tv Bloomberg Markets Asia Bloomberg November 30, 2017 8:00pm-10:00pm EST
>> it is 12:00 p.m. in sydney. 9:00 a.m. in hong kong. i'm haidi lun and this is bloomberg markets: asia. asia-pacific markets start the last month of the year in positive moves. stock are supported by tax optimism. new highs on wall street. brothers in arms. saudi arabia and russia stand together as opec extends the curve to american shale producers.
keeping in contact, linkedin has big plans for asia. we are going to set the challengers and the rivals. we are heading into the end of the trading week here in asia, and we do have a really supportive lead from wall street as we had the dow passing 24,000. the s&p seeing its longest streak, monthly gains up by about a decade. we are going to get a potentially before christmas. we have over the last half hour or so had the announcement of suspension until 11:00 a.m. friday morning in washington. the key compromise has collapsed and is scrambling to salvage that. buoyancyeing the passed through to the asian session. couple of key numbers when it comes to the agenda today. japanese inflation edging slightly higher, but surging still half of that target.
we saw south korean inflation falling more than expected. the other piece of data we are watching for his the pmi. the private manufacturing survey. this one versus the official reading which came in stronger than connected yesterday, at the private companies. this chart is showing essentially the steeper the red bar shows the discrepancy theeen the difference, worth of that in private compared to the official. it does tell the story of transmission and some of these policies perhaps being more favorable when it comes to the wash up for larger state owned into prices which are more represented in that official member. in 40 minutesthat time. let us get to the asian session and sophie is chat room that for
us -- is tracking that for us. southeast asia and taiwan coming online. how are we going? sophie: not too bad a footing after 11 month games through november. let's take a look at the open in taipei and singapore. we had the taipei stocks fall over 1.4% on thursday. stock in singapore halting at the day drop. not sure if malaysia is open. may be easing a catch. you have your futures pointing lower. and the yen is picking up against the dollar as the u.s. senate delays voting on the tax bill until friday morning in the united dates, so we are seeing states, so weo -- are seeing stocks into your. the topix has risen 10 out of 15 times since 2002.
textiles are rebounding. financials are recovering from thursday losses over in sydney. you have the asx 200 just above the 6000 level. putting a couple of moves on your radar, let's take a look at nippon paint in tokyo, rising the most in over a year. it is still on the hunt for m&a deals after ending talks with excel to. sharp jumped over 8% as it is set to return to the tokyo exchange's first session on december 7, so we kick off december with this in view. haidi: supportive starts to the last month of the year of course after what has been a phenomenal year for equities. up-to-date with the first word news. ramy inocencio with the headlines in new york. ramy: eco-data. contrasting messages from korea and japan. data from seoul showed inflation slowing unexpectedly to a one year low on gas and russia both.
growth came in ahead of forecast. japan saw inflation accelerating .8% in october, but cpi remains far from the boj's 2% target. unemployment and household spending were unchanged. the white house and state department both the ninth speculation that president trump to dump secretary of state rex tillerson. administration officials tell us the subject has been under discussion since at least september with relations breaking down since midyear. the official line is that the rumors are not true and the two men continue to work together. wildan sachs says the rides enjoyed by bitcoin this year means it is too soon to lay out any strategy. lloyd blankfein says excessive volatility does not make the cryptocurrency feel stable or have long-term value. bitcoin jumped 15% once they before plunging more than 20% from that level and then rallying again. he said he fueled no urgency to
develop any plans. >> something that moves up and down 20% of not feel like a store value. we will see. if it works out and gets more established and trades like a stored value and does not move up and down 20% and has liquidity in it, we will get to it. ramy: bitcoin is not the only stop on a high. these companies have jumped more than 1000% in 2017. the market value has risen from $100 million to $1 billion this year. they makes graphite electrodes turn scrapped into deal. as for china investment, it has stakes in a gold mine and auto parts company. amazing numbers to news, 24 hours a day, powered by more than 2700 journalists and than 120in more countries. i am ramy inocencio, and this is bloomberg.
haidi: the u.s. senate has suspended a vote on the republican tax bill. that is late friday night. me with aller joins the twists and turns we have had over the last few hours. how are they going to get this over the finish line and what are some of the hurdles that have been popping up? >> after what looked like a pretty good day, they had john mccain on board and it looked like they were shoring up their vote. they had a big hurdle cost in front of their path that the senate rule-making body decided that one way they were going to try to get three key republicans on boardwalk work. it was a trigger that increased taxes if the revenue targets were not met. they cannot go that way now, so those three vote are in danger, and they cannot afford to lose .ore than two republican votes no democrats were going to vote
for this. they were scrambling to get folks on board, but were concerned about the deficit being real. they got word that this would basically blow a $1 trillion whole and the deficit, even with some economic growth, so that is making some members nervous as well. haidi: was it surprising that john mccain got behind it overnight given that he was the one who scuppered the obamacare proposal? how crucial is his vote to this? >> it was very important. that got people thinking, ok, this may be is going to pass, especially since he had been the one who had scuttled the earlier passage of obamacare in the senate. the obamacare repeal in the senate with that famous thumbs down vote. so that was important, but the problem now is having these other senators, including this trio of republican senator's, who are skeptical.
one of those is jeff flake, who is retiring. so may well want to vote against it. there really are procedural and real kind of legislative triangulating here to try to get this passed. again, they want to do this quickly. if they have to wait, wait until next week. if earth being difficult to try to get this passed and then reconciled with the house by the end of the year, as a badly want to do. haidi: so what does actually happen, say it does get passed in the senate? what are the other challenges that are there? >> they have to reconcile the senate bill with the house bill. both chambers have to pass the same exact bill, and so the house bill is different. that individual mandate. it does not treat state and local taxes the same way. it limits some, but it does not
get rid of the exemption, so there are some big hurdles trying to put them both together, and that timeframe, trying to do it by the end of the year when there are not that many legislative days less, especially if the senate vote is delayed some. it makes it tricky. it tricky indeed. interesting to see how markets wake up to this news that it has been suspended until 11:00 a.m. washington time on friday. thank you so much for that, jody seiter for us in hong kong. lots of twists and turns as we have had a drama on the voting floor. we are getting lines through from the news agency in south it has arranged more than 13,000 kilometers. of course, we had some speculation as to the distance it could travel and whether it could actually beat washington these the, so that one line coming through for us there. still ahead on the program, ken
haidi: this is "bloomberg markets: asia." i'm haidi lun in sydney. a quick check of the latest business flash headlines. talks with exalts a collapse. it said its rival was unwilling to match its perceived value and take on the debt of what would be a $10 billion deal. the biggest shareholder is warren buffett, work for hathaway. two separate deals this month. broadcom is said to be delaying its pursuit of quail, until next year.
