haidi: we are counting down to asia's major market opens. annabelle: at the start of the day we are quite closely tracking the japanese yen because we are seeing it moving up the back of the april meeting and certainly it seems like they need to discuss further rate hikes to come. haidi: yeah. they are specifically the impact of the yen, saying potentially these moves in the yen, the impact may speed up the process of normalization. but on the other hand weakness across the consumer spending side, domestic households as we see that weakness of the yen is one of the key points when it comes to how quickly they move. and to that point we also had perhaps concerning weakness

still when it comes to wage gains. annabelle: that's right. we saw a real wages down 2.5% from a year earlier in march. that was actually the deepest drop we have seen in four months. the running streak of declines is now 24 months. certainly there has been a real question for japanese government officials. when they start to see inflation being driven by the demand-side or would it still be from the supply side? this is perhaps the numbers that the boj would not want to see at this point in time. but that focus on the back of the wage numbers coming into the boj summary of opinions. a lot of different lines dropping out of this. but this need to raise rates appropriately and at the right time and the need to deepen talks on rate hike timing. just some of the headlines dropping from that. also they are saying it is vital to cut bond buying and supply dynamics. here you have that market reaction so far this a slight

bit of strength coming into the japanese yen. nikkei 225 online this morning. a little bit of upside but fairly range bound. one of the key commentaries we are getting from wall street in particular is a given that the fed not really doing anything until september at the earliest. we have a lot of earnings in the rearview mirror at this point in time. it is that search for the next catalyst for market direction. let's shift and take a look at the outlook for korea. korea equities just started to trade here. a little to the downside but very much range bound as well. we are also tracking eco-data up this morning and that focus on the current account numbers. we saw the surplus widening to $6.93 billion over the march period. something that could have an impact on the korean currency. haidi: take a look at how we are opening here in sydney as we get that staggered session coming

online. we saw australian stocks in the previous session posting a five day winning streak. could extend that into a sixth straight, the longest streak since late january. we have seen a rally in recent days over optimism over rba policy. we had a similar picture from the banks and cba. of course when it comes to the trading update we have not heard similar return to shareholder value story but that does not mean that is entirely ruled out. that is a stop to watch as we get into the start of trading. citi saying sell australian bancshares and to buy niers on the dips. citi sees an opportunity to rotate into the sector and away from the strong performing banks. that is one to watch. also watching in terms of australia backing a $47 billion gas sector transition.

also watching for some nat gas names, potentially seeing a reaction today. aussie dollar at .6574. we had so much focus when it comes to the yen but the dollar focus has been a little bit higher given the string of fed speak we have had this week as well. taking a look at how bonds are trading we are seeing asian bonds falling. echoing selling pressure we saw across treasuries, supporting the dollar. you are still seeing that picture across trading and treasuries at the moment. annabelle: perhaps difficult to get a sense of where we get from here until we get the u.s. inflation print numbers next week and that will certainly play into the dynamics for the japanese yen. strengthening following that summary of opinions and also something that has ramifications for japanese stocks that have been sliding could let's bring in our next guest suggests buying japanese equities on the

debt. julia wang, strategist at j.p. morgan private bank. we had the impressive run-up in japanese equities. it pulled back slightly. is this an opportunity to get in? julia: thank you for having me on the show. if you take a step back we had a really good q1. since mid-march we have seen japanese equities start to correct due to two factors. one is the global pullback in ai and semi related names, and secondly, some volatility causing investor concern around the yen. we think if you take a step back and think about our broader thesis it is predicated on structural changes in the market. if you believe ai is arriving and going to transform the global economy and result in greater demand for semiconductors, then japanese companies are indispensable on

the semiconductor supply chain. they will be in the leading position to benefit. and the global supply chain shift. that is the core thesis. i think that is why you are seeing japan's economic recovery is really the corporate investment driving recovery. annabelle: we are tracking shares of softbank this morning. overnight we had a big drop in arm after it gave pretty weak guidance. so there are concerns around spending in ai in particular. do you think that is also becoming a thing and potentially impacting japanese equities if they are very exposed to this trend? julia: we think obviously the leading beneficiaries, there have been a lot of very high expectations going into earnings. so we don't think the earnings season as a whole indicates any real weakening in the demand for ai is a structurally think.

