haidi: good morning, i'm haidi stroud-watts in sydney, counting down to asia's market open. kathleen: i'm kathleen hays in new york. welcome to "daybreak asia." this hour, no one in situ a -- site to a shutdown of the biggest u.s. gasoline pipeline. the crippling cyberattacks just ahead of the summer driving season.

the battle for crown resorts heats up, sweetening the offer after rival casino operator star entertainment entered the fray. plus, tokyo's olympic stadium hosts a test event with infection protocols and focus. they say the virus lockdown is casting a long shadow over the games due to open in less than three months. as the first day of the trading week in open -- asia opens, let's get a look at the markets with sophie kamaruddin. sophie: going into the trading week with heightened nerves around, as japan's daily cases top 7000 at the weekend and india's fatalities is fueling calls for a nationwide lockdown. markets have relatively taken in stride. nifty future settling higher after the index cap a three-day gain. the commodities rally with copper and iron ore at record highs. aussie stocks snapping a

two-week drop with a rally on minors, but we see aussie futures settling. we are looking at any reaction to the casino bidding war happening down under. flipping the boards and seeing how we are standing elsewhere, we are not seeing it creeping to the other parts of the market's just yet. the u.s. drop report -- drop report is supporting the fed dovish stance and u.s. futures climbing higher after the snp hit a fresh record. futures slightly to the downside with traders assessing the prospect of u.s. 10 year yield hitting 2%. energy markets very much and focus after the cyberattack with the biggest pipeline in the u.s. we will watch for the open for brent later this morning. we do have moves higher in natural gas and gasoline futures on the back of that story. haidi: let's get more on that

story, the ransomware attack on america's largest pipeline supplier. colonial pipeline has given no timetable for a restart. it said it will bring back systems online when safe. let's get to our cybersecurity reporter, covering this out of new york. what is the latest we know and how things are progressing? reporter: thank you for having me. we don't know much. colonial put a statement out about an hour ago saying they are working on a plan to get back online in some smaller, lateral line. but we are still largely in the dark here. that is kind of the nature of these attacks. even if you have the best case scenario, if you pay the ransom or try and make it go away as fast as possible, it can be timely to get back to normal after an attack like this. kathleen: so coming back online,

permanent damage from this? something they can rectify quickly? is it so constructive -- i guess we don't know, but could it be so constructive that unless they pay the ransomware, unless something happens on the hacking side of this, colonial is stuck? reporter: yes, that is just impossible for us to know. it will depend on what contingencies they have and what kind of help and support they are able to get from the u.s. government and private sector. they have hired some private security firms to help. even if you are in their position, it is sometimes hard to know whether if you pay these groups, if they can actually decrypt your files. there is so much that becomes unknown. especially when the clock is ticking in a scenario like this, it can become difficult to make the best decision. i think they will still have to kind of do a lot more work to

figure out when they can fully recover. kathleen: from the outside looking in, and we don't know all the details, was colonial potentially remiss? is this potentially a new kind of rest -- ransomware attack? our facilities like this basically, infrastructure is important to the energy and industry, is it behind the times in putting protections in place? reporter: i think what this shows is that on the cybersecurity beat i've been paying attention to for a while, ransomware is spiraling out of trouble -- control. recently, we've seen a massive uptick. not only ransomware, locking computers and demand for payments, but hackers stole nearly 100 gigabytes of data from the company and threatened to release it if they did not pay. in that way, it is a lot like other ransomware attacks. but the brazenness and the impact here, seeing gasoline prices go up already that the

biden white house has to respond to, this is not something you see that often. it could end up being the most significant attack so far. kathleen: thank you so much. our cybersecurity reporter william turton. let's get the latest on how the market is reacting. su keenan joins us. what are the traders doing? this is a very surprising event? started on friday, it is sunday night in the u.s. are they able to protect their positions? what are they doing? reporter: they are scrambling to do so as we just heard, the traders are pretty much left in the dark as to when the reset will be. we can seek gasoline initially at the open, right at 6:00, jumped 4.5% higher that it was to a two-year high and has since

pared back to a 1.5% gain. oil gaining as much as 1% out of the gate and pairing that quite a bit. a little more information is known. we were not hearing anything from colonial but at least they have released a statement. traders are looking to other options. we hear from people close to the matter that without clarity as to when the system will return to normalcy, they are trying to secure vessels to deliver gas that would have been shipped over the pipeline. we are told some traders have secured storage in the gulf of mexico to protect themselves in the event of a long outage. the attack comes just as the energy industry is gearing up for the start of the summer fuel demand season, the kick off is typically memorial day holiday which is three weeks away. we have been just under the three dollar mark for the retail

price for gasoline, near the highest since 2014. it is expected with futures soaring. earlier today and possibly as we get into the monday u.s. open, what we will see is those prices at the pump going higher. once you get above the three dollar mark, it is typically a level that the white house will often respond to. they do have a couple of remedies at hand. one of them is they can release rate -- waivers on drivers to drive gasoline up and down the east coast. right now she's looking at everything that can be resolved. haidi: and this is really the latest we've seen in a number of energy hacks. what does this say about urgency? reporter: the urgency comes from the fact that there has been a series of cyberattacks and as we

