shery: welcome to "daybreak: asia." i am shery ahn in new york. haidi: i am haidi stroud-watts in sydney. . we are counting down to the major market opens. president biden is likely to continue trump's china investment ban, ignoring wall street's call to roll back restrictions. the world looks to china for vaccine support as india's inability to deliver on supply

comes amid record covid cases. the fed sounds a warning that a rising appetite for risk is stretching valuations and creating vulnerabilities in the financial system. shery: we do have breaking news. we are getting balance of payment numbers out of south korea for the month of march. we are seeing the current accounts widening to $7.82 billion year on year. this from a revised $7.9 billion in the previous month. when it comes to the goods and trade, also widening to $7.9 billion. this would be also widening from the previous month. revised of $5.9 billion. when it comes to the current account surplus, sites are narrowing to $7.82 billion from the previous month. we have seen pretty strong export numbers in south korea.

although, economists warned the global chip shortage could weigh on korean exports from here on out. let's turn to sophie kamaruddin to see the set up across asia. sophie: mckay futures in chicago, little changed. when it comes to extending the virus emergency. as we wrap up the first week of may, geopolitics and earnings very much top of mind. we had report cards from ocbc and mccoury --macquarie. we will get updates from japan airlines and alb or india, as the outlook for india's economy is coming under pressure. the imf saying it will revise its view on the gdp growth in july. when it comes to commodities, that has been key. in the spotlight this week, helping push the aussie dollar higher for a fourth week, as we see iron ore pop $200 a ton on spot prices. iron ore futures in singapore trading above 198. this as we see a rally across

commodities from copper to iron ore. in the fx base, keeping an eye on the offshore you on. it is holding its biggest jump since march 10, even as the fight and administration spoke of being tough on china. we saw the dollar slipped to a two-week low. that helped push emerging currencies toward the high of the year. as we wait on i -- on china's trade figures, pulling up a chart. we will look at the commodity priced pickups. we are seeing a rise in input costs to the mainland and import in pmi which indicates price pressures are feeding and through the system. that could be exported to the rest of the world. haidi: all right. the biden administration is likely to maintain pressure on china by preserving limits on u.s. investments on chinese companies. pres. biden: the chinese are eating our lunch. they are eating our lunch economically. they are investing hundreds of billions of dollars in research and development.

that is why right now, if it keeps going that way, they will only electric car market in the world. we've got to compete. haidi: we did see china's biggest tech firms touching session lows. for more, i want to bring in tom mackenzie who is with us out of beijing rate we are getting lines setting up expectations to the u.s. secretary of state antony blinken's speech of the un security council on friday, saying he is expected to defend a rules-based order at the one -- u.n.. is this a continuation of maintaining pressure on beijing? one of the few points of consistency from the previous administration. tom: absolutely. when it comes to china policy, the continuity is pretty clear between the biden administration and the trump administration, even if the rhetoric and the dealings between officials is arguably very different. according to sources, our

sources in washington, six sources, they are the biden administration that they will continue the ban on u.s. investments in certain chinese companies. but decision has not been made. the talks are ongoing. according to our sources, this is the likely outcome. just a reminder, this was initially put in place by the trump administration in november. targeting what the pentagon says are chinese companies that have links to the chinese military. prominently companies including chinese -- china's big three telco firms. but also the oil and gas producers. and the band was on u.s. investments in those companies in a process to delist them from the exchanges in the u.s. are sources say the biden administration will look to continue that ban. that is despite pushback, might

just from china which threatened legal action on companies that cooperated, but also wall street who lobbied for removal of these restrictions. biden knows that he will get broad support in congress for this policy, if they continue it. the other question going forward is the timeframe for investors. they had until may 27 to reduce their transactions in these companies. november 11 is when they have to be fully divested. you are absolutely right. this is another area where the biden administration is maintaining that pressure on china. shery: could we see progress on the trade front? there is talks about the u.s. and china having a discussion soon. tom: it does seem like this is going to happen if not in the next female -- few weeks, than the next few months. a report saying these talks between the key principles on the trade front will happen soon. that debt -- that dovetails with the comments we heard from the trade representatives speaking, saying she expects to restart

those conversations with her chinese counterparts. she has not yet spoken to the lead on trade here in terms of the deal. but she does expect that to happen at some point in the near future. on the question of tariffs, she said look, that will depend on the outcome of the conversation. she said she wanted to take the phase one trade deal that was negotiated by the trump administration and build on that because she believes in policy continuity. there's going to be focused on whether those tariffs will be removed if not in entirety, then and phases. as a reminder, the u.s. has tariffs on $335 billion on chinese goods annually. shery: tom mackenzie there in beijing. our next guest says that increasing sign on u.s. tensions could affect mobile companies caught up in efforts to reconfigure supply chains. let's bring in christopher smart, chief global strategist. great to have you with us. how much of these u.s.-china

tensions have already been priced into the markets? christopher: it is a reminder that we have spent all of our time before we heard of covid-19 focused on these u.s.-china tensions, on the tariffs, and on the supply chain disruptions. clearly none of that went away. even as the u.s. is emerging from the pandemic. these are issues that will be front and center. companies all along have been sensitive to the fact that they need to think about their supply chains, think about maybe diversifying their supply chains. but i think overall, most of the restrictions will be focused -- well, are the tariffs that are brought and in place. the restrictions in terms of more specific kinds of trade are focused around technology, duly use goods. that is why i think you are seeing this extension of the trump era ban on companies that have links to the chinese

military. i will say one more thing. the biden approach, while similar in terms of putting pressure on china, i think this time is also trying to work with japan, with europe, and other allies to present a concerted front that is not aimed necessarily at punishing china, but aimed at making progress. the real test of the current decisions will be whether it yields anything new in the months ahead. shery: does that mitigate the risk for perception for the markets? christopher: i'm not sure this is a central risk for markets right now. markets are still so driven by covid, by monetary policy, and by fiscal policy, particularly in the u.s., but also in europe and china. these are risks that may be sector specific. , if tariffs come back on. if companies are delisted, that is very important for those.

