>> the 10 year treasury notes flirting with that their present handle. and profitability expectations with increasing concern of slowing demand for chips, and as essult jumping, indicating easier sanctions on the company, but or like must go. this is bloomberg markets. ♪

with profits better than estimated here, and the finance minister in japan saying he is not thinking about resigning. these are the stories making headlines. taipei before and things get underway in hong kong. and let's begin sophie with the latest. tuesday withhectic the focus on ongoing turmoil on metals, then the overnight declines in the bond selloff continues with benchmark treasury's not too far off from 3%. it is a mixed bag for asian stocks so far. and in singapore and taipei we see declines, opening fairly flat. that the weaker yen boosting

stocks in tokyo, but it is ongged lower after a miss sales could at concerns that demand has peaked. apple,is a bad omen for with morgan stanley cutting apple shipments, underscoring that sales outlook. with that backdrop, capital futures sank be careful before apple. reports earnings on may 1 -- saying be careful. and they yen is edging towards 109 and a return to 110 not looking too outrageous as options markets points to a breakout for the dollar-yen. and the korean won falling the most in three weeks and investors think -- plaintiff

cautious as the inter-korea summit is on friday and will i i on the rupiah to maintain stability after the rupiah fell to a two-year low last week. and of this asian central banks are going to take risks on incentives. . given to pick up in treasury yields >> we have a new chief diplomat in the u.s.. let's get to first world news with paul allen. the senate foreign relations committee has voted in favor of mike pompeo being the next secretary of state. his expect to win the approval later this week and replace rex tillerson. ron paul his opposition after pressure from fellow republicans in the white house to ensure pompeo wasn't the first secretary of state nominee to be rejected since 1925. off about shares give up gains in trading after revenues because to's.

is well above forecasts, and other revenue that includes hardware, cap command that sales jumped, and expenditures tripled due to the $2.4 billion purchase of chelsea offices in new york. facebook says it has moved more conditt from terror groups by actively looking for it. in you review systems have been retrained to see got paid posts and action was taken against almost 2 million pieces of content in the first three months of the year. facebook says 99% of that was flight by the internal procedures -- flag. 10 people are what killed after event. question to pedestrians in toronto the driver has been arrested but it is too early to spend. like on a motive when this is say that i jumped they could at

a busy intersection and a. group of people before driving away. the incident happened as g7 ministers gathered in toronto ahead of the meetings in quebec city in june. global news 24 hours a day on air and on twitter at tictoc. i'm paul allen. this is bloomberg. at 10 yearok treasury yields at 2.96. the closest to the person they have been since 2014. all this as investors dust stuff playbooks on how to trade off with relatively higher rates. let's again with earlier guests had to say. at the decomposed nature in the past couple of weeks it is mostly a rise and. breakeven and inflation rates. i would chop it uptick inflation risk among coming back to the curve. >> the 3% special does enough to

get attention but by itself it. is not necessarily at sign. was phenomenal growth, the 10 and you look at the turn that is underway for a better part of last two years, this is a 35 year change in bonds. with the has just begun. >> at the end of they have a markedly get the fed and say, how much? will they let inflation? run above target if this fed is a push back on higher rates of inflation maybe we'll have a steeper term function. us for more is mark crumpton. yield?ainful for the >> high yields are definitely painful for emerging markets. higher long-term yields especially. last comfortable by surprise is a month ago were starting to think again about this treasury

being stuck in a range between 2.5 and 2.9. there is an abrupt change in rap sheet towards the 2% as you are saying. it is not to percent itself that is an amazing number, is the fact we had an abrupt change. . in the momentum has started to rise the rest they to israel confirming the fact that the fed is on the right path. the us economy is doing sternly well. and now people are tiny about gaining four rate hikes. instead of. three. the situation has changed quickly and that is a nerve and the emerging-market world. . . . . . . . >> what? does the market sink? about the fact? has a fallen behind the curve? >> there a play a risk your. some of those guests are saying the fed is underestimating the rising inflation environment. they are too passive and saying we don't need to worry that inflation is subdued. get some of the things come

through with wage inflation at some of the tightness in the labor market suggesting that the u.s. is nascent place and maybe the fed really needs to do a lot more. weeks will be watching closely to see if there is a shift in stance towards a faster pace rate hikes. and don't justify yields rising as quickly as they are. this is a story that has developed and watched closely the coming days. >> mark, thank you for that. if you want to follow this story with more details, that is on the bloomberg on that mliv. lossese commentary and a from bloomberg editor's and was affecting your money right now. let's look at aluminum prices that saw a record lunch as the u.s. softened its pressure on rrusal.

it is quite a roller coaster for aluminum. why exactly is the latest statement from secretary mnuchin so important? it has been quite a two weeks for aluminum. i was looking at the 30 day volatility for aluminum and it is the highest since 2010. if you go back to you weeks, u.s. placed punitive sanctions all overbecause people the supply chain to worry about were the metal is. going to come from. suddenly last night we get a clarification and softening of the position of the u.s. government. and quoting secretary steven mnuchin here, u.s. government is not targeting the hard-working people who depend rusal and its subsidiaries.