heard from my colleague, this is the brig us -- biggest one yet. in 2012, there was an attack on the cyber security facility in saudi arabia. in 2018, it was u.s. natural gas pipelines. in 2019, it was panamax and mexico. last year, there was a series of natural gas pipelines knocked off-line for two days. if you look at the size and scope of the colonial pipeline, the entire eastern seaboard impacted, dislocations and the new york area and atlanta expected to be the city most directly impacted. it is a whole different ballgame. when you look at the progression of -- these successive attacks, that is of concern. one expert says it is of critical importance that these energy facilities in the industry, in the u.s., become resilient and find a way to be

resilient to the cyberattacks. again, we are seeing prices rise early in trading, not as high as off the bag, but certainly at a level that will raise concern as we get into the full trading day in the u.s. back to you . haidi: su keenan in new york with the latest. we will have more with the cba analyst joining us, he sees the impact on refining products. and in the next hour, we will hear from the houston-based oil consultant. let's get first word headlines with vonnie quinn. vonnie: european leaders have urged president biden to lift restrictions on covid vaccine exports before embarking on discussions about waivers. on friday, the u.s. suggested suspending intellectual property rights to boost supplies for other countries. weathering are the leaders of germany, france and italy. they say while that might boost

supply longer-term, action is needed now. the european union and india have agreed to resume long stalled talks on free trade deals in the face of an increasingly assertive china. the agreement was struck at no virtual summit between eu leaders and india's prime minister narendra modi. it is aimed at rebooting relations and boosting cooperation across key fields including visualization, health -- digitalization, health and climate change. iran pushing for its industry to given guaranteed and conclusive sanctions relief. the country's central bank has confirmed that leaders directly involved in talks to enter any removal of u.s. sanctions is tangible to the financial system. negotiations resumed in vienna on friday on reviving the 2015 agreement. the fifth most valuable cryptocurrency, dogecoin, tumbled from an all-time high after billionaire elon musk

appeared on "saturday night live." he had previously been among the coins biggest boosters, but when asked on the show if it was a hussle, muska replied that it was. it had surged 16,000% over the past year. global news 24 hours a day on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i'm vonnie quinn and this is bloomberg. kathleen: still had, vivek dhar shares his views on how far the commodities rally has to go. next, the oxford economist joins us for a look ahead at what the economic data out of asia will tell us this week. this is bloomberg. ♪

kathleen: emerging markets including brazil, china, and

india will report inflation data this week against a backdrop of quickening growth. we are joined by sian fenner, senior asia economist at oxford economics. it certainly is a trend around the world. most central banks seem to be saying -- it's ok, it will be temporary. let's move to china. they are seeing higher food prices. they are easy to shrug off because they go up and down and you try and look at the trends. what will they see in china's numbers? >> we are actually looking for inflation to turn back into positive territory. partly this is actually a factor impacting inflation globally. when you see a huge shock like oil prices drop. we do expect inflation will start trending up in china and elsewhere but we don't see it anyway.

we don't see the higher ppi numbers coming out. we don't expect it will lead to inflation being uncomfortably high. it still leaves central banks in a position where they do not have to start tightening monetary policy and they can continue to support the economic recovery. kathleen:kathleen: so is it less and inflation question for the people's bank of china, the pboc, if it takes steps? certainly there have in some signals and words from the government that they are concerned about -- maybe not concerned, but they are ready to shift gears and not be so stimulative? we have not seen anything with big tightening moves, but where do you think they are going? >> they are trying to look at stabilizing macro leverage. they want to make sure they are not providing the stimulus that will lead to increased financial risk and increase leverage. that's what they are looking

for. we are not expecting any kind of consolidation on the fiscal side or significant consolidation. also, while we are expecting credit growth not to be stimulatory, it should be fairly supportive. it will be less of an impulse, but one that is not going to be a driver -- drag on the economy. haidi: other than the humanitarian aspects, which is devastating, how much of a concern globally or regionally is what's going on in india at the moment? >> as you said, the health concerns are there. we do expect that we will see andy is gdp on the economic terms, it will contract in the second quarter but we look for it to go forward in the second have to actually start to pick up again. we obviously, given the high numbers coming out, it is something we are seeing whether or not we will see more states impose restrictions. so there's obviously a lot of downside risk to india. haidi: and of course, we are

looking ahead to the australian budget. given the positive trajectory of the economic recovery, is there a question as to how much fiscal stimulus is needed, particularly in the context of a budget being a political creature? >> absolutely. the treasury has already indicated we are not going to be seeing any sort of consolidation or fiscal budget going forward. it will probably have a number of sweeteners. it is an election year year. they indicated that what they want to do is support the economy and the unemployment rate falling back to the natural rate, about 4.5% to 5%. currently we are at 5.6%. they have boosters on the revenue side. high iron ore prices. the labor market has been in a better position. this provides with that race, to actually not move towards consolidating and stunting the recovery anytime soon. it will be hand-in-hand fiscal

and monetary policy support going forward. kathleen: i know when the numbers come out on japan, you expect stronger household spending, that's a good sign, as well as a widening of current account surplus. we saw flip sides to the upside last week and the eco-data. how is the economy looking to you? there's still a question about the olympics, vaccines, and lockdowns, but somehow, the economy seems to be coming back. >> they have been extending the state of emergency. i think we have seen some weakness. it has had an impact in social spending. we do expect the capital investments, particularly globally. we had a very strong bounceback in world trade supported by the u.s. and fiscal stimulus with china and strong growth and that will provide the backbone. with vaccination rates elsewhere, that remains a

