shery: welcome to daybreak asia. paul: i'm paul allen in sydney. were kind onto asia's major market opens. we see strong demand for tesla's model three but its outlook is on with -- unchanged. we are waiting to reports from big banks.

plus, lyft is reversing gear agreed to sell it self-driving subsidiary to toyota. paul: we kick off with breaking news -- with breaking news. we are getting the first quarter gdp numbers. 1.8% expansion, much faster acceleration than the estimated 1.2% year on year. this would be the first growth year year on year since the pandemic begun. we have seen strong external demand from the u.s.. quarter on quarter is beating expectations accelerating 1.6% growth. the estimate was only 1%. manufacturing slowing town -- down, 2.8%.

retail and food services also at 2.2% quarter on quarter growth. we're seeing a lot of strength and south korea. the bank of korea has said it is too early to consider adjusting a policy stance. we have very loose policy there as we continue to see infections across the country. we will watch south korea when it opens other top of the next hour. let's see how he's are setting up across asia. sophie? >> this tuesday, asian futures are mixed. looking steady after u.s. stocks hit a fresh eye on the benchmark. nikkei futures looking at little change. we also get the exports report from hong kong and samsung sdi. in australia we are watching reaction to some mna mood news -- news.

tabcorp getting an offer for its media unit. plus we're are seeing a rally in industrial metals which is lifting the aussie dollar, trading around 78 this morning. on the commodities side, debbie to i -- debbie ti's holding around $62 per barrel. india's buyer situation is cloudy. prospects of rising food inflation will also be another headache for indian authorities and policymakers. that is prices of soft commodities tracked on the bloomberg index are surgery -- surging to an eight year high. last week, they do government pledge to spend $3.5 billion to provide we -- wheat to 800 and -- 800 million people who have been expressing economic disruption.

-- experiencing economic disruption. shery: let's delve into that. there is a shift in capital flows as to -- as investors differentiate between countries handling the pandemic well and those that are not. thank you so much for joining us. wary seeing the flows going -- where are you seeing the flows going? we know the pandemic is raging across india, not to mention southeast asia has not done much better. >> good morning, shery. thanks for having me. investors are looking to north asia. where a large economies like south korea, taiwan, and china have been doing quite well in controlling the pandemic. we see this in the first quarter gdp numbers. shery: what are you seeing in terms of the earnings results that we are getting from all

these economies? could that help offset the weaknesses coming from the health crisis? >> it is certainly very specific. so far in the first quarter, were not through yet, but if you look at i.t., specially hardware, the earnings have been very good. several places beat expectations due to top -- due to tight supply in the semiconductor space. there are rising expectations. they indicate that the order flow and pricing has extended. debt over earnings results are very helpful for investors looking for growth and some visibility on earnings right now. paul: we are starting to see some easing of travel restrictions in countries that are getting the virus under control. you have a contrarian view on the travel space.

>> i guess you can say that. i think there is good news for travel. yesterday we saw the eu will allow u.s. visitors who are fully vaccinated. we had the announcement of the singapore-hong kong travel bubble. but i think it will be a while before we see how various economies and countries decide to open their leisure travel. they need to be agreed upon by the various countries. this is not make a lot of changes to leisure travel when you can visit a specific country but on the way back you have to quarantine. unless we get more clarity on that, travel will likely not

rebound, especially not international travel. for large domestic economies where they have a large domestic travel industry, the situation is different. shery: broadly based on the earnings we've seen so far, how are evaluations looking to you? is it time to take profit or is that risky at the moment? >> it is a bit of a fine balance. it hardware ends tech, -- in hardware ends tech, investors are balancing good earnings with historic multiples. they are making adjustments according to that. but for a lot of growth sectors in the tv and consumer space, there's probably more of an expectation and a willingness to tolerate earnings at if this point in time. looking forward to the growth

outlook. shery: what can we expect on the semiconductor side of things? that has been fueling some of the growth and rally across northeast asia. we know there has been a shortage ongoing. >> i think the -- there is guidance we have seen so far. tsmc is reiterating very large guidance. -- capex guidance. they expect the tightness to expand into the second half. this will not underlined quickly. at the same time, it is sector specific. it depends on what sector you're in. some are very tight and that is august the good news for companies operating right now. i thing this will continue.

shery: that seems to be the assessment so far, the shortage is here to last for a while. the mask about the dollar. we keep getting these conflicting reports on where wall street stands on the weakness or strength of the dollar. this year has been more tricky to assess. where you stand? >> i think the dollar has been fairly volatile this year. i am not a currency expert. the dollar outlook right now, given global risks, are still fairly accommodative for emerging markets, particularly emerging asia. we are not worried about the effects outlook at this level. at the same time, at the end of the day many of these countries are export development -- dependent. shery: the head of asian

equities at bme. thanks for joining us. let's get to vonnie quinn now for the first word headlines. >> india hits a pandemic era high of three to 52,000 -- three and 52,000 -- 352000 bloomberg -- daily infections. people are escaping hospital beds and shortage. countries that have travel curbs on india or poised to do so. u.s. says it will send up to 60 million doses of astrazeneca vaccine abroad as president biden commits to wrap up pandemic assistance globally. he promises. to helping india. is not clear how may doses will be sent there. the astrazeneca vaccine is not used in the u.s..

meantime, the head of the wto has urged wealthy nations to export more vaccines. more than 400 million shots have been given in the america in the european union. they stressed the need to ensure four nations are not less -- left behind. >> vaccine and equity does not work. -- inequity does not work. countries must help as quickly as possible. it would great if we get the u.s. to be able to export some of the vaccines. >> in the u.s., president biden's top of my advisor just economic advisor has confirmed that a capital gains tax hike will only affect those earning more than $1 million per year.

on wednesday, biden is set to unveil his american families plan. it features major new social spending measures. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i'm vonnie quinn. this is bloomberg. shery: we will speak to the lyft cofounder on their plans to sell their side try -- self-driving unit two toyota. why wall street is disappointed in tesla despite their estimates. this is bloomberg. ♪

paul: tesla's following ahead of trade despite beating profit expectations. it is the second -- seventh consecutive quarter of profit with strong demand of its model three sedan. it's looking to expand operations on three continents.

