♪ haidi: a good morning. we are counting down to asia's major market open. shery: welcome to daybreak: asia. jay powell downplays inflation risks once again, saying he will do what it takes to support the economy. we speak to san francisco fed president mary daly. singapore's succession plans are

thrown into doubt after the heir apparent bows out. further changes at credit suisse. the bank is said to tighten in the wake of the fiasco. haidi: a look at what we are setting up for. what do you see? >> we are seeing qe stocks gain ground and asian futures headed for a muted start. the s&p human is is on the rise -- the s&p is on a rise. volatility is expected to jump in the summer. this is as investors worry the easy part of the inflation trade is done and dusted. inflation or a lack thereof remains a key scene.

fed pressures are expected to be temporary while emerging economies contend with upside risk. china's march, a modest rebound. we saw wti hubbard above $60 a barrel. it is interesting, the underlying market structure holding firm for oil. we do have the financial stability report due out today. the aussie dollar set for its first rise in weeks. haidi: for more on the markets, we are joined by the managing director at ebs global wealth management in san francisco. it is a funny market for the moment -- moment for the markets. the fed is still trying to dampen expectations of anything related to hawkish expectations. where are the opportunities? >> thank you for having me.

i feel the market is kind of slow and a lot of investors are worried about market highs. it does not mean it can't get higher and economic conditions are certainly set for a positive equity environment. we are looking at technology we still like technology, especially e-commerce, digital data, these are all areas that investors should be looking at. continuing with a rotation from glove to value cyclicals there'd -- cyclicals. we can still go into that direction. global stocks is where we see major opportunities. it is not just the u.s. economy, it is a global economy. the u.s. has been leading the way, but as the global recovery starts to happen, global

equities are where we see a lot of the opportunities. haidi: we hear that the white house is considering doubling the climate pledge under the biden administration. we now know more details under the infrastructure plan. does this revive green and climate things which had traded up in anticipation? xi: yes, green tech will be a long-term theme. the infrastructure plan proposed by biden, we don't see that will push areas higher in the near term. it is going to be debated by congress and probably modified. we see that is something that is more of a long-term play that will probably carry on the next eight years or so and that is certainly going to benefit green tech, 5g and all of that in the near term.

-- long-term. haidi: we hear from investors coming on the show that there are opportunities to make use of the pullbacks jump into the market. i ask how much of a pullback is a pullback when the s&p 500 is above 4000 and lingering there? xi: that is a legitimate concern. we just don't see a pullback in the next 6-8 months with the current vaccines rolling out. there are other parts of the world that might be rolling out faster than the u.s.. strong earnings translate to higher stock growth and the pullbacks could be minimal. there is also that volatility. it could be a volatile with this uneven vaccine rollout. -- could be volatile with this

uneven vaccine rollout. with where biden's initiatives are, this is a good time to invest. haidi: this gtv chart on bloomberg's showing volatility is now falling to 14 month lows. should be then be waiting for more idiosyncratic news related to specific markets? at the same time, we have all of these regulatory concerns. xi: like we said, this is a global recovery and that is an area we see opportunity. china is under allocated. china having the second largest economy is a reason to start

looking at investing and adding china to the portfolio. a lot of the chinese tech is back at december lows and china is leading the way in a digital transformation. haidi: we have seen surprising strength when it comes to the u.s. dollar. a lot of the strength we are seeing in emerging markets depends on this. xi: the u.s. dollar has been rising but that is going to be temporary. as the economy and market adjusts to a longer-term, lower sustainable rate, we feel that the dollar eventually will be more week in the second half of the year. haidi: xi qiao, managing director at ubs global, great to

have you. let's go to first word headlines. >> singapore's finance minister has stepped aside as the designated to excess or best successor to the prime minister. he said the pandemic meant he would be too old to take the post. it would likely telegraph a long power transition. the process could now take several years with the party aiming to have a successor in place by the next election. the u.s. has added seven chinese firms to a list which bans them from receiving american exports. they are accused of helping to build supercomputers to help with chinese efforts -- military efforts. it means they will need the commerce department's authorization to do business. sources say that won't prevent the firms from getting products made. italy's prime minister has revealed the government recently

blocked the takeover of a semi conductor company. mario draghi says he backs an extension of so-called old and power to protect local industries -- golden how are -- power rules to protect local industries. the indian prime minister says he is trying to boost capacity to make vaccines as new infections surged to a record. several states have warned of shortages with mumbai saying it is just three days worth of doses and stocks. india reported a daily record of more than 26,000 cases with that region counting for almost half. australia is recommending that people under 50 avoided taking the astrazeneca vaccine over warnings of links to rare blood clots. they say the first dose of astrazeneca should only be given

when benefits clearly outweigh the risks. the guidance comes after the eu found possible risks between the vaccine and blood clotting issues. global news, 24 hours a day on air, on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. haidi: still ahead, san francisco fed president mary daly joins us for an exclusive interview. this hour. but up next, credit suisse tightens its limits on hedge funds and family offices in the wake of the blowout. more on that. this is bloomberg. ♪

haidi: amazon continues to have a 2:1 advantage over the department store at wholesale union. this continues to determine

whether this department warehouse in alabama will be the first to join the retail union. the vote count ended for the day and will resume on friday. amazon was ahead. about half of the 3215 ballots cast remain to be tallied. the count resumes on friday. we also have more changes at credit suisse amid the fallout from the ark egos implosion -- archegos implosion, a move that could trigger a shift in financial practices what kind of changes are we talking about and what does it mean for other banks? >> it is really in regards to slot margins, which are the kind of products used by hwang's

family office. they are very populous and -- popular and have a lot of advantages. activists tend to use them to build up positions in stocks. credit suisse is doing this of their own volition and they are doing this to really clampdown on their own risk exposure to clients. it is unclear, will this also spread to other products, and will other banks do it? the question becomes, banks tend to use different ways of accounting for their margins. will this be something that becomes more common among tier two or tier three brokerages? and then will it impact how many clients and hedge funds choose to take on these products with

