i want to bring attention to other metals. slumping asrials the stronger dollar cut demand for metals as alternative assets. the greenback having an impact across the board. traders are also gearing up for the u.s. rate hikes. sizable impact coming from the dollar and on gold. what hasn't given back all the gains is volatility. ae nikkei and hang seng little lower, but the key takeaway is we are nowhere near levels we were last week, which means the nerves are out there. we will be getting the market details later on and we don't have the china data yet. we will get you that when it comes out. in the meantime, paul allen with your first word news. research claims the u.k. will leave the european union as the area's slowest growing economy even if it keeps the same trading relationship after brexit. the european commission says growth will slow to 1.4% this year and 1.1% next. conversely, the commission says the euro area economy will expand faster than anticipated with growth more balanced that financiale during the crisis. the senior british official says china is wary of providing trade commitments until it sees how brexit plays out. the u.k.yrne says hopes to negotiate a new deal with beijing during the two-year implementation period after march 2019. the two nations launched a review of their $77 billion trading partnership during theresa may's visit last year. we recognize we are still members of the eu and we are not be about to implement any trade union until after we leave the eu. -- clearly endorsed by both sides. it has put us in a good place to do that. paul: china's foreign exchange reserves rose for a 12 straight strengthen andan economic outlook improved. the pboc says the stockpile climbed $21.6 billion to 3.1 trillion, fractionally the lowest in the bloomberg survey. valuations since 2015, shrugging off signals appreciation should slow. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i'm paul allen, this is bloomberg. david: thank you. china at any point will be releasing its latest trade figures with the jalan's -- january balance import. when you haveime escalating trade tensions between beijing and washington. tom mackenzie is with us in hong kong. looking at the forecast, i'm still seeing solid numbers. the preliminary data we saw in terms of the pmi's and certainly from south korea, where you saw a tick up of 9.2% in the first 20 days of the month, seems to suggest the internal demand is there. in terms of exports, surveys suggest we see 10 .7% year on year, a little below what we saw in december, 10.9. double look to at least if the estimates are on point, about 10.6% increase year on year versus 4.5% last year. expected torplus is pick up pretty strongly at 54 billion u.s. dollars. that feeds into the fx reserves, 12 straight months of a pickup in fx reserves, the strength of yuan is a question. that may posedrug on exports going forward. there don't seem to be many economists out there who are too concerned about that at the moment, but seasonal effects are something to baron mind. always a caveat with chinese new year. haslinda: when you look at the headwinds for china's exporters, what are potential headwinds? the number one risk flagged by most is the deteriorating situation between the u.s. and china when it comes to the trade relationship. of course, you have the u.s. early this year putting things -- tariffs on things like solar panels. it seems like china is responding by having a review of sorghum imports. we have also reported that they may be looking at soy imports from the u.s., as well. that is an export that is valued from the u.s. at about 14 billion u.s. dollars. that is the key concern for many looking at this. we have heard from the ministry of commerce today talking about these tensions, saying the u.s. was on the wrong side on this, saying the chinese had been talking to their own agricultural importers and saying they wanted to have a bigger role when it comes to agricultural exports and imports. the other factor is going to be the yuan strength and whether that starts to put pressure on these exporters in china. david: thank you, and we will bring you back when the numbers come up. tom mackenzie in our studio. coming up, striking a balance. a very tough task facing the governor. she looks the balance inflation and unease in the financial markets. out why: next, find investors should stick to equities despite the spike in volatility. we are joined by margaret gill next. this is bloomberg. ♪ watches --ink our watchers are paying attention because the trade is out. tom: these yuan numbers for the month of january. imports taking up year on year, 30.2%. that was compared to the survey of 5.3%. it looks like the biggest tick up in imports in yuan numbers since 2017. in terms of exports, 6% pick up on exports in yuan versus the estimate of 2.6. the estimate is a little softer than what we got last month, but in line with what we expected. the import number is a blowout and a lot of that will be down to the strength of the yuan making imports. balance,of the trade 135.8 billion, the one number. the survey