still, a reporter who covers tesla -- what are the big takeaways from this result? >> shares are down in after hours trading because there is not big news. investors were expecting a profit. there was not new catalyst they were announcing. they did not talk about guidance for the year. you're seeing a selloff because there just was not -- it was good news, but not a blockbuster. the big news from the earning call was what they set about the most recent crash in texas. they were adamant's that, as far as i can tell, there was a driver in the front seat which contradicts earlier police reports we got out of houston and they are defending their technology. elon musk took journalists to task. shery: we also heard from elon

musk when he came to that semiconductor shortage. >> we have had some of the most difficult supply change challenges that we have experience in the history of tesla. insane difficulties with supply chains, with parts, over the whole range of parts. the ship shortage -- cap sort -- chip shortage. shery: any guidance on how long this problem the last? >> they were very clear was not just the chip shortage by condition -- but congestion at the ports. engineers were not able to go to the factories in china because of quarantine restrictions. despite all this, they had a strong first quarter in terms of deliveries. the new, refreshed model s and x has not been shipped yet.

paul: tesla has a pretty big exposure to bitcoin now. what impacted that have on the result we saw today? >> it certainly helped with their profit, as did the sale of regulatory credits. the cfo talked about their thinking behind bitcoin. they're looking for an asset that would give a high return and help them with liquidity. they sold 10% of their position in the quarter but plan to remain in bitcoin and invest more in bitcoin in the future. shery: denna holland san francisco what they -- with the latest. we will have more with ivan find self-made later this hour. i'm not, we will look at whether they can push ahead with global inventions. -- ambitions. this is bloomberg. ♪

shery: we are counting down to the start of trading in japan and south korea. some stories we are watching today. in seoul the world's longest shortselling ban was -- is coming to an end week. also reporting that samsung has submitted an application to change the largest shareholder of samsung live there subscribing -- surviving children. including the chair. we have more earnings coming out today including samsung sdi. over in japan we are looking ahead to the policy decision out of the boj -- they are expected to stand pat with their economic forecasts likely and focused -- in focus following the state of emergency in tokyo and osaka. meanwhile, lyft has agreed to

sell its self-driving division to a subsidiary of toyota. we will be hearing more from the lyft co-founder later this hour. sources are telling us that the ubs had of equity sales trading in japan has left the swiss bank , along with two other members of his team. he and another senior sales trader are said to have joined jeffries in tokyo. paul? paul: another item in focus today. nomura's earnings are due later on. we will watch for details from japan's biggest brokerage and the extent of their debacle. chris wilcox was just named cohead of its troubled america's unit. what we know about the new boss? t-rex -- >> he has his work cut out for him.

nomura accelerated his hiring. they want to bolster their business. he was previously head of jp morgan's asset management and works at citigroup for 15 years. he has banking and agree. -- pedigree. he will start next week. he talked today about how the firm has a great history and strong values in hiring and retaining staff will be a goal to him. shery: any idea what we could expect from the earnings when it comes to the transactions? >> they have warned already they may incur about eight to billion dollar claim -- a $2 billion claim which will put them just behind credit suisse. it is a bit of surprise a japanese bank is next in line after credit suisse, which lost

$20 billion from the whole debacle. the outlook for the bank is not too bad. they have been tightening credit for hedge fund clients. they have been tightening their governance. we are expecting profit to remain stable despite the one-time loss. they have had good rallies in equity markets in japan and the u.s. and high trading volumes have come out of that. that's agenda -- benefit there equity business. paul: we have another bank reporting earnings. hsbc due out with first quarter results later tuesday when we should get more insight into the bank strategic reset. that includes further cost savings and a refocus on asia. stephen engle's joins us from hong kong with a closer look. what are we expecting? >> we want more details on the strategic reset. we got that in february a couple of months ago, with

fourth-quarter results, where they talked about the cost savings drive. they're looking to shave 30,000 jobs over a three-year. from 2020. they are about 9000 into that. cost savings in general of $5.5 billion is what they are aiming for. with a very low interest rate margin environment, obviously. debt, interest, income has been shaved down. how will they find other revenue is the big question. the ceo said, we had a good start to 2021. i am cautiously optimistic for the year ahead. again, as part of this strategic reset, they are moving the cohead's of three of their biggest divisions to hong kong. essentially, they are moving the heads of the divisions that contributed about 95% of the net revenue in between 19 back here to hong kong to focus on asia.

in particular trying to boost areas beyond interest income, such as wealth management in the booming areas of china and hong kong and leverage their position here for the greater bay. paul: net interest margins being squeezed, you pointed out a couple of areas there where fresh revenue could come from. will it be enough? does hsbc need to look further than that? >> revenue will be a key number. bloomberg intelligence is talking about the key lever we will focus on with first quarter results, this income number. 6.5 billion u.s. dollars. they have to find other revenue areas. the consensus for the forecast for the first quarter, besides pretax profits expected to increase 34%, about 4.3 billion

dollars, that includes a 14% decline in net interest income. the good thing is they will have a modest $1.1 billion in nonperforming loan provisions. first quarter earnings will reveal credit risks have receded a bit. investors will be looking at the capital return plan, whether they are on track. essentially, the bank needs to speed up noninterest degenerating products and accelerate cost-cutting to offset what will continue to be for the foreseeable future, a low interest rate environment. therefore, margins are being squeezed. paul: stephen engle. we will be taking -- speaking to the hsbc cfo after we break those numbers in a few hours time. 2:40 p.m. in sydney, 12:40 p.m. in hong kong. let's get a quick check of the latest business headlines.

citigroup says it has declined 11 transactions related to call powell lining -- mining coal powered mining. it helps to divest by 2030. in its annual esg statement, it will stop declining -- financing those who get 20% of their power more from coal plants. jp morgan started a bitcoin fund. the latest signed -- sign wall street might be warming to bitcoin. bitcoin roses much is 12% to monday to trade almost $34,000, the biggest intraday gain since february. lyft will sell self-driving

subsidiary two's toyota. this is bloomberg. ♪ wanna help kids get their homework done? well, an internet connection's a good start. but kids also need computers. and sometimes the hardest thing about homework is finding a place to do it. so why not hook community centers up with wifi? for kids like us, and all the amazing things we're gonna learn. over the next 10 years, comcast is committing $1 billion to reach 50 million low-income americans with the tools and resources they need to be ready for anything. i hope you're ready. 'cause we are.

paul: -- shery: lyft has sold its self-driving unit to a subsidiary of toyota for $550 million. it joins uber in stepping back from driverless vehicle research due to the cost and lengthy timeline to commercialize the technology. ed ludlow standing by with a special guest. >> thank you, shery. i'm delighted to be joined by the lift president john zimmer. thank you for joining us. simple question. is this the end of lyft's autonomous vehicle ambitions?

