>> it is almost 11:00 a.m. in singapore and shanghai. here are the top stories. a bloomberg scoop. the u.s. said to impose tariffs on china's ev's and strategic sectors as soon as next week. asian stocks arising after an upbeat day on wall street with u.s. jobs data supporting the case for a fed rate cuts this year. and as india's election year nears the halfway mark, there may be a sign of voter fatigue. let's start with the markets. it does seem like caution is appropriate. what data -- one data does not make a trend. >> markets quick to jump on it as we saw the surge in jobless

claims pointing to a cooler labor market making a case for the reserve to cut rates this year. the asian stocks were buoyant starting the day on the front foot. what we need to keep an eye on is the u.s.-china tensions looming large the markets today. equities paring some of the surge earlier on in the session though we are seeing bonds continue their recovery. the hang seng leading the pack but even it has been paring the gains from earlier in the session and the csi 300 sinking in to negative territory. take a look at the movers and what is behind the moves and they hong kong benchmark. we saw the dividend asia shares, your chinese construction banks, those are the ones seeking big gains against the backdrop of report that regulators are considering proposals for dividend tax waivers.

a real drag in the asian side is coming through from the ev makers amid the bloomberg scoop that we could see the biden administration imposing fresh tariffs on china's ev's, solar equipment as well as batteries. it is also putting pressure on the broader chinese tech stocks as we also shift the focus to watch for the earnings next week. they are sinking into negative territory as well. i want to rake through how this is playing out for these currencies. we saw the offshore yen weaken one's the lines dropped. the onshore yen followed suit. the aussie dollar also coming under pressure given how it is an election year. the threat of tariffs will remain and we have the likes of maybank liking at the gap between offshore and onshore could why didn't. geopolitics in the mix for

markets in the region. >> the yuan is set to be under pressure. let's dig deeper into that story and the scoop that we were just mentioning. bloomberg has learned that the biden administration is set to impose tariffs on china's ev's and other strategic sectors. for more on this scoop, let's bring in eric martin from washington. what are the details? >> what are -- what we are hearing from our sources is that this is an announcement that will come next week. we are hearing this will be on tuesday. this is arguably the most important trade decision that president biden will take boring his term. this is putting his own stamp on the u.s. trade relationship with china. he inherited tariffs on more than 300 billion in annual imports from china from his predecessor, donald trump.

this is his opportunity, something they have been studying for years in what is called the interagency process. u.s. trade representative's and different parts of the administration debating what should be done. we are hearing it is going to be tariffs on electric vehicles as well as batteries and solar cells and really the most momentous trade decision that president biden has taken in office. haslinda: this does not bode well for u.s.-china ties and given that this is an election year can only imagine that tensions will deepen further. >> absolutely. in this election year we are seeing president biden and trump in a race with each other for who can be tougher against china. certainly in the swing states, they are determinants of the

election such as pennsylvania, ohio, michigan, wisconsin, trade is a very important issue. venue factoring has been hollowed out by the loss of jobs due to unfair competition from china and therefore trade is a sensitive and important electoral issue. this is a decision that has a political element in terms of looking at how to put american workers, this worker centered trade to policy that the biden administration often talks about and how best to pursue that a few months ahead of the u.s. election. haslinda: thank you so much, eric martin in washington. let's dig deeper into possible impacts on the markets and bring in our guest, the ceo of e-commerce advisory. the latest news out of the u.s., tensions back to the fore with

china. you might imagine that will dent the rally we have seen so far. >> but before we start that can i get this off my chest? by all means, impose tariffs on batteries and ev's if in fact there is a lot of evidence that these are state subsidized. but please do not bring this nonsensical argument to excess capacity. then elon musk must have excess capacity coming out of his ears. i have a phd in mathematical economics and i don't mind a quantitative definition. the output that can be produced reasonably with use of capacity minus inventories. i have not seen anything like that being dedicated or calculated in the case of china. but i stress, by all means

