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tv   Bloomberg Daybreak Australia  Bloomberg  April 2, 2024 7:00pm-8:00pm EDT

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>> welcome to daybreak
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australia. markets have just come online. paul: asian stocks set lower and a commodity surge reviving the good news is bad news trade. fewer rate cuts expected than the fed. haidi: first quarter sales missed estimates by the most on record raising concerns over ev demands. paul: presidents biden and xi speaking. we are open for trade in australia. we do have a staggered open, if occult to get a comprehensive read, but we are higher by 0.1%. one trade continued from the u.s., rising yields. you can see the 10 year climbing 4.121. we saw bonds yelling -- selling
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off. that u.s. data keeps surprising to the upside. in australia, bond sale, $3 million worth at 2.75%. oil prices we are watching, that keeps creeping up. u.s. crude futures topping $85 today, first time that happened since october. rising middle east tensions simmering in the background. we are expecting the cartel to reaffirm its current production policy. elsewhere futures for the nikkei looking flat as we continue to watch the yen for possible intervention. haidi: the idea of good news is bad news, higher-than-expected data out of u.s., compounding data out of asia. these economies contributing to the idea that may be rates will stay longer higher.
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a coin toss scenario when it comes to whether the fed moves in june according to market pricing. futures of the s&p flat. we are hearing from morgan stanley's wealth management arm that investor expectation is getting stretched and may seek opportunities outside the s&p 500. steer clear of the overboard territory we see for that market. nasdaq 100 futures looking meek. tesla, those sales missed by the most ever. not just a blow for tesla, but across the broader ev's. list slashing predictions. tesla shares down 5%, extending the 2024 selloff, one of the biggest drops in s&p. the first quarter coming as another one after another reducing the estimate for vehicle liveries out of tesla. still managed to surprise to the
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downside. we are also watching what fed speakers have to say. we heard from the cleveland chief saying they need to see more evidence of inflation. that has been the data dependence we have heard from many fed speakers. take a listen. >> that is a reasonable baseline but i would like to say, this is a projection. three rate cuts is a projection, not a promise. >> i think the most likely scenario is inflation will continue on a downward trajectory to 2% over time, but i need to see more data to raise my confidence. some further monthly readings will give us a better sense of whether the disinflation process is stalling out or whether the start of the year readings reflect a temporary detour on the downward path back to price stability. paul: let's get more on this and bring in kerry craig from jp
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morgan asset management. we just heard from the fed, no sense of urgency when it comes to rate cuts. july as the first month fully priced in for a fed rate cut, but if this data keeps surprising to the upside and inflation stays outside the target window, could expectations get pushed out more? kerry: good morning. that is the market narrative today, the idea we have had speakers from the federal reserve saying, we need more time, more data to assess. they will get that, two or three cpi prince before june. -- prints before june. they should see the projection they have come into play to allow them to start cutting rates. whether it is june or july that one month does not make a difference. there is the rate cutting cycle.
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maybe we do only get two rate cuts. the base rate is three, but the federal reserve is saying, only two could come through when it thinks about the dot plot. i midyear starting point for the fed, continues to count down in line with their forecast and will be looking at developments in the economy. avoiding that recession. paul: that good news is bad news mantra starts to get embedded again. in the 15 years since gfc have investors come to the conclusion that this is normal? kerry: there is an adjustment if they do because we will get back to the era of ultra-easy policy and low rates, there is a debate about interest in the u.s. economy. we saw the fed slightly nudged
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up their view of an interest rate back to 2.6%. in the past it has been as high as 4%. the idea that we could go to the zero bound or close is not something we will experience now given the outlook for inflation, it will be more choppy. we could see structural drivers leading to higher and more volatile rates of inflation in the future. for asset locations, needs to look beyond stocks and bonds for the portfolio. haidi: outside of the u.s., like in japan, where do you see opportunities and the next leg of this rally? do potential concerns over the yen at insert -- uncertainty to the equity rally? kerry: the weakness in the yen helps exporters, but it is not just an export story driving the market higher in japan. it is structural government shifts, abenomics.
