♪ haidi: good morning. we are counting down to asia's major market opens. shery: i am in new york, welcome to "bloomberg daybreak: asia," haidi: we hear exclusively from the boston fed president who says more time is needed to assess the recovery.

china is singled out for everything from human rights abuses to actions on taiwan. plus, moderna says an early booster trial shows promise against very lint -- new strains, but is concerned about india. shery: we are getting budweiser asia first quarter net income coming in now, $233 million. that is slightly higher -- actually, slightly higher than expectations of $223 million. first quarter revenue, also higher than expected at 1.6 $3 billion. expectation was around $1.5 billion. this adjusted, 52.8 percent gross margin. they seem to be having a very good first quarter.

the caveat is very easy comparisons in china given the pandemic luster. they did have new brands they started selling in march and had a marquee rollout in february in south korea, so that might have happened with numbers, now beating expectations with revenue $1.63 billion net income $233 million. the risk is always out there given beer sales have been hurt in south korea and we have sporadic virus spread as well. haidi: let's look at the market open. sophie kamaruddin, what are you watching as we get major markets back online today? sophie: aside from bud asia results, we get updates from nintendo. and we have now reporting earlier -- nab reporting

earlier. in malaysia, no changes is expected for a fifth straight meeting. the head of the boj, boj trading above 109 while nikkei futures are on the downside in chicago with japan online along with south korea and china this thursday. pulling up a chart on the terminal, we would likely see a muted start at the open on mainland markets, volatility with stocks trading at two-month lows while the csi 200 is off 12%, hitting the peak back in february. switching the chart on the terminal, markets were weighing inflation expectations, and i want you to see what is going on with treasuries. we have seen a climb on the two-year and five-year, as people see commodities as a hedge against inflation at $100

oil. haidi: when it comes to inflation, fed officials are playing down concerns. as the recovery continues, boston fed president eric rosengren tells us it is too early to talk about tapering. he spoke exclusively to bloomberg's kathleen hays about economic signs he is looking for. eric: we are expecting in the next few months better employment results in very good gdp reports as well. so far, we have one gdp report and one employment report that have improved. i think we need to have a little more time to make sure label markets are indeed moving as rapidly as we are hoping. we continue to make progress on a sustainable 2% inflation rate. once we make more progress, it then becomes time to start talking about when we should

taper. but it is probably premature at this point. we still only have relatively few data series. i am very confident the economy is likely to improve, but our new monetary operating policy and framework is focused on outcomes, not just forecasts. and today, we have had limited outcomes because we are just getting out of the pandemic. kathleen: it does still seem like an optimistic message. when you look at the number of jobs created so far, look at the first report, but it in with the february report and then add adp jobs, we have got over 2 million jobs in about two months. a lot of people are expecting another one million jobs. can we at least understand that at this point, for the federal reserve, it is not a question you're going to taper and you are just waiting for enough strong signals to give you that green light. and you are saying, it could happen in the second half?

eric: we are going to be tapering if it continues to be clear that the economy is going to move at the pace most forecasters have. most private-sector forecast expect a strong recovery. the last employment report was quite strong. i would highlight though, that we still have and i'm the employment rate -- we still have an unemployment rate right now if 6%. our labor market was badly hit by the pandemic. we have a long way to go, so we need a number of successive months with very strong labor report to make up for what was a significant shock. kathleen: as the fed gets ready to think about tapering, you are going to have to think about the speed you treasure taper resources the speed you taper mortgage-backed securities.

with a strong housing market, what would you be in favor of? eric: the housing market is much stronger than many anticipated, and has come out of the pandemic strongly. housing prices have been going up rapidly, rapidly enough that we want to make sure that they don't rise too quickly. so as we start thinking about tapering, thinking about how we taper and whether there is a difference between treasury security and government-backed mortgage-backed securities is certainly something the committee should have a discussion about. kathleen: given the strength of the housing market and the fact that maybe you don't need to have bond purchases that keep mortgage rates down, does this argue for you to start tapering mortgage-backed securities first? eric: no discussions have occurred, so it is premature to speculate on exactly which direction we will go. but i completely agree with your

assessment that the housing market is strong right now and prices have been going up, so the need for buying mortgage-backed securities at the pace we have been doing probably is not as needed as it was earlier in the recovery. shery: federal reserve bank of boston president eric rosengren. our next test says, although as and the earnings will reach a high this year, rates and policy will be more important for equity sentiment in the near term. joining us is kate moore, head of thematic strategy for the global team at blackrock. let a show you what inflation is doing right now because this dtv chart on the bloomberg shows the commodities rally is sending headline inflation siren ira. what does this mean for policy and i will that translate to the market? kate: great question.

one thing i have been focused on is the tension between current policy and the market right now. one reason why we have anemic overall investment participant tatian, particularly by institutional investors -- participation, particularly by institutional investors, is that they are waiting for fed change the guidance. we want a multitude of data points before we can be confident that the trend of growth and inflation is going in the direction they want and consistent with the change in policy. at the same time, we have never seen this level of strength in terms of economic momentum in the u.s. and in many parts of the world. we think it is really important we start to hear a change in tone from the fed, to start talking about liquidity, tapering asset purchases if not discussion about right rate increases, in order that the fed

is not behind the ball and we don't create a bounce in real asset. shery: when it comes to investing in the meantime, since there is so much economic momentum, is it time to focus on cyclicals and what happens to the growth sectors that were all the rage last year? kate: this is one of the great frustrations of the first four months of this year, that despite many of the growth companies, the pandemic winners or secular growers in technology, or companies that have great technology let forms putting up outstanding earnings numbers, in many cases beating expectations and raising guidance, they have not been reported. in fact, we have seen multiples derate many of these companies and we have seen investors rotate away from some of these

