haidi: a very good morning. you're coming down to asia's major market open. shery: welcome to daybreak: asia. asian stocks look to climb after stocks rallied to a record and sell of economic data indicated it is getting momentum. scott minerd says it's only a matter of time before another firm implodes like archego.

we will hear from the chairman this hour. the rba is expected to meet tuesday with a focus on financial stability and housing prices. haidi: let's take a look at how we are shaping up when it comes to the start of trading in asia. sophie: we are almost at a complete set in the asia-pacific. check out the offshore yuan trading around the 655 zone ahead of china's private reading. we have the rba decision. the aussie dollar holding above 76. they could be at risk if we see any signals the rba may shift its qe focus to a later maturity. when it comes to market pricing, we have seen that rock forward after the strong eco-data we got from the u.s. treasury futures higher.

we are keeping an eye on tech shares. given the yields coming under pressure in the u.s. the nasdaq jumping to percent overnight. we are keeping an eye on any archego related moves. credit suisse set to detail losses this tuesday. we will get an update from japanese bank nomura. given the location for emerging markets, the dollar holding onto overnight losses. shery: with the dollar falling and treasury yields stabilizing, emerging market currencies gained. next guest says it is especially dynamic. joining us as the jaguar growth partners ceo. always great having you with us. this coming at a time when we are seeing em stocks and currencies in red the firtash in red. the first quarterly decline in a

year or so. is this a buying opportunity? >> we believe so. we have been long bullish on growth markets globally. particularly latin america and asia, particularly brazil, mexico, china, india. we are particularly positive as it relates to those markets. shery: in latin america, in today's session with this grr function on the bloomberg, you can see that. how much will president biden's massive infrastructure program -- but also help other emerging markets? >> i think it is too early to say. it is aspirational. i believe the last major project we had in the u.s. dates back to the early 1950's with the eisenhower administration. it is about time. maybe every 70 years we address it.

i'm thinking particularly in asia. haidi: how much of this depends on what the next leg of the dollar story does? >> we do not think so much about currency in the short term. i think it is fascinating. we manage our relative -- how we think about currencies relative to the dollar. we are u.s. dollar-based investor but we are a longer-term investor. we do not hedge as a policy matter. the dollar strengthening, weakening on a short-term basis is not so much a factor for us. it is more longer-term growth and leadership within country. that is more of sensitivity.

haidi: would it be fair than that you pay more attention to a thematic leadership of the chinese currency more than the greenback and how does that play into the kind of leadership you see china taking in the em space? >> it is interesting question because china is distinguished in multiple respects. one of which is leadership is stable, steady. as opposed to leadership in certain other countries. i mentioned mexico and brazil. china is controversial of course, but major institutional investors have favored china among all growth markets over the last five or seven years. we are sensitive to that. shery: also leadership perhaps when it comes to some pboc

tightening moves. we have other emerging markets like russia, turkey and brazil hiking rates. how concerned are you this will materially impact your assets? >> those markets not so much because they have long shied away from frontier. i think your last guest was fascinating from the world bank, talking about contagion. that is a frontier statement. we in earlier days had experience and activity and a frontier. now we are focused on the institutional growth market. we are also -- we did not utilize leverage. haidi: when you take a look at post pandemic trends and what is going to be enduring the next five to 10 years, what do you think is going to be prominent in emerging markets? >> very good question.

we have been focused on sectors that are sustainable, durable, scalable. in the pandemic, post pandemic, warehouse distribution, logistics asset light and asset heavy, digital data, infrastructure, education, health care. these kinds of things. accessible housing both affordable for sale and accessible rental housing. those sectors are going to thrive post pandemic. we are not focused on high-rise office for example or luxury anything. because we think the jury is out on those areas. haidi: always great to have you with us. the jaguar growth partners ceo.

let's get you to vonnie. vonnie: u.s. secretary janet yellen has outlined the case for uniform corporate tax rate across the world's major economies. in her first major speech on international economic policy, she said the u.s. is working with g20 nations to find an appropriate minimum right she singled out china saying the u.s. needs a strong global presence to level the playing field. the world bank president says the g20 is likely to extend its debt services initiative to poor nations. the program delivered $5 billion of relief in 2020. he says more needs to be done to achieve economic growth without leaving hundreds of millions of families in poverty. the guggenheim investments chairman scott minard says is only a matter of time before another firm implodes in similar

mental -- similar manner to archego. in an exclusive interview, he told bloomberg the follow-up may not be over. >> it is highly likely we are going to have another situation like that. these things when they come like we are experiencing where out of the blue you hear of some major loss somewhere, they tend to continue to cascade until the market corrects and flushes the risk out of the system. vonnie: global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. this is bloomberg. shery: coming up, joe messieurs joins us for a look at what to

expect from the rba policy meeting. up next, new york's vaccine rollout is picking up speed while the u.k. is set to ease lockdown measures. details ahead. this is bloomberg. ♪

shery: the vaccine program in new york is picking up speed with shots available to everyone over 16 from tuesday. in the u.k., residents are being urged to test for covid twice a week as the country prepares to reopen restaurants and shops. michelle cortez joins us with an update on the virus situation around the world. let's start in the u.s. because president biden's easter message cast vaccinations as a moral obligations. is the message getting through? >> we are seeing people in the u.s. lining up to get vaccines and the number of available

doses is increasing. there is still significant frustration across many places where they cannot actually get into the doctor or the vaccination clinic because the appointments are not available, but we are seeing increasing numbers of vaccinations happening as states are moving toward the 16 and older vaccination clinics they are doing in sports centers, gymnasiums and other large venues. we saw on friday alone, in new york, there were 100,000 people vaccinated in one day. over half a million people in one week. it is possible. we are seeing an increased number of vaccines happening. we are still waiting on the process for other parts of the country. haidi: when it comes to the situation in the u.k., we may see a little more normalization when it comes to dining. the travel aspect is still something the governor is -- the government is worried about.