>> we have had enough thomas platform which is actually the deployment about sonorous vehicles being billed for some time. we are the leader in commercializing a sonorous vehicles. we have done over 100,000 paid a fee ride -- av rides. this is a doubling down of the strategy. we are focusing on the peace that we do. the level five work we're are doing has been successful. toyota saw that opportunity. this allows us to work with multiple partners to bring the best technology to the platform for our customers. in focus on the customer experience and the marketplace technology, along with fleet management critical to the success of autonomous vehicles. >> what was the impetus for lyft? was it cash flow concerns? was it technology itself and what it would take to bring it to market?

>> it was a long-term strategy and how the industry of av's has changed over the last five years since we got started building the program. we started it was not clear there would be multiple well-funded autonomous vehicle providers. today there are several well-funded autonomous vehicle providers. we brought a new approach to market. our team has done data-driven autonomy that is building an atomic system based on fleet information -- an autonomous system based on fleet information. now that differentiated approaches in the market and when our transaction closes it will be with toyota. we have brought another well-funded player with a new approach to market. there are only two major networks in for transportation. we believe we are in the best position, given we are the only ones doing fleet management, which is absolutely essential in an autonomous vehicle future. we have what we believe is the

best marketplace technology. >> talk us through the timeline from lyft's perspective. will we see rides in the real world that are fully autonomous? what gets you there? >> we have done over 100,000 autonomous vehicle rides. they do have a safety driver in them. if your question is when that safety driver will be removed, that will likely be over the next two or three years. we've announced a partnership to bring them to market in multiple cities in 2023. that will continue to scale from there. >> did this move impact any potential for lyft to diversify business? do think you will move into food delivery or goods or any other forms of autonomous transport in the future? >> we have already talked about one thing we are doing, b2b, our business focus. so we can be a platform for retailers in the u.s. and canada

to have infrastructure for deliveries without needing to rely on a consumer marketplace. we are extremely focused on what we do and what we do well. it has allowed us to increase our market share, improve our services to writers, and not focus is on consumer transportation. -- and our focus is on consumer transportation. in our opinion that is a multitrillion dollar opportunity. >> you said you received interest in a number of parties. why toyota? >> what was most important to us was that it was the right transaction long-term for us and our shareholders and that the people and technology were going to a place where there would be fully appreciated. all of the team members are going over to the toyota subsidiary. they believed in our approach on data-driven autonomy and how it of -- how it ties into a

rideshare network. there is a long-term opportunity for us to work with what last year on a sales volume was the largest oem for vehicles. >> one of the largest in the world, of course. some would argue toyota is lagging behind when it comes to autonomous technology. once you see in their ability to catch up? >> they now have a phenomenal team, a world-class team we built over the last four years. with a unique approach. that is why the steel made a lot of sense. it allows them to leapfrog further into the space and we built that team that was ready for them to do so. and it applies to their broad platform of vehicles. >> you and i are both in the bay area. we are used to seeing test vehicles on the streets of san francisco. one idea that toyota is working on is a woven city, a probe -- a

prototype city where autonomous vehicles are more commonplace. jo plans to visit the prototype city? -- do you have plans to visit the prototype city? >> i do have plans to go to japan to visit with the team as covid continues to improve. i love city planning and city infrastructure. the applications -- implications did sonorous vehicles -- of autonomous vehicles allows for cities to be designed around people and not cars. they are thinking of the city design and it is something i am passionate about. >> with some of the rationale behind the steel -- because you had a number of suitors, does lyft still get access to

technological delve destin element? is this you de-risking your approach? >> is twofold. we want to make sure we are in the best place for the transition. we want to focus on what we do well. the dispatch of web and where vehicles are dispatched. the hybrid network of human drivers and autonomous vehicles. marketplace technology and fleet management. you could call it de-risking, what i would call it focusing on those elements. it allows us to work with toyota, as well as many others in the av space to do our role well into what them do theirs. >> one final quick question. five years from now, what level of autonomy, real autonomy, will we see on the public street? >> i believe in major urban progress. you will see cars able to drive

around safely. much more safe than human driven vehicles. you will see it in multiple cities across the country. >> john zimmer, left president -- lyft president. this is the latest consolidation in the industry. thank you for your time. paul: thanks very much, ed. that was john's them or their with west coast resort -- reporter ed ludlow. want to get reaction to those comments from mr. zimmerman. ivan, john zimmer laying out a fairly compelling case for the sale of lifts autonomous vehicles unit to toyota's woven city for five under $50 million -- $550 million. what is your reaction to what you just heard? >> i think it is a good move.

they do not need to own the cars. they do not need to only autonomous cars. they need to provide yet sonorous service of cars. -- d autonomous service of cars. it brings in cash. it connects them to a strong partner. it reduces operating expenses. it brings him to profitability sooner to allow for more flex ability. to make new partnerships. to roll out and develop new services. i think, all in all, it is a good move. it focuses on what they do. providing services -- transportation as a service. >> geo similar optimism about tesla? we are en route -- do you have similar optimism about tesla daca -- tesla? what's your opinion? >> i love the company, the car,

and its ceo. the stock seems to go to the upside but it has been a hard stop to analyze and recommend based on the volatility and valuation. but i think we will see an increasing adoption of electrical -- electric vehicles especially as other manufacturers rollout electric vehicles because i think the competition for ev's is gasoline cars, and as battery technology improves, you can go further on a charge, they charge faster, and there will be more places to charge, consumers will increase their adoption of electric cars as a whole industry moves to being totally electric within the next 10 plus years. tesla has tremendous brand equity and a tremendously loyal cussler -- customer base. i think that -- they came pretty close to beating their goals, if you car's last year.