winters into cyclicals and more value-oriented stocks. there is a place in portfolios for both. because w have this very constructive view on economic growth we are going to see through the balance of 2021 and through 2022, we want to own cyclical exposures but be mindful of investing in areas of the market, travel and leisure stuff for example, that maybe pricing in a full return to 2019 levels. at we don't want to step away wholesale from technology names we think will be putting up strong cash flows and strong earnings for many quarters to come. so we are taking a barbell approach -- some cyclical exposure and continuing to own cyclical growers. shery: -- haidi: is there more value in growth right now, if i could put it that way, in cross value with tech? when you look at 2019 compared

to what next year' is portfolio might look like, what new sectors are you more constructive on, given disruption and dislocation the pandemic has played? kate: that is a really clever way to put it, that we are starting to see more value emerge in traditional parts of growth style, and by that, just that valuations have come down, that they are relatively attractive compared to other parts of the market, and especially if we are right, that we are going to see meaningful, and during growth for these companies. that is going to be an additional support. but you asian matters. it especially matters longer-term, but it matters less over shorter-term. we end up seeing that valuation as smaller power in your returns if you are doing something more tactical, college a couple quarters or even a year. so we want to be conscious of

the multiples in the market but don't want to be so fixated that we don't invest in strong growth opportunities. this is all a way to say that you really have to get to know the company, business model, balance sheet and management team when you are making these judgments. shery: kate moore joining us from blackrock. breaking news -- we are getting the latest numbers from cacao, the south korean messaging app reporting first-quarter profit that beat average analyst estimates, profit 155th .7 -- 155.7 billion yuan, beating estimates. consolidated net, much higher than estimates of around 134 billion won. cacao has captured over $11

billion during the month and saw stocks split, a large share placement of $450 million and the potential slump of its fintech business. right now, first-quarter earnings are beating expectations. haidi: -- shery: still ahead, the outlook for india. but up next, g7 ministers have a laundry list that is expected to irritate the government in beijing as they call out issues in hong kong, taiwan and shenzhen. this is bloomberg. ♪

♪ vonnie: this is "daybreak asia."

vaccines are part of the effort to increase global supply by the u.s. and address shortages in were nations. reports say the biden administration will actively take art in negotiations over a waiver at wto and encourage other countries to back it. shares of several drugmakers fell on the news. europe vaccine doses dumping by 7 million doses this month with new deliveries from china and russia. various manufacturers are helping to reopen a new economy struggling to reopen from last year's. slump. as of tuesday -- last year's slump. thailand's central bank cap its benchmark rate unchanged for an eighth straight meeting while warning the forecast for a canonic recovery is written

resurgence of covid cases -- is threatened by a resurgence of covid cases. the government voted wednesday to sustain measures to boost the economy such as cash handout. the brazil central bank raised rates for a second straight meeting, 75 basis points up to 3.5%. policymakers made the move to counter a rise in consumer prices that surged above their targets a link to a four-year high. they revealed plans for partial removal of stimulus and talked about another 75 basis point hike at their next meeting. global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie quinn. this is bloomberg. ♪ shery: top diplomats from g-7 nations laid out a laundry list

of concerns that will get under china's skin. they called out alleged human rights abuses, beijing actions on taiwan and incursions in cyberspace. markets coanchor tom kenzie joins us from aging. sounds like china was a central focus of the g7 communique? tom: foreign ministers also took a shot at russia, that was a big part of the statement as well, what they called an attempt to undermine democracy with the treatment of opposition leader alexi navalny, anti-putin later alexei navalny. but china was a major focus of the g7 leaders in the communique. what they called on china to do was participate constructively in a rules-based international system. but it was the specificity of the communique on issues like human rights abuses that will come as you say, likely ire beijing. we are still waiting for the

response the communique called out human rights abuses as they characterize them in to bet and another place, reeducation camps and reports of labor and forced sterilization. again, it was because this was so specific on human rights issues, that is unusual in these communiques. it is also link the groundwork, this communique, by the ministers and u.s. secretary of state before this g7 meeting next month in england, in cornwall, where president biden will take part in the g7 meeting. part of the emphasis for the president will be corralling his allies in the g7 to take a firmer line on china on a number of issues. germany, france, italy, the key european members of the g7 are not fully lined yet this u.s. push. but this communique shows that they are certainly getting there, and it is very different from what you have seen from the europeans even a few months ago.

haidi: in the meantime, europe is taking steps to push back against china. how is that playing out? tom: that is right, there is a two-pronged approach that came out of brussels in the past 24 hours. one was an attempt and set of strategies to ensure state-backed companies, namely those were china, cannot undermine their european rivals. the other line of this was an attempt again to assure europe can reshore production around semiconductors and chips and said they were naive to outsource those two taiwan and south korea. these are longer-term initiatives by brussels, but a big focus is shoring up the european union and putting in protections, building what they described as strategic autonomy. we heard from the commissioner on what she described as

intrusive rules to stop state-bank firms from undercutting eu rivals. take a listen. >> it is not fair on european workers or consumers as subsidies drive best companies out of the market. it has to stop. we will act aggressively when that is needed to keep our economies working well. tom: now, we also heard from the eu trade commissioner on this china-eu trade investment treaty. it is an investment treaty that was negotiated over seven years. the europeans are saying this is not significantly in doubt. what they are nodding to is that it is unlikely to be ratified unless china removes sanctions on members of the european parliament. china put those sanctions in as retaliation for european sanctions on chinese officials for alleged human rights abuses. this was an investment treaty

negotiated over seven years, brussel now saying -- brussels now saying it is very unlikely to be ratified unless china removes those sections. haidi: markets coanchor tom mackenzie in beijing. still more to come on "daybreak asia." this is bloomberg. ♪

