Over the election may overshadow the trip. Yousef it is 8 00 in the emirates and 4 00 in london. Im yousef gamal eldin. Hery midday here in hong kong were seeing a quiet start to the week. The regional benchmark is gaining ground but it has been a quiet session. A lot of the focus will be on chinese earnings. Take a look at the function on bloomberg. The hang seng index continuing to gain. The south korean won leading those gains. They stand out as the best performers in asia this week. 1 . Yen losing 8 10 of declining 48 a barrel. Debt yields in asia when it comes to the debt markets are falling lower. The university of michigan Inflation Survey fell to a record low. Yousef in this part of the world, two hours away from the opening of the market. The state of play, very weak volumes in dubai. Properties getting knocked down 2. 7 . Saudi goodell up saudi tadawul up 2. 5 . We are continuing to watch out. Quick note on what is happening in egypt. Poundng how the egyptian is moving in terms of the weakening of the currency. It is down over 10 . You can see the u. S. Dollar index strengthening. Is somethingira were watching after the remarks from erdogan. In terms of how the s p 500 futures are currently said, slightly low. Energy is a story currently pretty much [indiscernible] pretty rangebound. Close to 48 per barrel. Lets check on them the first world airlines. First world headlines. India mergerdafone is expected to close next year with each side having the right to nominate three directors. It will create the Largest Telecom company in a competitive market. It still needs regulatory approval. Le a merkel and shinzo abe Angela Merkel and shinzo abe to fortify efforts trade. They said that Global Markets can be open and fair. The speech came from hanover. Israeli Prime MinisterBenjamin Netanyahu is in china this week. To dissolve his government for a fourth time over mediaute broadcasting. News of the election dominated the news before he left for shining. Ping themeet with xi jin heads of alibaba and baidu. Saudi arabia said to be studying whether foreignowned businesses would be [indiscernible] relaxed, could be dropping requirements. Instead imposing an annual tax of up to 25 . For nationals living in saudi arabia, currently at a local sponsor to open a business. Local news 24 hours at a probable the 2600 journalists and analysts in more than 120 countries, this is bloomberg. Shery thank you. He was secretary of state Rex Tillerson used to 24 hour trip beijing to lay the groundwork for her president ial summit amid raised tensions of her trade policy in north korea. Our correspondent Tom Mackenzie joins us. The big focus right now on that summit between donald trump the president she jinping xi jinping, look and we expect. Reporter we have yet to have confirmation that it is going to happen and it will happen in ofil and in florida and part the reason for Rex Tillerson coming over here was to lay the groundwork and prepare for the president ial meeting. Modify his hosts to some degree and he did that by using some language taken directly from the Chinese Government talking about the need for Mutual Respect and cooperation and that played well to the chinese media. Tillerson has talked about the need for the u. S. And Chinese Governments to step their priorities fresh, a point in their relationship in the need to realign and look ahead. Clearly, this president ial meeting is going to be a big part of that. Tryvisit was an attempt to to find some areas of cooperation. There are major gaps between the governments on everything from to geopolitics, the south china sea, and north korea. This was a step to move forward to that president ial meeting in april. Korea . What about north this is at the crock some of the water discussions. Did he make any progress in terms of persuading the chinese . You point to a really i mean he came into this meeting having said that the tensions extremely high point over north korea to say that 20 years of discipline the cr north korea have failed and out a not ruling preemptive strike on north korea should it continue with its Nuclear Program but he dialed that language down with his meeting with the foreign minister and they both tried to and this is that they want to avoid conflict. The problem is that the chinese and americans are coming at this from different angles british chinese want the americans to talk with pyongyang. Washington says it is not going to happen until north korea moves away from their Nuclear Program. Still a standoff. North korea did not want to miss out on the action. There are reports that it tested a new missile engine. They are getting closer to an Intercontinental Ballistic Missile that could hit the United States which they claim to be working on and the Rex Tillerson asked whether this would be a redline. We get a trump would say he is determined to stop that happening. There is a lot more work than these to be done on the issue of north korea and i am not sure how much progress was made during this visit but of these they were tough about it and trying to move things forward. Lets keep the conversation going. Joining us is our guest, the extra minute for the middle east and north african deutsche bank. Great to have a on the program. As you look at the discussions between the u. S. And china and the format of the conversations that they had at the g20, are we beginning to see more cracks in the underpinnings of the Global Economy . Guest actually, thank you for having me here. Actually, i see more of a in the worldrowth economy. As you look at the usa doing quite well, the closest possible to goldilocks economy with growth expected this year. Of also, we have early signs improvement in europe. Have japan started taking up for the first time the impact of quantitative expansion is being seen. When youre