they sold 497,000. just shy of the 500,000 goal. their goal this year is 750000-80000. they have the german plan coming on board. they continue to focus on battery technology. they do have a support ecosystem with the solar shingles and the battery panels. ideally we should all be driving tesla's charge from the solar panels on the roofs of our houses. shery: more ev's on the streets also means more competition. at the same time, with more traditional carmakers getting into the ev space, doesn't that mean less regulatory credit that tesla can sell? that does not concern you? >> it does. i think we are going to see a

more ev credit for the consumer to buy ev's from the biden administration as part of its infrastructure plan. i think his infrastructure plan will include the rollout of the charging network. i think everything is moving in the direction to make ev's more affordable and more popular for consumers. i think they will all go that way. there will be a lot of competition. gm is coming out with a number of incredible cars. but tesla has the first mover advantage. powerful brand equity. it is a company that has always made cash only made ev's. as a powerful statement. they are planning on selling 800,000 cars this year. versus an industry in the u.s. that will sell 17 million. there's a lot of room for everyone.

shery: including for apple getting into the business echo >> -- business? >> yes. apple has the most loyal customer base. it will be interesting to make that initial leap, but if anyone can, and you have to commend tesla and elon musk for starting what is an incredible car company from a clean sheet of paper and to be as successful as it is. apple does have a lot of brand loyalty and equity and if anyone can make the leap into the next ev, it is probably apple. paul: i just want to get your thoughts on tesla's holdings of bitcoin. a $1.2 billion -- million dollar outflow of the coin in the first quarter. does that make sense to you? >> i really like the concept of

cryptocurrencies is a medium of exchange. i do not know if it really makes sense as a storehouse of value for companies to keep cash. i do not know. only time will tell if it is the right move. i think from the roof -- from the time they announced it, it is up from where it is. it is down from its high. for the most part, investors do not want companies to speculate on things outside of their business. so, you do not want them to see the company the pencil -- be penalized for any loss in bitcoin or rewarded for gain. you want to see them rewarded for the sale of the profitable innovative cars. i do not know if bitcoin is the righ. it is hard to say. shery: ivan feinseth, ceo of

tigris financial partners. you can get a round up in today's edition of daybreak. bloomberg subscribers gone your terminals, also available in the bloomberg anywhere app. you can also customize your settings so you get the news you care about. this is bloomberg. ♪

>> we're are in the early stages

of a sustainability revolution. >> the train has left the station. investors care. people who work inside corporate america care about these issues. >> every time the u.s. has some transformative things, there's been partnerships between governments and the private sector. >> there is not enough taxes in the world for private sector to pay for all of this. it will have to be a public private partnership. >> companies that have strong stakeholder capitalism as a part of their principles, those companies are performing better than the ones who are silent. shery: top executives and policymakers speaking at the bloomberg green summit earlier. a busy week for the oil market. bp will pick up -- kick off a slew of big oil earnings with the rebranding -- rebounding crude prices.

investors will not see much of that cash after the biggest producers were forced to borrow to find their dividends amidst the pandemic crash. the opec-plus meeting as the other big agenda item. the alliance has projected a strong recovery in oil demand. that has all been thrown into doubt by the virus crisis in india. long-term demand outlook will look very different, as well. aviation is the line in purple. the only segment that will grow through 2050. paul: let's cross now to richard -- to richard chatterton. we need to push for decarbonization in key sectors. what are the key takeaways from your report echo >> it is a tale of two outlooks. on one hand we have road fuels,

to -- demand we see declining significantly as the rollout of electric vehicles ramps up. on the other hand, as we mentioned, we see significant growth in other sections, aviation fuels and a true chemical fleet stocks. we see demand for oil products peaking in 2035 and declining gradually to 2050 to around 96 million barrels per day. a level not too distant were from total consumption today. shery: what are the uncertainties out there? >> like any modeling exercise -- any long-term modeling exercise, the outputs are only as good as the assumptions you make. there are key uncertainties. a number of them we have to take into account. most important is the potential cost declines and uptake of alternative aviation fuels. bio chats, -- jets, for instance

which would have a significant outlook on the demand for conventional jet fuel. we have a? around what would be the potential impact of the movement against single used plastics and certain economy trends and what impact that would have on the demand for petrochemical fleet stocks. this is driven by policy. policy and regulatory support which will boost alternative technologies. in this outlook we assume policy support remains constant. so there is no additional significant policy support over and above that which is currently in place today. this outlook is a baseline for which more aggressive scenarios fall. paul: the report finds demand for oil will be relatively

unchanged in 30 years time. that does not sound particularly good for the climate. what is the impact of the omissions outlook? -- emissions outlook? >> is the most somber conclusion we have come to. we are not on a two degree pathway. it is the most striking conclusion in terms of what it means for oil and gas company strategies as they manage the long-term implications of climate risk. on the one hand, f demand is to follow what we set out in this outlook, the world will need a lot of new investments in upstream oil and gas production, which is a potential opportunity for the sector. but that potential opportunity needs to be set against this massive additional downside risk posed by a two degrees pathway, that is if countries were to hit the pledges set out in the paris

agreement. it is this question which lies the heart of the strategic challenge the oil and gas sector grapples with as they attempt to deal with the energy transition. shery: richard chatterton there. pete stark -- be sure to turn into bloomberg radio. get analysis from the daybreak team broadcasting live in our studio in hong kong. listen via the app, radio plus, or bloomberg radio.com. plenty more ahead. stay with us. ♪

shery: a quick check of the latest business headlines. sources say saudi aramco might sell a stake in its natural gas pipeline to free up cash. the state owned energy producer is sent to hold preliminary discussions on the move and the deal could raise billions of dollars depending on how the transaction is structured. apple is increasing its u.s. investments by 20% over the next five years. allocating foreign 30 -- $430 billion to develop next generation silicon and develop 5g wireless innovation. the iphone maker says it will create 20,000 new jobs in the u.s. and fund a new campus in north carolina. apple said it is the country's biggest taxpayer.

