♪ rishaad: japan's trade deficit blowing out to above ¥1 trillion as january exports fall short. onchina calls for new talks the nuclear program after blocking coal exports. rishaad: bluescope jumping on higher forecasts, a share buyback. we will speak live to ceo paul o'malley. fiscal push in singapore, can it offset a gloomy trade outlook?

what,d: right, just gone i am rishaad salamat in hong kong. haidi: i am haidi lun in sydney. we are setting up for a muted start to the trading week. japanese trade members worse exports at least disappointing, dragging down the nikkei. we look ahead to the china open, contract showing a negative open as well. rishaad: indeed, the lack of momentum after a lot of momentum, perhaps this so called reflation trade losing steam. , a fairly muted session on wall street on friday. that wait and see approach on investor minds. 30 minutes away from the start of the session in hong kong. singapore, taipei, kl coming online. here is sophie. sophie: we are anticipating a

subdued trading day in asia. the bright spot taiwan, new zealand, and singapore. straight times marginally higher ahead of that budget update today. by .3%,ei 225 lower falling for a third straight day following trade numbers this morning. the kospi lower despite the rise in samsung shares. focusing on australia, the asx 200 falling .4%. we did get a boost in bluescope steel earnings, the likes of brambles and worleyparsons falling. worleyparsons falling almost fell,after its first half given the pullback around customers in the oil and gas space. elsewhere in the region, the currency space in particular, the korean won, the biggest laggard in asia today.

volatility has been 11% of the other asianore than emerging forex, but still a strong performer against the dollar. we do get ppi out of south korea , quickening in january, driven by higher oil prices, but traders do not see the data to turn the central bank from cutting rates further come although we are not anticipating a move this thursday. we do have the yen holding below 113 after that january export number rose less than forecast. have a tradeo deficit for january given some of the holidays in major trading partners like south korea and china. the last word on the pound, murmurs that brexit negotiations will be drawn out, a boon for sterling bears. the cable has been hitting lower , so there is a possibility that it may move towards 120.

fori: thank you so much that. we will be watching comments for the bank of england this week as well. let's get straight to the trade numbers out of japan, moving markets in tokyo. is there.er what is the broad takeaway? is a lot of focus on the export mix. i would look at imports first, the higher oilnspecte costs. exports, they were worse than expected. they could have been stronger. car exports to the u.s. and europe weaker than expected, and that was a big heart of the picture. still, two months of increases in exports, and that is a good thing for japan when we look at how bad things were last year. absolutely, you know,

the import number was way higher than expected there. does that reflect a change in the behavior of people in the micro economy in japan? is it an indication also perhaps a future price expectations or are price expectations changing? strongerwe hope we see price expectations in japan. it may be we see imported inflation in terms of the oil price and prices rising overseas. somewhat, we do see appetite from jeff a nice industry. we saw better numbers earlier. when it comes to the micro economy. we have not seen changes there. we do need to see further changes which would be an increase in wages to make consumers spend more in japan and push prices up that way. haidi: that magical wage growth that is still lacking. what does this leave us in terms of this pursuit of that 2%

inflation target? still hope to see more fiscal policy from japan, stronger fiscal policy could help demand, and a lot more in terms of reform from mission so of a. abe.hinzo o rishaad: thank you very much indeed for that. brett miller joining us from tokyo. let's look at first word news headlines with rosalind chin. says the yonhap news south korean president has asked the constitutional court to delay her impeachment hearings by a week. she as the court to give them more time to prepare for closing arguments. the court said it would review the request. our quiz and peach that after corruption allegation and months of protests. samsung there jay y. lee was take them back to prosecutors

for a second day of questioning. he was arrested friday on allegations including bribery, embezzlement, and perjury. the white house chief of staff has denied reports that trump campaign aides had repeated contact with russian intelligence agents. appeared onus sunday political shows to describe a report end you are times last week as total baloney. outletsainstream news washingtonting like daily cost of magazines instead of the way it used to be, where you would get a few sources on the record, yeah, some background and may be some anonymous sources, but to accuse an organization of being in constant contact with russian spies is outrageous. military saysu.s. an aircraft carrier strike group has begun routine operations in

the south china sea. the navy did not say how long the carrier and a company ships and aircraft's would stay there. during hison said confirmation hearings that china should be blocked from accessing artificial islands it built in the disputed waterway. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. rishaad: now china has called for new international talks on north korea after banning coal imports over pyongyang's nuclear program. let's get more now. we have seen the sanctions being imposed on the north in the past, but this could actually be different here. >> they are actually stopping the cold this time. rishaad: they were meant to do this before hand. >> there was a loophole that said you can still do this under livelihood exemptions, and so about $1 billion worth of coal

would go, which is significant to north korea, so china basically stopped everything. of north korea's exports, so it is a pretty big blow to them. is china getting increasingly frustrated with north korea? >> well, there are a number of reasons. the north is still doing nuclear missile tests, which are prompting the u.s. and allies to put in a missile defense system in south korea, and china is very concerned about this. it cannot only be used to stop north korean missiles, but also chinese missiles as well and hurt their unlimited capabilities. secondly, there was the murder ,ast week of kim jong-nam someone under the protection of chinese authorities, and he was seen as a potential replacement -un if thatg

scenario were needed. that upset the chinese as well. rishaad: beijing was apparently furious when he had his uncle killed too. what is the likelihood of renewed talks? north korean officials are preparing to go to the u.s. to have these talks. are a lot of obstacles to talks still taking place. north korea is dead set on getting its nuclear deterrent. china wants to slow this thing down. they don't want to collapse the regime, but they don't want to destabilize north korea on their border, so it comes down to trump and whether he will be able to do a deal with them. haidi: what comes next? this is a crucial turning point in terms of that relationship between china and north korea? >> it is fairly significant. whether it leads to them to completely pull the plug, china does not want that either. they don't won a big refugee crisis on their border, but they

do understand the message to pyongyang that it is time to come to the table now. arehe same time, they telling the u.s. that it is time to come to the table. now you have president trump in charge. he sat on the campaign trail that he would sit down and have a hamburger with kim jong-un. china probably sees now is as good a time as any before it starts hurting their own interests more. haidi: all right, thank you so much for that. from thead, we hear cleveland fed president speaking live in singapore this hour. rishaad: plus, bluescope steel seeing second-half earnings jumping 50%, planning a $115 million buyback. we will be joined by the company's chief executive. that is next. ♪

rishaad: i am rishaad salamat in hong kong. haidi: a quick check of your business flash headlines. vodafone's plan to merge its indian unit is expected to be announced within a month. the deal would create india's largest cellular carrier and could lead to vodafone splitting off its indian business into a separate india. it would allow them to consolidate the troubled india unit, a drag on earnings. rebounding to profit in 2016 come up full-year income at $46 million. that compares to a loss of $785 million. the lackluster commodity markets

continue to weigh on units. spacex,lon musk launching its second rocket, sending 2.5 tons of supplies to the international space station. nasa'ss lift off from apollo launchpad was a success. the falcon nine rocket launched without problems and landed without difficulty. rishaad: let's have a look at bluescope steel shares. , australia's biggest dealmaker posting stellar first half results. profit up 79% on stronger demand and higher prices as well. joining us is the chief executive, paul o'malley. so it seems to be going right for you. the thing is, what was behind these gains and are they sustainable? about five years ago, we zeroed in on a strategy to improve our product and to make

sure our steelmaking was internationally cost competitive. we had a massive cost of program with the last couple of years and our geographical focus is all paying off, so yes, it is a structural improvement in our business. the mostis china crucial part of your business? from, it is a small part of our footprint, but the net exports for steel out of china have a significant impact on global steel prices, so from an industry perspective, china is largest dealmaker and biggest consumer of raw materials, so a massive effect on the industry. in relation to bluescope business, we can perform well in china and outside of china, but ,learly if there is less demand china has a big effect on that.

rishaad: right, with that in mind, what about the growth potential elsewhere? what is your business in your view telling us about where the global economy is and where the united states is too? we have produced some fantastic results in the united states through 31%. we have a cost competitive, energy efficient, 2 million ton of your furnace running flat out. if you can produce a good quality product at a low cost, you can make money. demand going sideways. how growth, our organic growth come is fundamentally in asia. if you take a snapshot of our indian business in joint venture ata, it has doubled the

bottom line. paying off.ent is organic growth is best in asia, and if you have a good footprint, product, and market recognition, you can be successful. haidi: you frequently highlighted these growth opportunities as asia continues to grow and develop. how do you anticipate bluescope leveraging these opportunities, and where in particular? india, butoke about where do you see the opportunities, particularly if you have to lay the groundwork to prepare for the chinese demand story? sure, there are over 600 million people in southeast asia. countries,ultiple and even within countries, there are different markets. inside indonesia, the smart or market is different than the job of market, so we have a good footprint across the whole of

southeast asia, australia's manufacturing investor in asia. we have good people, a combination of local talent and very few ex-pats, but we are also transferring the technology and the product development that we started with in austria into asia, but modified it for asian use. you put that together and persevere and apply yourself, take a long-term view, you can create a market opportunity, and that what bluescope has been doing for many years, and it is demonstrating that type of focus can pay off. earlier, the china story, how long that has to run. if there is a downturn, particularly when it comes to the iron ore round a we have seen and the pickup and steel prices, if that starts to lopez caseat is your in a real? -- low base case scenario? high importad

costs, so there has been a lag in steel prices responding. the bluescope business i think is much less sensitive to date than it ever has been two changes in the spread between -- and raw material prices. we are focused on better value add in geographically diverse, but if china continues, i think it will, if china continues to focus on improving its environmental performance, it will close dirty production, so the longer term trend is a positive one for the global steel industry. be cyclicallways swings and roundabouts in one year to the next. our strategy is to be low-cost on the cost curve so we make money at the bottom of the cycle and more money at the top of the cycle, and that feels like this space the bluescope is currently in. rishaad: stick around with us,

if you would. that is called o'malley there. more coming from him right after this very short break. ♪

rishaad: you are back with "bloomberg markets: asia". i am rishaad salamat in hong kong. haidi: i am haidi lun in sydney. the yuan reference rate from the .4%. the lowest by we are looking at onshore pairing trading in hong kong, flat at the moment. onshore yuan moving as well. there is that maximum of 2% on either side. that is the most in terms of the weakening move since january nine. we will be watching that.

