Survived a year of negative rates with profits intact. A year of survived negative rates with profits intact. Yousef i am yousef gamal eldin. Ahn. i am shery welcome to Bloomberg Markets middle east. The wall street rally, banks leading gains after hence of easing regulations in the u. S. The dollar continuing to slip, oil getting a boost after it rose for a third week already. Absolutely. The geopolitical risk factor is creeping back into croup markets. Since been 23 years talks between iran and the United States. Basis, thisterm goes back to the beginning of , and you can brent see the scale and extent of volatility at the beginning of 2016, and after opec and nonopec reached that agreement, volatility moderating, and that opec, toa key goal of bring predictability back into these markets. Watch out what is happening with u. S. Crude rigs, the latest baker hughes numbers showing that. Shery im taking a look at gold. We are normally seeing the dollar lead the way for the metal, but now we may see a reversal. Take a look at my chart. Im looking at my cold getting past that 1220 technical level, and if that happens, Gold Investors take their cues from the dollar. Now it is gold may be signaling where the dollar is headed, historical correlation showing the dollar could extend. ,he bloomberg dollar spot index the longest losing streak since august 2010, so a forecast, something to look ahead to as you see gold continuing to search, but for now, lets check markets and play in the asiapacific. Asian stocks, the regional thehmark gaining ground, nikkei paring back some of those earlier gains, the japanese yen gaining a bit of momentum. The asx 200s down a little bit, and the hang seng on its lunch frank, but in the morning session gained. 6 . We have trading in the middle east coming up, so what you watching . Two hours away from the start of the trading day in dubai and abu dhabi. Some Downside Pressure in saudi arabia on financials, National Commercial banks the bright spot in saudi trade. Watch out in dubai. Is on ahabi, the focus Board Meeting there. Major profittaking, over 2 down, in that market, and also qatar stocks lower after earnings came in less than predicted. Right, lets get a check of the other headlines across the world with first word news. Rishaad the far right candidate for the french presidency promising a brexitstar referendum unless brussels agrees to its demands. Said the european experiment had failed and called for intelligent protectionism nd economic patriotism, saying the system is ruining france. Who could find satisfaction in an action in the face of the system that has us in chains and does not work, and worst, ruins us because of its malfunction. That is why one selected, i will announce the organization of a referendum on whether to stay or leave the eu. Rishaad shares set to plunge by ata says alimit as tak committee has recommended key Safety Systems bid. Key systems was acquired over a year ago by a chinese company. Nab reported a drop in cash earnings as costs canceled out a revenue increase. Thatses rose during because of increased wages and regulatory costs. Says thes ceo operating environment remains challenging, shares on the way up. Global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. This is bloomberg. We have got the world covered. Yousef thanks. We have President Donald Trump facing legal challenges to his travel ban. Now he has to deal with criticism from republican and democratic lawmakers after his latest comments on, yes, vladimir putin. With Donald Trumps latest words, its a question of moral equivalency. Is u. S. Action equipment to russian action. Many people would say no come or at least hope not come up in mr. Trump says yes. We have a lot of killers. You think our country is so innocent . That was an excerpt from a fox news interview airing sunday. The reaction was passionate pushback. House Majority Leader Mitch Mcconnell said the u. S. Is not the same as russia. Floridamarco rubio tweeted when has a Democratic Political activist been poisoned by the gop . And congresswoman liz cheney, cheney, tweeting moral equivalency is deeply troubling and wrong. Mike pence did come to the aid of mr. Trump you take a listen. Look, President Trump throughout his life, his campaign, and his administration has never hesitated to be critical of Government Policies by the United States in the past them a but there was no more equivalency. So no more equivalency as well from the vp. Meantime, the white house lost its bid to reinstate a travel ban on immigrants from seven majority muslim nations after Circuit Court of appeals told washington and minnesota and the white house itself to file more arguments by monday. At the core of the white house argument, does the executive branch alone have authority on national security. Vice president pence says yes, saying it is quite clear and we are going to win this argument. Keep and mind the white house must weigh a liberal Appeals Court in san francisco, and Dianne Feinstein says there is no doubt this will go to the supreme court. But wait, there is more. Weekend goter the to digest mr. Trump signing of executive actions on friday that starts chipping away at financial regulations through doddfrank. He has blamed doddfrank from keeping loan origination down, but loans have risen 75 since doddfrank was an active, and lending is at a 70year high. The s p Financial Sector got