having said that, the market has been quite optimistic for many of these companies going into the earnings season. that is why i think we had this pullback in the u.s. market as well as the japanese market. our broader thesis is if you look at the global economy in the next four to five years, many of your daily appliances will have a bigger ai component to it. it is the broadening out of the ai application that benefits things like your smartphones and tablets. this is where japan's industries are well-positioned because they are virtually monopolies. so that is very hard to require -- to replace. we talk about the japanese yen being a tailwind or a boost. even without further weakening of the yen, these companies are already very competitive and it is hard to replace them. i think that is the thesis of why we like japan on the structural side. of course there is a reflation story. i think inflation --

japan was in deflation for 30 years. we're starting to see accumulative wage gains really changing expectations for japanese households. and we know that corporate profits have been hitting all-time highs of the last couple of years. so there is a foundation for sustained wage growth one forward the inflation story is still in play. it is just going to take a bit more time. because of for how long the japanese economy was in inflation. and of course there is corporate reform, of greater shareholder return. so these are structural reasons we like the japanese market and that is why we think the correction is actually a great opportunity for investors to really engage with this market.

haidi: japan has obviously benefited from initial flows away from china. is this the right time to reengage with china? do you think this is the real deal when it comes to the rebound we are seeing? julia: i think the china market recovery over the last few months were driven by several factors. the first factor is the diversification away from the u.s. and japan to some degree after a very strong run in the first quarter. they look at the china market and what we have seen at the same time is the economy continuing to hold up even as we debate about underlying challenges and how sustainable they are. the fact is the economy held up. looks like policymakers can stay the course. lastly, valuation was very undemanding after a selloff in january. all these three factors we think in, nation may have the investor

reassess how much allocated to china and hong kong. and that is why we had a recovery in these markets. annabelle: finish your thought. julia: of course. as we think about the underlying economy and the policy outlook, this has not really changed. we think the market rally has been very strong. over 20%. and by going forward you have uncertainties on the horizon as well, be a geopolitical, housing constraints. these are the reasons technically we would prefer to take some profit at this point. haidi: i was going to ask you, what is your strategy cross credit right now? julia: we are still quite up in quality overall in credit. obviously higher market has had greater returns this year. we continue to think the overall

macro backdrop for the global economy is one of slowing. we are seeing contradictory data here and there but rates are restricted. we are seeing the survey sector slowing from the u.s. as well as a eurozone i think global demand in slowing against that backdrop, we do think the credit cycle will start to have more stress. so we prefer to lean up in quality still in credit. haidi: julia wang, global market strategist at j.p. morgan. let's take a look at softbank and other adjacent chip stocks after the disappointment when it comes to arm. soft arms sales falling after the company gave a tepid annual forecast. they are down about 8% in extended trading. their forecast has been seen as mixed particularly in light of high expectations. bloomberg intelligence saying it was a beat on the fiscal

fourth-quarter. all of that is getting overshadowed by the narrow miss on 2025 sales guidance. some of that enthusiasm being curbed. downside reaction and softbank as well as tokyo electron, sk hynix probably the best performing out of that cohort. morgan stanley saying they expect arm to continue outperforming expectations through next year given a broad range of drivers. annabelle: still ahead, president biden threatening to hold back further arms shipments to israel as u.s. unease grows over civilian casualties in gaza. we will have an update next. this is bloomberg. ♪

haidi: president biden says he will halt additional shipments of offensive weapons to israel if it goes ahead with a ground invasion of rafah. he told cnn the potential loss of civilian life is quote, just wrong. >> i made it clear that if they go into rafah, i am not supplying the weapons that have been used historically to deal with rafah. we are going to continue to make sure israel is secure in terms of iron dome and their ability to respond to attacks like what came out of the middle east recently. haidi: michael heath joins us now for more. were you surprised by this line that has been drawn? michael: i was a bit. it is a shot across the bow of