concern about easing restrictions and bringing household spending away from the retail side into the services sector. kathleen: always great haidi: haidi: to have you. sian fenner, senior economist at oxford economics. . . more to come, this is bloomberg. ♪

kathleen: tokyo olympics test event successfully completed at the national stadium with a games less than three months away. 1600 athletes, organizers, and media took part. the key focus remains as to how a full event can be pulled off safely in the middle of a pandemic. let's go to our senior editor reed stevenson in tokyo for

more. naomi osaka, one of the top women tennis players in the world weighing in, saying if you can protect plea bowl -- people, it's a good idea. everyone seems on the fence. should tokyo turn to the australian open, a tennis event, that was done successfully? i know the events are a lot bigger. is that a template tokyo is borrowing from but on a grander scale? reporter: in a way, sure. australia is a model of, they didn't really create a bubble down there. in tokyo, they will create sort of a quasi-bubble, where they are going to try as much as they can to isolate the athletes and delegates and the media coming into japan. they are all spectators expected , but they will be interacting with local staff. it will be an interesting test

to the measures will work or not. haidi: going back to this kind of pole conductor dust conducted, half respondents saying they wanted to be canceled. we know popular support for the olympics has been mixed to negative. . is that going to weigh into decision-making when we look at what's happening on the virus front? reporter: certainly watching local media here in japan, you get a sense that there is a lot of public opposition to the games. i can tell you that first of all, the political will to hold the games is very solid. prime minister suga has spoken to the administration on pulling off the games. what was interesting about going to the national stadium yesterday was when you walk in and see it is completed and you see them going through the paces

of holding the actual games, it's much more obvious they are going to happen whether or not the public wants it to. haidi: it's interesting hearing from naomi osaka saying she has been mixed feelings about whether the olympics should go ahead, even though she would represent japan if they did. i wonder when it comes to the broader impact on the economy, is there much meaningful upside to get from the olympics, given the lack of spectators?even if limited spectators are allowed? reporter: yes, the spectators and other events bring in a flood of tourist money. even before the cancellation, there was a shortage of hotel rooms. now there will be empty hotel rooms, restaurants, stores and department stores that will not get their usual boost. basically this will be a television olympics.

haidi: it is a first in so many ways. reed stevenson, our senior editor in tokyo as the countdown to the tokyo olympics continues. that's get a quick check of the business flash headlines. star entertainment has offered to merge with australian casino rival crown resorts, setting off a bidding war with blackstone. star is proposing in exchange for 2.6 h-shares for each crown share that implies a potential value of more than $14 aussie per crown share, topping blackstone's offer of $12.35 australian. a milk shares plundered -- plummeted. the ceo says the infant formula sales are drying in china. the milk marketer slashed a full user -- year forecast, down from a high of almost $2 billion kiwi late last year. it has plunged for more than $21

last year for to just over six dollars today. dutch shell head expects the clean energy to make up half the company's energy mix in the last decade.the dutch maker along with european peers is making -- aiming to be a net zero admissions company by the middle of the century, but the energy giant is set to clash with shareholders and atm's later this month. coming up next, gasoline and crude features jumping on the colonial pipeline closure in the u.s. to get the impact on the hacking of markets going forward. don't miss out on another big interview later on bloomberg. we will hear from a leading manufacturer of three wheelers in india, speaking to bloomberg markets exclusively. this is bloomberg.

kathleen: we are counting down to the start of trade in tokyo and seoul. here's the big stories we are watching. in korea, earnings season is underway. we have the japan table care. let's take a look at that. -- the japan daybook here. let's take a look at that. axis may broaden to the general public in june. the tokyo olympics are scheduled to start in less than three months. the ioc executive board has

scheduled a meeting for later this week. and we will be watching hitachi. some u.k. railway services were canceled after hairline crack's were found in some hitachi high speed trains. that is quite a big story. now we will look at trade. earnings season is underway. when we take a look at that we can see shopping reports, there is a law monday. moving ahead, we are watching the open. bloomberg intelligence saying earning strength may persist. finally president moon jae-in will deliver a special address marking his fourth anniversary in office. putting it altogether, sophie kamaruddin back in hong kong. reporter: quite a few things to

watch out for early this monday. we are seeing moves to the downside early in the session with kiwi stock under pressure. aussie futures are lower. a bit of a bump for japanese stocks ahead. the u.s. jobs report is bolstering the view. we do have energy markets and focus. we are checking in on that. brent is a size $69 per barrel. -- is as high as $69 per barrel. oil and gas futures are looking higher in asia on behalf of -- on the back of that cyberattack on friday. u.s. gas futures jumped more than 4% to a may 2018 hi.

if u.s. gas prices crack three dollars per gallon since -- for the first time since 2018, the light another layer to the rally. on the terminal you have the bloomberg index tracking raw materials. at a decade hi. -- decade high. copper is hitting fresh highs. 20,000 could be possible for the red metal if that shortfall widens. s&p says the industry could reach five-year lows by may 18 is the pipeline remains down. haidi: let's continue with the story. the impact of the pipeline shut down. that will be felt more on the u.s. east coast. let's bring in an -- a mining and energy analyst.