impose tariffs if state subsidies are somehow impacting the prices. haslinda: andrew, might we see an undoing of the rally we have seen in china stocks? andrew: most likely. china does depend significantly on its growth on exports. this will not help. and of course, the european union will follow suit. in other words, biden in effect jumped the gun and started out first. and the european union has been saying it and they will now definitely do it. haslinda: there are sectors within china's market that may be looking pretty attractive. case in point, china developers that continue to extend their gains by 2% or 3% on the back of

cities removing restrictions on sells. is this a pivot point? andrew: again, i'm stuck on numbers. i prefer not to base things on opinions. i have a good feeling and my stomach that things are better. i'm looking at the price of accommodation. newly built flats and 70 major chinese cities and for nearly 22 months of the price has been negative. they have not been falling. they have been shrinking. once this has finished, i will feel more comfortable to say that we are looking at perhaps the beginning of the dawn of the property market. remember, you can lift all restrictions that you want and you can tell people there are plenty of mortgages you do have at low interest rates and if there is no sense of confidence in the property market, this won't make any difference.

haslinda: effectively what you are saying is stay away from china. never mind that foreign investors are beginning to dip their toes in the market. andrew: it is not a matter of staying away with -- from china, it is a matter of looking at potential sectors in which something could or would happen and the property sector is not quite that. on top of that we have an extenuating factor on the export sector. leaving aside property which is a big leaving aside, i could begin to roll out some other ideas while at the same time saying stay away from china. stay away from china wall these things are happening. and while there has yet to be any significant policy measures taken. we have silently subdivided the policy sectors and not focused

on specific areas of the property market. haslinda: there has been a lot of talk about yuan weakness and how the pboc might consider a devaluation of the currency against the backdrop of a week yen in the hopes of supporting the economy. do you see a major move on the chinese yuan? andrew: not really, for two reasons. the bank can either fix interest rates or exchange rates. not both. they can try but that implies a great deal how much they will use and the impact it will have on their domestic credit. on the in the case of china, the pboc has cut some rates but with a small amount. and it does not really have a foreign exchange rate policy like hong kong. it has a snake in the tunnel. it is a managed exchange rates.

and the exchange rate has been allowed to depreciate quite a lot. if they are not willing to push interest rates up in order to maintain the differential, then they will have to let the of strange rate go. very sensible. i don't see anything wrong with that. in the same way that people say terrible things are happening and japan because yen has weakened. of course it has weakened. the bank of japan has not begun to decrease interest rates therefore widening the differentials. there is nothing wrong with that. there is harbor and terror and they are missing out on 101 economics. haslinda: for the pboc, how much room does it have to cut rates given the fed is taking higher for longer? might it take the opportunity in june or after when the ecb does

start to cut its rate? andrew: thanks very much. you raised a beautiful point for me. the pboc controls primarily quantity. a lot of the things they do is they say, we are going to reduce foreign exchange and the reserve requirements of the bank and we will change the way the reserve requirements can be used and they are not really touching interest rates which is correct. they can either control quantity or interest rates. not both. they are unwilling to do too much on interest rates so i would not be surprised they are decreasing the reserve requirements of the bank. completely correct and consistent policies. haslinda: andrew, hang tight. we will have more from andrew harris. let's have a check on how hong kong financials are doing. they are up at the highest level since june 2023 on the backs of

the high dividend stocks in hong kong are advancing on chinese regulators' proposal to exempt individual investors from paying dividend sectors on a cities' shares. the hong kong exchange rising as much as a percent. china concession bank up more than six. and china mobile also among the gainers. keeping an eye on chinese property. they are rallying on the back of more china cities easing in terms of the restrictions on property sales. the benchmark is up more than 8% as we speak. still ahead this hour, mcm partner tells us why they are expecting a big election win for india's ruling party and how that could impact the private market space. keep it here with us.