>> we are going to start to see opening happening in the u.k., which was hit very hard the u.k. variant that came out. now they are going to start opening shops and restaurants for the first time in four months. as you say, the and on foreign travel might remain longer. in the united states, we came -- we had some data that came out that the cdc said people could be traveling if you're vaccinated, within the country still wearing a mask but you don't need to test before, test after, you don't need to quarantine. also in the u.s., foreign travel is still frowned upon. it is going to be a whale before we get back. -- a while before we get back. haidi: delays to reopening in europe helping drag down oil prices. wti is recovering some of those losses after slumping nearly 5%. we are still shy of 60 bucks a

barrel when it comes to trading in new york let's get more context from our asian energy editor. what is the longer-term perspective looking like given the stop start nature of this recovery globally? >> i think there are a couple bearish factors weighing on energy markets this morning. one like you said, europe's post pandemic recovery is a little slower than anticipated. the u.k. may delay global travel beyond may 17 if infections continue to rise globally. italy has extended some restrictions for travelers. that is a bearish factor and would limit fuel demand. another factor is the u.s., iran, and other members from the 2015 nuclear deal are going together in vienna on tuesday and discussed potentially resurrecting that agreement. that would remove sanctions for

iran, which would -- you have a lot more supply coming as a result of that. those are some bearish factors weighing on prices this morning. shery: we are now hearing saudi aramco could be selling an oil stake to a public global management. some investors that it is leading. what is that story about? >> it is quite interesting. it does follow a pattern of saudi arabia seeking to open up its economy to foreign investors and use that money to diversify the economy away from oil. apollo is leading the consortium which includes u.s. and chinese investors. bloomberg has been told they are on the shortlist to make a final offer. it is not been finalized yet. from an investor perspective,

pipelines typically offer a way to get predictable returns. but it is quite interesting. we will have to see how it plays out. haidi: is the economic recovery in asia something saudi arabia is getting more positive about given the recent price hikes? >> i think they are optimistic. certainly some countries in asia have not been hit as hard as we have seen in north america. that price hike from earlier this week suggests they see a recovery centered in asia and that they are pretty bullish about stimulus flowing into economies and propping up, accelerating growth and boosting spending. i think that is why they boosted prices forrades heading to asia.

shery: still ahead, our exclusive conversation with the world bank chief economist. carmen reinhart says sub nations will -- says some nation will need serious debt restructuring. this is bloomberg. ♪

shery: here's a quick check of the latest headlines. softbank is acquiring a 40% stake in warehouse robotics company for a $2.8 billion. the deal values the norwegian firm at $7.7 billion and is expected to be completed this month. investment aims to boost softbank's push to bankroll growing robotics logistics company. google has won a battle against oracle. the u.s. supreme court ruled 6-2

that the use of the code amounted to fair use and did not constitute infringement. the decision spares alphabet a multibillion dollar fine and overturn oracle's and they shall victory. credit suisse's investment bank chief is said to be leaving the firm following the archegos fiasco. sources tell his exit will be announced as soon tuesday. the financial time reports the chief risk officer will lead the company. haidi: as the fallout from the archegos capital collapse continues to reverberate, scott minerd says he is expecting regulations. the guggenheim investments chairman added he sees equity and bond prices moving higher.

>> as long as we continue to expand the size of the fed's balance sheet along with global balance sheets, there is more and more fuel to keep the asset price inflation continuing. longer-term, despite any near-term setback we might have, we are going to see equity prices significantly higher and bond prices higher, which would mean lower interest rates. >> what does that mean for all assets? are there areas you see pockets of risk that are overpriced? >> the place i am focused -- there are a number of hotspots. one is europe. europe has been very slow in the vaccination progress. if they continue to drag along in terms of getting the population vaccinated, i don't

think the world is really anticipating the continued slow growth and the repercussions of that. that could easily spill over into the emerging markets. the other thing that is disturbing is the incidents we have had around green sill over the last couple of weeks where we have all this risk and leverage buildup in the system, which was not transparent. this reminds me a lot of the days of -- at the beginning of the asian crisis when we had large organizations or hedge funds like long-term capital that had excessive amounts of leverage and out of the blue, there is a margin call. in the course of that margin call, we get a hard sell off. i think for the market, that is the biggest risk over the next three to six months. >> do you think we will see a

raining in yucca do you think there will be -- a raining in? you think there will be more regulation coming? >> i think so. one of the places we will get more regulation is in the spac market. if you look at the earnings estimates that have been provided on the spac combinations or de-spacing, the delivery has been dismal relative to what the sponsors have advertised. that is just one area along with the private family offices that do not have to report to the sec about how much leverage they have that is going to cause regulators to become more disciplined and i think being part of a democratic administration, the bite in the administration is in favor of that. -- the biden administration is

in favor of that. >> at the triple sea level, we saw almost a 4% return. i'm wondering if you see those types of returns continuing deeper into 2021. >> in the last week or so, we have started to for the first time since march of last year reduce our exposure to credit risk. i have been very bullish on credit. i think the paradigm around credit risk has changed with the socialization of credit, which has resulted from various government and federal reserve policies. i do not really see a collapse in credit or a widening in spreads in credit happening right away. on the others, as you pointed out, we have triple sea credit spreads relative to u.s. treasuries around the tightest

10% they have been in the last 30 years. when we were trading at the widest 98% in march of last year, there was a lot of opportunity. shery: scott minerd speaking with caroline hyde and romaine bostick. we have more information when it comes to the archegos related losses. it could be up to $5 billion. we had heard earlier credit suisse could be detailing those losses on tuesday. reuters reporting they could be up to $5 billion. credit suisse has been hit hard by the collapse of archegos. sources have told bloomberg the losses could account to billions of dollars. credit suisse is planning a review of their prime brokerage business. the financial time is reporting the chief risk officer will be leaving.

the investment bank chief could be leaving as well according to sources speaking to bloomberg. haidi: a keenly awaited update from credit suisse. the bank starting to unload some of those stocks related to the big luck trades that did so much damage to the related parties. don't miss a big interview coming up. dell technology's aipac president. we will be speaking with the renew power management director about the renewable energy space in india and his plans to list on the nasdaq thrace back -- through a spac. this is bloomberg. ♪

