Cost outright outweighs any potential benefit. Yousef it is 8 00 a. M. Across emirates, this is Bloomberg Markets middle east. David i am david ingles in hong kong where just got past noon here. Theets are just entering lunch break. I am looking at my bloomberg gmm. I will give you an update of what is happening across markets. We are seeing markets in china down by seven 8 10 of 1 . When you look at what is happening in the bond space, there we go. Yields are on the way down across the board. Here in the asia specific asiapacific. We are seeing money coming back into the bond space. This very quickly. This is what i want to call this chart. Is speaking by the oil story. Normalized after friday. You have the aussie dollar and geoPolitical Risk being built in. South korean won is one dollar. There we go, 9848 is the normalized figure on that. Reverberatingff, a cost asset market we are just under two hours away of the opening of the emirates market. And was the state of play the gcc benchmark index, down a 10th of 1 . You are looking at industrial and consumer key weak spots. And consumeres staples and utilities. When i look at volumes, i see them at the lowest level. The lowest level since late september of 2016. Inmex is leading the gains dubai. Egypt extending those losses. Interesting in this part of the the foreigners were net buyers in that market. They are putting money to work, despite the geoPolitical Risk that seems to be rising. Turkish stocks up 3 financial in focus. Lets cross the board and go to the risk radar. Crude extending those gains. Since december, 56 flat dollars a barrel. Rand ise South African ever edging closer to the 14 market. We will get into that story, there is plenty to talk about. 500,equities for the s p barely down a little bit of a fifth of 1 . David we see more outflows out of south africa. 14 is the level we are watching. In the meantime, roger is here to give us an update on what is happening. Rosalind is here to give us an update on what is happening. Will continue to grow at a modest pace. Reviewing the bank strategy, thats bank was closed is objective. Yellen also says that growth and productivity was disappointingly low. While policymakers would not raise gradually, they want to avoid being behind the curve. If the economy ends up overheating and inflation threatens to rise well above our target, we do not want to be in a position where we have to raise rates rapidly, which could conceivably cause another recession. We want to be ahead of the curve, and not behind it. Japan sayshe bank of it will proceed back from its unprecedented Stimulus Program when it has hit its goal. The governor says the doj has various measures for exit, and shrinking the ballots sheets is one of them. They could also include redeeming and raising rates. Japan is out of the deflator respiral off falling prices. Just one week after redeeming production, live was libyas field has stopped working. It was supposed to be a key expert terminal after they stopped operating. The field is pumping 200,000 barrels a day at the start of april, it is not clear what happened. The hold will affect libyas put just went to 10 several hundred thousand barrels a day. The president of the philippines is in saudi arabia and will meet the king today. They are expected to raise the unpaid wages. 800,000abia hosts filipinos. It is the secondlargest source. Expected to discuss investments and trade. Global news, 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. This is bloomberg. Says thehe white house u. S. May expand the criteria for military action if syria does not stop using barrel bombs against civilians. Being site of people gassed and blown away by barrel bombs ensures that if we see this kind of action again, we hold open the possibility of future actions. New sanctions against edssian and syria were discuss ahead of Rex Tillersons visit to moscow. We are joined by medias bloomberg manager managing editor. What can we expect . Hard to say. The u. S. Has been sending mixed messages. There is different emphasis from the u. S. Ambassador nikki haley and tillerson. What is the goal of u. S. Policy . It is not terribly clear. And that case, it is unlikely for russia and pulling to show their hand, or to move until there is requirement from the u. S. Yousef as you look at all of these pieces being tested, what key risk do you identify . What strikes you as we going to the next few days . Is, it seems to me, how this relatively immature u. S. Administration deals with the leader in moscow. Toll carries human on. It is a terrible tragedy and the level of geopolitics that seems less interest to the leaders of the powers. They are just trying to find their way out. The risk is probably increased as theirin syria patron struggle for positions. David i am wondering, we go into these talks with a hope that, after them hopefully tensioners ease tensions ease out. When you look at what is happening, or what is on the agenda in moscow, it doesnt seem that that will happen. James no, that is exactly right. Again, the u. S. , and in fact the western allies have not been sending terribly clear messages to the syrians and their patrons in moscow. Again, it is very hard to see why, or how putin would move in any way that would accommodate the western position. Yousef james, great to see this morning. David. David absolutely. Very good point, very good starting point for us. When you look at markets, geoPolitical Risk really trumping any sort of news we get. If you can find any good news. I guess the lack of risk appetite, when you look at markets. Have a look at my bloomberg. Just a highlight. The positioning into volatility we are seeing into the last two days. Just very quickly, three measures there you have. You have the bn ky. Ornstein is the same measure here in hong kong. Vix. Lue line is bit uncertainties. But go to our next guest that has been looking at all of this. Joins us right now. He is chairman and asias ceo at ima. Thank you for joining us. Iswere talking about what bound to happen tomorrow. We have we have rest we have rex tillerson. Good luck to him. The hope