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tv   Bloomberg Markets Asia  Bloomberg  August 6, 2017 9:00pm-12:00am EDT

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is a 9:00 sunday evening in new york city. markets enjoying a positive start. stocks rising on positive payroll numbers in the u.s. north korea on the agenda. the united nations verging with new sanctions. we will head over to manila. -- -- >> i am in sydney. staying in the job despite the money laundering claims. this is "bloomberg markets: asia." ♪
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rishaad: the jobs report in the u.s. is better than expected. you have to drill down into some of it. what i want to bring up. this is the rate for those who a mainss educated with beneficiaries of the job creation taking place in the u.s. recovery has been strong enough, even people struggling in the labor markets are doing better. others are taking another view, saying most of these jobs are not creating that much value. 51,000 ofking about them are created in the food and beverage agency. hotels and bars as well. waiting staff and bar staff as
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well. that is what we have if you are drilling into that data. are seeing this reaction on the markets, equities are pushing higher with a little bit of a recovery in the bloomberg dollar index. that is back to trading flat in the asian session today. it did not move the needle when it comes to fed expectations. that is what we are watching for with the cpi numbers in the u.s. there is commentary from this fed president towards the end of the week. we are 30 minutes away from the opening in china and hong kong. we are seeing a rally with malaysia just coming online. let's get a look at the early session. asia and investors are taking their cues from wall street. we have equities across the board on the rise. asx 200 down in sydney, gaining almost 1% this morning. regional stocks are set to halt a two day drop.
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looking mixed. we are seeing treasury continue to fall. that is holding on to friday's gains. that is something to contend with today. we do have the yen extending, easing up on some of the losses. that is giving a boost to tokyo shares, along with earnings. nikkei 225 trading a half of of percent higher. it could be set to move past the 20,000 area that it has been stuck in for the past two months. on that yen we have asset management saying it may strengthen to 100 a dollar as soon as september, if u.s. political risks or fed prompts traders to cut short. the u.s. job support could provide relief of the aussie dollar. it is getting a third of a percent, its first gain in four days with the one -- yuan
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falling 2/10 of a percent. steel is surgingsteel is surgina half percent in shanghai. winter curbs for steel in china standby 9/10 of a percent, we showing you what is going on with oil. we have crude swimming to gains. $50 ajust below that barrel mark. we have major oil producers set to meet in abu dhabi on monday to discuss noncompliance by sub producers when it comes to out cuts. i want to show you some movers that are watching in asia, when it comes to stocks. toshiba rising almost 9% to halt a three day drop. local media reporting its annual report may be endorsed by its auditor. it continues to heat up.
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toyota going up and softbank is up ahead of its report card. commonwealth bank snapping a three to decline. lender says issues with the deposit -- deposit machines responsible for erroneous transactions. under scrutiny, given the surge around potential money laundering. kamaruddin,hie let's get you to the latest events taking place in the troubled country of south america and the arrest of the first word news. tom mackenzie. venezuela claims to have defeated a u.s. banks attack on an army bank in the central city of valencia. several people were arrested after social media showed images of shoulder -- soldiers declaring a rebellion. security has been tightened across the country, with military check points. independent observers say the alleged attack
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on another base earlier this year. foreign deposit banks in qatar dropped the most in almost two years in june. sources say some golf lenders are refusing to roll over lenders when they mature for the saudi led diplomatic isolation. to benks are said concern, they could face repercussions for their governments, but continue to do business with qatar on june 5. the man who appointed the special counsel to investigate russian meddling in the nosidential election, it is mere fishing expedition. rod rosenstein said that if robert mueller finds evidence of criminality, he can pursue further. he appointed a grand jury in washington, a move that some say he has found something. new diversity chief has pushed back against a memo from a male engineer complaining the
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company has a "politically correct a monoculture." president said the memo advances incorrect assumptions about gender. she wrote to employees saying google remains unequivocal in its leaf that diversity and inclusion are critical success. global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. china says it is confident that the new u.n. sanctions on north korea will bring the state that to the negotiating table. the issue was discussed at the foreign minister meeting in manila. our chief international correspondent of southeast asia was there. how realistic is it to expect we will get new talks that this will draw pyongyang back to the table? that they wereow
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sitting on ads following the two missile launches in generate. -- launches in january. they released a statement over the weekend saying that they are concerned about those launches. it is a very grave concern and it jeopardizes perspective -- prosperity in asia and the world. china came up with a strong response. it says it is confident that the sanctions will put a stop to the new weapons program in north korea. it also cautions that it could take the tight -- take the tensions a step further, take it to a critical phase. it is important to realize that the sanctions are not the end goal. it must come through negotiation talks. we know that chinese foreign minister has been in touch with .outh koreans
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he has urged his counterparts to react calmly to those sanctions. the question may have right now will the sanctions being imposed by the un security --ncil in the last 18 months and that is the exact question to the foreign minister of australian with an exclusive interview with bloomberg. >> it is a step in the right direction. the united states has been calling on all nations to uphold the un security council resolution on sanctions. overnight we have seen great progress. not only the members of the unanimous oncil this point, but there are quite extensive sanctions. haslinda: the sanctions imposed by the u.n. security council have not been imposed yet, but north korea has diebold states
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pretty advanced and nuclear weapons program. there is some doubt that that won't be stopped. china has been discussing all these tensions in the south china sea. a always have to do that, but it seems like -- was anything achieve this time around? haslinda: [laughter] skeptic in you. sign a code of conduct in the child set -- south china sea. this is nothing new. it brings forward the agreement that was abducted in 2002, but was ignored by all claims of the south china sea, especially china. hashat timeframe china built seven islands, some with runways and others with satellites.
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certainly gone all out to build up in the south china sea. what is with noting is that the framework of code of conduct is non-binding legally. there is no way of taking any action of any claimants that go against the agreement. there is no mechanism for resolution. that led to some critics saying that china is just buying time by adopting this. talk about timing. it comes at the time when the u.s. is distracted with a lot of issues. with russia, with syria, with its own domestic issues. china is buying time to implement all of its strategies in the south china sea. thanks for that howill be looking at realistic china's hopes are in bringing north korea to the negotiating table. next, how the asian
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markets have been so far to the strong u.s. job support on friday. this is bloomberg. ♪
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rishaad: you are back with "bloomberg markets." haidi: a quick check of the latest business headlines. taking a look at should link commodity house. off the weekg looking a little bit unchanged at the moments. the company making its first comments on the latest. there were no comments last week as they were "destined to fail." they should address the claim or the money and openly. they have responded to earlier allegations and has nothing more to say. toshiba is taking another stab at its u.s. partner saying western digital has no
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rights to new production that is crucial to both companies. .t concerns a new facility toshiba says it will be built with no input. cutting the company off from new technology. western had a stake in the venture when it bought toshiba's partner. u.s. employees have dealt the auto workers a blow by voting down its attempt to organize production plants. they voted almost 2-1 against joining to -- joining the union. that is against japanese, korean and german complex in the u.s. it is a setback. the total share workers who belonged to a union fell to a record low last year. rishaad: asian markets, they are not on their way up after the strong yield report on friday. equities will continue to have bonds in cash as it broadens out.
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give us an idea of where this optimism is coming from. the global economy continues to be at an upturn. you have seen from the jobs from the u.s. last week, drug -- job growth is strong in the u.s. the u.s. economy is on its way to the earnings growth we expect from the u.s. it shows no signs of slowing down. in asia, china is a economy continues to grow at 6.9%. the market was looking at 6.5% at the end of the year. the economy is on the right. that is why the markets continue to do well. rishaad: let's have a look at what has been happening. there is a bond storming year. we see a few of the big players that are hoping to drive things. at the same time we have had
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a-shares where china, those of the main ones listed here in hong kong. between --the gap even though we have had so much money coming in through the stock connect between shenzhen, we still have this premium on the mainland, the asia's. why will this not go away? kelvin: -- go away? kelvin: this is because there is a supply of new stock on the market, as well as the typing by the chinese government on credit growth in the mainland. don't forget the chinese economy is still up performing. where the asian market and economy is concerned, it is diving away. the chinese companies listed in hong kong are driving the gains right now. china rightan sbi now, it is up close to 35% compared to the performance asia is concerned.
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this does not need to go anytime soon. government linked companies and stocks were as msci china is being powered by the internet companies. anyone ison't think expecting anything dramatic to happen ahead of the congress that we are waiting for. think china can actually manage this balancing act, with trying to balance keeping growth at a certain level, addressing systemic risks in the financial system? at least at face value they get down. can made do all that and leverage at the same time -- can they do all that and leverage at the same time? markets can'tock be going up forever, this is an us -- unsustainable. there has to be some reckoning.
