U. S. Policy . Yousef this is Bloomberg Markets middle east. Im yousef gamal eldin in to buy. Im shery ahn in hong kong. Yousef, all in the red right now when it comes to markets across asia. Virtually all falling. Not surprising if you take a look at the gmm and go function on the bloomberg. Actually asian stocks are now trading at a threeweek low. Surprising, the s p 500 was devastated. Its all the day guest intraday reversal in 14 months. We also had the japanese yen just continuing to strengthen for five consecutive stinks or five consecutive sessions. This being felt across markets in asia. Southern that markets gaining across the board. The is. Treasury reeled, gaining. What are you watching . Yousef in this part of the world, just two hours away from the opening of the markets. The uae specifically and to buy and be. This was the state of play. Aking gains up the back of Group Sentiment on the back of improved oil prices. We are seeing some interesting moves when it comes to anything related to utilities. A weak spot compared to the gains. The best performer has been dubai. Six consecutive sessions. The last time this happened was back in january. First Abu Dhabi Bank helping support gains in the emirates. Switching games, holding relatively steady. We saw some moves after the inventories came through. Also some moves when it comes to the gold space and of course u. S. Equities. What are you looking at . All get as first of check of the first word headlines from around the world. His Rosalind Chin. The trump seems to have a change of heart on its syria policy, showing it could take action against the assad government. The king of jordan, the president said the perpetrators of this weeks attacks have crossed the line. It crossed a lot of lines for me. When you kill innocent children, innocent babies babies, little babies with a chemical lethal, is so legal people were shocked to hear what gas that is. Across as many lines. More than 70 people were killed in the attack. Is contesting eyewitness accounts forces loyal to president assad were possible that were responsible. Steve bannon has been removed from a key committee. The changes increase influence of the National Security adviser. Shows the change as a progression rather than a demotion. The white house economic adviser is set to back a policy that could flip wall street biggest consumer banks from the Consumer Lending businesses. The former Goldman Sachs executive told a private meeting of lawmakers he supports such a move. His comments echo what President Trump and republicans have been saying about bringing back the depressionera glasssteagall act. U. K. Prime minister has finished her trip budding business British Business to saudi arabia. She was joined to pitch for saudi a broncos saudi aramcos ipo. The state run company is considering what is expected to be the biggest ever share here in this is bloomberg. It is the markets versus the fed. Most officials on board for timing. Rate hikes and a investors are unsure whether the fed can hold for 2018. Were joined on this story. Fed trying to walk this fine line where they dont tighten too much that it becomes another Monetary Policy. They have not begun to give details. Increase inhat their key rate and the consensus showed they are looking for it total of three hikes in 2017, they also talk about something they have been talking about in speeches. Question ofed this Balance Sheet production. But they did say, lets look at. Key sentence in the minutes most participants anticipated the federal funds rate would continue at a change in the investment policy would be appropriate later this year. What theyre talking about is this a baby step towards reducing a 4 trillion Balance Sheet by not reinvesting the proceeds that they take out when they get the interest on the bonds. They would allow it to gradually go lower. Nevertheless, economists and traders are saying that it could start reducing its talents a tiny bit sometime later this year. Does that mean a form of tightening that would reduce the need for the three hikes . That is definitely a key question. The world Interest Rate projection, no doubt the market says. If you look at all the other meetings and all these other possibilities, there is no number even close to 50 for a third rate hike this year. This is where we stand. A healthy gain of 180,000 jobs is expected. Market isike the taking its focus away from the numbers because they are Strong Enough for the fed to be on this rate hike. More tolooking a lot get a better sense of what is happening next. People are asking whether reducing the Balance Sheet could be a second policy tool. This Market Reaction has been a pretty big. The s p 500 seeing the against intraday reversal in 14 months. How fragile is the u. S. Market right now. I think it is very fragile. This surprise in terms of the minutes came at the worst possible timing. We had the strong labor report and the market got very excited. That the a real belief risk aversion stays over, back into the reflation. Suddenly they had this surprise of the Balance Sheet reduction coming through later this year. Markets reacted hadley. They are vulnerable. Watch. 3 . El to that is the one that nearly every asset class will follow. It has not broken yet. Certainly the technicals are very negative given how the positioning got excited after the adp report. Lets head of the kathleen and ask about the Central Banks schedule. The reserve bank of india is not expected to do anything except hold its key rate steady come even though inflation has been giving some signals that it is easing up in india. It is not there yet. We can look at one of the charts to show you what the rdi is watching. Line,n see the turquoise it hoped up a little bit in the last report. 3. 