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(announcer) do planks for maximum core and total body conditioning. (woman) aerotrainer makes me want to work out. look at me. it works, 100%. (announcer) find out more at aerotrainer.com. that's aerotrainer.com. haidi: we have breaking news when it comes to japan. wage data coming through. we are seeing a less of a full year on year for labor cash earnings than expected. a contract you have two tents of 1%. slightly better of six -- slightly better than six tens of 1%. the year on year number coming in as a modest gain of 2/10 of 1%. other than expected -- better than expected. bouncing back from concoction area territory in january. health spending numbers crossing

the bloomberg for the month of february. we are seeing a contraction of 6.6% pure that is slightly worse than expectations. another month of declines. perhaps unsurprising given the state of emergency, the virus situation in japan. real cash earnings, a little bit high. labor cash earnings, a bit of a contraction. not much wage growth when it comes to the bank of japan getting to the inflation targett remains far away. take a look at what else we should be watching in japan. softbank again in focus. it is nearing a deal to invest nearly $3 billion in a region warehouse automation company. also watch local media saying they will finalize and disclose the size of their losses when it comes to that transaction with a u.s. client.

nhk expecting that to happen this month. mitsubishi rebuilding headquarters. preparing for cost savings in post savings -- post-covid world. in south korea, the finance industry leasing its report on national debt. we have a statement about online shopping. hyundai motor is another one to watch today. it may halt reduction due to a shortage of chips. posco may exit a million -- a myanmar military backed jv. sophie: the set up in japan, nikkei futures in singapore pointing higher. the yen trading above the 110 handle. jgb traders looking to a 30 year auction this tuesday.

this at the start of japan's new fiscal year. futures taking slightly higher after cash yields pulled back on better u.s. economic data. pulling up a chart the terminal, fed tightening has been brought forward to december next year with four rate hikes priced through 2023. barclays saying that is too aggressive. they are recommending going along. five year treasuries, giving the lack of progress. switching out the chart, the skepticism is indeed looking to play out when it comes to what is going on with the dollar and yields. skepticism about whether or not data will be strong enough to move the dial for the fed. the dollar falling to a two week low. the five-year low has capped off the year to date high. yields not voting well -- not boding well. still structurally bearish on

the dollar. pulling up the board now on the screen right here ahead of the rba decision that is due out this tuesday. aussie dollar trading near a one-week high. yields holding steady this morning. financial stability risk will be in focus in the rv update. -- the rba update. haidi: the world bank chief says some countries need to seriously restructure debt accumulated during the pandemic to spur growth. the program has delivered $5 million and a relief from more than 40 countries. the world bank vp and chief economist spoke to bloomberg about whether debt forgiveness is enough. >> i think the resounding answer is no. i think it helps. it helps in that it is still

funneling through the end of this year. not yet decided but most probably. funneling that capacity to shift from paying debt service to the dire emergency need. that certainly helps. is it enough to restore debt sustainability in number of cases or two more importantly widespread to be the kind of catalyst to growth? absolutely not. >> what kind of step do you envision being taken? is it something that has to come from the richer nations to the poorer nations? what we have seen with this new core hort of countries that lend , entities that lend to these poor nations including china, it is not just the paris club and a

handful of governments. it is harder to get these deals done and one of the big criticisms is they often help the private creditors. >> it is a good criticism. take the d ssi which you had mentioned. we have had no private sector participation to date. the issue of free writing on the official sector is not a new one. that is one of the takeaways from the developing country crisis of the 1980's. notwithstanding, i think we are going to be moving to the next stage, which is -- if you take the poorest countries -- the 74 countries eligible, about half of them are either in debt to stress or approaching it. that is going to require debt

forgiveness. it is going to require haircuts on the part of creditors. there is actually no substitute for that. i think it is the realization that these countries's capacities to repay was not what it was when those loans were made. >> i want to ask you about the question of special drawing rights. the u.s. treasury department janet yellen on board notified congress of support of the plan the imf has to use special drawing rights. this is something that will help poor nations. do you agree it will do that much to help them? some people say it will help the richer nations even more. >> in these things, the devil is

in the detail. as allocations get shifted more to those that needed the most, i think it will help the poor nations. i think the imf needed the additional firepower. in 2008, 2009, we had the super mega programs with greece, with ireland, portugal, iceland, those were record shattering programs. the imf got an injection of sdr's at the time. it is much more universally needed now. i think that again, the allocation will in the end be favoring also those countries that needed the most. it is still not a substitute for debt write-offs. i think creditors, private

creditors, official creditors whether it is china, the u.k., france, saudi arabia who will have to come to terms along with the bondholders and all the commercial lenders that debt restructuring, serious debt restructuring will be needed for these countries to be able to restore some element of the setbacks that have already been severed. poverty rates have spiked for the first time in more than 20 years. shery: the world bank chief economist speaking to kathleen hays. what ousted out to you? kathleen: it is interesting. it is not new for carmen reinhart, chief economist at the world bank, the author of the famous post financial crisis

book at time it is different. when she talks about where we are now, when it is couched in terms of we have got a divide between rich and poor, that is growing even wider because we have a pandemic that forces everybody to fight the virus, but everybody goes into it with different fiscal resources. everybody goes into it with more headspace or less headspace to increase the amount of debt you are selling to the world. the fact we can show you right here there is this debt explosion and as she also adds on top of that, that these countries -- everybody has to keep fighting the virus until it is done. that is one of the issues she is bringing to the table. it is very important. let's emphasize that she does see the possibility of this becoming something wider, bigger

at a time she said when we have got almost zero rates and we have things like the archegos situation, the big blockchain meltdowns. all kinds of things we have had. this shows how sensitive and interlinked more and more markets around the world, investors around the world are. that is weight is so important we listen. we will see what happens at the world bank meetings. is this discussed? are there any solutions? it is easier to talk about -- easy to talk about these things but it is difficult to actually do something. haidi: we have another interview coming up later on with kathleen. the philippines finance secretary will be joining us to talk about the pandemic's continuing impact on his economy, which saw its worst ever recession last year.