those things, because it could potentially make them less profitable. there are ripple effects that can be seen from moves like this but this is really the first step in terms of how they are clamping down not just internally on risk but on their clients in the wake of the scandal. haidi: this spectacular implosion of a story continues to fascinate. we have this great story how to lose $20 billion in three days which sounds like it is destined for a screenplay. are we any closer to figure out how this happened for a trader, which until recently was the greatest trader you had never heard of. >> the thing that stunned a lot of people was one of the biggest global banks in the world, the way that swaps work is you know

your own client's leverage and positioning. what you don't know is everything they are doing at the other banks. so if there is something that could change that your own bank needs to know more about what you're positions are and however they are -- your positions are. that is one thing that baffled a lot of the people involved in the story and it goes to show you how fragile wealth can be, especially when wealth is brought on using a lot of borrowed money. haidi: we will continue to watch the fallout from the archegos blowout. tokyo traders are reporting nomura has set up an internal team related to the loss from archegos. we also look at retail after the

uniqlo owner reported a jump in profit for the fiscal year. the governor of tokyo is saying she will ask the national government for a return to stricter virus measures in the capital as cases continue to rise. officials fear a rebound in infections has begun earlier than expected. haidi: coming up, we will look at the transition of power in sing or, looking likely to be pushed back after the finance minister bows out in a surprise move. we will have details on what it all means and what is to come.

haidi: there has been a blow to singapore's long telegraphed power transition with the man expected to take over the reins stepping aside.

our reporter has the latest. this was a surprise move. >> it certainly was. finance minister heng swee keat has bowed out, saying singapore needs a younger leader. he wrote a letter addressed to the prime minister. he turned 60 and said that the pandemic meant he would likely be too old to take over when the crisis is completely over, which the government estimates is five years from now. they need a leader who will not only rebuild the city alliance but also the next phase of their nationbuilding effort. he is a career civil servant and politician and has a lot of allies in the business community in singapore, but there was a poor than expected showing and last year's elections and that drew questions about his popularity and the timetable for succession. he wanted to make clear the election is not the reason he is

stepping aside, saying he just does not want to take on any job which he cannot deliver. saying that those who work with him know that he is a workaholic and a younger leader is needed to succeed. he will step aside in the next cabinet shuffle that will happen two weeks from now. haidi: so who could be the younger leader they are talking about? >> names have come up but it has thrown a spanner in the works of the succession plan. the fourth-generation party members are now saying they're looking for their replacement. lee signaling that he wanted to step down by the time he turned 70. last year at the height of the pandemic, he pledged to stay until the country was in working order. they are really trying to pull the party together after that week election performance last

year. possible successors, chan chun sing, 51, kung also 51, and lawrence wong, the covid task force minister. also education minister. haidi: we will be watching that closely. now turning to hong kong. one of their biggest real estate companies is doubling down on its expansion to other sectors as it targets more business in mainland china. adrian chang spoke exclusively in hong kong's state theater. >> things are going well. we made our targets in the first half into announcements. we have been on track around 60%

of our target, and that you look at january and february making a big recovery as well aired hong kong is seeing 40% year on year growth and china is doing around 150% year on year growth as well. >> the greater bay area is a big priority for you guys. give us an idea. what is the plan? >> new world is the dominant player in the greater bay area. we have spent over 30 billion. a lot of people have asked me why are you putting so many eggs in the greater bay? the reason why is very simple. it is 5% of china's population but 13% of the population of china. the population is growing and it

is going to be very important in disposable income and marketplace value. 70 million people is exactly like south korea, so a big market and younger audience. do you get the sense you are under invested >>? does 30 billion -- >> do you get the sense you are under invested? >> we keep incrementally adding more, but the most important thing is to find the right location. we are focused on quality land, so we don't want a bidding war with our peers. we want to find a good location and to provide quality services. >> you mentioned triple digit growth in china last year. is that a rate of growth that

realistically we can expect over the next five years. >> our guidance for growth is double-digit growth. we are bringing 24 klm projects and next five years and double digits for the contracts themselves for -- so we are very optimistic about the greater bay area and china as a whole. >> is a closer to 11 or 99 -- is it closer to 11 or 99? what with the revenue split be envision -- in vision? what does the pilot like -- hi -- pie look like? >> hopefully, divisions will grow.

when you talk about recurring income and property development, it is probably 50-50 by 2025. if you talk about the services, in 5-7 years, hopefully you will go into 20-30%. >> the ease of doing business in hong kong, is it going to get more challenging because of the complexity of the political environment in hong kong? what do you think the future will look like because the future is looking very different? >> we are very optimistic with hong kong. we will grow together with. our horizon is long-term. -- with hong kong. our horizon is long-term. >> adrian chen speaking

exclusively to david ingalls. haidi: a labor union has accused amazon of illegal behavior in a vote to unionize one of its warehouses in alabama. the resale and department store union says it will last the labor board to hold amazon accountable, though it is not clear what for. they hold a voting advantage in the poll and vote counting resumes on friday. an advocacy group for muslim americans has sued facebook for failing to police hate speech. they claim the company has violent a consumer protection law for falsely promising the company would remove content that vibrated community rules. up next, kathleen hays has with her is very important guest. >> after the break, i will be joined a sample cisco fed president mary daly who will be speaking -- joined by san

francisco fed president mary daly. this is bloomberg. ♪

>> welcome back to "daybreak: asia their i am kathleen hays in new york. we want to welcome listeners from all over the world. i enjoyed beit mary daly, president of the federal reserve bank of san francisco for an exclusive interview. president daly, it is great to have you back on the show. >> my pleasure to be here. kathleen: i want to start with the march minutes. they got the most attention of any minutes i've seen in a long time and there were important things said in them and one of the first things that struck me

was the assessment from the board of governors staff that the stimulus package, compared to what everyone was looking for in january, was much bigger than expected. was that stimulus package bigger than you expected and did it change your view of the economy at all? >> i had penciled in a little more stimulus than the board of governors staff and expected that to be a lift to the economy, so overall it materialized in a way that i more or less expected and overall i have not changed my outlook. the truth of the matter is that fiscal stimulus along with extraordinary measures at the federal reserve has taken along with getting kobe to behind us a bit and moving into a light at the end of the tunnel scenario we are seeing a lift to the economy that is positive and most welcomed. kathleen: certainly the jobs report, just about one million

