sunday, following 10 months of debate. Hsbc has been based in the u. K. For a third 23 years. They say remaining there is the best option for customers and shareholders. Powered by over 2400 journalists in 150 bureaus around the world, this is bloomberg news. Lets check in on markets in asia for you right now. This morning in asia, monday morning for us, australia equities right now are seeing gains of more than 1 . We are also seeing a stronger aussie dollar against the u. S. Dollar. 71 u. S. Cents. To new zealand, we are also seeing big games gains. 1. 5 higher. The new Zealand Dollar spot is that . 50 u. S. .