it is sometime it extended the amount of time companies can still do with rusal and have taken other steps to ease the effect of sanctions. thelly, he said that if billionaire what has been synonymous with the russian aluminum industry for 20 years exits the company, that might be a way out for rusal. >> are we seeing some kind of conclusion with this latest news? certainly -- no conclusion yet. the implication is it is not going to be as serious a situation as we suspected. we are seeing the u.s. essentially parts to russia as to what has to happen in order progress.tuation to doesticking points are how he exit and does he do so

willingly and that what price? what is the mechanism to do that? process,s a sticky you will have ruptures in the aluminum market. that andyou for joining us from shanghai. we'll have more on the commodity markets coming up later in the hour. put it to the former japanese fisa finance minister about how the popular to it will affect the yen. this is bloomberg. ♪

>> having a look at the pressure rising on prime minister shinzo

ivanka as a series of scandals and missteps because approval. rating to new lows. an increasing number of voters say it is time for him to go. global economics and policy editor kathleen hays is in tokyo, the university professor and former vice finance minister, quite known as mr. yen. when we look at the high,hich recently had a people are saying that we have to bring this important political question into the picture,, and who better to discuss this and connect the dots between politics and japan and the exchange rates monetary policy than mr. yan himself? things are different two months ago when i was last here

speaking with you. prime minister abe's political fortunes have changed so dramatically. one scandal after. the other at. the ministry of finance what does this mean? for his leadership? can he survive? >> his approval rating is at a crisis level. the fault of prime minister abe. and it is not from the finance minister scandal, the sexual-harassment scandal. although it is the closest level at present, nobody could substitute mr. abe. i think you may be able to go termthis and continue his for the next two or three years. that? does he do i think what the pen on talks

with mr. abe. there has been lots of public opinions. he may be receptive to public opinion. but he has to consult with mr. abe. kathleen: in terms of exchange rates, has is contacting over prime minister abe have anything to do with the yen weakening? the last time we spoke you called it right, the yen would strengthen and you said in the likelihood it could strengthen even further. does with this have anything to do with politics? reflects thes thisics, but my opinion, weakening of the yen will not continue for long.

it will probably go to appreciate at one dollar. kathleen: like that? >> one is president trump's policy that is going to continue. japanher thing is bank of will probably shift its monetary policy next year or in 2020. and bankers are going to tighten the monetary policy, and that might be a strong yen as well. on both accounts, u.s. policies -- yen would slowly appreciate to an advantage in my view. there are different. views on of this as well kathleen: you think it will hit 1.10? the boj technique is well out

there, a year or two. what do you expect governor kuroda to turn the yen? continuel say it will and easing monetary policy to come. moment, he will hand when an exit will be, so he will do that. the market is expecting that exit is a year or two years from now. readarket is trying to from mr. kuroda's remarks, but he is very careful. kathleen: what about the 10 year yield to note knocking at the door and rising above the yield curve? >> that what sort of translate expectedt is already and incorporated into expectations of the people.

on a risk, u.s. acts in a way that would sort of contradict expectations. i think it would not really move the markets. kathleen: what options does japan have event it appreciates above 100? >> intermission at the dow 100 is impossible. it is only possible when president trump and mr. abe agree. breaks 90,yen dollar then i think president trump may feel some uneasiness. at that time, we may intervene, but at this point, it is impossible. the failure of prime minister abe to get anything substantial with trade with president trump last week have been a factor in his political

steady decline in ratings? how does that play it to exchange rates and the whole question of where is this going? trump meeting was that successful, but that hasn't affected him that much. expected some extent by the results. his approval rating has come down somewhat, but i think he could sort of go over that. kathleen: japan traits morphed japan traits more with the u.s., is that more important to japan now? usuallyhinese rate is tend to the u.s. dollar. rate isdollar reflecting to the data. kathleen: how to ask about north

korea because this is potentially a huge story. for the world and this region. what you expect to happen there? way,ny skeptics say no north korea is not going to head to denuclearization. you agree that nothing is going to happen? situation forhe north korea, they have to path themselves. yan, think you very much for joining us in his office to talk about the yen and he sees it just about. not been weakening and resist prime minister abe will get through the scandal, although the finance minister may have to step down. interesting use at an important time for the prime minister and the markets. >> thank you, kathleen.

defendants mr. sankey has no plans to resign. you can get our interactive functions on tv and the functions we mention. pick up on the conversations using the incident message fortune. on the terminal. this is for bloomberg subscribers only. check it out at tv . this is bloomberg. ♪

♪ bloack. revolution the u.s. investment industry, and a similar thing in china, laying the groundwork for expansion made easy and

asian-pacific to open up the international industry by it vanguard is looking to double its shanghai office and is prepared to wait for the plans to bear fruit. lks about the part nership. for told them it with china earlier this era to incorporate on the engine for the cr 1990 white body which aims to break the duopoly of boeing and airbus and sources say talks are at an early stage and may not result in a deal and a decision is oscared next month print nunez is forgoing a bonus for 2017 a year after a pr fiasco by holding a passenger off a plan. the airline image to get blow when a dog died in its care. munoz has asked the board not to give him a passing it is important to send a message about accountability. chairman robert belton is also

stepping down. we are minutes away from the start of the trading day in hong kong and china, and does what it looks. 1%,he market one third of and futures indicating perhaps a slight uplift and shares when the trading day to get underway. very much inbeen focus, and deacons look at what is happening in asia aluminum related stocks. here is out,, 13.5% down. we have there is volumes 20 times the usual. down,um in australia is and the quick work of what is going on with chinese yields coming fake continue to go down. 3.85 percent, and that is according to some is a bit of a distressing handle to be on in

the yield. that comes as we see these bond yields decoupled from earnings per share for the asian markets as a whole, which they were very much closely tied to buy it watching that and more. the open is next. ♪