lululemon founder says it is dominating the chinese sportswear market. they paid 100 million for a .6% stake of the company two years ago and i've already made a 30% profit. -- and they have already made a 30% profit. >> there's a lot of competition for this market right now. but i have got my money on anta as controlling china and, as they go global, i think you will find it to be a real darling. paul: markets in tokyo, sydney, and seoul open in just a few minutes time. let's get to sophie for a look at what to watch. >> paul, we have japanese earnings front and center. watching after adrs jump, the

company listing its output income forecast now. citigroup saying the dividend type -- hike will bode well for shared holders. keep an eye on to pair just japan airlines. they are planning to make a china focus, low-cost carrier spring air into a subsidiary. we have names like onex group reporting. shery: we will watch those stocks is the markets in tokyo, sydney, and seoul open at the top of the hour. this is bloomberg. ♪

paul: good morning. asia's major markets have just open. i'm paul allen in city -- in sydney. shery: welcome to "daybreak asia." as earnings seasons continues to unfold and a what investors await decisions from the boj in the fed. investors are waiting for reports from two big banks looking for hsbc's pivot to asia

and whether nomira can shake off the archegos debacle. plus, china is this -- is expected to use on food delivery giant. >> for a look at ways turning on, sophie kamaruddin is in hong kong. >> the nikkei's gaining some ground. nomura on watch. plus canon on the radar. shares jumping nearly 3%. also watching toyota. and dg bees are rising on the boj decision today. we will watch for any clues on bond buying from the boj for the month of may. doubted security says there is low chance of a tweak being

made. on the end, that 108 level looming. in south korea, first quarter gdp report came in better than expected. consumption is starting to rebound. but a worsening virus outbreak remains a key risk. the yuan is on a stronger footing. while we have the kospi with little changes morning after a three-day rise. moving out of the open in sydney. watch reaction to mna news and macquarrie making a bigger deal. we are seeing shares jumped nearly 6% in steel this morning. helping the ac hundred -- asq

100 1% today. industrial metals are on a tear. this valley is causing record profits. we've seen the hot rally extend across the metal complex. it is pushing the gauge to 28 2013 hi. there is a looming risk of china derailing this run on potential measures to cool prices. also want to put a spotlight on food prices. still concern around inflation peers with crops like wheat, soybeans, and corn pushing the gauge towards a nine-year high. this would certainly be a headache for policymakers in places like india, where they have pledged to supply free rice and wheat to those hardest hit from the pandemic. shery: wheat, corn, soybeans all training and volatile territory. let's get more with mark cranfield. commodities on a tear right now.

do bind to the super cycle narrative? >> even if there is going to be a super cycle, as sophie was saying, there are authorities around the world getting jittery about this whole thing and they want to cool down in the near term. all of this rising commodities, whether it is in metals or agriculture, it all feeds into inflation. right now it does not sue any major central bank draft too much evidence -- too much of a spike in inflation. everyone wants to keep short-term interest rates low. most central banks have committed to doing so for a long time. if you get a spike in the inflation readouts, that could easily upset your bond markets. you can get the kind of taper tantrum's no central bank wants to see. we got a bit of a taste of it in the first quarter when the treasury market became a little unruly. there's no waste -- wave major central bank will want to deal with the fallout in the bond market at a sign the economic

recovery is in the early stages. you can expect a hear more from governments around the world, possibly even some action to cool down some of these short-term spikes. if it is a super cycle, there's not much they can do in the long run. global demand and the shortage of supply will determine where prices go. but they could step in and make it a little easier in the near term, at least. paul: mark, it will be a big week for big tech. first quarter earnings coming out. jan equities, what asset classes -- beyond equities, what assets klatt -- asset classes could be impacted? >> it depends on the direction of the earnings. we will see if there are earnings miss things -- missing's. we did see one or the two major tech companies, if we see them disappointing, that could affect u.s. treasuries and the u.s.

dollar, could even spread to the corporate bond market, as well. it is a sentiment driven thing. we've seen before when some of the major companies find their results to be not well received by the market, that dampens the effect on everyone's risk asset moves. it's more to do with, will it hit the buoyant move -- mood we have seen from the first part of the year investors? certainly you cannot ignore this week. you have microsoft, facebook, apple, alphabet all coming out within the space of a few days. each one has the ability to move the market beyond just the equities space. everyone will watch very closely. paul: mark cranfield there. you can follow more on this story and all the day's trading on our markets live blog. you can find that market rundown

in one click and analysis from bloomberg's expert editors. you can find out what is affecting your investment's right now. fitch has downgraded its credit rating for china to the lowest investment grade. -- this comes after they delayed reporting a 2020 result. speculation that huarong could re-structure debt is adding volatility to credit markets. jonathan,huorong downgraded by fitch. are we close to the end of the story and what is the risk of contagion deco >> -- contagion? >> we think we are closer to the end of the story. huarong's contagion risk is very

real. it is one of the big four amc's income -- in china. it is a systemically important institution. we say there is a likelihood the pboc will allow them to enter a messy default's -- default scenario. -- will not allow them to enter a messy default scenario. if it did, the yuan would have to medicine effects and therefore we do not think -- would have tremendous effects we do not think china wants to see that happen. paul: considering the government is there to play backstop, what sort of impact has the saga had on the broader appetite of dollar bonds in china. >> spreads have widened in both

the investment-grade side as well as the high you side. we think that actually creates a buying opportunity for china related credit or broadly asia related credit. where fundamentals are still sound. yet valuations are still meaningfully wider than u.s. counterparts or european counterparts. we think that what is happening with huarong is crating a buying opportunity for the rest of the market. shery: do investors want to get right now in china we have learned how uncertain and opaque the market still is. when it comes to them announcing they will not publish their earnings again, that announcement was only in chinese, very short, we've not seen it in the right, official statement, either. it was not in the hong kong exchange.