lots more to come. this is bloomberg. ♪

vonnie: this is daybreak: asia. u.k. prime minister boris johnson has revealed a bold plan to open the economy, which includes twice a week covid testing provided for free. outdoor attractions and restaurants can reopen for the

first time in four months. foreign travel may be permitted to may 17. >> we cannot be complacent. we can see the waves of sickness afflicting other countries and we have seen how the story goes. we still do not know how strong the vaccine shield will be when cases begin to rise as i am afraid that they will. vonnie: thailand is ordering the closure of nearly 200 night entertainment venues after a spike in covid infections. the two week long closure comes added the new year holiday next week. the shutdown may be extended at the outbreak does not ease by april 19. the entered states is moving ahead with plans to retaliate against six countries that attacked internet-based companies. the u.k. saying italy, austria, turkey and india could face tariffs totaling a billion

dollars a year. some of the goods targeted include austrian grand piano and italian anchovies. the south korean prime minister is planning to visit tehran to discuss billions of funds frozen. tensions between the two countries have been heightened since iran seized a south korean oil tanker in january. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i'm vonnie quinn. this is bloomberg. haidi: the rba is likely to keep rates on hold when it meets later. key parts of the stimulus program coming to an end. that decision has come as the

policy result has wanted a reprieve. we are seeing this rhetoric come out as the global economy gets on a footing. the pboc, the world bank, has the attention shifted to financial stability and debt risk? >> we are continuing to see the rba acknowledge the economy is doing better than expected. better than their upside scenario. in terms of the housing market, the commentary has been around the fact that rising house prices support household wealth and confidence and underpin consumer spending. in australia's case, the economic recovery has been driven by household spending alongside government support. there is a bit of murmuring in the private sector around financial stability. the data does not show any significant deterioration in loan quality. haidi: i want to bring up this

chart taking a look at the revival of the housing in a. it is a story of different cities. this chart showing home prices in australia have surged by the most in with 30 years in march. as we continue to see the recovery and virus cases very low and as you mentioned, the relationship between consumer confidence and needing a robust housing market. do we see more macro measures? >> we have heard last week reminding australians house prices in themselves are not a policy target. it is about the financial stability. the loan book at the moment does not look like it has seen a significant deterioration. we are seeing some acceleration in high loan deposits to loan value mortgages. some of that is a reflection of the fact that first home buyers have been part of the cycle. what we are seeing this time

around compared to 2014 or 2017 is the house price rises are much more widespread rather than concentrated in sydney and melbourne. they are including regional areas and they have been driven by first homebuyers and upgraders. i do not think we are going to see macro prudential any time soon. could we see something to slow the housing market toward the end of this year? that is possible but it will be triggered by the quality of loans being pushed out rather than house prices themselves. shery: we have seen with the housing prices rising, gdp, the broader economy recovering solidly across australia. this chart on the bloomberg showing the incredible rebound. i do wonder how much momentum the economy will lose with the end of job keeper. that was supposed to be worth 5% of gdp. >> that is exactly right. it is a balance between

withdrawing that support ideally at the same time as your private domestic economy is recovering. the australian economy has observed a big set down in support in tober and in january. estimates are that end of job keeper will see a lost of 3000 jobs, which is devastating for those impacted. in the last three months, the economy has been creating 55,000 new jobs per month. the labor market may slow through april and may. i don't think the end of these policies will disrupt or end the economic momentum in recovery we have going on. shery: thank you for your insights into the australian economy as we get the rba decision. we do have more on the fallout of credit suisse from the blowout when it comes to the archegos related losses. we are seeing credit suisse

disclosing changes and either equity staff memo. they are saying paul galli are to will be stepping down. training, we have already heard news we could see more changes especially with the likes of the chief risk officer that could be departing according to the financial times. bloomberg learning the investment bank chief could be leaving. we have heard from reuters credit suisse's archegos related losses could be up to $5 billion. right now we are learning credit suisse is disclosing some changes in their equity staff. stepping down as head of equity sales and trading. we will be watching that news closely as we get more development. plenty more to come on daybreak: asia. this is bloomberg. ♪

shery: south korea's soaring home prices and growing wealth inequality are feeling anger that coated her in the president's party. mayoral races are being held in seoul. peter joins us now. before we came on air, we were talking about how south korea's government has been under pressure given that they have not secured enough vaccine supplies despite contending with

the pandemic very well in the beginning. we have seen other issues coming to the fore when it comes to dissatisfaction with politicians. >> the pandemic, the way they have handled the vaccination is clearly one of the major outrage -- public outrages. another one that is having a huge impact on the election and the direction of the current president's agenda is the elections tomorrow when the two largest south korean cities are picking their mayors. this anger over soaring home prices, particularly over the on affordability of them, is going to be a huge factor tomorrow. the polls already indicate the opposition leader, the candidate for the mayor is in huge lead against president moon jae-in's party candidate. the vaccine as well as this

anger over and affordability of housing has really driven president moon's popularity down to the lowest level on record. i think it was last week it was at 32%, which is the lowest ever for the president. haidi: when you take a look at the amount of household debt, the numbers are i watery for south korea. the government has taken measures to try to clamp down on speculation. >> they have, but it has not had -- it has had very little effect. the home prices have doubled in the last five years from $500 million to about a million. i'm sorry. 500,000 to a million. while the average wage has only

gone up about 20% and the average wage is only $36,000. how do normal people afford a million dollar home? that has been feeling public anger. all these measures that the current administration has taken has not basically stemmed the speculation and the rising home prices. >> is that because they do not have any alternative assets to invest in? i lived in seoul a decade ago and this was an issue then as well. >> because of the low interest rate environment and very little other options for investment, investing in home is still probably the best vehicle particularly for retirees or people looking to retire. that is their retirement nest egg. and so i think that is part of

the reason whyme prices are escalating. haidi: a familiar refrain from here in australia. our bloomberg seoul bureau chief. sophie: japanese banks and the kyoto view -- plus no more in focus to disclose the size of blockchain related losses. keeping an eye on softbank. watching asian chip stocks. seen as a positive for the sector. hyundai motor considering suspending operations. shery: we will be watching. market opens in sydney, tokyo and seoul are next. this is bloomberg. ♪

shery: welcome to daybreak: asia. haidi: ages major markets have just open for trade our top stories this hour. asian stocks are set to follow wall street higher after u.s. stocks rallied to record. investors will be watching and rba statement with the central bank expected to hold rates. a management shakeup at credit suisse.