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haslinda: welcome back. the boe is adding fuel to the speculation of rate cuts. the governor indicating markets are underpricing the piece of easing in the months ahead. >> we have --

it is good news we think that there is evidence that suggests they are less pronounced then they would be. haslinda: let's dig deeper and bring back andrew farris. markets undercutting pricing cuts? andrew: this was so sweet to hear his statement. all my economists were busy following the fed. now we tell them to stop following the fed. inflation looks as if it has stabilized at a low level and they can are not excluding the possibility of a june or july kutch. let -- of a june or july cuts. that is very nice. the bank of england cutting interest rates is likely because it will match the european union. not that that is of any

importance to any central bank. haslinda: likely cuts for the ecb but unlikely for the fed you say, not until december at least. andrew: absolutely. the reason for that is simple. naïvely simple. it is not that it goes 3.8, 3.7, three .6 and it is coming down. they are stuck at three and the target is 2. inflation is still higher than the actual target. what can you do? we have cpi inflation and cpe inflation for nine months. we are coming close to a year. the normal thing would have been to begin increasing interest rates. the fed says, we are going to cut interest rates.

i am left a little speechless and a little worried if i heard this all right. so the fed said we will not do anything until perhaps another 2-3 months. they have to say that inflation is below 3%. and they are not saying this. i'm not quite sure if this will lead to more tears. a few months down the line we will be at the same situation. i want to present inflation and i have 3% inflation for nearly a year and increased interest rates still 5.5%. if necessary, i will increase them again but i will not cut them. why should the fed say anything that andrew would like to hear. haslinda: if you are right and if three is the new 2, you would say that exceptionalism would

continue until the end of the year. what makes sense? andrew: what makes sense is not to worry too much about the fed. for one minute i'm not saying disregard the fed. that is stupid. pay attention to the fed in a kindly and patient way. and in between find the obvious. go to markets that are not that closely related to movements and the interest rates. and i'm sorry, i'm going to repeat this again and i really apologize. defense stocks are going gangbusters. they do not rely on interest rates. because their major client is the state. the american government is not going to say, we will buy fewer bonds because interest rates are increasing or we will buy a lot more because interest rates are falling. have a spread of potential -- you have a spread of potential investments through asia,

pacific, the united states and european union. haslinda: you like all defense stocks? andrew: yes. it would have been stupid for me to say there is something like 36 different defense companies. it would be absurd to say by all. for compliance reasons i can't say one and not another. there are some that are good investments and you don't need me to know that. and i'm sorry, this is incredibly amoral rather than immoral. the wars are going on and nothing is going to happen for quite a while in gaza. most definitely not in the case of ukraine. and of course australia, south korea, they are arming as if there is no tomorrow. and this all has to do with a position towards china. haslinda: when we look at the

opportunities in asia, you have to look at india. foreign investors have been putting a lot of money into that market under the assumption that another modi government would have policy continuity. how attractive is that market? andrew: three points here. one is that india has a big defense sector and it is possibly the third biggest buyer of defense in the world. this is a seriously big market. they are not only making but also buying. i'm not interested in buying. i'm interested in making. this is a big democracy. and if they like what they see, this is good news. the third point is for us to carry on repeating to ourselves that india is not an export driven economy. anything that improves

investment particularly investment in infrastructure is extremely good and attractive. and there is a big domestic market. that is an altogether different proposition. i stick with my infrastructure investment. attractive. haslinda: we have jimmy morgan saying today it is on track for inclusion. is it a game changer? andrew: i have heard this so many times. three or four years back, it was chinese sales will be included. and morgan stanley saying -- wow! the shanghai market has been consistently down for three years. there possibly could be a little kick while some of the fans are their holdings. it is good long-term but not buy it now. it is useful but not exciting.