is, he hopefully wants to get something out of it. We will not see anything dramatic. I would be surprised if we see anything dramatic. I think it will be a real feeling out of each other. Added factor,r which i dont think was mentioned is, i wonder what the russians think is a position that tillerson hold in the administration. I know he is officially secretary of state, but it seems the policies being made by various people have the president s year. I think that is probably going to make it a little bit more difficult to move forward in addition to the other factors that were cited. David you think you will get an audience . He has a relationship, a longterm one. They knew each other when he was with exxon. A reasonablee is chance, unless putin wants to send a signal saying, no, until you do this and that, i am not going to listen. Yousef a lot of this comes down to negotiating tactics. What is the risk your of some severe miscalculation, and that the situation spiraled out of control be it in north korea or syria . Lets face it, a lot of these diplomats have not really had on the ground experience with this kind of situation. Mark i agree. Of course, in the u. S. Administration, which is a bit typical for the beginning of a new administration, but maybe a little bit more of a problem this time, they have not staffed up much. There is not a lot of support. I guess the risk might be raised, although i would think that that is no relatively unlikely. There always is, it does not make sense. Unfortunately, i agree with what was said earlier, there will still be violence. Increased violence almost no matter what happens, unless they reach some sort of agreement, which i said is a long shot. Yousef that is a long shot, that is not your base. If you had to rank the geoPolitical Risk, because we have a few to deal with and the markets have a few to deal with, and they are trying to get their head around that story and it has been pricing gradually. Rank them for me. Rank the risks for me. Mark it depends on where you are in asia. I think it is north korea. In europe,sitting maybe even the united states, it might be syria, because of the they about terrorism and associated factors with that. I think north korea is way higher on the agenda. Of course the south and East China Sea are as well. It has been a little quiet lately, but at the same time, that could always flare up, we always have india and pakistan and south asia. There are a lot of potential hotspots. Economically, asia is doing reasonably well. Politically, there are a few worries. David do you think the meeting went well between President Trump . It is wishful thinking, but if the u. S. And china are on one be able we may actually to take those and put them in the backseat. Mark we will solve all the trade problems in the next hundred days. The investment problems. Thats what they agreed to do. Im not sure with that means, but it shows an acceleration. It was talked about, it certainly did not come up to we talked about the south and East China Sea. We talked about syria. We tucked about a lot of other issues. It is not clear if those came up to probably because there was distraction. Because of the attack on syria, i expect that was a benefit for xi, any deny have to talk as much as he wanted to. It seems that the currency manipulation threats and trade threats, and so far have not taken place. Will they in the future . Can the president afford to disappoint his base . These are some of the open questions. They were not solved last weekend. He will be joining us in a few minutes. Before that we will be looking at problems. Ims that you my head. South africa, what is happening there. . They say they have little room the uncertainty over politics. We will get the view from the bank. Saysf plus, janet yellen she is allowing the economy to coast. Find out what that means for rises and howte Chinas Central Bank could react to all of this. We will talk about the Balance Sheet of the fed. This is bloomberg or it this is bloomberg. Or as before we ever put foot, pressed down on the gas pedal trying to give the economy all the push we possibly could. Now allowing the economy to kind of coast and remain on an even but, to give it some gas, not so much that we are pressing down hard on the accelerator. That is a better stance of monetary policy. Myid kind of sounds like driving teacher when i was 16 years old. I grew up with manual transition. I guess that is the point, we are coasting along. We are joined by chairman of asia ceo firm of imf asia. Of Business Books across the region to we were talking before the break. We really have no choice here in hong kong. We basically import with the fed does. It should not matter if things are i guess of Business Conditions are well. Gotten think they have better, generally speaking. You can see imf and other major , it is a little bit previousan they did years. In that sense, not everywhere. Not cut across the board, it is a little better. Nobody is confident. I think that is what the message was, it sounded like to me from janet yellen. Is,ourse, part of the thing she is holding some fire to because she said she did not want to put her foot on the accelerator, what is the Trump Administration going to put their foot on the accelerator. Will they go through with the Infrastructure Spending or tax reform with all of those other measures that might affect the economy and what janet yellen does . Yousef i looking at where bonds are at the moment, yes, they are rallying. Oil prices are holding up well. This is on the basis of your research this morning. Pull up in your bloomberg, your line of blue is your oil chart. Then you have the white line that the u. S. Brakes five years. What is key is that this is usually a sign. Higher Energy Prices are more consumer dance spending been actually spark faster inflation. Start changingo now that the fed will start winding down its Balance Sheets and tried to navigate this exit . Mark i am not one that can easily predict consumer behavior. Ou might talk to other guests but my guess is, there will still be concerned about how secure