♪ yousef: chinese bank stocks rush from cold the hot, leading shares to the highest in more than a year. china notches record selloff. the pbmc burning its reserves to top off the yuan. yousef: we will a closer look at how emerging markets are shrugging off rising inflation, and a more hawkish cents. shery: state of play, trump asks netanyahu to curb expansion as he turns away from the two state solution.

8:00 in thes emirates, 4:00 in london. i am uses community -- yousef gamal el-din into by. we had five straight days of declines. if you look at the reflation in the asian session, not a lot of conviction at the moment, is there? shery: it seems to be fading right now. treasuries just climbing, reversing declines. look at my gma function. we are seeing the markets in the asia-pacific looking pretty maxed. a halfkei fell just percent. we have more strength for the japanese yen, up 0.2%. when it comes to commodities, we saw the commodity index rebound over night, tracking gains in metals. metals in asia gaining momentum. the big story when it comes to commodities, oil is swinging between gains and losses.

is a lot about oil. let me show you what happened overnight. we did get debate out of u.s. crude inventory. i put the wti reference price. that is your line in blue. the important one to watch out is the white -- line in white. you can see this is a build of 9.5 million barrels last week. analysts surveyed by bloomberg were looking for 3.5 days. -- 3.5 million gained. that is more than expected. 1.3 billionorters barrels a day, the most in over 23 years. laying into the overall equation. let's cross over to this part of the world. two hours away from the opening of the emirates market. in the what happened trading day. you look at a mixed picture, dubai was lower. saudi arabia up 0.6%.

we have lower property from darla, the most traded stock. the two companies finalizing their merger, both stocks over 2%. a quick note on the key trade in terms of the risk radar. we are looking at gold. there is strength in gold, that ties into the anxiety we are speaking about this morning. brent currently $55 $.73 a barrel, and that south african cents. to -- lower six we go into the key story, and on the turkish lira, at 3.66 against the u.s. dollar. shery: we are seeing breaking news out of malaysia, the yearmy is expanding 4.4% on year. it is more than analysts had expected. we are seeing a malaysian ringgit go down 0.2% and trading

at 4.36. let's check in on first world headlines. here is reshot. rishaad: u.s. intelligence agencies and the fbi are looking at the contacts between president trump's associates and russia. this was after the 2016 and before campaign. the national security adviser michael flynn, paul matt forte and order page. democratscalls from for a deeper look at the connections between his team and russia. indeed, donald trump has confirmed that the u.s. is open to a peace agreement which does not include separate states for israel and the palestinians. they abandoned the two state solution, more than a decade of two failed negotiations. trump was with benjamin netanyahu. he is happy with whatever works for peace. fallinggovernor saying bank profits represent a new

challenge. he cannot deny another financial crisis may arise. governor kuroda has been talking about this at a conference in tokyo. he said regulation may be most affected if profits continue suffering from low interest rates globally. he praised japanese investors for taking risks. sources telling us china's security regulator is considering limiting the regularity of trade. they may restrict secondary issues to every 18 months. this would likely be limited to percentage points of a company's market value. they have yet to be finalized. we are operating in 120 countries with some 2600 journalists. we have got the world of business covered. shery. shery: thank you. china's holdings of the u.s.

treasury still the most on record last year. that as beijing hans -- beijing bonds are in the pile. we have the latest data. take a look at my bloomberg function. it is looking pretty interesting right now. what i am seeing is china and japan holding treasuries, declining. you see both of them, redline china, pink line japan. you see the uptick for china's holding of treasuries at the end. just december.as that was $9.1 billion up in december, but the overall trend for the year was almost down $188 billion, a record drop. december was the first time since may they ticked upwards, but we are looking at the full-year figures. down 1.6 trillion u.s. dollars in holdings of bonds notes and bills, u.s. treasuries by the chinese, the pbmc. reaction to the