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we are seeing a shift in the economy. and growth with that. domestic demand is coming through and in line with the weaker yen is helping lift markets. it is a market that is under coverage. it is a stock pickers market. the yen potentially strengthening. we might see intervention from the bank of japan, but do not expect a massive move in terms of the yen strengthening given the yield differential between u.s. and japan is questionable as markets priced out rate cuts by the fed and we do not think the bank of japan will go to far in terms of rate hikes after moving away from the negative interest rate policy. haidi: for china part of that good news is bad news narrative has been, the bottoming out of the slowdown has taken place.
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does that mean you're more strategic on chinese assets and how would you play that? kerry: when it comes to the broader asian region we prefer markets outside china at the moment. pmi numbers overnight, the resumption of the manufacturing cycle, a pickup in orders and the ratio is favorable. that should feed into the supply chain sensitive parts like korea, singapore, taiwan. outside of those markets and china, valuations are compelling when it comes to china. actions by the government and policymakers to find a flaw in the economy and market to provide stability, but there are question marks around how strong the recovery will be, the drive of consumption at a time when the property market is weak, and regulatory shifts could impact the market. there is a way to go to get more
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confident. certainly valuations what they are will keep us mindful. we are looking for a broader resumption and more strength and resilience in the market before becoming more positive. paul: valuations in china look appealing, but are there other sections of the market, other assets, where valuations are looking stretched? kerry: the biggest challenge looking at the economy, the broad macro narrative is one of a soft leaning. an upside to the data beating on market expectations. the idea you could have a better economic outcome and rising profits in this market is overlooked in terms of a more bullish case for equity markets. yes valuations are high. we should expect a pullback in the equity market that fuels disappointment. that means we look for a
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relative valuation. thinking about cyclical parts, industrials, the energy sector, or keeping a watchful eye when it comes to europe. again waiting for confidence the economy will turn and we are seeing rate cuts from the ecb. it is a range of opportunities globally and seeing the broadening of the rally in the u.s. gives us confidence the market will continue on this more bullish outcome than thinking of a bear market or significant correction in the near term. haidi: do you think that rally is at risk from the november election and other geopolitical factors risks might arise from? kerry: is a year of heavy elections in 2020 four. the u.s. election is front and center. there is a degree of not necessarily confidence but familiarity given the two parties running and presidential
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candidates that will come through, having relived this in 2016, the market may have familiarity which is keeping this risk adverse. it is also some way off. we are getting early indications with the policy dynamic may be and the split in terms of who has the majority in the house or senate as well as who is leading the white house will have a big impact on policy outlook. i think the market will pay more attention the closer we get to that november election, but it is more a case of thinking of the outcome of the election, not the biggest impact on the market, and about earnings and profits and policy changes may not be as severe as many are concerned about. haidi: always great to chat with you, carried correct -- kerry craig. we will take a look at tesla's
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big miss on first-quarter deliveries and how the ev pioneer may be able to turn around sentiment. and details from beijing staying silent on washington's claim they talked about tiktok. this is bloomberg. ♪ to me, harlem is home. but home is also your body. —last one everyone. i asked myself, why doesn't pilates exist in harlem? so i started my own studio. getting a brick—and—mortar in new york is not easy. chase ink has supported us from studio 1 to studio 3. when you start small you need some big help. and chase ink was that for me. earn up to 5% cash back on business essentials with the chase ink business cash card. make more of what's yours.