sources tell bloomberg it does not anticipate raising the $105 billion bid until closer to qualcomm's board meeting in march. it does plan to nominate directors on qualcomm's board next week. meanwhile, qualcomm facing opposition to its $47 million bid for an xp -- nxp. they plan to push qualcomm to sweeten its bid. they are said to have scrapped the latest restart plan for this iron ore mine in brazil. was shut two years ago, killing 19 people and polluting them via waterways. a new exam is being built. japanese inflation picked up pace in october, but price rises are still less than half the bank of japan's target despite
the tightest labor market in decades. the boj to lift the 10 year yield target next year. joining me in sydney is the global macro strategist at ubs securities australia. great to see you. let me throw up this quick chart could give the picture of what the boj is battling with. it gives a global picture of what the theme has been this year. the boj is battling the most severe deflationary forces given the last couple of decades, but what are we seeing given the job applicant ratio is what is the biggest jump or the highest we 1970's.n since the why are we seeing that translated to hire spending and inflation? >> you are seeing green shoots of that already. few are not at the 2% inflation yet. it reason for that is that is incredibly low and bergen. we have seen wage gains or labor market gains for a long period time. not enough. the pickup in inflation you have
had over the last year or so it is a good sign that you might actually see inflation moving towards target. haidi: we talk about five years of abenomics. is it working or is it just that it is taking longer than what the market expects it to? >> you have had a pretty good economic sort of environment for 10 years or so. that is what has been needed to get inflation on the rise. you basically have needed these massive labor market gains to get below. we are on par for reaching the target but it may still be a year or two away. haidi: does that change or call about the boj lifting that 10 year yield target next year? >> if you look at what boj speakers have been saying recently, they basically opened the door to adjust the target perhaps ahead of 2% inflation. we think it might be enough for inflation to get on core metrics about 1% or so. that might be in the first half of next year, maybe the second
half of next year, but nevertheless, it may be a story for next year. at the 10 year yield in japan, it has been incredibly stable under yield curve control. if they adjust that target, you could see a whole lot more volatility come next year. haidi: it's fascinating, isn't it? if you just ignore inflation, which is hard to do in the core mandate from a central banks, economic growth in japan has been stellar. growth in south korea has been really strong as well, which is clearly why the be ok felt the need to move yesterday. inflation fell the most in a year today, so are we overstating the synchronized global growth story or is it the fact that inflation is a shock from problem -- the structural problem? freddie: japan is a -- >> japan is a separate story. you're seeing it in the u.s., in large parts of europe, and also in australia, of course, wages
are not really picking up that much. sometimes, not at all. and no one really knows -- it is quite clear it is lower everywhere. haidi: are these financial stability concerns? wages are growing near record lows. a lot of them are struggling with a very high degree of leverage, household debt. >> i do think that is a concern. we have seen a lot of policy being rolled out in force as a result. but i do think, you know, with the coming years, you will perhaps, asset prices keep running higher, you will probably see some concerns. to some extent, that has as well. it can. equities are rising. know, theret, you are risks in certain markets, etc.. perhaps it does not want to say it that explicitly. it is sort of part of that calculation for the fed, i think.
haidi: other than the existential crisis of why aren't we getting inflation, but what is going on with the flattening yield curve? i want to bring up another chart. in the bond market, everyone is trying to work out, does this suggest something terrible is just around the corner? the market is pretty clear, taking this as a message to drive the dollar. what is driving this sentiment? >> i think it is very symbolic for how, you know, fed hikes, at the later stage of the cycle, may not be beneficial for the currency. that's because, essentially, longer-term yields are not too far from terminal rates. the fed probably expects to hike rates up to 275 or something like that. just keep it there in the long term. the 10 year yield is already not too far from there. the third year yield is slightly above that. from some perspective, we think the just symbolizes how
currency market may move on to focus on second over central banks at this stage in the cycle. datatually a pretty busy agenda going into the week. seeas always interesting to just how much there was with the official gauge. narrativechange the of the managed slowdown for you at all? >> it confirms the narrative. obviously today, we get to more inside. they are moving towards a rebalancing towards services sector of the economy. it seems to be going fairly smoothly. you're probably going to have some volatility along the way, but pretty much the best we can hope for at this stage. joakim: the main one would probably be the curve will in the u.s. continue to flatten. regarding the
boj. haidi: have a great weekend. thank you for coming on for us. it is good to get the insights from ubs securities australia with me in sydney. south korea's gdp, not inflation, mind you, but gdp estimates being beaten for the third quarter. inflation sinking to the one year low. this is bloomberg. ♪
what stands out in particular to you? bok pullsry after the the trigger. steve: the headline number and the core cpi number really standing out. we expected the gdp number to come in, the final number, right around where it was. 3.8%. that is the fastest pace of growth since 2014. ofching it, first quarter 2014, which was the fastest pace since the first quarter of 2011. that, we knew. the south korean economy has been humming along on great exports in the global economy as well. things are going pretty well. hike around inflation pressures. 25 basis point. dissent that you mentioned
voiced concern that inflation is not as high as, you know, the government is predicting. it was inching towards 2%. that is their target. it was 1.8% the previous month. the headline number falling down to 1.3%. the core falling down to 1.2%. month over month as well for the down zero point 7%. that is the biggest decline month over month for cpi inflation since 1986, so maybe the lone the center was onto something here. the wiseu, maybe he is one. we will have to wait and see. we are watching out for numbers in china manufacturing. steve: yeah, of course, because obviously, these export dependent economies are often times very much linked as well with the holiday aberrations as