i'm not sure if it is the level of something that will change the trajectory of the market by itself. shery: when it comes to the rerouting of the supply chains, this will increase costs for companies, right? are you pressing that into your calculations right now, or has that already been priced in? i ask this at a time when we are continuing to see global chip shortages. christopher: i think everybody has to price that in. i think those are the risks that have been building over the last couple of years. certainly remain in place. i think markets have come to the conclusion, even before the election, that the biden administration was not going to rush to take tarasoff. i think companies had shifted their production out of china for cost reasons. and i think it really is a company by company decision. having said that, the u.s.-china economic relationship is the

largest bilateral economic relationship in the world in terms of trade and investment. that is not one to go away. there will still be large flows of money going back and forth, even if certain sectors are disrupted. haidi: when you take a look at the structural direction of the u.s. dollar, some of the comments from the fed that we have been getting is that they may or may not clarify the future when it comes to monetary policy going forward. how do you assess the risk for emerging markets? christopher: the biggest risk for emerging markets is a sharp rise in u.s. yields. power view ad bearings is that there is obviously a secular recovery, that things are relating, we will see short-term inflation numbers next week. we may get some that spooked the market with the -- with estimates at 3.5% right now. i think the biggest risk for emerging markets is that that data starts to speak bond yields

higher, which will drive more money coming into the u.s. generally out of emerging markets, stronger dollar makes dollar nominated debts heavier to bear. i think generally the view would be is that this is something that takes place relatively gradually over the next year or two and emerging markets will, as they themselves recover, hold our own. there are a lot of one-off risks in places like turkey or ukraine or peru for local reasons. overall, we think they can weather the reflation of the global economy. haidi: we are hearing, and it is not surprising, but the development of the extension of how long it might take for international borders to reopen. we are hearing from our government ministers this morning saying it could be mid-2022. some people saying by the end of 2022 that we will finally see international borders reopen.

australia is a different case. in one sense. but what does this say broadly about the disruption to the flow of people globally and the way the consumption happens as well as the notion of globalization, if this aspect is not going to be normalized post pandemic for some time to come? christopher: i think that is a great question. i think it deserves more attention than it has been getting. as there has been so much excitement and euphoria in the u.s. because vaccinations have been rolling out, and it seems as if the economy is opening up to a strong summer and fall, and europe is coming in behind, think we are closely watching things like the news out of india, south africa, other countries. it is a fresh reminder that normal is not going to be fully normal until there is this global people, not just goods. as we look at various transportation industries, if

you are in the business of moving things, business is booming. if you are in the business of moving people, we have a long way to go. that will have some impact on reshaping demand, particularly tourism, has the talent he, that sort of thing. haidi: great to have you with us. christopher smart, strategist we will look at the world's increasing reliance on china for vaccines and how for some nations, it remains the only option. the peterson institute for economics will be joining us to talk about gender inequality and the policies playing out in china and how it is impacting demographics in the broader economy. this is bloomberg. ♪ is bloomberg. ♪

vonnie: this is "daybreak: asia." i am. -- vonnie quinn.

the group issued a list of grievances including over taiwan and beijing's treatment of uighurs. the chinese foreign ministry urged western nations to stop interfering in other country's national effect -- national affairs. beijing halted an economic dialogue with camera and blasted new zealand over accusations of human rights abuses. the u.s. is boosting security assistance to ukraine to help counter what it calls russia's aggressive and destabilizing actions. secretary of state's's antony blinken met with ukraine president and called on moscow to end attempts to force troops to ukraine's border. blinken says the tripped served as a u.s. commitment to its partnership with ukraine. the pentagon says the fall of the u.s.-backed government is in place in afghanistan and it is now inevitable when american stroop -- american troops withdraw. while a resurgence to the

taliban is not a foregone conclusion, the u.s. is looking at ways to continue training forces in third country locations. president biden set a date of september 11 for ending america's longest war. tokyo olympic athletes will be able to receive vaccine doses donated by pfizer and beyond tech, this as organizers go ahead with preparations for the delayed against. in a statement, the drugmakers say that they sign an agreement for the shot. the first delivery is expected at the end of the month. the ioc has not made vaccinations mandatory for athletes in order to participate in the games. global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries. i'm vonnie quinn. this is bloomberg. haidi: the world appears more reliant on chinese shots, despite concerns about their effectiveness. demand is expected to rise further if the who authorizes shots from biontech.

our senior editor jodi schneider joins us. first off, what is causing the increase and reliance on china's vaccines? partly i'm imagining this has to do with the situation in india. jodi: that's right. with india having a record 412,000 infections in the past day alone, that has really changed the focus. they were going to be a vaccine provider to the world. and now they are in a situation where they are just overcome with a number of covid infections. taking them out of the equation for the short run, and no one else has really stepped up to take the place that china has been able to really take and that global sense. the u.s. wants to now be sending more vaccines around the world. it has asked -- the biden administration has said it will support a waiver to allow that

to happen. that takes a long time. it has to go through the wto, the wto, they have to negotiate with others and angela merkel's government said they are not going to support that waiver. in the meantime, china looks to be the only vaccine that a lot of places are going to get. places as varied as a guay, senegal, and indonesia. there are questions about the effectiveness of the chinese vaccines, given they have not had the same regulatory scrutiny as the western vaccines. at the same time, these countries that have big need to be vaccinated and few options are turning increasingly to china. shery: could this change if the move to wave patterns on covid-19 vaccines takes hold of the wto? jodi: it could change. but it will take a while. the wto fight could take months, if there is a real fight. there may well be. this is not something that

someone will be able to step on very quickly. as we see with india, when you have a player like that come out of that equation, there is not really anything to fill it in the short run. for now, it looks like china will be able to maintain that position in the short run. although that could change in coming months. haidi: we know that in india, not only are we seeing over 400,000 daily cases. they are struggling to keep track of the variants as well. are there any epidemiological models that show us when we could see a peak? jodi: there has been they modeling, and it is a little bit a full in that it could be in may. at the same time, you have a very small percentage of the population vaccinated. and that is really what has allowed the u.s. to get ahead of not only covid cases, but of those variants.