will investors become a bit pickier when trying to get into the chinese market? >> yes. that is always been the case when analyzing chinese credits that there are some issuers with very opaque structures and therefore, we want to avoid those kinds of issuers. but when it comes to a systemically important financial institution, it enjoys very strong state support. the big part of the credit rating is coming from the state support. huarong is in cleanup mode right now. credit cleanup mode. we think they will likely emerge -- they are trying to emerge with a cleaner balance sheet. they will try to aim for some

non-core asset disposal going forward. some of the assets that have accumulated under the previous management, which we know that that did not end so well. we think they are trying to write to the ship right now. it is hard to analyze some issuers'opaque structures. and so many of the other local kinds of debt that we need to be careful about. shery: here in the u.s. we have the foi see meeting this week. anything investor should watch out for? >> the market is treating this as not much of a -- unlikely to be a market moving event. we think that the changes we will see from the last meeting are going to be incremental.

we think the fed will acknowledge the economy has become incrementally better than what they observed in march. marshall's when they -- march was when the gdp forecast was massively increased. this time, the adjustments will be more like tweaks. we do not think they will announce tapering of quantitative easing at this meeting. maybe down the road towards the second half of this year. certainly no rate hikes. we think that it is not really going to be much of a market moving event. more acknowledging the economy has continued to improve but that there will be some risk on margin to be aware of, such as the potential for coded resurgence, given what we have seen around the globe. i think the fed -- the first

conference is going to be an interesting part. i think jay powell will be grilled on when he is going to be starting going back on monetary policy. we will watch out for that. we will look at those -- shery: we will look at those glutes -- clues as always. still, hsbc to watch the coming hour. what to expect. but up next, how singapore got itself to the top of covid's resilience ranking and how the virus is being handled around the world. this is bloomberg. ♪

>> this is "daybreak: asia." the philippines is the latest nation to record more than one million

confirmed coronavirus infections. officials are assessing whether to extend a month down lockdown in the mattila -- in the mattila -- in the manila region. the philippines has the second-highest covid-19 caseload in southeast asia after indonesia. they are peeing commission has sued astrazeneca, -- the european commission has sued astrazeneca saying they have not delivered their doses in a timely fashion. the revised downward its projections for shipments in its quarter. and eu official says the aim of this suit is to contain the amount of vaccine doses. the head of the wto has urged healthy nations to export more of a 19 vaccines. more than one billion shots have been administered locally. for -- forager million of those

have been given to people in america, the u.k., and the eu. >> vaccine nationalism and inequity does not work. i encourage those countries that are not sharing or exporting to do so as quickly as possible. it would great if we get the u.k. in the u.s. able to export some of the vaccines they have made. >> global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i'm vonnie quinn. this is bloomberg. shery: joe biden says the u.s. will share it supply of astrazeneca covid vaccine with other countries, including india, which is facing the world's largest search of infections. we are tracking covid resiliency. on that ranking the u.s. has climbed to 17th place. as more of its population gets vaccinated. our asia managing editor joins

us. what a difference those vaccines are making here in the u.s. what else stood out to you becca -- out to you? >> i think it is made a difference, definitely, when you're looking between the countries that have contain the virus but are also doing well on vaccinations, which is why we saw singapore rise to the top, dethroning new zealand for the first time in five months since we have been doing this ranking. because they have not only got rid of the virus and been very effective at that, but they are also doubling down and really focusing on vaccinations, which, as we know, is proving key to opening up, particularly to international travel. on the flipside of vaccinations, some countries, france, july, -- chile not vaccinating fast

enough as we see the spirits become concerning. -- the experience become concerning. paul: what about some other notable moves echo i'm picking particularly in terms of india? >> india fell quite significantly. we saw them down 10 places to 30th and april. it is hardly surprising when you see them reporting more than 300,000 new cases a day. global records. a slight uptake in the deaths we are seeing in india, as well. they are trying to avoid a national lockdown there, which would weigh on their ranking even further, limiting the activities of business and people's freedom of movement. there are lockdowns in place and some of the biggest cities, which also would contribute to that decline. coupled with that shortage of vaccines, which is quite astounding in india when you

think that they are home to the world's largest vaccine manufacturer. paul: emma o'brien in beijing. we will stay on the story. johns hopkins bloomberg school of public health joshua feinstein spoke on bloomberg surveillance about the disparity in the covid situation around the world. in the global risk of the crisis in india. >> places that do not have access to vaccine in sufficient quantities are facing these variants that are so severe, they are having the worst pandemic at right now. yet, at the same time, places with access to vaccines are starting to return a little bit to normal in our thinking about doing things like european vacations. shery: if we do not to handle on -- >> if we do not get a handle on covid-19, from a contagion point of view, if we don't get a

handle on covid in india and other emerging markets, can they reinfected west? >> it is a human rights and human health catastrophe to have this many cases and deaths. the potential of suffering in india is staggering if you think about the situation where they do not have oxygen, where the hospitals are filled. it is compelling the world to jump in and help and to think about the important -- importance of making sure in the short-term they get the resources they need and in the very near term there is enough vaccine. absolutely, you're right. it puts the world at risk. >> it is a tragic situation, but i know that her point is that she is talking about the variations we could see. is that the real threat here? if we get everything dealt with in the western world and then the virus mutates in a way that

overcomes even the inoculations we have received? >> you are correct. this is humanity against the virus. if the virus finds a way in india or another country to impact people or to evade the vaccine, then everybody on the planet is at risk. we really have many good reasons to fight coronavirus around the world, even if it is no longer the immediate threat it was in our own street. >> every focus back in on the u.s., the vaccination rollout is obvious he going incredibly well. -- obviously going incredibly well. we have gotten them out -- the majority of adults with the first shot. 5 million people are not going back for a second shot. is a growing concern? >> i do not think it is a

growing concern, per se, but it is part of the messaging in a lot of places to make sure you get the second shot. when i volunteer with the health department i am always talking about the importance of the second shot. just because people do not get it right when they were originally scheduled does not mean they will not get it. people who struggle in a few weeks later, i see them. i think it is part of the overall vaccine challenge, to help people get that second shot and be as protected as they can be. >> dr., there is a growing sense demand for vaccinations, even the first shot, is waning? how concerning is that? >> i don't think it's so much that demand is waning. i think we always knew that the excess demand that was there, the people banging on the pharmacy door, that those people would get vaccinated. that is what is happening now. you are left with other people who are ready to be vaccinated, some of them, but not seeking out every dose right away.