has been for double that. up inthe big tick imports, the trade balance and surplus is going to be a little softer than what had been expected. david: again, these are not factors involved because we didn't have the spike this time last year. morethe dollar figures are closely watched, we don't know exactly when they come out. sometimes an hour after the initial yuan numbers. we will give you a breakdown in terms of some imports. we talked about soybeans, a big chunk comes from the u.s. and there are reports out of bloomberg that potentially, the chinese will be looking at reviewing soybean imports from the u.s. this isese saying pretty normal practice, sorghum as well. imports, 4.8 billion tons. i'm not sure how that puts it into perspective, but a fairly significant number. the commodities trade, some miners doing better, rio tinto -- >> 100 million metric tons. tom: the yuan will be playing into this, but there is this overcapacity that is being cut that are factories better positioned to continue to churn out goods and their demand for imports like iron ore seems to be relatively robust. crude imports also looking up, 40.6 million tons. theall, this is really import number we are looking at. the number that has surprised out of this data. some of the data leading up to this suggested we would look relatively strong in the trade picture for china. the demand picture when it comes to exports is important, but the key risk looking at china is the u.s.-china trade relationship. we have had a little more out from the commerce ministry today talking about the agricultural industry. haslinda: still, it is worth questioning whether the softening of the exports versus the imports will trigger intervention from the government, because of the stronger yuan. tom: that is certainly a question. what is their pain threshold when it comes to the exports? argument byen an some who look at the manufacturing sector in china and say because it is upgraded and they are pulling in more components regionally to manufacture these higher-end goods, they are less susceptible to you won strength -- yuan strength, but not everyone buys into that argument completely so we will have to watch to see with the policy response, if any, is to this. it looks like so far, the policymakers here have been relatively comfortable with a strengthening yuan. had a commentator in-house saying part of that is because of the signaling it sends out regionally as to the security of currency. of course, they have wanted the currency to play a bigger role in the market. the fact the dollar has weakened as well has been a benefit to the chinese in fx reserves and not having to worry too much about additional capital controls. the question now is focused on whether they remove the capital controls. you are right, the question is how much more of a pressure point -- how much pressure the exporters are under with this strong currency? haslinda: tom mackenzie, thanks for that. let's get an overview of the markets with our next guest who says despite the volatility, buy. margaret gill. what will dictate where the markets go from here? we saw the route and now there seems to be some stability. what are the factors that show where the markets go from here? >> i think the long-term fundamentals still matter. those are front and center. they are very much in place and easy to miss in short-term market turmoil is our long-term fundamentals changing. on the growth side, very little has changed. the picture remains positive. inflation, we need to watch it we what we have seen is what have wished for the last two years. not as something that derails market. the short term positioning is what i would watch in the next few days to see how that evens out. haslinda: interesting that you say buy the dip. 5373, this is where socgen says forget about buying the dip, you say buy vall because there is potential. in particular, emerging market bonds, why and what? manpreet: the idea is that we be careful about going on vol. long exposure to some straightforward assets out there. e.m. bonds, for example. at the end of the day, the offer more value than elsewhere and what we have through a little spread widening, easing on expensive valuations and a high-yield entry point. we think in portfolio, that is a long way to equities and alternatives in other asset classes. in the income space, it is tough to find value. e.m., you get a little bit. if you are looking at income, that is one place we would look. , just to talkt about fundamentals, one would say inflation expectations are changing. we look at how the pricing of the long end of the curve seems that either we are overshooting the market on the bond markets or this process every pricing expectations is not done yet. absolutely, inflation is one area we need to keep an eye on. calloint is that what we repricing or could calling normalization of inflation expectations -- that is what we were looking for. if you go back to last few years over the evolution of qe, this is what policy was meant to achieve. iderately higher inflation, think as long as inflation expectations