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haidi: president biden and xi
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jinping have spoken by phone in their first one-on-one communication since november. a political news director joins us from washington. tell us more about this call, what was discussed and the significance of it happening at all. jodi: the last part is the most important part, that it occurred. a bit of a surprise. we only knew shortly before the call took place that they would be talking today. it is their first one-on-one since november so quite a long stretch and of course the temperature has been dialed up often between the countries in terms of things like national security issues, and taiwan. also the industrial base, something janet yellen will be talking about when she goes to china this week. the call they said was candid,
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constructive. the fact that it happened and looks like they want to continue these kinds of conversations, and it happened in advance of janet yellen the treasury secretary going to china this week and antony blinken, secretary of state, going shortly after janet yellen, this is significant that they want to cool the temperature and try to find areas to agree on. one is stopping the flow of illicit drugs like fentanyl. another is climate change. they are far apart on many other issues, but the fact they got on the phone and talked to each other, both readouts of it were cordial, is a good sign that at least they are talking to each other. paul: plenty of areas of disagreement, among them the tiktok divestment. did that come up? jodi: the u.s. said it came up.
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john kirby a white house spokesman in the briefing today said yes, tiktok did come up. he said president biden brought it up. not as an issue of banning at button issue they wanted to be divested, they don't want to see china owning it anymore. the house of representatives passed a bill that would require the divestment of it by the chinese owned company, or there would be a ban. it has not gone forward in the u.s. senate, but there is a lot of support for it among lawmakers and support by the biden administration. the chinese version of their statement about the phone call did not mention tiktok. haidi: do we think anything specific and tangible will come from this conversation? jodi: i think there are areas they would like to say they could move together on. fentanyl is one. trying to take steps against the
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illegal flow of drugs globally. there are some other issues they keep talking about, trade. of course tariffs. i don't think we will see anything concrete, the u.s. has to decide what to do about tar iffs. the fact of this and the lead up to janet yellen going there, there could be economic policy discussions that could lead to concrete steps the countries can take together. paul: that visit from treasury secretary is happening later this week area what will be the focus for her and what will be the message? jodi: she is going to look at industrial plants. she is going to speak at the american chamber of commerce in beijing. she will speak to students as well. her message will be a tough one,
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basically saying she is worried about overcapacity in china, industrial overcapacity, and the effects it could have on the global economy, a statement she has made before, but directly to leaders. she is viewed as someone chinese officials like to deal with. they know her, she has been there before just a few months ago and they can talk about the economy with her. china had several major american business leaders in china recently, just last week. those meetings seemed to go well. given china's economic woes, this seems to be a time they want to talk to people about the economy and see ways to move forward. even janet yellen with a tough message i assume will be welcomed in china. paul: bloomberg political news director jodi schneider in washington, d.c. other geopolitical stories --
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the white house calling for accountability after is really airstrikes in gaza killed 78 workers. among the dead are british, polish, australian and other volunteers. netanyahu admitted what he called an unintended strike on innocent people. they have called on several charities to suspend food deliveries to palestinians who the u.n. and others say are on the brink of starvation. i ran's supreme leader promised revenge on israel after a deadly strike on its embassy in syria. he said israel will regret its crime. israel has not confirmed it was behind the strike in damascus which tehran said it destroyed its consulate building and killed 13 people including military personnel. nato with funds for ukraine, $100 billion over five years.
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part of a package leaders would need to sign off on one they gather in washington in july. the proposal could take charge of weapons deliveries to ukraine, amid european concern a second trump presidency could change u.s. policy. you can get a roundup of stories to get your day going in today's edition of daybreak. terminal subscribers go to dayb . it is also available on the bloomberg app. this is bloomberg. ♪ so, what are you thinking? i'm thinking... (speaking to self) about our honeymoon. what about africa? safari? hot air balloon ride? swim with elephants? wait, can we afford a safari? great question. like everything, it takes a little planning. or, put the money towards a down-payment... ...on a ranch ...in montana ...with horses let's take a look at those scenarios. j.p. morgan wealth management has advisors in chase branches and tools, like wealth plan to keep you on track.