>> we got dollar strength at the moment. the yen, weakness we have not seen since february or thereabouts. pound, also weakening to levels we have not been for about a month. dollar strength is the story currently and part of the reason could be the 10 year treasury yields in the u.s. edging towards the 3% level. ,lso, commodities in the front something the most since 2005, taking down a lot of stopped with it.

steve mnuchin said the government could be lent to loosen the tariffs. up., the openers are here is sophie. start forsubdued shanghai stocks, edging lower here. , could be sent to snap a two day drop. in hong kongares gaining ground, the hang seng gaining 0.4%. offshore yuan, continuing to fall after losing the most ground in a month against the dollar and the greenback climbs with the treasury yields. let's take a closer look at chinese metals.

under pressure and copper joining that downturn as we are seeing flow copper and aluminum prices sliding. russo, soaring 26%. that was the premarket trading in hong kong, after soaring is what is 19% in moscow. there is more clarity changing the ownership structure. that could be a solution. chart,an see on this could the shares see a recovery from this? the stock is lost over 60% since early april-ish. rishaad: thank you very much, sophie. more and more reasons at the moment for the ban not to be doing anything with the cost of borrowing. 0.4% up quarter on quarter, as

opposed to the 0.5% the market was looking for. a year on year increase in prices. we were looking for 2%. this is essentially the core cpi we have got, which on a year on one basis, 1/10 of percentage point higher. the aussi dollar range, weakening against the american counterpart. we have a bond default in south americ. for the rest of the first word news. reporter: thank you, rish. despite negotiating with banks for a loan. sources say the privately held group will settle about $150 million of offshore bonds. therewcht suffered

went tog cash flow that an energy producer. oil surged on the escalating conflict in yemen. launchedacked rebels unsuccessful cyberattacks. texas voted close to $69, while brent was close to $75. prime minister theresa may has suffered a third brexit defeat in a week. the house of commons and house of lords supported an mostment, ensuring that rights are litan according to british law after brexit. after negotiations resume on tuesday in the canadian foreign minister says the talks in washington are in an in

tensive phase. president trump said he could make exit can immigration trends a position. on twitter, the president said mexico must stop people heading into the u.s. and called for more funding fast. global news, 24 hours a day on air and on tick tock on twitter, powered by 2700 journalistss and analysts. the hong kong open, and indeed we are up. what about the market action beyond today. let's start with the main themes right now. there is a lot of noise. it is hard to make sense of it and that is why we are getting some skittishness. reporter: the most important thing for me is to recognize what happened during q1. and now where we are.

1 with what we now call the noisy boys. they came to the equity markets with all of the tricks and toys. they came along with a very strong narrative and a lot of leverage. what we found the beginning of q1 was a big momentum trade. it is all about yrvtech and tax cuts. we are seeing now is a deleveraging and a return to devesting. we are finding a lot of small volatility around stocks it around news flow coming out of the bottom level. while the macro stuff has transferred to the commodity markets. and currency markets. rishaad: what about the time being?

investors are looking and earnings right now? happen. was bound to that could come back to haunt us. expectations were stellar. mark: exactly and we did have a stellar year last year and a good rating out here in asia, as opposed to weak previous two ye ars. you should generally expect to move up in earnings. having cleared out a lot of that noise during q1, i think it is normal in the sense that valuations are ok. will it deliver on the earnings? started more expensive. we have seen emerging markets outperform developed markets when we are supposed to be worried about a trade war.

it makes me question if that narrative is what is really what is going on. kong, still hong 12, but there are reasons for that, as we've discussed. mark: we are not looking for ratings or deratings. we are asking, where is growth? it is not all on u.s. money. it is much more to do with and the emerging consumer. -- much more to do with capex and the emerging consumer. china has real earnings growth f consumer earnings of 7%. china ismer in actually very undergeared. it's corporate, or is it

government? it is difficult to tell which, but when you look at it, it is very different from the traditional emerging-market. this is not like malaysia or indonesia of 1990's. it is actually much more. i would argue therefore, much more sustainable. there is some debt that is undergeared. having said that, the pboc is more important the fed. i don't want to say that i do not care what the fed does. but what the fed does, two or three, it does not affect the earnings of any of the companies i would want to be investing in, or even the demand for the business earnings. rishaad: but does some of the other data in china where he -- for instance, record stockpiles of iron ore.