well. wey all get affected, and had some holiday is of course in october, so we are starting to get more interesting numbers are the trade numbers for south korea were below estimates. exports, imports, trade balance below estimates. humming along very well. semiconductors and technology rebound globally had been feeding into that. we had double-digit gains for the first nine months of this year for exports, but then that dropped off because of the big holiday season in october in south korea with the thanksgiving and all the families and all of the production slowing down. that went down in the single digits. we are expecting that to pop up to 10.3%. it came in at 9% growth. a little bit below expectations. the export story, pretty strong in south korea. the be ok yesterday saying the semiconductor cycle is still
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haidi: 9:29 in hong kong, just ahead of the the open. we are looking at negativity, if you will, going into that open in china. a few lines. the bank skipping operations this friday, noting liquidity is at a relatively high level. we know they do daily adjustments to ensure a balanced level of liquidity in the markets. setlso have the reference at 60.67 against the u.s. dollar today. q number we are looking out for in 15 minutesge
time. we are expecting some pressure coming through from that environmental crackdown, the rebalancing ahead of going into that where we see pollution higher and policymakers trying to avoid that and weakness when it comes to exports. we did see that perhaps as a hit coming through on the less than expected numbers on south korea. sophie, not quite enjoying the party we are seeing elsewhere. sophie: even that party is dampening somewhat. u.s. futures pointing lower for the tax encountering. let's take a look at what is happening for the open. shanghai shares extending losses for a second day. about 20%. flipping the board to see the action in hong kong, the hang seng gain about .3%. after an the rise
decent november for hong kong stocks with mainland inflows jumping to a record for that month. signs are showing as we checked words year-end. taking a look at the movers, tech recovering from the losses we saw on thursday. of about 1.5%. nomura raised the price target by 9% on optimism for the link brand. we are seeing more holdings falling 2% this morning. we are seeing moves for gambling shares. cal casino stocks on the back of the ratings. galaxy independent being upgraded. the best perform on the hang seng sent china higher. it was estimated to buy at hsbc. gaining over 4% this morning. neutral.wngraded to lawrencee speaking to
later on in the show at 11:00, 10:00 a.m.. chinese construction companies. equipment makers listed in hong kong and china after caterpillar flight caution china's economic outlook in 2018. keep an eye on the space right here. haidi: a stocks to watch with sophie. thank you so much for that. ramy inocencio with the headlines at the hour in new york. the past hour, the u.s. senate suspended votes on republican tax bill until 11:00 a.m. friday, washington time, 14 hours from now. lawmakers rejected a so-called trigger proposal designed to win support three of three holdouts had tied their votes to the mechanism which would have raised taxes automatically if promised revenues were not met. john mccain had indicated his support. he helped scuttle the obamacare repeal earlier this year.
the trump administration is calling on other major economies to offer a united response to china's a slow embrace of market principles. the rebuke comes as washington seeks beijing's help in corralling north korea and follow the period where the president scaled-back public criticism of china. the treasury says it is concerned that recent economic liberalization has load or even reversed. >> they are putting too many of their marbles in state owned enterprises, in the party structure. doingw that what they are is not working for u.s. workers, so that is the impetus for the change. angelaver to europe and merkel has held her first meeting with the social democrats in an attempt to forge a new governing partnership. the talks happen more than two months after germany's inconclusive election left merkel short of a majority. as deputy leaders were initially
said to be wary of reviving the so-called grand coalition with the cdu after both parties emerged from the vote with a weakened state. the u.k.'s efforts to compromise on the irish border are under threat from the party that supports theresa may's government. the democratic unionist party is opposed to any compromise at dublin and says it will abandon me if necessary. the average government spokesman says the u.k. still has not produced enough progress on the border issue. monday. has set a deadline to the liver. powered by more than 2700 journalists and analysts in more than 120 countries, i am ramy inocencio, and this is bloomberg. allies haveand his agreed to maintain cuts to the end of 2018 after a day of talks in vienna. the top producers showed some unprecedented solidarity. the russian energy minister told
bloomberg an agreement was not difficult. >> i can say the discussion process around the proposed project of the declaration of cooperation was fairly straightforward so the project presented by a group of ministers was accepted by most, and i can say the time taken to adopt this was fairly short. haidi: for more on this, but us get to our energy reporter. ben, fascinating. he says "i stand united, shoulder to shoulder, really reinforcing this and alliance." is it enough to push for the rebalancing in the market? ben: it is certainly a positive sign. if you look at the cut so far, halved since january, reaching the five-year average. it is still about 140 million barrels above that, so there is
evidence the cuts are working at the moment. largely expected, the outcome, no nasty surprises, so that is why you saw a bit of a mutual response from prices, and it is likely to hang around this area at the moment, but it looks like onwards and upwards from opec. no nasty surprises. plenty of surprises, though. what do you make of nigeria being included in that regional position being exempt? ben: it is a great sign that opec were able to bring nigeria and libya into the fold. impact of thee market, is it token. byh countries are hamstrung the internal conflicts they have. cap thing, agreeing to not theease their output above 2.8 highs, combined,
million dollars per day. haidi: is the biggest challenge ahead still on the u.s. side? has put this opec big deal to bed, all eyes are on what is happening in the u.s.. we had numbers during the week showing that production had climbed to 9.6 8 million barrels per day, which is a new record. the challenge is there now. it is responding pretty well, boosting upward. haidi: thank you so much for that. he was going through what the market wanted and what the market got in terms of that extension deal with opec and on opec members. let's get back to one of our top stories. japan's inflation seems to be inching higher.