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on balancing the economy they did a good job. so far, they started deliver it. we have not had impact on the economy but doomsday's are predicting it should have -- that doomed stays are predicting they should have. so far we have seen that consumption is not picking up a bigger chunk of the chinese economy, which is great news for all of us. on a longer-term basement -- basis, it will pick up as the soe reforms will go up. that could actually put the dampening on sentiment as we move forward to 2018. the chinese economy, stock market, jobs market, employment growth will be stable because we do not want anything chaotic to happen before october. where theterms of
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asia rally goes from here is what the u.s. dollar does. you think what happened on friday is a true reversal, or is it just a brief correction within a further downed trend? a blissi think it is because, as long as the dollar weakens, japan will do well. considerably against asian currency. uan as far as it is concerned. if the dollar reverses and strengthens, asia might see a pass to its strong rally. on that note, i think we do expect the dollar to be measured in its weakness against the asian currency. recordedrency has sharon gains against the u.s. dollar. pleasure.ays a joining us there from singapore.
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coming up, tech takes time. they are reaping the reward after five years of investment. this is bloomberg. ♪
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southeast asia's largest lenders spending billions of dollars for the technological transfer information. they say it is already paid off. we are seeing impact on our . market business, for example. importantm are seeing in revenue. we have digitized the ways customers engage with us. we are seeing improvements on the expense side. the acquisition is lower when we do it digitally, as well as our transaction processing costs
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lower because we killed a paper, it just goes straight through. and 46% a couple of years ago, to 43% now, our testament to the improvement aboard the income line and cost line. i would say the other place you see benefit is to look at expanding into markets in indonesia at some scale. x digital, we were finding it very hard to expand into those markets. you were the first one to identify alibaba as a potential competitor for lenders in singapore. what is your digital transformation? are you prepared to face alibaba head on? piyush: i think we have made important improvements, but the quality is slowly lending their a lot more.
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it is becoming more startup like. i have to say there is formidable competitors. one of the advantages we have -- of the, half a dozen platform companies have is that the cost of customer acquisition is low. sitting on ays massive pool of hundreds of millions of customers who they could cross sell financial products very quickly. that is different from the 99% of syntax who are small, but have to spend a lot of money finding customers. alibaba has that. haslinda: what now? they have said they are prepared to ease regulations to allow banks to acquire digital platforms. is that enough, will that level the playing for? piyush: the thing to do is make the bank invisible. what does that mean? that means that people do not really want to go banking. people want to do something else
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with their lives. they want to buy a house, a car, they want to go on a holiday. it is hidden in something else that you want to do. partners, wek with can hide the banking service and something else that the partner provides. that would be a big step in the direction we want to go. they are encouraging. haslinda: are you in talks to acquire any digital presence? we are in talks all the time to look for partners. if you look at did you bank in india, one third of our acquisitions come to china and not directly. that is the big difference of our approach. banks used to be what i call, pipeline companies. it's true from the bank to the customer. beay we are trying to platform companies so that we can in gauge in an ecosystem of relationships and bring customers into china's partners.
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to use china partners improve our offerings. piyush. that is ♪
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9:20 9 a.m. here in hong kong. we tell you down to the start of the session. taking a look at what is going on to the start of the trading week across asia. expected report on friday. the dow up is for a ninth straight record high. bit of an overlay in north korea. supporting sanctions against the north. south korean president putting too donald trump in a tweet just being released in the last 10 minutes. the president is very happy with the sanctions. is bloomberg this
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asia's headquarters. some: we are just getting of these lines through from foreign minister of china saying that a trade war is meaningless to china and the u.s. china and the u.s. has a lot when it comes to trade. perhaps settling some of these concerns we are seeing over tensions between these two superpowers. hong kong markets just getting over. let's get it over to sophie to see if they are joining this equity rally we are seeing here in asia. ishie: the honk saying joining the upside momentum, giving about 4/10 of a percent to continue gains. we have chinese stocks falling about 1/10 of a percent. this is extending a three date drop ahead of july 4 reserve. we have a barrage of chinese data. trade data due on tuesday, followed by inflation numbers on wednesday. we did have the yuan coming in at 6.7228.
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weaker by 4.1%. the most since july 4. the onshore rate is 2/10 of a percent after that fix. 6.7289 right now. now the front page of the china securities journal over the weekend, there was a piece saying the yuan was expected to increase its two-way fluctuation, with a lower possibility of a one wage depreciation. we have a dollar strike in the backdrop for now. there are moves i want to highlight in the commodities complex. we have called -- copper shifting gear. while that's on steel have fallen, the metal that is continuing to rally in shanghai, surging by the daily limit. we did see steel rise to the since 2008. steelmakers from benefit from more output cuts. curves inng winter china could reduce daily out by
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8%. last friday we had chinese steelmakers among the biggest. we do have materials up about a half of a percent. just to show you what is going on with steel players, up about 2.7%. take a look at the breakdown, you have been gaining almost 10%. steel in focus, given that rally in the metals price. rishaad: let's head back to beijing, tom mackenzie is there with the first word news. tom: samsung's de facto chief return to court today for a final hearing on charges of bribery and corruption. formaltion will make a demand for a specific punishment as part of korea's investigation into political and corporate grass. he is accused of paying millions hedollars to a confidant,
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denies the charges and a verdict is expected within weeks. the commonwealth bank boss says he has no intention of stepping down, despite the bank doing sued for more than 50,000 alleged breaches of money laundering and tara financing laws. they have led cba since the end of 2011. he says he remains committed to the job. he is accused of failing to monitor atm's, that could be transferred to other accounts in australia or abroad. approaching-- an typhoon has meant disruption in air travel. of 100 the cancellation five domestic services, affecting more than 10,000 passengers. has asked 62 services all -- already. the agency expects to cross the coast in the coming hours.
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from india say about half of the nation's banks are planning to raise new funds before the end of the financial year in march. the trust of india says many lenders have secured government lending, and some have started raising capital. india's public sector banks must find at least $17 billion for three requirements, which come into effect in march, 2019. global news, 24 hours a day, powered by more than 27 hundred journalists and analysts in more than 120 countries. this is bloomberg. job growth did keep the u.s. unemployment rate at a 16 year low in july. third-quarter gdp growth at about two and a half percent. would it be enough to support another rate hike? more on this. let's just start with the numbers. payroll is up 200-9000 in july,
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the forecast was for 190,000. the previous month, june had a gain of 231,000 net new jobs created in the united states. on that report, a bit stronger than people had forecasted. unemployment rate did not hold steady at 4.4, it held steady at 4.3. down a 10th of a percent, matching that 16 year low. take a look at 7665. you can see those white bars, the monthly payroll gains. at the far right, that green light is just the moving average. it has moved up to 100 95,000 to 185,000, that is looking better. the bottom part of the chart shows the unemployment rate that has dipped down to 4.3 in may of last year is back there again. you can see how strong the labor market appears to be. the gdp question, why is this important? about firstworried
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quarter gdp growth that rebound in the second quarter. this suggested that you will see the rebound holding as we move into the second half of the year. i want you to look at the orange line gdp, and the white line, that is the growth and payroll. go to the far right-hand side. you can see the payroll has risen, they have plateaued at a healthy level. gdp is heading back up. this chart could suggest that gdp will catch up to payrolls again. that could encourage the polls to move on to tightening policies. pointedg intelligence out friday, job growth is not strong enough to hit donald trump's growth of 3%. head of the national economic council, and the man who could be the next venture when janet yellen steps down, if she does, it seems to have acknowledged this. he said the trump administration is doing what it takes to move towards that goal. let's hear what he said on friday. >> we need to create the jobs by
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getting rid of regulation that .s holding down we need to inform tax codes to center vis companies to invest in america. we are totally committed to doing this, and we feel confident we could get that done beef -- between now and the end of the year. kathleen: he also egg knowledge that raises -- wages need -- he also acknowledged that wages need to rise faster. haidi: what does the fed a have to see to raise rates again? does this translate into higher wages and inflation? kathleen: they do have this stronger,ey have a tighter labor market. how will it help boost inflation? janet yellen says she expects to see it rise. get their complete enough when you have average hourly earnings of two and a half percent year-over-year?
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focushat behind us, the is going to turn to friday's consumer pricing. let's compare it to the feds key gauge. they go into parallel. you have core cpi in blue, the core pci in white. cpi as highthe core to 1.7. it is back down the white line is the core pce was up 2.1%. it is back to 1.5%. is expected to hit a high of 1.8% year-over-year when that number is released on friday. according to the bond king from janice capital management, that will not be enough for the fed to move. here is what bill told bloomberg television. bill: until we see a lift back will seee fed quantitative tightening, that
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will not raise short-term rates this year. kathleen: we may get some hints. we have four or five speakers this week. president of the new york fed. maybe they will give us more clarification. everybody is certain that changes in the balance sheet could start. the big question is that rate hike. it seems that inflation holds the answer to that. still that missing puzzle piece for the fed. kathleen, thank you. we'll take a closer look at the growing security threat on the korean peninsula. this is bloomberg. ♪
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rishaad: you are back with "bloomberg markets." lun in sydney.di take the check of the headlines. apple is said to be planning a new watch this year.