israel, but it is a decision -- but it is a decision that appeases no one. the people who are protesting who want this war to end and thank israel has been totally over-the-top, accusations of genocide, stopping 3500 bombs is not going to do that. and this is not related to what was just passed by congress recently to go to israel. so it is not going to do a heck of a lot. but i guess biden is a long-term supporter of israel. and as he said he will make sure their defense is fine, etc. but they have been saying this to israel for months, that they have to have a plan to do with the civilians. the u.s. assessment is it will not be possible to do that. so they have to at least signal intent. it is just the repercussions it has. if they sign a deal when the world superpower is telling israel we are not going to back you going in here, that hamas

can live to fight another day, if you are iran or hezbollah are you emboldened? probably not. in a sense it was a surprising decision. but they feel like words are not enough. they have to take some action. but everyone suspects biden is never going to leave israel lurching. if push comes to shove, they will support them if they need it. annabelle: we have seen other arms suppliers like italy, spain, canada, halting sales. this is a lot more significant given 70% of israel imports come from the u.s. is there a way for them to plug this gap elsewhere? michael: that is a good point. there is a good story on bloomberg looking at this exact issue. the israelis are very keen to do that. since -- israel has basically decided to buy all those

ubiquitous munitions off the shelf. it has a very good high-tech industry. it concentrates on building armaments you cannot get anywhere. so the plan is they want to manufacture their own weapons. i am sure they have the technological skill to do that but it will not be a short-term fix. we are talking a couple years away. the issue then comes down to what kind of stockpiles do they have. you suspect if israel really wants to go into rafah they will find a way to do it. but the u.s. has to join those other countries. it feels like it has to take a stand. israel just has the means that if it wants to take rafah, it will find the munitions it needs. haidi: another interesting story talking about how beijing and also russia, to an extent, are trying to take advantage of the

global distant can -- global discontent. is this an effort to try and cleave support from the so-called global south partners? michael: it is a free hit for china in a way. you turn on your television and you see these scenes of suffering. particularly in the global south where there is probably a lot of resentment dating back to the cold war as well. to have china come in and make that criticism pretty think the yuan spokesman talked about the u.s. pouring weapons into a humanitarian tragedy. there is an element of truth in that. china really can extend its influence. as we see with hungary, they can offer economic assistance to these countries. with russia it is just potshots. it is embroiled in its own invasion with a smaller country. i am not sure what people would cleave towards russia on but

with china, definitely pick china does not have a history of being involved with all this stuff. the u.s. pushes back and says china makes all these criticism. what does it actually do in trying to secure peace? that is a good point. they have russia's ear, they could be a lot more influential. it doesn't do anything. with the middle east, it does very little. so it is a lot of talk. but nonetheless the gravitation of the global south towards china is something the u.s. needs to be very aware of for sure. annabelle: we are of course seeing china building its influences in eastern europe it president xi jinping has arrived in hungary for the last stop on his trip to the continent where he is expected to sign more than a dozen agreements with the beijing friendly government. rebecca choong wilkins joins us morning for more.

we have seen it already in serbia. another government friendly towards beijing. what are we expecting out of this, given relations between hungary and china are already fairly well-established? rebecca: this is a way for china to showcase the advantages of this deep economic relationship with china. the other element is the geopolitical commonality between hungary and china. hungary is another country that has offered deep support to russia. that is often very distrustful of the u.s., is a big proponent of the china russia proposal of the so-called multipolar world opposing the u.s. there is a lot of geopolitical common ground here that both countries will be able to lift off. but the focus will be a lot on the economics. at last count, at least 16 agreements between the countries. possibly we see more. we also had a full throated -- f

rom xi jinping, made newspapers, advocating for excellent ties saying this is an example in some ways for the rest of china and europe there are a couple big projects we know that are already under the way. we have that cattle factory that is expected to create about 9000 jobs. we also have byd opening their first factory in europe, in hungary. that was going to be a project france and germany were also vying for. this is china potentially easing concerns that are being articulated out of the eu, over overcapacity, but actually moving onshore their factories when it comes to some of these areas like cleantech, creating local jobs, helping the local economy, perhaps as a way to drive a wedge between eu as a whole, and the member nations that are benefiting in major ways from this more deeper engagement with china.