are we expecting any of these comments from president trump about whether he is going to go ahead and declare china a currency manipulator? rishaad: yeah, we take you now to singapore, live pictures coming through. that is the federal reserve bank of cleveland president. she is talking as part of the global interdependence center central banking series. her not mentioning anything about interest rate policy, and is not comment, saying the economy and the united states is on a sound footing. there have been many snipes made by the new president donald concerning the independence of the federal reserve. she said fed independence, restricting fed independence would be a loss for the nation, but the top story is she is saying the u.s. economy is on a sound footing. we get back tot, our guest, bluescope ceo paul

o'malley in sydney. thank you for standing by. i want to talk about this trump infrastructure spend week are expecting, massive fiscal spending. do you see that impact in your business, particularly in ohio? think if there is a bigger demand for steel and the e united states, they are good on anti-dumping. so if there is a restriction and a big spend on infrastructure, then one would assume prices might start to rise in the u.s. come and clearly that would be beneficial for our ohio-based mill. haidi: you spoke about organic growth, but what is the current approach for deploying that balance sheet for m&a? >> surprisingly, we spent $1 billion in october 2015 buying a

50% share of our northstar mini-mill. we have done some small m&a, but in the short-term, our focus is on organic growth. the board announced capital management today with 30% or 40% coming back with dividend buybacks, but we see tremendous opportunity within our portfolio to grow organically, perhaps some small investments close to core operations, but no big m&a on the horizon at the moment. thank you for joining us. paul o'malley there. --whether theyre were interested in buying parts of it. up next, the terms of a $5 to mongolia, we

hear exclusively from the imf mission chief there on how that bailout is going. also, the start of the session in hong kong. pre-market on the way up. ♪

9:29 a.m. in hong kong and singapore, counting down to the start of the trading day for china markets. we are expecting hong kong and shenzhen to come on, expecting slight gains. that is part of what is going on for the rest of the asia-wide trend. looking at trade numbers, massive trade deficit coming through from japan. looking at other companies making headlines so far, the earnings the season still continues. i am haidi lun. it is just past 12:29 p.m. in the afternoon in sydney, markets getting dragged down by a few

misses when it comes to earnings, pulling down industrials. in terms of the china open, that fixed lower by .4%, the biggest move down since early january, so that will be playing into the shanghai and hong kong markets, which are just set to open in the next couple of seconds. now we go over to sophie for the opening. sophie: taking a look at how markets are shaping up a nation today, as you noted, read across the board, shanghai coming online .1% lower. taking a look at some of the movers on the index, the likes , others upin the red over 10%. seng,n the hang marginally higher today. china gains leading. one retailer falling upper 1%.

ofe a closer look at some the other equity movers in focus today. 10%,etailer dropping over the most since may 2015. it did post an earnings beat for 2016. it is china's largest hypermarket operator. last week in a filing to the hong kong stock exchange, son art said it is searching for potential online partners. it has experienced slower sales growth as more chinese shop online. you were talking to the ceo here it he did say there is no m&a on the horizon, stock of two point 4%. softbank rising on reports that it is looking at future talks, a merger between sprint and t-mobile. we had the cleveland fed president saying the u.s.

economy is on a sound footing. let's check the currencies space given the conversation around that. we do have the won falling for a second day, rising bets on that that hiking rates this year. asiann is the most liquid emerging currency, the best proxy when it comes to determining how the region will react to trumps trade policies. one analyst saying the won will likely face headwinds, but limited declines. it has proven resilient in the face of that political scandal around president park. rishaad: thank you very much indeed for that. that is sophie kamaruddin to let's get to first word news headlines with rosalind chin. rosalind: japan's trade data disappointed, growing just 1.3% from a year earlier, against forecasts of 5% next boards surged to 8.5 percent last

month, leaving a trade deficit of ¥1 trillion. the yen has weakened slightly after monday's data released. malaysian officials are seeking four north koreans who fled the -un'sry after kim jong half brother was murdered. kim jong-nam was killed while boarding a flight. iraq says it has launched an operation to take the western half of mosul from islamic state. the prime minister announced the campaign on state television. iraqis-led forces took control of eastern mosul, but the west remains under is control. the west has voiced concern for civilians trapped in iraq second-biggest city. angela merkel will host christine lagarde, seeking

assurances the imf will contribute to the greece bailout. area finance ministers will meet ofmonday, where a review greek compliance with bailout terms could determine the ims further involvement. says theoufakis bailout will only delay the country's problems. >> the greek state went bankrupt, and europe decided in its infinite wisdom to pretend that did not happen. how do you do that? ,xtending liquidity to it pretending it is a liquidity problem when it is an insolvency problem. rosalind: global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. rishaad: now the head of the cleveland fed says she believes the u.s. economy is on "sound" footing. making those comments in singapore.

let's get more from kathleen hays. been said so far? i don't think she said anything on the interest rates just yet, but what should we be looking for? duringhe says anything the question and answer about the possibly of a march rate to-three,e instead of four, or something like that. so far in the speech in singapore, she is talking about where people can reasonably expect from central-bank policy. ,he defended fed independence central bank independence, as important to giving the best outcome for monetary policy, not only the u.s., but around the world. she warned that trying too hard to get the economy just right could cause financial instability. overall, how she avoided speaking about the u.s. economy, word is that she did have this to say on a positive note. >> a decade has passed since the

onset of the global financial crisis and ensuing great recession, and the u.s. economy has emerged from those dark days and now on sound footing. a set ofke extraordinary actions outside the realm of normal monetary policy to get us back to this point. isin addition, the guys she one of the more hawkish fed reserve bank presidents, it will be interesting to see if she gets questions about last week's cpi, the number twice the forecast. does that have her inflation red flag up or not? some people are saying the fomc minutes this wednesday are now outdated because that cpi jump may be changed the landscape and made the fed tilt towards concern about inflation. what are we looking for in the fed minutes? we will have to see what she says on these points.

what about the cohesion on the federal reserve when we read through those minutes? does it seem like they generally agree? we will hike rates, but we don't know how fast or how many what about donald trump's policy, even trade on the u.s. economy? how important is that in the fed's outlook and trying to figure out what to do on rates. arest 5 trillion bonds held, when will they sell those off? we have seven fed speakers this week we will be listening to see what she says next, a cheekily when she gets to the q&a. for fed speak,k but in asia, the trading week has barely started and already we have disappointing indicators on japanese exports. how much of a worry is this larger than expected trade deficit. >> the boj and prime minister abe hoping they can produce a larger trade surplus. what we saw today, unadjusted

trade surplus of 155 billion yen. 350 ¥6 billionom in december. exports only rose 1.3% versus 5% forecast. up 3.1%, downwere from 12.4% in december. north american exports down 6.3 percent. western europe exports from japan down 5%. therere wondering if might be something going on here. they don't expect the trade surplus to get back to the inent highs, and of course japan imports rising for the first time since 2014. it i guess is a positive sign up with the consumer is doing, but raising questions about whether trade surpluses heading. rishaad: nice one. thank you so much. kathleen hays from new york. you can watch the rest of the speech as it happens in singapore as part of the global interdependence center

central-bank series. users just have to type live go to get that. mongolia has reached an agreement with the imf for a three-year program that includes a $440 million loan package, weaker $5.5 billion bailout to help mongolia with its upcoming debt repayments. mongolia, speaking exclusively. >> yes, it will be difficult for a couple of years, but our forecast for mongolia are very positive. we see growth growing to 8% by 2019, and remaining quite high, 5%, 6% after that on account of mining projects coming into out phased the out beginning after that. -- output phase beginning after that. underlying economy improved,

macroeconomic variables. all of this will allow the economy to get much stronger. on theare focusing fiscal policy, monetary policy, and the banking system? >> what we are suggesting to government is something many countries have done, which is launching an asset quality review. some problems may be uncovered in that process, then the banks would come up with a plan to strengthen themselves, and the government would be there to play offense of telling -- late a facilitating role. -- play a facilitating role. what does the imf think that mongolia can do to end this boom-bus bailout cycle? mongolia towant have another program in a few years. what the government has emphasized that they are interested in a stable solution to mongolia's problems. mongolia is heavily exposed to

two shocks, so this is a tall order. how can growth the stable, difficult challenge for anybody. that is why the government has emphasized many of these institutional reforms in order to make sure the fiscal policy stay strong. now what the government has done is that they have passed a law that makes it much more independent and commercially focused. thissaid they are ending quasi-fiscal activity at the bank of mongolia. the budget deficit itself is under control, and a whole after of measures are being introduced to ensure the budget is implemented in a disciplined way at all levels, level, ministry , so atparliament level the end, we get discipline and focus fiscal implementation so the economy can grow and be stable. that is the aim here, and i am hopeful that will happen with all these commitments the government has made to its people. right, well, china

stabilization giving commodity markets a bit of sugar. we will look at some of the sweet opportunities with greg smith. ♪

rishaad: you are back with "bloomberg markets: asia". i am rishaad salamat in hong kong. haidi: i am haidi lun in sydney. you are watching "bloomberg markets: asia". the business flash headlines. softbank shares opened higher in tokyo after word is reported is willing to give up control of sprint to cement a potential merger with t-mobile. last week, softbank founder and ceo masayoshi son told analysts he is open to all possibilities for the u.s. unit here it investors have been betting that the trump's less restrictive merger and barb may open the door to a deal. go batmanow the lake

movie led the u.s. parks office for the second weekend in a row, beating new releases including the great wall. the family-friendly animation from warner bros. raked in $34 million in north america. universal pictures taking third place there, edging slightly above estimates by earning over $18 million. has been toldrg that indian oil is reconsidering plans to invest $1 billion in the country's east after a provincial government threatened to withdraw tax breaks. the state government told the company's top refiner that it was no longer keen to deferred tax on petroleum products. such as commodities copper and iron ore have rallied on president trump's infrastructure plans, and signs that china's economy is on a firm footing. at the bloomberg commodities index, up 19% since last february. the question is, are we out of the woods?