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yourhat connect to sell networks, reducing its reliance on the iphone. currently, the watch must be connected to the iphone to upgrade, but the upgraded version will have chips allowing solo, whicht tasks should be a big victory over longtime apple partner. rishaad: preparing further investment in the u.s., possibly in michigan, and related to the motor industry. they held talks over the weekend with michigan governor, rick schneider and is expected to make an announcement. it is unknown how much money will be involved. foxconn will spend $10 billion in wisconsin. haidi: a report into last -- into the crash landing of the plane. a firefighter was killed and 30 of the 300 people hurt from the -- when the triples -- triple landed.-- 777
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it was emirates worst accident. the investigation is turning to the actions of the crew. rishaad: the adaptation of the steaming kings is opening up the top of the american box office. ofs than $20 million, one the lowest of weekend tallies this year for a number one film. it's only second release on the road from reviews taking to the emoji movie, 50% from its pay opening week. just over $12 million. coming up, could softbank see a list from the turnaround at sprint? we will take a look at its latest earnings report. this is bloomberg. ♪
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rishaad: you are back with
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"bloomberg markets." lun here inhaidi sydney. we are taking a look at how asia markets are getting the day started, the week started. the job market still not move the needle at all when it comes to fed expectations. dovish rately trajectory propelling equities in the u.s. and here in asia today. taking a look at earnings, when it comes to the side of the world, rish. rishaad: let's take a look at what else we have. the earnings season -- the u.s. earnings season has been stronger than expected. the has commentators pointing to nominal gdp growth, possibly being better than anticipated looking ahead to the third quarter proper and fourth quarter to come. , nine straight record highs.
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north korea has a geopolitical overlay. asia supporting alongside moscow. sanctions on a country, that is the strongest ever. did not know it was possible to have the sanctions we have. donald trump tweeting a short , well, president moon is very happening with what is happening. sitting on the agenda of the meeting in manila, we have china saying it is confident that the new sanctions will bring pyongyang back to the negotiating table. to do that we are joined by control risks associate director. what did they actually agree on at the u.n. ? i thought the sanctions were the strongest ever. what else could they possibly sanction? that is a great question.
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appears to be that by imposing the strongest and most robust sanctions we have seen on north korea in a decade, you will force a modification of behavior. the reality is, there have been few good options on north korea. certainly no easy ones. the calculus appears to be that if you increase the diplomatic and financial pressure on the regime, and doing business with the regime, you will convince them to come to the negotiating paid -- table, but with a different set of reduced options once the leverage has been taken off the table. rishaad: sanctions always tend to hurt the people on the ground. differentthe vast populist spire the regime here, which does not really care about people, ultimately. they all suffer and they should
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get the brains trust involved a bit more here. alecia: i think it is really challenging. if you look at the policy options available, other than sanctions, what else do you have on the table? there is the military options, you are looking at a preemptive strike on north koreans facility. it would prompt immediate destabilization on the korean a postla, and it will be by of the u.s. on the region. on the other hand, there is a recognition that the party talks have really failed to yield concrete results because pyongyang has not been a negotiating partner. he is rejecting the fundamental premise that it should abandon its nuclear weapons program. in reality, i think you are down to looking at a robust sanctions program that puts enough financial pressure on pyongyang to end its nuclear program, or
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at least halt provocations on the korean peninsula. haidi: of course they will sound more operations that sanctions left to do will create opportunity for negotiations. they just want fed to be put aside. what is the upside when it comes to the u.s. and its allies for going along with that strategy? also --a think there is i think, in addition to the sanctions regime on north korea itself, you also see secondary sanctions on chinese related entities. the idea is, if you stop the illicit flows into pyongyang, you will be what has contained the regime and force a modification of behavior. the upstate would be to bring pyongyang back to the negotiating table, but only after you have financially crippled the regime to the point where they have lesser options
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on the table and less leverage to negotiate. i think that is the fundamental upside of the sanctions regime. >> there is debate over how much leverage beijing has. the amount of ability for beijing to be able to influence the outcome by beijing itself. historically, it has really relied upon that to get what it wants out of negotiations with the u.s.. -- u.s. alecia: absolutely, that could -- the key question is to what have leverage. which brings us back to the un security council. package. robust if you examine the terms, you are talking about reducing exports by a third. that is $1 billion. not only that, it is putting pressure on other countries other than china to refrain from hiring north korean laborers. that means you are crippling flows back to north korea, along
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with secondary sanctions on entities limited at this point that do business with north korea. there is enough leverage in this package that could really put some pressure on pyongyang to change its course of behavior. rishaad: let's move to what else has -- is being talked about in manila. the nationina and who have agreed to a dumping the framework of the code of conduct. on the south china's -- conduct on the south china seas. is this scheduled to become a document that they pay lip service to and have many discussions about and create more hot air and not get down to the fundamentals and solve these issues of territory in who has it in the south china sea? alecia: that is the criticism that has been levered. it is important to remember that what has been signed is only the framework for the code of
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conduct. merely the blueprint on which negotiations will have to take lace. the chinese have said they are willing to negotiate. provided there is no outside influence. extentl question is, the to which the code of conduct will be legally binding on all parties. the reality is, even if you get a robust code of conduct, china has already changed. it has already seized the strategic advantage in the region. it has expanded its activities, it has military across. the real reality is that, you are looking at a cold of conduct that purely mitigates against further explanations of conduct, was not bring -- but does not bring a fundamental resolution to the maritime dispute itself. associate director with control risks in singapore. we were talking earnings of
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softbank. looking for a slight growth in profit and they will put that at the doorstep of sprint's recovery. bloomberg intelligence is with me now. tell me more. josh sprint is definitely a key driver. the company reported a few days ago the first net profit in three years. that is very encouraging. japan hadh it yahoo! slightly disappointing sales growth, we believe that the company could still -- this afternoon. alibaba,that would be they raised their target back in june. for softbank, a lot is going on. the focus is not the earnings anymore, it is about the fundings.
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we talk a lot about what is the strategy for spring. after the discussion and failure to merge with t-mobile, now with it cable company. many people do not believe it will get done. to pursue --going how will they finance it? will they sell more alibaba stake? and the financial, whether they will divest. a lot of variables there. recently we heard that they phasedd last year refinancing risks. softbank has a lot to say to investors. what they really want. was to get with sprint.
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now with a -- now that they can't, they get a bigger scale in the u.s. telecom and cable industry. that seemed to contradict what they have been telling investors. the focus is on funding, would you be looking at data about how they plan to monetize the alibaba stake in order to monetize the activity that we are seeing -- fund the activity we are seeing? anthea: for softbank to finance the deal they may have to do a combination of debt and shares. that is from our team. softbank can also divest some in otherother -- stake investments. they have been talking about a potential sale to the tech funds. rishaad: thank you.
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be live hour we will with the biggest dealers in australia, talking to the former world bank president. ♪
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>> almost 10:00 a.m. here in hong kong. evening on the eastern sea. asia-pacific still having a good day, but a decade high markets being list -- lifted by strong payroll numbers. china saying a trade war with america is in no one's interest. the foreign minister said the two sides must talk. haidi: i am haidi lun here in sydney. scramble tohe secures surprises of lithium heating up in australia as diggers and dealers conference happens. this is "bloomberg markets: asia." ♪
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haidi: we are kicking off the week with asian equities pushing higher, taking a positive lead from wall street on the back of a strong beat when it comes to u.s. job numbers. where does the u.s. dollar go from here? on the back of it we knew we had the biggest gain since the start of january. that avoided that fourth straight week of decline. take a look at the one-year chart. this in the november u.s. election, that has been steadily declining. the question now is, this recovery with half a percent gaining of all 10 of those, was that a substantial reversal? was that real or was that a minor correction with a continued downtrend?