new jobs added, and many economists are saying probably another one million in the next month and may be that. when you look at that, it the economy start to look maybe not better than you hoped for but better than you were actually forecasting at looking for? >> i have been bullish on how the economy initially starts to rebound. if you think back to last summer when we were able to get warmer weather, people were eager to come out. people want you to spend. people want to do open up their businesses, so that caused a first -- burst of activity, and i expect that sharp rebound to take place. it will take several months of millions of jobs to get us back to full employment and back to a point where we can say that we are fully behind the economic impact of covid, so i am bullish on the rebound but i know we have a long way to go before the job is complete. kathleen: is there anything happening now that if it

continues i would say -- you would say i was not not going to change back in march but it is looking good enough, and this would be a good thing if the fed says we could move this up a bit. is there something you have seen lately if it continues would make you think at the next meeting in june that it might be time to alter that a bit? >> i see the economy as shaping up in a positive way, so relative to december of 2020 i am much more bullish now than i was then because we have had a very successful vaccine rollout. we have seen people wanting vaccines able to get them now and that permeating across the country and across all age groups. covid numbers haven't been getting better not worse, so those are important developments. it does -- those have all boosted my outlook and that was

reflected in my positivity in the march meeting and going forward. for there to be more than that, i do not foresee that. we have indications that there are risks on the horizon in terms of some hotspots on covid and they are reminders the virus is not fully behind us yet. while i am very optimistic and very bullish, as it goes covid so goes the economy, and what we are getting closer and closer to having this fully behind this we do have the last wild to earn and i have not lost sight of that. kathleen: you anticipated my next question. i year ago federal reserve officials were saying we are looking over what would you be the abyss. we have got to throw everything we can at this economy now, and what we are going to do is build a bridge to get past the big falling apart and bring us back up, but when you look at where the economy is now, $6 trillion worth of stimulus lined up in

the last year, it is the biggest piece of stimulus we have seen in modern u.s. history, is it possible that you guys are still just a little bit looking back and did not seem that we may be getting across that bridge now, and that it is time to be assessing things in those terms and not so much that same caution, granted that the verys -- variants are rising but vaccines are coming out. >> i want to bring two things to the top of the surface. it was the biggest piece time spending we have had. it was the biggest peacetime war we fought. we have not had a pandemic in 100 years and the impact it had our lives, we lost over 20 billion jobs in a heartbeat, erased 10 years of recovery at expansion in one month. those are all real issues, real

holes and i walk along the streets of my community or travel across the u.s. and you still see real pockets of weakness, real pockets of concern, so i see congress's bold action to do what it takes to build a bridge across and our actions to ensure the economy as what it needs for us to fully achieve full employment and price stability goals, those are things that are really necessary , so it is important to recognize that why we see the economy in the state that it is in is on the part of bold actions by elected officials at the federal reserve. kathleen: you have all of this fiscal stimulus from the fed, and out the government as even more and there may be other $2 trillion or so in the pipeline. when i read through the minutes, as we all did, no fed rate hikes until the fed meets its inflation and employment goals. the fed says it will keep buying

until substantial progress is made toward the goal. fair enough, no rate hikes until you get inflation of 2% and full employment, but along the way as we move toward the goal that the fed will start considering tapering at some point before we get to 2024 to most of you are looking for the first rate hike. >> we said a clearly substantial further progress. it is important to separate out projections of what we think will happen and our optimism about getting kobe to behind us and the actual data. the clarity of the statement in my mind is we said substantial further progress. we have to see it. we do not have to expected -- expect it. that is what we are looking for. kathleen: if you see substantial further progress, next year, will the fomc get together and

say it may be tapering a little. we do not have to keep buying so many bonds to keep policy highly accommodative. is it not going to make it highly accommodative if the fed decides to start tapering at some point? >> we have multiple funds in our toolkit. 40 guidance is another tool and we have asset purchases providing additional accommodation to the economy, and that is the portfolio of our toolkit, and i will assure your listeners we take all of those things into account when we think of that and we will communicate clearly well in advance of making any changes so that transparency alps position themselves i do not want to front run the committee's discussion and i do not want to get ahead of ourselves. i find myself bullish about what the future holds. we can keep after these vaccines , but i also recognize that there are risks i had of us, and the global -- ahead of us, and

the global economy is struggling because the vaccination rollout has not been nearly so robust as in other countries. let's not get ahead of ourselves. good data is a good thing but we have a large hole to dig out of. kathleen: fair enough but i am trying to get us something more of process, not so much assessing the economy. the likes of the new york fed president said when he was so your colleague there that it would be most likely the fed would have to start tapering before they start raising interest rates, right? i am saying in terms of process. is this a kind of process we can expect when there is substantial progress, when the fed sees actual data that things are better, than that we would expect to see and that is what could happen depending upon how the data go? >> one of the things i want to repeat is our statements are made in part to provide clarity. the clarity is how we will react

and what we will react to and i see that as the best guide to what we will do. i know what everyone would like to have is what is exact date, but if we want to provide database guidance, i would have supported database guidance, but i support outcome based guidance, and the outcome based guidance we have given is when we see substantial further progress. kathleen: can i ask you another thing about the minutes? a couple of participants, i take that as two, expressed concern are the accommodative financial conditions could lead to excessive risk-taking at the buildup financial imbalances. we have seen everything from the likes of gamestop to archegos, it seems to me a complacent, a confident view from most fed officials, which group are you in? do you see any chance of keeping rates so low so long and by so many bonds, -- buy so many

bonds, it risked excessive risk-taking, excessive leverage that cannot favor the financial system? >> many fed officials have spoken about this. in the low interest rate environment where we have to have accommodation for lower, for longer, then of course there is this reach for yield behavior. that is true. at the job as i see it is to look over the entire financial system, not get caught up on gamestop and say a vulnerability is sweeping across the system. right now i see a financial system that is very liquid, very accommodative and is supporting the economy and the way we need, and we look for vulnerabilities all the time, and right now i see overall the financial system in a good place. kathleen: under the risk people are talking about is the fed's model of we want to see actual data, but the economy is moving