our next guest certainly believe so. he is greg smith. he has been trading commodities for three decades, but it has flown by, hasn't it? what is your view on this? having me.u for yes, we are out of the woods. we have seen the lows in late 2015 early 2016. if anything now, it is an seriouslyy to start looking at getting into commodities. rishaad: last time we had you on the program, it was september of 2015. you were going on about the breakfast trade. i guess basic materials were in the doldrums at that point. you are looking at, well, i think it was sugar, which has done fantastically, up 50% here it then you had oil, which is slightly down on that basis. i can't remember the third one.

it will come to me. is that over with now and you have switched out of that? >> sugar is still a good trade. rishaad: it's up nearly 50%? >> is because the inventories are not what they used to be. rishaad: the other was coffee, up 9%, 10%. >> that is the trade between vietnam and brazil. at the moment, there is plenty of coffee in vietnam. brazil has yet to start the harvest, so if anything, it is a seasonal trade, but sugar even though it is up 50%, it is because you are buying a premium for that. with regard to oil, i notice coming in here that the tightest trading range in 13 years. up, so at some point it breaks on the upside or downside. if viewers are looking for a maybe buy a point and see

which way it breaks. when it does come it will be a decent one. haidi: the other driver of this rally for a number of commodities, copper metals, cotton, and glass, the speculative chinese investor. to beave a propensity flighty. the government has a propensity for shutting down these asset bubbles, overheated markets, so how sustainable is that contributor to the recovery we are seeing? chinat you are seeing in is a diversification effect. yes, the money is flowing, but they are going into commodities as an alternative way of getting diversification. thegovernment has tightened margins, but this is going to continue, and you are also starting to see the west, this institutional money, moving back into commodities. it's the first time i've seen and six years. again, it is because not necessarily the trump trade,

inflation, infrastructure, but diversification and concern about so many trigger points that can create chaos, i think, so it is good to be diversified. haidi: gold is another interesting one that has had a funny old time of it since the election. it has not reacted in the way we expect it because the markets have not reacted in the way we expected. what do you see for the rest of the year? is the volatility with the european political situation, uncertainty of whether the trump reflation trade will come to fruition, is that creating opportunities for gold prices to go higher? >> i think the gold bugs will win the day by the end of the year. the price will be harder than what it is now for all the reasons you just brought up you do also had the uncertainty in europe with possible right-wing leaning folks.

metals, not just gold, platinum is also a goodwin. platinum is probably a better trade because it is more expensive now and it -- cheaper than gold. rishaad: it has always been more expensive, and palladium, but are these still the moves? storyday, we had a great about how fine ones have gone up to levels we have not seen in a long time as people are getting jittery about this equity rally. >> have a look at the chart. that has had a decent run since trump got in. there is not as much platinum as there is gold, and if anything, there is probably more of a precious metal because we do not use it as much as we use gold. silver is another one that tends to move -- , 95% has beenr destroyed. >> that's right. two or 321es, it is

when you get those rallies. precious metals are generally a good trade this year for all the reasons we have been talking about. rishaad: agricultural then, surely the tide will lift up all of these commodities, so what do avoid? >> there are plenty of grains around. you get tariffs put on by the u.s. and there is this , agricultural will be the first hit. there is plenty of inventory. it is really the precious metals, sugar with a good fundamentals, and the gold, but not the agriculture. rishaad: great. great to see you. budgetup, the singapore can help lift the shadow hanging over that economy. we will have a look at the outlook. that is on the way. this is bloomberg. ♪

now, singapore unveils its 2017 budget this afternoon as it battles with a gloomy trade outlook. let's get more from haslinda amin. what kind of booze could this budget if a lackluster economy there? know what, it will be a telling year ahead for singapore, but the budget is unlikely to provide short-term fixes. package is expected because china is showing some signs of recovery. no urgent need to prop up growth it what you can expect is a budget that is targeted to longer-term growth, the next phase of growth for the next 10 years. i want to show you this pie chart. that is the budget allocation last year, health and education focus areas, and it will continue to be so. singapore has an aging

population and the need to upgrade the skills of workers given an economy undergoing a transformation, so expect the budget to account for skills development, health for smes to tap digital, easing regulation seesusinesses as singapore innovative industries, the same areas highlighted by the committee on the future economy set up a year ago. the goal really is for singapore to grow 2% to 3% a year in the longer term. these strategies will hopefully work at achieving that goal. mentioned an easier time for businesses, what about taxes and corporate tax rates? are we expecting a move on those? well, corporate taxes have fallen over the year. back in the 1990's, it was in excess of 30%. take a look at this bar chart, rates on a downward spiral, now a competitive 17%, but a

different story for income taxed. it is suggested we need a progressive system, the higher income you earn, the higher tax you pay. asre is room to do this singapore at the highest rate is 22% versus 45% were you are. our rate is among the lowest in the world, but it is unclear whether the government is ready to adopt such a policy. it still requires some mulling over before the government can make a decision on that. rishaad: thank you a lot for that. joining us from singapore, i'll southeast asia correspondent to have a look at what we have coming up, loads more on the way, including a full market roundup on the day dominated at the moment by gestures really. it is all about this reflation trade and fears that it is ,ssentially coming to an end the trump bump turning into the

trump dump. next, china cutting off north korean call. we asked jonathan miller for his take on what this means. this is bloomberg. ♪

♪ haidi: japan's january exports well below estimates, sending the trade deficit soaring above ¥1 trillion. a sound footing, the cleveland fed president speaks, expressing confidence in the u.s. economy. for talks oncalls north korea's nuclear program after blocking coal exports. and, bluescope ceo telling us he is seeing a positive long-term trend for steel, earnings jumping 80% there. it is almost 10:00 a.m.

in hong kong, 1:00 p.m. in about 9:00 p.m. in new york. rishaad: i am rishaad salamat. this is "bloomberg markets: asia." right, taking a look at what is going on out there at the moment. we have more yen strength. you could argue it is dollar weakness, but it is yen strength, gaining against the dollar more so than other currencies as well. on top of that, trade numbers out of japan, showing that trade jefferson much worse than had been anticipated. there are some rays of light because it is now down to imports going so much, indicating perhaps japanese people spending again and buying things. haidi: that would be nice. the thing that has been lagging, and that has been keeping the boj away from

that 2% inflation target, but we are seeing a little bit of flocking to the safe havens like more detailsting on infrastructure policy, economics and tax policy, from the u.s. president this week, but in terms of what we are looking at in the asian session, it is nice to see green coming through from the asian markets. sophie is that the board to break it down. china markets doing their own thing, but it down session across the rest of the region. right. that's the losses earlier, shanghai reversing gains, up point 4%, so regional declines of softening somewhat there. taking a look at the movers in shanghai, the likes of pacific heavy up over 10% today. look at the hans saying, up .6%, china mengniu dairy up 3.3%. below on the

consensus target price. doubled, downou 3.5% the past week. nikkei 225on, the and focus given japanese exports for genuine came in below estimates. the nikkei 225 down about .3% ,ith the likes of mitsui mining falling over 2%. health care and pharma also falling 2%. however, the likes of bridge gaining after announcing its biggest stock buyback since 2000. this after its operating profit fell for the first time in seven years on the strength we have been seeing in the yen. bridgestone does not see much change to its profit outlook for this year due to currencies and

raw material prices. softbank up about 3% there, this on reports that in may be looking to toss around a merger with sprint and t-mobile. i want to get a quick highlight art, falling by 12%. this after it posted an earnings beat for 2016, profit up from 5%. it is china's largest hypermarket operator. it did say it is an early talks with potential online partners. looking at the currencies base come i want to show you the philippine peso. it declined to the lowest level in 10 years against the dollar, even though there is not much in the way of economic events to drive those moves, he did reach the psychological 50 level on friday. political developments have added to some of that downward pressure, but those are probably not significant because we are

also seeing downward moves on the likes of the rupiah and won on political factors. haidi: currency and focus today at the start of a brand-new trading week. selfie, thank you for that. let's go to first word news in singapore. yonhap news says the south korean president has asked the constitutional court to delay her final impeachment hearing by a week. her lawyers asked the court to give them more time to prepare for the closing argument. the court said it would review the request. park was impeached by parliament in december after corruption allegations and months of protests. investigation has widened. jay y. lee was taken back to the prosecutor's office on sunday for a second day of questioning. onwas arrested friday allegations, including bribery, investment, and perjury. staffite house chief of has denied reports that trump

campaign aides had repeated contact with russian intelligence agents. previous appeared on the sunday political shows in the u.s. to describe a report in the new york times last week as total baloney and containing some treasonous types of accusations. >> mainstream news outlets that are acting like washington daily gossip magazines instead of the way it used to be, where you would get a few sources on the record, yeah, you need some background and yes, some anonymous sources, but to accuse inorganization of being constant contact with russian spies is outrageous. military saysu.s. an aircraft carrier strike group has begun what it calls routine operations in the south china sea. the navy did not say how long the carrier and accompanying ships and aircraft's would stay there. tillersonof state rex

said during confirmation hearings that china should be blocked from accessing artificial islands it built in the disputed waterway. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. rishaad: well, the head of the cleveland fed says she believes the u.s. economy is on an "sound footing." making those comments during a speech in singapore. let's get more from kathleen hays. last, she hasd been caring on. give us some of the highlights. thank goodness for a smart audience that knows what kinds of questions to ask. she gave an interesting speech talking about monetary policy, how it is important to protect central bank independence. thell want to hear what cleveland fed bank president has to say about the economy,

inflation, and in fact, for starters, even in her prepared remarks, she was positive on the u.s. economy. let's listen. the decade has passed since onset of the global financial crisis and ensuing great recession. has emergednomy from those dark days and now is on sound footing. set oftake a extraordinary actions outside the realm of normal monetary policy to get us back to this point. >> an answer to a question she was asked about exchange rates, inflation, she said she does see an inflation close to target and employment close to target, moving in the right direction, not behind the curve on rates. in other words, they are not moving so slow that we have to worry about a big acceleration and the fed having to move rapidly and a way that could destabilize the u.s. economy. she is comfortable with rates going up over time.