haslinda: always candid with your comments. [laughter] thank you so much for your time today and have a great weekend. plenty more ahead. this is bloomberg. ♪

haslinda: welcome back. though csi 300 index under pressure on the day that the rest of asia is tracking gains. looking at china tv's, under pressure -- looking at china ev's under pressure on the back of the biden ready to impose tariffs. it is said to unveil a sweeping

decision regarding china tariffs as soon next week. the decision is a culmination of a review of so-called section 301 tariffs first put into place under the trump administration in 2018 and will focus on industries including ev's, batteries and solar panels. and chinese property -- look at how shimao property is surging 50% on the backs of reports that 60 cities has canceled the lower limits for mortgage rates. an update for chinese property. plenty more ahead. keep it here with us. this is bloomberg. ♪

haslinda: welcome back. china

markets heading to lunch. those csi 300 index under pressure on the day asia is tracking gains. the benchmark down .3%. ev plays under pressure on the back of the biden administration set to impose tariffs on ev's and other sectors. look at where the yuan is trading. slightly weaker verses the u.s. dollar. the yuan fix remains tight. we talked about the ev plays, this is a -- we are also keeping an eye on property stocks. china property sectors -- property starts getting a lift. on the back of cities removing the restrictions on sales, lifting sentiment at the same

time. as china goes to lunch, japan is back from lunch. the nikkei two to inching upwards. up by .5%. front and center it is about the yen and when we might see intervention or might we see the boj intervene. the nikkei to 2-5 up .5%. topix is also up. and it is also a busy week for earnings in japan. take a look at some of those that we are tracking. japanese earnings with a focus on automakers. nissan swinging. it post a forecast that beat expectations. honda investors will be watching

for strong profit guidance for the fiscal year after a robust fourth-quarter. analysts expect a share buyback. mazda boosting its operating income guidance for the year earlier this week. mazda down 2.3 and honda lower by .5%. a singapore lender first quarter profit beat estimates. and it made a 1.4 billion singapore dollar offer. what is behind this offer? avril: i think this offer and the move behind it is speaking to ocbc strategy to tap on rising asia wealth. it has strong positions in singapore and dubai and this latest move could go some weight and solidifying its leadership position and wealth management. the offer is 1.4 billion singapore dollars.

for the remaining 20% stake it does not have an great eastern. ocbc did say it expects its capital strength to still be there and still remain. indeed, among the three big singapore banks it is seen as having the greatest capital strength. the latest move might go some ways in helping ocbc keep pace with its peers. those other lenders working to integrate their retail businesses in asia from citigroup here haslinda: earnings being spared at the question is whether that is sustainable going forward. avril: it was not just ocbc that beat. it has been a good quarter for the three of them. i think it allays some of the concerns because wealth trading fees surged. we are seeing the lending

revenues be robust. where there is concern, speaking to how sustainable this is, is in the net interest margins. it has come down from the previous quarter at 2.2 7% now. as the funding costs rise, could come under further pressure. they might want to lock in the higher interest rates before the fed turns dovish. we are seeing potential pressure on its asset quality. the spike in the non-for -- and the nonperforming assets is something we are keeping an eye on. haslinda: how does it look for the next 12 months? it is a difficult environment for a lot of the countries. avril: a difficult environment but for the first quarter, they have been faring well so it shows how lending profits is still holding up despite the higher for longer interest rate environment. into the first half of this year, the demand from businesses

might still be quite weak. if you look at the broader macro picture come in singapore you see imports and exports picking up. the idea a could trickle through into business activity and corporate loans, we could gradually see the improvement in the latter part of the gear. haslinda: hopeful. a key factor in earnings is a strong dollar and its impact on asia fx. there is weakness in the yen despite expected intervention from officials. expert rivals tried to keep pace. let's bring in mliv strategist, mary bank allow -- mary mick allow. >> you have been hearing a lot of talk about competitive devaluation in the region. especially because of how weak

the yen has gotten, so putting a lot of japan's expert competitors under pressure. we have to keep in mind, we did some analysis on the blog that focused on, what does it mean for the currencies to depreciate and what is the impact on the equity market? taiwan's equity markets as well as korea's does worse every time the currency weakens. they benefit from currency strength. we have to remember the overall environment when their current the -- when their currencies strengthens, it is a positive risk sentiment. they do better, the equity markets do better when their currencies do better. haslinda: even with the yen there is a limit to how the weakness is supporting its borders. it has stopped helping automakers. and for the yuan, there is a lot of talk about you want devaluation which might help the

