we are counting down to asia's major market opens. in asia we got interesting earnings keeping things dynamic. haidi: where do we take the rally given the barometer when it comes to chinese consumers. it is more of a weakness, but looking ahead to the budget implications and balancing act between stimulus and policy. annabelle: yeah. we mentioned going into the last hour, producer prices came out and pretty much in line with

estimates. in line on the month on month basis. earnings are one to watch and softbank is trading after getting more aggressive big asset sales for the company and surge in portfolio companies including arm holdings. south think putting out better than expected net income, helped by investment gains and derivative contracts. that is the state of play. optimism creeping through, heavy earnings flow. korean stocks not seeing much movement the kospi is smaller. you've got the korean currency

firm, a big countdown to u.s. inflation is due later so wall street is quiet. haidi: how we are setting up as we look ahead to the australian budget, a sluggish start and caution as we await the inflation prints. jim charmer's will announce that their back in the black. australia's fiscal standing is near the top of developed world so we will see how they are planning to address cost-of-living with this series of rate hikes without pushing back rate cut expectations further. that is the picture. sort of seeing bonds primed to get a boost and the announcement

today, watching the impact on the australian dollar. headwinds for asian currencies. 66 and twin threats of stickier inflation and potential for tariffs and potential for retaliation is janet yellen says there are strong gains at bay. oil as we see a steady picture. cpi data, clues as to where curves will be extended in the shape of the monetary policy is a big driver above $79 a barrel. a picture of treasuries just edging higher. the countdown to april data, not huge moves ahead of that.

annabelle: let's bring in the head of aipac equities and credit. i'm curious what you see because her seeing fed cuts on the horizon. what do you think is the big catalyst? guest: morning. inflation is only one outlook. things like consumer savings have been drawing down, nonetheless it speaks for softness. all these things they tell us regardless of if the number deviates, it does not matter.

direction of travel is clear for rates and in terms of recommendations we continue to advocate for high-quality bonds and small caps. haidi: can you dive into that? share more details? reporter: on the small caps side, what we like, direct beneficiaries of calling rates, so if we compare them with s&p companies, there is 10% on small rates. they are suffering more and when the tables turn, then they are a beneficiary and they benefit from that part of it.

haidi: we took a breather when it comes to japan equities. what do you make in terms of what the next phase polls? does this have anything to do with redirected flows into china? reporter: the investors look too much at returns in japan currencies. there was a case last year and this year. the moment you translate into currencies like u.s. dollars, it is not impressive. not terrible, but it does not stand out. if we assume rates are falling even in the second half, we could see one or more rate hikes so when that happens is speaks

for yen strength and in an index where half of your companies are exporters you may see that the yen strengthens. performance is subpar and we don't think the image will have an upside. strong optimism has not borne out. haidi: we've seen with credit data, pretty bleak. more enthusiasm to lift the markets, does that concern you when we've got geopolitical rats increasing with terrorist threats? guest: as far as china,

certainly cheap, not as much as the end of january nonetheless, we think there is potential to perform in line so we have not highlighted typically. you can sometimes see a proxy, the hong kong market. the correlation is high. so we technically prefer the hong kong side to the mainland market. haidi: what about moves in gold? a mixed view, big run up, slip a little bit. what are you watching? reporter: the fed but there is a factor at play beyond

fundamentals, but the behavior of central banks. it seems central banks are looking to diversify away from the dollar so you have fairly price-sensitive buyers with deep pockets and that is another factor. we have a forecast of 2500 in the longer run. there is a little upside but not all of it is explained by fundamentals. haidi: that was the head of credit at ubs and we were discussing moves in the yen weakness. it's been reflected in government debt with bonds and yields. 10 year yields rising to a level we have not seen. speculation that boj will

deliver more rate increases sooner given high ongoing weakness in the japanese currency and focus on the yield gap between the boj and the fed. haidi: a couple of key stocks in the session, big stories, weakness for both. ehp down after anglo american rejected a second approach. pressure building on anglo to lay out a vision for independence. bhp improving by 15%, rejected in the offer, crucially it maintained a structure that is unworkable. we are waiting for the next moves and whether this will spur