is in the context of course of a u.s. economy where job twice latest cpi as much on a monthly basis as was forecast, so as much as the cpi can lead the fed's key pce, wen rates, the would expect bpce to move towards target. fed officials expected to get there in the next week or so when we get the latest report. the fomc minutes because of this jump in inflation that raised red flags for some people, maybe not quite as dramatic as they might have been, but people will still watch them closely. the 16f all, within pages, you see cohesion in the discussion? are the tubing size unified? unified?des that might be asking for too much, but would be helpful.

how is donald trump affecting the economy? he's talking about trade, taxes, and spending. the balance sheet, $5 trillion worth of bonds comes so we will see a debate over how soon they should selloff some bonds. she is just the first of seven fed speakers this week, and this is in a holiday-shortened week in the united states, so are a lot of fed comments to digest over the days ahead. haidi: let's hope we get some answers out of those questions you posed to just now. and terms of the asian data, disappointing start with japanese export numbers missing expectations. how much of a concern is this? >> if we assume the forces that held exports down in january are just temporary and will pass, or maybe there is something more going on here, because the japan trade surplus at ¥155 billion versus the ¥356 billion it was in december, and that missed forecasts across the board.

5% was forecasted what happened to exports? let's take a look at what capital economics is looking after china exports of three point 1%, only a fourth of what they did in december when they rose 12%. lunar new year? perhaps. 6.3h america exports down percent are western europe down 5.1%. you have to wonder as capital economics says that the maybe there is a slowdown in some of these countries. in fact, they are saying that japan trade surplus is unlikely to return to its previous highs this year because they do see a renewed slowdown in some of these economies less of that is something i'm sure will be on the boj governor kuroda's mind as he looks at these numbers and keeps his fingers crossed that a weak yen can offset some of these export-dampening forces. rishaad: thanks. you can follow more on this story, have a look at it.

looking at what is going on, followed the action of the trading day dust far. -- day the us far. you can get a full market run their there. commentary coming through as well. so that's what we have. you can find out what is affecting your investments right now. "bloomberg though on markets: asia", a crucial bailout. we are not talking greece. mongolia's multimillion dollar loan and where it will be spent. haidi: up next, could china be changing its student when it comes to its position on north korea? intot inside pyongyang's increasingly shaky relationship with beijing. this is bloomberg. ♪

haidi: i am haidi lun in sydney. rishaad: i am rishaad salamat in hong kong. this is "bloomberg markets: asia." calling for international talks on north korea after banning coal imports from its neighbor, and it is all down to pyongyang's nuclear program. a vital source of income away from kim jong un regime. >> in fact, coal makes up more than 50% of the trade north korea does with china. so, were china to cut off all it would do,t says it will cut off a big chunk of access to hard currency for the regime. a united nations council cutolution $700 million off a year.

coal undereen buying exemptions under what they call a livelihood purpose on items related to the north korean nuclear program. that is how it has been allowed to continue buying coal from north korea, which it says it will not do anymore. haidi: we know that china is a massive consumer of coal, but does this impact them at all? amountd: it is a tiny for china. the north korean coal imports make up less than 10% of its imports. since it is coming to the end of the peak season where there is demand. china has been looking at three inosing caps on production china to help manage the glut. so for china in terms of the supply, it will not make a huge impact, but it has been under

pressure when it comes to north more to make it sanctions effective. the china foreign minister met with rex tillerson last week, the first meeting, and they rexussed north korea, and tillerson urged china to use all available tools to moderate north korea's destabilizing behavior. thank you for that. i want to bring in jonathan miller at the council on foreign relations who joins me and rishaad from tokyo. i'm curious, is this a signifier of a turning point when it comes to the relationship that beijing has with pyongyang? also, some other changes falling into place, you mentioned in your notes the situation and seoul, korea, the leadership crisis there. what would beijing hope to gain at this point? are a couple of

interesting dynamics. beijing has been ratcheting up the pressure on north korea over the past few years. i think there is another interesting element here with the seemingly north korean led assassination of kim jong-nam in malaysia. he and his family had a quasi-protection from china over the past few years, so that is another thing that has angered the chinese. bit ofnese see this as a an opening. i would be cautious to frame this as a breakthrough. this is aificant and significant amount of income for the north koreans, but we have to look at what their motivations are. clearly they are signaling to the trump administration in washington that they are showing this as a sign of good faith that they are doing concrete work on north korea, which is good in one sense, but then we have to look at what they want

for that, whether that is concessions in the south china sea or concessions on trade, so we have to look at it through that larger lens. we have absolutely, and a chinese official come out and say the u.s. policy on north korea is well, "not working here," but they have just instituted effectively one of the u.s. policies, so what gives? >> i think the chinese see a window of opportunity here. thats interesting to note the yuan sanctions came in before the trump administration, necessarilynot introducing a new policy, but their public announcement is something they are throwing towards the trump administration , but what i think they are hoping for and the u.s. a policy they are opposed to are opposed to our on the military-security side, so whether the deployment

trilateralrea, military exercises with south korea and japan. those are the things they will look at throwing more concessions from their side to disarm that security side from the u.s. rishaad: it is a situation where they keep doing the same thing and hoping for a different result, sanctions and u.s. policy, but it is also the same on the other side, but with a bit more success. it has been suggested that with all these ballistic missile assassination taking place in malaysia at well, it all adds up to north korea wanting something, and that is normally, well, in the shape of money quite often. >> well, that has been a cyclical cycle, these provocations, followed by negotiations, or the other way around. it is not as if things have not

been tried with the north before. agreement with the obama administration, but quickly after that, there was a ballistic missile test that killed that agreement. there have been attempts to reach out to north korea win it seems in a situation similar to this, whether humanitarian assistance, but then it is always followed by another provocation, which makes it politically unpalatable to continue that policy, so we seem stuck in that same kind and tractable cycle. haidi: a lot more to discuss stay with us. we will talk what it means for china and what the new u.s. president will take in terms of a stance on north korea. this is bloomberg. ♪

rishaad: i am rishaad salamat in hong kong. haidi: i am haidi lun in sydney. you are watching "bloomberg

markets: asia". jonathan, we have been talking about the propensity for the new u.s. president to be occasionally contrary and for the sake of being contrarian. do you think he will stick with continuity when it comes to policy and the approach on how to deal with pyongyang? as hel he throw that and said he reckons he can sit down with the north korean leader over a hamburger and discuss things? nailthink you have hit the on the head. the policy, if there is one, it has been all over the place. the only hence we seem to have from the presidential level our tweets about not going to happen with regard to the missile test, which clearly did happen. he has promised a strong stance against the north koreans, so we are unclear what he means by this. the idea of direct negotiations

him is sitting down over a york orr in new washington would be very destabilizing to the allies, and that is the element, the north has been wanting for years to have direct negotiations with united states, but without any sort of concessions from the a pledgeide, whether on de-nuclear station or some efforts towards that end. is unnecessaryt to give the north that kind of concession from the american side, and it would be thought very not well in seoul, korea and tokyo. rishaad: jonathan, the thing is that donald trump has said that he is going to be very, very tough on north korea now. enough these sanctions, they have gone down the whole of the diplomatic channel. is a nuclear option the only thing left? yeah, i mean, well, i think

this is where we are kind of going at it. really, the trump administration's approach, ironically, i think it is similar to the obama administration's approach. the obama administration pushed hard on sanctions with china. this is pretty much in line, the trilateral work in looking at missile defense, all of these things are pretty much in line with president trump's predecessor, so i don't see any drastic change in that sense. the military options are still untenable from the u.s. side, so i think we will still see what i call and modeling through approach or a deterrent plus, focusing on the deterrent angle, seeing what can come up via china, but i am skeptical on that even despite this news about the cold band. ban.al haidi: we are seeing growing

tensions when it comes to the south china sea, this u.s. air craft carrier strike group beginning patrols. do you have any idea of what sort of policy that will materialize from the new administration? they have been talking tough, but will that ritter translate into action? >> this is the thing. clearly at some point, the u.s. n't be towards china ca butletely adversarial,' so far the rhetoric has been tough on trade, north korea. president trump and prime minister abe were talking about the closeness of their security a lines, so clearly at some point there will have to be some talks, some give, on these issues come up but we are still unclear whether trump focuses on the trade site or is able to

make some concessions. leave it have to there. great insights. jonathan miller from the council for foreign relations. coming up, bluescope, we hear from the ceo. ♪

[ alarm clock beeping ] weather. ♪ [ laughter ] cartoons. wait for it. [ cat screech ] [ laughter ] ♪ [ screaming ] [ laughter ] make everyday awesome with the power of xfinity x1...

hi grandma! and the fastest internet. [ girl screaming ] [ laughter ] kong, 11:0:29 in hong 29 in seoul, korea. first word headlines. january trade data for japan has disappointed, exports growing 1.3%. that is against forecast of 5%. eight .5% last month, leaving a trade deficit of just over ¥1 trillion, the first deficit in five months. the yen weakened slightly after monday's data released. malaysian officials say they are seeking four north koreans who fled the country the day kim jong-nam was murdered. four other people have been .etained for the killing

south korea's unification ministry said sunday that the man killed was kim jong-nam. launching an operation to take the western half of mosul from islamic state. are announced the campaign on state television. iragi that forces took control of eastern mosul last month, but the westin airport remain under is control. there is concern for hundreds of thousands of civilians trapped in iraq's second-biggest city. german chancellor angela merkel lagarde, christine seeking reassurances that the imf will contribute to the bailout of greece. financers meet on monday, where a bailout could determine the ims further involvement. yanis varoufakis says the bailout will only delay the country's problems. went bankrupttate

and europe decided in its infinite wisdom to pretend it did not happen. how do you pretend that the bankruptcy has not happened? by extending liquidity to it, pretending it is a liquidity problem when it is an insolvency problem to do you keep kicking the can down the road, or as i like to say, the snowball up the hill. eventually the snowball comes back down the hill as an avalanche. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. thanks. this is "bloomberg markets: asia". i am haidi lun in sydney. rishaad: i am rishaad salamat in hong kong. swings between gains and losses this monday morning. the lunchtime break and japan, no trading in the u.s. today. here is sophie kamaruddin with the market action. off with the kick latest out of thailand, gdp numbers from that economy up 3% period.