when you have more people vaccinated and vaccinated across the country, that really helps. that is not the case in india where they are holding at 5% of the population being vaccinated. again, the record number of deaths, we have seen on 300,000 cases in the last 15 days. i'm sorry, we have seen 300,000 cases for the past 15 days every day, 21 million total. even if that declines, even if it hits the peak, that is still a large number. the real question is the variants and how quickly they are spreading. shery: jodi schneider in new york with the latest on the pandemic. still ahead, we will speak to big businesses in india about the latest virus waive. the ceo of consumer products joins us exclusively. this is bloomberg. ♪

haidi: airbus ceo expects china to become a legitimate rival and global playmakers by the end of the decade. that would likely increase price pressures and risk their supply to china's state owned airlines. china narrow jet is said to be delivered by the end of the year. asset management says it has wide funds to pay offshore bond coupons due friday. . the manager transfer the interest due on four dollar bonds including a note on one in 2022. and paid a 2025 singapore dollar bond. they told bloomberg that it is operating normally with sufficient liquidity as doubt about it's financial health persists. hong kong's tycoon says it will make southeast asia a priority,

and is planning to deploy more capital in the region. they told bloomberg it is setting up a team to explore investments over indonesia. the firm has invested in three indonesian startups in funding rounds that have raised more than $210 million. shery: where counting down to the start of trading. tokyo and seoul, some stories we are watching. in japan, the prime minister may extend a state of emergency for tokyo. the governor wants restrictions to remain until the end of the month. nintendo is a watch after earnings beat estimates, it is still warning the global chip shortage may hit production of its marquee switch device. plenty more companies report on friday in japan. among the highlights, japan airlines, nippon steel, and olympus. over in korea, earnings are in focus. korea aerospace among the results on friday. they have applied also for a preliminary review of their ipo.

we understand it is among the leader rangers. plus, we are continuing to monitor the reaction to shortselling, resuming on the kospi. enter shorted more than half $1 billion worth of shares on thursday. 10 times the amount of local institutions. they were the most targeted stocks. take a look at what the markets are doing now. we are seeing kiwi stocks losing round at the moment. down .1%. sydney futures pointing higher, a court or percent. we are watching japan. nikkei futures unchanged at the moment. this as we have the japanese yen at a three week low against the u.s. dollar. we do have labor cash earnings at the bottom of the hour. watch out for those. we also get pmi numbers out of japan as well. kospi futures pointing higher. .5%. all of this coming up on "daybreak: asia." this is bloomberg. ♪ g. ♪

>> we are just getting the latest japan wage growth numbers. that is better than the expected. it was expected to stay flat, essentially. when it comes to real cash earnings, we are seeing half a percent. we are also looking at the cash earnings year-to-year numbers.

that is better than the contraction that was expected for the month of march. we are seeing some movement when it comes to wage growth in japan. but nowhere close to what the bank of japan have been targeting. shery: over here in the u.s., the federal reserve's latest report is waving a red flag on the vulnerability of asset prices. kathleen hays is here with a message from the twice yearly support. >> they are worried about markets getting stretched. this is touching a nerve. this is what a lot of people are worried about, how long stocks continue to move higher without getting overly stretched. the board governor's head of the financial stability committee. they put this report out twice a year. she wrote her own separate

statement. the combination of that value, they are watching, because of the potential to amplify the effects of a repricing event. if stocks start selling off, corporate bonds are under pressure. i am putting words in her mouth, but there are obviously concerns here. prices are vulnerable to significant decline. let's move onto another very important point. this report went out of its way to talk about capital. they say calls for more granular, high-frequency disclosures. that event illustrates the limited visibility into hedge fund exposures.

you can see why the fed is getting a little bit nervous. finally, you have those rates. this is the kind of thing people have been talking about for a long time. is that the kind of thing that is fueling that reach for yield? helping stocks continue to get to the lofty levels? jay powell was talking about this last week. he said he sees risks from frothy stock prices. he thinks the fed needs to start talking about tapering now. pulling back on bond purchases because of the excess that is out there. i wonder how this financial morning may contact that thinking. haidi: economists are predicting

a big raise in u.s. payrolls. what could that change? chairman powell: let's start with the jobless claims. weekly jobless claims had a big tumble. this is the blue line. they are down to about half a million. they have come down are a long way. at the pandemic peak, this was up to about 15%. so a lot of progress. this is the favorite thing for the fed to talk about. there are more than 8 million people unemployed. you can see the big decline in

jobs. there will be about a million new jobs created. they need to wait and see what happens next. haidi: the bank of england expects a big surge in household spending. the bank of england spoke with francine lacqua about those changes. >> we have not changed. what we have changed is the pace. but we have not changed that and dates. we frontloaded it somewhat.

we were concerned with financial markets. it made sense in terms of market efficiencies. >> you made that very clear given how the markets initially reacted. what does this tell us about how much focus will be on that? >> i fully expected we would be having discussions like this. there is this point they are bringing out. they are different in that sense. >> what are your expectations for next year? >> i don't have any expectations.