potentially quickly now. this is not like to move out of the great financial crisis. we had a big move downward, we will get a big move upward. we have tons of fiscal stimulus we did not have that many years ago back when that was ending, so is it possible if you are waiting to see data that you will get behind the curve? people are wondering if you wait until you see inflation and you see a way up there and then you have to move so quickly that you hurt the recovery you are trying to help and you potentially again are destabilizing to the markets? >> sure, that is the talk about history. our models, the architecture of our thinking reflect our past by definition, and we remember many of us the 1970's and 1980's and that very thing happening, but the world we are living in now is quite different. today we are fighting inflation

from below our target. we also come through a very large dementia that is completely outweighed the supply shock. while i expect a little bit of inflation pick up in the second half of this year from the 12 month math of low ratings in the past and normal readings now, those are transitory, and i do not see the pickup in inflation. if it does happen we have tools to fight that off and we are prepared to use them. kathleen: that is the concern that you might overuse them. my final question in this part of the interview is what is the biggest risk to your forecast? what is the biggest risk to the path the fed is on? 2015, raised rates to early based on a model and assumptions. the fed now has a model and assumptions. do you see any risk that you are watching that is signal that things need to be adjusted right now? >> i think things are balance

right now. on the downside, we have changing variants of the coronavirus, will do vaccines beat them back? what pockets of surgery under control. ? people seem to have a lot of momentum. if we fully vaccinated population we could pick up more quickly. i think they are balance. i think policy is in a good place to handle either of these two risks. kathleen: we are certainly with you on that having the vaccines pick up quickly. that is mary daly. you are sticking with us. plenty more to come. this. -- this is bloomberg. ♪

kathleen: this is bloomberg daybreak: asia. i am kathleen hays and your. welcome back to our listeners all over the world. mary daly holds one of the most prestigious jobs in the economic's role as president of the federal reserve bank of san francisco and at the forefront of the push to create more diversity in the fed system worldwide, but how did i high school dropout always on the outside looking in rise to a position like this. mary daly joins us now for our bloomberg equality series along with michael akers shery ahn -- with mike: anchor sherry -- my coanchor shery ahn. you have a powerful story. a young kid who dropped edify school when things went right

for the family. tell us more about that part of your life and how it led to the next parts. >> sure, my family, like so many families in america fell on hard times, and as a consequence i needed to work. when i was young school did not mean that much to me relative to drawing to help support does relative to supporting myself. that is why i got jobs. i thought my destiny was to state without a high school degree and work at jobs that i could do with that kind of change -- training but that my life changed. kathleen: your life changed. what changed it? >> this woman took an interest in me and she saw something in me i could not see in myself, and it was that spark of interest that caused me to go ahead and get a ged, then to get a college degree and of course to go on to pursue things, and so betsy is doing what so many

of us and the power to do. she recognized any young person something a young person did not have any experience with and could not see, and look at me now. i have gratitude to betsy but i am committed to trying to scale that experience so i do not become unusual, i become typical. kathleen: how do you take that as someone who says she always felt like an outsider, outside looking in, not someone board with a silver spoon and take that to the san francisco fed and how you used all of that, and also the fact that you were a gay woman, and rose to the top of the bank? >> i have an appreciation for a couple of things. first of all, i know what it is like not to feel like you belong , so i know how important belonging is. if you think about the difference in just your intellectual power, you are not

taking any bandwidth to feel comfortable you are so much more capable. one of the things i learned early on is helping people feel included, helping people feel belonging, that actually raises productivity, it makes all of us better and makes for better policy, and for myself, the other thing i recognize is we all look through a lens. my lens comes from my upbringing, and you outlined that, but there are other lenses that are equally important in our society, so it is not any one person we want sitting at the table. it is everyone' voice we want at that table, and that is the power of true inclusion, and it means people from different ethnicities races, gender, geography, socioeconomic background. that is how we make a nation that works for everyone. shery: you at the san francisco fed have done a lot of research on this front as well. your recent paper on how much an equity is actually costing us

was fascinating. what did you find in terms of which disparities, whether gender, race, employment, education, what causes the largest economic cost? >> sure, that is a great question. our thought experiment was what if we equalize by gender, many women, by race, different racial groups, and gave people the same opportunities and education, employment, occupational choice, and how well they are allocated to jobs that demand the skills that require. all of those things better. the big ticket items were getting people the right amount of education and getting them into positions equivalent to their education and having them pay appropriately for the education and skills that they have earned, and those were things that increase innovation, increase productivity, and this is the main bottom line, they

increase economic output. over the last 40 years $30 trillion in lost economic output to our country, and we are losing more and more each year as are economy becomes more diverse. shery: if you do not do those things you incur economic losses, right? are these losses documented in any way? >> absolutely, we added them up, but there have been other research papers that show quite definitively that you keep someone from getting an education or they do not have the opportunity to get an education or maybe they are not encouraged to become a doctor and a doctor is what they should be that is lost productivity not just for the year they did not get that but all years subsequent, and it translates into intergenerational mobility differences between those who at those opportunities and those who do not. this does accumulate in our society and we cannot afford to do this anymore, because we need to compete globally, and we are leaving far too much talent on the table, so it is costing us

economic dollars, hopes and dreams of millions of americans. kathleen: final question, what is the most important steppingstone to creating this equity among these various groups of people, many of them disadvantaged? is it education? >> education is absolutely essential, but another essential element is a strong and healthy economy that has sustained growth. what we deliver sustained growth -- when we deliver sustained growth more people get to participate. employers take a second look at people they did not look like previously and they find is a very valuable workers. it is about having a strong economy that delivers an inclusive opportunity to everyone. kathleen: thank you for giving us the opportunity to spend so much time with you today, mary daly, president of the federal reserve bank of san francisco. thank you. >> thank you. shery: we are minutes away from

the start of trade in japan, south korea, and australia. started to sophie kamaruddin. sophie: we are looking at a modest art for asian stocks with volatility across regional markets. thailand's stock exchange chief has warned of a volatile period i had for thai equities amid surging virus cases. steady growth and yield curves growth shifting. there largely deficit in india, with chances of a rate cut. bloomberg economics expecting the rpi to flatten the yield curve, and in thailand the trend is deeper but ocbc saying flattening after the bond session is over there. speculation that the fed may increase buying 20 your paper. that has flattening treasuries. we are seeing australian bonds follows -- follow suit. u.s. yields on the long that has