and people really need to hear more or have more convenient access. this shift was always going to happen. it came a little sooner because we had so many vaccines faster than we anticipated. this is going to require not just a rush of vaccines but patience, outreach, listening, -- shery: they also discussed a

proposed waiver of certain provisions of the wto's intellectual property rights. 20 more to come on daybreak asia. this is -- 20 more to come on daybreak asia. this is bloomberg.

shery: pick a look at the commodities rally. the metals index at an eight year high. copper prices surging. the highest level since 2011 on reopening bets. backwardation between the december 2021 and 2022 contract suggesting we could see more gains, not to mention the iron ore surge has been an 11 year high. much of the world's diet surging to highs we have not seen since 2013. wheat, corn, soybeans in overbroad territory. bad crop weather in key

producing countries. too much dryness in the u.s. all affecting prices. plenty more to come. this is bloomberg. ♪

shery: china has expanded its antitrust crackdown beyond? ma -- beyond jack ma's empire. avr's fell in u.s. trading after the news. we'll be watching how the stock will move when markets open in hong kong. let's cross to our china tech reporter. what do we know so far? ? we know china -- >> we know that china antitrust watchdog announced an investigation. the regulators made it clear in a statement they have kicked off

the process a wild back. -- a while back. meituan has been criticized for years. paul: how serious is this investigation? >> this is an ongoing investigation. for now, we don't have much details yet. based on china's antitrust law, if they are found guilty, it could phase a penalty somewhere between 1% to 10% of its annual revenue. that could be as much as the 1.7 billion. in the case of alibaba, the

company got a 2 billion fine. shery: what is the implication for the broader tech sector? who could be next? >> that is a $1 billion question. it is a clear sign beijing has tried to crackdown against the tech giants. to start with, alibaba and e-commerce. and now meituan. i think we will have to wait and see. paul: our china tech reporter in hong kong. we have been up and running for a little over 30 minutes in sydney, tokyo and seoul. markets showing a little weakness. sophie is taking a closer look at home,. sophie: we are seeing marginal

losses across the board. the aipac index lower for the first day. in sydney, banks and gold miners wing the most on the asx 200. the latest gauge of consumer confidence taking a hit in light of the perth lockdown. over in seoul, the kospi is snapping a three-day gains. this passes concerns over a worsening outbreak of the virus in south korea cured may be overshadowing the first quarter gdp report. we are seeing some fluctuations in tokyo. the nikkei 225 pretty much steady. checking in on paper. jumping earlier by as much as 11%. it is to develop a tv -- any the battery that does not require rare materials. a company gaining ground after a

$2.7 billion unsolicited bid. check out bingo climbing this morning. this with a company a great -- agreeing to buy it for 1.8 million dollars. a mixed bag for this space after the carmaker maintained its good delivery guidance. lg chem gaining some ground shery: here. we are watching the jacob -- the bank of japan meeting. we're not expecting any policy changes even as the renewed state of emergency threatens to slow the economic recovery. could this tilt the boj toward more stimulus? kathleen hays is here with a preview. really making at tough for the boj to forecast what the economic outlook would look like, right? kathleen: the state of emergency is serious. it is making people a lot more worried about an economy that was looking like it is getting

better. exports are picking up. look at the virus chart. viruses are surging again. the government has declared the third state of emergency. it is not just tokyo and osaka. it is kyoto. accounting for a third of japanese economic activity and l point. -- and output. it is being extended early three months before the olympic start. making that look like it is what is canceling them. this could hurt small businesses. let's look at a terminal chart. people are getting worried about what could happen to first quarter gdp. you can see those first two strong quarters of growth after one bad one. second quarter of last year it down 29%. two gains of 29 -- 23%.

this idea that because the u.s. and china are doing better, there will be better exports, stronger japanese economy. that is fading fast. some people are thinking -- are talking about a double dip recession. a research institute says forget a v-shaped recovery. this is what the boj faces. they cannot do much more. they have already done a lot. it certainly makes people wonder today. paul: what does the boj have left in terms of ammunition? what might we expect to hear from them? kathleen: let's member what happened in march. they did tweak policy to make it sustainable. it is a long-term marathon. it is not a race to get inflation to 2%. last week, the governor of the

boj told the parliament they are not in a position to consider entering the bond purchases or thinking about hiking rates given where the economy is now. people familiar told our bloomberg news team in tokyo they are giving up on the idea you will get this fast recovery as the u.s. and china power ahead and buy more exports. of course, they are also making their first formal statement according to people who are familiar with the debate ahead of the meeting today. that they will not hit their 2% inflation target. they are expected to say that they will have inflation by fiscal year 2023 and at around 1%. what people are getting a sense of is how much more negative the doj is. will they make good on something else they said last month? if we do go to negative rates, they could have an impact.

once again, the game is all about not just fiscal policy and the special lending programs. it is about the government speeding up the vaccine process. this is the big question for the japanese outlook. it will be interesting to see and hear what kind of questions the governor gets today at the press conference after the policy decision a couple of hours from now. paul: global economics and policy editor kathleen hays. you can turn to your bloomberg for more on the boj decision. you can go to tliv to get commentaries and analysis from bloomberg expert editors. we have a big interview coming up. we'll be speaking with the stock exchange of thailand's president as the nation grapples with a flareup in covid cases. up next a securities agent looks ahead at results as a bank

targets cross savings. this is bloomberg. ♪

vonnie: this is daybreak: asia. president biden's top economic advisor has confirmed a capital gains tax hike will only affect those earning more than a million dollars a year. the national economic council director says the move would affect only a tiny share of american households. on wednesday, biden is expected

to unveil his american families plan. featuring measures funded in part by higher taxes on the wealthy. the u.s. will send up to 60 million doses of astrazeneca's vaccine abroad as president biden pivots to ramp-up assistance globally. the president promised his full support to helping india as they battle the world's largest surge in infections. it is not clear how many doses would be sent. the white house says the astrazeneca vaccine is unneeded in the u.s. portfolio. it has been manufacturing millions of doses in the u.s. under a federal contract. french president emmanuel macron has told vladimir putin he has concerns about the health of jailed opposition figure alexei navalny. president macron says he told president putin over the phone moscow must respect alexei navalny's fundamental rights.