>> what kind of trend are you expecting? if you look at your forecasts? is your next move tightening? >> our forecast stone validate the market. we use the market profile to construct a forecast. what i would say is it is quite interesting. the difference in inflation terms is pretty small. i would not over interpret the point of that market curve. it is a convenience for us to use the market curve.

but it is not policy in the sense that it is not a canticle. >> how do you manage market expectation? >> obviously we think quite hard about how policy will be interpreted. we watch that carefully. it is one input to our policymaking process. it is not the only one. we are not validating the market curve. >> can you give us an indication of how you tighten? >> we are doing the review at the moment. they said they would tighten and increase rate before they

considered reducing stock assets. an awful lot has happened in the intervening time. it seems appropriate to come back to that question. does what has changed in the meantime cause us to change our view? >> we will get more asia focus coming up. haidi: we are about 20 minutes away from the open. >> early in the session, kiwi stocks losing ground.

those will keep margins healthy. iron ore futures are trading up. this trade data will likely underscore that. it may take more than high commodity prices. that looks good for value. they are looking at markets. we have seen asia stocks have a soft start to made. they are continuing to underperform global peers. they reckon this could be the

months to buy into asian stocks. it has moderated valuation. worries about a new virus outbreak are causing this. it's about the chart for the look at the picture. they say they are on track for a rate hike by year or even earlier. on thursday, we have the bank of malaysia on the latest recovery. highline -- thailand held onto rates. more conventional policy medians dissipated to support the economy. haidi: coming up, we have some insights into demographic challenges facing the chinese economy. this is bloomberg.

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>> sources say the white house is likely to keep in place certain bands on chinese companies. talks are still in the preliminary stages.

there are a wide range of issues, including humans rights abuses. president biden has been in louisiana drumming up support for his infrastructure plan. set the u.s. needs to step up and invest in the future. >> the chinese are eating our lunch economically. they are investing hundreds of millions of dollars in research and development. we have to compete. >> angela merkel weighs in on a proposal to waive patent protections. the german government says the u.s. plan would create severe complications. the industry has argued that

drugmakers may be slower to make vaccines in the future. the president of the european commission is starting a campaign. she took a swipe of the u.s. and u.k., saying both nations keep vaccine production for themselves. the eu is the main exporter. the vaccination push has picked this case -- pace. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. this is bloomberg. haidi: we are still awaiting the results of a once in a decade senses in china. -- census in china. for more analysis, we bring in a research statistician.

this lack of data we have had so far has been subject to a lot of criticism and analysis. what are you expecting to see in the demographics? why do you say it is skewed to the future burden being on chinese women? >> i think we still need to wait and see to see if the population will really decline. if it declined last year or this year. the demographic structured in china is very clear. china is becoming an aging society. it is getting more and more important to make better use of women in the labor force. haidi: we have seen the one child policy play into the demographics. china had 30 million more men and women. are the feminists losing the

population goals? >> i think it is a combination of both. or from the workplace side. china is not floating any parental leave policies for fathers. they are only bringing forth the social stereotype. the government can also do more providing better health care and childcare support. the government can do more about it. shery: what sort of workforce are chinese women encountering right now? how far or broad is the

discrimination against them when finding jobs? how easy is it to find certain jobs more than others? >> currently, chinese women make up 40% of the total labor force. they face a big glass ceiling when they try to climb up the corporate ladder. this rate is higher than the global average. less than 10% of senior executives are women. that is the glass ceiling that women are facing. shery: what has been the impact of covid? >> the gender gap has actually

widened. it may take several years to get to the precrisis level. haidi: when it comes to the birth rate, how much is the trust deficit a problem? i have friends who do not want to have kids because they do not trust for care they might get or the kindergartens their kids my go to. there seem to be a very broad range of policies that are contribute into this problem. >> it will definitely play into this issue. women might need to sacrifice their own career to give birth

to a baby. china is very special in the sense that it gives extensive maternity leave to mothers. when a woman decides to be a mom, she will need to take a month away from work. shery: thank you very much for joining us. coming up, nintendo riots the gaming boom. but it is warning of trouble ahead. this is bloomberg.

>> a quick check of headlines. coinbase sunk to a new low. the operator of the largest crypto currency exchange dropped for a fourth straight day. an etf that tracks shares plunged four and eight day. they are unveiling stellar earnings. they went on a dealmaking spree.

net income rose to $2.4 billion, compared to about $2.1 billion a year earlier, beating a bloomberg estimate. balaton -- peloton delivered an increase after we were calling all of its treadmills. shares gained 141% and subscriptions jumped 135%, to just over 2 million. the stock tumbled while awaiting new guidance, but then regained. shery: we will be watching nintendo when japan opens in a few minutes. operating income came in at ¥120 billion. however, the company warrants the ongoing chip crunch could affect its switch consul.

-- console. how long can this last when people are no longer stuck at home when the economy is starting to reopen? >> that is a really good question. we can look at recent history for guidance. one of nintendo's biggest markets is north america. it is one of the most aggressive companies for getting back economically. and moving into that post pandemic lifestyle. in tendo's earnings over that quarter have shown real strength. that pandemic boosted earnings, but the company'd during strength is in the quality of its content, its games. there is more than one driver. it was not simply the pandemic that led to the runaway upper. -- outperformance. haidi: analysts are calling this

forecast conservative. could this chip shortage play out in the way they are worried about? >> probably not. nintendo tends to be super conservative at the start of the year, give itself some room to out warm, so that looks good at the end of the quarter and the year. and also to raise forecasts. we have people on a familiar basis who say they are preparing to create more switch cons oles. it is also aiming to sell more software. the real targets are a bit higher. shery: the semi conductor, will nintendo be able to create enough consoles? >> probably. given that the component

shortage that they have faced have not just emerged. they have been there for a while. the company has said it has challenged production in recent months. the console is aging. things look like they will be manageable. it is getting into its fifth and sixth year on the market. but the company is planning an upgraded version of the console. that might be more limited in availability. >> are asia tech editor. coming up next, we will be discussing the markets. and a preview of chinese trade numbers due out later today. we also have the market open in sydney, seoul, and tokyo in the next couple of minutes. this is bloomberg. ♪