economy but in terms of sentiment for investors, it could go the other direction. >> you have to keep in mind where the fixed rate has been and the stability of the yuan. we are not convinced there is some stability. especially if we want to get the oomph out of the economy and the extra growth we want to see, you need to see a stable currency as well. that is what we are seeing from policymakers. they are placing the fixing strategically around 710. and that is vital especially for capital flows. haslinda: we also have the u.s. saying, do not intervene. the u.s. is saying that to japan. >> it is not only that. take china, it puts them in a precarious position if they do engage in what seems to be a competitive devaluation at a

time when we are getting extra tariffs and at a time when they are in europe trying to placate any issues when it comes to fears of dumping. them engaging in a competitive devaluation puts them in a precarious position. haslinda: between a rock and a hard place. how do you see asian currencies performing in 2024? >> especially with the higher for longer mantra sustained, they will remain under pressure. no question. how do you ignore u.s. 2 year yields near 5% when the others don't offers such attractive short-term yields. in that sense, it is going to be more focused on the dollar and currencies here across the region are still going to remain in a precarious situation. haslinda: especially indonesia, thailand and the philippines. mary nikola.

sharing views on the indian market as they expect a big win for the prime minister's ruling party. the managing director will be joining us next. keep it here with us. this is bloomberg. ♪

haslinda: welcome back to bloomberg markets: asia."

we are counting down to the india open. futures pointing to a high open. nifty index also up about as much. you have to wonder the peaks given the rest of asia gaining i more than what we are seeing in india. the ruby, -- the rupee. one stop we are watching is the state bank of india. planning to more than double the pace of new brunches this year but there is a risk. this is the country's largest lender. the state bank of india up .8% in terms of futures trading in

mumbai. the election nearing its halfway mark. public concerns about voter disengagement. the lower participation is raising questions about support for the ruling party with uncertainty spreading to financial markets. let's bring in our government reporter in new york. put this in perspective. what could this mean for either side? >> to begin with, it is not good. in india, there has been a continuous rise of low voter turnout. what does it mean for the prime minister or the opposition? the jury is still out and there is no clarity as to which way it will benefit or which formation or party is going -- it is going

to harm. one of the reasons for that is micro level data is still not available. clear, definitive understanding or clarity as to who or why or who this is going to harm is not yet there. but it is an issue of concern. traditionally, what has been observed is a high voter turnout is at times when on the ground there is anger against the government, a high voter turnout sometimes means that people are coming out in large numbers to vote against the government. similarly, when there is a favorable situation on the ground as we saw in the elections in 2019 when indian jets had gone across the border and bombed suspected terror camps in pakistan. hundreds of thousands of people came out to vote to say, we are with the government. a higher voter turnout means

different things but is always good. in this case, voter turnout falling is not a good sign. haslinda: how much of this has to do with covid-19 deaths in india? >> that is an interesting thing that is coming up. some of the election watchers, the pollsters are talking about it. reason being, india has under reported deaths and this is an allegation being made against the government over and over again and it has been borne out in reports from multilateral organizations saying giving an estimate of covid deaths which are nearly 10% higher than the official death toll that the government of india had given. why is this important? it means the electoral rules were not cleared up after it happened. people who have died in the

pandemic are not there so these people cannot come out and vote. that could be one of the reasons for the lower voter turnout as is we get to hear from politicians and pollsters that there is no overarching issue in this election as we have seen in the past few so therefore voters are not enthused to come out and vote. haslinda: thank you so much for that. our government reporter in new delhi. let's do a quick check on indian markets as we come down to the indian open. we saw some gains earlier. they are persisting. india opening in 15 seconds. the indian ruby is at 83.4825. we are looking at a strong dollar environment. we expect u.s. exceptionalism to continue until the end of the year.