remain modestly higher and contained, those could be good periods for equities as long as earnings keep coming through. i agree that if we see a significant overshoot and the signs of that, that is something that will be a risk for us. at the moment, i would argue we are seeing more normalization to 2% than an overshoot. david: in terms of the dust settling, there was a lot of excessive positioning in asset , whats, whether short vol should i be watching out for? are there still positions out there that might cause a little more disruption ahead? manpreet: potentially, yes. the next few days, our starting point was quite a bit of stretched positioning. for us to visualize a lot of this is through where equity markets were sitting relative to the 200 day moving average. that incorporates a lot of the data we will get on positioning. day, we hadf the strong deviation from that, have normalized to an extent, but are still 4% to weigh on the major indices. to us, we wouldn't worry too much to see a move lower toward the 200 day moving average. whether we go all the way there or don't bottom out before that, that doesn't concern us -- but that is the move, the fact we stay sustainably above the 200 day moving average on major equity markets. that would sum up a lot of positioning data the next few days. haslinda: you talk about inflation, how much has market expectation of inflation caught up? manpreet: we are finally catching up. there yet. earlier, we had the food where the fed needs to catch up with market and that has reversed. that is fine. one of our ways of looking at the world is we think 2018 will move to a more reflationary outlook. we have been the goldilocks of growth for a long time. we are seeing a bit of catch up on the inflation side and as long as we don't get the over suit, which causes the fed to overreact, that is ok for risk assets. haslinda: sit tight, more with manpreet gill after the great -- break. this is bloomberg. ♪ ♪ david: this is "bloomberg markets: asia," i am david in glass. haslinda: i'm haslinda amin. manpreet gill is still with us. to what extent has the currency market factored in future rate rises. manpreet: to some extent, but it is not fully priced in. we are most closely watching the euro dollar. on the dollar side, we have seen a lot of repricing. i think europe is most interesting where the market is by 2019 and wein think that is where the market may be underpricing risk. that is why we like the euro so much, a good entry point. haslinda: how much higher for the euro because it has already reached the levels targeted by a lot of analysts already? manpreet: i would worry less about the level then interest-rate futures in terms of what the market is pricing in in 2019. when we go back and see what type of pricing, i wouldn't be surprised to see us go over 1.25. expected,ster than we but going back above 1.25 isn't difficult. david: when do you think the first rate hike will be? the first half of next year, ecb? manpreet: next year would make sense, to mirror the fed to an extent where it eases up on its qe program before rate hikes, but it is more about -- then about that. it is not so much about the first rate hike as much as what path we take from there. attral markets rarely stop one hike alone, especially when you have growth data and eventually some inflation as strong as in europe. you could view the fed as a template here and that is where we think there is room still for going the next few months for the euro to reprice to some extent. i think euro would still be close to the top of our week -- list. david: three central-bank decisions in the region to consider. the r.b.i. warned of inflation, central-bank might move soon and saying they will not move until next year. that is quite a divergence. there is opportunity looking at just those three. no onet: there are, and is talking about easing anymore. everyone has stayed back or is looking closer at inflation. that fits both into our view of going into a more reflationary world, but our view that you are getting more surprises not on the dollar, but on the other side of the equation, whether european countries or emerging markets or asia-pacific currencies. at the end of the day, that adds up to a weaker dollar. we discussed the euro as an opportunity, but we like him urging a lot and for bond investors, that makes local currency bonds interesting. especially when we see central banks supporting concert -- currencies in the process. haslinda: let's bring up #btv 4689. it is how emerging markets are less volatile. where exactly in these emerging markets are you liking? in asia? manpreet: a lot in asia. , but moreian equities reflationary markets in asia. south korea and china. arehe bond market side, we more cautious. it makes sense to take advantage of local currency markets, with the dollar markets, we are more cautious. yes, a lot of opportunities in em and there is more room for these to go. haslinda: who would have thought emerging markets would withstand the pressure from the global route? manpreet gill, thank you for your insights. let's check the latest business flash headlines. young china slumped in trade after announcing a charge taxted to the republican cuts, shares fell almost 4.5% despite fourth-quarter earnings per share that the estimates. revenue came in at $2.2 billion percent.parable sales rose 7%. david: rio tinto is promising a full-year dividend of five to $.2 billion, plus a billion dollars buyback. earnings, almost 70%, 8.6 billion dollars thanks higher commodity prices. the ceo said the company is now watching for opportunities and running his new ventures unit shares in sydney just 1%. haslinda: southeast asia's biggest bank posted higher fourth-quarter profit driven by rising income from loans and wealth management. 