and hungary is really important from a search egypt point of view for china, because hungary has this ability to obstruct, delay, or be influential in terms of direction of travel for eu policy. it also of course gives china one route into that single market. so it is hard to overstate the significance for china when it comes to the role it believes hungary will play in the eu. haidi: the issue of overcapacity, we knew it would be front and center ursula von der leyen made very clear certainly what the european union is expecting. is there a quick fix here? is there a willingness or ability for beijing to do anything at this point, given the structural, fundamental vulnerabilities of its own economy? rebecca: the short answer is there is no quick fix here. partly because a lot of these issues have been underway for if not years, decades.

overcapacity or some risk of oversupply has characterized the chinese economy. if you look at property or other forms of manufacturing capacity in one way or another for a long time for we had those comments from ursula von der leyen seeing the eu preparing to deploy all tools available. i think it is worth waiting to see whether or not this trip, whether or not this relationship with hungary and so on are able to slow the momentum of that litany of probes that we saw. it is not just one or two but it is quite a few currently in the works. as you say come and no real quick fix. it is really about beijing first and foremost trying to slow the momentum, trying to get across this message that from their point of view there is no overcapacity problem when it comes to china at all. that they are helping to ease inflation with these exports. and it is a central part of how beijing is thinking about

reshaping its economic model of growth going forward. these so-called new three drivers of growth, solar panels, batteries, and ev's, are all part of getting that strategy underway. if they do see significant trade tensions, significant more increases in tariffs other kinds of frictionor, that has the potential to impede that transformation. annabelle: that was correspondent rebecca choong wilkins there. you can get a roundup of the stories you need to know to get your day going in today's edition of daybreak. bloomberg subscribers go to dayb on your terminals and it is available on mobile on the bloomberg anywhere app. you can customize your settings so you only get news that you care about. this is bloomberg. ♪

haidi: take a look at how commonwealth bank shares are performing.

26 minutes into the start of the trading a little bit of downside come over 1% lower. that buyback was in focus and did not come through. we have seen a broader trend of returning wealth to shareholders in this round of banking numbers. this trading update really we have seen weakness, a second consecutive drop. we are also seeing perhaps the impact of citi recommending rotation from highflying banking shares in australia to miners. annabelle: that's right. another stock we are tracking is mitsubishi motors. you can see a drop of nearly 6%. the company says its u.s. unit received a court order to pay more than $1 billion in damages and relations to a car accident that occurred in 2017. mitsubishi saying it

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“price lock” guarantee. which has made him, a bit... unruly. you called yourself the “un-carrier”. you sing about “price lock” on those commercials. “the price lock, the price lock...” so, if you could change the price, change the name! it's not a lock, i know a lock. so how can we undo the damage? we could all unsubscribe and switch to xfinity. their connection is unreal. and we could all un-experience this whole session. okay, that's uncalled for.

annabelle: taking a look at some chip stocks or arm-related stocks. you are seeing the drop for arm and after hours but softbank heavily exposed, declining 2%. other chip stocks a little under pressure for the most part. we are seeing a broader tech gauge, one of the drags. arm of course, we saw the chip designer giving a lukewarm revenue forecast for the fiscal year but let's get more on that and bring in our senior analyst kunjan sobhani. analysts had been predicting a total of over $4 billion. we are seeing quite a big drop in after hours trading. kunjan: look, the reported

quarter were pretty strong. we think the long-term ai story remains intact. the driver for the slight miss in the guidance was really coming from two major areas. one is networking and the other is industrial iot, which most of the semiconductor companies exposed to this are seeing weakness here. that is not company-specific. there are higher inventories in the demand is weak. so that is what caused the shortfall versus what consensus had. but the drop you are seeing in the stock, the reaction is driven. we have seen that for a couple of other ai exposed names. one example would be amd where investors have these really lofty and ambitious expectations that these names have to come and beat and raise their total revenue and eps growth numbers. which didn't end up happening,