outflows and the stemming of the beens fall, the pbmc has -- pboc has been going through 2014,r chest since defending the yuan. it is now below $3 trillion u.s. to a six-year low. that is one side of the story. the other side is the biggest creditors to the u.s. are looking at the prospects of a rising deficit in the u.s., rising inflation and fed hikes. yousef: we have breaking earnings heading bloomberg especially on lenovo. let's crunch those for you. third-quarter revenue $12.2 billion. the estimate was $11.7 billion, so good for the third quarter, but look at the other net incomes. $98 million here. million, sizable

mix on the net income front. gross margin, 13.1%, analysts were looking for 14.6%. this was under the growth margin. we'll see how the stock fares in light of all of it. talk to me more about the holdings, for a holdings, of u.s. treasuries. how are things holding up for japan? what trends are you seeing? stephen: japan is the number one creditor to the u.s. government, buying $1.9 trillion worth of those treasuries in 2016. billion down by $31.6 year-over-year, so their horrid as well is coming down. it was the sixth consecutive month, december was, the fifth consecutive month of falling purchases. japan is still number one, but number one and number two top creditors to the u.s. government are trimming back their holdings. shery: that could be an issue if

they make it more expensive but u.s. government to finance them. stephen: the 10 year yield. shery: touching 1.6% at one point. thank you for joining us. let's talk about the markets, asia. it is a mixed the cure for the regional benchmark gaining just slightly. let's get juliette saly with more on that. juliette: it is interesting what you were talking about with u.s. treasury's, because we have seen the momentum coming through in the bond market and in the japanese yen. that is showing us the picture, a little one of caution across asia. .e have seen a nice pickup looking at malaysia, it is down 0.4%. we had gdp coming down at 4.5%. 4.4%s a little more than expected. the stronger yen weighing down the nikkei. it is off by around 0.05% and

also the topix as well. we have the jobs number in australia today, fairly flat, weakness in new zealand and elsewhere. you are seeing a mixed picture. worth noting you are seeing more conviction from hong kong, led by tencent. we had a bit of a falter in the asian shares rally during wednesday's trade, but still a lot of buying coming through. asian market, we had a lot of analysts earlier this morning saying they expect asian shares narrowing even closer in the following weeks. looking at currency, the korean won is flat, but it is a three-month high against the dollar. yousef: thank you. let's get a preview of what is to come on the program. donald trump says he will go with whatever brings peace to the middle east. we will take a closer look at

his departure from the two state solution. shery: the fed and the trump administration are taking emerging markets on the roller coaster ride. what is ahead with this person. ♪

♪ to bloombergme markets: middle east, live on bloomberg to the end radio. shery: emerging markets have rallied on the back of hawkish testimony from fed chair janet yellen and the surge in u.s. inflation pushing up expectations for a rate hike. that seems odd. tracy joins us from abu dhabi to discuss this surprising em rally. this is quite unusual reaction for the emerging markets. you will see a lot of volatility usually. what is going on? reporter: yeah, that is right.

once upon a time in markets, the prospect of a hawkish fed, stronger u.s. dollar, more inflation, that would have been a negative, but that is not what we saw yesterday. we saw both em stocks and currencies rally off of the back of that search in u.s. cpi. what is going on? i heard to good excellent nations for this. most of this is coming through commodity prices. we have seen the recovery in oil, copper has been on a tear. that is good for emerging market currencies. the second explanation is that this good inflation, the expectation of more price increases, is coming off the back of a stronger u.s. economic growth and the idea that when the u.s. is doing well, emerging markets should be doing well in theory as well. yousef: what about emerging market? what patterns are you seeing?