30% to 920 u.s. million dollars. that is in line with bloomberg's estimates. the ceos decision to clean up the loan book means it is no longer burdened by provisioning. david: deutsche bank plunged to its lowest since the crisis back in 2016 after an earnings slump prompted downgrades. when the bank reported avenue -- revenue at a seven-year low. declines in the business and several units have been struggling since agreeing to the seven point -- 7 billion dollar deal with the department of justice 18 months ago. let's look at markets in china. into the lunch break, a divergence. what you are seeing, shenzhen i.t. stocks up in shanghai. we are getting the open in tokyo next. this is bloomberg. ♪ haslinda: it's almost 11:30 a.m. in singapore. we are in the middle of the trading day. reversing yesterday's losses, up by 0.05%. among the gainers today, dbs pretty much in line with expectations. profits reversing up 33%. that is pretty good news for singapore banks. dbs, the largest lender in southeast asia. david: that is providing a bit of a list. when you look at hong kong, there you go. it's a bit shaky when you look at that. let's flip that and have a look at shanghai continuing its slide. 1.3%. on both -- 1.4% as we speak. we are about 1.5% from this one entering a technical correction during third straight day of fairly sharp gains on the chinese mainland. i am david ingles in hong kong. haslinda: i am haslinda on and singapore. you are watching "bloomberg markets: asia." a quick check of the first word headlines of paul allen. paul. paul: thanks. held's overseas shipments up in january despite the strong you on -- yuan. import growth surged. exports rose 6% from a year earlier. imports increased 30%, smashing estimates and leaving a trace of more than $21 billion. the data are often distorted around the lunarimports new yea. house minority leader nancy pelosi says democrats won't back budget budget agreement without a commitment from speaker paul ryan for an open debate on immigration. pelosi spoke for a record eight hours after senate leaders provided nearly $300 billion in additional funding. the agreement should over it a friday government shut down. ofthis bill is the product extensive negotiations. -- negotiations among congressional leaders and the white house. no one would suggest it is perfect. we worked hard to find common ground and stay focused on serving the american people. >> it has been a painstaking and month-long process. -- months-long process. >>at the end of the day, i belie we have reached a budget deal that neither side loves but both sides can be proud of. world's largest money manager is seeking more than $10 billion to buy stakes in a range of companies. the top block rock -- blackrock wants capital. sources say it would make investments from 500 million dollars to $2 billion on long-term themes such as averaging demographics and millennial spending patterns. china's hna group says it is a victim of a conspiracy. bloomberg has seen the transcript of a speech given by an hna by cochairman. it says they are trying to subvert the communist party. hna has seen borrowing costs spending tens of billions on assets. powered by more than 2700 analysts in more than 120 countries, i am paul allen. this is bloomberg. david: it is 11:30 in hong kong. it is set to come out with a rate decision. survey says no move. when you look at most, not all. that is the key take away because you have a few in the that esp will have to jack rates up. the need to hike rates is there. inflation up 4%. when you compare that across southeast asia, it has the lowest real rate in the region, fairly negative. haslinda: that's right, but this is a country that has been seeing exponential growth, one of the fastest-growing countries in the world. our southeast asia bloomberg editor. when you take a look at the inflation, 4%, the highest in more than three years. what are the chances the central bank will raise rates today? guest: good morning. is a bigt is -- there chance they would tighten today. the economists we forecast, only five of the 17 predicts an an increase,redict but many we have spoken to say they would not be surprised if it tightens today. i think that they will be very worried by the inflation number that came out earlier this week showing inflation at 4%. 