65 . Still well below target at 5 . That white one is the Bloomberg Intelligence estimate of court inflation. They see that starting to fall. The big story is lower fuel prices, lower gasoline prices. That will help to continue to drive inflation lower. Followingnflation below 4 by june. They will be ready to cut back he rates. That is what we are expecting. Some indication after the policy meeting this is what the reserve bank of india sees for itself. I am looking at the function and specifically at how the indian rupee has been performing. It is easy to get distracted from the russian ruble and mexican peso. What do you see from a technical perspective . If some they wanted to trade . I think the rupee, the fundamentals are incredibly strong. You have one of the fastestgrowing countries in the world, moved beyond the shock of the modi cash withdrawal. It brings some money back into the black markets. Yield, you have massive inflows into the market. It might have rallied too far too fast. It might produce some consolidation in the shortterm, especially giving what is happening in broader asset markets. The longterm nature remains very positive for the rupee. Little there is still a bit of a risk in the premium because of the French Election coming up. That continues to be reduced. There is very little chance for le pen winning. A will be unlikely she wins runoff if she gets into a runoff. There is a lesson less of inflation, but a relief to come once we get beyond the French Election. The economics in europe continues to look better and better. Yousef excellent reporting. Thank you mark and kathleen. Lets get you another preview. We have pioneered national resources. He tells us why he sees the oil price advancing to 55 a barrel. Currently brent at 54 and . 10, down half of 1 . Shery we look at saudi aramcos sale with one of the worlds leading islamic lawyers. This is bloomberg. Yousef does Bloomberg Markets middle east on bloomberg tv and radio. Im yousef gamal eldin in to buy. Shery im shery ahn in hong kong and a quick check of the business headlines. Chinas follows but is 9 , the biggest decline since february last year after to private Equity Investors collected 6 . Sold to antners Investment Bank for 39, 70 to hong kong per share. They say the stock stands to benefit from increased free float. Again on wednesday pushed past wells fargo into 10th place with 279 billion. That is ahead of googles parent alphabet. Six of the top 10 companies are in tech. Including the top four. Another step closer with the eu giving its approval oneday ahead of the u. S. To the same. The European Commission says some pesticides and other products the problematic overlap and allow regulators to clear the 43 billion deal. The company is expected to close the deal in june. It still needs approval from china. Bloomberg has been told saudi aramco is planning to raise 3 billion from its islamic bond sale. We are told aramco is still in debt with a sevenyear, 10year lets get more perspective. Lets get your thoughts on this latest development on moves that we are seeing to tap the market. It is very interesting, particularly noting the saudi vision 2030 and in relation to the entire sovereign strategy. They just set the market with a huge 70. 5 billion bond issuance. It is a highly domestic play. A privateg offered on basis to financial institutions. I think it will be interesting to see this on the international play. Saudi aramco being saudi aramco, i think it is sufficient demand for the paper domestically within saudi. The interesting thing is if they crossed the shores of saudi and see if the international market. Yousef what you say is the wider trend to identify . What other highlights are you seeing . The saudi governments issued bond was an important want to set a benchmark for a lot of the bluechip saudi and government related entities tapping the market. That was important to set the benchmark for a lot of these entities to come to market. The saudi sovereign has announced it will market. I think that was a followthrough from a bond issuance. We are very interested to see some of the other government related entities tapping the market. Now that the sovereign has opened the door for them to tap the market. Why has it taken saudi arabia so long to issue . That is a very interesting question. When this was being considered last year, whether it was the first tapping of the International Debt market would be a conventional bond, my money was on saudi being the conservative Islamic State good. We are all pleasantly surprised it was a conventional bond that took president. That is a lot to say precedent. They set the benchmark pricing which then allows others to come. Why did it take long for saudi to issue any sovereign debt is important, is because it perhaps did not need to until the old sovereign the expenses. I think that is critical in the analysis to why they tapped the market. Shery when it comes to bond issuance in the broader gulf market, what do you expect to be the proportion of sukuk compared to conventional ones . That is an interesting question. We recently saw kuwait tap the market. That was a conventional bond. They have made no secret they will be tapping the market again with a sukuk just like the saudis did. Dubai has issued a most 14 and they will be updating their current program. I think in the region we are going to see far greater sukuk issuance ease compared to bond, particular for they will be moving into sukuk. Have alreadyae issued sukuk. There are benefits for issuing sukuk over bonds. Yousef we put a track together on the basis of some of your notes. This is one of the popular functions for our clients, hs go. We have added to keep metrics, one big bjp morgan middle east one being the jp morgan molest sukuk index. The take away here is the differential that spread has been narrowing over the past few months. It tells a story of two sides to the coin. A sign of