tells more about how you see this potential impact -- tell us more about how you see this essential impact, and determining when that restart will happen. >> that for us is critical. until we get more clarity, right now it is a lot of speculation. the impact will be felt first and foremost in bonds. we will see that in products, particularly gasoline. the impact on crude oil is something which will actually be negative if this continues for a prolonged. . -- for a prolonged period. we will see demand start to ease . that is how we really see it translate through. before that happens, there is

still a lot that has to take place. it is still a risk. it may very much be transitory, but this is how we are seeing the situation unfold. haidi: let's move to a story that is well-established, which of course is the great commodities boom. i want to talk about iron ore in particular. you have interesting views on the fragility of this extraordinary rally. it is hitting 200. these are trading in multiyear highs. how fast -- how far does this go? it seems like this market is ignoring any idea of a transitory state of inflation. it is really ignoring a lot of the virus related bad news as well, around the world. >> sure. when it comes to iron ore, it is

still -- is not the case with oil. we talk about iron ore, it is linked to what is happening with demand in china. and what is happening on the supply side. just touching on china, china counts for 73% of global iron ore. when we talk about iron ore demand, it is a one-way story in that regard. what is driving this is the steel demand in china. it is hard to understand how long it will last. to put it in perspective, how strong this rally in iron ore is and why it is so strong, steel prices are now high enough to keep china's steel in the margins at the highest level since 2018. that is remarkable. the sector is absorbing very high coal prices.

the sector is very hot. just when china's steel demand is thought to ease, it is perhaps the biggest pressure of 2021 right now. kathleen: just a quick follow on that. if china's demand falters, you figure that takes the steam out of this rally -- or is it possible as more vaccines get rolled out and economies reopen, that even if china's demand is not as hot, there will be rising demand in other parts of the world that will keep it going? >> that's right. initially this year the view was we would see bigger contractions and chinese steel demand in the second half. that has moderated. there is a chance that if china can come back to such an extent that we still see still demand globally pickup and iron ore demand remain at these levels.

it's important to note that when we talk about the rally to be what it is today, it is very much a supply situation pertaining to covid-19. we talk about iron ore supply. it is still well below potential following that fatal dam collapse in 2019. supply is still not able to meet that strong demand. kathleen: how about oil? oil has had a run. how much further can it go? it seems demand is holding up. in fact, again, as economies reopen and people can travel more, there will definitely be a lot of places where demand goes up, as well. >> yes. certainly. on the oil side we certainly see the demand very strong.

the part of the oil context which for us is really one which is a policy call is what we see from opec-plus. so far the policy has been about managing supply so we keep drawing down inventories. so long as that has been the main thematic, oil prices seem to be well supported. that is indicated for the rest of the year. i think the demand story is well below -- this commodity is very exposed to covid-19 and its restrictions. about two thirds of oil consumption is tied to transportation. the moment when you have reopening's economies, the demand can come back. the problem is we are currently sitting with about 8% of state supply, actually close to 10%, under the control of opec-plus, which means we have seen artificial shortages and i will

keep prices higher for longer. kathleen: thanks so much for joining us. more perspective on energy ahead. a houston-based analyst joins us in the next hour. this is bloomberg. ♪

>> this is daybreak asia. i'm vonnie quinn with their first word headlines. india has extended its lockdown in the capital for another week. it has adopted stricter restrictions during a new wave of infections. restrictions had been set to end of monday but will now run until at least may 17. they are battling the world's fastest-growing outbreak of the coronavirus, reporting more than 403,000 new cases, along with 4000 deaths. tokyo has officially completed a test event at its national stadium in the count down to the olympics. around 1600 athletes, organizers, and media got a taste of what the games will look like when they begin in july. protocols were in place, including temperature checks and mandatory masks. tokyo's state of emergency has been expanded until at least the end of may.

boris johnson has confirmed that the next stage of lockdown easing will go ahead on may 17 as planned. people will be allowed to stay overnight with friends or relations and indoor hospitality will be reopened. limited area -- limited international travel may also resume. they have given more than 50 million doses of the vaccine and has its lowest infection rates since september. 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. this is bloomberg. haidi: the battle for crown resorts is heating up. blackstone is increasing its offer. that move comes after crowns rival -- crown's rival proposed a merger. once we know about these competing bids and what makes more sense for crown? >> let's start with the star

entertainment bid. it is nonbinding, it is hard to put a price on it. we will get to that in a moment. crown's problems are very well known. they cannot get there casino in sydney open after the regulator refused to grant them a license. they found evidence of money laundering and risks of -- links of organized crime. crown's operations are risks -- are at risk. star has a track record of operating casinos in sydney and brisbane. if it can merge with crown, it woke create a compliant -- it will create a compliant casino giant worth $12 billion. blackstone used to work with star before striking out on its own. that is at 12.35 a share.

kathleen: what's in it for investors? >> this is a premium exchange ratio. stars worst -- star is worth a quarter less than crown. star is saying this merger would deliver cost savings between 150 million to 200 million dollars per year. there is obvious synergies between these businesses in terms of court and aiding marketing and loyalty programs -- in terms of coordinating marketing and loyalty programs. this will be something for the new ceo at crown, he was named this morning. it will be interesting to see how long he remains in that job. kathleen: thank you so much.