top executives including the investment bank chief set to leave following the archegos fiasco. we have an exclusive interview with the philippines finance secretary where we discuss the impact of the lockdowns and relief measures he has taken to stimulate the economy. shery: japan, korea and australia coming online. let's get straight to the market action with sophie in hong kong. sophie: i japan, -- in japan, household -- we are seeing stocks gained some ground. the nikkei 225 adding a third of a percent while the yen is little changed. jgb traders looking out for a 30 year sale this morning. south korea, getting closer to wednesdays elections. housing prices a massive sober point. this morning, waiting on the annual national financial report from the finance industry. the national financial debt set to rise. we have seen the kospi gain for

tens of a percent. the korean yuan looking stronger, trading at mid-march levels. flipping the board, chinese markets back online. a private read on pmi do this morning. the offshore yuan trading longer this morning. the -- australia in focus. the aussie share market open higher by for tens of 1%. the aussie dollar is trading your a one-week high ahead of the rba decision while yields are looking pretty steady. the ten-year staying capped below the 183, 1 82 level since early march as the rba has pushed back against bets of tightening for australia. we have seen fed fund futures pricing for a rate hike in december 2022. we are seeing skepticism on whether or not data can provide a lift off for the fed. that is seeing yields pullback. the five in focus as it has

retreated from the year-to-date highs. barclays recommending going along five-year treasuries. market pricing too aggressive for fed tightening. the dollar trading your a two week low on the back of solid u.s. economic data. haidi: will stay on the big market event. it is the rba decision. policymakers have managed to be rewarded by bond traders given the low yields we have seen as well as a weaker currency. joining us is a global market strategist at gp morgan asset management in australia. we have seen just an overall calm when it comes to the bond market. does this last? what is this window of opportunity for the rba today? >> i don't think you will hear that much more from their rba be on what they have been saying the last few weeks. the economy is improving. they are seeing some improvement

in the labor market. that is great for the near term should they must balance that out against the longer-term pressures weighing on inflation and the fact we are some way from what they view as a full employment and what they view as a level of wage growth, which would create that inflation. the message would be staying the course and the need to act to do more on qe or to support the economy if needed. there may be some mention of the fact that some fiscal support measures would be willing off in the coming months which may lead to slightly softer growth than expected. that will be quite balanced in that view. and thinking about some of the financial stability aspects of what we are seeing in the housing market. the wealth effect of howard -- of higher house prices versus when the market is getting too hot. it will be a balance statement from the rba around that. the market will not be too surprised unless there is some sort of announcement about an extension to yield curve control, which is a few months off.

haidi: when it comes to the equity market, is there anything that is going to move the needle beyond the rba when it comes to aussie equities, which tend to trade sideways? >> i think most of the focus now has to be on earnings growth. last year was data re-rating in terms of what we saw on pe. australian markets now trading in 18 times. i think that is what we are looking at. earnings revisions around the world and seeing the risk be slightly better than what we have seen in australia. that will be a big factor in thinking about how equities will perform especially as we consider the rotation continuing into value and where the australian market stance relative to others. i believe it will be the others at stand out in terms of japan, europe and the catch-up we expect later in the year

relative to what we have seen in australia, which lagged a the first quarter and will continue to be that way. shery: we have heard more positive pole from japan because of their cyclical nature. as this chart on the bloomberg shows, we continue to see japanese yen weakness. that showing the dollars -- the dollar level. how much more upside could we expect in this market and what do you like there? >> thinking about the rotation that continues to push through and that rotation, the cyclical sectors push toward the markets. japan has some risk around how it handled the coronavirus pandemic. the cases that have been seen and the vaccine rollout. we think about the order and some of the cyclical sectors. the concern is financials and what we have seen with banks. the impact of further negative rates. it is always concerning.

if you play those markets or those parts of the markets which are in tune with what is going to happen globally, this would be a market that would continue to perform. the currency is another aspect to consider. it has not behaved as was expected. we may also see the shift later in the year as some of the u.s. dollar strength starts to turn to the u.s. dollar weakness. shery: that is one currency where we have not seen that perform as expected. you think the structural weakness will return. when? >> the $10 million question. what we have seen is the markets focusing on the potential for a hike and rates and what the fed is thinking about. we have seen bond yields moving heiner -- moving higher. we have seen a big unwind in terms of the net short positions in the u.s. dollar, which is added to the dollar support. that will continue to be supportive the next couple of

months and that will hold the u.s. dollar up as we see the outlook for the vile cases and the outlooks across europe. the risk of the world catches up and we see more synchronized growth, that will reverse over the later part of this year. you will see the ideas, the structural weakness that comes with the relapsed deficit. the trade deficit as well with the u.s. should reassert themselves on the currency, which is high in terms of the u.s. dollar and that will see that depreciation, as we had to 2022. it will be a time of near term for the u.s. dollar. bleeding out tomorrow weakness for the rest of the year. . shery: do see the slowness of the vaccine rollout in australia having an impact on earnings? >> the pace of vaccination rollouts around the world is one of the refining features of how

we are thinking about the reopening. given the rate of tourism and the importance of the economy, the vaccine rollout is going to be important for allowing others to come in and allowing australians to travel elsewhere around the world. we might get news of a travel bubble with australia and new zealand. something that has been delayed many times before. until you have a large portion of the population being vaccinated, that concern is always going to linger. the pace of rollout is going to be important for thinking about the reintegration, the tourism aspect and the growth in the australian market. the fact we have done so well domestically containing the viral spread means herd immunity is very low because we have not had a huge number of cases. you can that with the u.s. where they are rapidly moving toward herd immunity on the basis of the vaccination. they have had a larger number of cases. that is going to be defining

feature in terms of thinking about how stroll you performs not just in the near term but over the course of the year as the rest of the world does start to open up. shery: the imf was talking about how some countries will have vaccines. others will not. we will continue to see this diverging economy in a dangerous way. you expect to see the divergence , the divide grow between economies that can actually get vaccinated and others do not and what does that mean for the market? >> perhaps the poor nations around the world gaining access to these vaccines. the important part is not just the vaccination levels but that he about herd immunity. two countries that have had a high number of cases to reach that but at a larger humanitarian cost.