tracy: i am glad you brought that up, because if you think back to november, emerging markets were supposed to be the big losers in a trump win. we were supposed to have a bunch of protectionist trade policies out of the trump administration that would be very, very bad for emerging markets. we have not seen that. we have seen credit spreads on emerging market corporate debt for instance slide to multiyear lows. i have seen two explanations which gives you some idea of the difficulty of engaging what is happening here. one excellent nation is that market investors don't think trump will post the protectionist policies. the second is that they think he will somehow be able to push through the fiscal stimulus that will boost economic growth. you can see there is tension between these different narratives now. yousef.. yousef: let's widen the conversation and bring in the head of the client research for

bank of solace. let's start up with the fed. in the words of morgan stanley, they are saying the fed has laid quite a tall order in terms of expectations for inflation and employment. what is your idea in terms of perspective? is a function you can pull up. you can see the increase from 24% of week ago, now 44%. where you stand in terms of rate hikes? >> there is an expectation the price will be more aggressive this year than in 2016. when we started with 2016, everyone thought of rate hikes. all of this expectation has proven totally wrong. now the constant -- consensus is therate hikes that i think investors are prepared for such

moves. it is a possibility we may see the next rate hike in march. it is still early for the fed to really clarify its position when it comes to inflation and the tax cut, the benefits of the tax cut. yousef: let's dig deeper into the credit risks, because the reality is with the strengthening dollar, a lot of these countries are at risk. this chart tells us the story of involving.are you are concerned about three countries here, turkey, south africa and mexico. apostolos: these countries have idiosyncratic issues. they do have a little bit of weaker balances when it compares to the rest of the emerging markets page, which has done great progress on extending their positions and at the same time, have increased compared to what we have seen three years back when we saw intense

volatility. idiosyncratic, which combined with a stronger dollar and higher u.s. rate hikes, might feel the depression more than the rest of the emerging markets. shery: we have seen prices pick up across the world. out of the latest inflationary pressures. will they be a problem between emerging markets this year, and which countries could witness a higher fx of [indiscernible] ? apostolos: this is one of the risks for emerging markets. we start to see inflation. we do believe that inflationary pressures would remain under control across most of the emerging markets countries. with a few standing out, the names like i mentioned, turkey, south africa, and perhaps mexico. these are the more festive countries, but broadly speaking

as a universe and as a group, e.m. trends not expected to skyrocket. the same story even from a developed market. there is a large explanation for the u.s.. we have seen something, but it is too early to really go into a major conclusion about the negative impact on the space. shery: when you take a look at emerging market assets, equities this year at least, they have outperformed the markets. take a look at the bloomberg now , because you can see this chart where the msci emerging markets index overshot the s&p 500, msci world -- is this a recalibration of eem investors, where they have seen so much political strategy already, they are becoming resilient more than their developed market peers?

would you invest and that on further -- and bet on further upticks? apostolos: they went through major political events in 2016, and we had the attempted coup in turkey, the impeachment of former brazilian president rousseff, ongoing tensions in russia, and even in south africa, a lot of noise about the finance and esther. so the foot -- the people are getting accustomed about political risks in the em space, and as long as this risk does not have major fundamental impact on the economies and is not really affect growth but the default rates and corporate banks, i think investors are willing to remain efficient in markets, taking advantage of the higher yields, as long as there is not deterioration. we have not seen the case from all of this events. a lot of the emerging markets in this challenge countries like

turkey, china and brazil -- russia and brazil have recovered quickly. it is interesting what we are seeing politically, which has historically been the case for emerging markets becoming an issue for the developed markets. with the uncertainty with the u.s. administration as well as in europe with a long election cycle, and the rise of populist movements. shery: you see it so many times, you become immune to it. thank you so much risk -- for us. we will have another person joining us to talk about inflation and policy. it will play out in the middle east and the biggest risks ahead. ♪

♪ shery: welcome back. you are watching bloomberg. in the let's bring back head of emerging market credit research for commerzbank.

