>> welcome to daybreak australia. markets have just come online. annabelle: we are counting down to asia's major trading opens in the top stories this hour. the rally in u.s. stocks on optimism that the fed will engineer a soft landing. s&p 500 hitting the 20th record this year. haidi: swiss national central bank delivering a surprise rate cut. annabelle: apple sheds value as regulators from the u.s. and europe close in. what a week of central bank action. surprise moves from the swiss national bank and taiwan as we end what has been a seismic week for global monetary policy.

just in the first minute of trading, a staggered start in australia, 1/10 of 1% upside, we expect a mixed open for the equity session this friday in asia and investors are rethinking the one-way optimism that really propelled the hefty gains we saw in this part of the world and the u.s. session, fresh signs of inflation persisting in the u.s. and we are seeing the aussie dollar holding steady at 6570, we had a big move when it comes to that reaction of the labor market numbers we had yesterday. rba financial stability review is due out later. looking at the start of trading in japan and korea, a picture for u.k. -- nikkei for service

-- futures up 1/10 of 1% but asian stocks researching to the high on the back of dovish expectations from the fed this week bell. annabelle: that is continuing to power u.s. stocks overnight with the s&p 500 hitting the 20th record high for the year. strong data coming through in the labor market and housing and manufacturing and these are things that point to a strong economy and the overarching narrative and what is grabbing attention continues to be the fed and the message that we will see rate cuts this year so the nasdaq as well likewise hit a record high and treasury yields we did not see much movement but 10 year continuing to hold around 4.3%. dollar gains had the best day in

three weeks and dollars drink something that hits commodities overall because you see wti coming on more soft so continuing to hold above the $80 per barrel level so questions around the supply deficit we will likely see at the end of the year but the focus very much on central banks and one is the swiss national bank that unexpectedly cut key interest rates overnight, one of the first since the pandemic abated from them. the fed and ecb headed towards a pivot to rate cuts. our chief economist joins us. if you look at the central bank action this week the takeaway is the focus on inflation is in the rearview mirror now. >> i think that is right. if i had to coin a phrase to

describe it i would say the world central banks are engaged in a multi-pivot. the big story is the fed, ecb, bank of england moving towards a midyear rate cut and you have central banks for smaller countries, switzerland today thinking how to get ahead of this and that is why we saw the snb do a preemptive cut and surprising the markets today. and it is not the only pivot. turkey two years ago was following an extremely controversial monetary policy where the central bank appeared to believe raising interest rates boosted inflation rather than cutting it. what we have seen today with turkey central bank is a pivot back towards orthodoxy and you have the boj which for years was

locked in extreme rigid yield curve control settings are now pivoting toward something that looks more like a mainstream flexible approach. haidi: we also had the move out of taiwan central bank. this suggests that if you are in an environment where the fed stays dovish for longer as we get through the year could be get more surprises as other central banks try to keep up and adjust positioning? >> i think there will always be idiosyncrasies and central banks being moved more by a national story than by a global one. and you mentioned taiwan, i think the story in taiwan is about electricity prices and the impact it will have on

inflation. other global central banks also have particular challenges they are facing. think about turkey, argentina with runaway inflation. they are certainly not going to follow the fed. the big direction and policy this year is inflation coming back towards target, the fed, ecb, bank of england moving toward the midyear pivot, rate cuts probably for all of them in june, and smaller central banks whose currencies are moved so much by the relationship between their interest rates and u.s. interest rates navigating that shift. haidi: when you look at some of the risks, the structural slow down for china is one, geopolitical risks go into such a huge election year i assume would be another. how difficult is it for central

bankers to guide in this environment? >> you hit on two of them and china of course is another central bank which very much is facing specific domestic challenges rather than being moved by the big trajectory of the fed and ecb. previously the governor facing a challenge of not inflation, but deflation with prices falling in china. i think expectations from our china team he will respond to that over the course of the year with further cuts in the medium-term lending facility rate to give a little bit of an impetus to reflate china's economy. another big thing coming is the u.s. election. let's not forget this year will be a replay of the fight between biden on trump and that trump,