at the top of that,, we have got a yields sincets sins last month. that is sending out one other signal. electricity use since january, even if you take it on a seasonal use since last year, we have 620% growth. -- we have got 6.8% growth. surely you cannot have all of those things at the same time? mark: well, you can. cash indicators, which we got excited about a couple back to the late 1990's. they were a way of monitoring the economy and the previous growth rates. --m much more interested in rishaad: the pboc is easing by

reducing the reserve requirement. mark: in china, you have very different interest rates. what used to happen is, the state would lend on to a medium-sized company at 15%. we saw the 3%, not the 15%. now, now whatng we have done, what deleveraging has done is the steel company cannot borrow at 3% or 5%, but at 8% or 9%. rishaad: so, irrigation? mark: exactly. the signals we see from interest rates are not necessarily what we would expect, having spent many years analyzing the west.

we are looking at an evolving financial system here. it is not going to be perfect. you mentioned the stockpiles and so on. people were borrowing against those commodity powers. it was all going into the inventory. i do not think that's been completely solved. of yes, we have a lot speculation. rishaad: let's go back to the macro noises we have been hearing. go deeper than that. it's about a new world order, is it not? how do you position yourself if that is the case? america hasody in recognized that it is a negotiation between china and america. there's a loss of position

here. the net result of that was the g10 trip to mar-a-lago. they said they would allow u.s. financial services to go into china. now, both sectors will do well. rishaad: that will they, because there is nothing concrete? people have pledged fatigue. is in china's interest to help them price out the financial infrastructure. china's big deficit is in energy. america has the growing surplus in energy. i think that will happen. this is more about, and i was talking to a u.s. economist in this. new economy, who

is setting the rules for the internet, the cloud. and i think what's going on is trump said, i'm going to pull out of nato, the tpp, eve rything -- he is using that to say, i might go back in. i think he will go back into the tpp and say, you are all behind me, and we are going to set the rules because america has hasgnized what trump recognized, that america cannot do this all on its own. rishaad: you can talk about tariffs. donald trump has had some legitimate complaint. but he is probably serious in many regards. the administration's resolve can be shown. mark: if you have got a stop that you think is going to be able to go outside of china without any hindrance, then

recognize, that could be in third countries, there could be competition, but going into the u.s., there is much more likely to be restrictions. try being in american getting into europe, there are all kinds of nontrade barriers. there's nothing new about these things. one of the things we have got to do is not draw straight lines and say, here is the growth of these areas. there is going to be a lot of fighting for positions. rishaad: and you politically as well, with regards -- and geopolitcally, as well with regards to smaller guys fighting for position. mark: i think that -- rishaad: the clever ones will.

mark: china and japan were both competing in the region to invest, whether it was in thailand or malaysia. i think what we are seeing here is, it is for china's geopolitical regions, china has no west coast. china is trying to compensate for that with the high-speed rail links, and obviously the links to africa. i think it really is about trade. there are some interpreting it that way, but i do not think it is that way. there's no doubt there will be a lot of competition, saying, would you like to build me that pipeline or irrigation system? rishaad: a couple of trades and ideas. mark: for us, it remains the chinese consumer.

that is not going away and the outgoing chinese consumer will be important across asia. robotics,a 2025,m particularly out of asia and particularly out of china, there will be a lot more competition from the chinese-made robots within the automation sector. again, something to watch out for. rishaad: something to watch out for. mark: what we have on automation. ts, the robot working with the human to make the human more productive, increasing productivity my using robotics and human operation. rishaad: coming up, the head of city capital will be looking for tensionse. as

really mount. that is ahead. ♪

rishaad: you are back with bloomberg markets, with china's top investment banker. the trade tensions with the united states, the chairman of he spoketal, exclusively with our very own tom mackenzie about his assessment of the trade status. >> the current situation concerns us. i think on one hand, i believe there are solutions for the trade issues.

think it could be resolved. tom: do you expect to see a slowdown in chinese investment within the u.s.? >> this year it will be slower. it is a huge year. that or even more. we are doing a lot in japan. so, at the end of the day, broadly.an grow it is welcome. are they linked to the china 2025 strategy, whether that is robotics or etc? zhang: of course.

government, medical. clearly our view, it is a sector that has a lot of demand. demand., a lot of tom: what is the strategy capital's buyout fund? aroundfirst is corporate buyouts. we actually last year had mcdonalds lifestyle, which is the second-largest maker in the world. an american company called wall street english. and then we just completed a deal, a marketing intelligence and economics -- a database

company. tom: can you give us an update on how the mcdonald's strategy is playing out? zhang: we have seen the company opening up last year. track to they are on open 315 stores. starting next year it will be another 400 to 450. we are well on our way to achieve the target we set for o urselves inm: there are changes foreign operations operated in china. it sounds positive, but the reality is operating within the banking space, it will prove very difficult for foreign players to compete in china. zhang: the interesting thing is

asset management. asset management is the one sector in china that has never been truly developed in many ways. but given the circumstances in can bet it is a matter of time. rishaad: bloomberg users can interact with the charts we show you. we have recent charts featured on the bloomberg. you can catch up on key analysis. this is bloomberg. ♪

rishaad: you are back with

bloomberg markets. the hang seng gained, while iron ore shipments fell, while placing the blame on workers. in march, just under 39 million tons, which is in line with forecasts. russo jumbled the most on record in hong kong after the u.s. softened its position on sanctions and they discussed a path to lifting the tariffs. building on a 19% rise earlier and the moscow treasury positions said they would use positions. -- they would ease positions. during the next hour of bloomberg markets we are analyzing the rising geopolitical tensions.