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the all new godaddy airo. get your business online in minutes with the power of ai. >> 1000 global leaders will gather in doha gain unparalleled insight and make new connections and uncover valuable opportunities. request your invite now for this exclusive event, the qatar economic forum, powered by bloomberg. paul: it was not a very good day for tesla. let's run through numbers. 386,810, how many tesla cars were delivered the first three
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months of the year, a massive miss. we were estimating 420,000 and thought that was conservative. bad numbers. the share price responded accordingly. haidi: we had cut after cut in expectations and they were too optimistic in terms of what we finally saw. it will be interesting to see if this contributes to weakness across ev's. lots of factors tesla blamed. production, logistics, the refresh of the model 3, a blackout near a factory in berlin and disruptions in the middle east. if you look at numbers for production, still outpacing deliveries. more than 46,000 vehicles. it is producing more cars than it sold in seven of the past eight quarters. it does not seem to be a production series. paul: does the market buy this? a slight is in between two
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waves, just a question of how big is the trough between. a lot of market watchers are doing their breath for something new from tesla, may be the model 2. haidi: the wave of chinese supplies just crushing. we talked about weakness in the chinese market at a time when producers -- the huge discounting we see putting pressure on tesla which has increased its prices in china. march shaping up on the other end of the spectrum as strong for chinese ev makers. a slow start to the year because of seasonal holidays, but byd sales jumping 46%. others listed in the u.s. surged in deliveries between 14% and 39% in march. paul: we will have more commentary on this tesla story.
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dan ives called this a train wreck. standby for what should be an interesting conversation. haidi: should mention rivian numbers also beating expectations. 20 tony for output target capped at 57,000. good news across the space if you are not tesla. let's look at developments. toyota and hondo, big u.s. sales gains to start the year. general motors demand helping automakers defy expectations of a slowdown, underscoring the importance of affordability after pandemic driven shortages and high interest rates are driving up costs. disney management pulling ahead in a proxy fight with an activist investor nelson peltz. biggest investors vanguard and blackrock will vote for nominees at a board meeting. it is a major boost for bob iger looking to stave off trian.
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a worker committing to spending and job protection as a meaningless piece of paper. the japanese company was trying to bolster support for a planned takeover of u.s. steel. president biden said the company should stay american-owned. more to come on daybreak australia. this is bloomberg. ♪ not all caitlin clarks are the same. caitlin clark. city planner. just like not all internet providers are the same. don't settle. you want fast. get fast. you want reliable. get reliable. you want powerful. get powerful.
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>> the teams have been working a lot since november on fentanyl
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precursors, on climate change, uneconomic practices. on artificial intelligence. there's been a lot of staff level work and both presidents thought that a few months later, this was a good time to check in and see how that's going, discuss the future. >> that's national secured a council spokesman john kirby speaking about the phone call between president joe biden and xi jinping. let's talk more about this with the founder of geopolitical consultancy ashton analytics. you've noted that there were no real surprises out of that call. was this conversation really more about stopping things from getting worse comic -- worse rather than helping improve? >> i think the entire policy of engagement is largely that the biden administration embraced in spring of last year is largely about stopping things from getting worse. precisely.