♪ shery: japan coming back from golden week holidays. futures under pressure now, .3% as we continue to see the japanese ye holick -- japanese yen holding a three week low against the u.s. dollar. march meetings coming up in about 30 minutes. counting down to the start of trading in tokyo and seoul, stories we are watching today, the japan government looking to extend a state of emergency for

tokyo, osaka and to prefectures as we continue to see increasing virus cases, according to a newspaper. the osaka governor says it will be difficult to loosen restrictions. on the corporate front, nintendo on watch after it said it will increase output switched to 30 million units this fiscal year, according to nikkei. we have data with vehicle sales for april do later today. in south korea, plenty more corporate earnings due today, major ones including cjenm, dragon, bjs. they will hold a meeting to review the housing market and chip and car industries. and the bank of korea will be selling 2.3 trillion won in two-year bonds. haidi: let's check business flash headlines. tesla is about to lose a

corporate partner seen as a key to partner. the company says compliance will save three headed $60 million, roughly two thirds of which will have gone to tesla. tesla increased sales or credits to carmakers that need help complying with stricter emissions standards. asia's third bank on asset beat estimates on first quarter profits, just over three quarters of a billy dollars for the first quarter, rising 18% from the same period last year. it is the second major bank to post earnings. the national australian bank's first half your profit doubled as the bank unwound bad debt and strengthening recovery in the economy. it rose $2.6 billion u.s. in the six months that ended in march. it doubled dividends $.60 a

share from a year ago. coming up later, ross mcewan joins bloomberg markets. this is bloomberg. ♪ ♪ ♪ look, if your wireless carrier was a guy you'd leave him tomorrow. not very flexible. not great at saving. you deserve better... xfinity mobile. now they have unlimited for just $30 a month... $30. and they're number one in customer satisfaction. his number... delete it. i'm deleting it. so, break free from the big three. xfinity internet customers, switch to xfinity mobile and get unlimited with 5g included for $30 on the nations fastest, most reliable network.

>> this is daybreak: asia. spacex landing the fifth test flight of the starship prototype, marking a new milestone in elon musk's mission to spars. it went 10:00 meters -- 10 km before its descent. bill and melinda gates, the

holding company cascade investment sent shares to melissa gates this week in several counties. they are divorcing, but say they will remain involved in the foundation. a chairman has sent a warning that popular training apps like robin hood exploit features that keep people trading. he also said transactions routed through a few big players threatens competition. donald trump remains banned from posting on facebook. the oversight board announced the ruling, while recommending a

review in six months. a statement was issued by the former president. trump also remains banned on twitter. global news 24 hours a day on air and on bloomberg quicktake powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie quinn. this is bloomberg. ♪ haidi: covid booster shots against virus variants, one booster is an additional shot of the moderna vaccine. the other is against the african strain. >> as this data is coming out, we are seeing strains in india that are even more ominous, so how would that do against the

booster? will we need another booster? we are going to be stuck in this battle for some time, but we have a weapon to deal with it. >> michelle joins us now. how much do we know how this will work? not everyone got the modernity shot? how does this work? michelle:: it is a great question. this is a mid-stage trial, a proof of concept to see if it's possible to get the variant under control. no details have been ruled out. the trials will happen that should answer those questions. one of the shots is tailored for the south african variant, the other is a booster of the mrna

vaccine from the dharna. studies have -- from the dharna -- moderna. the regular infection is not anything like the vaccine itself. it will cross over different vaccinations, but there will be more studies on that specific issue. haidi: michelle, do we know if you will get a whole new vaccine , or a third booster shot of the one you already had? michelle: we don't have information on how the different shots will work out. in the trials people got the original vaccine and were reenrolled in this follow-on study, so it was consistent, but we don't know exactly how it

will work. it was targeted specifically to the vaccine variant, as opposed to just the third dose of the original vaccine, but again, we will have more information with the study. haidi: what are the aspects of the latest approach? michelle: that means some people will need three, instead of two, but we want one, not having to come back every year, get two, so asking them to come back three times and figuring out that, it is just another hurdle. it also reduces the supply. we don't have vaccine for the entire world, so if some people have gotten the two, if they will get a third before others get a first.

that is increased inequity when it comes to vaccinations, something the world is worried about. haidi: we have seen other pharmaceuticals under pressure, this after the u.s. said they would be backing the proposal to waive intellectual property protection for the shots. how significant is this, given we are talking boosters and vaccine, and this takes a lot of investment. how do pharmaceuticals fare after this? michelle: it has taken phenomenal investment, but a lot came from the government, european governments, the u.s., others, so some of this intellectual property is owned by the people who did the investment, the taxpayers, so the wto will take up this issue.

the u.s. is saying they support the waiver of intellectual property so we can get more production going. the pharmaceutical companies or sink that is not the issue, the -- part saying -- are saying that is not the issue. they are saying we don't have enough manufacturing capacity, and they're willing to work with others, but don't want to give up their intellectual property. everyone will have to be in agreement, so it will be a long haul. haidi: michelle cortez with the latest. let's look at the markets. sophie: a muted start in asia and japan, the government considering the extension of the emergency, and that the second

vaccine will get approval in japan. aussie bonds climbing ahead from a speech on monetary policy in the time of covid, and also buying bonds today. let's check out what is going elsewhere. commodity prices and focus. wti losing steam, holding that mark, with prices elevated, helping with outperformance, holding above that level this morning. we see more room to run for the australian dollar. we see u.s. breakevens in focus, the five-year around 2008