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the answer lies in fed expected -- said expectations. we did not see a change in these for the rest of the year following that payroll number on friday. a very strong number out of that, as well as quite a bit of fed speak. rishaad: we have also got a slew of the in this part world with trade figures coming out of china and the plant -- and japan. europe has aget, lot of factory output indicators, including industrial production. let's find out what is happening market wise. sophie is having a look at a green spree. it was the china market that was not -- not playing ball. sophie: i want to get into what is going on in the chinese market. there are a lot of data points to consider out of asia. we have indonesia's second-quarter gdp. do we have initial stocks
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gaining to a half percent after a two-day drop. we do have a weakness coming through in the dollar. currencies are mixed with the korean won leading the drop. the aussie dollar up about one quarter of a percent. we have asian bonds chalking treasury lower. asian stocks are on the rise. set to snap a two-day drop back to a decade high. chinese stocks are not joining the party. deepening losses as energy producers, bank and property firms fall along with risers. are dissipating with producers losing the most pure we have copper falling a quarter of a percent, retreating from a two-year high as output from rue is on the rise. we are seeing a rally in aluminum, gaining 2%. steel over 4%.
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a 10th of a percent gains, steel players leading gains there. we are anticipating the winter a deeper curve when it comes to daily output for china. citigroup's catch elation, in 8% drop when it comes to daily steel output. iron ore is tracking the jump we are seeing in steel prices. a jump in 7.3% in singapore. it is back in 2017 for iron ore. asy have fallen by as much 30% when it hit its low in june this year. iron ore's rally has really helped the drop for 2017. the gl co function on the terminal, this is what is going on with oil. gains and losses in abu dhabi, saudi arabia and
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russia are expected to lean on producers to meet the compliance , it was at its lowest level since january of last month. we have crews losing a 10th of a percent. just above that $52 a barrel a month or it -- $52 a barrel. let's go back to beijing with the first word news with tom mackenzie. it is confident that new you and sanctions will help bring north korea to the negotiating table and end its drive for nuclear weapons and ballistic missiles. the foreign minister met his north korean counterpart in manila. he calls for a calm response to the sanctions. news is reporting that representatives of the two koreans met on the sidelines of the talks. president trump has spoken to his south korean counterpart in the past couple of hours. he and the president discussed
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the new you and sanctions. trump tweeted he is happy with the security council's decisions. the president said north korea will never be allowed to have nuclear weapons. venezuela claims to have defeated a u.s. banks attack in valencia. several people were arrested after social media showed images of soldiers declaring a rebellion. security has been tie into across the country with military check points. an allegedchoes attack on another base earlier this year. google's new diversity chief has pushed back against the leaked a memo from a male engineer complaining that the company has an "political he correct monoculture." said that isident incorrect assumptions about gender. she wrote to employees thing google remains unequivocal in diversitysions that
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is critical. global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. the united states and parts of europe have gone sour on globalization, but it is a very different story in this part of the world. asia-pacific being -- seeing exports being strong. american automakers landing new facilities in china. our correspondent is with me now. a lot of talk out there does seem that globalization is in tact, at least it would seem. >> it is a bumpy year for trade in asia. we are seeing record trade in places like taiwan. we are seeing exports see significant gains in japan, korea, probably another bumper with trade data. a lot of it is because the
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better global economy. it is not just the global story, it is the interregional asia trade. it is reaching a point where it is having its own legs, rather than depend on u.s. and europe. certainly has not played out at this point of year. last month suggested that , as well aspan canada should carry more weight when it comes to global growth in the u.s. and the u.k. is there a sense that interregional trade is becoming more resilient and more relevant? doubt aboutis no it, this is a much happening. we are seeing asia buying more and more goods off of each other, rather than depending on the u.s., or with with u.s. in more recent years.
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we are seeing the electronics sector because of the supply chain between south korea, taiwan, japan, china and others. there are selling more goods that they are buying for either to own consumption and components in their own manufacturing chains. this is a new and recurring theme, that there is an interregional trade that was not there in more recent years. that's a big part in terms of asia's maturing economy. ever since the election, or before the election we were as the about this theme u.s. retreats from global trade, we will see other trading partners. are we looking at greater partners of dealing with x u.s.? withdrewn the u.s. from tpp, there was a feeling that there would be an end to one of the region's biggest trade deal. they are carrying on without the u.s. they are getting that deal across the line. original deal, which china
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is a part of. that is still in the works. get their eu in japan trade deal last month. that has seen a major breakthrough. there are signs that both bilateral and multilateral trade deals are advancing. again, that is probably not what we thought when donald trump pulled out of gdp. these negotiations are continuing in the near term. we are looking ahead this hour, we will be heading back to the dealer's conference to speak with the former bank president. that exclusive conversation is coming up. the dollar surging after that good payrolls report. not everyone is convinced. with the credit.
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this is bloomberg. ♪
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haidi: this is "bloomberg markets: asia." rishaad: just getting some breaking news coming through currently. it is what has been going on between donald trump and what has been said about the prior president of south korea. freeare talking about a trade agreement, which has been in place for a while. donald trump says the revision of that agreement is needed. coming back and saying it is already beneficial to both the united states and south korea. this is all against his background at tensions of north korea. welcomingbeen positive suggestions about having more dialogue with
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pyongyang. of southhe president korea seeing a peaceful resolution of north korea's issues -- missiles are needed. this is after the sanctions against the north. we will keep you up to speed with the headlines as we get them. the dollar has a good time -- a good time. perhaps it brought in into its recent fight. for how long? let's discuss it with david. is it a gut check at the moment? me on thanks for having the show. it is a bit of a gut check. games were against the aussie and the euro because the markets where the best, or the longest position versus the dollar in those currencies. a little bit of a gut check. we still think the dollar can rally against the yen and the swiss. no central banks will need a leg
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up when it comes to monetary policy. against the euro, we still think the euro has legs, given that there has been a shift in the euros economic data as well as the ecb. sterling, it about also took a hit against the dollar. we have been asking this question about 130 or 132. what is the pound pricing? in a actually pricing reminder -- in a remain in the long-term? david: when we do our modeling and taken to the bad accounts of brexit, we's -- weep that into our modeling. -- we put that into our modeling. quite a critical level. sterling recently has had more of a rally due to shifts in monetary policy expectations. the bank of england caught a
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halt of that last week by revising down its growth forecast and saying steady on the rate hikes. -- staying steady on the rate hikes. you have markets pushing higher and higher, even though we are not seeing volumes we were a few weeks ago. complacency,nse of and do you -- and if so, expect to see a wave of tightening induced volatility? david: that is a good question. in terms of complacency, we have two indices on bloomberg. there is also an economic uncertainty index. those indexes have been tracking the each other for quite some ago. until about two years the uncertainty index, which is based on the data -- so the number of hits you get onwards to do with uncertainty has gone higher? there is a fair bit of complacency. what can undo's that complacency?
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-- what can do that complacency? obviously, political risk. you have the fed considering to raise rates and you have the boj start a technical taper. you have potential volatility on that front because the central bank is being removed from equity markets. bring itjust want to up, because he referenced it. we are looking at extraordinary aws given that, i feel like lot of analyst have discounted this growth policy platform from the u.s. being able to be pushed forward, given the political missing fortunes and the lack of political credit that a president has to be able to do all that he promised to do. where do you see the seismic risk coming from? is it from here in asia, is it what happens after the party congress in china, or do we see renewed volatility when it comes to the u.n.?
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potentialyou seeing risk aversion that the markets are not pressing at the moment -- pricing at the moment? ng globalthink tighteni financial policies and the of banks. the congress in october november, it looks very good. chinese growth will continue to perform well. we do not see that as a source at the moment. tightening in financial areitions are the ones we most concerned about in terms of complacency. we do have the note, while there is a lot of bad things going on in terms of the white house and congress, corporate profits still look good in the u.s. that is helping equities and keeping it on the low point. rishaad: where would you see a surprise from -- if any surprise , obviously it would it be a
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surprise. david: i think the surprise would be if trump manages to get legislation passed. apart from payrolls, we had good overtures on that front. we had people from the freedom caucus suggests it could get raised. the treasury line adopting treasury in the u.s. similar to the freedom caucus. until that you had gary: sane there could be incentives -- saying there could be incentives in the package. rishaad: how many rate hikes are actually priced? there are less and less talks of rate hikes at the end of this year. david: we still look for one in december, we look for the element -- the announcement of the balance sheet in september starting in october. we will look for three rate hikes next year. is market and the als curve 65-75 basis points behind.