hence what you are seeing. annabelle: it was just a slight miss on the forecast but it is quite a steep drop of a nearly 10%. so is it the case of that the expectations are just too high from wall street, or is it a real concern that ai spending, that spree could be slowing? kunjan: look, we did not see any data points for arm-specific ai revenue projections. in fact they actually gave outlook for fiscal year 26 and fiscal year 27 for growth about 20% it the street averaged slightly below 20%. so that was a pretty robust sign that they have strong visibility into almost two years out roadmap, which is mostly driven by the new engagements coming from ai and their higher architecture and subsystems.

again, there was no weakness in the ai story per se but all in all, wall street and investors have set up this expectation that you just have to come in every quarter and beat your already high and ambitious projections. haidi: we are also seeing weakness in trading in intel. that is about almost a one year low for trading in intel's share price. the expectation that revenue will fall below the midpoint of $12.5 billion to $13.5 billion, how much is this about the revoking of licenses from china, the huawei issue? kunjan: most of it is from that huawei restriction. they showed a press release after the news broke out. but in the bigger picture, we expect this to be a few hundred million dollars of impact. which will impact the next quarter.

however, we think for the rest of the year, what they could have shipped here could have been picked up with other customers. so we don't see that as a significant impact when we look at the fiscal year numbers going forward. other than intel was also talk about qualcomm. qualcomm however even before this, the revenues they are collecting from huawei which is purely on 4g products, we have fallen off after this year. so we do not see that much of an impact on either of these names in the long-term. haidi: does it complicate intel's turnaround plan at all? kunjan: not really. when you look at the amount of laptops or desktops that huawei was using intel chips in, when you think about it, it is less than low single digits in terms of the total market. it does not move the needle that

much for intel's turnaround plan. haidi: kunjan sobhani stephen: -- official chinese data suggests sales jumped 12% in march. it is an early sign of success can efforts to turn around the decline after retailers cut prices. the tech giant last week surprised investors by reporting quarterly revenue from china that beat expectations. you can get more on the latest when it comes to apple in today's big tech, focusing on who might potentially succeed tim cook as ceo. mark gurman takes a look at some names emerging as potential successors. you can get that story on the terminal right now. it is also online at bloomberg.com and businessweek. annabelle: some other corporate stories we are following, shopify shares tumbled after the canadian e-commerce company pledged to continue investing in

marketing despite the pension profits. the firm sees growth margins in the current period narrowing, a forecast which shadow -- overshadowed its strong performance. shares saw biggest intraday decline ever reflecting concerns about future profit margins. airbnb is providing lackluster guidance for a second consecutive quarter, suggesting growth and travel spending will slow further before the peak summer season kicks in. it sees revenue for the current quarter between 2.6 -- i airbnb is blaming the earlier timing of the 2024 easter holiday as well as currency had went. nomura has joied -- sig. anti- is -- sig. anti- -- the fund, its founder, and a

former dealer say they will vigorously defend themselves. country garden is said to be seeking help from a state backed program to pay interest due on thursday. it is in talks with china bond insurance company over two notes with payments worth more than $9 million. it is the first major test of a program introduced in 2022 to h elp developers with lucrative crunches. more ahead including on the country garden story. this is bloomberg. ♪

annabelle: china's april trade numbers are due today we expect exports and imports to swing back to year-on-year increases largely due to last year's low base for comparison. haidi: let's get a preview with michelle lam. what are your expectations when it comes to this recovery? a lot of the upside could be because of a flattering comparison. michelle: yes. we have similar views. we think the export and import growth in april will stage a recovery compared to march. and probably not that strong of a recovery on the export front. but we still think the export

trend should be on the modest recovery trend seeing that we are seeing resilient growth. haidi: front and center of these concerns over chinese overcapacity. how is that expressed through the trade numbers and what would you be watching out for? michelle: if you look at the volumes for new energy exports they are doing pretty well. but in value terms that is really affecting the fact that because of china's overcapacity problems we are really seeing the price events have been a significant drag. it also tells you the problem that the problem of cutting prices --