in contrast to other u.s. presidents, has not been shy about getting his hands dirty in terms of talking about monetary policy. so the nexus between the election, a fed that is pivoting, and concerns about fed independence will be in the mix as we think about u.s. monetary policy heading towards the november election. haidi: tom, always great to chat with you. it has been a monumental week for central banks. let's get market reaction. looking at the surprises from turkey, taiwan, snb and the size it -- seismic shift with the boj and watching the fed, our markets agile enough to deal

with the surprises and potential for morn the financial side? >> there is no shortage of surprises. taiwan hiking the rates unexpectedly. japan central bake hiking but sending the message of quite dovish so the takeaway is we see a high level of dovish coming from central bank. they hike rates but stress they see a limited chance for further tightening, particularly the boj and that is why we see the japan market, taiwanese market doing exceptionally well this week. [indiscernible] the fit -- the fed said we think

inflation is picking up but just a small bump. there will be more info in the next six months. that is the biggest question for the ask and the fed moving forward. haidi: investors in the markets seem pretty convinced the trade they have come along with shows a weaker yen and stronger equity markets will continue. >> if you looking for the market you just mentioned s&p 500 is 20's all-time high this week and

reason markets pushing so high is investors seems to price in perfect scenario, said taking dovish trends moving forward and we expect more cuts to come and [indiscernible] everything is moving perfectly. if that is the case that we are going to see for the upcoming months and potentially keep momentum going but once the market get to such a high and lofty level the question being left is resilience of market weakening because market get quite sensitive to expected daughters -- data. just perfectly demonstrates this

highly sensitive in the market now. annabelle: for asia stocks trading at highs, where do you think the unexpected did surprises are most likely to come from? >> in terms just purely looking at asian region inflation could potentially picking up continue to be a surprise not just a bump. looking at japanese market has been pushed out to all-time high but just don't forget japan economy just marginally expand recession so whether or not japan is economy could continue to fit more confidence into the market about it it is a convincing rebound for japanese economy. addition to that would be china side and u.s. side will likely

impacting the market like taiwanese stocks. haidi: this week we have seen a big run up and a lot of equity markets and one that has missed out has been chinese at woody's. do you see that shifting soon given the csi 300 is close to the 200 day moving average which has been a bit of resistance in the past? >> i think i do see bit of shifting in chinese market because central bank a meeting is also biggest data week for china after lending years so this is testing week. we have data coming in on china and production and employment rate and market expectation but if you looking carefully into market risk only up 1% just in case of [indiscernible]

i think the attention for the chinese market is shifting a little bit. the investors have come to terms with the narrative of a slower china but more attention is now focused on would it be any surprise coming from china, policy support is one thing but we see technology tensions between china and u.s. is indicating whether or not [indiscernible] i think that is a possibility we cannot rule out in the near term picture. annabelle: still ahead we will hear why bank of america securities expects the boj to move towards further policy normalization as we count down to japan's latest cpi numbers due in 15 minutes. first, apple loses billions in valuations as u.s. and eu

regulators close in. more on that story next. this is bloomberg. ♪ when you automate sales tax with avalara, you don't have to worry about things like changing tax rates or filing returns. avalarahhh ahhh