seeing china raising Interest Rates. We have seen korea. Many countries will be adding to Economic Growth this year. A coordinated growth worldwide and wellng positive really be reflected on the relationship between those countries. Nobody [indiscernible] shery henry, you are talking about all of these Growth Opportunities but that could get derailed by protectionism but also if you take a look, you can that china is also regional growth. They have put some retaliatory measures against south korea on the economic front and Bloomberg Intelligence gathering this showing some of the countries that could be addressed from more aggressive stance from china. Will we see this thread materialize this year and how could it affect these economies that are so highly dependent on this economy . Seet i mean, i am happy to that the deflationary pressures in china are out of the question. I happy to see that china has started raising Interest Rates recently been that nobody is talking about devaluation anymore so as the chinese economy picks up momentum with the rest of the world it would be impacting all of those countries who are trading with china and have a relationship with china so i am more optimistic than [indiscernible] our clients can [indiscernible] this is the United States and i have supported [indiscernible] you can see its had every bit coming in at number 15 just in terms of the implications for this part of the world. How much is there risk, really, from these possible guest i agree. Oil. We export our are less affected. The region especially will be less of a threat to world trade the people are talking up. It is more visible in terms of major exporters like korea,. Aiwan and is part of the world the rules of free trip in the markets are open. There are not tariffs in those so it is less of a probability that the u. S. Will [indiscernible] over raise import [indiscernible] [inaudible] stick around because we have plenty more to discuss. The extreme and for deutsche bank. Still to come, one year ago investors were filing into iran. Nothing can only take it up. Later, how the trump administrations policy has led to outflows from tehran. Egypt andst ahead, setbacks in their attempt to go 5 a year. This is bloomberg. This is Bloomberg Markets middle east live. Im yousef gamal eldin in dubai. A quick check on the latest headlines. Deutsche bank expected to raise a . 5 billion after pricing its new shares sale. It willnew shares issue new shares. A 35 discount until the close on friday. They announced the project on march 5. Their ceo reversed strategies after saying he did not want to tap shareholders. Confirming their president is leaving the company after growing tired of controversies that the company, harassment. Sexual they are also facing rivals, teaming up to share resources for writing healing services. Services. Ehailing uber is or defacing a fourway alliance. Facing a fourway alliance. Rishaad henry, as you look at his numbers, and, again, it has been a story of a strong recovery in egypt. What do you make of the latest figures . Long as you have the security situation under control as people get more confident, nowith the imf program that we have a freefloating currency, now that capital inflow is coming from outside the country, they should be able to meet the target. I am pleased to see that they started the process of reducing subsidies. It is going to be resisted but we know they are on the right track. We know that other things being equal, egypt should be able to get out of trouble. We have a few functions that speak to the Economic Health of the country. Of thisthe bellwether part of the world. It was a bit of a slowdown. 3. 5 . It is faresnt in them the figures past. This program might kick in faster than people think. Way to analyze the kingdom is to take the oil gdp and nonoil gdp. What is happening . With the reduction in production, there is negative growth. We are talking about actual reduction. Gdp,u look at the nonoil you have the government and the private sector and those are. Usy moving higher financing the deficit, not necessarily internally but by borrowing. More less liquidity liquidity available in the local market. I look at negative growth in the oil sector and marginal growth in the government sector. The private sector, you have certain sectors like banks likely to benefit from the Interest Rates. Services will be expected a little bit because of the Higher Exchange rate. Rates ining at growth the private sector of around 2 . Up slightly for the drop in the oil sector. Expected. Ld be when you are talking about this private investment, what role does Foreign Investment play . We are hearing that the government will allow foreigners in the country to own businesses in some sectors, dropping those requirements for local sponsors. Can we see more when it comes to Foreign Investment in the country . This is is a market for foreigners. That billionsent invest itill come to there are many opportunities. Maybe now, we are not very much seeing that but the potentials are huge and this should attract lots of money. Stick around because we have plenty more coming up. More on the us for markets and coming up, we faceoff in the battle of the charts and the theme is the fed. Made the best chart win. Stay tuned. You are watching bloomberg. I am yousef gamal eldin in dubai. And i am shery ahn in hong kong. Our guest will pick the winner of our charts. Take a look in my chart about inflation and expectations. Time inflation and expectations fallen to a record low. That would be the blue line on the top panel. The white line, break even, the lowest common matching the longterm average in the second panel. That is the line in yellow. Can we finally say that main street and wall street are in agreement . Consumers were worried about inflation. What does that mean for the fed . I am looking at the call about the storm raging debate as to whether were heading into a bull market over a bear market. You can see that is your yield right there. 