productivity. watching softbank getting more aggressive. we've seen a sharp pivot to ai investment. second quarter of profit surge occluding strategy and plans more forceful in the cfo saying the balance sheet a not the conservative. they have been shedding assets not considered core. janet yellen says china could retaliate against steps the u.s. takes. she declined to confirm that the biden administration is hiking tariffs on chinese goods, but she told us about the president's thinking on trade tensions. >> he believes it is acceptable

to be completely depending on chain. and he wants to make sure, given that china is not playing by the rules in the sense that they have subsidies in critical areas , it's resulted in overcapacity. he wants to make sure the stimulus provided through the ira to support industries creating good manufacturing jobs input country that have been overlooked or suffered from deindustrialization and the past, the president wants to protect investments and i do not want to get ahead of the 301 review on tariffs, but this is a

commitment that president biden has made and i agree. i was in china a couple weeks ago and i made it clear we would not allow chinese overcapacity harm our emerging industries. reporter: does the u.s. won a trade war? janet yellen: we should have deep and productive trade and investment relationships. we are working to stabilize our economic relationship, we do not wish to disengage economically. we think the playing field should be fair and china engages in unfair practices like subsidies of industries they have decided are critical in those are cases where we will act to protect ourselves. >> we have seen beijing respond.

are you expecting a response? janet: president biden believes anything we do should be targeted to our concerns and not broad-based. and hopefully we won't see a significant response, but that is always a possibility. annabelle: that was janet yellen speaking to anne-marie. still ahead, a new report on generative ai and why they say students and employees lead the revolution. first, what is next for bhp after anglo-american read offs a takeover offer, under pressure in the first the teen minutes of trade. more ahead, this is bloomberg. ♪

when you automate sales tax with avalara, you don't have to worry about things like changing tax rates, exemption certificates or filing returns. avalarahhh ahhh ahhh ahhh 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. when you're planning for it all... the answer is j.p. morgan wealth management.

♪ >> muted moves in bhp, off by half of 1% after anglo-american rejected a second approach. the takeover would've made bhp the largest copper producer. let's bring in paul allen hunt. this has not one over the

anglo-american board. paul: the -- the -- the offer is now up to $43 billion, but yes, the response was bhp's approach undervalued the company so that includes copper. where the risk came from has been the structure of the deals so as part of the deal, they would be required to spin off its platinum metal business and iron or business in south africa. getting approval and regulatory green lights to spin off those parts of the business as soon -- are seen as key risks.

anglo said it could take a long time and was not worth it for shareholders. management are under a lot of pressure. anglo has failed to keep up with glencore, bhp so it is quite undervalued. last year, the board announced they would undertake a review you of assets and the business. shareholders have been in the dark, not knowing what is next. management promised today that they would release the strategic review and outline value for shareholders. haidi: it has been underway for months and rushed into the market.

what is in there that will impress shareholders? paul: it remains to be seen. a strategic review is a precursor to divestment or spin off so we will watch anglos business, fertilizer resource. a $9 billion project with something like a 34 call ahmed or tunnel. this project requires a lot of capital and no joint venture partner. that is something we are watching and the diamond business has been struggling in the current market. haidi: the scramble for copper is on. is this going to spark a wider

wave of competitors? paul: yeah. most people are presuming there could be another competitive bid but they are not quite sure where that will come from. broadly speaking, copper is set to sort if you look at the forecasts. it is key for the energy transition, for electrification, decarbonization. there is only limited proven copper resources and they are harder to find. industry has not kept up with holes and exploration, so it is the deposits that have been found, big minors such as bhp are looking to acquire.