egypt says it is eager to reach an amenable settlement tied to the container vessel that blocked the suez canal. the canal authority has claimed $960 million in damages from the owner of the vessel. the authority claims it missed out on a 15 million dollars in transit fees each day. 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. paul: japan's biggest brokerage reports results on tuesday. investors are going to be keen to learn more about the extent of the damage from the archegos debacle. for more on this, we are joined by our chief north asia

correspondent, stephen engle in hong kong. what do we know about the transactions? stephen: today is going to be two sides of the story. one is the business is doing well with trading volumes and stock market rallies lifting the numbers in the third quarter. they are already 100 20% of consensus by the full year. that is the one side of the story. the other side is much more interesting to investors. to know the exposure and the damage in the fourth quarter that is going to come from nomura;s exposure to archegos. already it has said it is likely to see a $2 billion claim from an unnamed client. it raises lots of questions because nomura is not the only

one. it raises a lot of questions about their internal risk control as well as their taking on a global risk and their expertise or lack thereof of taking on global risk beyond what has been a slowing japanese market. lots of questions here for christopher wilcox who will take over as the new cohead, the co-ceo. he was previously head of jp morgan asset management. he has 15 years of experience at citigroup. he is vital tested and has the experience. we will see if he can bring credibility back. nomura is trying to crack into the biggies on wall street. shery: when it comes to the

numbers, what are we expecting in the full-year results? stephen: nine months, they were 120% of consensus for net income. we are seeing that income at a 19 year high through those nine months of 2.9 billion u.s. dollars. the full-year earnings, we are likely to see a net income of ¥256 billion despite what we might see more details with these losses from. positive rallies in the equities markets in the united states as well as japan. high trading volumes helping the brokerage unit benefiting the business and boosting retail products at the retail unit. in the third quarter, we saw profits rise 130% to asset management up 41%. they are doing something right. we will have to have details. at 3:00 p.m. local time, what is

going to be the extent of those losses. they built a pretty strong buffer through the first nine months. shery: stephen engle in hong kong, our chief north asian correspondent. you can turn to your bloomberg for more on the earnings. go to tliv for analysis. let's turn to another earnings report from hsbc. it is their first quarter earnings on tuesday after having set up plans in february to shift more of its business to asia as part of a pipit to where most of its operations are based. i am joined by the ceo of securities in hong kong. always great having you on. what are you expecting from the earnings? >> i think the consensus that the earnings will rise 3.6% from last year.

this is not a blowout earnings. the bank has shifted several executives to hong kong and tried to concentrate. instead of europe and america. we do not expect any sharp improvement in the share price because the bank has been a disappointment for the last few years. it is returning to normal. shery: the relocation of senior executives, how smoothly will that go? >> first, there are some risks at the local level like the senior executive in charge of

asia does not like the idea of becoming the fourth person in command in asia instead of number one in asia. there will be some resistance. it shows the bank is really trying to make things right instead of -- there will be some resistance. i think we will overcome the problems. paul: it is going to be a heavy focus on cost-cutting. where do you expect to see the cuts being the deepest? >> i think what they will do, i think they will selloff their

retail businesses in america because they have been hemorrhaging money for a long time. all of the euro accounts for 20% of the profits. the account for more than half of expenses. expenses in europe are particularly high. i would expect them to make further cuts in europe where the salary expenses, are much higher in asia. paul: where do you see the best opportunities for growth for hsbc and how long you think it is going to take to get revenues back to pre-covid levels? >> that is a difficult task. they already have -- they will concentrate on wealth management like ubs.

there are so many billionaires and trillion errors in asia in particular. -- and trillionaires in asia in particular. the problem is, everybody is going for the same business. what are your advantages over the competitors like ubs, voa, morgan stanley and goldman sachs? hsbc does not have a strong investment banking business. the trillion errors, billionaires -- trillionaires , billionaires, if you are not strong in doing deals in investment banking, it leaves you in a weak position and at a

disadvantage. shery: we are hearing the china huarong will be delaying again. what message will this send to the markets? >> the case is the worst case of corruption in the finance industry ever since china's opening up. it is much worse than other previous corruption cases. something like a ¥1.7 trillion. right now, they have 500 million in u.s. dollars. they defaulted on it. extend the repayment. and then tried to figure out how

to cough up. i think because it is so big they cannot just walk away. they will have to ask the major banks and insurance companies and other asset companies to share. what you see is really a lack of oversight and control over these major financial institutions. they have so many assets under their belt. of course, this is the first time we have a corrupt official being executed. this is quite a big mess for china to handle. shery: geo -- paul: geo

securities joining us. we'll be speaking to the hsbc cfo after we break those numbers. that will be at 2:40 p.m. in sydney. this is bloomberg. ♪

shery: there is a quick check of the latest headlines.

tesla posted a seventh consecutive quarter profit off strong demand for its model three sedan. it left its multi-your outlook for 50% growth in deliveries unchanged. beating an estimate. revenue improved to 74% in the first quarter. the results failed to impress investors with shares down in after hours trading. a deal worth $515 million over five years. it will allow the company to turn and adjusted profit. it estimates the sale will save it $100 million a year in operating expenses. lyft joins uber in exiting autonomous research. >> this is doubling down on that part of our strategy so we are

focused on the piece we do. the name of our program we have been doing. it has been successful. toyota's all that opportunity. -- toyota saul that opportunity. this allows us to bring the technology to the platform for our customers. paul: we are seeing weakness any the equities market open in the asia. for a closer look of what to watch, let's get to sophie. sophie: we have the index at a technical crossroads. key on the monopoly probe. we have a chinese battery maker on watch ahead of results due on tuesday. the pboc governor said managing inflation. watching the taiwanese dollar after it crossed 28 for the first time since 1997.

credit ebersole says it will outperform asian peers. paul: that is it from daybreak asia. standby for bloomberg markets: china open up next. this is bloomberg. ♪ so you're a small business,

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tom: it is 9:00 a.m. in beijing and shanghai. bochum to bloomberg markets china open. i'm tom mackenzie. david: good morning. i'm david ingles. we are coming down to the open of trades. china and