vaccination is one aspect of doing it. case counts are another. i do think it will be a case of thing he about the divergence and growth we have seen at the moment becoming more synchronized over time as the vaccine rollout does progress across the rest of the world. there will be important for thinking about what is going to do well now in terms of how the growth plays out the next quarter or so. seeing how the rest of the world will catch up later on and the rotation we see from the u.s. to the rest of the world particularly in terms of the emerging markets which may come under pressure from a high dollar now and benefit later on as that starts to reverse. shery: always great having you on. opal market strategist at j.p. morgan. let's turn to vonnie quinn. vonnie: u.s. treasury secretary janet yellen has outlined the case for a uniform corporate tax rate across the world's major economies. in her first major speech on

international economic policy, she says the u.s. is working with g20 nations to find an appropriate rate. she singled out china saying the u.s. has a strong presence to level the playing field. officials from iran and the u.s. are set together in vienna later tuesday as they take part in talks to end the crisis over the nuclear deal struck in 2015. both countries will attend with e.u., russia and china. iran insists on the full removal of sanctions over its nuclear program while the u.s. has rolled out any unilateral gestures. is really prime minister benjamin netanyahu has appeared in court as his corruption trial resumed. he faces charges of accepting bribes, fraud and breach of trust in three long-running cases. he calls the while again -- he calls the allegations a witchhunt.

new zealand prime minister jacinda ardern is reportedly expected to greenlight a bubble. it has paved the way for quarantine travel both ways between australia and new zealand by the start of next week. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i'm vonnie quinn. this is bloomberg. haidi: still ahead, an exclusive interview with the philippines finance secretary. we will be discussing the outlook for an economy that suffered worst recession last year. plus, the world bank's carmen reinhart says nations like the philippines will eventually have to hike rates to show up

inflation pressures. this is bloomberg. ♪

shery: the implosion of archegos capital continues to have major -- >> the hits keep on coming for credit suisse. what we sell after hours, a drop in rekey stocks that are tied to the archegos unwinding. people close to the matters say are being shopped around by credit suisse show the exposure, the amount of the offerings.

we are hearing 34 million shares trying to be sold by credit suisse and viacomcbs. 11 million in far-fetched lpd. this again shows there was perhaps additional exposure. many analysts on the street had estimated credit suisse would probably report a loss of upwards of three to 4 billion. they have said they took a significant loss. reuters is saying the bank is prepared to report a loss of up to 5 billion. that announcement may come tuesday. we also know investors have been waiting to hear how big this loss would be. it does give reason to the huge shakeup we are seeing in terms of the heads that are rolling as a result. haidi: some pretty high-level departures we are seeing from credit suisse. >> let's talk about those.

what bloomberg has learned from people close to the matter is investment bank chief brian chin who took over the position a year ago when the trading unit was merged with the investment bank, he is said to leave in an exit that may be announced as soon as tuesday. we are hearing from people close to the matter. the bank's leader have also been discussing replacing the chief risk officer while sparing the rest officer. it is not public but the financial times is reporting the chief risk officer is set to leave the firm. it is important to point out many analysts on wall street have been asking whether credit suisse has a systemic problem in risk management. the dibacco from -- the debacle from archegos capital follows a blowup in green silk capital

earlier in march where credit suisse had to freeze a series of funds tied to that firm. we also know according to people close to the matter there are likely to be other departures if not clawbacks and bonuses. the head of equity sales and trading is stepping down from that role effective immediately. he will stay through april to assist in the transition. that is according to a staff memo reviewed by bloomberg. we are hearing he will be replaced on an interim basis. the word on the street is tuesday will be the day for many of these announcements. back to you. shery: su keenan in new york with the latest on credit suisse. you can get more on the fallout from this archegos blowup and other stories you need to get your day going in today's edition of daybreak.

bloomberg subscribers, go to dayb on your terminal. you can customize your settings so you only get the news on the industries and assets you care about. this is bloomberg. ♪

shery: here's a quick check of the latest headlines. apollo global management is said to be leading a group of global investors eying a $10 billion stake in saudi aramco. it is believed to include u.s. and chinese investors and is on the shortlist to make a final offer, edging out the likes of blackrock. it is part of saudi arabia's plans to attract investors. blackrock is examining its business to see how it may have contributed to racism in the financial system. breaking ranks with its wall street peers. the biggest money manager is

planning to undergo an independent racial audit of its operations following a shareholder request. goldman and citi have asked shareholders not to back similar audits. mitsubishi usg will rebuild its tokyo headquarters as part of the revamp with a post-covid world in mind. bringing together about 19,000 workers who are currently spread across nine locations in the city. the world bank's chief economist says central banks cannot ignore inflation risks when making tough decision on rates and while the g20 is likely to extend a debt suspension plan for poor nations, carmen reinhart says huge challenges remain for policymakers made an uneven recovery. she spoke to kathleen hays.

