♪

>> welcome to daybreak australia. we are counting down to asia's trade opens. record highs for stops cuban by big tech. boj refrains from signaling hikes. haidi: investors are focused on an updated dot plot and rate cut. paul: philippines president tells us he wants to avoid worsening ties. staggered open. market flat now. ozzie yields went lower after we heard from the reserve bank of

australia. the bank saying it is really nothing in or out. they seem to have found support. we've been trading in new zealand as well. the market looking like this. public holiday although we will have futures trading in equities and bonds. not a great deal of movement in futures. yen is weakening. 150.84 at the moment. haidi: look at u.s. futures, flat trading.

that session was interesting. we had gains ahead of the fed. we expect the fed to push back as the economy and surprises. fresh record high, broad-based rally. energy is the best performer as we see a rise in oil prices. wti above 83 dollars, propelling prices higher. seeing the impact of drone attacks adding upside pressure ahead of key summer driving season. nasdaq 100 up by 1/10 of a

percent and we had date or saying china's stock pile declined in january. we saw japanese holdings of treasuries increase. we are focused on the fed. let's bring in enda. for the assets across fx, the fed seems to be the bigger influence. enda: no change expected tomorrow, but all eyes will be on these. stickier than expected.

the market is expecting to look at cuts, three different stories . broadly speaking since the year began, the growth story has been good. jobs has been good. no policy change expected. paul: to that point, we are seeing the market steadily repricing. we are down to three now considering inflation numbers did not really play ball. enda: car insurance and services

areas, it is not so long when people were predicting the fed to cut interest rates. people are looking at june. it all depends on where cool -- there are pockets that are stickier than expected. we had a press conference with chairman powell, let's see what he has to say about whether or not they are on track to bring rates down. a lot hinging on dot plots in

fresh signals from the fed. paul: let's bring in chris weston, head of research from our melbourne studio. picking up on those remarks if we look at stocks, we've had the s&p trimming gains. can we break the new highs or are we range bound? chris: the market told us a loose message that they expect the dots to upgrade gdp. forecasting 1.4%. a small increase in today's fed meeting. if we were to see dots being

taken, you could see a spike in yields. volumes were ok, the market is telling you they are comfortable that the dots remain where they are and we might see upturns. paul: there seems to be a consensus around june as the start date for easing. historic tightening, back at the end of negative rates. the forecast is for a weaker yen. how do you get there?

chris: the market went into the bank of japan with news priced in and a lot of measures. 10 year jgb's closed down a three basis points. we saw sellers playing through in the yen and dynamics took over. it feels like the market is happy with the way things are going. communication has been spot on. looser financial conditions. they are buying jgb is to suppress volatility and people are happy to carry. volatility is low and it

incentivizes us to put on the well-adjusted trade. tenure swaps and jgb's moving closer to 1% and you're seeing a situation where the position still works. we are only pressing in 20 basis points of hikes, so important about this is not the start of a cycle. that is a greenlight for trades. haidi: is this less to do with a soft approach from the boj and more to do with divergence, availability of fields in other geographies?

chris: new gout momentum in markets. divergent trade is there and that will get an extra leg up if we were to see fed dots up. that is the risk going into that and we've seen clients looking to reduce dollar shorts. what if we see two cups this year? that should put a floor under markets in incentivize buying. as long as equity markets trend the way they are going we've got credit spreads, very conducive

if you have carry trade's. momentum and kerry are good places to be. haidi: we know china's foreign minister as in sydney, met with penny wong. it is hard to have conviction when it comes to domestic trades. they waiting for a catalyst? chris: how i'm looking at china is if you look at the bond market, people pounce and it rules over and you see yields testing lows, telling me policy stimulus -- we have not had the bazooka. in has been aimed at markets and will benefit mainland shares.

i like the idea are of being long. that's the trade and we've seen good flows into hong kong stocks and tencent reporting today, equities reporting might be positive, but have not seen that aimed at demand. you're going to see the spread wide in, so we like it from a long short perspective. stimulus is lacking demands so until we see the situation will not see a selloff. yuan fairly stable, no lasting

impression in the equity market. haidi: chris weston, head of research at pepper stone group. beijing's top diplomat holding meetings. we discuss implications. first hearing from the philippine president about tensions and manila's efforts to defend sovereignty. this is bloomberg. ♪ ahhhhhh filing sales tax returns? ahhhhhh business license guidance? ahhhhhh -cross-border sales? -ahhhhhh -item classification? -ahhhhhh does it connect with acc...? ahhhhhh ahhhhhh ahhhhhh