the index is in the positive. investors are weighing the potential election performance of modi's party. it is confident the prime minister's party will secure a victory. to discuss, let's bring in our guest from mcm partners. jahnavi: if you look back in history, the only time a party has had majority in the last 32 years has been in 2014 and 2019. they were both under modi. 282 and 303 consecutively so it is going up. he needs over 240. voter sentiment is such that he is popular, he is viewed as being pro business and helping the economy. i believe he will secure a

victory higher than the last election. haslinda: what would it mean for business? policies? what are you anticipating? jahnavi: continuity and stability are prevalent themes. modi has been pro-business as we saw a summit in september 2023. it was a huge success. he has had schemes of incentive production giving outside companies incentives to come in and invest in india in the manufacturing sector. i think we are going to have more of the same. a lot of infrastructure spending , 100 billion has been spent in the last three years. 5400 kilometers of highways made. i think modi will continue especially if he has a big majority.

execution will be easy for him. haslinda: many factoring infrastructure well benefit but not enough to create the jobs that india needs. what will it take for that to happen? jahnavi: that is a good point you're making. of the one billion eligible people to work, only 100 million have full employment. the others have a partial employment. as we invest more in infrastructure and manufacturing, that will create jobs. and one can only hope it will create all the jobs we need to. another segment of the population missing is that only 20% of indian women are part of the workforce. modi is going after laws and regulations which inhibit women from working. haslinda: we have had other guests say that india needs to grow at a faster gdp rate then what it is showing at this time.

there is a risk right now in terms of where oil prices are and there are expectations that they will surge further given the tensions in the middle east. how much of that will weigh on india's growth? jahnavi: first of all, india is the third largest country in terms of renewables today. while we are a net importer of oil, we also are heavily investing into renewables. we are the fastest growing country in terms of using renewable energy and producing it and 40% of our electricity comes from renewable energy resources. and india has sovereign contracts with russia, saudi arabia and iraq that are long-term contracts. they will not be as effective as short-term volatility in oil prices and spikes. the corporate sector will be effective and that will need to be managed. haslinda: what are you seeing in

terms of what your clients want? where is money heading into? what sectors are they interested in and what are they not? .9 the sectors can continue to be popular at tech. fintech, payment companies are very popular. i think the sectors that are not popular where investors are not confident at least in the private market space. credit -- private credit means they have to lend money to lenders. this is where i find investors not moving beyond due diligence. haslinda: in terms of deals, is that a trend picking up? yvonne: family offices tend to know each other. people with a certain amount of wealth know each other.

if you are coming to a deal and someone comes with you, gives you an added layer of security. each family offers to do their own due diligence. if i come in and my friend comes and as well, i have two rows of winners. haslinda: why are they choosing --what are the advantages? jahnavi: family offices can move faster. private equity, it takes a longer time for money to move. the decision-maker decides and you can go right ahead. the other factor is that private equity, you need to return the money in 5-10 years whereas family offices can keep the money in as long as they want. haslinda: always good to have you with us. thank you for your time today.

now tomorrow top stories we are following. jp morgan says it is on track to include india in its debt index from june though most of the other clients are ready to trade. bloomberg market feedback has been largely positive. india has been outperforming this year. india express says it has ended a standoff with cabin crew beginning -- agreeing to bring back the crew. india's unit had to cancel several flights this week. the carrier is currently integrating with air asia-india as part of its aggressive expansion flats. plenty more ahead. this is bloomberg. ♪

haslinda: let's take a look at benchmarks in hong kong. the hang seng up 1.7%. h shares up 1.8%.

hstech in the opposite direction and negative territory. keeping an eye on the property index. the gauge rising as much as 9.8%. shimau jumping 73%. china properties and focus on the back of reports that about 60 cities have counseled the lower rates for mortgage rates of purchases our first homes since 2023. we have seen how china in particular has made changes to its policy when it comes to property purchases. two perhaps prop up the properties sector --t to perhaps prop up the properties sector. two days of outflows. mainland chinese investors are buying into hong kong driving the flow we are seeing. look at that.

only two days of outflows since early february. talking about how there has been a lot of interest in property plays. you can see how those stocks are playing. shimau property surging 63%. quite a surge. reports are about 60 cities have counseled the lower limits on mortgage rates and we increasingly see cities and china doing all they can to support the property market. in terms of the overall look and asia, tracking higher. that is it. this is bloomberg. ♪

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