Dude. Llo to the 5 a. M. In london. The latest in dubai. Here in hong kong, a look right now, very quickly. Of, equities are offered the dollar on the back foot. Very green. The other big story is yields going back. Japanese 10 year minus two. Right at the zero level where that onceth him and it to be. Flossing in terms of those assets. Crude isnt in focus crude is in focus. The highest level in almost a year. Also in terms of what is happening with gold, that has been extending the highest level in some month. If you look at what is happening with south africa, saw some gains of 2 . Very interesting play and cover under pressure. The metals complex, threemonth low on wednesday. Uncertainty on where the donald trump will affect supply. This was a state of play with the benchmark. A strong start in the earnings season. Stocks, energy doing well. Foreigners are the course of five days, of 370 . A lot happening in the market. Lets get you up to date. Sophie hey dude. Earlier,from a year shipments rose 16. 4 in dollar terms. More than two years. Robust, the pace is likely to slow. Commodity prices are behind. The syrian chemical attack was the work of a butcher and it is likely moscow to not know in advance. Lavrovlerson and sergey warned that relations between the two countries have something dangerously low. Relations are at a low point. There is a low level of trust between our two countries. The worlds two foremost Nuclear Powers cannot have this kind of relationship. Arabia has raised 9 billion, one billion more than it was any four. Demand was high when they ordered an excess of 3 billion. The budget deficit may have reached 53 billion. A rise in quarterly profit as the i. T. Giant expands into new. Ervices and raising costs the income rose to 557 million in march. The Company Forecast sales growth of 6. 5eight. 5 . Shares are down two point percent. Global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries this is bloomberg. The trump administrations policy stops are being tested by moscow and beijing. You have china dealing with north korea. Secretary of state Rex Tillerson in moscow for talks. Trump said it is unlikely russia did not have advanced knowledge. It is certainly possible. Probably unlikely and they are doing investigations into that right now. I would like to think that they did not know but they could have. They were there. We will find out. General mattis is looking into it with the entire Pentagon Group that does that kind of work. When he also saw. China is not or no longer or whatever it is, not in its currency. Exchange, dealing with north korea. I think he wants to help us with north korea. We talked trade, we talk a lot of things. The way you are going to make a good trade deal is to help us with north korea otherwise we will do it alone. Goingalone makes means it with other nations. And joe barton and joins us. Listen to what we have been hearing from the two Foreign Ministers and looking at body are the comments from russia is it just rhetoric . I dont think anybody was highfiving after this meeting. On the bigdisagree issues of whether or not chemical weapons were used. Whether a solid should stay. Interference in the u. S. Election. I think the expectations were maybe low but the Glass Half Full is perhaps they did meet. Agreed toith putin, set up a low level committee. This hotline between the two militaries, they do not shoot each other out of the sky. They have resumed that. At the end of the day it may be that they got as much as they could have gotten out of this meeting and maybe they have three months or they can hopefully avoid any big confrontation. In july putin and trump may meet in hamburg. As expectations, while there were no breakthroughs, this might be just as good as it couldve been. For one, president putin granted an audience to Rex Tillerson. What is next . You mentioned these big meetings. Is it fair to say the takeaway was at least they sort of get along now . Sort of get along might be a little bit optimistic. Relationssaid that were at an alltime low. Two Nuclear Powers should not have this type of relationship. Serious problems beneath the waves. What willestion, change . I dont think much will change. Assad will continue fighting, russia will continue supporting him. The u. S. Will continue the campaign against the islamic state. If we can avoid a major confrontation between russia and that may be the case when the two meet in july. We may see some progress. Step is tot acknowledge there is an issue, they did that. That is the one takeaway. Now we look ahead to july and hope that things do not flare up. Theres one part of the equation. This is a case of give and take. Steve is here with us. Thesemed to be dangling trade incentives to persuade beijing to fall in line . Trump the businessmen. Trump the campaigner said a lot of inflammatory things about the one china policy, that is gone by the way. Yes and just one china, beijing, you are the ruler. I paraphrase of course. The currency minute later, he he did not do that and overnight he was saying china is not manipulate its currency. Maybe the pragmatist is coming through. With china it seems as though they profess the talks in a maralago as going to be very difficult. On all accounts it seems as though it didnt fairly well. China and the United States have shared interest to have a healthy trade relationship and also is definitely in the u. S. Interest in chinas interest to get north korea reigned in because the tensions are definitely ratcheting up. A switch of direction. A radical switch and direction from the campaign rhetoric. What would donald trump have asked in return in terms of any favors or support . North korea . Nothing is for free. He changed his course on one of the key issues, what did they have to deliver in return . , in his phone call overnight she was again saying that dialogue is the most important thing to get to rain and north korea. Donald trump once influence. The regime that allows them to continue its weapons program. Maybe get multiparty talks on track. See that take form by the chinese. They