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clicks welcome to daybreak asia from bloomberg's world headquarters in new york. haidi: asia's major markets after stopping for trade. asian stocks are seeing little upside as trade data from china closes on growth. gamestop sources --shery:

sources tell up -- us they are likely to continue trump span. haidi: in the kent -- pandemic total reaches daily highs in india. let's take a look at starting of trading. as >> as we wrap up the week we seen the risk coming as they make a decision on the emergency. we are seeing downside for japanese stocks this morning. this after jumping the most in two weeks. jp morgan favoring japan, europe, and em markets under high exposure to value, and cyclical plays. let's check in on how south korea is kicking off. there is growing remote -- momentum for a faster recovery in south korea. we have current account data

during the surplus. we are seeing upsides for green stocks this morning, which could put the kospi on course for the first weekly rise in 3 -- we have several earnings, as well. switching it out to check in on australia, we are waiting on the rba quarterly monetary policy statement, which may include upgrades for passport 2023. international borders might not be reopen until the summer of next year. we are keeping an ion miners. it has kept the aussie dollar on the upside. we are seeing a trade near a one-week high. copper zero record high -- is near a record high. you need a 50% rise in copper supplies to purge -- to

encourage new supply. with that, pulling up a chart on the terminal. as we wait on china's april trade figures, we are looking for clues as to whether or not inflationary pressures are building, which we are seeing and it comes to input costs and import pni's -- pmi's. shery: let's get some more market analysis. great to have you back with us. sophie was mentioning these crazy prices when it comes to commodities. our indexes at a nine-year high. question of the day, how far can this rally go? i want to turn this also in relation to inflation. what should markets watch out for, given that the prices are higher? >> indeed, commodities are a good space at this point in time

, driven by both demand and supply factors. production is lacking demand estimates. at a time when there are supply-side pressures because of covid and you have a big demand from the u.s., with plans for the infrastructure program, and higher consumption, and consumption has shifted from services to goods over the past 12 months. they know not -- they do not need services as much. but over the next 24 months, as we see economies reopen because of the vaccination drive, that should taper demand down from commodities. on the inflation side, commodities are a big driver of inflation. our models indicate that inflation globally has a pretty high correlation with behavioral

commodity prices. we expect inflation to go up meaningfully over the next few months. but the good news is, by the end of this year, global inflation readings should start coming down. shery: does that mean the markets should not pricing for central banks or start tightening? >> when you look at central-bank action, you need to split into two halves. our senses that most individual markets will treat spikes in inflations as transitory. on the other hand, on the emerging-market side of things, inflation baskets have a lot higher, you will see them spike their causing certain central bankers to tighten at the margins. we've seen evidence of that in russia and brazil. maybe some other central banks

will recalibrate, but not significantly, because they're still week domestic consumption. haidi: shery mentioned the roller coaster gains we have seen across the mining sector. let's take a look at this chart, valuations. despite higher earnings. is this one area where you're still finding value, given the elsewhere so much of the market remains elevated? >> generally, new look at sectors way the potential is high, even in the old economy sectors. you need to understand whether those conditions will last for one or two years. the market is priced that if it is for the next one or two years. if it is five years, maybe. there is more room for the stocks to rise. haidi: where else do you find

value at the moment? >> value is elusive. the whole construct of monetary policy means that yields are very low at this time. -- in asia, we think local stocks are cheap in real terms. singapore could be in the market. markets like korea and taiwan will continue to do well. taiwan is a market that could come back into play from a valuation standpoint. shery: we have breaking news out of japan. we're hearing from the economy minister speaking in tokyo right now saying that the virus emergency will be extended to may 31. the expectation was they would ease next tuesday. they have been implanted since

april 25. we have heard from the tokyo governor, as well, that they need to be extended given the rising infections. japanese government is seeking to add prefectures to the state of emergency, as well. we have an extension to may 31 and also to prefectures being added to the state of emergency. it is not just japan that is seeing the insurgents of infection. korea is doing very well reining in infections, but they are very behind when it comes to inoculations. how do you reprice these risks in economies that you thought had overcome covid-19? >> indeed. resurgence of a new mutant is a big rest to certain markets. -- big risk to certain markets. you talk about japan, the

country lagging the most. that is showing up in japan's equity performances. despite the fact they have a deep cyclical correlation. they generally bring good numbers, but they are struggling because of concerns about vaccination and the olympics. india is beginning to lag because there are so many cases arising. vaccinations are going up but it -- at a slow speed. this is causing investors to trim down and -- trim down estimates down 10% for india. you could see more downgrades. haidi: when it comes to india,

at what point do you see opportunities? what would you need to see when it comes to the virus situation and what the government is doing or perhaps vaccination levels that would make you see there is a confident path forward? >> to start with, the number of new cases needs to dip down. we need to see a much faster pace of vaccination. you need to see the economies being reopened. at this point time, the largest provinces in the country are we imposing lockdowns to control the spread of the virus. by some measure, the economic activity levels are now back to 15 pet -- 10% below pre-pandemic levels. they need to do a lot better of a job than has been done over the past month or two in terms

of controlling the spread of the virus. haidi: joining us from hong kong, let's get you to vonnie quinn with the first word headlines. >> tokyo olympic athletes and delegations will be able to receive covid-19 vaccine doses donated by pfizer as organizers move ahead with preparations for the delayed games. in a statement, the drugmaker say the ioc signed an agreement with them for the shots. the delivery is expected at the end of this month. the ioc has made vaccinations mandatory for athletes to participate. the u.s. is boosting security assistance to the ukraine to counter what it calls russia's aggressive and destabilizing action. secretary of state antony blinken met with ukraine's president ntf -- in kiev to end

attempts to force troops at ukraine's border. the u.s. reaffirmed commitments and its partnership to the ukraine. the pentagon says tolerance -- chairman of the joint chiefs of staff said that while eight resurgence of the taliban is not a foregone conclusion, the u.s. is looking at ways to train afghan forces in third country locations. president biden set the date of some barletta -- september 11 two end the countries longest war. the subpoena for trump's records should no longer be held to the same high legal standard now that he's out of office, saying that the president is not serve for life. some lawyers say the standards should still apply. 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.