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the hopes that things will get better. better in terms of may be more stable, more predictable, less volatile. better doesn't mean more robust engagement in trade and cooperation on commercial issues. it certainly doesn't mean that. paul: we had to description after these talks that they were constructive. certainly the problems in this relationship are well-known. can you talk to us about the constructive part? what was the good news to come out of this? anna: sure. first of all, it's good that the policy engagement that the biden administration launched last spring is continuing. it clearly has produced a bit more stability. some of the things that the white house has raised with beijing as priority issues for the united states have seen
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follow-through from beijing. for example, beijing was avoiding senior-level military engagement. but we've seen multiple meetings since last november that have made progress on that. we have news that secretary of defense lloyd austin plans to go to china at some point this year . in addition to that, there's fentanyl. there was definitely movement from the chinese side to crack down on producers of precursors to fentanyl that were shipping to elicit buyers after the november talks. and then there's upcoming efforts to have a bilateral dialogue on ai risk mitigation. it's refreshing to see that both sides have found something like that, that's pressing and potentially significantly disruptive to countries everywhere that they were -- want to work on despite their
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distrust of each other on so many fronts. haidi: we understand that tiktok was raised in the conversation although beijing has made no mention of it from its side. how big of a deal is this for xi in particular? anna: i don't really perceive beijing as likely to step into save tiktok. if indeed the policy on the u.s. side ends up being to divest. i think that if china was going to do that, they probably would've done it when tiktok was facing a ban in india because there were more users in india than there are in the united states. they didn't do that. tiktok is not part of the strategic tech industry that the chinese government has focused on really building out. and it won't stop tiktok's china
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platform from operating. i do think that the u.s. obsession over tiktok is symptomatic of this broader distrust about chinese cyber activities. whether that's hacking or embedding mall where in infrastructure or stealing data. that's going to continue to be a problem as the two side's distrust deepens. i think that's going to increase. haidi: distrust leading to de-risking policies leading to the broader decoupling that we see across tech and security. does any of that change? what potentially worsens depending on the outcome in november in the u.s.? anna: it is so hard to say. i think we saw a biden administration in its first two years that was very focused on rebalancing the trade relationship, getting rid of the
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bilateral trade deficit. there have been plenty of suggestions that the focus would be reinvigorated. it hasn't really gone anywhere. the terrorists -- tariffs have been kept in place. would we see an increase of those tariffs? i think there's a fair chance that we would. on the other hand, it's harder to tell exactly what the trump administration might do on other aspects of the relationship. would they dismantle the dialogues that have been restarted? maybe, maybe not. i don't think we've had any clear indication from trump either way. would they be anxious to step up defense of taiwan and be more emphatic about the u.s. position on taiwan as a democracy or to declare taiwan as independent?
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maybe. or on the other hand, trump inc. somebody who prides himself on being a businessman and has a history of being transactional. perhaps he could go the other way if there's an opportunity in his mind to make progress in china on issues that the u.s. cares about. paul: unpredictability when considering a second trump presidency. chip restrictions. she shipping saying he's unhappy about restrictions on the chinese tech center. could things get tighter after november? anna: i think they could, yes. i think there's a lot of bipartisan support for those restrictions, for those restrictions to be ratcheted up. i think that we've seen that china's response to that has been to double down on its own efforts to try to catch up technologically. to try to embed its technology
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in other markets worldwide and make it harder to avoid. i think that as the u.s. tries to step up its restrictions in order to protect u.s. competitiveness and protect u.s. national security interests, china is going to continue to see that not as about protecting u.s. competitiveness but pushing china back and trying to keep china from catching up our meeting its own technological goals. so china will both continue to double down and throw subsidies toward industries that it wants to see advance more rapidly so it can compete better. also engage in retaliatory actions where it views those actions as helpful. for example, we've seen some export licensing restrictions rolled out on critical merrills. we could see more of those. we could see those restrictions
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implemented and enforced in a more stringent way. and certainly that's a vulnerability for the united states that it can't overcome in the near term. the u.s. is quite reliant on china for a lot of critical minerals and certainly the processing of them. so this could hurt u.s. interests certainly. haidi: a new poll has suggest that china is the top alignment choice for southeast asians. the survey by singapore's i.s. eas institute sought china's popularity climbing to just over 50%. the report says that waning confidence in the u.s. could be attributed in part to anxiety about washington's strategic and political influence. the u.s. is asking south korea to adopt restrictions to chip technology exports in china.