plus, looking at concerns tensions.g the rising that and more. this is bloomberg. ♪

rishaad: a weaker yen, giving japanese stocks a list, after the dollar reached a three month high. the nymex, giving expectations regarding the concern about sterling demand for chips. 'ssome stocks jumped. the u.s. suggested they could ease sanctions on the company. in hong kong, i'm rishaad. this is bloomberg markets. ♪

commodities very much in focus, prices about aluminum not seen since 2005. seeing on the currency markets. climbed 0.1% at the open and we have a mixed pic ture across the board, the hang seng gaining 1% across the board. aidex, gaining. chip makers are sliding across

the board. we do have the only segment under pressure, well consumer and health care stocks brought the asx 200 to a second day of gains. we do have the bears very much in control with malaysian paper very much continuing to sink. malaysian bond yields are jumping after a intervention within the bond market. indonesian bonds have underperformed since the start of the year. the 10 year yields might fall to 6.25%. i want to follow up on the bank 's intervention, gaining ground after it fell to a two-year low last week. and the korean won falling to

the lowest level in two weeks. we have the korean summit on friday. as you pointed out, the commodities space is very much in focus, as the mayhem among metals continues. aluminum is continuing to slide in shanghai, and london copper is under pressure. i want to show you a snapshot of the metals s ppace. have a loss of over 10% earlier in the session, the biggest drop since july 2015. players in tokyo and malaysia, also getting swept along within this vortex. and after searching in moscow rusal shares soared to 26%. there is more clarity that changing the ownership structure could be a solution. there are concerns that the recove could be sustained. april.g over 60% since

rishaad: let's look at the change, taking a hit. let's get to that story, along with the first word news with paul allen. and trading after third-quarter profit and revenue beat estimates. deliveredarent profit of $13.33, well above the forecasts of $9.30. year.jumped 40% on the oil surged on the escalating conflict of yemen futures reached the highest levels after ianian levels reached the highest tension

levels. brentrged above $60 and was closer to $75, the largest premium since january. facebook will remove more content from the islamic state. computeriew systems have been reviewed and action was taken against 2 million pieces of content. facebook says that 99% of that was tracked by the internal procedures. there were at least 16 injured after a van crashed into pedestrians in northern toronto. the driver has been arrested, but it is yoo early to speculate on a motive. gc incident happened as ministers gathered in toronto ahead of the leaders meeting in quebec city in june.

global news, 24 hours a day on tock onon t ick t tick twitter. analysts. 2700 rishaad: bonds with ten-year treasury you just closing to that 3% level. still off it. if we hit that, it will be the first time since january. part of this is for investors to dust off the playbook and how to trade in an era of relatively higher rates. this is uncharted terrain. only a few years ago it was something like 1/4 of people in financial institutions had never had an era when rates had gone up. >> this is turning out to be a key psychological level. many are worried about the 3%

level and the impact it will have. stocks and emerging markets already see that fallout, particularly in currency. the indonesia rupiah is down to a 10 year low, triggering intervention and with similar moves in the korean won. the peso has fallen out of bed and emerging-market stocks are also taking the hit. different,little bit though this time it is paired with more concern about growth. we do not have that sort of woolwich global growth outlook that we did a couple of months ago when we needed 3%. there is also the trade war factor, which is a big concern. seems this time people are more concerned we will hit that 3% handle. mma: it is a matter of time and it could be during the trading day today. people are starting to fet about the implications. rishaad: let's move from u.s.

bonds to chinese bonds. they are moving in their own direction. showing how closely how correlated these yields were to the msci emerging markets index. there we go. we have that emerging markets index in, up and up and up. look at this. and there we go. we've gone from 4.1% in november down to 3.5% at the moment. what gives, and what are the implications? emma: it has been an amazing time and it has come about as the deleveraging campaign has been intensified. that is having a real impact on how people see the growth outlook in china. that has led to that quite big drop in yields, which has put

pressure on the mainland stock market, as people rotates and move into the market. rishaad: we are reflecting on the true nature of the economy. emma: that's right, and over the last five markets emerging markets have become more hinged and correlated with china, which is why you see the direct impact on the chart there. and why there's an additional pressure for emerging-market assets. rishaad: emma o'brien, with us from. beijing. some say it is too much, too soon. some say it is because of quirky accounting. macron, attempting to persuade donald trump to stick with the iranian nuclear deal. this is bloomberg. ♪

rishaad: end we are back, geopolitics are back in the astlight, watching donald trump parents an unexpected victory with his people and the secretary of state. macron visiting washington d.c. pompeo.art with mike he was expecting a pretty rough ride, and it took some arm-twisting, i'm assuming, but he came through. >> he did. onre was a mixed vote committee lines, but senator rand paul decided at the last minute to go for his approval. it would have been embarrassing had they not. it would have been the first time since 1945 that the committee did not vote for the

incoming secretary of state. it would have been an embarrassment for the trump administration and mr. pompeo, but in the end, they were able to get that and senator mitch mcconnell, the majority whip said they will have the votes. this week on the full confirmation, gull -- full senate confirmation. rishaad: this week, macron, the first state visit. >> of the trump presidency. rishaad: how can he leverage what he has with donald trump to get what he wants? we knew that shinzo abe was meant to have a great report with him, but it did not mean much. >> no, because he is pretty empty-handed. president macron wants very badly to get -- to convince president trump to stay in the iran nuclear accord.