shery: up next, the biden administration is said to be leaning towards keeping the pressure on china by preserving limits on u.s. investments in chinese firms. we have the latest. we will discuss the implications of china's economy with hsbc's fred newman. we will get a preview of the trade numbers out later. this is bloomberg. ♪

haidi: the biden administration is likely to maintain china -- pressure on china by maintaining limits on investing in chinese companies. >> the chinese are eating our lunch economically. they are investing hundreds of billions of dollars into r&d. that is why right now their will

on the electric car market in the world. we have to compete. haidi: we did say -- see big chinese tech adrs touching low. let's bring out bloomberg reporter bruce arnold for more. is this policy a continuation? >> the by demonstration seems likely to continue this trump policy, which trump had announced back in november, banning u.s. persons from investing in companies on a new list of what they called communist chinese military companies. following the announcement, there is some confusion, the new york said it was initially going to delist three chinese telecom companies but then did not. the treasury department got involved and said you should. the trump treasury named the three companies as companies

that needed to be delisted. haidi: how is this sitting with wall street? reporter: we know this is a policy that is popular among politicians. it supports on support -- it has support on capitol hill. at the very least, the banks want to clear guidance from treasury on how to comply with this ban. haidi: what could be the next step? reporter: president biden has more options to put pressure on chinese companies. there is a law that congress passed in january that allows the administration to expand this investment ban to cover more chinese companies, including companies in the tech

sector. that the administration decided are tied to espionage, human rights abuses, other things. the biden administration is considering this. they have not decided yet on what to do on that. haidi: --shery: how is china expected to respond, especially as washington applies more pressure? reporter: there is growing pressure that the u.s. is trying to put on china by working with allies. just this week, secretary of state tony blinken with counterparts from the g7 issued a statement critical of china, from its actions in taiwan over human rights abuses in xinjiang. they have lashed out about that.

they criticize what they call click politics. china just this week also decided to cancel and economic dialogue with australia. we will see some action today, because there is a virtual meeting of the security council, the un security council, that china is chairing. both tony blinken and china's foreign minister will be addressing that. we might see some more diplomatic fireworks today. shery: bruce einhorn there. we might see a cooling of relations, with europe, as well. the president of the eu chamber of commerce in china says the investment deal reached by the block could take seven years to get ratified. >> we have worked seven years on this deal. without being sick -- cynical, it could be another seven years

and so is you applied. it is not that in the water, but definitely the sanctions -- the asymmetric, unwise sanctions from china, targeting eu parliamentarians, definitely have caused major problems for the ratification process. china has to list -- lift the sections on the parliamentarians. i do not see this happening anytime soon. we are in the situation of having concluded something and then three much later having to wait again. >> europe is that this will go through, -- your hope this would be ratified quickly, that is not going to happen. this could potentially be years. >> sanctions are easy to impose. very difficult to lift. just look at the west and russia. when he 14 and nothing is really happen. the sanctions from the chinese side being lifted anytime soon,

i guess there is some discussion going on. but certainly not for the foreseeable future, and less china makes this major step and lifts sanctions, particularly on european parliamentarians. >> what does it mean for european companies? the whole point of this deal was to provide a loving -- level playing field for european companies. if there is no deal, what happens? >> we would not fall through the crack. there are still 7% or 8% growth. 30% of growth in the next 10 years will be in china. we will participate as we did over the last decade. but of course we would have been better off by having more transparency on state owned enterprises and accountability on subsidies. we will wait for this one, but the background is -- you have to

be in china and you have to be in china more than ever. reporter: yesterday the european commission put out this industrial strategy and mentioned that state aid when it comes to china, the relationship needs to be more reciprocal. while happen to big chinese projects like the silk and belt road? is that dead? can we assume no european country will participate? >> we are trying to make sure there is a level playing field in our backyard because it is hard for companies to compete against a state funded enterprises. at the same time, we always urge the commission to look into the third country connections and relationships because we are competing against chinese companies and third markets under this level.

there we have lost a lot of deals because, again, we cannot compete against state-funded enterprises. belts and road is something that is fading away. there's been a lot of awareness around the world that china not throw money at countries. some of asked for -- or actually as for repayment. haidi: please be sure to tune into bloomberg radio to hear from today's big newsmakers. you can get in-depth analysis. they are broadcasting live from our studio in hong kong. you can listen in fire the app. -- listen via the app. we do have a lot more ahead. this is bloomberg. ♪

shery: here's a quick check of the latest headlines. nintendo delivered a big earnings feet on switch sales

but warned causal production could be threatened by the chip shortage. it's profit was on was double the average estimate and came amid a covid era boom in gaming. it said it was not able to produce as many devices as it open gave a conservative sales estimate of 25.5 million switch consuls for the full year. mccrory delivered record profits pinched to capitalizing on a dealmaking spree and pandemic induced market volatility. $2.4 billion compared to 2.1 a year earlier. china huoarong asset management says it has wired funds to pay offshore loans. this includes on a petrol note

in one paying out the 2025 singapore dollar bonds. huoarong told bloomberg it is operating normally. airbus ceo expects china to become a legitimate rival in global playmaking by the end of the decade -- planemaking by the end of the decade, which could risk their supplies to china stay owned airlines. china's c919 narrow wild jet is said to be delivered by the end of the year. up next, hsbc cohead of asian economic research joins us. this is bloomberg. ♪

shery: we are getting the final april pmi numbers out of japan. they're coming in at 49 .5, higher than the preliminary number. also the composite is coming in at 51 higher than the per luminary number. when it comes to the services pmi, it is getting close to the expansion territory number. this will be a big one. when it comes to the composite number, it turns positive for

the first time in 16 months. it is staying positive, a little stronger even in the final numbers at 51, as well. haidi: we're looking ahead to the big one. china's to delete trade data that will shed light on the strength of global demand. bloomberg economics expects exports to registry 27% year over year rise. let's get more on this and the broader economic recovery with fred newman, the cohead of asian economic research hsbc. let me start with this chart when it comes to the state of the relationship with china. the year on year change in both dollar and you on -- yuan. that base effect on it comes to exports will play out slightly unfavorably. >> we are in the. where everything is flattered by pay offense -- base effects. remember we get korean export

data for april and it actually shows a 6 -- shows a second -- shows a sequential subtraction. there's is a slight slowdown. new expert orders have not been that strong out of china. there is a bit of a loss of momentum coming through despite very strong headline numbers. haidi: i want to take a look at this chart, too, because i'm curious if you think this will come down to commodities and what you are seeing is this extraordinary run and commodities. this chart, mostly iron ore, blue there is coal, purple there at the top is imports of crude. how sustainable is this? when it comes to iron ore imports, it was the fifth biggest monthly hall for china. >> it could be another blowout month in april.