consumer prices show at least a continues to go in the right direction. let's get over to the new york where kathleen hays is here, crunching the numbers. we are also looking at the federal reserve. another official getting ready to hike rates regardless of low inflation. let's start off with the fed, if you will. who's talking this time? existsn: the conundrum in so many developed countries. we are talking about loretta mester. she has been hawkish in the past , but she steps down in washington with our own michael just like she said, jay powell, the incoming fed chair had a couple of days ago, she agrees the case is there for a december rate hike. let's see what she said. >> we really need to be moving interest rates up gradually given where the economy is pure growth is at a sustainable pace. labor markets continue to
improve. kathleen: it is not just the labor market. the consumer is holding up reasonably well. in fact, we got consumer spending numbers for the month of november, and after surging in october, hurricane related purchases, you have got to get a other one.e the a. consumer spending back to more normal pace of 0.3%. a lot of focus on more on inflation, which did inch a little bit higher. 6897 tells a story simply and easily. you have the red line for the target and a turquoise mine for the headline -- livne for the headlines. a long you go to get to do percent. team.erg economics that is set to tighten policy. thekaplan, president of dallas fed. the fed is wise to take the step
on tightening in the near future. i expect that is december 13. wedi: moving to japan, as started talking about yesterday, we heard from the boj's harada, saying the prices are not rising. it is still a major problem, right? that is why they get paid the big ben: thoughts -- kathleen: that is why they get paid the big bucks. the economy is doing better in japan. let's start with the inflation numbers in japan. is fact that inflation inching higher is good to me. let's look at #btv 7942. the most important is the white line -- the most important line is the white line. take a look at that citi trends. it may take a bit to get to 2%, but it is clearly moving in the right direction. why the optimistic? #btv 4596. you can see the jobless rate,
you can see the job applicant ratio, the unemployment rate down around 2.8%, holding steady at a very low level we have not seen since the mid-1990's. the job applicant ratio up to 1.55. that is one of the best levels we have seen since the 1970's. household spending was flat after being weak. as the boj gets ready to meet, i generateis about -- 23rd. they are getting good numbers. probably not enough for them to make any changes in policy. the one story i want everybody to read is a great story about how mobile phone bills and prime minister abe decided to take steps to make more competition, to make mobile phones were cheap, has really undercut the boj. call.e he made this they let more independent
operators into the business. phone service contracts. the prices fell 25 months in a row year-over-year. under kuroda in october, they noted the price drop was the biggest reason the boj had to cut its fiscal year 28 inflation forecast. it is a big deal. remember, janet yellen has been saying the same thing. one of the special factors in low core inflation in the u.s., the cheaper global phone contracts. maybe it is mobile phone prices around the world. [laughter] haidi: maybe that is something we are not looking in depth enough. certainly really fascinating. thank you so much for that. kathleen hays there in new york. tokedin has got big plans move its presence across asia. the managing director joins us next. this is bloomberg. ♪
haidi: this is "bloomberg markets: asia." i'm haidi lun in sydney. we are just a couple minutes out the from the release of private gauge of manufacturing indicator coming out of china. we are going to take a look at whether that correlates with the unexpected strength we had yesterday. it is just out at the moment. we have got a number at 50.8 coming in just a shade lower than the expectations of 50.9 for october. 50.8 for the manufacturing pmi. some context that is worth pointing out is we do see more of the smaller export oriented private companies represented in the survey as opposed to the official menu gauge from the government looking at these larger, oftentimes state owned enterprises. companyally a smaller that seem to perform a little bit weaker when it comes to the forward indicators. what we had just shy of
the 50.9 expectation. moving ahead, we have been talking about japanese job market. we are seeing job markets across the world. has not been feeding through to wage growth. it is a very interesting conundrum that policymakers are facing. our next guest is from linkedin. the company is making big inroads into asia. this is the largest online professional network with more than 138 million members of the region since it launched last year. olivia legrand runs linkedin in asia as well as japan and he joins us exclusively from singapore. what kind of trends are you seeing in terms of the way that the service is being used at the moment? olivier: good morning, we are seeing one of every four professionals in the world is in this part of the world. incredible milestones
this year with more than half a billion members on the platform and as we crossed the 100 ,illion mark in august in asia we are at 130 million. the platform continues to grow at an incredible rate of roughly two bank new members per second. it is definitely relevant in helping professionals in asia connecting with that. that: where are you saying opportunity is?i'm curious as to how that phenomenon that we see on a microeconomic level, the supertight job markets in japan. job to applicant ratio since the mid-1970's. how is it playing out in terms of, you know, who and how people are using linkedin to find opportunities and talent? we cross really interesting milestones across the region.
in india, 45 million members. in china, 36 million. those are markets that is important. 2 billion more in singapore. we are seeing trends in terms of the type of talents. artificial intelligence, cloud computing, are very important. shortagere seeing is a of those talents in the region, and the region being a net exporter of those talents. what are the challenges, creating more of those talents and retaining more of the talents in the pacific region. haidi: what are the engagement numbers that you can share with us in terms of, you know, not just membership numbers, but actually keep on linkedin being able to use it to take advantage of opportunities and having those interactions? olivier: yeah, so, we have now
at any point in time over 10 million jobs on the platform. moreembers are publishing than 100,000 articles every week on the platform, so it is a mix of connecting with opportunities in the forms of jobs, but also in the forms of relevant confessional information. that will drive it. learning is more and more leveraged on our platform, and really, our members are using the platform to get the skills to be successful in their jobs. that is the interaction we have today. at thei am looking number. i shouldrs -- members, say, being created in asia every second. that is really extraordinary growth in terms of membership. you spoke about the need for providing relevant and accurate professional information. do you see the challenge as also being misused when it comes to linkedin as we have seen on
other social media platforms on the likes of twitter and facebook and even the likes of youtube where you do have an abuse of the platform and this kind of threat of misinformation being spread? olivier: there is always a risk for that. the context of our platform is that it is purely professional and has been professional since is creating a unique environment in terms of our members portraying themselves as professionals in front of their networks, so there is a real attention paid by the members in terms of driving the value back to the platform as well as getting value from the platform. we are seeing much, much less of that than in the personal sphere in the networks you have mentioned, for example. haidi: in terms of the geographic breakdown, where are you seeing the most business, or the most opportunities in terms of -- are you looking at the younger workforces in the likes of indonesia, the philippines, southeast asia, or where are you
seeing the most traction? olivier: absolutely, developing economies are a massive opportunity for us. we launched earlier this year a product called linkedin light, a web version of our application that has been designed for lower markets. we are seeing this as a big driver of our success and growth in this part of the world. we are driving opportunity for youth and indonesia and malaysia 's pacific region. and across the developing market all over the world. that segment is very important. a lot of high-level professionals which are now whog the platform and many were to leverage their relationships and get access to high-quality content that will make them better at their job. students, across developed markets, developing markets, and it is a very ubiquitous usage of the platform we are seeing across various different dimensions.