they feel about some of the issues we were talking before about you politically. I expect that will have an asact on how people feel well as whatever the numbers are showing. Because, even one with High Oil Prices a while ago, people still do not seem to panic. In that sense, i think there are a lot of other concerns. Yousef what is your call on oil than . What the syria tensions reverberating around the road,hat could break out this gcc or opec, nonopec dialogue with russia. That could possibly spike oil to an entirely different level. Clearly volatile, but im not in oil person. Again, youll have to ask someone else about that one. David let me get back to the geopolitics. When you see higher oil when you look at a country like syria, the problems have been around for five years. North koreas issues have been around for decades. Mark 2000 years or 3000 years. David exactly. What is new now is that you have a u. S. President that may actually skip that consensus steps. Should we just readjust for the next four years . We have to appear in one of the tests is, are the countries being targeted, will they react in a way or become more paranoid or react in a way that might be dangerous, or will they step back and say that this guy is serious . Webetter watch him, maybe should scale back a bit. I think the jury is out on that one. I suspect it will be very hard for him to scale back. , china is now in a very political year. Is coming up. Ess the last thing they want is problems coming up in trying to calm everything down. Trying to more or less go along with the same general policy views, not criticizing north korea, but at the same time not stamping down too hard on them. Will that work . It might not anymore. David thank you for joining us. Chairman of the asia ceo forum ma. I am a i a a go functions for our bloomberg subscribers. I will pull it up. What a lovely shot. Janet yellen in a classic car, cruise control. Take it easy, the headline here. That said policy is closer to normal. Kuwait is saying global crude inventory down. You can scroll to the various territories. You have everything here as you need to know. On your left you can even customize it. Again, at your settings. Plaintiff take out. Plenty to take out. David i like that car. Sort of cruising along with a chill out hit. P. Restructuring plans have more constant benefits. That story is next. This is bloomberg. Yousef you are watching bloomberg. I am in dubai. David big story out of australia. They have dismissed these proposals to a structure for patch on billionaire. The plan on the table by eliot management has been on its oil assets and changed its optimistic without change in benefits. We are joined by the reporter who joins us out of melbourne. What has been the response of the company . Has rejectedy those proposals from its hedge fund. Valueee them as disruptive weather than value accrued. Plan by abouta 50 . U. S. Asnning off the those assets could be about 22 for a separate company to be listed in new york. They wanted them to simplify its complicated structure. Two entities, one in the u. K. , one in australia. The hedge fund was the one in australian headquarters. He will company with a primary london listing. They also wanted to see more greater returns to investors, essentially taking away from the temptation from the Minor Companies to maybe squander the recent higher cash flows were seeing on acquisitions. We sought in the sector towards this decade. The three point plan was squarely not back by ghp. From there bhp. They continue to review options, but they are not right at this moment in time. They see them as potentially ,ostly, difficult to achieve and to erode values. Very tough response there. Yousef the question that strikes me here is, how do other investors view the plan . A bit of a mixed response i think. Some of them agree that maybe something does need to be done in the oil unit. Many People Struggle with the idea of a mining company. That. Aving tension may be focused on what assets,ht do with their rather than its conventional petroleum and assets. That is seen as a key longterm part of the growth story for bhp. The idea of simple find the Corporate Structure is a perennial debate among investors. The quex i have spoken to in the last 24 hours, they agree with the company. It is difficult to achieve. For no real clear benefit at this point. David absolutely. Good reporting their out of melbourne. Are a reminder, market yachting these developments. Hold 4. 1anagement does percent of bhp. We will be talking about turkey. The country is set to vote on a key referendum which could expand the president s power. What this means and what is happening in south africa. This is bloomberg. Is 12 30 in hong kong. I Rosalind Chin and these are of the first word headlines from around the world. President ial candidate has described multiculturalism as a weapon. She calls russia and egypt, which are the countries most involved with fighting terrorism. She accused saudi arabia and qatar of not doing enough. To have the best relationship with all the countries of the world, including qatar and saudi arabia. On the condition that they respect the principle of noninterference and that they refuse to be a support base, even implicitly for activities that are illegal. They should contribute to fight against terrorism. They should play that part in the refugee crisis by accepting them, beginning with those who have the same relation. Neckind running neck and ahead of the first round of the election on april 23. Ahead of next month election, iranian president is pushing back against criticism that his policies have not helped the poor. He is credited with ending irans isolation through the landmark in 2015s nuclear deal. The president ial race has been tilted by the surprise entry of conservatives. An ally of ayatollah hominy. May holdsaid they flights to turkey. The two countries are growing over the war in syria. Year afterored last being stopped in 2015 following turkeys downing of a russian fighter jet. Now russian tourist to turkey have fell to a million from 4 million in 2015. Egypts Cons