3%for the fourth quarter by on year. as you noted, swings in the chinese market this morning, the shanghai composite up .6%. we do have some adding over 10% there, a department store operator. it is china's biggest hypermarket operator. taking a closer look at the shanghai composite, breaking it down by segment, banks leading the gains, up over 1%, as well as consumer stocks, a chinese liquor maker there. trading debuts in china. , we seell up this board several rising by the daily limit today. friday on a on

chinese regulator announcing new say there areors 600 companies seeking approval for first timeshare sales. backlog to contend with, and the chairman said capital market still falling short. in december, the most since 1997. it' the offshore yuan strengthening for the first time in three days. the pboc weakened the fix the .ost since january this as the pboc adds cash for a third straight day. rishaad: thanks a lot for that. sophie kamaruddin there. shares in worleyparsons falling heavily, down to its interim net loss. sydney for us.n

this is not a stock we hear too much about, but it is making headlines for all the wrong reasons today. what went wrong? paul: a number of things. a first-half net loss of $2.4 , buton, a narrow loss shareholders not used to seeing this from this engineering firm that provides support to the mining and petroleum industries. as for what happened, falling sales, restructuring costs, but also late paying clients, blowing out the net debt to $900 million. worleyparsons declining to identify these late paying clients, but they are government agencies. this performance was disappointing. there is an action plan to cut costs, that two the chart making for ugly reading. needless to say, no dividend. haidi: worleyparsons getting dumped today, but bluescope

seeing some nice buying in the sydney session. they had nice results. ,aul: $359 million net profit up 79%, underlying profit tripled, second half costs lower, underlying earnings continue to grow, mainly thanks to steal prices coming back strongly on chinese stimulus, but the ceo telling bloomberg that he does think those prices are sustainable. done a the company has lot of restructuring and is planning a share buyback of $150 million, and an interim dividend of four cents. haidi: a row best that a numbers. thank you for that. we did just speak to the bluescope ceo paul o'malley. he explained why the 80% jump in profit is a sustainable result. years ago, we zeroed in on a strategy to improve our value added a product and make sure we were

cost competitive. massive cost out program and our focus on the u.s. and australia is paying off , so yes, it is a structural improvement in our business. rishaad: is china the most crucial part of your business? it is a small part of our footprint, but the net exports for steel out of china have a significant impact on global steel prices, so from an industry perspective, china is the world's largest dealmaker and the biggest consumer of raw materials, so they have a massive effect on the global industry. in relation to bluescope, we can perform well in china and perform well outside of china, but clearly if there is less supply over demand and prices are producing better margins, then the opposite occurs, and china has a big effect on that. right, with that in

mind, what about the growth potential elsewhere? in youryour business view telling us about where the global economy is and where the united states is too? we have produced some fantastic results in the united states through 31%. we have a cost competitive, energy-efficient 2 million ton a year furnace that is running flat out. that says if you can produce a good quality product at a low cost, you can make money. business building where demand is going sideways and we have improved productivity. it says it is good if you have good businesses. our organic growth is fundamentally an eight or come and if you take a snapshot of our indian business in joint it has with tata, doubled its bottom line in 12 months. it has been a big investment, but it is really paying off.

my view is that organic growth is best in asia and if you have good footprint and products and market recognition, you can be successful. haidi: you frequently highlighted these growth opportunities. how do you see the scope leveraging these opportunities? where did you see these opportunities, particularly if you have to lay the groundwork when itbly prepare comes to the chinese demand story? sure, there are over 600 million people in southeast asia. countries,ultiple and even within an countries, there are different markets. inside indonesia, the sum much or market is different from the java market, so we have a good footprint of assets across the largest australia, the manufacturing investor and asia.

we have good people, combination of local talent and very few ex-pats, but we are also transferring the technology and the product development we started with in all straight into asia will but modify it for asian use. you put all that together and persevere, apply yourself, take a long-term view, and you can create a market opportunity, and that is what bluescope has been doing for many years, and it is certainly demonstrating that that type of focus can pay off. chiefd: bluescope executive paul o'malley speaking to us earlier on "bloomberg markets: asia". aming up, against the drag of slowing economy, is singapore fighting an uphill budget battle? we look at what to expect from monday's planned. this is bloomberg. ♪

haidi: i am haidi lun in sydney. inhaad: i am rishaad salamat

hong kong. you are watching "bloomberg markets: asia". plans oil reconsidering to invest $8 billion in the country's east after a provincial government threatened to withdraw tax breaks. state government telling the country's top refiner it was no longer keen to defer vat tax on his petroleum products. softbank shares up and higher in tokyo after reuters reported it is willing to give up control of sprint to cement a potential merger with t-mobile. last week, softbank founder and ceo masayoshi son told analysts he is open to all possibilities when it comes to his u.s. unit. investors have been betting the trump's administration less restrictive merger environment could open the door to a deal. the lake go poke batman movie leading the u.s. box office for a second week in a row, beating new releases,

including matt damon's the great wall. family-friendly animation from one or brothers raked in more than $34 million. universal pictures the great wall taking third place, earning over $18 million. singapore unveils its 2017 budget this afternoon as it battles slowing growth and a gloomy trade outlook. let's head there now and join house a haslinda amin for the details. what kind of booze can the budget give singapore given that it is so portable to external haslinda: trade headwinds? haslinda:you are right. haslinda: singapore is seeing lackluster growth, but not enough to warrant a huge stimulus package. china is already showing some signs of recovery, so the next phase of growth over the next 10 years will be the focus. i want to show you this chart to

get a sense of how previous budgets have been. this looks at last year's budget. here is the allocation, health and education. singapore has an aging population, so they need health care covered. we also have an economy undergoing transformation, so expect the budget to cater to skills development, help smes to go digital, expect regulations to be easy for businesses as the government seeks innovative companies and industries. a economy,s a mature targeting 2% to 3% a year for growth. the budget hopefully addresses strategies needed for that to happen. andaad: how about corporate income taxes? is singapore expected to review these rates? haslinda: unlikely to be a change in corporate tax. we have already seen corporate

tax fall. in the 1990's, it was in excess of 30%. chart,look at this bar rates have been on a downward trend, now 17% to about the same level as hong kong, but when it comes to income tax, maybe there is room. singapore's income taxes among the lowest in the world versus the likes of australia, 45%. it is suggested we should move towards a progressive system, the higher the income, the higher the tax, but for the moment, singapore may not be ready for that to happen yet them a so it may not happen for this years budget. rishaad: thank you very much indeed. haslinda amin there. you can also turn to your bloomberg for more on this liveed, have a look at our t get commentaryo and analysis from expert editors. that is on the bloomberg

terminal. singapore's builders looking for signs of relief in the annual budget later today after five years of curbs on the construction industry. companies are falling behind on payments to suppliers. it looks like the problem could beginning bigger. joining us from singapore to -- talk us of this through some of the signs of trouble. getting really bad at paying their bills to the suppliers. about two years ago come the average time it took a homebuilder to pay their suppliers was 5-6 days, now it is 104 days, and we are only talking about the listed suppliers for which we have data , so the list of builders is not a big universe, but still significant. thes important to see

difference here. we are not talking about the developers. we are talking about the builders, the contractors. the developers are still doing well. they sell the apartments, but hire somebody to build these apartments, and these guys get the money from one building and use that to build the next building, and the next building is not happening because all these property curbs are soloing supply in the future. there is still a good swath of supply that is keeping them going, but that supply is slowly dwindling. this year, we may see a 5% increase and insolvency. that could hit the banks come and something we will be watching closely on the budget. haidi: as you were saying, you anticipate this could be the next pressure point amongst other industries, oil, gas, local singaporean lenders. well, the trouble with

the singapore lenders as they started seeing some pressure because bad loans spiked in 2013 following the stricter curbs and kindin 2013, and they are of stabilized around 700 million singapore dollars, but the vendors kept amending, said the amount of exposure they had to this sector has doubled. it used to be around 70 billion singapore dollars, and it is more like 146 billion singapore dollars now. sector starts to see a lot of trouble, you can see the next pressure point for the banks. i'm sure the budget should address it in some form, although most people don't expect property curbs to be ease the because property prices are still very high in singapore. the average person can still not afford an apartment or condo. a familiar refrain.