do not want to see a crumbling of the regime and do not necessarily wants to give their cards away. Yousef they do share a border. That was steve angle in hong kong. Andrew barton joining us live in dubai. A key official in the saudi arabia effort to diversify the economy away for the alliance in oil. Corrects the key risks facing the global economy. Digging deeper into the geopolitical elements to the conversation and how it will affect the markets going forward. The Political Uncertainty around the world differently in the european region. It is also high on our agenda. Flows moving for from emerging market economies as the result of the reinforcement of the dollar is the third one. That are the three risks apply to a situation. It is quite positive at the moment. That was the imf chief talking about the risks she is watching. President trump talking about currency. Have thoughtould that that was over with. A couple of months since he was last able to effectively do that. Below the 200 moving day average. That is in addition to what has been happening with the treasury yields. The same thing right here, you can see highlighted in yellow. Comments sentmp them lower. Lets get some extra insight. The head of global strategy research. I want to get into the strength of the dollar. To what extent does donald trump have control over the currency . You are making the argument we should be focusing on the fed. Think the market in some ways has misinterpreted the price action. I do not think it was Donald Trumps comments on the dollar which hurt the currency. I think it was more his commentary on the fed and his willingness to potentially reappoint janet yellen and his desire for lower Interest Rates. The fed has been extremely a higher and steeper trajectory over the next couple of years. The market has been in many ways skeptical or unwilling to embrace that. Wantsea that donald trump a lower rate trajectory is probably a bigger factor for the dollar. In terms of where those bond yields go, not much indication of the reflation trade if i look at a foreign asset tight for u. S. 30 year. It is not materializing. Where is this going to go . In the shortterm term with a couple of problems. Or increasedth skepticism about trumps ability to deliver fiscal stimulus. There is concern about inflation expectation. At the end of the day the fed and their increase the increase in the rate has not read to a higher trajectory for the term structure Interest Rates. I stink i think what the market is struggling with is where the u. S. Goes from here, where the trump go from here in terms of his agenda . Fed, thereen to the is my much committed to raising Interest Rates to more times this year. I think what the market is failing to spend enough time on in something we are very focused on is what the fed it will do come the end of the year or early next year. That is a fairly significant risk driver for longterm Interest Rates. We havent really seen that budget. I want to bring up a chart at this point. One that really speaks to the fact that we are not really seeing the long and of the care of. It comes down to the argument of potential growth rate. Swap on the 10 year rolling over. Out of the hands . Explain this to us. What we have tried to do is look at a different factor. Term premium, the incremental amount of risk that investors take when they extend the yield curve. That has been coming down fairly dramatically since the start of the year. The other chart is equally interesting. Describere trying to is even with the fed having loaded their first interest like in march, suggesting they will go to more times, the market is unwilling to embrace the idea that eternal fund rate could go anywhere close to 3 . That is the ultimate interactive. Objective. If they want to tighten financial sick raising shortterm Interest Rates is not going to do this. That is where the contraction comes in. What is the next step . Next step is for the fed it to raise Interest Rates again in june. We think they will do exactly the same thing that they did with the march rate hike. We would expect that over the Third Quarter we would hear and to see quite a bit of discussion on the Balance Sheet contraction schedule. That really becomes a big risk for the bond market. Until the second half of the year. Eric stays with us to talk more about the market strategy. Secretary summers tells us what is on his radar. The capacity of the u. S. Government to move legislation. It seems to be probably more room for surprises at this point than for upside surprises. David im in hong kong. Yousef im in dubai. The quick check on the headlines starting with cap a specific. The a new ceo, talk as the ceo for about three years, shares fell 30 and that time. In the face of cup from chinese rivals. Its first and will loss for eight years. Shares rose to the highest in six months, the price at least a jump almost 10 midweek taking it to 21 . Analysts expected see a loss, the Company Posted a 12 million product. A profit since going public in 2008. No timeline was given. The german engineering giant says it will expand on the sites in the event ends. Contracted to provide support for the export site. 21 5000 people in the uae. Conversation right now with thanks for sticking around. Everyones favorite topic for todays session is the dollaryen. Is it undervalued mark at the top panel, the bottom is arguably your most important forward indicator of where the yen it goes full. Is it again undervalued . It does look like it has catching up to do. Think dollaryen is undervalued. Geopolitically whenever risks rise in the world and there is a period risk aversion aversion, that has. Ressured the dollaryen it has suffered with a decline in the Interest Rates. Current levels we do expect the fed to raise rates in june. That should give some support to u. S. Interest rates. Yields to move a bit higher from here. The bigger story is actually the bank of japan. Quite a bit of discussion that the bank of japan might raise its fuel target, we do not think that is accurate. Inflation expectation is