paul allen joining us from sydney for the latest on this very big story. as for you, be sure to tune into bloomberg radio to get in-depth analysis from the daybreak team, broadcasting live as you can see in front of you from our studio in hong kong. listen to the app, radio plus, or bloombergradio.com. 20 morehead -- plenty more ahead. stay with us. ♪

haidi: whirlpool ceo says the chip crunch will last well into the quarter and possibly beyond it. speaking exclusive to us, mark let's said the production was being driven by supply constraint. >> there is stress in our supply chain. it has improved. then we had the texas winter storms which had a rippling effect on the plastics supply in north america. on top of that, you have the microchip shortage. this hit us later because we have slightly different supply chains set up compared to automotive companies. we make longer-term volume commitments. protection for some time -- but

at some point you will face rout. we see that in q2 and in q3. should -- chips shortage is significant. we hear about the industry talking about things getting better in q3. i'm not so sure. unfortunately, i would not be surprised if it is not over until the end of q4 or even beyond. haidi: marc, you have been nimble. you've changed your production line. you've tried to look for ways to navigate this quickly. how will you continue to do that? our price rises inevitable? -- are price rises inevitable? >> to put it in most simple terms, we basically have a pool system. we have orders and produce accordingly.

if you just have orders running against the system, you have chaos. we turned it around and have a constrained production. what we have available today is pretty much what we are producing. it is anything but efficient or normal, but that is how you have to run it. the second part is, on the prices, that has to do with a broader cost inflation that we see across the board. steel, plastic, its logistics, labor cost has started increasing. i know there is top or hope that this is a temporary blip -- i know there is talk or hope that this is a temporary blip. we announced in our earnings call that we have started to raise prices starting in january. that is the only way we can right now mitigate these significant cost inflations. kathleen: that was whirlpool chairman and ceo marc b

litzer. now a quick check of the headlines. a cochair of facebook's independent contract oversight board says facebook's internal rules for banning content is a shambles. the panel decided last week to extend the ban on former president donald trump for its post--- for his post surrounding the storming of the u.s. capital by his supporters. >> they are not transparent. they are unclear. they are internally inconsistent. we made a series of ackman nations about how to make their rules more consistent and clear. kathleen: moving on to tiktok, its owner has set its site on china's e-commerce market in an attempt to take on alibaba. bytedance is generating to -- is aiming to generate over $180

billion by 2022. the vet could help the firm surpass its tuner $50 billion valuation as it prepares for one of the world's most highly anticipated ipo's. this rideshare service will raise pair. -- raise fares. they vowed to prevent extreme cases where cuts are more than one third. haidi: let's take a look at dogecoin, the alternative crypto currency on an all-time high as billionaire elon musk appeared on saturday night live. when he was asked if it was a hussle, muska replied that it was. -- musk replied that it was not.

haidi: from on this, let's talk to joanna. super entertaining from a lot of different respects, but we had already seen some movements across these related assets even before elon's appearance on the show. reporter: there was such a big move up in dogecoin over the last week or so that some of this is kind of from the rumors, and people were like, he's not doing a whole lot while he is on. a lot of the air came out of the sales there. then there was the announcement that spacex, his company, is going into a satellite deal funded entirely in dogecoin, so

does coin is up from $.43 to $.57. it is really bouncing around. kathleen: we should all stress that that was a comedy routine. it was not an interview. they rehearsed that. that's what they chose to say to make a joke, we assume, although you point out any story wrote that when his mother joined him on stage, mother's day theme running throughout the show, the opening monologue -- her joke was she was excited about her mother's day gift but did not wanted to be dogecoin. depending on how you look at this, all this attention musk has put on dogepoin in the long run is a plus because in some sense he is taking it seriously. reporter: people are getting used to it. it is the fourth-largest cryptocurrency right now. it is too big to ignore. there could be a lot of momentum for it. a lot of dogecoin analysts are

saying it is good for cryptocurrency. the market has -- musk has always been like this. he has always been a little bit jokey and a little serious about dogecoin. haidi: who's laughing now? the latest on dogecoin. let's take a look at some of the other stocks we are watching. sophie: we are closely watching materials prices. goldman is recommending staying long on copper and natural gas. iron or futures in singapore continued to climb by more than 9% during the commodities rally across the complex. keeping an ion bluescope, which bloomberg intelligence says that it's discount is unwarranted.

we are keeping an eye on aussie casino stocks after crown received competing bids from star and blackstone group. in japan we are keeping an eye on honda, reporting they have suspended automatic manufacturing in india. they will be asked to close by city governments during the extended emergency. we will get a check on the local consumer there. kathleen: sophie cameron, thank you so much, getting us all set for the rest of the trading day. we will get you set for some more market analysis with citigroup. we'll get into what the dry weaken u.s. stocks means in asia and the carryover for the week, the outlook for stocks in korea. market opens in sydney, seoul,

and tokyo are next. we are watching currencies after the dollar hit a 10 week low and we see emerging markets potentially getting a boost. keep it right here. this is bloomberg. ♪

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kathleen: welcome to daybreak asia from bloomberg's world headquarters in new york. i'm kathleen hays. haidi: and i'm in sydney. asia's major markets have just open for trade. our top stories this hour, asia jobs at a steady start. attention now turns to inflation and retail numbers due out later this week. crown resorts is one to watch as it gets more bids.