dimmed the dollar appeal. the dollar down against other currencies say for us. heidi: we will be watching. an operator at the same profit rebound in the year. for more grace joins us. tell us about investor reaction, whether this is a low base comparison or something that is sustainable. >> hi, today, before the market opened the stock is sent to rise to the opening, and the reason it will rise is its forecast but it was below the bloomberg consensus we compiled. some are saying it's assurance of the company has a strong management skill to control

price and recover and sell well even under the pandemic situation, but on the other hand , some says even though they did perform well in the past its stock is trading at eight times of its value, so it might be on a high branch stock price already. i hear mixed voices. it was a good rebounds. shery: there has been a lot of controversy and tension over a cotton source and china. the ceo, did he say anything about this? >> it was an issue for many media attending, and they were

questioned about the cotton issue, and he repeatedly said no comment, because he thinks it is more of a political issue rather than a human rights issue or even making the comment itself may put him into a political situation. he declined to comment anything about it. analysts think it is very wise. you see the brand commenting on their stance about she and jane -- xinjiang comment. i think it was wise he did not comment. haidi: our asian consumer reporter. coming up next, an exclusive interview. the cofounder and ceo joins us

as the fashion industry is moving away from china to upper manufacturing ops across china. plus more markets and analysis. david gauld joins us at the top of the hour. we have market opens in tokyo and seoul next. ♪

♪ haidi: welcome to daybreak: asia. haidi: asia's major markets have just opened for trade. asian stocks are poised for a steady open after wall street rallied. jay powell downplayed inflation again. singapore's succession plans are thrown into doubt after the heir

apparent receipts. tensions between the u.s. and china could be set to rise. washington takes more steps to curb chinese companies as washington draws up plans to counter beijing. let's get to the market open in sydney. >> the nikkei is gaining ground, set to end the week below 30,000 once again. some stocks of note moving to the upside. local media is reporting this company is to restart factories after operations were halted by a fire. we have the yen trading around 109.33 after its biggest jump since november. fast trade install -- in seoul. the korean won is holding steady that it is set for its fourth

weekly decline. local media is reporting the government will maintain the local distancing level amid concerns that a fourth wave of detection is underway in the country. that's get to sydney for the start of staggered trade. we are getting close to cracking 7000, no dice yet, but the index is trading at a 13 month high. this is ahead of the rvh financial stability report and we are seeing the aussie yield curve drifting lower amid speculation the fed may boost to the buying of twenty-year paper. after we saw u.s. stocks climb with the s&p rising to a fresh record, s&p futures are rising. the dollar is just rising after we saw a fall overnight with u.s. yields, this after we saw

the fed maintain its dovish stance playing down inflation. we do get china's report card for consumer and reduce her prices and the offshore yuan set to hold -- halt a drop. the housing market on the mainland is drawing even more scrutiny. shery: we will be watching. meanwhile, rising rates are one of the big risks that could derail the equity rally. let's discuss more with david gaud, pictet asset management. what other risks are out there and have serious are they? david: rates rising in the u.s. in particular are a risk to the asian markets. a rising u.s. dollar for asia is

equivalent to a kind of tightening. it is something we need to watch carefully, how high the two-year and tenure will rise in the u.s.. this actually tends to make the asian currency weaken. the second sentiment you mentioned is supply shortages across the supply sectors. they came initially with self finance for the full year which was high and positive, but gradually revised downwards because of a potential shortage. we expected to be a powerful year. we may see slight revision

downwards, we may see pressure because of the rising input costs and all of this translates into a bottom line that may be slightly below. we know that markets are moving on momentum of the changes in this is something we have to watch company by company. haidi: are some of those risks the reason you really -- recently downgraded chinese bonds and equities? david: in the case of china, it is because the economy is recovering so strongly. when you look at the infrastructure spending for the month of february, the number is actually astronomical. there is a big push in terms of spending and this call gives opportunity for more monetary tightening, less liquidity and more rebalancing and will call for more regulation across

sectors. the pace of reform is going to carry on and probably accelerate further. this is going to affect policies at the macrolevel. it is why on china we are now neutral where we were overweight last year. haidi: with volatility so low, yields pretty steady, are we seeing a re-rotation back into growth? david: we should see rebalancing some of the names that have unnecessarily risen and where they offer pricing, but this regulating issue, political tensions you mentioned, it is very hard to quantify and value when it comes to the fair value of names. not all of the growth names are going to recover because a regulatory announcement could come anytime any day.

it is not just about thefundame. if you look for instance at the chinese import, china is becoming a major importer worldwide. this is positive news for steel companies across the world and is sector where they have not been active for years. we are going to see strong pricing power where we see opportunities. actually calls for a more balanced portfolio, it is not a bad thing compared to last year when it was all about internet and growth and so on. haidi: i want to go to this chart where you have been talking about growth

outperforming value in developed markets. in asia that rotation story has come to a stop. when you take a look at this, is this an idiosyncratic factor-type scenario rather than a broader trend? david: we have to look specifically at the u.s. market and economy in particular where the growth acceleration and monetary support is fully on board. this quite unique. in europe there is monetary support but growth is having difficulties with the current situation. there is a lack of liquidity support. this is why when it comes to growth exposure this year, it is going to be about the u.s. market more than the rest of the world. for the rest of the world, this is more of a call on value cyclicals. once again this will probably be

a year where the u.s. will stand out. haidi: if you are watching the archegos blowout, what longer ramifications does this have? david: clearly, we have to differentiate the different segments in the banking industry . it has always been a volatile and unexpected segment. we are in a context where we have not seen such a situation in years where we see height deposit levels in the credit growth picking up. when we see pricing power coming back net interest margins are going to start rebounding. we have liquidity levels for most of the banks around the world.