highs. we are seeing bankers check of that, including the rbnz, that inflation is a temporary factor, and rates will stay lower for longer to benefit the economy. >> yes, one person saying it is premature to taper bond buying purchases. he spoke to kathleen hays about how the data has a long wait to go. >> we are expecting the we get better employment reports and gdp reports, but so far we have one gdp report and one employment report that are good, so i think we need to have more time to make sure labor markets are improving as we hope they will, and continue to make

progress on a sustainable 2% inflation rate. once we make more progress, it becomes the time to talk about when we should taper, but probably premature at this point. we only had some data. i am confident that economy will improve, but our operating monetary policy framework is focus on outcomes, not just forecasts, and today, we have had limited outcomes. kathleen: it does seem like an optimistic message, and when you look at the jobs created so far, what we saw in that first report with the february report and adp jobs, that is two jobs in two months, and they are expecting another one million jobs. this is a question of, we we

taper? you will taper, and you just waiting for the strong signals to give you the green light, hey, the economy is good. it could happen in the second half? >> if it becomes clear that the economy improves that the pace that forecasters have, and expecting strong growth, most private-sector forecasts are showing that, but the last employment report was strong. we still have an unemployment rate, right now, of 6% in the labor force participation rate is quite low, and you combine those two features, our labor market is badly hit by the epidemic -- pandemic. we need a number of successes months with strong reports to make of the progress for a significant shock. kathleen: as the fed thinks

about tapering, you have to think about the speed you taper treasuries, versus mortgage-backed securities. we have a strong housing market now. what argue in favor of doing? >> the housing market is stronger than anticipated. it has come out of the pandemic strongly. housing prices have been going up rapidly, rapidly enough to make sure they don't rise too quickly. so we think about tapering, how we taper, and whether there is a difference between treasury securities and government-backed /mortgage-backed securities is something the committee should have a discussion about. kathleen: you spent many years at the fed, doing a lot of research here, and you are watching it, you said.

you said we could see financial instability? >> as we get into the recovery further, as we have low interest rates, it will be important to be vigilant on what sectors are starting to show too much by dylan's -- exuberance, so i would already say there are areas in markets where the pricing is fully priced, and i do have concerns of people take on substantial risk, as the economy tends to do well. that is something we will have to be very vigilant about and think carefully about how monetary policies are impacting financial stability. kathleen: with the massive stimulus in place giving a push, one person said that rates might need to rise to make sure the economy doesn't overheat. janet yellen walked back her

remarks later, but clearly that is what she sees. with so many things, how can you be sure that it will only be temporary? >> we can never be sure, but if you look at private-sector forecasts, the blue-tip forecasts, today, i had a chart showing what forecasters expect for inflation this year and next year, and the averages 2.3% this year, 2% next year, so why higher this year in glover next year? because they are likely to be temporary affects that will cause it to be higher this year. people start spending in await they don't have to be socially-distanced, so there is likely to be increased to demands at the same time there

are supply constraint, but we are not expecting that to persist into next year. shery: that was eric rosengren speaking to kathleen hays. we will get more views across asia with our guest, along with our guest from t. rowe price. plus, the rbis says swift action is needed to counter the virus surge in india. this is bloomberg. ♪

haidi: india's central bank announced new measures, pledging to inject $8 billion in liquidity against the second wave of the coronavirus. the comments were made in an unscheduled address wednesday. we are joined now by radhika rao at dbs bank in singapore. great to have you. this has confronted every economy, to what extent can monetary policy alleviate the pain caused by the pandemic ongoing? radhika: what happens is monetary policy is more nimble

and we can take action faster. most of the central banks cut rates/tier, including the indian central bank. this time, the banks have been saying asset quality pressures are building. the second wave has been more hurtful than the first with significant humanitarian costs. the central bank has provided a provision of the covid phonebook to provide--loan book to provide support and extend some restructuring facilities to those most affected. these businesses were not in trouble going into this second wave. they have been given this extension, where they can

discuss the terms with the respective banks, and other measures as well. the idea is why there is no room to cut rates in nonconventional measures, liquidity providing ample provisions, that is the part the central bank is exploring this time. haidi: are you expecting localized lockdowns? it is now left to the states, so will there be increasing pressure on the businesses services sector, in terms of the banks, loan quality as well? radhika: the responses decentralized. states are taking the lead role. most started with curfews, then lockdowns, and now they are progressively restricting

movement on weekdays. a shop may be open for apart, but otherwise not allowed to function. that said, mining and construction and production are all functioning, depending on where they are situated and other factors. you will see a differentiated response, but it is getting progressively tighter, meaning it might take a deeper economic bite as compared to what was assumed in the past. we are looking at modest downside risks to our full-year growth forecast. everybody now is watching a quarter on quarter contraction. haidi: this chart on the

bloomberg showing how growth behave that way during the pandemic, then stabilizing, but surging to new highs, and with supply chain dislocations in the ongoing tragedy of the crisis, will this be an issue? radhika: the country went into a national lockdown. this time, you are seeing movement, interstate, it depends between states, but the restrictions are not as tight as they were last time around. it will involve some supply chain shortages and price pressures building. oil is one part of the problem,

but steel come basic metals, they have resume quite sharply, and that is another part of whether manufacturers will feel a squeeze in terms of the margins because of rising input prices. if they could resolve it, but at some point, it will be passed on to the end consumer. not many of them did that, but more businesses need a hand this time around, and that is why the central bank has come in, and the message is clear, that they stand ready to do more, because certainly the caseload is still at a global high on a daily

basis, and not showing signs, and at the same time you have other statements. we are watching closely. at this time, there is no alarm, but it will be in one way on the banks. haidi: great to have you with us. taking minutes of the doj meeting from the march -- boj march policy meeting, saying they will continue funding businesses. we knew the bank of japan expected to miss the price goal as inflation continues. there was no change and they released the latest projections when it comes to those inflation expectations as well, and currently parts of japan considering an extension of that latest date of emergency, another drag on growth and pride