it is proving that acquiring assets is often better than drilling yourself. there are other companies, tech for instance, quantum, freeport, which could all be on the table in the coming months or years to come. haidi: paul allen hunt. more to come, this is bloomberg. ♪

annabelle: big movers this morning, names in focus. nomura is one in the midst of japanese earnings season with

double pretax profit. this is looking to generate income of more than ¥500 billion , 3.2 billion usd. softbank is fluctuating and their back into positive territory. plans to get more aggressive in ai, second quarter profit in a surge in assets. let's bring in our tech reporter. what stood out to you the most? reporter: the prophet. softbank turned to profit. that was a good thing to see. and you mentioned valuations and positive things. they have net asset value of ¥27

trillion, a record and this measure is one of the favorite metrics. this helps us believe that softbank is getting more ready to spend money and invest in ai and chip technologies. unfortunately, we did not see much detail. but the net asset figures suggest we could expect exciting news going forward. >> the cash part of this is ready to be deployed and we saw loss provision, was that a surprise? >> yes, the vision find reported a loss which was just pointing and not expected.

it speaks to how we do not have clarity on private assets for we can estimate how they are doing. for private assets which get written down without clarity, it raises questions about what is going on and the fact that valuations have not been giving assets a boost is disappointing. you mentioned the cash pile. it does not mean softbank does not have money. overall valuations have been recovering and the cash pile is at six went to trillion yen. they have money to spend and because of these factors we can anticipate more activity on the

group side, we have to see how things develop to be sure. >> technology reporter. coming up, a closer look at australia's budget. the country is seeking to move beyond its bread and butter industries. more details on the future policy. this is bloomberg. ♪ and they're all coming? those who are still with us, yes.

grandpa! what's this? your wings. light 'em up! gentlemen, it's a beautiful... ...day to fly.

>> taking a look at market

action this morning japanese bonds are trading here, 20 year yield rising to the highest level since 23rd teen. -- since 2013. 10-year yield spiking to a point we have not seen since last november. the changing market perception is coming through as to where the boj comes next. the governor we saw playing down the impact of the week could japanese currency on inflation but the tone of remarks has changed after the meeting between him and the japanese prime minister and since then it seems like there is more urgency to act and the negative impacts for japanese economy so you see that agitation for policy change that could come at the next boj meeting in june haidi. haidi: looking at australian

assets and looking at the delivery of the federal budget, some broad caution across the region as we stay in emergency mode. not a great deal of risk-taking. some upside when it comes to health care and consumer but by and large most sectors are trading in the red including materials and industrials which could benefit from the budget that focus on critical minerals. the government is set to unveil the third budget, the last before the next election. one of the center points will be the future visualized in australia initiative. >> australia's economic strength has been built on digging stuff up and shipping it out. the idea has paid off and now

another idea is being revived, adding value to the raw materials first. money will be thrown at solar manufacturing and other local industries. >> the future made in australia does not replace private investment but attracts more of it that requires public investment and we need to make sure we get value for money for that. >> a future made in australia is a flagship policy as the government looks at an election campaign next year. the u.s. says the inflation reduction act, -- the u.s. has the inflation reduction act, direct government intervention is having a moment and australia does not want to be left behind. an early recipient of the loan has been alpha hpa which

produces minerals key to the energy transition. there are abundant minerals but little manufacturing in australia. it is dominated by china. >> it is critical [indiscernible] so-called eternity of supply chain for critical minerals processing but to challenge dominance is impossible because china's power is not just in the process and technologies it is the entire supply chain behind it. >> extreme sadness i confirm [indiscernible] . building cars in australia. >> ford, gm, and toyota had to

shut down local production. haidi: let's get more with our economics reporter [indiscernible] and a happy budget day and when it comes to this future made in australia policy, is it too late given we have just sort of named all of the other policies and other economies? >> that is the question and because the government has not announced details of the policy we have not heard from economists or industry people or any criticism or any kind of comment about it. people have probably said it may or may not be good and inflationary but it depends what they say and that has not been leaked so far so we will watch

that announcement today. annabelle: we expect tax cuts to come through, more aid for cost-of-living. is that something the rba does not perhaps want to see? >> most of these things have been announced. tax cuts have been legislated. the targeted cost-of-living measures have been flagged on the rba has probably taken it into consideration when they raised inflation forecasts for the near term. most economists think this budget will not be inflationary but the information we received last night $9.3 billion surplus