we are really seeing ppi numbers for china as well. we are not surprised to see there have been increasingly large number of countries complaining about china's excess capacity issues. so that will be a problem for exports over the medium term. as far as this year is concerned we are still looking for a pretty solid recovery trend for china. haidi: part of that overcapacity complaint ties back into demand within china. what are you seeing among chinese consumers at this point in time? michelle: i would say that the chinese consumers are going to have a very weak recovery in 2023. right now we are probably starting to see some small recovery trend. i think if you look at the holiday spending numbers and the labor day holiday spending

services are still doing really well but at the same time if you look at other items like spending and autos in general, you still didn't get to see the policies to see a continued recovery for the auto sectors. so i would say we are probably looking for stronger recovery for consumers. but still a pretty soft pace. 8% is the pace we saw in the years before covid. it is -- annabelle: what i found interesting in the travel data from the lunar new year and also golden week is you are seeing more people taken trips so that is obviously a good signal. but it is the average spending per trip which is to weaker.

how much of this perhaps is just a new trend emerging within china and is there even the expectation we should go back to 2019 levels? michelle: i think it is pretty clear there has been a shift in consumer preferences. they value the experience, the quality of the goods. there is also some disinflation or even inflation momentum going on. if you look at spending per visitor numbers, you look at the golden week holiday numbers they are still below the 2019 levels. i think that is telling you that the consumers -- the structural shift means if you look at the value, the number not -- the nominal numbers they will still not be recovering very strongly. we have to understand the backdrop to these numbers. haidi: we have seen that real

turnaround when it comes to sentiment at least for equity investors. some of that has been foreign investors. to sustain that what needs to happen from a policy perspective? michelle: i think there are a lot of drivers that have been causing this in the chinese markets. the first part is there has been a severe correction since the second half of last year so it is not surprising to see a technical recovery. there has also been news coming from the april politburo meeting. most prominently the message on the property policy. we sense there is probably the beginning of a shift from policymakers emphasizing the important projects that support the building of more rental housing. which i think is pretty

positive. if we look at the china economic slowdown, a lot of it is the house price decline. that is really affecting the consumer confidence in the wealthy tax. really manage to see house price stabilization because of the efforts working to put it floor on the house prices. we could be looking for some house price stabilization at some point. that also means the house price correction in japan or even hong kong. it is likely to repeat in china. that means we might not see the kind of sustained deflationary momentum happening in china. that is about reducing the downside risk for china long-term. annabelle: some people made the argument that perhaps china could avoid that multiyear property malaise like we saw in

japan and the u.s. following the subprime mortgage crisis. do you see this shift now 2d stocking achieving perhaps that result? michelle: i am always of the view that china's housing problem is probably not as serious as what we have in japan. if you look at the housing structural demand, if you look at the level last year it is already below the kind of structural estimate based on the rating in the gym -- demographics. also the household debt for china, there is still room. it is not leveraged excessively. and demographics is not deteriorating as quickly as japan. for china the second part is not as bad as japan. also there is a lot of policy room from chinese policymakers to support the housing market.

especially with the property shift from the policymakers, we could be talking about -- previously we were thinking there could be some downside risk for cities to seek more house price correction 20%. but we have seen relaxation of restrictions in the top tier cities and we see faster mortgage rate interest cuts. so we could be talking about a reduced downside risk looking for stabilization but house prices for next year. annabelle: that was michelle lam , greater china economist. thank you so much for your insights. taking a look at how markets are faring this morning, watching what is happening in the bond space. we are seeing that four coming across, echoing the selling pressure in treasuries and the price session that supported the dollar. equities looking mixed come a pretty flat day on wall street. we are seeing that slight rise coming through in yields,

mirroring what we had for treasuries. we had a more than $40 billion sale of 10 year bonds. that's all mild demand in u.s. notes as well. little changed at the outside of trading. sticking with that bond, guggenheim partners cio says have in the fed on extended pause is creating a positive environment for credit investments. she spoke with us from the milken institute global conference in beverly hills. >> when we sat here last year there were recessionary pressures in the system. believe it or not those pressures are still there. but there has been one big difference it you talked about treasuries and that has been fiscal spending. it has really supported the economy in the u.s., even while the fed has been tightening during the qualitative tightening process. what you have seen as globally other central banks tightening. they did not have the fiscal stimulus effect that we had. so they slowed down.