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the data on friday reduce the chance of subplots, but we still think there is a chance. realistically, given that the market is so far behind, it would not have much impact. david from civ. foreign minister saying united nation's sanctions on north korea are a step in the right direction. this is bloomberg. ♪
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on in north korea's manila on the weekend. the foreign minister, julie bishop as what she sees as a risk to the global economy and stability. i think it would be this slow and uneven economic growth that we are seeing around the globe. that economic
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growth, or the lack of it is leading to instability in a number of areas. i have been speaking to people around the world in recent months, so often, one of the ,rivers of instability extremism, terrorism is a lack of economic opportunity. we have not seen the growth that we had hoped post the global financial crisis. economic growth is one of the greatest drivers of instability. haslinda: some might say that north korea is causing the instability with that ballistic missiles. the un security council has responded with sanctions. will they be successful in waning in north korea? >> it is certainly a step in the right direction. the united states has called on
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uphold the to security council with the notion on sanctions. overnight we have seen great progress. not only the members of the being a council unanimous, but they are quite extensive sanctions, including banning experts of north korea including coal and seafood. oft would have an impact north korea's ability to fund its ballistic missile and nuclear weapons program. on also, the restriction what comes from foreign workers. it would again have an impact on north korea's ability to continue with these dangerous and provocative ballistic missiles. the sanctions are the third set of sanctions in 18 months. what makes you so sure they will work? north korea has showed to be very resilient to all these sanctions.
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ultimately, the more -- the north korean regime must focus on its impoverished people. we have been urging north korea to abide by the international , a buy by the un's that prevent north korea from pursuing ballistic missile and nuclear weapons programs. its activities are illegal. improving the impoverished people of north korea. these sanctions, and addition to those imposed in the past, but the message is clear. all five permanent members , areding china and russia determined to prevent north korea from continuing down this path. we will see how effective they are. it has only just been announced. we must maintain pressure on north korea to change its behavior.
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it is a global threat. haslinda: is there a sense that the global community is running out of options to deal with fair torea, and is it say that america's nonproliferation policy over the last 25 years have failed? the do not believe that if case at all. i think we are seeing progress in the last few years. north korea's ability to carry out these tests have increased. of these tests have increased. now we are seeing a united -- a unanimous security council resolution on further sanctions is a very positive step. of course, we must stop north korea from becoming a nuclear powered nation. the idea that another illegal nuclear state should be allowed to exist is unacceptable. a course it would lead to
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race because other nations -- nations would feel they have no option but to gain nuclear weapons as a defense. it is very important that we continue to work collectively and ensure that the sanctions are not only ugly -- agreed, but are implemented universally. if using force to nuclear eyes threat and option at all? >> the united states has maintained a all options are on the table. clearly that would be the worst of a series of bad options. what we are looking to do is nations of ill the by the un's security solutions on sanctions and implement them universally. opportunityad to an for dialogue with north korea. rishaad: that was foreign minister julie bishop's with our very own haslinda. secureup, the race to
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lithium is heating up in australia's demand growth for energy storage. we will be there next. you are watching bloomberg. ♪ . . is this a phone?
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...on the hotel you want. trust this bird's words. tripadvisor. the latest reviews. the lowest prices. beijing,is0:29 in 11:00 a.m. and so -- i'm tom mackenzie. president learns that an agreement between two sides would benefit both. the leaders also talked about new sanctions on north korea and the president tweeted that moon is a very happy with the security council decision. the july foreign reserves are released monday with the stockpile of international cash seen rising above the $3 trillion mark. -- analysts weto
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spoke to see this going up from june. that would be a rising trend from january's low, citing better-than-expected growth and capital controls. the governor of the commonwealth bank says he has no intention of despite the bank being sued for breaches of money laundering and terrorism financing laws. sent 2011.ed cba -- since 2011. and an approaching typhoon has meant flight cancellations in japan. canceled flights affecting thousands of passengers. need bonaire was hit even harder, disrupting the plans of 9000 passengers.
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global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. i am tom mackenzie. this is bloomberg. >> tom, thanks for that. arguably a pretty big week, rish. datave these slew of china any time loans now from now until tuesday, but at the moment we will see asia and equities returning to close to decade highs. and we will have the jobs numbers on the upside for friday. yes, and of course the dow, nine days, nine record highs, right? incredible. let's look at what is going on and driving the markets in this part of the world.
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well, take it away. haidi: asia and stocks are gains.g on the morning's equity investors carrying on with what we saw from wall street. we have earnings driving momentum in japan. they are 6/10 of a percent higher. looks little changed. most companies in japan that results i have delivered a beat. in chinese stocks are joining the party. they are up an eighth of a 10th of a percent. shares in changing being led by i.t. and health care stocks. the drop that we are seeing in chinese mining stock seems to be andrsing with a surge material stocks throughout the
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region. that is up by 9/10 of a percent. iron or is also on the up, recovering from 2017's losses. going back to iron ore, that that other raw materials could play catch-up. the bloomberg commodity index is in white on this chart. that has been languishing. they may have to provide some reinforcement when it comes to trade story. there is still a gap when it comes to iron ore, but watch might happen. haidi: and speaking of demand formaterials, the scramble lithium players in the market. the recent boom is down to rising demand in china for lithium-ion batteries.
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joining us from the biggest --lers congress underway david, how faster things moving? it is accelerating incredibly fast. we are seeing new lines come online this year, old lines going back into production. australiaom growing incredibly fast, adding mining dimension to the sector. this lithium story is giving us a boost to the mining sector. one analyst described this land graham -- landgrab -- he describes it as a rush to the middle east with the oil giant in the late 1960's and early 1970's. rishaad: i guess we better ask
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what the impact is and what we can expect from new supply here? rish, i guess you would expect new supply to depress prices. that is not what we are seeing. prices are undershooting demand. prices are still rising this year and the expectation is they will continue to show strength for at least the next three years. there simply isn't enough supply to meet that accelerated demand from china. there is the electrical vehicle story and also power storage. rishaad: david, are we going to see the biggest global miners enter this market? are they going to be sticking their toe and it mark what is the deal? david: yes i know. let's be honest, the lithium market probably no more -- yes
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and no. let's be honest, the lithium market probably no more than 10%. the top minor sees more value and the copper demand from a let trick vehicles, but the number do have a lithium project and could potentially put output from serbia as soon as 2023. big picture, you are therefore diggers and dealers, where the giants of the industry altogether and what will you be looking at this year ? david: i guess we will be looking at the potential for more deals in the sector, potentially consolidation. gold prices are up 12%.
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lots of expectations of prices for those metals. they are essentially looking at doing more deals. yeah, very interesting this week.e miners that is david from todd gurley inaustralia -- kagoolie australia. we will have more from goldman sachs asset management in australia. this is bloomberg. ♪
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things thenext guest market is underpricing the strength of the u.s. economy, given the pace of fed rate increases. called the top of the
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ag rally. your views, have they changed from friday? >> no, not at all. friday is one drop in the market. it just tells us again that the u.s. labor market is really strong. we are not going to see the unemployment rate, probably in the high three's next year at this pace. >> they are pushing 40% for another high at the end of the year? probably this is wage growth -- >> yes, it is. haidi: inflation. what needs to happen for you markedly change your views? >> to markedly change the view, i do not think one number would be enough to markedly change it. the market needs to see a trend increase and the trend increase is slow. it's really slow. we think there is good evidence that it is there. very slow trend rise. maybe it is going to take longer. but with monetary conditions as
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easy as they are in financial conditions much better than when they started, we think the fed is committed to its cause. fed have anyhe business at 18 or above? >> yeah, it is there. don't argue with the market too much. the currency definitely should have risen. but this kind of discussion around rate hikes in australia, i think politically -- haidi: the resilience before we ore we recovery in iron wondered about that disconnect, but the bump of 280 was about confusion over what the neutral cash rate was. do think that they can walk back those expectations?
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maybe., i don't think the markets misunderstand what the neutral cash rate is or where it should it but i think having discussed as openly as it was gave the sense that this was the neutral rate and we need to get there pretty swiftly. and that led them to come to the conclusion that there was a fast series of rate hikes coming. in the old days, we would have walked the market back from that pretty clearly, i think. we still think, you know -- in our view, the are the is trading above 84 sustained time and it puts rate cuts back on the agenda rather than rate hikes. me wherephilip, tell is the juice when you look around? where is the yield? tell us. >> well, there's not a lot of it around. and that's exactly the question that all of the clients we deal with are asking and we are
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sources ofind safe yield and their portfolios. parts of the emerging-market still look attractive to us, relatively high where the markets have stabilized. we think that there is still value in some structured credit products, particularly the high-quality clo's, offering a premium -- mentionedhilip, you clo's, aren't they the daughter the sameirtually thing. high-quality you say, but exactly the same thing where the real rubbish has been wrapped up with some of the top stuff? these cdo and the zillow are actually different. it's a lot of technical and andng conversation to -- clo are actually different. it's a lot of technical and boring conversation to go through.
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who have bought loans all the last two or three years of become very popular in mutual funds, and honestly the zillow is a wrapped up series of loans and the senior part of it has a lot of credit support and trades relatively cheaply. is it out of bounds? certainly if you think it is a high-quality asset, it offers an attractive yield. ok, what about corporate bonds? how is that space evolving in this part of the world? people worry about what has happened to the dollar. we have seen more issuance in indigenous currencies. >> first, corporate bonds themselves, we are a little nervous. if you buy into the fed hiking , inflation rising story, then that is probably not great for earnings. corporate bonds have rallied quite a lot. leverage is high.