pressures. this is bloomberg. ♪ more still to come. this is bloomberg. ♪ ♪

>> a quick check of the business flash headlines. uber with continued growth in the delivery business, spending

hitting $20 billion, revenue declining from reclassifying workers in the u.k. it also abandoned it self-driving car business, and said business could be bigger from food delivery. gm reported stronger than expected growth, despite the chip shortage weighing on output. it posted an adjusted profit of $2.25 billion, beating estimates on robust demand. gm expects earnings to hit the higher range of $10 billion to $11 billion. the recall of treadmill products as u.s. regulators have issued a warning and launched an investigation after dozens of injuries and the death of a child were reported. balaton -- the company has

apologized for not acting sooner. tokyo is looking like a mix to start to trading today in asia. futures up. this is bloomberg. ♪

>> welcome to "bloomberg daybreak: asia". >> asia's major markets have open. top stories, japan and chinese mainland, the holidays, in tech shares weighing on yours markets. >> the boston fed president

spoke recently, saying more time is needed to assess the recovery. and, showing promise against vera lent covid -- covid variants, but there are new strains out of india. let's take a look at stocks this morning. sophie: stops to the upside, higher on the nikkei 225. we are watching asian vaccine makers, with the quickening rollout, and japan considering an extension of the emergency. moderna may get approval in japan. nintendo results do today. reaction to one mining company. boj meeting minutes, agreeing.

you have bonds higher. south korea, one player reporting a solid quarter, but downside moves for the kospi in a week was shortselling resumed. one research institute predicting the benchmark could cross 4000, if korea is upgraded to the msci world index. back above 1125 to the dollar. switching out to check the open in australia, that on the back of results. a downgraded morgan stanley and credit suisse. a incident rising 1% --anz rising 1%, and the index is higher. aussie bonds up, as we wait for

his speech from the bank governor. we are seeing oil lose steam, brent and wti under pressure. some dislocation in oil markets, and the defendant -- uneven recovery, with oil prices turning cheaper. cash treasuries opening in asia for the first time this week, after a four-day game, the 10 year lower, and commodities have also been rising. as chinese markets open, the offshore yuan at that level. that is the first after the long break for mainland markets, which saw tourists take 240

million domestic trips. shery: after that best monthly performance since january. let's turn deeper into the markets. my next guest says the key benefits will be north asia and singapore. let's bring in the head of asia-pacific microstrategy, state street global markets, thank you for joining us. these economies are strong. is that what you're looking at? >> yes. tech in particular. we are in the midst of a pandemic, and what it means for demand, product demand, various sectors. we think that is tech. it is an overriding beneficiary of this work from home trend we have seen, and that will

probably not go away. when you think about the importance of pharmaceuticals, and there are areas, major pharmaceuticals exporters, the sector, region, north asia, singapore, but an economy along the same lines is north asia -- as north asia, why it will outperform in the domestic demand consumption picture rises with three openings. in the midst of country restrictions, these markets should do well. they should continue to do well, because they export with the rest of the world once comes of this is a key region to focus on. shery: how have they fared when it comes to earnings? what does the earnings picture look like so far? >> it has been a good quarter.

when you think about expectations of earnings, we hear concerns about the level of equity markets, the levels they have reason to come looking overvalued and stretched, and when you combine those earnings going forward, expectations of earnings are rising as the economy and growth open and pick up, and we are still in the midst of an extremely accommodative policy environment, not only central banks of the stronger reaction from government, and this is often the thing that is overlooked. fiscal policy joined in the midst of this covid pandemic, we getting a double whammy in policy reaction, extremely

accommodative policy and significant government spending, giving all boats i lift, and that's a lift, and we maintain it on that. shery: you have mentioned potential factors that could ruin the party, but haven't, so does that mean the liquidity globally has risk rates more elevated? >> yes. we have had potential hurdles and headwinds. you mentioned this in some of the unusual things that happened in the equity markets and the acceleration in political risks, so it still hangs around markets, but markets are looking through the geopolitical risks, not downplaying it, but the

tailwind throughout the global economy, not throughout the globe, there are winners and losers, but there are sufficient tailwinds, including the policy reactions, and with that means for economic activity going forward. i mean strong fiscal spending in the u.s. would provide a strong balance for infrastructure spend. there is real economic activity driven by the changes in policy in the last 12 months or so, and because of that, risk should not be discounted completely, but they will not derail markets, so equity markets look well supported, traditional risk place, the search for yield, it is still there and foremost in the minds of investors moving forward. shery: are you constructed from greater china, both from the

perspective of regulatory headwinds, corrections, and we are seeing the recovery take places well? >> i mentioned how positive we are in north asia. china is a story in itself. it is marketplace more control by central authorities. it is clear in the numbers, credit numbers in particular, we see china moving towards deleveraging, not that they want to slow the economy down, but there concerned about debt and market stability within china, so that implies credit growth in the domestic economy will slow, also financial assets, but the

currency, this push towards outflows is a strong signal the authorities want to slow down currency appreciation, so this financial markets in china have to be looked at differently than north asia, not a bad story for china, but there seems to be an engineered slow down from central authorities in terms of policy. shery: always great to have you with us. one stock we are watching in the sydney session, lackluster, after three days of gains. some declines, even after the double unwinding from bad debt provisions, and the economy driving cash earnings to $2.6 billion, a beat on estimates, but not having priced in that better expected number four nab.