we will be looking out if we get surprised stimulus measures or loosening of the property curves in singapore when that budget is announced later monday. next, tracking the deal as the imf chooses to give mongolia a helping hand. we will hear exclusively from the fund mission chief up next. this is bloomberg. ♪

i am rishaad salamat in hong kong. haidi: i am haidi lun in sydney. you are watching "bloomberg markets: asia". the imf has reached a deal with 5.5 billionrt of a dollar bailout deal to help the country with its debt repayments. bloomberg tv mongolia spoke exclusively with the imf mission chief. to be ait is going little difficult for a couple of years, but our forecast for mongolia are positive, growth growing to 8% right 2019 and remaining quite high, 5% or 6% after that on account of large mining projects coming into force, and the output beginning after that. also underlying strengthening

and confidence in the economy, improved macroeconomic variables from all of this will allow the economy to get much stronger. on fiscalare focusing policy, monetary policy, and the banking system? towhat we are suggesting government is something many countries have done, which is launching an asset quality review. some problems may be uncovered, then the banks would come up with a plan to strengthen themselves, and the government would play of facilitating role. at the same time, the bank of mongolia is improving their regulation and supervision to keep on top of these problems and improve their coverage of the banking sector going forward. >> what does the imf think mongolia can do to end this boom-bus bailout cycle? >> we don't want mongolia to have another program in a few years. a stableinterested in solution to mongolia's problems.

and mongolia is heavily exposed to shocks them a so this is a tall order, how can the growth be stable forever, a difficult challenge for anybody. government has emphasized many institutional reforms in order to make sure the fiscal policy stay strong. now what the government has done is they have passed a law that makes it much more independent and commercially focused and said they are ending this quasi- fiscal activity at the bank of mongolia. the budget deficit is under strong control, and a raft of measures are being introduced to ensure the budget is implemented in a disciplined way at all levels, level, ministry level, parliament level, so that at the end we get disciplined and focused fiscal implementations of the economy can grow, and be stable. that is the aim here, and i am hopeful that will happen with all these commitments the government has made to its people. bloomberg tv was

mongolia speaking exclusively to the imf mission chief to mongolia. let's check other stories we are sayingng, india's pti vodafone's plan to merge with idea say there planned to be announced in one month. it could lead to vodafone spinning off its indian business. the deal would allow vodafone's chief executive to seek de-consolidation in vodafone's india unit, which has been a drag on earnings. tic full-year net income came in at $46 million. the commodities firm warned that the outlook for 2017 contains an and thatf uncertainty a lackluster commodities market continues to weigh on the group's units. elon musk a spacex

launching at second rocket in as many months, two point five tons of supplies to the u.s. space station. sunday's lift off from nasa's apollo launchpad was a success. rocket landede without problems after taking the dragon spacecraft out of the atmosphere. look at how take a markets are faring on this first trading day of the week. we do have upside when it comes to greater china stocks, hong kong up .3%, off session highs for shanghai, up .4%. weakest wetting the have seen since january 9. the pboc adding liquidity to the market for a third straight day. the nikkei 225 weaker after disappointing trade data. you have thatlso strength of the yen playing into that with the yen now with a 112

handle. a situation with very little movement in either direction. the kospi unchanged. the taiex pretty much the same. the straight times the only one on the way up on friday, now erasing gains, down .1%. right, ahead on "bloomberg markets: asia", updating the big stories of the day so far. that's right. be joined byll mark mcfarland to talk about what we can expect from this trump reflation trade. this is bloomberg. ♪

♪ >> is almost eliminate :00 in hong kong. we're in the middle of the asian trading day. welcome to "bloomberg markets: asia." ♪ shery: japan's january export disappoints. it helps the trade deficit blowout the yuan ¥1 trillion. butis ready for a rate hike denies the central bank is behind the curve. singapore's builders hoping for budget relief today as years of

property curves lead contractors hurting. we will get the numbers in the afternoon but a bit more subdued trading for a monday. we had the u.s. and presidents' day holiday spirit a little more subdued -- holidays. a little more subdued here. china fourth-quarter gdp and line with estimates. take a look at the markets. continues to rally up to present -- up 2%. a little downside pressure. theustrials weighing on t index. we are around the 101 level. on the back of that we had the japan yen losing about .25%. still continues to gain in shanghai trading. we have had a phenomenal year of 2016. year to date when it comes to

steel, up double-digit is already. the little subdued when it comes to some direction and sovereign debt markets. treasuries on a halt because of holidays. we are seeing the australian two-year graining ground in the basisfollowing about two points. australia's 10 year bond yield finally declining after six straight days of advances. something to keep an eye on. this is a snapshot of what is happening in asia on monday. now onto first word news. malaysia has summoned the north korean ambassador to the foreign ministry and record its envoy to pyongyang as tensions rise. malaysia says the ambassador insinuated that it has something autopsyby conducting an without allowing officials to be present.

they are speaking for north koreans today kim was killed by poison at the airport. the president asked to delay her impeachment hearing by week. they want more time to prepare. the court said it would review the request. in decembereached after corruption allegations and months of protests. investigation has widened to include the country's biggest industrial conglomerate. they were taken back to the office for a second day of questioning. lee was arrested friday on allegations including bribery, embezzlement and perjury. the u.s. military says an aircraft carrier group has begun what it calls routine operations in the south china sea. -- did notd not see say how long they would stay there.

secretary of state rex tillerson said during his confirmation hearing that china should be blocked from accessing it. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. japan's january trade data is disappointed. just 1.3 percent from a year earlier. against forecasts of 5%. let's get a breakdown. should we consider these number -- bitor is it a bidder trendier? james: it is hard to make a judgment now. thants were a lot weaker people were expecting. in cars, exports to north america and the eu. the other side is the chinese new year happened at the end of

january. every year that has an effect in trade data. to get a picture of what is happening with japan's biggest trading partners, china and korea and taiwan are also be trading partners, we will need to see the data from february if we can say whether this is indicative of a seasonal factor or showing a slowdown in demand of from japan's biggest trading partners. on the other side, you saw a big increase in imports to japan. a lot of that was oil and coal. does because of the increase in rises of crude oil after opec made the decision to cut production. also the increasing imports of coal into china which is pushing up prices. on the domestic side you are seeing stronger demand domestically. that is an indication that the economy is not doing too badly and people here are expecting

exports to continue to grow into the future. mixedl it is a bit of a bag but we will have to look at the data next month to get a big -- better picture of what is happening overall. shery: uncertainty is coming with trade between japan and the u.s., although it did have a bromance between trump and prime minister shinzo abe. what should we be looking for when it comes to bilateral trade, especially with the new administration now? way it went, so the before and after trump came in he made a lot about japan's trade deficit and the u.s. trade deficit with china. since the premise or went to the u.s. and held discussions with deputy prime minister also went and held discussions with vice president pence, there has not been any public statements about the tray position with japan. it is expected that vice president pence will come here in april for discussions, which

will include trade, currency and other things. i guess you could say there has been a backing off of criticism of japan's position. tother there are changes what happens with u.s. tax policy, what happens with the border tax, if that is put in place. that will was affect japanese companies but right now it is too early to say how all of these are going to actually affect japanese exports or companies because there's really no clarity from the u.s. on what the economic were trade policy will be these of the japan and the rest of the world. clear on a lot of things come in fact. thank you for joining us. the head of the cleveland fed says she believes the u.s. economy is on sound footing and the central bank is not behind the curve on rates. she made the comments during a

speech in singapore. let's get more with kathleen hays. how do her comments measure up to janet yellen's comments and what are the key takeaways? even of the president of the cleveland fed is considered a hawk, someone who is more concerned about inflation, more inclined to say let's stay ahead of the curve, let's raise rates and do not let inflation get out of control, unlike some fed officials who say we can let overshoot for a while. at the same time she seemed reasonable, she sees rate hikes coming, but not super in a hurry. in that way she does seem to be in step with janet yellen. even so, she is not worried about inflation. which he made it clear if the fed waits too long to wait on rates she could be. here's what she said. >> i would become trouble with an increase in the funds rate at

this point. if the economy keeps going the way it is going and my outlook bills in a gradual increase in the funds rate over time, and i am comfortable with that. -- i do notcern think we are behind the curve yet in terms of that, but if you continuethe laying, -- to delay you eventually come behind. last week b.j. wary consumer price report got investors wonder if the fed is getting more worried because they're are getting more worried about inflation. the index jumped. year-over-year rates accelerated as well. let's look at the bloomberg, one of our charts. you can see that white line, that is the fed target, the pce measure, at 1.7% roughly. the turquoise line is year-over-year core cpi. it is up around 2.2%. the purple line is the cleveland

fed's trimmed mean measure of inflation running at around 2.5%. maybe one reason they might be more concerned than others. the big question is what will we hear from the fed on wednesday? we will get the minutes from the february meeting. some people saying it might be outdated now because the jump we got an inflation, which was accompanied by strong retail sales, happened before the fed met. when we look at the minute we will be looking more for things about the debate over how donald trump might affect the fed's p ace a rate hikes, when will they selloff bonds? that kind of thing. first ofs one of the seven fed officials to speak this week. we will get a lot more views on where the economy is heading. shery: also the focus this week will be on brexit again, in parliament and the bank of england. kathleen: it is getting so

interesting. brexit is always interesting. the upper house of the british parliament is going to be debating theresa may, the prime minister's plan to trigger brexit and leave the european union. , formerir, labor leader u.k. prime minister, is trying to get the brits to resist brexit at any costs. >> the people voted without knowledge of the terms of brexit. clear, iterms become is their right to change their mind. our mission is to persuade them to do so. kathleen: eu officials have made it clear that train has left the station. but maybe who knows, tony blair and these forces could get them to pass amendments which would put more of a brake on the conditions that theresa may could agree with the eu.

we shall see. it will be an interesting week in a u.k. as well. shery: definitely interesting comments. kathleen, thank you. let's check in on the markets because we are seeing a bit of a mixed picture around the asia-pacific. japan finishing in the red but also the asx 200 being pulled down by industrials and energy stocks. let's get the details from sophie. phie: losses in asia softened somewhat going into the lunch break. certainly much softer in terms of the quantum of the drop. we have banks adding some 28 points in the report. tire maker bridgestone is trading at a 15 month high after its biggest stock buyback since 2000. in china we have consumer stocks

leading the charge along with financials. one major highlight today, what is going on with shanghai. alibaba announcing a tie up with the company. it is one of the biggest supermarket in department store chains in the country. last week we had alibaba confirming it was not interesting in retail assets. that tie up, very interesting. we will be looking forward to that. still had this hour, will singapore builders receive any relief in the annual budget? later today we are live to the lion city to check out construction industry curbs are affecting the economy. next, japan's trade deficit blows out for january. is it time to hit the panic button? we'll ask mark mcfarland. this is bloomberg. ♪