what is your biggest prediction when it comes to how much the workforce is going to change the market? recruiters that people are just not seeing at the moment? olivier: we are paying a lot of attention to that. we are now publishing a monthly workforce report in the u.s. and looking at doing more of that, so we want to stay at the core of this notion of the skills gap. what we're seeing is really how companies, people, and governments would be involved with that. learning from individuals, members, professionals, that we lifelongup with learning and learning through companies that will provide, to their employees, the platforms and the means to require the skills to stay relevant to their jobs and government. initiatives like the one in
singapore, which are really focused on driving the tools for people to acquire the right skills around the world. so that is very, very important. the skills themselves are very dynamic. i mentioned cloud computing, artificial intelligence. marketplace and want to share a bit of the data back to individuals, companies, and governments, to be successful in addressing this. haidi: thank you so much for that. us fromlegrand joining singapore, the managing director for linkedin for the asia-pacific. as well as japan. some news crushing the bloomberg about toshiba. finally, an update when it comes to where this tussle with western digital is that pure they are close to set -- digital is at. western digital will drop efforts to block the sale of the
memory business in exchange for an extension of their agreement, according to people familiar with the matter. we are hearing that western digital plans to end these arbitration claims in the u.s.. course, they reached that agreement with a consortium led by bank capital. presumably, this development does allow now that to proceed. we will get more on this as details become available. more to come. this is bloomberg. ♪
haidi: a quick check of our markets and how they are rubbing up the trading week. a pretty buoyant start to the last trading month of the year. we are starting to see that fade. the nikkei 225 lower by one .1 percent. futures signaling a lower open. we had the pushback or suspension of that senate vote on the tax bill until friday morning, washington time. toe is sydney, holding on
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♪ it is almost 1:00 p.m. in sydney. i'm haidi lun. this is "bloomberg markets: asia." ♪ haidi: the slowdown is there, but china shows resilience, the private factory gauge a shade below expectations. ishiba jumping on reports it close to a deal with western digital. brothers and arms, saudi arabia and russia standing together as opec extends the curbs, american
shale producers the target. are seeing this buoyant friday supported by that strong record after record in the u.s., the dow crossing 24,000, also records set by the s&p, but that is starting to fade in asia has we have indications the senate bill on tax reform could take longer and it may be quite difficult. that has been suspended for the vote 11:00 am friday time. what a year it has been for global equities. stocks -- thisl is 4999, global stocks carried through to december, the 13th monthly gain, the msci all country world index, the first
time in the three decade history of that index that the gauge got yeargh an entire calendar without a monthly decline, so the longest winning streak as we get this momentum driven rally in global equities. let's get it over to sophie now. we are not seeing a lot of momentum. i reckon investors are looking forward to happy hour after the week we have had. we are seeing gains here out across the region. .1%, u.s. 225 losing futures pointing lower, and we are seeing that risk appetite as the dollar is 112.40, and gold on the up and gaining ground. chinese large caps under pressure, while the chinese islands are on the rise. the shanghai composite lower for a second session. energy players the biggest drag,
energy stocks and materials losing ground after the latest private serve survey of pmi. .1% am a do have some gainers, komatsu in particular, leading advancers. morgan stanley with an overweight rating saying momentum is driven by china and other emerging markets. interesting to note, caterpillar has flagged caution around china's growth outlook in 2018. you see telco stocks being led lower by ntt. push to bank says the lower fees threatens carriers. some other stock movers, sharp on the rise as it awaits its return to the tokyo exchange on december 7. nippon paint in the hunt for m&a
deals. tencent reversing gains, dropping over 2%. when you look at the breakdown for regional stocks, i.t. shares continuing to slide down over 15% today. much forank you so that. getting this note from david ingles pointing out it is the worst week for asia this year, the only week where stocks have dropped monday through friday, an indication of a phenomenal year for equities. let's get you caught up with first word news with the headlines. close to aba settlement with western digital over the sale of their flash memory chip venture. bloomberg has been told western will drop its legal challenge and exchange or the extension of other joint ventures, including a guaranteed supply of new chips from a new plant. toshiba was to sell the unit to a consortium led by bain capital
for $18 billion. contrasting messages from korea and japan. data showed inflation slowing while growth came in ahead of forecast the last quarter. japan's inflation accelerating 2.8% in october, cpi remains far from the 2% target. unemployment and household spending were unchanged. the white house and state department are both the denying speculation that president trump is preparing to dump secretary of state rex tillerson. administration officials tell us the subject has been under discussion since at least september with relations breaking down since midyear. theofficial line is that rumors are not true and the two men continue to work together. opec and its allies have agreed to extend production curbs until the end of next year to balance the oil markets and rest back the initiative from american shale drillers.
the unprecedented alliance between saudi arabia and russia confounded analysts who said moscow was reluctant to keep the curbs going. the saudi energy ministers of the two are united. >> we elected to call it an amendment in january 2018 through december 31, so basically a one-year agreement with the tweaking of the language to strengthen the to conformity by each and every one of the participating countries. i can say the discussion process around the proposed project was fairly straightforward. the project presented by a group of ministers was accepted by most, and i can say the time taken to adopt this was very short. paul: global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg.
haidi: thank you so much for that. has we were talking with the sophie, markets across asia looking listless. for asiahe worst week all year. this is the first time we have seen a monday to friday drop. despiteei 225 off .2%, the record close in the u.s. on optimism tax reform will get through by christmas. we have suspension of the vote until friday and a tussle over a key compromise and they are scrambling to see if that is workable. u.s. equities futures looking negative as well. hong kong keeping its head above water .1%, although we are seeing a drop when it comes to tencent. shanghai lower by .1%. .5%.y also seeing gains of lots of data to focus on, japan
inflation creeping up on a but still half of the 2% target. fallingrea inflation more than expected after a tightening move from the bank of pmi a and china taking shade off of expectations. .et's get more on these markets mark cranfield joins us now. the pmi was neither here nor there here it what is driving this seeming downturn in sentiment in asia today? >> i think asia is disappointed that this tax deal is not out of the way. i think people came in this findng thinking they would everything agreed in washington and off they go and they can follow the great rally in the united states. that is not the case. this has been pushed back to friday. asia is saying we just have to tread water for the rest of the day. when they look at the data, there is a good set of emi
manufacturing reports to come out today that follows the good report from china yesterday, japan, south korea, thailand all improved from the previous month. the underlying data is pretty good. once people get back to looking at that, they should feel more comfortable. haidi: where are we seeing weakness and fatigue -- in particular? taiwan is flashing concern at the moment. is this an extension of fang which we saw a rebound from in the overnight session? been onech sector has of the fantastic performers this year, and asia has been a big part of that. asia has some stale positioning the needs to be unwound, but if you look at the united states, they seem to be back on track. it is probably a temporary thing and asia will get past it. for the short-term, they are asappointed, but as soon
eight stock like tencent stabilizes come it will help the region. haidi: we have been scratching our heads as to why we saw that sudden decline when it comes to tencent. .ou look at the bigger picture it has been an extra generic run for global equities, the best in three decades when it comes to the all country world index. is there a sense that we will see a pullback soon? >> if you look at the projections for growth next year, oecd, all are saying world growth will be extremely good in 2018, possibly better than this year. there is no particular reason for people to turn negative. inflation is subdued, well under control. central banks generally are still helpful, although we have seen the fed raise interest rates and south korea doing it, but there is telling us there is not much more to come come us of the central banks are not taking away the punch bowl in a hurry. processgradual
come us of the background factor for more gross next year in equity markets is good. short-termound to be disruptions, but 2018, i think a lot of people would agree with analysts who say markets to generally do better by the end of the year and will be higher than they were at the beginning of the year. haidi: thank you so much for that. it is good to into the week on a positive note, right? our cranfield there from mliv team. you can follow that on the and get aat mliv market run down in one click. there is ongoing a live commentary and analysis from bloomberg's expert editors so you can find out what is affecting your investment at any given moment in time. coming up, why lloyd blankfein is not impressed when it comes to bitcoins massive run-up.