the good news is that the regulators are going to be less heavy at this time so we are going to resume paying. the banking case has to be separated from the rest, but banks each year are truly a valuable opportunity and will deliver strong earnings momentum. this is where you compare your usual growth stocks like internet names. you're going to see banks which deliver 18% on growth this year. it does make sense to add some exposure to the quality internet names. haidi: david, always good to have you. let's get you to vonnie quinn. >> australia is recommending

people under 50 avoided taking the astrazeneca vaccine amid warnings to a link of rare blood counts. test clots -- blood clots. they say it should only be given when it benefits clearly outweigh the risks. this comes after the eu found possible risks. narendra modi says he is trying to boost capacity to make vaccines as vaccinations served -- searched. several states say they have just few days worth of doses in stock heard india reported a daily record of cases on thursday with the mumbai region accounting for more than half. joe biden has announced a set of executive actions to curb gun violence. he urges congress to enact stricter laws while denying they

infringe on second amendment rights. just before biden spoke another mass shooting left six people dead in south carolina, including two children. italy's prime minister revealed its government recently blocked a takeover of a semi conductor company. mario draghi says he backs the extension of rules. they have been scrambling to rain and price assets after a stock route left many vulnerable to takeovers. global route news -- global news, 24 hours a day on air, on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie quinn. this is bloomberg. shery: we will have more on the tensions with beijing. we will look at the senate's latest strategy to counter china and how it will affect relations. plus, singapore's finance

minister bows out as a successor to the prime minister. we look at what that means for the transition of power in the city state.

haidi: there has been a blow to singapore's long telegraphed power transition with the man expected to take the reins stepping aside. let's get to our senior asia economics reporter. this was a meant -- and this was a surprise move. >> heng swee keat was considered the heir apparent and singapore is a place that likes a stable, predictable leadership process and this known for that stability. keep in mind the party has ruled uninterrupted since independence and this would only be the fourth prime minister. he was seen as a steady hand, slightly older than some they call fourth-generation leaders

but the idea is he would be a solid caretaker of the role. he was elevated to deputy prime minister alongside his role and that was a signal he would assume the top job. he has held a number of prized possessions -- positions, but yesterday he talked about how covid had delayed the handover, and he showed a fairly disappointing performance in the elections last year. he cited health issues at his age as a reason to get to the next generation more quickly. haidi: who are the likely candidates to succeed the prime minister? >> there are a few names in the next. trade minister sing remains a top contender. there are other names in the next, including lawrence wong

who has been seen as a rising star. he is also the education minister, which is seen as a prized post in singapore. the leaders need to select a new candidate amongst themselves and this has set off a rapid timeline of events. we will expect to get a better idea of who they are championing by them. the prime minister has agreed to stay on until the next candidate can take over. they asked for patients among singaporeans and acknowledged this was a really rocky development. they would have to change their plans and redo who they see as a top leader. we will see how quickly and smoothly we can all address this. haidi: the u.s. senate has introduced a new bill which directs the government to adopt

the policy of strategic competition with china to protect what it calls america's vital interests and values. let's get more with our congressional reporter. this was a 280 plus bill. -- 280 page bill. what does it do? >> there was a lot. it was a comprehensive plan to work with china going ahead. it sees infrastructure investments, technology investments to compete, but it also focuses on defending international property and would strengthen arms control measures with allies, so really, really broad ranging legislation here. it is important to note that this bill was a bipartisan and worked on by the senate foreign relations panel and senate

leader chuck schumer has already highlighted this bill as a priority to pass in congress. >> the u.s. is also adding several chinese supercomputing firms to this export ban list. >> this is that list that prohibits american firms from doing business with these companies unless there is a special permit. these companies are involved either with building supercomputers for china's military or wet -- or weapon systems. we heard the commerce department will use the full extent of its abilities to prevent china's military modernization efforts. haidi: emily wilkins in d.c. on the latest pressures on beijing. coming up next, $20 billion gone in just two days. the fast rise and even faster fall of bill hwang. this is bloomberg.

haidi: more changes are coming from credit suisse, which lost over $5 billion from the archegos implosion. they are tightening limits for hedge funds and family office and it could signal a shift in industry practices. we are joined with how these changes are taking effect immediately. >> lou burke has learned that the bank has already been calling clients to change market requirements and swap agreements , the ones used by hwang. specifically, the bank is shifting from static merging to dynamic marketing, which allows the bank to ask for more collateral as risks change. this could force clients to reduce the profitability of some

trade. the losses of around 4.7 billion and the departure of seven top executives. as for how archegos ceo and founder bill hwang managed to rise fast and fall even faster, bloomberg review shows he had 200 million in 2013 advantage -- and managed to reach a value of 30 billion this year. it turned out he was using borrowed money and leveraging his bets fivefold. he was largely long a handful of stocks that when they fell late march triggered a margins call he could not meet and that forced multiple banks to dump in billion-dollar block trades and left a trail of destruction. haidi: we are hearing from reuters that nomura is setting

up an internal probe. >> japan's biggest brokerage firm has set up its own team to investigate a loss related to archegos. that is related to two sources cited by reuters which have more plans to reveal details related to its loss on april 27. we also know that mitsubishi j financial group is amongst other firms. the hit was so much smaller for mitsubishi, but it was earlier reported that a number of japanese banks and financial organizations are now being questioned about their risk and management practices so they can better understand if there is greater exposure and how to prevent this in the future. shery: here is a quick check of

the latest business flash headlines. hsbc will allow 50% of staff to return to its offices in hong kong. hsbc previously said only critical workers should enter company buildings. however, local infection numbers have fallen in the city amidst tough social distancing measures. they said the new policy is contingent on the covid infection rate remaining low. bank of america will give it junior investment bankers a pay increase next month, and the latest move by wall street bank to address pressures created by intense workloads. analysts will get a $10,000 boost. they work till you drop -- the work until you drop culture of global finance has come to the fore.

china's huarong is expected to sell off non-core units, part of the plan to become profitable and avoid restructuring. they have submitted the planter regulators and received positive initial feedback. they spooked investors this month by delaying earnings. gll is said to consider a plan to sell its property management business in china. sources tell us a potential sale has drawn interest from competitors and financial investors. the real estate brokerage and evaluation business are not part of the sale. last year, they generated 30% of their revenue from the greater china region. with take a look at shares and investors continuing to punish the stock due to the state of

the lockdown and emergency in tokyo, giving down -- giving back all of the previous gains and then some. the operator of unit close stores is announcing a jump in profits. they also raise outlooks -- raise the outlook for the year. there is some concern that this could be a one-off adjustment due to that very low basis place same time last year. when it comes to operating forecasts, that was lifted to 255 alien yen. -- billion yen. it still fell short of estimates. the home market in japan has been resilient, but we have seen these negative reactions to

price cuts play out as well. coming up, the san francisco fed president tells us the u.s. economy is shaping up positively the risks remain. -- though risks remain. more on that. this is bloomberg. ♪