talk about the ramifications for the federal reserve on this part of the world, particularly the kingpins, saudi arabia. liquidity has been improving a little bit, but before we got back from break, you were saying they are not out of the woods. apostolos: i don't think saudi arabia is out of the woods yet. there were the injections of summer in the latest issues that have helped liquidity conditions, but once the government starts issuing large amounts of bonds, banks will have to buy this, which is going to tighten liquidity. so we make start to see again the concerns resurfacing. obviously with the oil prices staying above $55, not the confronting factor. but the list -- at the liquidity in general has not been resolved. what we see in the entire jcp is

growing convergence. you have high-quality credit with the uae and qatar. the liquidity and equality is more the same. yousef: where do we rebound in oil prices? it has been talk in the $55 range since opec made the decision. where do you see the price going, and who stands to benefit the most? my personal expectations, we will see a my l expectations, we will see a very small rebound, but i don't expect oil to shoot above $60 anytime this year. it is good for all of the countries, but as i mentioned before, the likes of qatar, kuwait and uae are in a much better position. we see more signals on these three countries where saudi, bahrain and oman, they may

continue to remain under pressure and most likely, they will have to continue taking some of these aggressive austere measures in order to fix their budgets going forward. shery: how much of the booth will the banking sector in the gulf countries get, given that we are expecting u.s. regulation and the financial sector to be eased with changes to dodd-frank? apostolos: this is a good point, but it is really premature to make any assessments on the impact of the banking, not only here but i think across the globe. there is a lot of speculation that there will be some amendments on the dodd-frank rules, regulations, but we still don't have clarity how far the trump administration will go. and even if they do, some of it will start slowly increasing the rest of the world, but it will take time, about a year before we talk about positive impact.

yousef: there is a chart that shows easing liquidity restrains and constrictions here in the last six months after the peak we saw around the summer of last year -- before you head out, i wonder take on egypt. that is the very top of your radar. is certain to look more positive. there were two main catalysts on the egyptian pound november, combined with the signing of the three-year deal, a positive catalyst. they have to some extent renewed international investors-interest. theaw the latest on majority of investors, they were international investors. there were rumors that the egyptian government is also working its team to clear out the backlog for international investors that want to put in money. yousef: always great to have you on the program. he is the head of eem credit research for commerzbank. coming up, we will talk about president trump's new direction

for the middle east. what it will mean? ♪ with x1 you get the best of the oscars.

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rishaad: it is 12:30 in hong kong. i am rishaad salamat, these are the first world headlines. the u.s. remains committed to nato, calling it a fundamental bedrock of the transatlantic community. but he also told european allies to increase defense spending, or the u.s. will moderate its commencement -- commitment. president trump described it as obsolete. >> the european minister of defense said last week, it is a fair demand that all who benefit from the best defense in the world carry their proportionate share of the necessary cost to defend freedom. we should never forget.

it is freedom that we defend here at nato. rishaad: a south african antitrust regulator says more than a dozen international banks colluded to commit foreign currency trades. jpmorgan, chase, the bnp paribas and others. they participated in price-fixing and trading foreign currency including the brand since at least 2007. they should be fined 2% of their annual turnover. allusion -- malaysian woman arrested in the apparent shooting of kim jong-un's brother. she was arrested at the airport, the terminal where he was attacked. they believe he was poisoned with a needle or terminal -- chemical sting. workers on strike at the world's biggest coppermine have agreed

to talks, but odds are we in to hold them? -- when to hold them? it was down on thursday. they agreed to meet with labor officials, but the time did not work for the company. it has driven up copper prices, and it could be friday before the talks happen. twice 600 journalists and analysts working in more than 120 countries. i'm rishaad salamat. you are watching bloomberg. yousef: u.s. agencies and the fbi are investigating contact between president trump's team and russia. he has slammed back on twitter and set is nonsense. ramy inocencio has the details from new york. ramy: russian contact with donald trump's inner circle did not start with michael flynn with russia's ambassador to the u.s. it goes before that to the 2016 white house race with a senior

russian official. repeated contact with trump campaign aids. that is according to the new york times. the fbi and others are conducting multiple investigations to find out who is talking windows were held, what was discussed, and whether it impacted the presidential election. at least four people are being examined right now. in addition to michael flynn, there is paul manafort, lobbying links to russia and ukraine. there is carter page, former foreign-policy adviser who lived in moscow and advised on roger -- energy deals, and there is roger stone. they are looking for answers in a bipartisan fashion. the senate intelligence committee could call people by the end of this month. they will look for testimony from lynn, metaphors and sally actingthe former attorney who donald trump fired for not defending his immigrant that -- band.