>> we allege that apple has employed a strategy that relies on exclusionary conduct that hurts both consumers and

developers. for consumers, it has meant four choices. higher prices and fees, lower quality phones, apps, accessories, and less innovation from apple and its competitors. annabelle: that was u.s. attorney general merrick garland on the antitrust case against apple and the firm is facing investigations in europe. you can see the drop in apple shares, erasing 113 billion dollars in market value. for more, let's bring in anna edgerton. this is something you reported what happened earlier this week. a lawsuit five years in the making. what stood out to you in terms of size and scope? >> one thing to note about the complaint is the narrative they tried to craft in telling the

story about apple's conduct the justice department alleges harm to consumers. what is notable is how they have taken big swings at u.s. companies, especially in the tech industry, but how they are also sticking to the fundamentals of antitrust law. they are alleging consumers were hurt by having less choices on higher prices and it is causing antitrust law so we will be interesting to see how the sides visit their case in court and how this works out ultimately. haidi: apple's response is interesting, appealing to the fact that they have been a trendsetter in many ways and what this kind of decision could potentially mean for their own innovation. >> yes and we saw the statement from the doj saying apple has tried to respond to previous scrutiny with a whack-a-mole

approach, specific remedies for specific complaints but he alleges the problem is with the broader business model and apple's conduct and when it comes to procedures and practices that can make it hard for users to switch to other companies. a perfect example is when an android user shows up as the green bubble group chat when everyone else is blue. it is harder to send video between phones from different companies so that is that kind of behavior the justice department is trying to highlight as giving apple an unfair advantage. haidi: in europe as well we are hearing from sources that perhaps apple and other big tech giants could face scrutiny over complying with the digital markets act. do you think this regulatory action is a hint of more to come? >> when they were talking about

passing via digital markets act initially there was a lot of concern from tech companies that the measure was designed at u.s. tech companies and there was a lot of frustration that the biden administration did not do more to push back in defense against what some argue our u.s. hometown heroes that add huge value to the u.s. economy but the biden administration had the antitrust enforcers take aim at big tech and is trying to make the argument that innovation flourishes in an environment with more competition and it is not good to have big dominant companies so a dueling ideology and it is playing out now in the enforcement action we see in europe and the u.s. haidi: anna edgerton with the latest after a challenging week when it comes to the eiffel in -- iphone noise in europe.

macron is in focus posting a biggest gain in more than five years. the ceo spoke exclusively to us and said the semiconductor industry is looking at a multi-year opportunity enabled by ai. >> our economy is driven by demand related to ai with tight supply and demand that is strong across most and markets, particularly data center driven demand and micron has a strong portfolio of products and we are very excited about our latest offering you referred to earlier. we just began shipments of this and we see strong growth in the corners ahead of us and supply is tight, the leading edge in tight supply that is leading to

price increases as well. so as we look ahead at 2024, the year of the recovery, we see increasing prices german by supply demand fundamentals and we look to next year to be a record year for micron's revenue , with significantly improved profitability as well. >> you sold out on 2020 four. let's dig in on the high-bandwidth memory because nvidia called this a technology miracle. will prices remain elevated? >> it is the hbm product that is sold out for 2024 and vast majority of the supply for 2025 is allocated as well. this is a critical product. it is in very early stated and is key enabler of generating ai

platforms are able to do. the latest blackwell platform that has been announced has 64 die of memory and it, a tremendous amount of silica and. hbm is growing fast and expected to be in the mid to high teens in the next seven years compared to be in just half of that last year. annabelle: that was the ceo of micron speaking exclusively with bloomberg television. we will have plenty more ahead on daybreak australia. this is bloomberg. ♪

haidi: take a look at how we are trading half an hour into the start of the session in sydney, a bit of a mixed day setting up. 1/10 of 1% softer when trading on the asx 200. gains, precious metals with new highs being hit for gold, a dominant theme in the previous session. pretty tepid trading ahead of the open in japan. gains for real estate not thoroughly convincing and big declines across energy, unsurprising given the number of days we have seen oil prices had higher. coming up, japan cpi numbers are due in a few minutes and we will look at that and how it petén chile impacts -- potentially impa

annabelle: take a look at the

latest inflation data we are getting out of japan. a little softer than expectations. 2.8% is the year on year for february. accelerating from the prior reading of 2.2% purge of -- for january. and again, taking up the pace from 2% in january. if you take out fresh food and energy, we see a jump in oil prices, 3.2% is the price for consumer in february. we have also seen expectations when it comes to the march tokyo cpi data. a leading indicator falling. there have been higher