prices are ripping at the moment. that is probably a temporary aberration. we would not expect that to us terribly wrong -- terribly law -- expect that to last terribly long. steel mills have accelerated the pressures -- the purchases of iron ore. but if you look at housing construction, infrastructure construction, steel demand likely slow. that will weigh on iron ore prices, so they will probably come a bit down back to earth, not quite where they were prepared to make, still elevated, but not pushing much higher. shery: ppi at a 2018 hi. will this become an issue for asia? >> not really. one of the reason why the ppis going up is because of that temporary squeeze on some of the

productions on steel, for example. chinese authorities have initiated a steel production curve for this year. that will likely mean a steel prices will come down at some point later this year. temporarily higher because of the lack of production, but ultimately we would think steel crisis start to cool -- steel prices start to cool again. we had to see whether consumer spending is strong enough to get past ppi pressures into cpi. there is no sign of that happening. shery: will asian economies see those price pressures? what does that mean for the central banks? >> we are feeling relaxed about underlying price pressures in asia. you will see base effects from oil, food prices are higher. what central bankers are looking at is underlying rights pressures on the consumer side. because we have a relatively subdued recovery in local demand

in most places, even in china things are cooling at the margins. we are unlikely to see an increase in underlying price pressures. what does it mean for central banks? no one will hike rates this year. they will all sit and rate -- sit and wait. it will be them -- it will be until the middle of next year before we see tightening in asia. haidi: these liquidity injections measures, how much does that limit both fiscal and monetary policy tools they can reach for? quick it is very tricky. they are facing huge economic, let alone human challenges in india. the first reaction by the central bank will likely be to protect the financial system, offer as much help as you can, and worry about inflation later.

we are almost in crisis fighting mode when it comes to monetary policy. as long as inflation remains elevated, that really limits the number of rate cuts they can deliver. a little bit of a bind here. unlike some other central banks, indonesia is much more subdued. they can afford to maybe add even stimulus if needed. in india, they will prioritize protecting the financial system. we are looking at these new estimates from the australian government about when the reopen of international boris would happen. they are now saying, 2022. other saying 2023. have you looked at the long-term implications where the global recovery based on the rebound in the movement of goods but not in

people? >> it is a critical element. the movement of people is a big sector in many asian economies. australia being one. if you think about thailand and malaysia, hong kong, singapore, tourism matters greatly. not just tourism. cross-border investment. you need to get people across borders to negotiate deals and get the wheels of commerce running smoothly. until we have full travel coming back, that will remain a track on economic growth. unfortunately -- fortunately for asia, it looks like we will not see a meaningful removal travel berries until early next year. we need to get vaccination rates up. we are lagging across the region hind the west on that front. shery: especially at a time where we are seeing economies

who have done well containing the virus extending emergencies, like japan right now, who has just extended their state of emergencies to the end of the month, not to mention that they added prefectures as well. are you factoring in these new risks from economies we thought were doing ok, like japan and south korea? >> we are factoring it in. the reality is, until we are vaccinated to a critical degree, let's call it 50%, 60% of population, you will always have the risk of renewed outbreaks. until you get that vaccination level, the authorities will always be forced to reimpose restrictions. malaysia is another example. even in vietnam we have restrictions. in thailand, for able. that risk will remain with us. the projections are, we will not get to those vaccination rates until late in the year, if not early next year in most economies.

i gives us another two quarters or so of really elevated risk for lockdown, for restrictions, and that will weigh on domestic activity. shery: always great to have your insights, cohead of asian economic research at hsbc. we will get more asia focused economic analysis later from betty wang and bank of america securities chair ellen chow. we are 40 minutes into the trading session. let's get to sophie for what to watch. >> just waiting for the screen to pull up where we are with the markets. the big picture for stocks this friday morning, the kospi with the first weekly rise in three with financials among the best sector there in seoul -- sector in seoul this morning. the nikkei could drop. we do have the aussie share

market now leaning higher as we see miners provide a lift, with commodities in the spotlight. oil prices are set for back-to-back weekly grains. crude gaining grounds -- ground this friday. they are warning of a short-term correction in metals as they become detached from fundamentals. the chart for appetite for risk assets. global stocks moving ever higher, with market caps doubling from the low last year. you can see from the chart on this terminal, which is raising red flags for the fed. rising valuations having to come by increasing debt, which someone could amplify the effects of a repricing event. we are seeing complaints is the

-- complacency in the asian credit market. we've seen steady issuance across the region, including from sectors like age -- like aviation. that spread could widen on the risk of war lockdowns in asia. -- of more lockdowns in asia. haidi: lots more to come on daybreak asia. this is bloomberg.