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officials want them to tighten the flow of technology used for making memory chips. the u.s. reportedly discussed the topic and death -- in depth with korea's president. china is a key trading partner. catch up with past interviews. it's our interactive tv function . you can dive into any of the securities or the bluebird functions we talked about and join in on the conversation as well. this is for bloomberg subscribers only. this is bloomberg. ♪
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or filing returns. avalarahhh ahhh >> the japanese are fighting a losing battle. they might as well give up. there's no way that they can do anything to strengthen the end. it will probably continue to weaken. >> it remains to be seen whether we can have that effect. the key is that we see broader dollar weakness happening. >> if we look at the central bank, they are still printing money. they are keeping a loose monetary policy even though they are saying, we are making changes to interest rate policy. compared to the fed, there's a wide gap. >> i understand that when you have weakening currencies, the
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market tends to do very well. these are the promising ones within japan. export is a bit less so. paul: some of our recent guests weighing in on the end. let's bring in garfield reynolds. mark mobius singing it's a waste of time, trying to defend again. bank of america saying it's got the at 160. there's no indicator that this is out of japan's hands. garfield: yes and no. they did plenty of jawboning recently. the n pulled back from 152. they've drawn a line in the sand. the difficulty is, u.s. economic data is so strong that the rising tide threatens to completely obliterate those and other lines in the sand. in the short-term, japan has
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some potential to restrain the declines. let's face it. in a lot of ways, that's what they are fighting to do. restrain the decline. i think they would acknowledge that there's limits to what they can do precisely because of the policy divergence. that doesn't mean that it's not worth doing because of the concerns. if it breaks rapidly, above ¥152, then it could go to 160 or so in a heartbeat. we've seen the yen really motor if it gets a full set of green lights. so i think that also maybe even speaks not directly -- the fed's unwillingness to look at the really strong data we've had lately and say, you know what, we might only cut twice. we are not sure.
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but they are sticking with that three cuts. i think that's partly an acknowledgment that on a range of issues, they are concerned that if they make that step, that will cause turmoil in their own markets and elsewhere. and will act to effectively tighten policy both at home and abroad in ways that they did not necessarily get ready for. haidi: it's not just the yen. we are seeing weakness across a lot of asian currencies. the yuan is one of them. does it banish it -- benefit beijing to lean into that weakness? garfield: it creates a lot more problems in many ways for the chinese authorities than it does the japanese authorities. japan has got a forward set of monetary policy settings and a clear path. they've ended negative rates. in the future, they would want to move at some stage to actually raise interest rates. at the pb oc has a whole range
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of levers that is busy adjusting and tweaking. it's got an economy that is showing some signs of turning around but is still pretty weak. the yuan complicates all of that. in many ways, a week one would help to ease conditions in china, would help to stimulate the economy. but not if it gets weaker than about where it is. again, threatens to run away. they got even more interest. their official policy is to restrain it to more than 2% either side. so that creates a very tough set up for the pb oc, especially this week as a short week for china. they are off on thursday and friday. that means there's no fixing on thursday and friday. there's a wide gap between the onshore and offshore you want. so yeah.
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that's a currency that really threatens to steal the spotlight for asia in the coming days. because of the weight that china's economy has. for a lot of asian partners and also it's one of the most traded currencies especially in asia. it has a lot of influence over the australian dollar. so yeah. in many ways, i would be keeping a stronger focus going into the week. i would be concern for the potential turmoil to either side . you can set off severe reactions across asia and even beyond. haidi: garfield reynolds. let's talk more about the impact of the weaker yen on japan's consumer sector. with us now is asia pacific strategy execution leader. she joins his client -- helps
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clients. great to have you with us. i guess to start off, what has been the biggest impact when it comes to these big downside moves that you've seen in the currency? >> the downside move has certainly helped the export oriented companies, the big companies. we have the global footprint. this has been an underlying factor for the market rally that we've seen in japan. 20% since the beginning of the year in the first quarter. so it's been supportive for that. at the same time, the yen depreciation is negative for the imports and people are suffering from the inflation that we see. cpi is up about 3% year-over-year. haidi: what has that man when it comes -- has it meant when it comes to confidence and sentiment? are your clients gauging that? we've seen the weakness in the currency have an impact for