blackstone is sweetening its offer after its arrival star entertainment enters the fray. there is a shutdown of the biggest u.s. gasoline gas pipe, the crippling cyber attack coming just ahead of the summer driving sit -- summer driving season. kathleen: let's take a look at hong kong and the forces shaping asian trade today. sophie cameroon joins us now. >> we're seeing temperatures in asia early monday morning. we saw daily cases top 7000. the yen is trading at a week i, at 109. stocks are slightly higher. we are keeping a close eye on asian oil players. we could see a rush for replacement fuel that could emerge. you can see traders turn to

asia. we are waiting on a speech in south korea from president moon. the korean won is trading firmer. switching the board to check in on the open in australia, this with commodities very much in focus. we're seeing some downside moves. that is great and grounds. we are seeing continued rise across the commodities complex. and aussie dollar is trading at a 10 week i ahead of the national budget due on tuesday. take a close look at commodities. this is a focus on the energy space. iron ore futures have jumped to a record in singapore on the demand outlook. new york crude also gaining ground. u.s. gasoline futures earlier rose more than 4% to may 2018

highs. if s&p saying you could see inventories of u.s. gas fall to a five-year low on may 14. f the colonial pipeline remains down. goldman's saying there is more upside for commodities by 6.8%. there is a goldilocks scenario coming together and with that they are seeing a go along crude and not gas, as well. haidi: we are watching crown resorts. one of the biggest movements this morning. it has jumped the most in six or seven weeks, up five close to 4% -- up to close to 4%. it has been a pretty interesting morning of developments. star is lobbying for a merger of the two casino giants, app essentially the same time blackstone is sweetening its own bid, offering structured finance

proposal, meaning investors have a lot to contend with. we also heard the naming of the new crown ceo, as well, within a short time. . como stocks are at a record high -- global stocks are at a record high. we are continuing to watch for news about inflation. let's get to a question of the day from our global team. how does the highest cpi we've seen a decade hit assets? such a key pillar of all the trading action we are seeing so far this year. we have the head of ages trading strategy at citigroup. does this give us any conviction of where -- is this transitory, is it reflation, is this an ongoing thing that markets rightfully back into? did they give us any more information on that?

>> they did not tell us free much about that but commodity prices are telling us that inflation in the short-term, at least, has some very scary numbers. we're going to be, for example, this week's number in the u.s., we are looking at something like 3.6%. what the market has to start doing is price in some probability into the bond market. that perhaps this inflation not as transitory as thought. at the moment, i think the view is very much that the inflation is transitory. i think it will last in -- last at least until the end of the year. once they start withdrawing stimulus, we will see if the inflation number has not shrank very much. the fed is experimenting and has

for the last 10 years. there trying to run a hot -- they are trying to run it hot, but at the end of the date disinflationary forces are still very strong in the economy. we have to reverse some of the things that of caused disinflation. i do not think we are anywhere coast -- close to doing that. haidi: are we seeing a bit of a gap developing now. for so long and this pandemic it has been about asia pulling ahead with the recovery. now we are seeing some of the worst outbreaks. while the u.s. and u.k. are showing clear signs of recovery. does that change asset allocation preferences? >> from a mechanical perspective, when you look at the upside risk reward argument, yes, it does. what it does not take into

account in asia is that asia has underperformed by about 15% since the middle of february. derek to key drivers to that -- there are two key drivers to that. china is moving to a tightening bias. there are bubbles and asset markets and equity markets. even the regulators are warning about that overseas. the chinese market took it very much to heart. the bubble building short-term in hong kong tech names, that seems to have burst. now we are at very interesting levels, we think. even this morning, where basically the market needs to hold to prevent another 14% downside. we think the state funds -- they are the first driver. this will be something probably achieved in the u.s. and u.k. by next year, perhaps in australia if the rba does decide to move

onto yields controlling in july. i think that is very much what we are seeing. the pboc is being tricky. i think the second thing is really the reaction to the virus. the reaction to the virus across asia has been anything from incompetent to sluggish to autocratic to complacent. you can take your favorite country and put them into one of those categories. so we get a better hold on vaccinations and are scheduled to reopen economies, i thing i read they will take a test it will take 1.7 years to reopen. kathleen: i would like to jump in. it is ironic to me -- the u.s. was criticized for its response to the virus and yet it is leading the world with vaccines,

producing them, vaccines are rolling out like crazy. and another irony is although stimulus checks have helped fuel china's recovery, ages recovery. if you look at the latest trade deficit, half of that big deficit is with china now. that is what those $1400 checks have done. buy a lot of stuff from overseas. when you look at asia, how important is it that more u.s. fiscal stimulus comes to help asia keep afloat? especially countries hit hard by the virus. it move ahead once they finally can get this whole vaccine process in place. >> i think, ironically, we are in a strange situation where in the u.s. economic data is good for the equity market. the fed will continue its stimulus. the market will go higher. in this region, as well, if we

get bad economic data over here, particularly for china, what we are waiting for is some sort of catalyst that says that the pboc is prepared to loosen policy. what is interesting is at the moment, as china continues to tighten policy -- inflation in china is only running out 1% here. real rates are positive. what is interesting is the three-month forward on rates trending down with the equity market. we think is the equity market falls here, you could actually see a very significant change in the way the pboc is actually approaching the economic environment. i think the stimulus checks arst certainly -- are certainly helping the recovery, but that is not translating to helping equity prices, as such.