>> this is daybreak asia. i'm vonnie quinn. sources tell bloomberg news the white house is likely to keep in place bans on u.s. investments in certain chinese companies imposed by the previous administration. we are told talks are in the preliminary stages over bans lengths to china's military. tensions remained high over a wide-ranging -- a wide range of issues, including human rights abuses. president joe biden has been in louisiana drumming up support for a 2.3 trillion dollar infrastructure plan. speaking in lake charles, he

said the u.s. needs to step up its game and invest in the future when it comes to china. >> the chinese are eating our lunch. they are eating our lunch economically. they are investing hundreds of billions in research and development. that is why right now if it goes the way, they will on the electric car market. we have to compete. >> china has delivered ace sharp rebuke to the g7 after the group listed a group -- a list of grievances. chinese ministers urged western nations to stop interfering in other countries national affairs and fix their own countries -- they blasted new zealand over accusations of human rights abuses. 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. haidi: earning outlooks raise

following a robust first quarter. bloomberg's matt miller spoke with the ceo about the earnings and the global chip shortage. >> we would be happy if we could finish the year at levels of 2019. that would be our target. there is still a lot of challenge ahead of us because of the semiconductor shortage. i think we could manage very well in the first quarter. but the incidence in japan and in america, they will hurt us now. over the year, we think towards the year and we are hopeful to recover. reporter: can you quantify how much they will her in the second quarter? we have heard some pretty shocking numbers in the industry. ford, for example, a close partner of yours, said 50% of

its production will be cut in q2 because the chip shortage will cost them $2.5 billion. what do specific numbers look like for volkswagen? >> we are fighting day by day. we are going to be heard, -- hurt, but not in that magnitude. we think we will see some lines stopping for a few days or weeks. but not as brutal as the figures we see from some of our competitors. reporter: how about how long it lasts? some of told us a few months. some of said the shortage, the bottleneck will take a few years to play out. how long does it look like from your vantage point? >> the shortage, we will probably see it through this year, at least. next year, probably, because of the ramp-up and the additional capacity will take time.

but what we hopefully do not see is such kind of incidents, we can see all over the world because of the incidents in america japan. semiconductors will be in tight supply, but there is a lot of additional capacity and we are in direct dialogue with semiconductor manufacturers. we think it is a transition -- semiconductor demand has raised a lot because of the internet of things. now it is important to add capacity as fast as possible. shery: the vita -- the vw ceo speaking with bloomberg's matt miller. carmakers around the world argan creative to keep some production moving forward. some are scrapping itech features to save on chips.

the ongoing crisis is a historic test for the industry as they try to accelerate the shift towards smarter electric vehicles. edwin chan joins us now. give us some examples of what these carmakers are doing in order to respond to the crisis? reporter: i think is seeing carmakers scale back a little bit and perhaps water down some of the features. none of these are safety-related features. i do not think that consumer has to be worried. speedometers moving towards analog, and scrapping infotainment systems. i think that underscores global industry right now, just heard from a major -- you just heard

from a major automaker a few years ago. the industry is bracing for shortages to extend, assuming capacity ramps up appropriately. haidi: what's the demand side of the story looking like? reporter: i think -- you've seen demand not just fall for cars, but also for a host of electronics that required chips. all of these devices, appliances, all of them are using an increasing amount of semiconductor content. that is why we are in kind of this predicament we are in right now, whether there is just not enough chips to go around. i think we will see shortages well into next year. shery: who has been the most

nimble when it comes to adapting to this new environment? reporter: if you're talking just about the car industry, i think analysts have singled out asian carmakers such as hyundai and toyota as being more farsighted or, at the very least, having stockpiles of chips. i think you're seeing other automakers warning about production delays and stoppage is and moth bowling plants for a few days, sometimes for a week or more. if you are an analyst, you're looking at hyundai and toyota is being shielded from the shortages going forward. haidi: our asia tech editor there. all japanese automakers will be posting results to the course of the next week. we will take a look at how much that chip shortage is making an

impact on their bottom line. we will also get results from the chipmakers themselves. tsmc will be on watch for the production outlook to see whether the bottleneck can be resolved. major tech names, as well, on the earnings agenda. softbank, alibaba rounding out what will be a very busy earnings week ahead for markets. much more to come. this is bloomberg. ♪

haidi: a quick check of the latest business headlines. singapore's second largest bank be estimates with net income more than doubling to $1.1 billion. an offset in decline as low interest continue to decline. hong kong private investment firm horizon ventures says it will make asia a priority. horizon told bloomberg it is setting up a team to explore investments on indonesia in particular. over the past year the term has invested in three indonesian startups and funding round that have raised more than two to million dollars. coin bank sank to a record low

as investors fled to the likes of doge coin, a soak in the exchange does not offer. china huoarong asset management says that wired funds to pay offshore loans due friday. this includes a perpetual now and one maturing in 2022. huoarong told bloomberg it is operating normally with sufficient liquidity. let's take a look at some of the stocks we are watching as we head into the next hour of trading here in asia. so fiasco --sophie? reporter: we are watching chinese tech shares after the

biden administration says it will likely maintain investment purpose imposed by the trump administration. chinese stock has started the month on the back foot. we have seen analysts tame some of the enthusiasm they came into 2021 with. credit suisse is cutting china's underway outflowing profit. goldman, they are finding value in chinese stocks compared to other regions. let's check into how they compare this friday's session as they wrap up the trading week. we are seeing marginal moves this morning across asia, with the nikkei marginally higher this morning. this around news around the potential of the potential -- the potential extension of the virus emergency in japan. nintendo under pressure following the results. in korea, we have stock gaining ground by .4% this morning. in australia have gold miners

getting a boost with bullion trading near 10 week highs. that is certainly a big focus for us, with commodities. we will question whether or not we are seeing this inflation pressures creeping into other metrics. for sample we have chinese april trade figures do. we are waiting to see if we get any clues about imposed -- input costs seeing a general uptrend. fred newman at hsbc told us earlier he does not see upward momentum for this across asia. shery: a key concern and the rest of the world, as we continue to see commodity prices spike going into the headline inflation numbers. we will discuss all of that and preview trade numbers from china and the private cpi with betty wang.

plus, we have a big interview coming up. we speak exclusively with the tata consumer products cl -- ceo. this is bloomberg.

♪ tom: it is not :00 a.m. in beijing and shanghai, welcome to bloomberg markets china open. abigail: david: -- david: we are counting down to the open. entering higher, trade numbers out of china, quiet this morning over apple prices.