opportunity or a sign of the conventional bonds, how do you read these numbers . I think there is one key point here from the numbers perspective the key point is with a sukuk, you are tapping the conventional islamic investor. Your Investor Base is wider, arguably your demand is more, and therefore it has an impact on pricing. That has been narrowing between bond and a sukuk. More important geopolitical implications that have an impact as to why one would look at a sukuk over a bond, over the numbers. Yousef we still have plenty to get through. East a partner of middle Capital Markets. Lets get you up to speed with. Ne of the key functions the best way to start your day. I followed up here on my bloomberg. You can see the first thing, the fed minutes inspiring that first page picture. Then some of the other big stories including the oil story. Also the r. B. I. You can customize and add your own tickers. Check it out, dayb , defy the way to kick off that trading day of years. Up, we will be breaking into some of the feds minutes and comments we got overnight from the United States. It will also talk about ramifications on this part of the world. This is bloomberg. Yousef youre watching bloomberg. Shery im shery ahn in hong kong. Earlier on bloomberg, we spoke to veteran emerging markets investor, and now i started by asking him with middle eastern stocks of a discount, how interested is he . Saudi arabia is going to have this issue possibly, not so sure about that what this evaluation will be. That will be a boost to the market as well. Theyre going to have to open up the market little more, which is one of the problems. Being the biggest market in the middle east, they are still very restrictive. Yousef were joined by a partner of middle east Capital Markets at kagan spalding. In terms of opening up, there really doing that. It need to go further. What is that . The size of the market and the kind of capital theyre looking to raise, i think that is the natural next course of action to further open up the market. We have seen recent changes which allows Foreign Investment in certain sectors. Entities and so on. I think the steps have been taken in that direction, like everything in saudi it is very thoughtout, controlled, slow level progress. It needs to get their and i think the steps have been taken in that direction. The level of change needs to be accelerated. Shery an interesting note from templeton as mobile app backing that call. Markets are currently trading at 50 to 20 discount to start 15 to 20 historical discount. I think it is going to be where we are currently seeing yeartoyear comparisons. Not lower in if best case scenarios. It is a challenging Capital Market environment from the anymoreide i dont see new ipos coming to the market other than the one that has been talked about out of saudi arabia. Yousef the latest commentor on the Balance Sheet shrinkage, how is is going to impact this part of the world . Is it not going to be that second tool of Monetary Policy . Closely toook very the minutes, they keep using very relevant terms editable, saving, shrinkage of the Balance Sheet. I think of be nice that that does not have an impact on the timing of the monetary. The question is what level of impact is it going to be . Yousef great to have you on the program. Lets get you up to speed with what is still coming up. We have london. They what a piece of the aramco ipo action. Theresa may made the hard sell to the saudis. We have all the details next. This is bloomberg. Shery it is 12 30 in hong kong, im Rosalind Chin and those of the first would headlines. Party hascas ruling backed jacob zuma saying it will not vote against him in a noconfidence motion. A downgrade from s p global ratings. The partys decision to back him raises the chance he will survive the noconfidence vote on april 18. If he gets away with what he being removed,ut then we are really in trouble in south africa. Youre going to see a rating downgrade, we will going to junk status with the debt and corporates will follow. Their ratings will go down. Opecs out curbs pave the way to take moreducers share of the asian market. Total asian imprints of west african crude are expect to be 2. 4 Million Barrels a day this month. Also a record. As ty top the agenda egypt is a leader of u. S. Aid. The trumpet menstruation pushes for budget cuts. Matus says egypt is critical to stability in the middle east. There is a new world cup sponsor after scandals were struggled fee for had electronicsnsumer and is largely unknown out of its home market. Global news 20 for hours a day powered by more than 2600 journalists and analysts in more than 120 countries. Im Rosalind Chin. This is bloomberg. Yousef lets get the latest market action. I am looking at the function. Ive taken to what the biggest losers are the region. He can see a lot of markets are coming underwater. Japans nikkei down. The topics trading at levels we have not seen since december 6 last year. Coming up the good rally they had yesterday. A lot of analysts saying that what we heard from the fed minutes overnight is not what the market wanted to hear. You dont want to hear the Balance Sheet is being produced. Lso volatility lets switch that up have a look at some of the commodity players. You have seen crude stall somewhat. Below that level again. Youve also seen it switch out of the brent contract as well. The yield is higher. I just want to show you this chart of gold as well. We have seen this rally coming through in gold over the year. It really seems to be stalling at this average. The itso cutting its 2018 price forecast. Gold could also sag this year as the fed boosts rates. Find thatresting to resistance of that level. President trump hosting is at his counterpart maralago resort. The talks come during a crucial time. Tom, a critical time for president xi jinping. What