haidi: always great to have you with us. let's get you another check on crown resorts, as well as star entertainment. crown shareholders now with three options on the table when it comes to that star entertainment proposal, a full merger, or that sweden deal between blackstone group -- that sweetened deal with blackstone group that is gone up by about 4%. star entertainment is also higher by 4.3% let's get to vonnie quinn with the first word headlines. >> u.k. prime minister boris johnson has confirmed that the next stage of lockdown easing in england will go ahead on may 17 as planned. people will be a lot just a overnight with friends and indoor hospitality will be reopened. visitors and international travel may resume.

the u.k. has given more than 50 million doses of vaccine and now has the lowest infection rates since september. european leaders have urged president biden to loosen restrictions on coded vaccine exports before embarking on complex discussions on patent waivers. on friday the u.s. suggested suspending international property rights for poor countries. the leaders of germany, france, and italy said that while that may boost it longer-term, action is needed now. india and the eu have agreed to trade talks. they had a virtual summit between e leaders and the eat -- between eu leaders and indian for prime minister narendra modi. iran is pushing for its banking industry to be given guaranteed

sanctions release. the country's central bank has confirmed to bloomberg that it is directly involved in talks to ensure any removal of u.s. sanctions is tangible for the financial system. negotiations resumed on friday for reviving the 2015 nuclear agreements. 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. kathleen: still ahead on the show, we will have a chat with cls a head of career research paul choi. he sees good momentum for korean stocks on both the earning and liquidity front. i'm next, oil and gas supply in focus after the shutdown of the colonial pipeline in eastern u.s.. we will get some analysis from andy lippo. more on that, this is bloomberg. ♪

kathleen: fuel suppliers are growing nervous about the possibility of gasoline and diesel shortages across the eastern u.s. almost two days after a cyber attack knocked out the massive colonial pipeline. our next guest says the timeline for a restart is now crucial. andy lippo is a consultant, president of lippo oil associates. andy, let's start a little broadly. we see things like oil fields in saudi arabia or other parts of the middle east getting attacked physically. now, more and more, the cyberattacks seem to be the big threat. our oil companies, -- are oil companies and pipeline companies ready for this?

>> judging from the expense we are seeing at colonial pipeline, we have seen that malware has been able to infiltrate the largest pipeline in the u.s. and i imagine that all the pipeline companies, as well as the oil companies and infrastructure companies are looking at this event and saying -- what happened? how did it happen? how will he prevent it from happening to our own facilities? what additional steps to we need to take in order to prevent this from happening in the future? what i see is that the perpetrators of these events are step ahead of the defenders of the facilities. the defenders are trying to prevent every sort of event that happened. kathleen: right now it seems like everybody in the industry may -- maybe even policymakers, are playing defense. they have to deal with the situation and move it ahead. memorial day weekend is coming up.

a lot more week -- a lot more people driving. you did not want to see the price of gasoline go up. it surely will. how big of a hit? so far it's hit three dollars a gallon. that does not seem so bad to me. what if it moves higher? >> i think colonial pipeline -- we should be -- it is only impacting the mid-atlantic and southeastern states of the u.s. and unlike a hurricane event on the gulf coast, we still have refineries up in operation waiting for colonial pipeline to pick up the product on the gulf coast and deliver it into those markets. that is one difference. i think the market itself will go up three cents to five cents per gallon. a one or two day outage is really an inconvenience for the market, but when you get to four

or five days, you can see more widespread outages of product at the terminals because colonial delivers to those terminals every five days. haidi: one of the risks you are flagging is potentially the deliveries made to key airports. is that a real area of concern to you? is there a way to circumvent a supply shut -- a supply-side shock? >> this is a very big concern. when you look at the efforts of colonial service, it includes fairly good sized hubs for major u.s. airlines. if they are not getting the jet fuel resupply -- any other terminals that might have jet are very few and far away, so what airlines have to do is fill up their aircraft at a place outside of the region and holiday inn -- and haul it in

and top off their tanks. this is a big issue for the airlines. i am sure they are trying to figure out their contingency plan and whether they will be able to maintain schedules over the next week or so. haidi: hindsight is always incredibly wise. is there now and urgency when you take a look at attacks like this for companies and power grids to be able to do better at defending themselves? joining on that agent's asian side that is led to -- the -- joining on the digitization size that has led to vulnerabilities like this. >> companies might think they are not vulnerable but they may still well be and have to re-examine the systems they have in place to prevent something like this happening to them in

the future. it certainly is a wake-up call because we do know that malware and ransomware has been around for a number of years and while the policies that a number of companies have made make them feel secure, this event really demonstrates that more needs to be done. haidi: if this proves to be some sort of temporary impact, i think part of the point you're making -- i want to step back for a second. in 21, u.s. reopening to other parts of the world, still having a tough time with the virus. what you see the price of crude oil doing? >> if we are to look at brent, it will have another run up to $70 per barrel. having said that, we know that opec-plus has not restored all of that production cut. they still could bring on another 7 million barrels a day in production throughout the balance of this year. they cleared themselves the