comparisons at play. so much of this feeding into the sensitivity of what the bank of japan after this week does next. annabelle: a lot of questions about the direction. let's get a rare -- let's get a reaction with izumi devalier eight. when you see slight softening coming in but still holding above the inflation target, do you think inflation is taking hold in japan? izumi: thank you for having me. to summarize what we are seeing in inflation, currently, the prince inflation which surged in 2022-23 because of the weakening of the yen and rising commodity prices is coming down. services which compact -- comprise half of the cpi basket is rising.

certainly while we are heading and the right direction, the pace of underlying inflation, but the bank of japan considers the stable core measures is slightly below 2%. for the bank of japan to feel confident that inflation is truly re-anchored at the 2% target, we need further momentum in inflation particularly for corporate's to start passing on the increased in labor costs that will worsen over the coming year because of wages. we need wage hikes price -- passed on to prices. annabelle: i guess that backdrop, the bank of japan moved this week. it was historic because it is a first time we have seen it since 2007. are we one and done? izumi: our base case is that this is not the end. if you listen to the governors

press conference, i think it was very clear that in the bank of japan's days case, they do have -- base case, they do have further policy plans. but, as the governor stressed, the bank of japan does not consider 2% price stability to have been achieved. it is confident it is heading in that direction if the forecast for the outlook of the economy pans out. the emphasis was on gradualism and data dependency. we see them hiking again in october and another 25 basis point hike in april. that will be contingent on evidence that corporate's are going to deliver another round of price tags to pass on the rate -- the wage hikes.

haidi: the market reaction has been decisive even with a more dovish fed signaling, we still see weakness in the yen. is there a sense -- at what point do we see the impact particularly on the currency given how much it correlates to depressed domestic asset values? izumi: on the fx side we do get questions about -- why is the yen still weakening despite this rate hike? we answer that the rate hike is 1.7%. it might be a big step for the bank of japan but the policy is still pretty easy. in that sense the u.s. data and what the fed does matters more for the yen in the next 2-3

months rather than what the bank of japan does. for bank of japan normalization to be a driver of yen strength we need to see much more resilience in the japanese economy and more confidence that the bank of japan will have to do much more than what is currently priced in to contain inflation. haidi: particularly to get to the point where it starts impacting household sentiment. we have robust wage gains and inflation. when do you expect to see that translate into the lifting of animal spirits? we know it is hard to get out of all of these years of a deflationary mindset. izumi: that is where some of the uncertainty lies. in the ongoing spring wage negotiations corporate's agreed to the highest level of base pay hikes. we are probably headed to 3% hikes in fiscal 24. that should lift nominal wage growth.

combined with the slow down in goods inflation, we think real wages will turn positive by the summer. i do think there will be a lift to consumer sentiment. we will see consumer spending recover. i think it is not going to be the boom -- japanese consumers are still cautious. we have to see how consumers react to the increase in wages. annabelle: something markets clung to. -- something markets clung to was balance sheet reduction. izumi: i think it is something on the agenda down the line. if the bank of japan affectively told us this week they don't plan to change the pace of government bond purchases for the time being. at least for the next three months i think you are not looking at significant cuts to the purchases. in the post meeting press

conference, the governor said that now that the 2% price stability target is insight, reducing the balance sheet is something they will be considering down the line. i think that is such a big decision that they could not get around to that given how many change they already -- how many things they already changed this week. in -- quantitative tightening may be delayed until 2025 though there is a risk it happens earlier especially if the yen continues to weaken. haidi: always great to have you with us. izumi devalier. japan's real estate shares and investment trusts are releasing a surge as investors focus on further potential gains with relatively cheap stock valuations and rising asset prices. our senior agent is here. the concern was that with some

sort of tightening from the bank of japan after lift out this week we will see pressure on these sensitive sectors. that expectation of a super dovish trajectory has quieted some of those fears. >> this is probably one of the most interesting developments in japanese stock market over the -- stock markets over the last several days. the index of these companies has risen 12% and the last five business days, double the gains in the broader market. there is something going on here. part of this is likely to be an unwinding of bets around the boj. they are considered as one of the most interest-rate sensitive sectors.