♪ haidi: the chinese foreign minister is meeting with penny wong and they are expected to live tariffs. ben wescott joins us. ben: china is optimistic. this is a high watermark in relations given that this is it the most senior official to visit australia. li visited australia seven years

ago and relations have taken a big tumble. this shows we are bounded to a positive level as we expect news within a week of the lifting of sanctions. paul: encouraging signs but the mantra has been cooperate where we can but areas of disagreement have not gone anywhere. >> experts have said areas of disagreement are moving away from simple issues like tariffs and trade sanctions to more complicated issues like taiwan, south china sea and the suspended death sentence.

this is a positive development in the relationship but there are questions on where we go from here. china is keen to keep the winning going and australia is talking about stabilization and normalization. haidi: we know there meeting with the former prime minister who has been critical of the current governments policies on china. ben: former prime minister paul will be meeting with wong ye during his time in australia.

the stance is not backed up by the labor government and sees the u.s. as more combative and china as a close partner. his comments have embarrassed labor and put pressure to push back which is difficult as he is a legend when it comes to economics. paul: australian government reporter ben wescott. ferdinand marcos, jr. says the threat to china's claim to the south china sea is threatening. his efforts he says are not meant to start a conflict. >> we must do more to defend our

territory and that is what people are seeing. the more robust defense of our rights is recognized by the international community and law and lee feel very close to that. we have not instigated any conflict. >> the u.s. points to article five of the defense agreement signed in 1951. that says it extends to all attacks in any area of the south china sea. what does that mean? >> and the incursion or to

occupy, which has already happened. trying to keep it peaceful, but as i said we think about peace and it does not serve any purpose to say mutual defense. no one wants that unless -- you have asked a difficult question. unless the effects are such that it is a threat that is existential to the country. then i think it is easy to say that would trigger the treaty.

>> how confident are you about u.s. support? how far with the u.s. go? >> we can say the u.s. has been supportive in every way and has shown that it takes seriously these agreements, but it is dangerous to think that we will run to big brother. that is not the way we treat it. we do this for ourselves because we feel that we have to and it is not at the behest of the u.s.. >> how confident are you the

u.s. is willing to go to war with china? how far is the u.s. prepared to go? >> i really -- to take a step back from that question, that is what we want to avoid. we want to do everything to avoid that situation. this is not -- this is not poking the bear. we are to do the opposite and keep things manageable, to continue dialogue at every level

and we have initiated those dialogues. so that is what we have to continue because lose there are many volatilities in the region. >> philippines president speaking with haslinda. watch us live and catch up on past interviews on the terminal or dive into any of the functions we talk about. this is for bloomberg subscribers only at tv . this is bloomberg. ♪

♪

haidi: early gains in the first half hour of trading. another day of gains for oil prices with wti above $83 a barrel. watching stocks, we have the chinese prime minister -- trade minister in australia. seeing weakness in new zealand, but watching nikkei fu

♪ >> the u.s. is running a 6%

deficit. largest in history and a peace time non-recessionary environment. if they are doing full employment, they are turbocharging a stressed environment, which is why bitcoin in commodities are the best asset classes. paul: that was jim courier speaking on the commodity rally. he had a few thoughts on oil, sees it rising above consensus if the fed cuts rates in june. new york crude around 83. china's move to support manufacturing points to higher prices with china's optimism not extending to iron ore, slipping

again. it has lost 21% of value since the start of the year which is being reflected in the stock market. most sectors are higher with the exception of materials. haidi: it depends on china and the foreign minister is in china for talks with his counterpart, penny walton. china's top diplomat is set to meet with the former prime minister who has been critical about the policies toward china. let's get perspective with the director of research at the low institute. is it a problem that penny wong has tried to downplay?