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these things generally lend to underperformance in credit. within worried about underperformance in credit whether it is investment grade or high yield. there are opportunities in some markets and away from the u.s. where the tightening cycle is going to be. we see opportunities in the established market and em corporate bonds. asia, the issuance has been more than expected, right? doesn't that set demand? >> issue it seems to be creating its own demand at this stage. there are consistently strong levels of support. there's consistently a lot of money trying to be deployed. and clients are looking at that marginal yield and local bonds, particularly for local investors , gives them some comfort. and the idea that there's a lot of thought into changing their
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financing behavior away from financing the banks will therely give strength and is more impetus for people to change the way they fund. haidi: is chinese that looking more enticing? mentioned bonds connect last him. bond connect in the short-term is not making that much difference to the way we are looking at the names. we prefer other parts of asia to china at the moment. haidi: who'd you like? >> we like some names in indonesia, some indian names. china, although the economy is performing very well, post be a political changes in november, there is a chance that they are going into slow growth and is pretty expensive to us versus some of the other markets. philip, always a pleasure. phillip moffitt from goldman sachs here in sydney. let's have a quick check on the
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latest business flash headlines. thatba jumping on an order they are ready to approve the books from last year. this closure is now expected by the much delayed thursday deadline when they also are endorsed for the first quarter of 2017. right toigital has no start chip production from a new factory. lastad: a report from august, a crash by emirates dubai has found no fault with the plane. fire and landed along the runway. haidi: all right, apple is said to be planning a new watch this year, one that is connected directly to a cellular network,
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reducing the reliance of the device on the iphone. it is said to have lte chips that will allow to perform solo. that would be a big victory over qualcomm. we will be talking about the challenges facing the global economy. that exclusive conversation coming up next. this is bloomberg. ♪
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haidi: welcome to bloomberg markets asia. i'm haidi lun in sydney. dealers the diggers and is going on in joining us from the event, the keynote speaker, the former world bank speaker roberts ehrlich. robert, thank you for joining us. about the state of the mining industry there and what it tells you about the global economy. the coverage is just begun, but i get the sense that -- >> coverage has just begun, but i get the sense that people are positive. they know that there was a lot of capital investment in the past. a lot of it depends on the state of the chinese economy.
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i think it is pretty positive, but they tell me, if you are in the mining industry you got to have an optimistic outlook. rishaad: absolutely and the new president with the protectionist people asking you about that protectionism and whether you see it actually really coming into play and developing almost into isolationism, as some people have actually suggested? yeah, there is obviously a question about the u.s. role, economic, security, other issues. trump has upset a lot of people about the role that the u.s. has played for 70-some years and developing that system with allies like australia. i think on the security side people have had assurance because of the long-term relationship, the visit of vice president pence, senator mccain, secretary mattis. i was here when admiral mike
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rogers was here. moree trade side, nervousness. august the pulling out of the transpacific partnership created trepidation. those are questions people are asking. i think overall, the world economy is moving along pretty well. i pointed out this will be the first year in, i think, five or economiesl of the g20 we growing. 80% of the world economy is growing slightly higher than the norm. so the overall economic conditions are ones where people are feeling better, and the broadbase nature of the world economy grow gives people some comfort. but geopolitical issues like north korea and frankly how the u.s. conducts itself, those are risks. think thatrt, i there is nervousness about this whole thing about china as filling the vacuum of leadership
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, whether it is going to be responsible stakeholder. as the former president of the world bank you would know that there have been increasing calls from an emerging countries like china saying they should have a greater say when it comes to these global institutions another have set up their own institution. do you think there is a concern and a risk that this growth will come at the expense of countries like china being responsible stakeholders? yeah, well, you've got a few different questions embedded in there, but in essence, i think china is going to be an important part of the world economy. trying to encourage it to bridges abate in a rules-based way is very important. as you know, i am the person who in 2005 first talked about responsible to be a stakeholder. i disagreed with the obama
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administration because i thought 30 years of dealing with policies for the u.s., everybody wanted the u.s. to pay for their objective. china was willing to put up money for infrastructure. the big issue was, what with theirwould -- what with rules be in terms of transparency, anticorruption, good governance? and friendly, the head of the agent infrastructure bank went to people from the world bank to try to get it right. i don't think one can assume in some areas like security there's obviously moring zaidi. one belt, onet road here because that has geopolitical dimensions for india and others, but also in the commodity and infrastructure base. if you start out with the core question of, if the u.s. steps back, will china take its place? i don't think so. china has its own challenges and china's economy for investment, openness, it still has a lot of issues.
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i think the greater risk is if you move to greater fragmentation it becomes more disorder as opposed to order. that is the risk we face if the u.s. does not play the role it has played historically. do cr theert, what other risks to the global economy. it's potentially very destabilizing. i think after nine years of extraordinary monetary policies we are on the edge of an exit from those policies, but financial markets have very little priced an expectation for interest rate increase. so, you saw about a month ago when a few of the major central bank heads just started to reference the fact that this was going to have to change and markets took a little bit of a pop up. i think the central bankers have to walk a very fine line. they want to gradually move back to more normal policies reducing the big expansion of the ballot sheet, slowly increasing rates,
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-- balance sheet, slowly increasing rates, but they do not want to do it in a way that triggers down per -- downturn. this leads to debates about inflation and other things. the u.s. is further as the long. i think the federal reserve will proceed cautiously, but it's going to try to gradually increase rates and reduce the balance sheet. yes. thank you so much for joining us. .obert zoellick a former u.s. trade representative joining us. i had on bloomberg markets, sherty s will be along to update sheryery will --shery -- will be along. ♪
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haidi: it is almost 11:00 here in hong kong, 1 p.m. in sydney. ahn.hery we are in the middle of the agent trading day. welcome to bloomberg markets asia. ♪ shery: asia pacific stocks are it decade highs. gamekong extending the says the mood brightens. china says a trade war with america is in no one's interest. the foreign minister says the two sides must talk and north korea was on the agenda at the talks.
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beijing is optimistic new sanctions will trigger negotiation. also shaping financial markets, a barrage of july data out of china. including fx reserves and not to fxtion we will also get reserves. the estimate is it will climb a bit and stay above the $3 trillion mark. there's more optimism at the chinese market. this chart, it 8668 on the bloomberg showing exactly that. we are seeing less demand for long-term bonds as we see more optimism over the economy in the chinese market. so we are seeing the 10-year government bonds widening the yield gap with a one-year debt, the most in three months. of course, we did to have data -- we did have data on industrial process, it was showing strengthen the second-largest economy. we will see if that economic data is supported this week by
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cpi, pp numbers that we are also expected to get out of china. and it's not only optimism about the chinese markets. we are also sing optimism along the regional equity markets. we see them extending four weeks of gains. let's get the breakdown of the markets. again, sophie, we are near those 2007 highs. , not a bad start to the week. we have a lots of earnings to digest. they looking for data points from china, japan, and australia. stocks are near a decade high. bonds are tracking treasuries lower. we are seeing a mixed bag for asian currencies. credit suisse saying the
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is more focused on the dollar then north korea. dollar bulls will be closely watching the u.s. inflation report. commodities, the jump in steel and aluminum prices are sending miners across the region, on optimism that the prices will continue to rise, gaining almost 1% this monday here. and along with steel and aluminum, iron or also rising today. steel companies jumping there. you have materials gaining 9/10 of a percent. when you take it down by sector, imax functionm p on the terminal. imap function on the terminal. i pointed out, earnings are a
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key driver today, this week in asia. mitsui hitting 4.6% on its earnings beat. when you look at those who missed earnings estimates, we have other industries sliding today, given their report card. most since there were trees 16 tokyo giving that the loan yield -- given that the loan yield has been compressed. and toshiba is snapping a three-day drop, on a speculation over a new chip plant. and when it comes to mining stocks in sydney -- last friday, j.p. morgan upgraded the stock to overweight. and the last note -- a company gaining 4.6% in taipei, one of of the iphoneiers
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casing. we are expecting a report today on monday. ,hey are forecast to rise 10% slower than the 13% rise we got for exports in june. i.t. very much a key focus when it comes to sectors. say 10%, it is still a lot. thank you so much for joining us in that breakdown of the markets. of course, focus also over the weekend, right now, with korea. china saying it is confident that new sanctions will bring the reclusive state back to the negotiating table. the issue was discussed over the weekend. what has been the reaction? well, a step in the right general direction is the consensus. foreign ministers released a statement saying that north missileorth korea's
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launches in july, two of them, are a great concern and something needs to be done about it. it is a threat to the peace and stability in asia as well as the world. interesting reaction from china that you mentioned. china is confident that sanctions will put a lid, in fact will put a stop to north korea's nuclear program. china is also confident it could to therth korea come negotiation table. they have not done that in a long time. of notth and south spoken since 2015. china has warned that sanctions .ould escalate tensions what is important is the sanctions are not the end goal. we need to get north korea to the negotiating table. , also interesting to
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note that china has played a critical role. china agreed to the sanctions -- remember, china has the veto power. china understands the gravity. i also want to point out, shery, the role that china is playing. it seems to be the voice of reason. china did speak to north korea, asking north korea to react calm late -- calmly. on the other hand, it also went and urged them not to increase tensions with north korea. that china isng, playing this role in the whole situation. you've got to wonder if it is in xinping looking to
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play a bigger role now that china is withdrawing. shery: yeah, it is a mediating role, isn't it? for northanctions korea but these are, what? the third set of sanctions in 18 months. the message could not get clearer than this. >> yeah, these are the most stringent to date, as we have heard from the u.s. they cut about a third of exports, limited the activity of theanies overseas, limited guest workers, a bit of hard currency. will hurt the north korean economy remains to be seen. there is a lot of black money to begin with. it's not too big to begin with. it's only about $1 billion. the impact might be much less than, say, iran. we have some analysts
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that are a little more optimistic up the sanctions. take a listen to the director of control risk associate saying the sanctions could, in fact, work. imposing the most robust sanctions package on north korea we have seen in a decade, you will force on vocation of behavior. there have been few good options wasorth korea and no good pure the calculus seems to be if you increase the diplomatic and financial pressure on the regime itself, you will convince pyongyang to come to the negotiating table. shery: however, as you mentioned, the debate is there. can this make any difference at all when it comes to practical matters? shery: i think the inclusion of china and russia in this was very important.