a trump bumper friday on the news. Netanyahu meets theresa may later today. Later this week, he will be at the white house. This start to talk about discussion between Benjamin Netanyahu and theresa may. What will Benjamin Netanyahu focus on . I think Prime Minister notnyahu said he is necessary targeting the deal, criticals been quite of the deal in the past, and i think the idea that there is a come outand to strongly from the start of the Trump Administration, and the cohesion we seem to be seeing with the u. K. On that front. This is a big year, reelection year in may, what happens with the latest trump or rhetoric in terms of how that plays into the cards for some of the hardliners there . What we have been seeing in the hartline and conservative press is a strong coming out of the opposition to rouhani as a moderate politician, a strengthening of the rhetoric they have been having for years, which is the u. S. Is not a trustworthy part, so this is in some ways we could argue that Trump Administration and the way it has been approaching its policy towards iran is in fact perhaps we can even call it an opportunity for this cap opposing rouhani and whatever he stood for, which is the policy of engagement and diplomacy with the u. S. Yousef thanks. From dubai. Ive lets get you a preview of what is still to calm, twitter and netflix planning legal challenges to President Trump slates immigration order. Shery but first, we talk about the impact that trumps policies could have on the Global Economy from Standard Chartered. This is bloomberg. Watchingou are bloomberg. I am yousef gamal eldin in doha. Shery i am shery ahn. , solid growth, but missing estimates of 5 . Quarter on quarter for indonesia declined 1. 7 , which was less than expected it by analysts. Again, gdp growth for indonesia eight year on year for the Fourth Quarter at 4. 94 . Inkets across asia trading the green right now. Lets get you the latest breakdown with sophie kamaruddin. Sophie regional gain supported by asian banks following wall street given trumps plan to roll back regulation. The hang seng up. 6 , chinese lifeers gaining with china climbing 6 . Elsewhere, the asx 200 erasing earlier gains despite the fact and gold miners trading high. We aree dollars slide, seeing yen strength gaining ground, so some pressure on the nikkei 225 because it has spent most of the morning on the front foot. Taking a look at movers on the nikkei 225, yahoo up 14 , japanese banks a bright spot in japan. Ufj,enders like mitsubishi Sumitomo Mitsui advancing given robust earnings out of that sector. , trading atfj up 4 the highest level of the year after its earnings beat. A quick check on Top Performing in asia, the korean won at a threemonth high, the taiwan dollar strongest since june 2015, but there is cautioned to be had. Watch out for a reversal says goldman sachs, pointing out taiwan and korea are vulnerable to trumps protectionist stance. In the bond space, australian 10 year yields falling for the first time in four sessions, the benchmark falling one basis point. A pickup in japan 10 year yields above. 1 , falling below that level following the offer to buy 4 billion of for your bonds and 10 year bonds. Yousef different parts of the market enjoying the trump jump. The latest sector was the Financial Sector, which made a lot of gains and friday trading in the United States, but economist taking a more longterm view as always. They are more skeptical for the most part. Is the us now for more global chief economist for Standard Chartered. Thank you for joining us on the program. I recall the title of your report started off with welcome to the jungle, this back in december. If anything, it is a denser jungle out there. Is, and the title seems to be playing quite well with what we are seeing in Financial Markets and the world economy. It is only february, so i think things will be getting even more exciting as we move along. As you remember, we expressed doubts and concerns about the extreme optimism and euphoria and Financial Markets. Takings that markets are a step back right now, which is fully justified, but as we go forward in 2017, the two Key Developments are the fed, which i think holds the key for the u. S. Economy and global Financial Markets, and then the u. S. Dollar. Just toin all of this, be clear, how surprised are you by the moves donald trump has made since the inauguration . And more importantly, is this just a negotiating tactic question mark will he be more of a moderate when it comes down to it . I am not surprised at all. If anything, donald trump is consistent as a president. We saw who he was before the u. S. Election. In the Financial Markets with brexit and the election of theld trump we have lost right and privilege to be surprised with politics. We need to be taking a close look at politics and policy, and we can no longer be surprised, so he is consistent. It might be a negotiating strategy, but if it is, the impact and uncertainty it would create should be taken seriously, so we should not be taking it lightly because it is a negotiation strategy. It can still cause volatility in the markets going forward. Already causing volatility and the dollar index. There mayonsistent, be more downward pressure. Take a look at my chart on the bloomberg, leverage funds peering back bets on the greenback against a range of currencies to the lowest since september. Blue. Ould be your