2. 2 . Ttom red line, the forecast goes all the way up to 3 . The bottom panel is your 10 year yield. He can see how much it has gone down. Analysts are saying that the fed the 1. 75 trillion position in mortgagebacked securities. Take that. It is not easy. It is not easy. For the first time, the Federal Reserve and the markets are on the same page. Last year, markets were expecting one increase in Interest Rates whereas the fed was talking about four. This year, they are more or less on the same line. I am more inclined to the chart presented before. Shows markets and the fed [indiscernible] Market Forces are on the same line. Right, thank you. Wallstreet converging with street. Thank you so much. Lets continue talking about the fed. How much command to they have when it comes to the policy outlook compared to last couple of years . The markets with the theets are aligned with expectations for future Interest Rates. The fed growth increased Interest Rates by 25 basis points. Rate, we are in negative territory. 1. 7. Arel, Interest Rates negative. We will not see the impact tightening in my belief. Answerill did not get an as to whether the bond market is in a bear territory . Kuwaiti you expect . What do you expect . Headingond market is into a situation with you can see inflation is still a under control. There is no fear yet in the market for insurgent inflation. Control,prices under with productivity increasing, there is now wage inflation. Henry stays with us on the said. But youn might have won guys get a call. I need you to weigh in. Lend a hand. You can take a look at the charts. You can look back at it. You can also see the functions. , some key functions. Of course, still plenty to discuss on the program. Livestream your favorite sport at the airport. Binge dvrd shows while painting your toes. On demand laughs during long bubble baths. Tv everywhere is awesome. The allnew Xfinity Stream app. Xfinity. The future of awesome. Welcome back to hong kong. These are your first world headlines. Lets get started with the oil market. Prices falling now. The prospect of opec extending the production deal. They extended a drilling surge into a 10th month. The Saudi Energy Minister said that riyadh will extend the curb. Opec will meet in may. Says u. K. Lawmakers may need to pass as many as 15 pieces of legislation before the country leaves the european union. They have been examining the onden brexit will put parliament. The report also said the additional work will leave mps little time for any other bills. Slowing. Then economy there was a slight drop from the same quarter one year earlier. Egypts government is aiming for a growth of about 5 this year. A crypto currency, bitcoin, continues to fall after losing value due to a spat within the Developer Community that will split the virtual currency. The fight is over the size of transaction. Only blocks of one megabyte can be processed. Some want to increase the size. News 24 hours a day powered by more 2600 journalists and analysts. This is bloomberg. The japanese market is on holiday. The markets that are open are mixed. The regional benchmark is gaining ground. Lets get the details. Japan and Risk Appetite are on a break. A lot of the safe havens, gold is up by 4 10 of 1 . Onsaw a rally in the yields friday. The australian note, down. Yieldsre and new zealand also sold off. Most developed markets are under quite a bit of pressure today. South korea off by around 0. 5 . Hong kong, we are waiting on a number of repeats. A number of earnings. Emerging markets seeing some strong gains. Jakarta is at a record high. This chart is starting to show some overbought signs on the index. This is the only one in asia on a record high. The regional index, higher. Lets have a look at some of the stocks we have been watching in the region. Pack on Energy Leading the , jumping in most since 2008. Quibble in malaysia after announcing a longterm goal. Event under pressure after cutting profit and copper stocks also being sold off. We had seen copper retreating. Lets take with the emerging markets. Stocks have been climbing. The emerging market index rose 4 . The longest streak of gains since august last year. Tracy alloway joins us from abu dhabi. That is exactly right. There are two things happening. The fed is perceived to be hiking into economic strength and that would build well for emerging market economies. The reaction in the dollar we have seen a softening of the dollar. The dollar index weakened after the fed decision last week which is beneficial for emerging market economies. You can debate whether that will continue. You have ideal conditions for emerging market assets. Julia mentioned the strength that we have seen a lot of rallying in fixed incomes and credits and currencies. Bondseek we saw sovereign up 0. 25 . 0. 33 . G markets up by also, brazil and india. The dollars office is also a key point. Our strategist saying that because the dollar index broke, that can mean that we already saw the longterm top for the dollar. Tracy, all of that has implications for emerging market assets and what analysts think is going to happen. Do you think that there are assets . This is a question. If you look at the commentary over the past week, i characterize it as ecstatic. The yen was supposed to be the election. Instead, it is turning out to be a winner. That afterrgan same moving in the aftermath of the election, it is now adding risk exposure. A little bit of a mea culpa from jpmorgan. Fed will said that the allow emerging market assets to fly. Really, the risk is commodities prices as well as what happens with china. In china,a slowdown that w