whereas we are still slowing at a slower trajectory than we would have anticipated last year when the fed was very active in quantitative tightening. >> how does that complicate what the fed has to do? jay powell says we are growing, yet, some that velocity creates inflationary pressures. anne: absolutely. what we have seen is that in quantitative tightening in the u.s., the balance sheet has been reduced to about $7.4 trillion. but when you think about the fact that deficit spending has been about $2 trillion in that same timeframe, it has been almost perfectly offset by fiscal deficit spending at this point. and that is inflationary in a makes the fed's job harder. two forces working against each other. romaine: has it made your job easier? anne: absolutely. with a resilient economy and by the way, usually periods where the fed is on pause come which they are, and we don't see a

rate hike, that is a very good time for credit, for fixed income investments, particularly investment grade fixed income, and also for risk generally. romaine: i have to ask you about the health of the market, particularly the treasury market. lisa cook was speaking a little while ago talking about she had concerns about treasury market liquidity paid for you, does it matter, and b, if there is a liquidity issue, how severe is it? anne: liquidity is a concern but i do not see it as a short-term issue. right now there is plenty of liquidity in the system. if we think perhaps more big picture, since quantitative tightening started globally, $5 trillion has come out of the system. but when you think of that in context of where we were pre-covid and how much has come in since the quantitative easing that occurred in the stimulus, that was $12 trillion.

that means there is still an extra $7 trillion that has room to move. we have a lot of flexibility. haidi: guggenheim partners cio anne walsh speaking with our colleagues carol massar and romaine bostick. we have more ahead on daybreak asia. this is bloomberg. ♪

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annabelle: hong kong is turning to oil-rich saudi arabia for new phones to help offset a growing list of challenges facing its stock market. they are cohosting a conference today for saudi firms to meet asian investors. our china show coanchor yvonne man joins us now. we have already seen for instance csop issuing an etf that tracks -- this is another signal of this growing connection we are seeing between the middle east and hong kong and greater china. yvonne: that's right. it is at the inaugural event of the capital markets forum. as hong kong exchange. the theme is powering connections. you have seen a very warming of close ties between china and the saudis of late. even the hong kong chief executive has made all people trips to saudi arabia to try and lure some investors or even the

saudi aramco second listing to this destination. so certainly there is a lot going on. the timing is pretty opportune as well. given the fact hong kong has been dealing with a pretty depressed ipo market for the past two years. they are going to need new listings in the definitely want some big names as well. and the saudis are certainly businesses ended delegates that are here are looking for more of that foreign ownership of saudi assets as well. they're looking to gain more exposure to an asia investor base. while this is all beneficial to hong kong we have to ask about the ipo pipeline. the new hong kong exchange ceo will be joining us. we are going to talk more about the measures we heard from the csrc last month to talk about encouraging firms to list here in the city. what does that exactly mean? how big of a boost cannot give the city here? haidi: how can hong kong

investors gain exposure to saudi assets? yvonne: there is one etf right now. the csop, saudi etf that was launched back in november. that is the first fund of its kind here in asia where hong kong investors can gain exposure to saudi assets. $1 billion in assets was what was promoted back in the day. with the backing of a saudi arabia sovereign wealth fund. so it was very promising. take a look at how performance has been. volumes has come down. they only attracted about $20 million in funds so far. so we are going to ask the asset managers themselves about what is still needed to bring more liquidity there. haidi: yvonne man there at the capital markets forum in hong kong getting underway today. lots of great conversations. that is it for daybreak: the china show is next. ♪