line in the bloomberg dollar spot index is the line in white, capping a sixweek declined come a so how long with the dollars retreat last, especially when you factor in President Trump . I think talking the dollar down could only have a limited effect, and only over a short time. We are moving from a point of extreme long positioning on the dollar, so some retracement was to be expected. Talking it down is having an impact, but ultimately. Undamentals will prevail ultimately, the fed holds the key. Most of Donald Trumps policies are likely to have an impact on inflation and i would expect the fed to continue to sound relative hawkish. If the fed begins to hike Interest Rates to combat an unexpected increase in inflation , i would expect the dollar to have another rally and to rebound once again, so i think inflation is key, the fed is key, and ultimately this will provide strong support for the dollar going forward. Shery what does that mean for the japanese yen . Continuing toit strengthen, going against abenomics and what it is trying to achieve. Isthe problem with abenomics that it relied too heavy on Monetary Policy and too little on fiscal policy. I think that would be the one biggest criticism of abenomics, the principal was correct, but the execution was not dependent on all three arrows. It was only reliant on Monetary Policy. If we do see higher Interest Rates by the fed and a stronger dollar, that would have significant implications for positive and negative for many markets across the world. We have found in previous studies that perhaps the most resilient currency in asia to higher u. S. Interest rates is the korean won, so im not surprised to see if performing very well. One of the areas we have highlighted is that perhaps one of the biggest beneficiaries of trumps economics will probably be europe and the eurozone, despite the huge political problems in the eurozone. The unitedicy in states could provide some support for the European Union going forward, may a stronger dollar and a weaker euro. Do stick around because we want to continue our conversation. We do have six Central Banks meeting this week, so plenty to talk about. This is bloomberg. Shery welcome back. You are watching Bloomberg Markets middle east. Lets continue our conversation with Standard Chartered chief economist Mario Maratheftis in dubai. Central Bank Meetings and a share, six of them coming up, including australia, india, new zealand, is there anyone we should be watching out for for a surprise . Mario i think most of this Central Banks will stay on hold, so we dont anticipate any change, with the one exception being the reserve bank of india, which we expect to cut Interest Rates by 25 basis points in order to stimulate a little bit the indian economy, which is going through a shortterm slowdown. Overall when we look at asia and monetary conditions, they suggest conditions in asia are quite loose at the moment, so there is no urgent need for asian Central Banks to proceed with any sort of action, with the one exception in our opinion being india. Shery what about australia . The aussie dollar is trading at the highest level since may 2015 its a trading Partner Trading partners, could that be seen as a risk . Seen as acould be shortterm risk of, but at the same time, the currency markets have not settled and they are still volatile. I think Financial Markets are still trying to interpret exactly what we need to expect from the United States from policy and its implications, so i think it would be premature for a central bank at this point in time to base its decision on what the currency is doing. Right, and of course we do have your mentioning of the the earlier with the euro furthest below fair value of monti10 peers, according to the oecd purchase power parity measure. Where is the currency had it . Mario we think there is some consolidation and retracement at the moment, but if there is a reflationary policy implemented in the United States, which is likely to drive Interest Rates in the u. S. Higher, one of the s of release resistance for a stronger dollar would be through the euro, so i would like to highlight the Downside Risks for the euro. We also have significant political risks in the European Union in the eurozone right now, so i would expect beyond the shortterm retracement we are seeing now, some Downside Risks reemerging for the euro, which is good news for the eurozone economy and something the europeans would welcome. Shery mario, thank you for joining us. Mario maratheftis of Standard Chartered. Coming up, we will be talking about japanese banks. This is bloomberg. [ alarm clock beeping ] weather. [ laughter ] cartoons. Wait for it. [ cat screech ] [ laughter ] [ screaming ] [ laughter ] make everyday awesome with the power of xfinity x1. Hi grandma and the fastest internet. [ girl screaming ] [ laughter ] the firsthese are word headlines. President trumps travel ban suspended after a u. S. Appeals court to grant an appeal. It gave the Justice Department until monday to submit further arguments for enforcing the ban on people from seven muslim majority countries. The case will hinge on whether the executive branch alone has authority on matters of national security. Inidrug operations stopped the philippines, officers quarter to focus on other crimes such as murder, robbery, and rate. Some police have carried out contract killings as part of the war on d