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it is the message to north korea. hate, your biggest backers are really worried this thing might get out of hand. there is a question that they are really worried -- if they wanted an icbm for the u.s., he is already advanced to doing that. , warhe message from china would be a catastrophe. military conflict would be unthinkable. we have to find some way forward here. shery: we have heard mcmaster coming forward and saying trump is not ruling out preventative war. what is interesting about this debate over north korea is not everyone is on the same page. we are hearing south korea say they do want dialogue, but then you get the japanese, the foreign minister saying he does not favor talks at this time. how will this be resolved?
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see a: i think you will movement towards dialogue because the alternative is so scary and unthinkable. so much would be economically, much less the human toll, that going toward talks is the sensible option. how long does it take to get there? months?month, two looking -- the best message you could send a stop your missile testing. stop firing rockets every other week and then maybe we can talk. shery: and of course we have tillerson going from manila to thailand, to malaysia. what headlines can we expect? is the this trying to rebuff the idea that we are not paying attention to southeast asia. signs that, ok,
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we have north korea and southeast asia has been forgotten at the moment. tillerson will be out there reassuring the u.s., reassuring these countries that the u.s. is still in the region, still engaged. shery: whether or not make theica great again includes u.s. still being an agent. thank you for bringing the latest on those talks from the meeting in manila. word news with tom mackenzie. tom? tom: thanks. venezuela claims that a u.s. attack -- the government says several people were arrested after social media showed images of soldiers declaring a rebellion. security has been tightened across the country with military checkpoints in caracas and elsewhere. independent observers say that the story echoes an alleged
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attack on another base earlier this year. foreign deposits at banks in they may follow more after dropped the most in two years in june. some gulf lenders are refusing to roll over lending's when a mature because of saudi led diplomatic isolation. the banks are concerned they could face repercussions from their government. who appointed the special counsel to investigate alleged russian meddling in the u.s. election says that the inquiry is no mere fishing expedition. he says if robert mueller finds evidence of criminality, he can measures further. he impaneled a grand jury, which some say indicates he has found something. receiving push back
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after an email from an engineer. google remains in a quizzical in his belief that diversity and inclusion are critical to its success. global news 24 hours a day powered by more than 2700 journalists in more than 120 countries. i am tom mackenzie. this: right, still have hour -- how bitcoin-based technology could help companies. plus, gold is up 9% this year. we ask one of australia fro largest producers, what is on the horizon? this is bloomberg. ♪
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is bloomberg markets asia. i'm shery and. let's get a check of the latest
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bloomberg/headlines. toshiba -- the latest bloomberg/headlines. the gun of tokyo says exposure by the much delayed thursday deadline and we will get the earnings for the first quarter 2017. toshiba has taken another step at its western order, saying western digital has no right to shift production from a new factory called fab six. thatweek, iceberg said noble is in a perfect storm. noble now says he has already responded to earlier allegations from iceberg and has nothing more to say. employees have the second attempt to
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organize production plants. the voters voted almost two to one against joining the union. the vote is another setback for american labor groups. the total share of workers who belong to a union fell to a record low last year. and gold has been under pressure from the dollar's rebound following the strong payroll numbers at the weekend. let's discuss those prospects. we have our correspondent from the diggers and dealers conference, ceo -- thank you for joining us. let's discuss first of the price of gold. we are seeing that gold has been 1200 to 1300bound, has been the range in the chart. it is showing also volatility 2000 eight.below
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what will it take to see gold move out of this range? do you expect it to move higher or lower? >> look, i would say i expected to move higher. when you consider that range it was only a year or so ago the first fed rate hikes were coming out. so now the range that we are trading in, it is quite comfortable for us and especially for australian producers. underlyingis the inverse relationship with real interest rates. we see pressure from the fed that now, even with more fed hikes, gold has its positive base. we do have geopolitical issues, but those seem to be fairly short-lived unless it really
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kicks off. the structure as gold finds his place in more investment portfolios and pension funds, there simply would not be enough if everybody were not in a bit of play, so i feel quite positive on the issue. shery: in the macro environment though, gold demand has dipped to a two-year low in the second quarter. outlookll you see this rebounding? what is your forecast? >> i think in the last year in investment gold demand overtook jewelry demand for the first time in a wild. it's very volatile. the other side, we have to look at supply. to look at deeper and deeper mines, lower grade mines. it all matches together. i think demand, obviously, is just remaining relatively
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steady. shery: let's discuss a little bit about your business. you have done small exploration thecompanies recently, function go on the bloomberg showing that. your latest one, as they can peel mining -- a stake in peel mining. before that, catalyst. what are you looking for to act and production assets? >> we are certainly looking at that. million debt often 20 months in the strength of that cash flow continues into our bank balance. we just announced our first dividends since 1995. a dividend was announced this morning. now that the bank balance is picking up, we are starting to return to shareholders, we are looking for growth.
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we need to diversify the production base. when i look at and organic growth such as m&a, i look along the whole product, we look at early stage expression and we ,lso look at development assets assets in operation and even mergers. when we are focused internally paying off our debt, organic opportunities that extend the life are very affordable. so we have turned our focus to bigger m&a type of targets. it's very hard to do that in butralia and you do -- you've got to be careful to make some of the right choices. shery: that's exactly what i mean because your preference has been for gold in australia, but considering the market, what other places are you looking at? i know you have production in popper new guinea. what else is out there for you? -- i know you have production in papua new guinea.
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there are organic opportunities as well as an organic opportunities we still look at. in other jurisdictions, i'm not sure we are necessarily in position to blaze a new trail or new territory. if you have a company that is already successful in the new territory like somewhere in africa and there's a lot of good jurisdictions of africa: if you end up joining with the company that is more geographically diverse, that's a good way to balance the risks of a new area rather than going into a new jurisdiction. that is not something we would be looking to do. when you look at north america, the valuations are much higher for gold. what are we going to bring to north america and how would we make value for our shareholders when the valuations are so high their relative to australia? -- relative toe
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australia? but there are things even in europe. shery: even in europe. thank you so much, the ceo of saint barbara. coming up, is the glass half full or half empty when it comes to u.s. trade deals with the rest of the world and what is asia's role in sustaining global growth. more on that next. this is bloomberg. ♪
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shery: welcome back. the u.s. and parts of europe have gone south on globalization. it is a different story in the asia-pacific. enda curran is joining us now. what are we seeing? exports in double digit growth a lot of times. we are seeing south korea, taiwan, china, and japan doing very well. much of this is due to the
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it's a pretty positive story. it's not just exports indicating that globalization is alive and well. we are seeing foreign investment by u.s. automakers i am china. ford motor's has a big went there in particular, and the trade deals need to be talked about. so, overall, we are in quite a big space. yeah, visually, this shares surging. let's talk about interregional trade though. enda: traditionally it may be very dependent on the u.s. economic cycle in a sense. now interregional trade growth, they are becoming increasingly self-reliant. you can more or less predict what is happening with the u.s. economy and the european economy .