♪ haidi: this is "bloomberg markets: asia." i am haidi lun in sydney. a quick check of the business flash headlines. talks paint jumping after collapsed. wasaid its rival unwilling to take on the death to complete a $10 billion deal. shareholder is berkshire hathaway. the company has had to suffer deals fall through this month. itsdcom delaying acquisition of qualcomm until next year. raisingnot anticipate
the bid until the board meeting in march. meanwhile, qualcomm is facing opposition in its bid for the next. a group of shareholders plan to press qualcomm to sweeten its bid. and -- bhp vale could not agree on terms for using waste storage pit by vale. it was shut down after a tailing dam collapsed. another option is to divert waste into a nearby valley while the new tailing dam is built. agreedd its allies to maintain production cuts until 2018. her next guest is a former energy adviser to the iranian
prime minister and sees oil prices between $55 and $75 in the medium-term. singapore, now from great to have you with us as always. let me start off with a quick chart as to how they have done so far with these curbs. mission in the process of being accomplished. we have seen global product inventory shrink and a pickup when it comes to prices as well. this deal which the market expected and wanted, is it enough to keep pushing participants to rebalance? >> i think the market is already in balance. the concept of the five-year average inventory is not really a sound concept. when opec reaches the five-year average, i think the prices will
be $65 to $70, which made the russians nervous. the price of oil is going to high, too fast, and that would bring in competition. action the market is already in balance today. by thewere you surprised united front presented by russia and saudi arabia, the saudi energy minister saying we stand shoulder to shoulder. was that of each and's a positive surprise? allegiance a positive surprise? 2016 thisecember cooperation has been very good. both of them knew they had no choice. if they did not agree to a nine-month extension, the prices would definitely fall. the net longs in the market are at record levels and everybody is nervous. taken very little
to bring prices down five dollars to $10. they had no choice. they did what they had to do, and they did it well. haidi: what about the inclusion libya?ria and that came as a positive surprise. are the implications significant? >> i think it is quite significant. one thing that did not come out in the meeting is how much they can produce. as you would have noticed, they have restarted the clock, not from march to the end of the year, but from january 2018 to the end of 2018, and this is why. they want live via and nigeria to be subject to the agreement from next month, and that is why rathere starting earlier than the end of march is expected before. we mentioned at the top that your view on prices over
the medium-term range from $55 to $70. clearly the days of $100 a barrel are behind us, but i am curious what factors you are factoring into the lower end and on your end of that range. the prices fell from $100 to $50, but the right way to look up it is the prices when and double for no reason come us a $100 was the apparition of four years. what will happen this existing opec agreement is that the prices will go higher than opec $75 as theto inventories become smaller and smaller, so then they could either reorganize the agreement or starts cheating, which i expect they will do. opec is good at getting together when prices are low.
when the prices are high, the russians and opec will find it easier to produce more oil, so higher prices today mean lower prices in 2019, you can be sure of that. or $70, what happens to u.s. shale? today the news came that the u.s. shale production increased by 140,000 barrels per day above what was expected. i think there will be substantial growth. in the u.s., they don't look at the brent market. they look at the vti. $55,ng as the vti is above prices will do two things. one you hedge when you're ford's so you don't care what happens to prices. the second, those projects which were not working like bach and or eagle ford i'll become active
. so there will be a price to pay and this is why the russians are saying the prices are going higher, meaning the prices will come lower. the lower it at price, but opec and saudi want higher prices because they won a higher price for the ipo they plan to do, so the russians have a good point in trying to moderate the price growth. that is also what i wanted to go into, does this environment where you have a goldilocks price point when it comes to crude, does that set up s want to beudi going into the aramco ipo? ipo,ey need $65 for the but the financial markets can see that if you in-depth with a higher price now, you will end up with a lower price later, so
the forward curves would factor that in. i am doubtful whether the $2 trillion valuation they want the big get, but so far bosses in saudi arabia wanted to happen and everybody is moving in that direction. everything is set for the second half 2018 to bring the ipo on. haidi: stay with us. plenty more to talk about. i want to get your views on the demand side of thing, particularly china and whether xitwill get talk of an e strategy from opec. plenty more to come. ♪
lun in sydney. let's pick up on our conversation with our guest, the founder and chairman of international energy consultancy . thank you for staying with us. we were having a chat over the potential for greater volatility swings if compliance stays high and we are in the situation for another year at east. .o you see -- at least do see some sort of geopolitical interruption we have not priced into move the market significantly? >> the answer is yes. and non-opecec stick with the cuts, the market is very tight. of impact on oil production which before did not seem to matter, now matters. let's say another big conflict in libya cuts production by 500,000 barrels a day, another major boko boko haram attack in nigeria cuts production, that can lead to substantial
increases in the price of oil. if anything happens in saudi arabia which impacts the stability, then prices can go through the roof, so the market is now at the moment tends to be volatile on the upside. as long as the cuts continue, i and otherssaudis will produce more and dampen the price. factor thatther could obviously introduce aggressive moves in the market it strategy.of an ex they were adamant it is too early to talk about it. what would it actually look like? exit strategy would look like this, september and october next year, you are close to the
end of the year, then you start talking about phasing it out. this exit strategy cannot be coming in one blow. it has to be phased in by saying you go from 1.8 million barrels a day combined cut back to one million, then in a few months, 500,000, but remember that has the prices go up, opec will start cheating. the opec cheating will itself moderate the system by itself, so that would be a way of phasing out by looking at the cheating. as i said, opec is good when the prices are down. when the prices are good, the conditions will be much greater to produce more. haidi: always a pleasure to have those insights from you.