2% central bank's target is to 4%, and we also expect that they will raise the inflation forecast for this year and next year, so that is going to be closely watched. you know, what will hold them back will be the market turmoil .e have seen, you know to what extent does the central bank want to be adding to that volatility or will they have the eye on what the inflation outlook is going to be? when you look at the situation for the central bank in the philippines, it kind of makes me think of myself on a friday night when people are essentially calling me to come out and get a drink. i would always say one and done. if they raise rates later on today, are they one and done or is it wanted more -- one and more? is goingi think much to depend on the inflation outlook. you know, we saw a rapid increase in prices in december, and that was really on the back of the tax increases that were announced recently. know, the worry is what is that going to do to broader increases in the economy? because of the fuel price increases, are we going to see other prices pick up? now, most economists are seeing about two interest-rate increases this year. we have to watch or closely what the currency is doing. worstso is one of the performers in asia this year, down more than 2% already. macro in balances we have a deficit widening. it is rising because of the infrastructure spending that the president has pledged. the central bank has to be vigilant year, and it's going to have to tighten at some point. whether they do it today are not remains to be seen. seria, thankreen you so much. let's bring in the head of emerging asia economics resource at credit suisse. you are expecting a 25 basis point move today. given the route we saw recently, the meltdown, why? think the signs that growing andhas been probably hitting capacity constraints has been there for a while. we have seen that in the deterioration, currency weakness. now, the inflation growing reafd that point. partly, yes, it is to do with positive changes, but if you look at the details, it is saying inflation is quite broad-based. core inflation jumped up from 3% to 3.9%. i think actually, we have not seen the full change in terms of this coming from policy changes and tax reform. when you put that together with all the signs we see, it is probably being paid to be seen ahead of the curve and preemptively put a stop to this, touch a break on this, rather than being behind the curve. haslinda: will a rate hike in still confidence? they want to reign inflation, it has to keep the markets calm. sanitarn: yes. there is two issues. there is the timing of doing it and the pace it is delivering the rate hike cycle. maybe one strategy that we are thinking about is they would try to do it early, but also aggressively. you can signal that they are now in a hiking cycle. we are aware of the issues that need to be tackled, but that would essentially prevent them from giving them more room in order to not hike to aggressively. david: david in hong kong. some you agree there is pockets in the philippines that might be overheating? are you worried about the we currency -- weak currency? >> that has been a concern since last year, to be honest, signs that there are pockets that are showing signs of overheating, growth hitting the capacity, and that is partly because it has been growing, surpassing everyone for many years now. the current account is the clearest example of that. typically, when we see across asia, especially southeast asia, account is, current a better indicator of you hitting the capacity constraints than inflation. sometimes, inflation takes time to creep up. we have seen account that for ae now showing in the currency front. when you put that together with inflation taking up, it is probably a sign you have to do something. haslinda: i would like to pivot here, if you don't mind. you released a report talking about the potential of e-commerce in all of southeast asia. the call the reason aussie on -- the region asean. what prompted you to make that statement? santitarn: i think everyone is asean has a huge potential as a consumer market with 150 million middle-class in the region, and everyone talks about the potential future for e-commerce for many years now. it is hidden because we have not quite seen the e-commerce actually taking off the same way we did for example in china. if you look at the penetration total, it is as a 2% of the present, roughly around what china was into any 10. -- in 2010. when is it that this hidden tiger is going to wake up and become the full roaring tiger? areinda: is the region -- they investing in this part of the world? how will that play out due to consolidation? santitarn: the next battleground for all of the key tech dragons for tencent and alibaba coming to wake the hidden tiger up. there is going to be a lot of competition. eventually, consolidation over the next year or so, a lot of entries from up just china, but maybe japan, maybe the u.s. guys as well, going to come in. that is going to change the scene a lot because it will unlock the payment constrained to more each game is. it will reduce the logistic barriers. those are the two ones that have been held back for asean and e-commerce. haslinda: the digital divide. , head of sathirathal emerging asia economics research at credit suisse. david: lots more to talk about. hope to have him back to talk more about that. in the meantime, let me get you the update about what is happening across markets. two things. are coming up. the market open in india and the collapsing we are seeing across the chinese mainland market, right? shares are listed in hong kong. that will enter a technical correction. a slight bid when you look at futures over on the indian markets. we are also on the lunch breaksg kong. that will enter a on the chinese mainland. 