join me for that interview later. let's get to first word headlines with vonnie quinn. vonnie: top g7 diplomats have singled out china after two days of talks in london, calling on beijing to engage constructively in the rules-based system, while alleging human rights abuses in two regions and supporting involvement in the who. leaders meet next month and the u.k. the u.k. will lift a ban on international leisure travel, but only to the handful of locations. destinations could include malta, iceland, and israel. testing will be mandatory. airline say it is too costly unlikely to put people off traveling. the philippines could see its vaccine supply jumping 7 million

doses with new deliveries from china and russia and covax deliveries. it is counting on manufacturers on reopening after last year slump. the government has inoculated 2 million people with 1.7 million doses at their first doses. global news 24 hours a day on air and on bloomberg quicktake powered by more than 2700 journalists and analysts in more than 120 countries. i and vonnie quinn. this is bloomberg. ♪ shery: still ahead, the outlook for the hong kong property market. we speak with one head of research. next, our exclusive chat with eric rosengren. this is bloomberg. ♪

shery: samsung heavy seeing its

worst day in three years, after an announcement to sell shares, and the loss that expanded due to the covid-19 pandemic, and an increase in prices of steel plates. it is now down more than 50% -- 15%. they were reduced to cut at hsbc. the rise in prices of commodities leading to concerns about inflation, but fed officials playing down worries about u.s. prices in the same it is unlikely to get out of control. eric rosengren says they need more time to gauge the economic recovery. eric rosengren: we are expecting

as the next few months roll out that we will get better employment and gdp reports. so far, was gdp report and was employment report that is good, so we need more time to to be sure labor markets are improving rapidly, and we are making progress on a sustainable 2% inflation rate. once we make more progress, it becomes time to talk about when we taper, but it is premature at this point. we only have several data series. i am competent the economy is likely to improve, but our new operating monetary policy framework is focused on outcomes, not just forecasts, and today, -- as of today, we have had limited outcomes.

kathleen: it still seems like an optimistic message. if you look at the jobs created, that first report, the february report, adp jobs, people were expecting one million jobs. can we understand at this point for the federal reserve, maybe it is an obvious question, are we going to taper? and you're waiting for the signals to give you the green light in your saying hey, the economy is good, it could happen in the second half? >> we will taper if it becomes clear that the economy continues to the pace most forecasters have. i'm expecting a strong economic recovery. most private-sector forecast are projecting that. i would highlight that we still have an unemployment rate, at least now, that 6%, and a labor

force participation rate that is low, and you combine those two features, the labor market was badly hit by the pandemic, so we have a long way to go, and need to have success of months with strong labor reports to make up the progress for what was a significant shock. kathleen: you said the fed will have to think about the speed you taper treasuries, versus mortgage-backed securities. what would you be in favor of doing right now? eric rosengren: the housing market is stronger than people anticipated and has come out of the pandemic strongly. housing prices have been going up rapidly, so rapidly we don't want them to rise to quickly, so as we think about tapering, how we taper, and if there is a

difference between treasury securities and government-backed securities is something the committee should have a discussion about. kathleen: given the strength of the housing market and the fact you don't need bond purchases to keep rates down, does this argue for tapering the mortgage backed securities first? eric rosengren: no discussion has occurred at this point, so it is premature to speculate on the direction we will go, but i agree with your assessment that the housing market is strong and prices have been going up, so the need for buying mortgage-backed securities at the pace we have been doing is probably not as needed as it was earlier in the recovery. shery: that was eric rosengren speaking the kathleen hays earlier. coming up next, oil taking a breather.

there is no stopping bets on $100 crude. we will look at that next. this is bloomberg. ♪

>> let's check the commodities complex. crude, elevated prices, and expectation of higher prices. traders looking at a bumpy recovery in demand. there are rising concerns about india, the third biggest importer. you can see the drop for brent, down 0.70%, as we watch what has been a strong rally this year, the reflationary recovery story

and major economies. soft commodities in particular, corn, industrial commodities like iron ore and lumber, crude, across-the-board commodity surge as large parts of the economy reopen. according to the bloomberg spot index, there is an increase of 70%. let's talk about commodities, including ones we don't focus on. our process that reporter is here. extending that record rally. topping that level for the first time. what is driving the demand? >> hi, it is not often we talk about lumber, but we even have tiktok videos about high prices. one of the biggest drivers is

homebuilding, the boom in america. it has diminished the amount of lumber available, diminishing some capacity because the pandemic, so lumber prices are at extraordinary highs, fitting in with the idea that many places in the world are coming out of the pandemic, the recession, and people want to do things again, manufacturing, so a lot of it is coming out of that pandemic trend. haidi: lumber is an everyday conversation in the u.s.. it is expensive with lumber prices now. it is not just lumber. it is almost and everything rally, right? corn, coffee, multi-year highs? >> absolutely.

it is a jumping market at the moment. what traders are looking at is the weather for the corn, coffee . they are constantly checking the weather. major growing regions in south america, including brazil, the number two exporter, there has been a drought, and at the moment, one survey said 88% of brazil's corn fields were available at levels below needed level for healthy corny growth, which is -- corn growth, which is concerning. it is so dire, supply subtype, that brazil imported corn to use for feed grain, so it is a dire situation on the weather front in south america, also the u.s. and europe was so it is painting

a pretty grim picture. shery: i call this in almost everything rally, because there seems to be something when it comes to the commodities space rally, and that is cocoa. we are seeing everything shooting up in recent weeks. when it comes to cocoa beans, it has fallen into negative territory. the reason is interesting. we talk about china demand. china has been buying everything, grains, oil, but not so much cocoa beans. china doesn't like chocolate? what is going on? haidi: as the pandemic worsens,

that's expected to for chocolate. lockdowns, i guess people are not going to supermarkets to supermarkets the pickup chocolate supplies, meaning additional stockpiles, pushing that level down. we have had good weather for coca growers, adding to oversupply concerns, but people are optimistic when it comes to consumer names, chocolate makers badly beaten down, some bargains you could be into, if you want your chocolate fix. shery: i'm doing my part to take down some of that supply. all chocolate lovers here, especially on those heart, difficult, stressful days, chocolate is the way to go. coming up, moderna booster shots show early positive results against a new strain. we will have the latest on that