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but is it secure? sure it's secure. and even if the power goes down, your connection doesn't. so how do i do this? you don't do this. we do this, together. bounce forward, with comcast business. >> we focused too much on the short-term and palliative measures and not enough on longer-term supply-side measures and i think we to, as a country, invest in things that will increase the inclusiveness of the economy and longer-term attentional of it, particularly invest in people so they can take part in and benefit from the prosperity of our economy. >> in the united states, there is a lot of discussion about

infrastructure, including green infrastructure, adding to these elements green and social services. social structure is positive and broadly we do support this. shery: jay powell and the imf managing director speaking about joe biden infrastructure plan. here in the u.s., government debt is surging, but also around the world and emerging markets, you can see latin american debt has soared followed by the middle east and asia. for latin america, government debt was surging to the highest in years, in decades really. with the pandemic hurting revenue, governments are wondering how they can pay for all this.

we continue to see high levels of inequality, latin america seeing 1% of the population taking the bulk of earnings. same thing with asia, where 1% of the population takes in 17% of national income. there are more proposals to tax the rich. and the united states, the so-called millionaire tax is all the rage and what affect more than 100,000 people in new york. tax the rich and initiatives are abundant in other countries around the world. haidi: let's stick with the economic outlook for the u.s.. we spoke with the san francisco fed president. she is keeping her bullish forecast, still telling us that a number of risks are appearing on the horizon despite stimulus. >> i had penciled in a little more stimulus them staff referenced and expected that for

the economy. so far, it has materialized in a way i expected and i have not changed my outlook. the truth of the matter is that the fiscal stimulus and the extraordinary measures the federal reserve has taken, we really are seeing a lift to the economy that is positive and most welcomed. >> the jobs report just about one million net new jobs added and many economists are saying they will get probably another million in the next month and maybe after that. does the economy start to look better -- not better than you hoped for, but better than you forecasted? >> i would be bullish on how the economy starts to rebound. when you think back to last summer, people were eager to come back out.

consumers wanted to spend and to open up their businesses and it caused a burst of activity in output and employment. i expect that sharp rebound to take place. it will take months of jobs to get us back to full employment to where we can say we are fully behind the economic impact of covid. so i am bullish on the rebound but i know we have a long way to go. >> is there anything happening now where you weren't going to change or dots in march but boy it is looking good enough now? is there something you have seen lately that would make you think at the next meeting that it might time to alter that a bit? >> icd economy as shaping up in

a positive way. relative to say december of 2020, i am much more bullish now than i was then. after a successful vaccine rollout, we see people wanting vaccines able to get them now and that permeating across the country and age groups. covid numbers have been getting better, not worse, so those have all boosted by outlook and that was reflected in my positivity in the march meeting. going forward, for there to be more than that, i don't for see that. we already have indications there are risks on the horizons in terms of hotspots for covid and it's a reminder the virus is not fully behind us yet. as skills covid so goes the economy. -- as goes covid, so does the

economy. we do have the last mile to get through so i have not lost sight of that. >> you anticipated my next question. a year ago, officials were saying we could be looking over the abyss. we have gone through everything we can with the economy and we are going to build a bridge to get past the big falling apart and bring us back up. when you look at where the economy is now, when you look at $6 trillion worth of stimulus lined up, it is the biggest peacetime stimulus we have seen in u.s. history. is it possible that you guys are a little bit looking back and seeing we may be getting across that bridge now, and it is time to be assessing things in those terms and not that same caution? variants are rising, but

vaccines are rolling out. >> i walk along the streets of my community or across the u.s. and you still see real pockets of weakness and concern. i see congress's bold actions to do what it takes to build a bridge across the pandemic and our actions to ensure the economy has what it needs. those are things that are really necessary. haidi: mary daly speaking to us earlier. kathleen, it sounds like she is 100% in powell's camp. >> it certainly does seem that way. looking at it from jay powell's point of view, from mary daly's point of view, it is great to see that improvement. yes things are looking up, but they are being very cautious because they want to make sure

they don't move too soon. they want to make sure these are actual numbers that don't rely on forecasts. the fed raised rates to quickly. janet yellen has said yes, we made a mistake, so now in 2021, we have to see the data and have these average inflation rates of 2% and staying above. they want to full employment. that is why they are optimistic, but that is not enough. it's also a matter of not letting the markets think they can be pushed in to tapering down the bonds or doing something like that. it's also based on what the sea in the economy and what they don't see yet.

haidi: we are getting the inflation numbers. what are you looking for? >> it is a tale of commodity and energy prices. the march producer index, the factory engagement age is actually supposed to have accelerated. what you can see here is we will start getting a surprise in global cpi. if you focus on the global cpi, domestic prices have surged year on year and that is generally the global rise in oil prices. you're comparing it to much lower prices earlier, so you have that year-over-year comparison. domestic steel prices rose over 20% from a year earlier. bloomberg economics expects it

to accelerate in april and may because of this comparison, but to decelerate in the second quarter when we are not comparing it to such a week time a year ago. domestic energy prices have been moving higher in the past several weeks. gasoline prices may have risen more than 20% year on year. that number is supposed to go to flat. closely watched by investors and the people's bank of china. haidi: and by our very own kathleen hays. let's take a look at the markets. shery: china's inflation data, and ahead of that the offshore yuan is on stronger footing set for the first rise in four. we also -- in four weeks.