>> this is the difference between albanese or penny wong, the opposite effect would never work in china, but in australia you can meet with who you like and paul keating casts a long shadow over the current government. i think this is a signal that beijing is sending, making clear it endorses paul keating's critique of the government, that they are hardline on china. so this is a way of deepening the wed within the party in australia and is probably not

entirely welcome, although he is entitled to have the meeting. haidi: there is a clear warning about how there is no third party, but there is when you talk about the alliance. how much more complicated is that after november? >> a great deal because it is not just australia who worries about the u.s. alliance, but it calculates beijing -- complicates beijing's calculations, highlighting that the bilateral relations with australia and china do not happen in a vacuum. there is context and there are issues where they remain at

odds. look at what the foreign minister spokesperson was saying in beijing. he criticized strategic partnerships. australia's cooperation over south china sea and plans for pursuing nuclear powered submarines. bigger issues than trade and reopening lines of communication. we've had stabilization for a while, the narrative took hold since albanese met xi jinping. what comes next? you detect frustration in beijing about where is the positive agenda. you have not fetishized our difference and yet they want normalization.

paul: the problems have not gone away. hong kong, taiwan. taiwan and china want to ascend to the cptpp. where are the areas of cooperation? >> environment, hydrogen, investments. the remaining tariffs on wind may be lifted in march. orders have been made in china for us trillion wine, so that contributes to the positives, but there is not a compelling agenda. there is more maturity in the context between the two sides, but you can detect a widening golf between china and

australia. they are not conceding that we will go back to the previous relationship. paul: china is trying to draw small nations into its orbit. these countries can make up their own minds, but can you see a situation where china might have a military base? >> it is an ongoing concern. china's ambitions are a point of concern. in terms of policing agreements which undermine domestic stability, that worries australia and others and may be a point on the agenda.

no clear resolution in sight. haidi: how much bandwidth to they have with challenges? what happens after november? the u.s. stops supporting ukraine, what signal does that send beijing about taiwan? >> there are upsides and risks to the trump presidency. beijing is probably holding off on what the effect might be on calculations. china has embarked on strategic reprieve with the u.s.. they are holding to see what materializes after the u.s. election. it is really about moving beyond

stabilization. it's a difficult process of bargaining and the chinese want more, australians will hold their line. everyone is waiting and seeing on the regional context and what happens in the u.s.. paul: that was the director of research at the low institute. another story, hong kong's domestic security law is prompting new warnings that could muscle discussion. this was approved unanimously in a snap meeting. chief executive john lee calling it patriotism. the u.s. is alarmed by the vague wording. traders have shifted their

attention to the fed decision after the boj ended the last negative interest rate regime. this is bloomberg. ♪ or filing returns. avalarahhh ahhh welcome to ameriprise. i'm sam morrison. my brother max recommended you. so, my best friend sophie says you've been a huge help. at ameriprise financial, more than 9 out of 10 of our clients are likely to recommend us. our neighbors, the garcía's, love working with you. because the advice we give is personalized, -hey, john reese, jr. -how's your father doing? to help reach your goals with confidence.

my sister's told me so much about you. that's why it's more than advice worth listening to. it's advice worth talking about. ameriprise financial. ♪ >> there is distance to 2%.

considering the gap we will conduct normal policy while maintaining and accommodative environment. haidi: was the boj governor speaking. this was seen as a dovish hike and markets are split. expectations are that this will not be an aggressive regime but consensus has the rate at 0.1% by the end of the year. we had a big move for the yen. $154-yen and you're seeing a flat picture for the u.s. dollar.

flat going into the fed and we could see big moves. our ethics and rates reporter joins us. the hike in rates, does it look one and done? we saw that movement in the yen. is it something bigger? >> i don't think it is one and done, the there was distance between yesterday and the next one. christmas because the japan economy has inflation, but real

rates are negative. they went to great lengths to reiterate that at the press conference yesterday. they have done so much and it might be a decent while before they do something again. they will see how the yen performs, that is the main concern right now. the boj already played its hawkish cards and dollar-yen is back near the cycle high. if we get a vigilant powell or

they push the rate cut off the table, that might keep the differential wide enough and push it up. the haven through 152 is interesting because a squeeze may encourage intervention. they do not want to see a run against the currency and they got a long time between now and the weekend. there is dater out tomorrow. you've got cpi on friday and there is a lot to digest. not just what happened yesterday. yes, they have hiked rates effectively, but a flip-flop in