but the outliers have a bigger deficit which means the budget is more stimulatory than last year so that is a concern for the rba and we will hear from them only in june now. haidi: there are only seven countries that hold that including switzerland and singapore how much of a comfort is that to the government and if you look at i guess policy measures in that post-pandemic environment is it sort of you know the lucky country through luck or good planning? >> in the past political climate has been around australia getting books in order and debt and deficit disaster used to be a tagline that the previous government used to use a lot as well so it is considered a political victory if you deliver a surplus and retain your aaa

rating so the labour party is not doing that well in the polls because of cost of living pressures and they are retaining the aaa rating it would be seen as a political victory. it is a double-edged sword because people might say we are having it tough and that government is just worried about the surplus position. also as far as lucky country it is an interesting one because in terms of where the surplus comes from it is commodities prices and [indiscernible] maybe it is luck. haidi: the eternal question when it comes to australia's economy. annabelle: tomorrow we dissect australia's budget with finance minister katie gallagher. catch the interview 7:30 a.m. hong kong time.

coming up we have deloitte's inaugural age-specific report that reports businesses have fallen behind on a i adoption. at this is bloomberg. ♪ avalarahhh ahhh

annabelle: looking at broader

markets, mixed. japan is standing out with the big earnings focused. more on that in a moment. otherwise steady. tracks wall street overnight given a lot of investors counting down to the u.s. inflation print. we should see signals of moderation but not what the fed wants to see if they are going to start cutting rates and that is the state of play and broader gain steady now so let's change on because the focus is coming down to earning so far and some name standing out, toe pan holdings at the top with commercial and publication printing and rising here after announcing a share buyback for up to 100 billion yen and other names in focus, a similar sector printing rising after forecast

beat estimates. as dora is looking mixed. the iowa we are watching. they will be investing around $330 million in new issued shares from japan to give it 16% of voting rights and that will make die well the bank's biggest shareholder and we have been tracking as dora given the exposure to u.s. commercial real estate here but very much under pressure so far haidi. haidi: deloitte has released the personal generative ai survey. 11,000 employees and students in the asia-pacific participated revealing how younger employees are driving the adoption of ai in the workplace. really interesting findings.

perhaps unsurprising use you see the younger people being leaders in terms of a i adoption but given how breathtaking the investment has been in the space has it been surprising that the take-up has been less organized in that sense? >> it has certainly been inconsistent. everyone knows generative ai is important. and we are tagging the generation ai because we have seen 80% of students across asia pacific are using ai daily. but now we find a 60% of employees are using it day to day. when we start to see it creeping more into the workplace. over 40% of employees report they use ai at work. those using it on a daily basis are saving more than six hours

of week. they are using that time to improve quality of life -- improve quality of their work and also improve worklife balance. but it is inconsistent. developing countries are advancing more quickly than developed ones by one third. that means more employees are using it, more students say they are making career decisions in developing countries based on where they perceive ai will be, and more employees are saying their employer is investing in ai. but those that are using it, only half think their employer knows they are. one in five employers has banned ai but in those cases, the

employees are more likely than average to use it secretly. so employers really need to get on top of this quickly. haidi: that is clear but also the fact that there is so much suspicion towards it and a lot of this is happening in an underhand way, does that go to pointing towards concerns of the credibility of the work used -- work done using ai? >> i would not use the term underhand. this technology is revolutionary and embedding itself into just about everything we do. people use internet at work and search on google. you would not say that is underhanded. they are using ai from social media to their own personal research so it is no surprise that use it at work. the reason that it is important

that employers stay on top of this is the technology is not perfect and makes mistakes. so there is quality control. but those who use it in the right way they are using it as fact taking and not risking many mistakes. but we have to manage it well because the trends are that investments will continue going up over the next five years. annabelle: perhaps as well in response to the issues around possible areas being made or hallucinations is does that also sort of underpin the shift toward more of the private or propriety specific models? >> we do see specialization. everyone became really where of -- aware of generative ai when