but she said michael flynn could be mailed by russia -- blackmailed by russia. shery: president trump said he would like to see israel hold back on settlements a little bit after his white house meeting with prime minister benjamin netanyahu. he has abandoned the two state solution to peace between israelis and palestinians. joining us now is a man from dubai. we are going to talk about what this means with him. take a listen to what we are hearing out of those meetings that took place. president trump: so i am looking at two states and one state, and i like the one that both parties like. i am very happy with the one both parties like. i can live with either one. i thought for a while the two state looked like it might be the easier of the two, but honestly, if bb and the palestinians, if israel and the

palestinians are happy, i am happy with the one they like the best. yousef: let's get more on this story. give us a bit of a sense of how dramatic a shift of these words from president trump are in the scheme of what has been a 70, 80 your timeline. >> the two state solution has been the peace talks since the oslo agreement in 1993. this is more than two decades. so now he comes and says, it does not have to be two states, it could be one if they both like it. on the other hand, because we don't have more details, he could be trying to release some pressure of prime minister netanyahu, who is taking pressure from his right-wing coalition party saying, forget about two states. annex the west bank, maybe this would prolong that and relieve pressure. shery: but trump did indicate

israel would not get everything that it wanted. what is he talking about? alaa: exactly. whatid they would not get is wanted. maybe they should go easy on the settlements. that is far more less than what the palestinians want. he does not have to be two states, but what kind of one state are we talking about? binational state, which does not chime well with what the prime minister said when he said palestinians must recognize israel as a jewish state. are we talking about where they don't have voting rights, which will make the palestinians not happy? he did not have an exact division. it is all very big right now. yousef: thank you for joining us. let's get you a preview of what is coming up. we will talk about the egyptian central bank.

they hold rates into -- in spite of surging inflation. the finance minister said it will be in progress. we will get you the full story. ♪

♪ are watching bloomberg. i am yousef gamal el-din in dubai. in hong am shery ahn kong. president trump has tapped a number of goldman sachs employees to join his administration from his chief strategist steve bannon to his treasury secretary. but talking with caroline hyde, goldman's president david solomon says for executives are more likely to sean the firm then show favoritism. -- shun the firm than show favoritism. >> we operate in the environment -- haveto give operate

to operate in. we try to advantage any scenario. when there was massive regulatory change after the financial crisis, a lot of it came with the purpose of giving assistance, and that is positive. because it happened quickly, there are a number of rules and things that have happened that have an impact on the functioning of the banking system and the market and economy. in hindsight eight or nine years later, you say, that is not optimal. are there things we can do to improve lending especially in midsize businesses with growth? is there stuff we can do with market liquidity? we can visit some of these things. we can optimize the solution for everyone, without affecting safety. caroline: so it was too much risk-taking? david: i think a thoughtful discussion -- trying to optimize markets' access to liquidity,

lending for small and midsize businesses, taking a look at rules where in hindsight, you want to operate differently. we are focused on those things, but not at the expense of [indiscernible] caroline: let's talk about the goldman guys and girls in close proximity to the administration. --saw steven mnuchin and powell -- there are a number of goldman executives surrounding the administration. is this a positive thing long-term for goldman sachs, or concerns? avid: we have always had culture of public service at goldman sachs. i'm proud that people have the opportunity to work at goldman sachs, they do well, then they give back to society and the community.