divergence between bank of japan and the fed is a stretch. the boj played in cards, but the fed is modular. this will matter in terms of what range we are going to have for the next three or six months. paul: what is the expectation around when easing happens? it seems to be june but could anything push that out? >> if that were the case, last night we had a strong housing print. that is the data that the fed focuses on to see how strong the polls is and if it repeats

itself, maybe we go to two at best. in the yen like i said, if bank of japan interest-rate policy was a netflix series this would be a season seven. pay respect to the cpi on friday. paul: bloomberg's michael wilson. more ahead upon daybreak australia. this is bloomberg. ♪

this is our future, ma. godaddy airo. creates a logo, website, even social posts... in minutes! -how? -a.i. (impressed) ay i like it! who wants to come see the future?!

get your business online in minutes with godaddy airo ♪ paul: los angeles dodgers and padres will play the first games in south korea as an effort to attract fans outside of the u.s.. for more on the big take let's bring in maxwell adler. what has led to the boom in popularity. >> the answer requires three parts. after six years, show a otani proved that he is the first

player since babe ruth to successfully pitch and hit and the first ever to do it in the same season. he signed the biggest contract in baseball history, which made headlines. he is coming to the dodgers, the second-biggest rand behind the yankees. they have a huge asian following after a signing in 1995 of the first huge japanese star to leave japan. they were big in helping the sport recovered in 1994 and invigorated the asian fan base overseas. haidi: is the league promoting

players more aggressively now that they have a global superstar? >> we found the leak does not take kindly to accusations that they are not good at promoting, but baseball has a star power problem. the average american or australian could not name last year's mvps. everyone knows who lebron james or travis kelce are in different sports. the league is promoting more aggressively and established a player engagement department. the league made a significant change to scheduling prior to the 2023 season two and every team plays each other, similar to the mba and nhl in their

efforts to promote lebron james, michael jordan, sidney crosby. they want to make sure fans have a chance to see the bigger stars. paul: otani is a big star. what has to happen for the contract to be worth it? >> it is probably already worthwhile. a few people we talked to called it a team friendly contract, which sounds crazy considering it is 700 million dollars, but the deferrals make it so the dodgers will spend aggressively on other big free-agent stars without going over the luxury cap. mlb if you spend over a certain amount of money, you get taxed.

so they will be able to spend aggressively and it's a great deal for otani if he avoids california income taxes on the money that he earns after the contract is up. when a championship is viable for a franchise. the patriots are an example. they went from being one of the least valuable franchises 20 years ago to winning six super bowl championships and consistently valued as mvps in the world. winning a world series would make this valuable to the dodgers, but they are making a lot of money on the added eyeballs from otani and additional sponsorships from japanese companies. haidi: maxwell, are sports

reporter. subscribers can read more on the terminal. you can find it at bloomberg.com. the future of china's credit market is in focus. the china credit forum hosted by bloomberg. let's bring in coag or of the china show. this is a huge event. what are you excited about? >> bringing the studio upstairs. we are going on location but still staying here in our headquarters. bring the show live in ucr crew setting up. it has been tireless effort to build a tv set with a live studio audience, a first for me. what a time to have a credit forum, when we are seeing the property downturn in china

entering a new phase of debt restructuring. 20 or so firms have received orlanda orders. at least five including evergrande, that has been asked to wind up. where are we in this process? have we seen the worst of the downturn and what are the opportunities and risks, given that we have not seen a quick turnaround just yet. paul: who are we going to year from? >> several themes, opportunities in property, lgf the. argie speech will be with someone who is a partner at bain capital. we will ask what he means by

special situation space. they've been involved in the real estate market. not traditional developers. data developers. we are also tug about lgfv in the future of the market when it comes to local government. david will talk about the future of china's credit market, certainly a lot. you do not want to miss out. paul: china shoko anchor yvonne man at the china credit forum. stay with us. the market open is a next. this is bloomberg. ♪

♪

haidi: we are counting down to asia's market opens. the day after the boj in the day before the fed. a widely dovish mood from the bank of japan. bigger move for japanese assets. paul: japanese markets are closed, will have futures trading. it is all down to the fed and other central bank decisions. haidi: full steam ahead and japan equity rally. another market hoping for the same narrative is korea. a down day in tradi