they are now unwinding. another interesting thing here is that actually japanese real estate stocks are very cheap when you take into account the booming property markets here. take the largest developer here, basically, they are trading a pvr of something like 1.4. if you take into account the unrealized gains they have on their properties, they are trading below their net asset value. this is a real opportunity as you buy some. -- as viewed by some. annabelle: we had inflation consumer numbers coming out. the signals of inflation taking hold, are they also helping real

estate stocks? >> some people are starting to talk about that. this is not a consensus trade yet. everyone believes that inflation is taking hold and that japanese asset prices will be rising sharply. the stock prices of real estate companies should be much higher than where they are right now. but this is something that market players were debating the last six months or longer. if inflation is going to boost japanese asset prices, then real estate companies are likely to be some of the best performers. they are likely to benefit the most from rising prices. haidi: what are we speing when e performance of rates in japan right now? >> interestingly, the reads

rebounded sharply along with property shares. japanese rates have been underperforming since the start of the year. but that seems to be driven by a number of factors such as retail investors reducing buying because some of these rates are not included in new tax-free accounts, for instance. suddenly they started rising. they seem to be pretty good at the moment. even though japanese bond reads have risen over the last two years, reads still have a much higher yield than japanese bonds. if you look up the spread between the two yields, that stands at 360 something and that

is above the average of the last 10 years. the rates still look fairly unproductive in terms of the yield. annabelle: that was our bloomberg reporter from tokyo. that's get some warning calls ahead of the trading day in asia. asset management is considering increasing its stakes in japanese companies after the boj's rate hike. it's has a policy move makes the sector more attractive as it signals the central bank believes that growth is on solid footing. ever shares fund has beaten 96% of its peers this year. bernstein says the u.s. justice department's lawsuit against apple creates regulatory overhang over the stock. it knows the worst case scenario would be that apple pays a fine and loses restrictions for

competition across its ios platform but it does not expect the move to have much impact on the consumer's iphone retention or revenue. we will have more ahead. this is bloomberg. ♪

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haidi: blackrock's philipp hildebrand things switzerland's surprise rate cut is a signal that the world has turned the corner in the battle against inflation. the former s&p president explained why the central bank decided to move now. >> we have been waiting for this were a long time. the market has been pricing it. the first one is out of the gates. not surprising it is the swiss central bank in the fact that switzerland has a best inflation record through this difficult period of the pandemic. it is a courageous thing but justifiable when you look at the inflation forecast and the inflation data the last few years. >> what does a policy mistake look like? is there a danger that if you cut too quickly, inflation will make your job double harder to get on top of that? >> the main challenge they face

and all the central banks do is that goods inflation continues to come down. that is the post-pandemic adjustment which will settle roughly at zero. what is not going to happen in my view is service inflation will not come down. we have very strong labor markets, wages are strong and so my guess is that service inflation will turn out to be sticky when it settles. and in combination with goods at zero and service inflation around 3%, that suggests to me that what we will end up with is a rate that will be hired. i think what you're going to see is a higher for a longer story that will ultimately feed through the short-term adjustment of rates now beginning to ease policy rates beginning to ease. >> for many years you were in charge of the s&p -- s&p.