chatgpt was launched but it is not just about those public models. it's about investment in specialized models, sometimes embedded in big software platforms, sometimes in creative platforms like social media and then increasingly in-house, people are building their own models, drying on open source and other -- drawing on other models and open source. it is important for organizations to get a handle on this strategy and what data they want to feed into these ai solutions and in what tasks do they want to apply it and how will they make sure it is done well. ai can make mistakes but you can put very good controls around it and have confidence because ai

can also dramatically improve your output. growing up i relied on a -- on encyclopedias to get facts. but you did not just trust one page of the encyclopedia, you cross-referenced. it's no different than using online searches or using ai, we can build in safeguards but we need to plan for it and to plan for automation. that is really the message people have made career decisions around ai. we summarize the findings in this report. annabelle: this is on a company by company basis. what about if you look at it country by country or by region, what do you see? >> we have done a map and looked industry by industry at the

impact and we found in the next three years we will see over one billion hours of work significantly displaced, changed in the way it is done across asia pacific every year and that impact will keep going up. by 2030 every, almost everybody will be using ai enabled technology almost every day, often without realizing it. of course it is activities that are already highly online and i.t., media, professional services but increasingly we are seeing construction come through into the physical world and things like manufacturing and enabling a wider range of people to be able to apply skills that would not otherwise have so it is not just about displacing work, it's about enabling different people to be able to

do work and to do it more efficiently in a wider range of day-to-day tasks. annabelle: that was robert hillard their consulting leader. we will have more here on daybreak asia. this is bloomberg. ♪

annabelle: let's get to market calls. jp morgan says it is difficult to justifying stocks due to elevated interest rates and meager potential returns and that the market is prematurely settling into the soft landing narrative and macro outlook is uncertain and more stocks -- until the next recession. bank of america says it would take broad global risks for the u.s. to potentially coordinate efforts with japan to shore up the yen. one strategist sees the u.s. getting involved only to curb excessive volatility and that tacit approval of japan's unilateral activity seems to be the most the u.s. treasury is willing to concede at present haidi. haidi: blackrock says the

private market boom and if and when the fed decides to reduce interest rates. susan chen shares her thoughts on the timing of those anticipated cuts. >> i am not sure the feds will take the rates down because there is no factor that is for my personal opinion there were no macro factors today that would have a strong dictation of said should move on rates so i think rates will normalize around here. having said that, if rates go down the search for income becomes even more prevalent. that is an area where i think private markets will continue to play a long-lasting support to our client base because of the fact that there are critical themes and private markets that if you just think about for

example why are people focused on infrastructure and that transition to net zero, that will take place over a long time and the themes will generate significant amount of returns and irrespective of where rates are i think this trend is here so it is a trend irrespective of rates, even though it might be bumpy depending on how quickly rates move but i have a firm personal opinion that rates are normalizing and will be quite stable for at least the main part of this year. >> you always provide me with good advice, whether it is on career investment about what is the best career advice someone has given you? >> do not worry about things that are out of your control. focus on things you can control on a day-to-day basis. >> i love that. as a senior female executive in the finance industry, what is

your take on breaking through the gender and cultural bias and how does it help women in finance succeed? >> it is a multi-decade journey and i think every step is a win. so let's do everything one step at a time and let's not try to make massive changes overnight because we need everyone to join us on the bus and take the journey. annabelle: that was the blackrock head of asia-pacific susan chan speaking on tiger money podcast. it is hosted by rebecca senna and david and gladys. -- david ingles. you can find it on apple, spotify, youtube and bloomberg.com but one of the action so far and actually susan spoke to us about japanese equities being an investment opportunity but a lot of the

action that we see so far in the bond space is the rise we see in yields really led by the longer end of the curve given you've got traders educating for some was sort of policy change from the boj in response of course to the weaker yen and japanese government officials are saying that they are watching the yields and will respond haidi is necessary. haidi: take a look ballot how we set up u.s. futures looking like this as we head into really the expectations of what the inflation print will come about as always seeing some softness when it comes to tile features as we get into the open. the china show was next. -- is next.

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. when you're planning for it all... the answer is j.p. morgan wealth management.

david: call we are half an hour away from the opening bell. you're watching "the china show." >> earnings today