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>> this is "daybreak: asia." spacex stuck a landing on the fit test flight, marking a new milestone in the mission to say humans to mars. it took off from the launch facility in texas, reaching an altitude of 10 kilometers, before its descent. donald trump remains banned

from facebook. the oversight board announced the ruling, recommending a review of it in six months. the president call the decision "a total disgrace and embarrassment to our country." trump remains banned on 20 or. hiking -- on twitter. hiking the interest rate was made in a move to counter prices , now at a four-year high, repeating plans for a partial removal estimates in brazil, and promising another key rate hike at the next meeting. they raised at 75 bps to 3.5%. in eighth straight meeting, warning recovery is threatened

by the resurgence in covid-19, is china is dealing with its biggest wave since it began. the tiling government voted on measures with cash handouts and spending subsidies. global news 24 hours a day on air and on bloomberg quicktake powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie quinn. this is bloomberg. ♪ >> galaxy digital holdings is making a purchase in a transaction valued at $1.2 billion. one person spoke about the acquisition. >> first, we become the second-largest custodian, $43 billion, second only to coinbase , to become a major player in the custodian space. they cover 400 institutional accounts we don't speak to, a bigger global footprint, so we

are able to cross sell our expected tease -- expertise to their clients, and the same to our client base, a great synergies. far more importantly, we built this company where we invested in all things blockchain, traded and participated on top of blockchain. we are going to build the infrastructure of the future, and to me, that is the most exciting part. >> i have to ask you about this run up in dogecoin,, but my guest said elon musk likes it because he thinks it is a joke. what do you make of this recent rally? >> listen, you have to give credit where credit is due, most of them have worked themselves

in the crypto market into a frenzy. elon musk and mark cuban have been part of it. we are in a world where because of what chairman powell is doing the money supply in the basement -- debasement of fiat, people are doing all sorts of things, collectibles are skyrocketing. what is driving that is also driving crypto. there is a young group of people , almost a nihilistic sense to what they do, almost as a joke, this community, i think it is dangerous. there is no institutional buy into this. this is a retail frenzy. they built an $80 billion market cap on this meme. there is no development in the doge ecosystem, but it is a pure

bet. we wrote a report about it as a coin yesterday. galaxy digital wrote a report on doge, that toshi something about the success. >> it sounds like you're worried about a couple of bubbles. you are hesitant to go short, but would pop the bubble. what should investors be looking for in terms of signs of a downturn? >> i don't think crypto is in a bubble. there are some all coins going crazy -- alt coins going crazy. some people take profits who have made money and bitcoin, so all of a sudden they have a lot of wealth, and there like, what is next? you have been retail-driven

rallies in the the coin. they have no use at all, but become the hot asset going up in price, and they will come down in price. >> mike nova garnets -- michael speaking to bloomberg. a mixed picture. let's go back to sophie. sophie: a mixed picture, gaining ground after the golden week break, rising on the nikkei 225, also with tech. sidney snapping a three-day gain, banks, despite stronger cash profits, it is a low base, and the doubling of the dividend payout. financials on the kospi

climbing, offputting the drop in chipmakers, samsung heavy falling on the earnings miss and share sale plan. stocks jumping in south korea and japan. by july 19 high in tokyo, this with a supportive backdrop for steel prices, according to citigroup. i went to quickly mention holdings here rising to a high, with a forecast for an annual profit, despite concerns around the slow recovery in japan. checking bond markets. jgb's ahead of the bond buying, gaining ground. you can see more support for jgb's, if the virus emergency is extended. australian bonds climbing.

treasuries with a four-day game, back above that level. we see that climb. inflation expectations have fueled the commodities rally, but oil taking a breather at that level. haidi: sophie kamaruddin. let's get the latest on the vaccine effort. moderna says booster shots are showing early promise against variants. one booster is a low-dose shop of its existing vaccine. the other is aversion against the south african strain. one person says the race against variants is unlikely to end soon. >> just as this data comes out,

we are seeing strains in india that are even more ominous than south africa, so the question is how will that be with the boosters. people who think we were stuck in this battle for a long time, we will be stuck in this battle for a long time, but at least we have a weapon to deal with it. haidi: robert, this battle seems to involve multiple types of weapons. what do we know about how effective these boosters are. do you have them in addition to the vaccines, or would it be better if you had the original moderna vaccine, for example? >> the short answer is we know none of that. it is all new. with the companies are testing, including pfizer and moderna, a variety of different booster shots, a third additional shop to provide protection if these

variants emerge as they mutate and get better at evading the immune system. we found some testing that says both booster shots, including which is a low-dose shot, had enhanced antibodies for the strains, brazil, and the strain in south africa, and both boosters showed antibodies, so that it's a good sign and what people hoped, but more studies need to be done and we will have to wait and see if and when we will need these boosters. it is a situation that is moving fast and not totally clear now. haidi: we have confirmation washington will be supporting the proposal to waive

intellectual property rights on covid vaccinations at the wto. this is what the executive vice president of merck had to tell us yesterday about this move. take a listen. >> it is challenging to manufacture vaccines. to start with scratch with a voluntary license, someone who hasn't it before, has a new formulation, it is risky and is hard to do. the approach being taken is to engage as much of the world that vaccine manufacturers, and involve experienced people in the process. haidi: robert, is it surprising that they would be opposed to this waiver, but do they have a point? robert: we just need many, many more millions of doses of vaccine, and fast. countries like the u.s. are

getting vaccinated at a quick rate, but large portions of the world are far behind. the faster we can vaccinate people and get more doses out, the better chance we will have to slowing down these variants, so there is pressure to get these out as soon as possible, and why they are doing this added step, but as said, some of the biggest constraints are patents, shortages of supplies and expertise, so even though a patent is an early step, you need a factory capable of making hundreds of millions of doses. haidi: sure. that was our health care reported. next, less than one hour from chinese markets opening. we will have a preview of what is next. this is bloomberg. ♪