he has been working with chancellor merkel and theresa may to try to convince, you know, to convince the u.s. to stay in the accord. may 12 is the deadline president trump has set. and now, we also have the issue of whether there will be trade. whether there will be this trade exemption, whether the tariffs will remain for europe. those will be the two b ig things on the agenda. see you.great to what are you making of all of this, as well. can macron lockout with anything substantial, in your view? the iran deal is turning into a

motif for us. foreign polic. >> i think the fact that the president has agreed to stage a state visit for president macron is an indicator of the appreciation, or maybe even the would have. hopefully the president understands the stakes are at such a level that walking away from the discussions empty-handed is going to be a big embarrassment for all sides acrond, whether or not msv is going to be successful in convincing the president to stick with the iran deal is an open question. at least now that we have the new security advisor and plays, john bolton. but i think the new arguments are pretty powerful and i am sure the europeans will be levying them powerfully against the president. placeld end up in a worse

than we are now. reporter: what would it mean if president trump decides to leave 12 iran deal byt the may deadline? what could that mean for the talks tween the korean and north korean leader? could that complicate those talks? >> it absolutely well. the president has staked a fair bit of his reputation and potable capital, such as it is, on his relationship with kim jong-un and the forthcoming summit. clearly, the logic would have to resonate with the president and his advisers that walking away from an agreed-upon nuclear iran will have implications on the success or failure on the deal with north korea.

iw oul -- i would hope the president and his advisers would understand that for this d eadline, may 12 on the iran deal, it is not the time to be pulling the rug out from under this. let's get through one more extension at least and see where we can get with the discussions with north korea. reporter: do you think president macron will be able to convince president trump to at least postpone the deadline? do you think that is something we could see come out of these talks in washington? him,: if he does convince i would be surprised if the president says that publicly coming out of those meetings. we still have is coming discussions with chancellor merkel. as well as prime minister may. would behink it normal for the president to come out with the meeting with macron and say, i've been convinced. who knows though.

a very unpredictable, personalityy, obviously. i think we will know closer to the date. rishaad: but all the pressure is on, isn't it? angela merkel, towards band of the week, they will all but pressure on president trump. it's a concerted effort. bates: it is. and at bototm, we have got to try to understand to what degree does president trump care that the transatlantic relationships are in some tatters. that actually america gains in strength and in international clout through close relationships across areas of common interest with these very powerful friends on the other side of the atlantic. that has to sink in. that has to take root, and i hope it will.

if he could come to the understanding that through relationships with friends, such as the u.k., france and germany, the night dates comes up -- the , that it iss important. rishaad: this has the european capitals involved as well. what are the implications of ending the relationship between the european union and trhhe u.s.? bates: i think it would be the intent of the other major actors around the iran deal to continue to provide the incentives to iran to keep them in compliance with their agreement not to move down the pathway of developing a nuclear weapon. now, that will presumably happen

with the conjunction of renewed sanctions on the part of the u.s. so, i think the transatlantic relationship could pop possibly whether much of this. with an american withdrawal, what will that mean for iran ian intentions to get back on the pathway toward developing a nuclear weapon? that is my biggest worry and hopefully the remaining parties -- china, russia and the europeans -- can keep iran on board to some future date when we can get the u.s. back on, if president trump pulls the plug. rishaad: i want to ask yourself first, isbut jodi there any real intention here? is the state department having their posts vacated and not

replaced? on top of that, we have these incoherent noises regarding china and other parts of the world. firstly, jodi, what gives here? does seem to be the fact that the president will say last week he said that he wanted to look again at the trans-is the ownership and now, they are saying, not so much. that is part of the difficulty here. but given the fact that he wants to have some relationships with macron,like president you might be willing to give more on a personal side to cement that relationship. rishaad: is it all ambiguity, volatility and irrationality and is that this strategy that keeps everyone on their toes? bates: if you think uncertainty and volatility is a strategy is a strategy, then yes.

but i do not think it can be maintained. your allies need some reassurance that what you say will stick? without that, these huge geopolitical chess moves cannot move in the right direction. rishaad: thank you for joining us, bates gill. and thank you, jodi scheider. plenty more to come, including a market check. yields on u.s. bonds, moving higher. ♪

rishaad: ringing the new suv to china by the end of next year. the cofounder of the company of

byton spoke exclusively to bloomberg. >> bringing the suv to market by the end of 2019 is the target. outline the challenges got ud. -- outline the challenges for us. >> we are absolutely on track and will make that happen. if we do this in only three years, this is not an unlikely process. when it comes to the engineering engineering employees are convinced we can do this. going to the chinese market by the end of 2019 and going to the u.s. by 2020 and going to the european market by the end of 2020. tom: what is the engineering target for byton by 2020? >> we are looking at roughly, $1 billion. this is what we need for the development of the car and that is another thing.

at the other end, we get great support from our planners on construction. so, it will be a bit more than oneb billion dollars thatr we have to raise within the capital market. e>> what is your sales target? >> we are aiming for a volume of 300,000 units after three years because this is the amount we need to complete our plant. that is so many for-profit production within the plant. and in the fifth year, the volume will be below 100,000 units. but ramping up to 300,000 units in four yeras. -- four years. reporter: what is the strategic value in partnering up? >> they have supply power. they have negotiation power within the market. they get strong politicla support.

and they have the connections to china. tom: who do you see as your competitors? >> from the electric car perspective, maybe. but not from the smart car perspective. the high-speed connectivity. from a market segment perspective, we have the premium market. our competitors, bmw, mercedes, and audi. >> the changes within the chinese auto market, do they do away with the competitive advantage that breitfeld has? >> we could face more competition within the market? but we are not really afraid of it he goe -- >> at what point do you start to consider an ipo?