. >> higher rates are a very tough choice. do not forget also that countries have fought long and hard purity emerging markets also have fought long and hard to have a credible low inflation environment. inflation is very regressive. in emerging markets. it hits the poor very hard. food prices, which make up a big chunk of the basket of lower income households. it is a very tough environment because you do not want to raise rates in the midst of what is still a downturn. at the same time, you cannot sit back and say we are not going to worry about inflation because that also in itself is quite an

aggressive setback. kathleen: do you worry about policy credibility as they try to navigate these very tricky waters? do they run the economy hot and echo the fed and is that potentially undermining in the long run? >> the idea that emerging markets have this full independence of monetary policy is not there. it is not there in reality. big economies. what the u.s. does, what the ecb as a whole does is not something that is in the capacity of even big emerging markets. brazil, which raised its rates in the midst of what is a horrendous health situation and recession. that has never been the case.

on your question of central-bank independence, i think that is a question for everybody, not just emerging markets. we are heading into a post-covid world in which raising interest rates will be not without significant cost in terms of what it implies for debt servicing. let me get back to the emerging-market question. rates may rise because central banks tighten or they may rise because they do not and inflation expectations rise. as i said, it is kind of a tight rope act that we are in, which is a very difficult situation, which is why you hear so much worry around the annual meetings . or the fact that we have a very uneven recovery with the u.s. and to a lesser degree at the

moment, europe doing much better than not just the poor countries but the middle income emerging-market class as well. kathleen: what is the answer here? what do you do? >> i think countries have to continue with social policies as long as the pandemic is creating ravages. we are seeing new spikes in india. we are seeing spikes in eastern europe. all over south america, there are concerns. we are still in the midst of an emergency. i think however, the idea of -- i think it is very dangerous to say, let's go back to 20 years ago and give up on all of the

gains that have been made in establishing the credibility of central banks and maintaining a stable environment, which is as i said very important for the households that do not have the ability to hedge against high inflation.

>> breaking news out of singapore. the ihs numbers for the month of march at 53.5. it is slightly lower than the previous month, but still in expansion territory for a third consecutive month. we have seen exports gaining momentum. strong electronics exports, but still waiting on singapore has been elevated unemployment numbers. pmi numbers coming at 53.5.

watch out for the monetary authority. no change expected. gdp coming out, could be a fuller year on year contraction than the previous four -- quarter. >> the meetings of the imf and world bank are happening as the global economy recovers strongly but unevenly from the crisis. let's go to kathleen hays for more. >> it is posing difficult questions about how to deal with the impact of the pandemic and implement support measures. the philippines being such an example, the government extending a lockdown in manila by at least a week as coronavirus cases reach the highest in southeast asia. so what does it mean for the economy? what steps might the government have to take? joining me now is the philippine finance secretary carlos dominguez. it is so good to see you.

>> thanks for having me on. >> it is a busy time and given everything the government is having to deal with. what is this going to mean for the philippine economy? when you look at growth for the year? >> it is going to be lower than what we expected. this surge in the contagion, which is incidentally happening in brazil, canada, france, and turkey and other places is certainly not good for the economy. however, we just want to emphasize that our death rate is much lower than other western countries. we only have 12 deaths per 100,000. other countries have over 150 deaths per 100,000.

the best way we ought to do it was to have activities in the manila area for the two weeks. >> that is important to emphasize that the death rates are lower than other parts of the world, but in terms of how you are going to manage this, aside from cutting corporate taxes, managing the bad loans, what are the steps the government can take to ensure adequate fiscal support for the economy? >> our support for the economy has come in three basic ways. number one, last year we granted our poorest citizens a cash handout of around 5 billion u.s.

dollars. this year, we have done another one around 500 million u.s. dollars for this two-week lockdown. number two, the monetary authorities have major the economy is flush with cash so that the credit does not get locked down. they have injected a lot of cash into the economy by lowering our requirements, primarily. they have also advanced to the philippines, to the philippine government, around 10 billion -- a little over 10 billion u.s. dollars. as you mentioned, we have

recently passed legislation to lower corporate income taxes for large corporations by five percentage points from 30% to 25%, and for small corporations, less than $100,000, from 50% to 20%. >> do you have plans to tap the central bank for more loans this year? >> we already have a little over 10 billion u.s. dollars. >> are you going to do more of that? >> to increase that amount. >> you don't. ok. are you going to pay off that $540 billion loan from the central bank? >> we will look to wind it down

sometime late this year or early next year, depending on the situation. >> to clarify something, it sounds like you are saying -- your growth target, 6.5%, you don't think it is going to drop. how much do you think it might drop or do you think it is negligible? >> for this lockdown, probably it will cost us 0.5%. >> in terms of borrowing, any plans to borrow in the u.s. dollar bond market? >> we will tap the u.s. bond market before rates skyrocket, and incidentally, we just issued the first ever zero rated bond last week, 500 million u.s.

dollars. >> are you concerned about how much debt is going to go up? a lot of countries are saying we have to do this. but are you concerned it could -- do you think the government needs to set a cap? >> we have set a cap an hour cap is 60% of gdp. we started out 2020, 39.5% of gdp. debt. we have increased it to around 54% as of now. we have to keep in mind the foreign reserves of the philippines are already 110 billion u.s. dollars. that's actually higher than our total foreign debt. >> are you considering new taxes to help pay for this? >> at this point in time we don't have any plans to

introduce new tax measures, although i must confess that yesterday i talked to our staff and i said, you know, we have to start thinking of this debt, and by sometime next year. we have to look at the potential revenue sources. they are working on it right now. >> any idea what those revenue sources might be? >> not at this point. >> i want to ask you about climate change. this year, you have become the head of the philippines climate change commission. one of the things you have called for his climate justice. to get more developed, richer countries you say are responsible for so much of the carbon emissions to cut them back and cut back on things like the typhoon that had been hitting the philippines so hard. do you think you can move the

dial this year? >> well, we are engaged in discussions with our own citizens as well as preparing our nationally determined plans, and we will present it, asking the more developed nations to cut more, although we are ready to do our share. let me just point out something. when i was assigned the climate change commission, i told them after 10 years of their existence, the average filipino actually has no idea how he can contribute to mitigating climate change. our goal this year is very simple. i want to bring home the point to the average filipino that he can contribute.

to do that, we are asking congress to pass a law banning single-use plastics. every day that laws in effect, each and every filipino has a means to contribute to climate change. >> is not exactly a link, but i'm wondering about airlines and discussions with the government. i want to note for our viewers that years ago, one of your many corporate jobs, you ran the philippine airlines for a couple of years. it is near and dear to your heart. where are they now? you have said assistance needs to come from the private sector. do you continue to hold that stance? >> yes. i have to say one of the best things the president did was to privatize philippine airlines and get the government out of

the airline business. at this point in time, i do not want the government to get back into the airline business because that is not our role. however, as i mentioned, we are ready to support private-sector efforts. one airline, to be specific, put together a $45 billion -- a 45 billion vessel rescue fund of which we -- our government banks participated to the extent of less than 18%. it is private-sector lead, but supported by the philippine government. philippine airlines has not come up with a specific plan as of now. since they have announced they will take the step of going into chapter 11 in the u.s..