i am paul allen with the first word headlines. the u.s. senate has suspended votes on the republican tax bill until 11:00 am friday washington are when rule makers expected to trigger a proposal designed to win support of three gop holdouts. , john mccain indicated his support. he helped to scuttle the obamacare repeal earlier this year. chancellor angela merkel has held her first meeting with the social democrats to forge a new government partnership. the talks after the election
left angela merkel short of a majority. wary ofe initially reviving the grand coalition after both parties emerged from the vote in a weakened state. the uk's efforts to compromise on the irish border are under threat from the party that supports theresa may's government. the democratic unionist party is opposed to any compromise with dublin and will abandon theresa may if necessary. an irish government spokesman says the u.k. has not produced enough to aggress on the the issue. goldman sachs says the wild cried enjoyed by bitcoin this year in's it is too soon to lay out a strategy. speaking to bloomberg, lloyd blankfein says excessive volatility does not make the currency stable or have long-term value.
lloyd blankfein says he feels no urgency to develop a plan. >> something that moves up and down 20% every day doesn't feel like a currency. we will see. if it works out and trades like a store by you and doesn't move up and down 20%, we will get to it. paul: global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. haidi: thank you for that. it looks like a down into the week, pretty bad week when it comes to asian markets. the worst trading week so far this year given that has been a phenomenal year when it comes to asian in global equities, but let's look at what is driving all this. a lot of it is disappointment as asia woke up with expectations that tax reform was going to be significantly progressed, but it has been suspended for that vote in the senate until friday
around midday washington time. let's get the latest from sophie tracking the markets for us today. had that encouraging read when it comes to japanese inflation, not enough to drive sentiment. sophie: not enough. looks like investors are holding on to the their disappointment around that stalled tax progress. gains in japan vanishing a the yen halted his decline. real estate the worst industry group so far. utilities sliding as the kobe steel scandal is seen hitting customer profits. to electric company stand to $320 million over the two month delay. telcos are now gaining ground, up .2%. ntt under pressure. taipei, stocks headed
for their worst week since may 2015, extending losses after the worst drop in 12 months. logon and hon hai precision of the biggest drags. have becomeemblers cautious over weak sales data from china. in hong kong,vers country garden on the front foot, while tencent lost as much as 2.9%. byd electric on the back foot, and one restaurant operator falling the most since october 13. the hang seng is now higher by higher by gambling stocks like galaxy entertainment, sands china, wynn macau henri ratings from hsbc and others.
taking a look at chinese stocks, positive.g shenzhen gaining 1%, while shanghai is up .2%. still some winners to be found in what is generally at down session to into the week in asia. short-sellers facing some of the china's biggest bond rout in four years. and was pointing their fingers at a rise in bearish bets fueling the surgeon bond lending color leading to's to's hundred $74 billion worth of notes issue this year. to $274 billion worth of notes being issued this year. it is kind of a vicious circle we are seeing. >> that's right. this is a byproduct of the deleveraging campaign that beijing has been running all year. the bond market has been pretty rattled and 2017, and the banks
are seeking to capitalize on that. this is the way they have been shorting for market basically, by borrowing government debt out there, selling it into the spot market, which exacerbates the losses we have already seen, then buying it back once the price falls to an acceptable level, so classic short seller behavior, but one that has picked up in china this year. we had seen levels of bond bar ring, a key signal -- bond , risingg, a key signal to record levels in 2017. arei: is this something we likely to see government intervention or a slap on the wrist? >> i guess anything is possible. to have aities here very strong track record of
intervening in the stock and currency markets when it comes to this sort of thing. they don't like speculation, particularly the stock market, but we have yet to see any kind of intervention in the bond market for this sort of behavior. we did not get much response from the authorities when we went to them with it. i think it is probably likely to continue. it is not something that is illegal or frowned upon as of yet, so it will probably be something that banks will continue to get involved in come especially when you have the benchmark yields for example near its highest level since 2014, over 4%. it is important to point out that not all the bond borrowing is foreshortening, right? >> that's right. use this to finance,
particularly in situations where cash supply is quite tight, and we have seen tight liquidity conditions in china, particularly into the end of november. haidi: thank you so much for that. where you seeenue that deleveraging campaign playing out in china. toshiba is climbing on reports it is close to a settlement with western digital over the anticipated sale of this lucrative flash memory chip unit. let's get over to tokyo with our asian tech editor. what do we know? is this close to being over? at the very least, it removes one major headache for toshiba to getting the deal done in terms of the sale of its chip business. western digital had disputed the entire deal, saying it had essentially the right of first refusal and that created a lot of uncertainty. is doing is one by
one removing uncertainty. they are also selling some stock. their balance sheet can recover in time for the end of the current fiscal year when they were facing a potential de-listing because of massive losses in their nuclear business , so the western digital settlement we are hearing about definitelyg will remove a lot of uncertainty, and that is the reason why you see the shares go up. haidi: could you look at this is western digital buckling? we have seen this intensify pressure campaign from toshiba over the past few weeks. >> i think it is an issue of reality setting in. western digital, made me through its subsidiary sandisk, which it bought last year, needs a secure supply to build its products. the partnership with toshiba is
what makes that happen. toshiba has a little bit more leverage. they are building out a new facility to essentially build , and access to output from that facility is also important for western -- sandisk,ns disk and toshiba has been using that as a negotiating tool that looks like it has paid off. haidi: what happens in terms of clearing the way for the sale to bain capital and the consortium to be completed? itif there is an agreement, would probably happen before that, and essentially would put bain capital and its consortium of investors in toshiba's memory check unit in a much more comfortable position and raises essentially the probability that there will be a
closing in time. much forank you so that, certainly a key development in that struggle between toshiba and western digital. coming up, counting down to the regulatory deadline. we asked the eu commission president for his views on whether there is any wriggle room at all. that interview is next. this is bloomberg. ♪
american says it has offered 150% of hourly pay to encourage pilots to pick up the slack. to launchtors expects self driving vehicles by 2019 as it races to lead other automakers and tech companies in the field. gm told investors that the cars will be able to carry passengers and deliver goods. it did not say how many vehicles would be deployed or where, but it does aim to run right hailing and delivery services at a profit. after & noble plunging reporting a struck drop in sales last quarter. it is putting the blame on the young magician because 2017 did not have the boost of the new harry potter book. barnes & noble said total sales fell 8% through october, fueling a loss of more than $30 million. the european commission has stressed the deadline for the