♪ welcome back. a quick check of the latest business flash headlines. in tokyoened higher after reuters reported it is willing to give up control of a potential merger with t-mobile. he is open to all possibilities for his u.s. unit. thestors have been betting trump administration's less administration -- it might reopen a deal. that is a 30% increase from a year earlier. the pboc says this form of shallow banking outpaced the 10% growth for normal lending, raising risks for the broader economy and undermining china's

deleveraging efforts. resources rebounded to profit in 2016. net full-year income came in at $46 million. that compares with a loss of $785 million a year earlier. the commodities firm warned the outlook for the year contagion gnomon of uncertainty and -- for the year. commodities just a part of that reflation inflation story. our next guest is watching the price pressures in asia and what that might mean for central banks. joining us now is mark mcfarland, aged chief economist at union bank. thank you so much for coming in. let's talk about those price pressures in asia. south korea's ppi numbers today doubling the pace from a month earlier. that is only part of the story. cpi data in south korea and

taiwan, and ppi did in china as well. prices rising in asia, will banks be forced to hike? mark: we have got to a point where the rate cutting cycle is over. india for example, you can see inflation pressure rising there as well. it is not just about commodity prices. it is also about the fact that interest rates haven't low and policy rates haven't loose and that is leveling out and we will eventually talk about rate hikes. shery: a big part of it is commodities. you just showed us that beautiful chart. commodity price inflation running above zero for the first time in five years. , thatn see the white line would be fuels and primary commodities excluding fuels, both above 0%. if the bulk of these inflation is -- would that mean inflation

would dissipate in asia? mark: what happens generally is whenever commodity prices pick in for example you saw korea's numbers and you have seen it in the chinese numbers and the ppi figures. got does not necessarily through cpi. quite often it hits margins. it is not necessarily the case that you get a quick increase in inflation, and therefore interest rates. shery: those commodities are getting support for the aussie dollar. 72 u.s. dollars. you think it will reach $.80. mark: i think there is a good chance of it. the rba governor talking about interest rate hikes by the end of the year. we have not seen that yet, and that is a real change in direction for the rba. that change in inflationary pressure is moving central banks in the opposite direction to the

one they have an for the last two years. shery: what happened with japan today? exports missing estimates by a lot. forget, those were also seasonally adjusted. sometimes that impact the numbers. i was quite surprised. the gdp figures for q4 were quite strong. the pmi data you have in getting from japan has been quite strong as well. overall i think it is a little surprising you are getting that weakness there. generally speaking, world tree growth is showing good size of picking up. japan is normally a good beneficiary of better trade growth. shery: that means they will recover. this was just the month, the next month we could see a pickup. mark: that is more than likely. shery: the japanese yen seems as though confusing. will there be a u.s. strength the story? goust do not know where to

with analysts because they are so divided. mark: look at the 10 year yield in the u.s. and that is a good indicator of where the japanese yen is going to be. shery: the dollar is rising along with the 10 year yield, then we see the yen falling. mark: the boj says we do not want to change our 10 basis the 10 yearg for yield on the curve. the long-term yield in japan will not change. the dollar-yen goes higher and you end up with a yen near 120. shery: your analysts saying they'll have to change the target of the 10 year yield. mark: yes. there's a big debate about whether they will change that from 10 basis points to 20 basis points. if you look at recent statements they will say inflation will not hit the target for two years. they recently revised numbers. room -- the room for maneuver has gone up. the likelihood you get a weaker

yen as a result. shery: stay with us because we have still not gotten to fed speak. we will join in a group discussion. still ahead come up in flames. why a chinese ban on north korea coal means for relations. as a bloomberg. ♪

♪ china has called for new international talks on north korea a day after banning -- from rosalind chin. source of way a vital income. how will this impact of them? korea's: coal is north biggest export. china is their biggest trade partner.

cool is about 50% or more of export -- coal -- all coal imports from north korea it would substantially impact the north korean ability to get hard currency and income. the yuan security touts a was adopted in late november last year, -- adoptedecurity council this late last year. there are people who were skeptical about it. an exemption in the sanctions, which allows for livelihood provisions which is basically items not related to north korea's nuclear projects. shery: china was huge for the north korean regime to survive.

how big of a deal is this for china? will it impact it at all? rosalind: china has been managing a supply glut with coal. it is not a lot in terms of supply. china is already the biggest consumer and producer of coal. because less than 10% of total coal imports from north korea. it may not make much of an impact in that sense. as it comes towards the end of winter china is looking at reimpose and coal production cuts for its own markets because of the supply glut. that is not a huge impact by not allowing north korea imports into china. shery: some were saying a jakarta could benefit because they also import coal. speaking with north korea, you mentioned the sanctions and their nuclear ambition -- ambition. all tois affect them at

move forward with nuclear goals? rosalind: it is another step otherd in how china and parties are dealing with the north korea nuclear issue. rex tillerson was discussing north korea. tillerson urged china to use all available tools to moderate north korea's destabilizing behavior. china saying let's get back to the table and talk because the sanctions are not working so why not -- china has its own interests at heart. it is also concerned about stability in north korea and what that could mean in terms of bringing u.s. and perhaps troops closer to its own border. last: i covered the nuclear talks in beijing. those talks have been long dead. thank you for joining us with the latest on china's coal import ban from north korea.

we are looking forward to the afternoons business in tokyo. we had a down session in the morning, we will see how they do in the afternoon. this is bloomberg. ♪

♪ it is 11:20 nine in hong kong, 12:29 in tokyo. i'm haidi lun and with the latest first word news. tokyo's economy grew in line with estimates come expanding 3% as 2016 gdp gained three point 2%, slightly less than predicted. the imf belize economic growth in thailand will lag behind its peers, and protectionism in the u.s. allows the outlook for exports. japan's china where trade data has disappointed, exports growing by just 1.3% from a year earlier against forecast of 5%. a .5%, leavingto a trade deficit of just over ¥1

trillion and the first deficit in five months. the yen weakened slightly after monday's data release. will hostkel christine lagarde, seeking reassurances that the imf will contribute to the greek bailout. euro area finance chiefs meet monday, bella terms could determine the ims further involvement in the program. thes varoufakis says bailout will on the delayed the country's problems. wente greek state bankrupt, and europe decided in its infinite wisdom that did not happen, and how do you pretend it does not happen? ,y extending liquidity pretending it is a liquidity problem when it is an insolvency problem. you keep kicking down the can the road. the white house chief of staff has denied reports that trump campaign aides had repeated contacts with russian intelligence agencies. reince priebus appeared on

sunday political shows to describe a report in the new york times as total baloney and containing treasonous accusations. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. >> thank you. the japanese markets are kicking off the afternoon session. they just turned green. the japanese yen continuing to weaken. what ist the details of happening across markets and what is moving the markets right now from sophie kamaruddin. you noted, japanese markets back online, adding to the green in asia, the shanghai composite leading, up .8%, the a department store operator leading gains in shanghai, surging by the 10% daily limit after news that

alibaba is partnering with the operator as part of its efforts to transform brick-and-mortar retail. alibaba plans to upgrade some of the 4700 stores across china, similar to what it has done with other players. rt,ifferent story for sun a .alling as much as 15% it had said it was in early talks with potential online partners as it grapples with slowing growth. t clarifying that alibaba and tencent were not among the interested parties. said, executive director sun art is unlikely to sell rt mart. has been earlier, that clarified as not to be the case. over in sydney, brambles falling

over 9% after it announced a first half profit plunge in net profit of 44%. that also joining worleyparsons when it comes to its earnings disappointment. much. thank you so we will be talking about that stock soon, but first of all, shares in bluescope steel at the highest level since 2010. the australian steelmaker announced a big jump in first-half profits. paul allen joins us with that to break down the numbers. 350 $9.1 million for the half, the key number. , netis $275 million u.s. profit up 79% on year, so strong numbers from bluescope steel. underlying profit tripled to 360 million dollars, and bluescope sees its costs in the second half lower. a large part is thanks to what

has been going on with steel prices, which is also think to what has been going on with chinese stimulus, so the key question for bluescope ceo paul whether this fantastic result was sustainable. here is what he had to say. years ago, we zeroed in on a strategy to improve our value-added product and make sure our steel mating making was cost competitive. our geographic focus on the u.s., asia, and austria is paying off, so yes, it is a structural improvement in our business. news fort's all great investors. bluescope shares one of the best performers on the asx today, up 3.5% at the moment, also a share buyback of 150 main dollars and a four cent interest dividend. shery: a different story for now down 17%,

falling as much as 22% today, taking a beating up to the engineering contractor posted , sofirst ever interim loss what happened here? provide services to them mining and energy industry. the first-half net loss of $2.4 million australian does not sound too bad, but it is the first ever net loss or worleyparsons. it reverses a $23 million profit from a year earlier. why? , falling sales, restructuring costs, but late evening -- late paying clients, worleyparsons not designating, but saw deathblow out to $900 million. the result was disappointing, but there are action clans to cut cost. shares falling

steeply. needless to say, no interim dividend. level in moreest than three months. paul allen in sydney, thank you for the latest results out of australia. just to highlight the big-name guests coming up on daybreak australia tomorrow, haidi lun will be joined by the australian prime minister malcolm turnbull. that interview from 9:15 a.m. , 5:15 monday if you are in new york. don't miss that. will bee's builders looking for signs of relief in the annual budget later today after almost five years of curbs on the construction industry. companies are falling behind on payments to suppliers, and it looks like the problem could get bigger. joining us from singapore to is our bloomberg gadfly columnist. it take us through some of the signs of trouble in singapore. it is physically