the riverview that when people leave goldman sachs and go to washington, there is connectivity. it is almost the opposite. they have their own reputation, and they want to prove they are doing the right thing for the country that they want to serve, and they are almost more careful the other way. do i think it is a good thing? the culture of public service, people want to give back, it is good. it is a good thing for society, great when there are confident people like gary cohn serving in washington. yousef: that was the copresident david solomon speaking to caroline hyde. let's stay with the broader topic. the outgoing governor has said the core of the dodd-frank banking reforms will survive the trump administration's efforts to roll them back. >> i think it is far too early to tell what the outcome of these administration talks will be.

i can say my hope and expectations are that the core reforms we put in place at the largest institutions, the increased stress testing, liquidity requirements, and the requirements on the resolution regime will last durability. shery: we have big interviews coming up on bloomberg television later today. chair will join our "bloomberg surveillance team exclusively at 7:30 p.m. hong 11:30 in new york. we will speak to atlanta fed president dennis lockhart. we chat with him at 11:30 hong kong time, 3:30 p.m. london, 10:30 a.m. in new york. yousef: it is decision day in egypt, getting ready to release the latest recall. one of the highest inflation rates, economists are betting

they will hold the benchmark. for more analysis, we go straight to our guest. let me show you this chart on the bloomberg. we have laid it out for you. you have the line in yellow, where the central bank has its interest rate. the line in white, that is interesting. that is the egyptian pound against the u.s. dollar. look at is strengthening. it is 10% in five trading sessions. the light blue, that is the key inflation. let's talk about all of this senior bank.al what do you expect it to do? >> we are expecting the central bank to hold any change, because it is too early to make a move on that front. they have preempted that hike where we are seeing inflation, where they raise interest rates. my view is it will take time to boost the economy, given that almost 30% that we have seen in

the last reading of inflation was strictly from food and beverage. i do not believe it will be affected even if the central bank takes anymore rates at the moment. yousef: you have made bold calls in the past when it comes to the exchange rate. we have seen it remarkable, one of the best performing currencies. where is this going to go? is it on a solid trajectory for even further strengthening? is there enough fundamental in the year egyptian economy to sustain this? hany: we have seen good improvement. the market was skeptical about how fast this was going to improve, but egypt has attracted over $24 billion. if you take out the multilateral funding, and you focus on the domestic improvements, first from the migration of foreign markets' dollars into the

banking system or the flow coming into fixed income and treasuries, we have seen almost of the banking system get $12.5 billion in those three months, which is more than enough to clear the backlog. whether we are talking about inputs, which banks had done already, and we have also seen central bank announced that all of the investment and backlog that was in the market and equities has also been cleared. these are very strong fines that the pent-up demand, which were at an all-time high, in 2016, is easing off. at the same point, it is at an the gdp.low, clearing it would allow it to appreciate further in 2017. shery: those are very positive sign coming out of egypt right now. we talk about financial markets, we are talking about the central bank. how about the consumer on the

ground? how much can they whether the very high prices? hany: that is the key question. 2017 is not the year for consumers. the consumer has been suffering bte,-- put through by the the valuation. we have seen more of those in the future. investment recoveries we are waiting for are not going to happen early 2017. maybe the second half of 2017. by the time investment picks up, employment except from -- picks up, that will take time. not before 2018. right now, officials keep justifying a rise in prices on the reform package. they keep saying inflation will slow down when those effects wear off. went and we expect that to happen? hany: not before november,

because this is when we expect the base effect of inflation of year of year inflation to online. you will see the annual inflation figure drop, and the local powers also going to put pressure on reducers and buyers to reduce their prices and then probably bring the general price level down as well. back tolet's bring this the fundamentals. this is an economy that depends on to her is on, revenue from abroad, the suez canal -- how will that progress, and give that important floor with the strengthening of the egyptian pound? tourismam not confident will influence this anytime soon. maybe the last quarter, when we see some proper recovery in tourism.