>> we are concentrating on bringing this product the market year. end of nex tyext ♪

charlie: it is 10:29. a senate foreign relations committee has voted in favor of mike pompeo being the next secretary of state. he is expected to win the approval of the full senate and rex tillerson. senator rand paul drops his opposition after pressure from fellow republicans and the white house. macronpresident emmanuel has arrived in washington for a three-day trip which includes an attempt to keep the u.s. in the iran nuclear deal. lavishmes after a

welcome in paris last year. german chancellor angela merkel due in washington friday. negotiations continue on tuesday. however, president trump has makeagain that he could mexican immigration crub -- curbs ao condition. twitter, president trump called for wall funding fast. sources say the privately held group will meet wednesday's deadline to settle $150 million in offshore bonds.

odebrecht suffered losses after a scandal. this is bloomberg. ♪ charlie: getting you up to speed with the markets. sophie: taking a look. the nikkei 225. gettingthat benchmark 2/10 of a percent. bc scene uptake and treasury yields. and taking a look at what is going on on the mainland. moves to soothed by easy policy pains. russo is focus. --share jumped in hong

kong after searching as much --surging as much as 90 percent. we have that against the backdrop of aluminum prices continue to plummet in shanghai. volatility is soaring for aluminium. you see this in the gtb library. it looks like more price swings are coming with potential shocks hitting the metals market. that is helping goldman sachs with its forecast. --tightness and the alumina market, that is a main ingredient in refined metals. atdman's forecast remains 2000 bucks a ton. producersouth

lot of concerns and it is stemming from the smartphone market. saying thatcomment demand for server memory continues to drive earnings at the smartphone market continues to reach saturation. --t's bring out high next hynix and their result. this is after a warning that sales would miss. sedenue at sk hynix, it mis revenue. we were expecting a .2 trillion. we were expecting 8.2

trillion. nperating profit did come i slightly above estimates but connecting come missed estimates. that is adding to the global concerns about slowing demand from the likes of apple after that warning. the industry has been seeing butening in ram prices seeingd ram are revenue. rishaad: china is a key market? >> in the guidance they have been highlighting china. they are saying chinese mobile market growth a bit slow in the first quarter. demand from the likes of walkway outlastedeem to have

the weaker than expected demand for the apple iphone. they gained from those dram price increases. it's a server memory demand expected to outgrow mobile by next year. that is where a lot of the growth is coming. those big servers. rishaad: this big servers used for mining bitcoin. it growing about demand for this new iphones. en revenueave se growth tank sharply. that is after the release of the latest devices. what exactlyith these taiwanese companies do for apple. >> good morning. major looking at 5

taiwanese companies that make gadgets for apple. they make eye funds for apple they have aand contract for ipads. rishaad: with all the things they do for this huge company in the world, what do these five company revenues tell us if we work out an aggregate about >> theserall sales five companies make the majority of apple's hardware gadgets. these local companies are required to release their monthly revenue numbers. -- howot get the better

apple's gadgets are selling by looking at the monthly numbers from the suppliers. we can look at the first quarter , in the march quarter, the combined revenue of these companies. aey still look like relatively healthy 8 percent, but for the 4th quarter, their sales up 19 percent. the numbers from the first quarter have fallen out quite a bit. why has the market been seeing a jitters --ers -- rishaad: we can perhaps have a read through about these revenue numbers from the third quarter. a read through about apple's performance. >> it can be an indicator of

sales will be faring. i think some numbers from the companies can bolster our sense that apple sales in the march quarter have slowed down quite a bit. turning andll be focus to the indian mobile market and having a look at the concerns of having a mobile startup. that is next. this is bloomberg. ♪

charlie: this is bloomberg markets in hong kong. rishaad: brandeis group has

amassed more than functional in dollars of assets and revolutionized the u.s. investment industry. they are wanting to do something similar in china. beijing'sde easier by decision to open up to international industry. rolls-royce is expected to be in talks about making engines for china and russia. they are going to discuss cooperating on an engine that is designed to break the duopoly of boeing. they say it may not result in a deal. nba star seth curry is heading to hollywood and is planning a deal with sony pictures. the company that curry

cofounded, unanimous media, will be backed by sony. curry said he wants to use the deal to affect the world positively. let's get a flavor of what is going on. the glass is half full. this is the big china-shanghai, of 1.9% -- up 1.9 percent. seng, up. nikkei 225 has its lunch break. .67ing out the morning percent. investors focusing to some extent on the u.s. treasury market. 10-year note floating with the 3% handle, the dollar adding to the overnight gains.