he has also said he will step down. what are the intricacies of managing the swiss economy? >> keeping the track record of it to. the legacy of thomas is he has the best inflation track record of any central bank. that is the principal challenge going forward, to make sure there is no question that the credibility will be maintained. and in the longer term, the question will be, how do you deal with a bank that is going to be very large compared to gdp? and that is the legacy of the ending of credit suisse. >> would he be worried about market reaction? >> i don't think so. they have known -- they know how to surprise markets, they have

done it before. i think you could perfectly justify the decision. he could have also waited. when you look at the inflation forecast, there is not much point in waiting so why not go ahead. i don't anticipate any problems. if he gets a little currency weakness out of this, then i think that is perfectly fine. this will not create any market reactions but it does signal to the world that we have turned the corner. central banks are easing. and then the question is, where will this settle in the long-term? annabelle: that was the black rock vice-chairman speaking exclusively with francine lacqua and looking at the market action today because the moves we are seeing referencing what has been the overarching theme this week is the expectation that inflation really is starting to move into the rearview mere for a lot of major central banks and

that has been prompting gains in the u.s. and we are seeing a bit of a flow on in the session. nikkei futures coming online, .6% to the upside. and a different tale, japan's inflation story, we see it rising at the fastest pace in four months. core inflation up to .8%. we have the rba stability review of the financial system do later today. haidi: take a look at some of the geopolitical stories. top israeli officials say his country will invade rafah no matter what the u.s. says. speaking on a u.s. podcast, the israeli official says israel will finish the job and defeat hamas. it is said he will head to washington to look at concerns of the biden administration over a potential rough invasion.

china and russia have been told that their ships can sail through the red sea and the gulf of aden without being attacked. that was after an understanding was reached between their diplomats and a top figure. beijing and moscow may provide political support to the houthis and body such as the un security council. a senior u.s. official says smic may potentially have broken u.s. law. undersecretary of commerce for industries and security has made the remark during a testimony before u.s. lawmakers. washington has been investigating the processor that it made for while ways smartphone last year. -- for huawei's smartphone last year. become part of the conversation

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shares surging 48% as investors and braised the social media platforms vision of profiting from the growth of ai. we spoke to the coo about the major milestone from the floor of the new york stock exchange. >> it has been our dream, our dream to have our users and communities be able to have shareholders in reddit. everything on reddit is built by our community. >> what was the main benefit of the ipo? we talk about the money raised and the dollar valuation. an ipo gets its name out there. how do you way up the pros and cons of listing? >> there is certainly a lot of press on a day like today. it is a special day. becoming a public company has made us a better company. we have been in this process

longer than most. almost two years. the process has made us more disciplined, operationally rigorous and actually allowed us to get to know investors better and tell our story. so this whole process has made us a better company and we are prepared to be a public company. i think it has been good for us. and i think companies that can go public, it is a duty as part of the process of maturing as a company and then the benefit of having our employees have liquidity which we promised them and in addition have our users be able to be shareholders makes a lot of sense. annabelle: that is the reddit ceo speaking to ed ludlow. look at the stocks we are watching. apple's asia suppliers in focus today. the u.s. justice department

suing the iphone maker for violating trust laws. and disappointing outlooks from the likes of lululemon overnight. fila will be in focus for us today. we are also watching for the readjusted expectations potentially from the bank of japan. these are moving in the right direction. inflation for japan on the national data we got earlier this hour accelerating to the qic's pace in four months. this is an outcome that will keep markets focused on whether the boj will follow from its first rate hikes since 2007 with an encore later this year. we will see how that plays out in the relentless weakness that we have seen in the yen. ♪ a tax-optimized portfolio. at creative planning, our money managers and specialists work together to make sure your portfolio and wealth

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>> this is daybreak: asia and we are counting down to asia's major market opens. a consistent take away from central banks is that inflation moving into the rearview mirror with some notable exceptions. one being the bank of japan. annabelle: the national cpi we went through pointing in the right direction showing the acceleration. that is going to keep investors comfortable with the dovish positioning after the lift up we had from the boj. if the data continues to go in this direction, maybe we will see an encore from the bank of japan later this year. annabelle: are we one and done or will there be more hikes coming from the governor?