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households and their spending capabilities. >> right. there's a weakness in the spending. the spending is very subdued. it is not at the level of pre-covid yet. this is impacting the depressed stick companies. -- domestic companies. overseas demand is pulling up the proponents. so this is a concern but we think that the domestic consumption and economy will bottom out as early as the second half of the year. this is due to the wage hike that we've been seeing. positive moves as a result of the negotiation. the japanese people are not used to inflation and the wage hike has not yet caught up with the inflation we are seeing. as people get more comfortable about the sustainability of wage growth in real terms, not just
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nominal, and are comfortable with this inflation at a mild place that we can see for the past decades, i think the consumer sentiment will also bottom out. paul: something else japanese consumers might not be used to is the ability to earn interest on their savings. do you think there's a chance that some of this money could be sorted away and saving accounts. >> that would be a change, to see some interest-rate positive on the savings account, yes. that's a positive factor for people's sentiment. at the same time, people also borrow. on the mortgage rate and so forth, people will start seeing the increase in rate as a short-term prime rate will change. that would be a balancing act. at the same time, the government is encouraging consumers to invest. so there's a program to encourage retail investors to invest more. this will boot a new phenomenon
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for japanese population as well. paul: we will be hearing from japan's retailers. we already heard from fast retailing. some interesting detail in there. fewer customers and a higher average spend. can you make sense of that data for us? what is the coming spring and summer going to look like for fast retailing? >> share. for fast retailing and giants, their domestic sales is very much influenced by the temperature. market share is already tapped out. so the decrease of existing outlets by 1.5% is largely attributed to what we had in march. people were discouraged from buying more for spring fashion. at the same time, people were buying more winter close which
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pushed up the average spend per capita. paul: all right. asia specific strategy execution leader, things for joining us. just wanted to get across some lines we were hearing from president biden at the moment, relating to the conflict in gaza . president biden saying that israel is not done enough to protect civilians. he says they must continue to press israel to do more to facilitate a. this comes on the heels of those seven aid workers killed in israeli strikes. israel has sense admitted fault and contrition as a result of that. but president biden saying, we will continue to do all we can to deliver aid in gaza. really tightening up the rhetoric on israel. they say it's not doing enough to protect civilians. more head on daybreak australia. this is bloomberg. ♪
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haidi: take a look at how we are tracking. just about an hour into the start of trading here in australia. quite a bit of sustained weakness, all except for energy and utilities as we continue to see the strength sustained across crude prices. energy stocks up by 1% across a weaker market.
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upside for materials as some of that money piling back into commodities on these. we priced excitations with the better data that we've seen out of the u.s. and china. perhaps rates more globally will stay higher for longer. in terms of japanese equities, a bit of weakness as we get into the start of trading there. we are still watching and volatility at levels under 152. that's where we see the prospects potentially of intervention. we've seen pretty regular bouts of job owning from authorities in japan. paul: let's take a look at the stocks we are going to be watching. keep an eye on supplies of tesla and ev batteries. this is after elon musk's company reported first quarter deliveries that missed estimates. one stock on the radar, lg energy. 18% of its sales from tesla. carmakers such as toyota, nissan, hyundai will be in focus
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as well following the tesla mass. more analysis on tesla's first quarter deliveries next hour with dan ives. he didn't hold back in his assessments of that bigness on deliveries. why they remain constructive on the medium-term outlook for stocks. we've got those opens in seoul and tokyo, coming up next. this is bloomberg. ♪ so, what are you thinking? i'm thinking...
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haidi: this is daybreak asia. we are counting down to the major market opens. rhetoric that good news is bad news for this goldilocks rally. we see that kind of pullback in sentiment and a lot of warnings including from morgan stanley's wealth management arm. saying that you should stay away from the overboard s&p 500. what does that mean for mega tech big caps in the u.s. if this coldly low scenario starts to fade? paul: that is still holding together. we will have three rate cuts this year. not just yet. i think the market is starting to reprice that. july is the next possible option. we are running out of time if this is going to happen. haidi: good news when it comes to china data, not coming through when it comes to the yuan. let's get you straight to the open. a bit of optimism there.

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