we are betting on highly is that for those to continue in foreign interest and treasuries, bonds that are normally the gdp, and what has already been capitalizing on that. we see in flow of workers abroad , into the banking sector, which whenkey factor to consider thinking about improvements for currency liquidity. on top of that, we are expecting fti transactions in 2017. now we have a solid investment program that is about to unfold. we have seen the currency take the hard step of evaluations. that is a good year for investors. yousef: what about the cabinet reshuffle in the works? how will that affect the economy? any new legislation that could the foreignen

investor interest even further? hany: it is possible. we have seen two or three reporters joined the new the one whoecially has taken over the ministry of investment. she has done a great job as minister of financial corporations. she has improved to the reputational image of egypt when it comes to the dollars. she is very familiar with what needs to be done with the egyptian reform program, especially in her focus program. i'm expecting good things out of that. shery: thank you so much for talking to us. .he ci capital senior economist the latest on the egyptian economy. a quick check of the latest business flash headlines, bloomberg being tells -- told that these people are advising on the development of the last remaining: operations in australia. they are pursuing a street in

castrol mines in queensland after receiving unsolicited approaches from potential buyers. the assets could fetch as much as $1.5 billion. pincus inrburg discussion to buy tata motors. they could buy a significant holding in taught a's technology technology. the company with outsourced design, research and development services, and machinery. toshiba's shares are filing -- falling after they may not do this. they may start talks with selling a stake in the semi conductor business. alsohis being sold off may be increased. toshiba has plunged ever since billionorted a $6.3

loss in the nuclear power business. the shares have been devoted for the second section of the tokyo stock exchange. to seekking to europe warmer diplomatic relations. why leaders are keen to engage tehran. ♪

yousef: leaders in europe are emerging as strong backers in iran, after donald trump described it as the dumbest deal in history. let's get more. why is europe so keen to engage iran here? reporter: iran is a big market, 18 million people. the e.u., europe has had for a a number ofars

relationships and commercial engagement with iran, so it is not new. the companies have stayed at the height of the sanctions. so for europe, it is interesting at this point, when they have gone through engagement with iran to start on a, with a strong push. it is a very different situation , which, after decades of hostility with iran, the commercial and business potential is not the same. there is more stigma linked with wanting to do business with iran , especially with the republican-led congress. how big of a market, export market is iran for europe? ladane: what i can tell you is imports heavyly machinery and equipment from europe. this is something that is really needed for iran, because after i

,hink it -- decade of sanctions but there is also a real need for access of new technology and equipment that can allow it to modernize its economy. that also plays into the agenda of president rouhani, which has said he will be liberalizing the economy further, moving away from his dependence on oil. how much he can give, how much he can fulfill those promises. yousef: let's talk about the meeting with netanyahu and trump. he has never been a big fan of the nuclear agreement. will that result in any changes of position when it comes to the u.s. and iran? ladane: yesterday when netanyahu met with trump, they both did mention what they always have been saying, that the iranian security deal is not a good deal, but neither went as far as

to say, it needs to be dismantled or actively opposed. stands out from the conversation yesterday is that probably the trump administration is now recognizing the fact that iran has a strong back with the euro. as a way to go about it, it would not be alone by imposing sanctions. yousef: lefty you up to speed with stories before he wind down the program. a bb plosser any for bahrain. developinggdp, financial sector and other support have kept it looking stable. that is a remarkable rally. interesting plays on that front. also, the other thing we are watching is out of kuwait, the country has reported half a million barrels in production. it will expire.

opec is the key function. that is all we have. course, we have other headlines and the market at the top of the hour. ♪

shery: it is 1:00 here in hong kong. here are your top stories. largest pc maker plunging by two thirds to $98 million last quarter. pc makers are struggling as people often for smartphones instead. hp.vo stayed just ahead of sources tell bloomberg that china's security regulator is considering regulating frequencies. we are told that they may restrict secondary issues to once every year. sources say the plans are not yet finalized.