implementation of new regulations in the financial industry and they will not be extended even if companies say they are not ready in time. we spoke earlier about the commissions commitment to delivering on schedule in january and speaking about the current state when it comes to brexit talks. >> we are currently working to make sure that all practical preparations are in place and that industry has done its part during the time when we had already explained the deadline once. i would still emphasize that there was sufficient time for preparations. we are ready to work closely with industry to ensure there is a smooth introduction, and also as regards to a third country jurisdictionso outside the eu, we are also
preparing the necessary equipment decisions. >> you had some eq officials granting ainst equivalency to some alternative trading systems here in the u.s. for instance, and i'm curious what your stances on that. you have had several colleagues saying that granting that equivalency, warning against it. will some of these trading venues and a should be granted that equivalency by january 3? in any case, we are currently working on those equivalents decisions. it is still a work in progress and i cannot comment in detail on each decision, but we are working to finalize in december. >> i'm just curious. thedid mention you move to deadline once already and are
working with partners to make sure everyone is ready for this, but if push comes to shove, with their be willingness to move that deadline again? there are currently not moving the deadline since it is ,lready set and eu legislation so we are ready to work closely with industry to ensure that there is a smooth transition and react ifre able to some difficulties arise. there are plenty of other political considerations for the eu at the moment. are you confident a deal on the and the irish border can be reached next week, another deadline for you? nowrexit negotiations are reaching very intensive stage and the aim is to achieve what
is called sufficient progress on the first three issues, eu citizens rights, u.k. citizens rights, financial settlement, and irish border, and hopefully we will be able to report more progress, but what really matters is the substance of the agreement as the european commission will only be able to report sufficient progress to the council if there will be a substantial agreement. >> the u.s. is concerned about regulatory development in the eu after brexit, specifically access for third countries and how that will affect them. you have concerns for asian trade partners as well? eu, am here exactly for asia-pacific, regulatory
dialogue, which is about to start to discuss how we can further out cooperation and how we can ensure global integration casee markets, so in this we are very open to discuss those issues with our international partners and to rely on equivalents in which the eu has been open and recognizing third country rules, and this is an approach that we will continue. haidi: that was the eu commission vice president speaking earlier to bloomberg. we have a date for the -- abdication of the japanese emperor. shinzo abe saying it will be april 30, 2019, putting to an end a rain of almost three decades. the 83-year-old has had heart
surgery and treatments for cancer and will be handing over the reins to his son, the crown prince, on that date, and we will expect all of these duties, these public duties, will be eir.ed over to his h it marks the first abdication in almost two centuries. 30, 2019,ns april shinzo abe giving the confirmation there. india's economy rebounding in the last quarter, but analysts still think the economy is not out of the woods just yet. we will be live in mumbai next. this is bloomberg. ♪
♪ haidi: this is "bloomberg markets: asia." i am haidi lun in sydney. india's economic growth bounced in the third quarter. enoughuld give the rbi confidence to keep interest rates on hold. reporter joins us now from mumbai. is this a signal that growth is finally picking up after five straight quarters of declines? >> that's right. what we are seeing is that india is finally turning the corner
with disruptions caused by the cash ban and the chaotic d in july.on of the gs this recovery is being led by the manufacturing sector. the de-stocking is happening again. with trade days being a drag and private investment still not picking up. sustained,as to be both exposed as well as -- havents have to be to pick up. until that happens, we will see 6.5% in the to coming quarters. haidi: the partly answers my question as to whether this is enough for monetary policy to start to change when the rbi meets next week? inflation targeting
central banks. it is very serious about inflation. , thereth is picking up will be inflationary pressures, but more and partly for the rbi, ,rude oil prices are rising mineral prices are rising, so there are upward pressures on inflation and the rbi is aware of that. with growth picking up and things not looking that add for the economy, it looks unlikely would be willing to cut interest rates or have an accommodated -- accommodative bias. what does it mean for prime minister narendra modi then? >> this is good news for him. he has been battling a slowing economy for five quarters. the opposition has been on his
case given the catterick rollout of the gsd which he initially proposed. it will be very interesting how the vote for the ruling party is. will go hardr modi with the fact the economy is bouncing back. it looks like the reforms he has initiated, the recapitalization all thesethe gsd, things are in place and there is a sense of optimism within the swing party that he can it towards his ruling party, so it is very good news and very timely for him. very timely indeed. thank you so much for that. we will take a look at how markets are faring as we close out the trading week in asia. let's start with the good, shall
we? sydni stocks hanging on gains , a off session highs up .3% rebound on those sold off banking shares despite a note saying the royal commission into the sector will be painful and expensive. over in singapore, a little upside as well, up .7% for the fti. in hong kong, we are seeing that drag come through with that decline in tencent. we are seeing a .25% gain when it comes to hong kong stocks as well. more on bloomberg markets. david this around to update the stories on this friday. looking at the declines in tencent, is it just profit taking after a massive year? so.d: i would imagine i was looking for any reason why people are dumping the stock and can't seem to find anything. it is still holding above it
support level. that is also playing out when it comes to what is happening across markets right now. it has change direction several times today. we will discuss that with sophie later on. a few guests and note, the chairman and ceo of melco in japan. isill be asking him why he in town and what he thinks about the prospects potentially of the gaming industry there. the other thing i want to barclays joins us in 45 minutes to talk about why they think the economy and the rebound might not be as robust as people think. stay with us. ♪
>> it is a :00 here in hong kong. i am david ingles. last friday and it is the trading session of the week. welcome to "bloomberg markets: asia. " ♪ david: the slowdown is there. but china continues to show resilience. the gauge comes in just below expectations. shoulder to shoulder, opec extends the curbs. american shale producers are the target.
rolling the dice, the city of the future. can be bigger than macau and manila. fact, we will be joined by our guest in 10 minutes or so to talk about what he is doing in tokyo. if we do get from the japanese government, they pass that integrated resource bill, we will be joined by lawrence ho in 10 minutes or so. and we will speak to someone from barclays on the indian gdp story in 45 minutes. notad a forecast of 6.2%, as robust as other people in the market. 6.3% growth when you look a gdp growth. the indian markets opened up. first reaction to those numbers.