we are waiting for an opportunity to discuss with them exactly what their plans are and see whether or not there is enough private-sector support that the government can back out . >> i want to ask you about inflation. there have been government caps. more steps to guard from spillover effects from inflation on the economy, and it has certainly been rising in the philippines food price is one big reason, but it is a difficult situation for policymakers. what do you expect to see with inflation? >> we still hold onto our target. right now we are slightly over 4% year to date. i believe the inflation numbers will be announced today, and i am hoping they show a decline in

rates. we have to look at the source of the inflation. it is really meat that has been driving it up. the philippines is a large consumer of pork and unfortunately we were hit by the asf as other countries have been hit. we impose price controls merely as a shock to hold back the prices while we decrease our tariff rates and increase the amount of pork that is allowed to come in. we are not using price controls as the only means to hold back prices, will -- but we are increasing supply. >> quickly i want to ask one

more thing. as the imf and world bank meetings are getting underway, the last time we spoke in person, that is where we were. what is the number one thing you would like to hear as the secretary of finance of the philippines, long time policymaker. what is the thing you would like to hear coming out of meetings? >> i would like to hear solutions to the debt problem. this is a problem of hours as well as other countries. the discussions in the world bank and the imf would be very helpful in enlightening us and giving us new ideas on how to handle this new situation, this new debt situation brought about by the pandemic. i'm sure secretary yellen is

also going to contribute to that discussion. the u.s. debt also has ballooned. >> thank you for taking so much time with us. philippines finance secretary carlos dominguez. >> we will get more on the philippines now. manila is lashing out at beijing over tactics in the south china sea with chinese fishing boats. let's get the details from our southeast asia government reporter. why are the boats there? >> good morning. the vessels, officially numbering in the hundreds, were taking shelter from the wind according to beijing. countries view this differently, perhaps as a form of coercion at a time china is becoming more assertive over its claims. china claims more than 80% of the south china sea based on a

1947 map. beijing has rejected a resolution under the u.n. this could partially be a way for china to get the philippines to give up on its claims of sovereignty through the area or more simply as a way to get the philippines to work with them on joint exploration deals for oil and gas, one thing they are discussing. >> what has been the response from the philippines? >> the language has been a bit more brusque. has been more than two weeks with this development. while the number of boats has decreased, over the weekend there have been 47 votes. the philippines foreign affairs said they will issue daily protests as long as, quote, a

militia remains in place. >> coming up next, stability in focus at today's rba meeting with housing loan approvals signaling private growth. ♪

>> this is "daybreak asia." scott minerd says it is only a matter of time before another firm implodes. the fall of our to go's send tremors through the financial markets as banks liquidated $20 billion of positions linked to the firm. minard told bloomberg the fallout may not be over. . >> is highly likely we are going to have another situation like that. these things, like we are experiencing were out of the blue you hear of some major loss

somewhere, they tend to continue two until the market corrects. >> boris johnson has unveiled a bold plan to reopen the economy. outdoor attractions and restaurants can reopen for the first time in four months. foreign travel may also be permitted under a new guideline. johnson warned britain's not to let their guard down. thailand has ordered the closure of entertainment venues including bars in some areas of the capital after a new spike in infections. the closure has come ahead of the tie -- thai new year holiday. global news, 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries.

>> with the rba not expected such policy rates, financial stability risks are in focus as housing loans surge. let's get a preview from our economic editor. what are you watching out for? >> the rba will be completing its first $100 billion queue you program. pivoting toward its program, its second program of the same amount. there are still outstanding questions over its yield curve control program and whether the rba will switch to targeting the november 24 bond. we don't expect this question to be answered at this meeting. there will be a focus on financial stability ahead of the rba.

the financial stability review will be released friday. prices have been gaining momentum, as have -- take advantage of low interest rates. prices rose the most in 32 years. the rba previously said they are pleased lending standards have been upheld. we will be watching to see if there is any change in language to how they are viewing the situation. >> how successful has rba's policymaking been in terms of what we are seeing in bond yields and the aussie dollar as well? >> if we take a look into the march meeting, we saw there was a lot of angst over whether the rba could credibly maintain its yield curve control program, and we were seeing the reflation trade putting upward pressure on that. we also saw the aussie dollar

was touching $.80. we are seeing the yield curve control program, we think that target is in line with its target and we are seeing the aussie dollar 5% lower than the late february hi. it will provide a lot of relief to the rba as they meet this afternoon. >> plenty more ahead on "daybreak asia." eak asia."

>> we are about half an hour away from the market open in mainland china. >> so far into trading, asian stocks are mixed to mostly higher. u.s. chip stocks helping boost the kospi. the nikkei little changed. aussie shares gaining ground. led by banks and miners. checking on the greenback, trading around a two-week low amidst debate on if the positive u.s. economic data we got overnight is enough to budge the fed. the aussie dollar is holding around one-week high. the korean won trading on the front foot ahead of the annual financial report, which is

likely to show pickup in national debt on rising bond supplies. the government's extra budget is extra lift. gdp forecast to 3.9% in south korea. they have also lifted their view for china, now seeing 9.3%. a higher read on china pmi. the offshore yuan trading in this 6.55 zone right now. we did see the best week since mid february. trading has been range bound for most chinese benchmarks. volume has fallen. >> sophie kamaruddin with the latest ahead of the china open. coming up, more market analysis in the next hour. that is it for "daybreak asia."

we are taking a look at trading in shanghai and shenzhen. stay with us. "china open" is next.

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>> it is 9:00 a.m. in beijing. welcome to bloomberg markets "china open." let's get your top stories this tuesday morning. equities gaining on the back of stronger u.s. economic data. emerging