going down not up. It is our view the bank of japan will stay accommodative which ultimately should we can again. We are seeing it told, some of the highest levels in five months. Charts breakdown the index to what has been happening. Very very interesting changes here in purple. Precious metals, you can see how that is picked up. Industrial metals complex, we see big moves to the downside. Agriculture and energy making a it is a comeback. Talk to the about gold. You are saying it has very little to do with what is happening. It has a lot more to do with what is happening with the u. S. Dollar. One of the things we believe in very strongly is that there is an anonymous amount a normas amount of myth. But iflike to hold gold you look at the financial with supply and demand it is real yield. At the end of the day gold is not an asset that pays net it is an interest the opportunity with the cost of holding gold goes up. If you look at what was driving the weakness in gold, it was the increase in real yield in the u. S. Trajectory coming under scrutiny, the decline in Interest Rates three of seen since the start of the year, that has been a very supportive factor for gold. As we mentioned earlier, if the fed does raise rates again in june and the second half of the year, that should them at the gold increase. Eric robertson, thank you for joining us. Almost 1 30. We are entering the last 90 minutes of trade. It is a beautiful day. A sliver of solace. The dollaryen at one. 09. Sophie the world. The u. S. Has agreed to greet tokyo before taking any military action against north korea. The nikkei says the pentagon has discussed a possible strike following the missile launches. Threatening a preemptive strike on south korea. A response the u. S. Moving to the area. State media said it would hold america responsible. Iraq and the uae were among several opec members to break the output curves last month. The two countries along with algeria, ecuador pumped more than allowed. Saudi arabia produced less than promised. Opec discussing prolonging for the another six months. Likely to support an extension. Registered to run in defiance of the ayatollah how many ayatollah how many likely to face the architect of the reverse of irans isolation. China overtaking the u. S. Is the largest foreign investor in pakistan thanks to the trade route. Ports,as been revamping railways, and roads place 55 billion to chinapakistan economic corridor. Mid2013 through last january was over 500 million. Dayal news 24 hours per card by more than 1800 journalists in more than 120 countries. This is bloomberg. Yousef we are on a break in hong kong. Heres juliette. We are seeing weakness coming through in these markets. The dollar is the real story of the day. Following Donald Trumps promise seeing weakness coming through, sending a lot of the asian currencies higher. We also had Employment Data coming through of australia. The 76 cents mark. Liking theustralia stronger yen in the nikkei down by over 1 . Australias market also being hurt in iron ore. Interestingly, korea Still Holding onto gains and adding to them yesterday was the first win in seven sessions. Weve seen more calm in terms of deal political concern regarding korea. I want to show you a chart of two chinese stocks in focus. The Shanghai Stock Exchange. Investigating the big drop coming through. Quite a big impact on the market at the Shanghai Stock Exchange certainly is one to watch as we see those come back and recover from the big selloff. David thank you. A quick look at what were doing. Look at the spread. At iron ore futures traded. Metric ton. Up by a third of 1 . It has really come a long way down as far as iron ore is concerned. It has been a year since the delete runs the deputy prince of self saudi arabia ready revealed his plan to shift away from dependence on oil. Is partormation program of the blueprint to drive those changes. Great to have you back on the program. They have pointed to the as it execution risk. Talk to me about the progress you are making. Thanks for having me. When we look at what is happening, economic policy, it is huge. Totally different from than what we had gone through in the fiveyear plan. Sent oute the last year. Fully operational. To the pretty clever us different government bodies. The performance center, responsible for gathering the data of all the programs, the initiatives, and the progress of all that is going on. The initial report of the program, most of the initiative has already kick started and i have gone with 510 inflation. In terms of the policy changes, in terms of the mechanisms that they are driving here, talk to me about what has changed fundamentally. Different parts and how what machinery. What is fresh and what is new . Thing it is actually changing with economic policy, andused to rely on subsidy a social economic policy. Now it has gone away from that to apply capitalist policies. It is more to the subsidies and government spending, which was quite clear what was seen in the fiscal balance program. Ready, itat came out was part of the reforms that happened in 2015. There are more programs in the pipeline similar to that on a strategy level. It is going to take care of some. Arts of the economy a painful price being paid them a economic growth. Chart, doeson a your gdp growth. For reference you can see the , 1. 19 four the fourth quarter. When his recovery going to kick in . Difficult to pinpoint. Reformsyou expect and to really start supporting more rather thanivity pulling wind out of the sails . Anybody is hoping the recovery will chart very soon. It does not seem to be starting at that point. From this point on, the numbers are going to get even worse especially this year. Progress untilhe the end of the year, we will opportunities that the transformation is creating. Through all the things the country is gone through, all different industries, we will see some emerging including the housing. The regulation is mostly set. Project, the second thing that will come out of this transition. Everything else in terms of policy, regulation is goi