>> china's mainland markets coming online in the next hour. let's get a preview with our chief china markets correspondent. it was all about the risk surrounding it, so where can we

expect markets to pick up? >> good morning. what we are looking at is the tourism numbers over the holiday , a reminder that china was off for five days, a strong holiday. we just got numbers that trips made over that period was higher than last year, so tourism and other stocks that could move thursday. the box office numbers were higher than a year earlier, although a citigroup report said it was below market expectations . there were no blockbusters. before the holiday, there was some expectation that casinos in macau would get a boost, but that was slightly disappointing. we do have some saying, ubs and

goldman, saying you should buys chinese stocks in may, but there really isn't anything to drive the market higher at the moment. haidi: what about things that could drive the market lower. is there a sense that the regulatory clouds are starting to clear a little bit? a lot analysts say that correction could be done from that perspective. >> yes, there is an expectation that the lack of news suggests the worst can be over for now. we have bonds trading, the perpetual bond around $.70, so there is concern around that, and broadly what does it mean for state owned enterprises in china? will they support these

companies, is there systemic risks, is liquidity tightening, is that bad for stockmarkets? that depends on turnover and trading volumes. if you look at the gauge of chinese companies in hong kong, it is not doing well. a key member to watch is that it is testing its 200-day moving average. the last time it dipped below that level, that was mid 2018, and that year, stocks fell into a bear market and it was a painful market for chinese stocks, generally, so we will watch to see if the index holds above that for the week. haidi: hong kong's economy posted its fastest growth in the first quarter, though uneven and

led by exports, the city is still optimistic. the level for properties so to a low level. let's speak with our guests more about this. great to have you. are you optimistic the turnaround or potential turnaround for the hong kong economy more broadly could make commercial property more attractive now? >> yes, the historical cycle, with the gdp has been doing has been highly correlated with those in hong kong. we saw that gdp rebounded significantly in the first quarter. it will be good news for the market, but how it sees those sectors, it depends on how this

country will stabilize and enhance the criteria, the relaxation of socializing, covid rules in the city. haidi: let's break it down into commercial office space and residential. i want to start off with office space. how disruptive with the pandemic and work from home trend to for property in hong kong, particularly as you see major tenants in singapore giving up a lot of their physical footprint because of the prolonged or permanent expectation that work from home will be here to stay? >> for the work from home exercise, it is different in different cities, but for a city like hong kong, we have short commuting time, and relatively

small residential units, so what we hear from the ground is that the work from home exercise is not entirely feasible for all staff here. indeed, some of the clients have mentioned that they may reconsider moving back to the office. another thing is the covid situation created an opportunity for those companies to adjust. yes, part of the staff will be working from home, but it is crucial to have it spaced out

with careful distance to ensure safety. so the net-network from home impact will be small from the economic impact. haidi: you mentioned the historical background of what happens when growth returns to hong kong, and how that correlates to the property market, but given we have at the hader grip -- tighter grip from beijing on the city, not to mention the pandemic and so forth, does that relate to what is happening on the ground, expecting when you are that investment appetite to return? >> certainly. the data, the first quarter, there is a slight rebound in sentiment. what we are hearing is that institutional investors have been raising money, and this

year we are having more interest coming back to the investment market, although they need time for those properties. right now, we do see some downsizing, but it is hard to pinpoint whether it is a political effect or economic effect. to be honest, the office sector weakness has emerged with the second half of 2018, with the trade tensions, then 2019, protests, and last year, covid, so it is a combination of impacts, and we usually seen some downsizing and relocation. when the economy comes back up, we will see that significant rebound. haidi: the head of research for

hong kong and the greater bay area, thank you. we are seeing the topix rallying above 2% of the best days since march 1. the nikkei higher, energy, financials, industrial stops -- stocks. the kospi is up zero point 50%. we are trending towards a 3000 level. the asx under pressure, after the aussie dollar keeps trading at the range, with kiwi stocks falling for a second consecutive session. more to come on "daybreak: asia." this is bloomberg. ♪

>> a quick check of the business flash headlines. investors are underestimating the ability of the industry to grow, barracks gold making that statement in this time of rising environmental status. >> our industry has always been floated by the rising gold price, since the turn-of-the-century, so it is an

important time. the real tension is between fund managers wanting to get more from investments in the industry generally, and the importance of reinvesting in a consumptive industry, and begin balancing that pie. >> southeast asia's third biggest bank by assessments beat with lower impairments in a jump in fee income, reporting profits rising 18% from the last report last year. it is the second of singapore's major banks report this quarter. profit doubled for the bank as there is a strengthening recovery in the economy, cash earnings through march, and the bank doubling its dividend from a year ago.

don't miss our exclusive interview coming up, ross mcewen on bloomberg markets. also, we will discuss the economic outlook across apec. this is bloomberg. ♪

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♪ >> this is my kitchen table and also my filing system. over much of the past three decades, i have been an investor. the highest calling of mankind i thought was private equity and then i started interviewing. i have learned and doing my interviews how leaders make it to the top. >> i asked him how much she wanted, and i did not negotiate with them, i did no due diligence. , and how they stay there. >>