there are expectations we could see pullback on credit growth and that has expectation for the demand for metals and commodities. china is the biggest buyer of copper. we are seeing futures edging slightly higher after lme prices topped 9000. they do not see much impetus to see moves above that level. bhp is under pressure and play for copper is moving lower. taking a look at the aussie share market, we are seeing the index lower by resource names. it is still set for a three week rise. japanese stocks are rising. the nikkei is set for a second weekly advance, even as retailing shares are under pressure after profits missed

analyst estimates. we are seeing costs fluctuate with samsung it big drag while lng electrons are on the rise. we have futures appointing higher for u.s. stocks and the dollar is headed for the first weekly drop, while yields have stabilized on the fed's dovishness. haidi: up next, an exclusive interview with e-commerce company zilingo. we asked cofounder and ceo ankiti bose about her listing plans. this is bloomberg. ♪

>> this is daybreak asia. singapore's finance minister has stepped aside as the designated successor to the prime minister. in a letter, heng swee said he would be too old to take over when the crisis moved over. it likely telegraphs a long power transition that could take several years with the party aiming to have a successor in place by the next election in 2025. the u.s. senate is introducing a bill to counter china, erecting the biden administration to adopt a policy of strategic competition. pressures seek to boost alliances with strategic allies and call for investments to

compete on global supply chains and technology. the bill is part of a package led by dr. schumer and will go to a vote in the year. the u.s. has added several chinese firms to a list that bans exports for helping build su computer peters -- supercomputers for the chinese military. companies will need the commerce department's authorization to do business with them. they say that will not prevent products from getting made by tsmc. u.k. has granted asylum to nathan law, a member of hong kong's legislative council. he fled to london last year after china imposed sweeping powers over the colony. -- the former colony. global news, 24 hours a day on air, on bloomberg quicktake, powered by more than 2700 journalists and analysts in more

than 120 countries. i am vonnie quinn. this is bloomberg. haidi: while china continues to dominate the supply chain, our next guest sees a greater role for aussie on -- asean. david: -- ankiti bose is the ceo and cofounder of zilingo, an e-commerce platform, and joins us now from singapore. tell us about the parties you do business with. ankiti: what has happened the last few months is there has been a major shift in terms of where products are produced for global consumption. on one hand, we hear the fashion and lifestyle industry has slowed down. some people estimate there has been a slump in overall fashion consumption. and while that is true, if you

look at fashion going digital or how much has been sourced online , there is a shift from traditional off-line retailers to online retailers and they are all sourcing much more digitally. they are open to sourcing outside of china because they want more transparency, fair trade, and sustainability. that is what consumers are demanding. i would say all of the shifts around digitizing the supply chain that support the lifestyle industry, everything around esg and sustainability has only been dramatically pushed forward and i would said last 12 months have had an impact of forced digitization on the entire industry. haidi: is post pandemic a good time for you to consider a listing?

do you have any plans? ankiti: what is interesting is that the direct to consumer brands we are selling online has grown. i would say us and most companies supporting digitization of the supply chain are growing a lot faster than they are before. we are deeply committed to finding the best opportunities for all our stakeholders in this kind of situation. we are grateful we have the opportunity to help enable brands across the board. haidi: in terms of your plans, is a listing on the horizon? is it an ipo?

ankiti bose as -- ankiti: as is the normal course of business, we will continue to evaluate all our market opportunities to bring to fruition our vision of zilingo. haidi: what about raising fresh capital? ankiti: compared to say two years ago or just one year ago, there is a lot of capital that is available for companies enabling dtc brands globally. we are very impressed by just how much people understand this space now, digitizing the supply chain, making it more fair, transparent, and sustainable. just going by the market trends,

we are a lot more profitable than we were before. we are growing a lot faster than we were before. we will of course evaluate and be open to opportunities that are available now in our industry. we are super excited about what is coming. haidi: what is your position when it comes to supply? we know there are tensions when it comes to she and young -- xinjiang cotton? ankiti: it is an interesting trend you mentioned. there has been a lot of geopolitical issues that accelerated the growth of southeast asia and asia as export hubs. -- hubs away from china, almost. one of the reasons driving that is if you simply look at the

growth of exports between 2014 and 2020, you will see that the trend of them going is between 20 and 60% driven by countries like cambodia and sri lanka, all taking some share of the export market that used to belong to china. the main reasons is not just a that the cost of manufacturing is lower, it is far deeper levers like sustainability and transparency and a greater degree of control. consumers demand a degree of transparency and that is actually rippling through digitized platforms outside of china. haidi: ankiti bose, cofounder and ceo of zilingo.

profits lift as the japanese beverage maker lost share to its arrival, however they see demand for its flagship beer can help drive back. the ceo tells us he is looking to grow outside of asahi's domestic market. >> we are looking to the australian business by exchanging the countries in which we are running the breweries, such as europe and japan. also we aim to expand the global plan to the urban areas of each

countries. i have experience in australia. my time in australia, 5.5 years. i am confident to expand. to expand the successful brand to other countries globally. >> you have had this ambitious goal of making your flagship beer into a top 10 brand by

2030. can you speak more about which countries will be most important to reach that goal? >> it is important to be in every city and every big country. but in particular, to put superdrive in london, shanghai, beijing, and some u.s. big cities. >> the olympics are set for july this year and you guys are a sponsor. however, it is going to happen must scaled-down the spectators.

what impact will this have for asahi and how are you feeling about the olympics overall? >> we have been enjoying substantial benefits from promotions and our products tied up with the olympic games. we are satisfied with the partnership of the olympic games. haidi: that was the asahi groups ceo -- group's ceo speaking to us in tokyo. let's take a look at the stocks we are watching. >> ahead of china's ppi report,

we are keeping an eye on us or players in the mainland. this as profitability at steel mills have been surging with efforts to reduce pollution. we will also keep an eye on nickel and related tv players after city lowered forecasts for nickel. this is after plans were announced to start producing battery grade nickel, which undermines the medium-term bulk semantics for the metal. switching out the board, we are watching the cash open for koala plumper -- kuala lumpur. we have seen these companies' share prices diverge. they are working on a plan to merge malaysian operations. haidi: coming up, we will speak

to a guest from bnp paribas, plus catherine young. the china open is next. this is bloomberg. ♪

♪ >> happy friday. it is not :00 a.m. in beijing. i am tom mackenzie. >> good morning. happy friday. we are counting down to the open of trade on the chinese mainland. jay powell plays down the market. fears of rising prices.