1.5% session lows on the shanghai composite. thanks and energy leading the declines following the release of the china trade data. speaking of trade did a, we have the dollar numbers out as well out of the chinese mainland, following the surprise imports on cny. 37% up. there we go on imports. 11% up on exports year on year. trade balance, 20 billion. a massive collapse in terms of the trade surplus. my mistake. we were expecting 54 billion. we are lookingthere we go on im. 11% up on exports year on year. trade at 20 billion. lots of details here on that. one thing i do want to note that when you look at these numbers, keep in mind we are entering isnese new year, so there that seasonal aberration that you need to consider. in other words, depending on when that week is, that will determine when factories in china and other buyers, do they frontload or wait until chinese new year is over and then start dying given the fact that it is february? we are seeing from voting in those purchases. we were just mentioning iron ore. one of them, 100 million metric tons. there is a quick look. big drop in your tradewe are se. pop in your import number. one other thing i would like to mention, if you are a bloomberg subscriber, you can catch all of our interviews. we have a few more coming up in the next few hours or so. our interactive tv function, tv . join the conversation, send us messages. if you don't like my tie, tell as well. our team will be welcoming those comments. we will filter them of course. tv . this is bloomberg. ♪ as well. our team will be welcoming those david: markets getting underway. let's get over to sophie. >> let's kick off with mumbai. a bit of a relief coming through , snapping a seven-day drop. current selloff is only a valuation catch up. she suggests a shift to large cap as well as long-duration bonds. checking on indian 10 year bonds, we are seeing the yield continued to fall now at around the 751% line. let's take a look at the broader picture. we saw a relief rally yesterday. now sending into the thursday's session. this as traders were quick to share the rbi's. we are seeing yields fall away that we hit last week. gainsnalysts think the that will not endure until the r.b.i. deals with the oversupply. haslinda: if we had china's trade figures just moments ago, we had blowout import numbers that is not impacting the equity markets in any way. sophie: that seems to be getting lost on equity markets. take a look at the leading in china. eeding in china. overall, it is shaping up to be the most painful week for chinese equities since january 2016. the biggest casualties. real estate stocks under pressure, resuming the declines we saw on wednesday amid deleveraging concerns. enter aare gauge set to technical correction. btv 430. we will see it fall more than 10% on the high we hit back in january, so dave, this is demonstrating how fragile recovery attempts have been. david: looking at some of these and how close we are to the line in the sand. h-shares index there. to put this intodavid: context,e next chart i'm going to show you makes up -- quite bullish. we talk about the collapsing of the trade here. 5616. this chart should be saved. have a look at the collapse on the right side of your screen. nothing there is voluntary. a lot of the short positions forced and squeezed out. this is really a story we should keep talking about. you do have wider ranging implications. a lot of people got into these trades not really understanding what they were getting into, and then suddenly, have something like this. somestory, banks pulling of their products. it was a mess and might continue to be a mess. let's continue to see where this goes, guys. haslinda: that is a concern. mom and pops getting into products they don't understand. the popularity of these volatility audits has been the talk on wall street. what goes through how these products might impact the vix itself? >> sure. a lot of fingers clearly being pointed at these products, and in particular, two of them. these two products combined had a little over $3.5 billion worth of assets under management as of monday. they now have something like 1/10 of that. the way they impact the vix has been the subject of speculation, and nothing is for certain just yet. you get a lot of different viewpoints, but you would imagine that rightimagine that f people will be looking into this and talking about the potential for the table to wag the dog, so to speak. because