conservative. if they're going to do this, there must be a big reason. we don't know if anything will happen to be honest. there had been hopes they would ease property curbs for the past three years. none of it has played out because they are weighing, there is a difficult balance they have to strike a between making property more affordable in the city, and also not letting the things lose track. banks have already been facing higher delinquencies among builders. the number of nonperforming loans from building companies, contractors, not developers, has increased very much in the past three years. they used to be half of what it is now, now 700 million singapore dollars. the trouble is banks are more exposed than ever to this sector, and if there was ever a reason to kind of look at what

are the dangers on not helping the property industry, perhaps now is the time. it is starting to get there. suppliersments to taking much longer, so when it comes to the banks, what real impact are they seeing, feeling on the ground? >> so far, we have only seen nonperforming loans fries about three years ago. they went from 200 million to to 700lion close million last year. the trouble is this has knock on effects. the oil and gas offshore troubles we saw last year cause something like 15,000 jobs to be lost in singapore, therefore numerous hits to the economy and bank balance sheets. you can see the same from builders. even though they are not such big employers, they could still and thes pretty badly

local economy, so this is one of the things we are watching closely in the budget later today. our bloomberg gadfly, thank you for joining us from singapore. of course, you can find his for bloomberg subscribers are searching for a silver lining, we discuss whether japan's disappointing trade data really spells trouble for the economic recovery. this is bloomberg. ♪

shery: welcome back. this is "bloomberg markets: asia". i am shery ahn. a bigger than expected trade deficit out of japan. principal globe are investors agreed with the sentiment. the number should not necessarily have been read

negatively. >> i wouldn't get too excited about anyone months number, exports were good in the fourth quarter. frankly if imports are better than people think, that means somebody is buying, which i think is positive longer-term for japan. i guess i would not make too much out of one month's numbers. they are volatile and can easily be revised. shery: with the collapse of the tpp deal, japan must not give up hope. it should try to coax the u.s. back to the table. so far, japan and the united states have successfully negotiated its bilateral trade along with the tpp negotiations, so what we have reached between japan and the united states in the tpp framework, i think that is the best sort of results so far. so i think where the united

states is very much encouraged to come back to the tpp deal, even for this u.s.-japan bilateral deal. frank lavin says the trick is working out the trump administration's foreign-policy stance. he says while the president's rhetoric remains protectionists, it is worth watching how his cabinet acts. better offyou are watching him in action than taking any specific remark. he is coming out of a campaign which had its own share of emotionally-related or campaign-oriented rhetoric, just making that transition to government means you are going to have an adjustment there, but i would look the actions of a rex tillerson's trip, and deduce from that. shery: that is the word from asia. ,et's continue our conversation and what should we talk about?

maybe the fed? we have the chair of the cleveland fed sort of an line with everything coming out of there, but just the fact we had so much fed speak last week, including janet yellen come a but then dollar bulls a bit confused right now because the greenback did not react to that much, so is the fomc minutes coming out this week, fed cleveland's saying things, worth anything, or is everything about trump as we saw earlier? >> there is so much news that it is difficult to know. rishaad: there is little news at the same time. >> there is so much news it is difficult to come to any conclusions. the on the conclusion you can come to is that the fed will raise interest rates to-three times this year. it will probably wait a little bit longer than march, but other than that, there's not much really that has come out of any great substance. here,rything happening

what are you looking at? is there anything we should keep an eye on? news from noise at the moment. if you move away from the fed, we are also sing with the new administration would do on trade. we all know the rhetoric, but the language seems too soft and and shift to one-china. we have not heard talk about china being a currency manipulator, so what trump will deliver is key. that will impact the whole region. >> what will be driving this foreign policy? steven mnuchin in, rex tillerson, matus, and they all seem to have different views. >> it is probably tillerson. rishaad: it should be him technically. be driving the foreign policy, and is probably the most appropriate person to drive the policy, followed by mattis, but i do think you have to wait. we are only 40 days, 30 days

into the new administration, sorry about the math. i think you do have to wait and see what happens. i think it is quite evident that trump intends to deliver on his promises. >> was it interesting to all of you when you look at what vice president mike pence was saying in europe, and also james mattis, that they did not take any questions. people were pointing to that. you could see that from the russians and the chinese, but the americans not taking questions after their speeches at the munich security conference. >> may actually have not said much about china. it has been very quiet. there has been a lot of talk prior to the elections about protectionism and currency manipulation, but in the time since the inauguration, you have heard very little. it is a wait-and-see program as far as i am concerned. >> we have a major speech by donald trump on february 28. that's when he might reset the

narrative on what is going to do on china. rishaad: another reset? just to go back to geopolitics, we have not had missileon the thaad system. that will probably be resolved in the next couple of weeks, if i'm not mistaken. >> when it comes to the economics, does that affect the korean economy, china, all the parties involved? >> it will affect everyone. if you look at the effect of exchange rates, china is not the one with a weak currency. it is japan and to some extent the korean won and the australian dollar. rishaad: just to comment on north korea, with what has been going on, the assassination, the pressure is on at the moment, isn't it? theseinese also blocking coal exports from north korea. that is upping the ante too. >> it is.

the game is to get china to walk away from north korea, whether through the missile defense system or some other form of political risk premium. i think the general game is too diffuse the situation on the korean peninsula by china effectively backing off, and ultimately that leads to a better outcome for everyone. >> they are sort of the only reasons north korea is still surviving. >> thank you for joining us. coming up, tony blair makes the case for leaving the european up and fightd brexit. our interview with the former british prime minister next. this is bloomberg. ♪

shery: this is "bloomberg markets: asia". i am shery ahn.

tony blair has urged opponents of brexit to "rise up and fight to change the british people's minds about leaving the european union." should not goblic for brexit at any cost. >> the key thing is we retain the ability to trade in an easy way with our main trading partners, and we certainly maintain close links around issues like defense, security, the environment, and so on. the problem though, and this is the problem the prime minister faces, and this is not an easy task. i am at one level deeply sympathetic to her about this am a but the problem is there are no easy ways of maintaining all those links whilst doing what the people on the right, driving this agenda, the far right, want, so if for example, do don't want people from europe to come here or you want big

restrictions on them, it is hard to reconcile that with membership in the single market. you see what i mean? ie problem is i can say what think she should do from the perspective of what would be in the interest of the country, but i'm not sure it's negotiable given the red line she set herself. >> how does chain get affected here? i'm curious as to how you see the mechanism working. parliamentary's have made it clear that whether or not she is on the right course, they will back up. are you arguing the house of lords should step in, another referendum? you have argued against governing by referendum in the past. what are you arguing for, and is this a process? p this is an important point right now, there is no way that the many millions of people who feel that this decision is wrong and who particularly now think we are going down the route of brexit at any cost, there is no

way they can articulate their feelings, but what i am saying is that all these different groups in different political parties who are agitating around this issue are saying, come on, let's think what we are doing here could we have to combine together, then frankly members of parliament, who at the moment feel this is just going to happen, so what is the point of speaking out against it, you have to give them the strength, the courage, the protection come if you like, to be able to say, hang on, my constituents are now saying to me, we need certain guarantees about this, or my constituents are now saying to me we don't like the way this is turning out. >> are you the right person for this? if you are not, who is? >> i don't think you need a person to die think you need of movement. >> you are going to start this? >> i think a lot of people are already starting this. the question is how you will coordinate this, bringing

different groups and different political parties together, but one advantage of today's politics is that it does change fast, so right now we need to be making the arguments coming getting out to people the facts, then tracking very carefully this negotiation. remember we have not yet begun the process of negotiation, so we don't know what terms are being offered. right tonow, we have a say we like it or don't like it. >> prime minister, on the show the other day, deutsche bank suggested we would see a weaker pound sterling, that we would see a depreciation in pounds sterling given brexit and the path of the united kingdom .conomy how much depreciation and sterling can all of the united kingdom take? >> that is a very good question. it goes directly to what i am saying, because i don't think , who votedcted this for this come expected a large

fall in sterling. i don't think they quite appreciated that this was the financial markets future prediction as it were, the course of the british economy, and already some of the imported foodstuffs and people rely on in the shops, the inflation rate is going up to her that is a classic example of where as the pain of this becomes clear him of people are gointo say, ok, let's go back and ask why we really did this. and i think when you do that, you go back to certain themes and problems that when you analyze it, brexit is not going to affect those things, so this is a very good example of what exactly i'm saying. i have tome minister, ask a delicate question that has to do with the firestorm in washington at this time. it is presumed that the president will visit prime minister may. should he be allowed to speak and enter westminster hall, your

house of commons? whether he enters westminster hall and addresses our parliament, that is a matter for parliament, and i won't comment on it, but of course he can come here. look, what ever the situation is , the british-american relationship is important. criticizingand not the prime minister for reaching out to president trump. it is important that she builds a strong relationship, and frankly, right now, i got enough on my hands without entering into your political debate here shery: former british prime minister tony blair they're speaking to bloomberg. let's take a look at the markets open in the region. hong kong and shanghai trading at, the honk sign up .3%, one point touching the highest level since august 2015, although coming down from those highs. the shanghai composite up

.8%. weakness in the japanese yen has sent the markets higher in the afternoon session. you are seeing the nikkei up .2% after losses throughout the morning session. the japanese yen right now down .2%, trading at 113. that was after three days of gains against the u.s. dollar. the asx 200 down .3% among one of the few markets that are in negative territory at the moment. we are seeing energy and material stocks leading to decline. new zealand unchanged at the moment. taiwan and singapore trading right now, singapore down .2%, while malaysia is up .3%. let's take a look at other markets trading at the moment, we are seeing jakarta up .3%. remember that chinese north korean coal imports banned, and that could help jakarta because indonesia is one of the biggest , so keep an coal

eye on that market. that is it for this edition of "bloomberg markets: asia".

♪ yousef: regional tensions to the blastsaudi arabia iran, which in turn mocks donald trump. taking a stakep as the emirate looks to asia for investment. $143 billion uni