we see yield differentials arguably coming into play. yen on the retreat as well and leave it to the yen, it helps those benchmark supporters in japan . kospi down a third. a string of semiconductor makers where earnings have been disappointing and that is adding a bit of drag to the kospi. plot ever there in taipei as those tech stocks are responsible for that .085 percent fallback for the leading index of taiwanese stocks. plenty more to come including a look at what is going on in regard to indian mobile and mobile market as well.

this is bloomberg. ♪

charlie: the balance sheet -- rishaad: the balance sheet of is under the microscope. >> these are the perks that

allowed jio to become the nation's 4th biggest carrier in months. some analysts are asking if jio's profits are a bit too much, too soon. too much, too soon. rishaad: let's ask dave about this. what is the general thinking. >> there has been a lot of scrutiny about this venture from the very beginning. this is a field in which india's richest men are playing. he is not the only billionaire who is dominating this industry. it is dominated by very big players and they are going to treat any new competition, particularly an upstart that offers free services, that is a big threat.

rivals initially sued and demanded the regulator take a look at this offer of free services. that was not b-- knocked back and now there is a lot of scrutinizing the books. this is going to be an ongoing battle of will between these two players. you're looking at a nation of well over a billion people. over auld have well million users. when you talk about that scale, the competition gets very heated. the specific allegations that the company has been generous with itself and how it accounts for appreciation, that is not completely unheard of in this industry and the industry in general. the depreciation rate is something analysts look at and

they can base their earnings rates pretty clearly. other things, how they time to the revenue and what they ended up calling a quarter which is more like six months, that is very controversialand th -- controversial and i could come by to haunt them. how do they account for the following quarter if they have already taken the initial six months. in coming quarters, whatever anomalies there are, is going to be clear that these kind of profitability is not going to be sustainable. charlie: the thing is, when we talk about all these figures, we have --they have all that more importance because there has been a lot of talk around this company over a possible ipo, even a trade sale. >> absolutely. it takes a lot to finance this.

this comes about as each one of these competitors is looking at the move to 5g. they're moving a lot of customers into 4g and that has been well underway. the next frontier is 5g and they need a lot of money to build that network. the amount of money that need to be borrowed and raised to maintain one of these networks is huge. they are talking about ipo and this is a complex arrangement. the infrastructure play is also there. this is a company in which a big part of the infrastructure will come from another indian billionaire who happens to be mukesh ambani's brother. he started a telco that ended up failing that he is picking up that infrastructure in a deal that has also been challenged in court. there is a lot to watch here. this is a very complex deal

going forward. we can expect to see the numbers getting a lot of scrutiny. how they have accounted for their cost. their capital spending going ahead. it is going to be difficult to project the profitability of this kind of endeavor accurately. charlie: always a pleasure. thank you so much. getting more on this, this is the executive vp at brokerage onm india and he joins us the phone. thank you for joining us. people are saying too much, too soon or is it too good to be true? it,- the way you like reliance, say the apple card, the consumer is laughing his way to the bank.

uncertaintyot of that the numbers can be isstioned but i think data the new goal. now jio, and a large part advent of jio. there is pressure on the balance sheet is that will alleviate as prices start to stabilize. months, -- six an combination of higher prices of market share gains. charlie: this is just it,

sanjiv, if data is king, you think the other india income incumbents, they would also be benefiting from the amount of data and it is not true. is competitive and has created a technology by which it boasts it could be the lowest cost producer. sheet is a one micro balance sheet on a quarterly basis. the other incumbents are going through a lot because of the cost of spectrum. sooner battle and

rather than later as prices stabilize, we'll see the other incumbents doing relatively well. charlie: -- rishaad: we never really fully audited results. this is the first time they have audited. we have had some interesting decisions take place. the role for the company to burn through billions of dollars of expenses without that cost showing up in its income statement. that is probably working to the -- numbercrunching is difficult to decipher. quarter, --last good times, it is telling you

the new incumbent and the new user is having a -- the number of necessities they are providing is seeing a large amount of market share. more practical on a larger base. because control and managing the larger economies. on the balance sheet, i think jio will be in an ideal market in 2019. ofis well on its way becoming an $11 million company. to stabilize ins the next few quarters, -- charlie: can this story continue -- rishaad: can this story continue if you look at it with a glass half-full?

>> like a said, we know that data is now the new gold. --this could be the best industry in the next three years given the demographics of consumers, it is more and more india centric. they have raised money right now, are well placed to hold on the market. in the next two or three quarters, you'll see many more numbers on the balance sheet. rishaad: thank you for talking to us. that's it for the first two hours of "bloomberg markets." we have another hour to go.

david: since you're talking about india, i'm curious which way bond yields will go in india. you have competition that is keeping a small part of the inflation basket low. you talk about oil at 80. our other guests, ubs wealth management's representative joins us. lots more coming up in the next hour of "bloomberg markets: asia." ♪

alisa: you're watching bloomberg technology. french president emmanuel macron and his wife bridget have arrived in the u.s. for a three-day official state visit. this is the first by any foreign leader during this administration. macron says security, trade and talks on multilateral issues are on the agenda. senator john valley is the third support mike- to nnalelly-senator do