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now, that is not discounting the u.s., of course. doubt that there is an intrusion today that was not there before. shery: thank you for joining us. ♪
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>> trump is discussed trade in the last few hours. .nd the south korean about the $3 trillion mark. saidconomist we spoke to
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that it is around the trend in june and it is helped by the appreciation and better than appreciated growth. the disrupted air travel in japan. it affects more than 10,000 passengers. are affecting 4200 passengers. they expect this to make landfall on the coast. sharedding provider of workspace provides half $1 billion in asia and korea. they are stepping up this and this is part of the plan. had a deal tot expand in china and there was a
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joint venture in japan. by more thanowered 120 countries. this is bloomberg. we have a check on the markets. asian stocks are near a decade high in earnings and gaining over one present in the market. kong stocks extend is due tothe company report this month. 75% of those have reported so 77%.nd this number is heading to a two year these are among --
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this is despite the earnings on the weaker sale outlook and they are cutting back, so it would seem. >> we have measures by the government on shadow banking showing some resolve and there is liquidity and refinancing risks that remain evident and global liquidity has had a little bit of a problem and we have seen the chinese bond under pressure with further leveraging and crackdown. we expect that data out of china. steady and to stay growing at 9.5%. liquidity ande on refinancing risks remain
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evident. this is a big issue to what happens in the rest of the region and we are going to get data for the second day. this shows how the growth has stayed in the country in the past few years and we have seen some pickup in the media and this would be from the year on year in the fourth quarter. exports seeinge slowdown in the last quarter and the bloomberg intelligence they say to keep an eye on the numbers. abouter news, let's talk carmakers. they have plans to take a stake
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into one another and build a plant in the u.s.. makes honda feel more lonely as they pursue their strategy. our analyst is joining us now. talk about the difference with what theymakers and are doing. >> toyota is busy and they have tie up with mazda and all of this is to spread cost. zero. and they are advancing at rapid rates and all of the automakers need to partner up to spread the cost.
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isfar, it looks like it going it alone. possibilitybe a that there are more tieups in japan. >> when it gets to honda, there is a lower revenue base then toyota. why are they pursuing these partnerships? there are a lot of things going on in the boardrooms right now, especially with this current tie up and this recently announced one between toyota and mazda. they are thinking about what they are doing for the future to stay competitive in the marketplace. >> this has a lot to do with the factory that they hope to build in the united states. any favorites? >> this could be one of those plants and it is very logical.
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this is a win-win situation for toyota,, if you look at you look at the u.s. market and there is a huge shift into pickup trucks and suvs. there is lower oil prices. it is toyota partnering up to build the small cars. over the long-term, we don't know how viable, in terms of sales growth, the small cars are going to be, if oil prices keep dropping. >> always great to have you for a breakdown of automakers and tieups. blamescommonwealth bank a software error for deposits. there are breaches of money laundering rules that went
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undetected for almost three years. our reporter joins us. what happened here? >> we are still led on the details. this has been a substantive response to the allegations. madethey said is that they an unrelated software update to the machines that allowed people to deposit money and credit that to accounts and almost instantly abroad. they said that this had the effect of stopping the machines and the deposits over 10,000. it was three years before the mistake was noticed. >> on those requirements. what are the key ones that they should have met? >> there is a number of elements to this case and they are reporting that all of the
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are within 10 working days. the other thing about this is from thes also regulators that the bank had been notified by the police and there was suspected money laundering. regulators have yet to hear a response on those particular charges. >> not surprising, we could see the public sentiment. what are the chances that this the term ofilize the prime minister. let's it is too much to talk about that, but there is no doubt the pressure is holding. this and long wanted they are jumping on this.
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>> how secure is his job? that he has no intention of going anywhere. thatain reason for that is they have positioned themselves as a technology company. differentiator. it is definitely worrying. it has a lot to do with how analysts see the future. >> thank you for joining us. coming up on the show, more details on this is next. this is bloomberg.
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>> further investment related to michigan and the auto industry. missionre held with the didn't governor and they expect to make an announcement soon. it is not known how much money will be involved. foxconn said they will spend on a plant in wisconsin. $3.7 billion investments in technology. the ceo says that they are andng significant savings acquiring new customers cheaper. rivals are formidable competition in digital finance.
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>> we are a little more nimble and very fermentable. one of the advantages that we the activation is there is the acid pool of hundreds of millions of customers that can happen quickly. opening up at the top of the box office. for a numberwest one film. the emoji movie plunged 50% to just $12.3 million. north korea was front and center at meetings. we asked the australian minister
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what she sees as they risks to global stability. slow and not is a even economic growth that we have seen around the globe and we have seen that economic leading toack of it instability in a number of areas and around the world. , one of the drivers of extremism is a lack of economic opportunity and we have not seen to growth that we had hoped the global financial crisis. driver ofgreatest stabilities.
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is a launch of a ballistic missile and the un security council responded with the toughest set of sanctions. inl they be successful reining in north korea? is a resolution on sanctions and we have seen great and they are unanimous on this point and they are extensive sanctions, including and thatng of exports would have the impact on north korea and their ability with ballistic missile programs. the revision would have an they have the
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provocative missile test. >> these are the third set of sanctions. what makes you sure that they will work? north korea has been resistant to these sanctions. >> the regime must focus on the needs of the people and we have abide byth korea to the international law and the northtion's that prevent korea from building a ballistic missile and the activities are illegal. they are not improving the lot of the improve -- impoverished people. have all five permanent
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determined they are to prevent north korea from is onlyngerous and it just now being announced. there must be pressure to change behavior. it is a risk and it is a global threat. say thatfair to america and their nonproliferation policy has failed? >> i don't think it is that it has failed. and thes been progress frequency of this has increased and we are seeing a united unanimous council that they must
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it is the idea that it should be allowed to exist. so, it is important that we continue to work collectively and make sure that the sanctions universally.ed >> using force to neutralize the threat? >> the united states maintains all options are on the tape and that would clearly be the worst of bad options and we are looking to make sure that all of the nation's abide by the
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council resolution and implement them and that will hopefully lead to the opportunity for dialogue with north korea. with us bishop speaking . you can get more of that. saido spoke to the ceo who -- that interview. if you feel that i have not addressed all of the questions, you can send us instant messages and we will try to get to them. check it out. plenty more coming up on the show. how a new tech knowledge he company helps cut counterfeit from the supply chains. this is bloomberg.
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>> welcome back. thingset a check of getting underway. we have seen extensions of the gains and this was the longest weekly gain in five months. the nse remains above a psychologically-important level. ofs is after five weeks strength for the indian rupee, which has gained ground and we have seen the chinese yuan gaining. of course, this is a currency that has been rallying from weakness since early this year and has given a boost to some
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consumer stocks. and is the strengthening strengthened the and you cane stocks see the discretionary index in blue and gaining momentum. andave seen some correction it is not really significant, but there is a rebound right here that we are seeing, including the rise of these asian currencies and some of these big performers in the region. the technology behind cryptocurrencies is being evaluated.
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we are joined now to explain this. ,his is not really a surprise when you talk about fake food in china. i heard that they produced fake eggs. i think it would be harder to produce fake eggs then get real eggs. issue are these products? >> it costs the food industry around $40 billion a year and it has grown over the past decade, as we have seen the food industry gain with higher-quality for higher cost products. oil and honey targeted. world's biggest consumer market and the biggest production mark. for these it is a
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sorts of things. this is a company that runs food buying and china tracks down the whereupply chain to check the counterfeit and the fraud is taking place. >> how does this play itself into the equation? why does it attract the food fraud? >> some of the bigger retailers are being looked into over this and i will take you back a little bit. i was surprised to learn that a lot of the industry is still on paper records. projectmart did was a that looked at pork in china and they put all of the different elements along the supply chain
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when it comes to that. the thing about the block chain is that it cannot be broken. you cannot take it out. everybody on the chain it knows about it and it goes to the core problem. >> do we see a technology spread around the world? they see it as the future and there is nothing stopping them from putting one thing in the block and another thing into the food over here. there is a wider way of dealing with food overall. >> thank you so much for joining us. we are breaking down a new technology about counterfeit
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food. at the top of the hour, tracy will join me. we have a packed our coming up. how is that impacting the economy? >> we will look at that. and there was a short respite on friday, but we will talk to the portfolio manager about how low the greenback might go. closer to home, we have a meeting taking place today and tomorrow and it is clearly big news. is complianceion or lack thereof. this is the lowest since january. we will talk about what they can do to boost that.
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don't miss out bloomberg markets middle east. that is it for markets asia. this is bloomberg.
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