these products offer inverse leverage to movement in the vix, wall street's fear gauge, the way they do that is they have to rebalance their portfolios. they have to maintain constant leverage and exposure to the underlying index. what tends to happen as at the end of the day, they rebalance their portfolios. up, theyx moves sell futures. if it moves down, they buy futures. you have it being driven up by buying more futures, and that ended up being a vicious cycle that eventually resulted in the demise of these two products. we talk about this blowup. what will be the fallout from this volatility blowout? tracy: yeah, there are many different parts to this. reputational risk for the issuers of these products. we have already seen nomura he --an apologetic apology to investors saying that maybe there was a mistake made and we had retail buyers. we have seen the cboe, the proprietor of the vix index havef, shares in the cboe tanked since this happened. clearly some reputational issues. potentially regulators looking at what happened. you have the second order effects on markets and this is where it gets really complicated and quite unclear. we have a lot of dealers who have been on the other side of the short volatility trade . they have to go out and hedge their exposure as well, and no one is exactly certain what that exposure looks like right now. on the plus side, we have seen some estimates saying that the volatility complex is probably vol ball atnet long l at this point. it is unclear what is happening in the back end of the volatility market right now. one the one is now that these products are sort of dying out, in theory, once again, they should not be having much of an impact on the vix going forward, so maybe we start going back to slightly more normal times when it comes to the vix movement. again, the volatility of the volatility index, we did see that rise to a record on monday. really stunning stuff there. david: yeah, the vix. tracy alloway, live for us in upper darby. she has a lot coming up in the next hour or so. the world bank has likened cryptocurrencies to ponzi schemes. bitcoin bulls are not deterred. this is bloomberg. ♪ david: this is "bloomberg markets: asia." i am david ingles. haslinda: and i am haslinda amin. a quick check of the latest business flash headlines. softbank in discussion with reinsurance giants over the purchase of a minority stake. the zurich-based company said preliminary talks have been held, but said any transaction is a long way off. the reinstatement comes after the wall street journal said softbank is already in talks to buy up a third of the company, a stake estimated to be worth $10 billion or more. david: rebel bank is to pay just under three and a $70 million to resolve claims that helped hide money laundered by drug cartels in mexico. conspiring toted defraud the united states and obstruct regulators in the state. the justice department says hundreds of millions of dollars of untraceable cash flowed through the bank and its branches near the mexican border. right. speaking of, a little bit of a gray area here, and something that will be an interesting topic. bitcoin, cryptocurrencies. $8,000, roughly speaking. that is even after seeing major losses. that is not helping a lot of the long-term crypto bulls. of them say they are in for the long haul. listen in. is 7e market cap of gold trillion. the market cap of bitcoin, 100 billion to 200 billion. we can bitcoin disrupts gold. appreciation of anywhere from 100 billion to 7 trillion. 20 to 30ywhere from from here. to thelots of angles bitcoin story. a good story on the terminal. and conducted a survey found that nearly 1/5 of them had actually owned cryptocurrencies and bought them on margin. if you are a fan of respect you late in, here is a story for you, i guess. everyone is speculating and nobody understands bitcoin fully. i wanted to bring up this chart. g #btv 1928. take a look at that. they keep sliding away. -- there you had it. there have been warnings, and the latest warning saying "be careful." it is like a ponzi scheme. it is not clear how it is going to work. the only upside is the technology that is backing bitcoin, dave. this is where the potential is to perhaps reshape the financial sector. david: it's a developing story. we see a lot of volatility here still, more than we have seen in the equity markets, because it is a problem. that is it for us. "bloomberg markets: asia." "bloomberg markets: middle east" is coming up. this is bloomberg. ♪ >> you're watching bloomberg technology. let's start with a check of your first word news. the white house said today's senate budget agreement meet the priority on defense spending and providing a two-year budget plan. the agreement on a two-year nearly 400 billion budget deal programsvide domestic with huge spending increases. white house staff secretary rob quarter will resign after a tabloid reported he emotionally and physically abused his ex-wife. he called the allegations outrageous. john kelly defended porter, calling him a man of true integrity and honor. railroad executives are now