swing producers in the event that more shall production comes online or we see more demand in places like india, brazil, or elsewhere in southeast asia where the virus continues to run rampant. i think that as we move up, we will see more pressure for opec-plus to start production. on the other hand, as you alluded to in an earlier story, we have had the u.s. and iran taking baby steps in indirect talks in vienna and i think both sides are interested in making a deal that will lift sanctions and return irani and oil to the market, as well as a radiant part is -- as well as iranian participation in the nuclear agreement. haidi: i want to end on your views on india. are you watching for real implications on the crude market ? >> i definitely am. to put it in perspective, india

consumes about 5.3 million barrels a day on a pre-pandemic level, roughly one quarter of what we see in the u.s. and one third of what you see in china. one can see that if india were to go into a lockdown and we lose demand of 20% or 30% like we saw in the u.s. or elsewhere around the world, that would equate to about 1.5 billion barrels -- 1.5 million barrels per day which is enough to start pressuring oil prices downward again. haidi: andrew lupow, really great to have you. you can read more about the hacking story today. "daybreak" has that for you on the terminal. it is also available on the mobile in the bloomberg anywhere app. ♪

kathleen: let's get a quick check of the latest business headlines. star entertainment has offered to merge with australian casino rival crown resorts. they have set up a bidding war with blackstone. stars propose an exchange of 2.6 star shares for each crown share. that implies a potential value of more than 14 aussie dollars per crown share, topping blackstone's sweetened cash offer of $12 and $.35. crown says it is accepting stars proposal. they announced the die show -- the milk marketer slashed its revenue forecast to 1.5 new zealand dollars, down from a high of 2 billion kiwi last

year. the stock, the largest on new zealand's market, has plunged from 21 new zealand dollars last year to just over six dollars per day. shall expect clean energy to make up half of the company's energy mix. the anglo dutch major, along with its european peers, is aiming to be a net zero admissions -- emissions energy company. haidi: coming ask -- coming up next, we will get an outlook on the korean market. we are seeing momentum for these stocks. we have the market opens around the region. this is bloomberg. ♪

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haidi: a big week ahead for corporate earnings. major tech names including soft tank and alibaba reporting. we will also be getting the results from chipmakers. speaking of the chip crunch, japanese automakers will be reporting their results. mitsubishi and subaru will be kicking it off on tuesday.

let's get it over to sophie with a check of the markets. sophie: this monday morning, most stocks are higher across the region. kiwi stocks off 10%. we are seeing nikkei adding 9/10 of 1% with names like gsc holding among the gainers today. we are seeing oil related names rise across the region. tracking gains we are seeing. u.s. gasoline futures nearing a two year high. that is lifting refiners across the region. fortescue shares rising for a fifth straight day, climbing to a february 25 hi. i want to pull up this chart on the terminal. you have the dollar back to square one after the jobs report on friday reinforced a dovish stance for the fed.

pushing the dollar firmly below its 2021 uptrend appeared that is indicated by the line on this chart. there could be more stimulus ahead. biden is to host four congressional leaders at the white house on wednesday. now to check in on the korean yuan, which is leading gains in asia. also leading gains for em currencies with a gauge of the emerging market. forex hitting fresh highs once again given the focus we are seeing on that space. kathleen: let's stick with this whole look at korean assets. stocks have been on a tear since march, outperforming every major market globally. despite the rally, some say valuations are starting to catch up. let's bring in the head of korea research from cls a.

valuations starting to patch up. what do you see? >> korea had a big rally. korea was categorized as a beneficiary of covid-19 because career has a high exposure to technology and it is advanced in the i.t. infrastructure. there are a lot of sectors that benefited from covid-19. the value is that historical highs. it is not the cheapest in the world. it used to trade at a discount to a lot of the regional markets. it is no longer the cheapest market. kathleen: i want to touch on the vaccine. on the virus itself, korea was one of the countries that seemed to take in the strong, active, aggressive steps and lead many countries in getting under control. it is true that on vaccines,

they are lagging. the markets have done so well. is that something that could get in the way or is that something investors can put to one side? >> i think it is a potential risk. it is not an immediate risk because right now, the economic recovery and earnings recovery is taking more center stage. as the year goes on, if the vaccination rate stays low, as well as other countries, it could cause some domestic economic recovery problems. this is going to be especially a problem if countries like the u.s. with a strong economic recovery, they start to think about raising rates. kathleen: haidi: it seems like -- haidi: it seems like we are seeing a reversal of the trajectory. we saw the likes of japan and other parts of north asia including korea be the leaders

in vaccine and the virus management and now things are starting to turn. does that mean the growth differentials are starting to look unfavorable soon? >> no. i think we have time until the second half. we have to see how the vaccine will be rolled out here. a lot of governments are saying they have secured enough vaccine for the country to be vaccinated with herd immunity by the end of the year. it is uncertain at this stage. haidi: what do you make of what happens next? what is the next chapter when it comes to the supply shortage for chips? i know you are overweight on the semi conductor supplies. you also overweight the automakers as well. >> we are generally bullish on

the cyclical stocks as well as reopening. the chip shortage is good news for korean chipmakers. the share price has not been reacting a lot to the good news that has been coming out. the quarterly earnings that came out a couple of weeks ago. it is not reacting. maybe it is because the retails have bought so much in january that the flow in terms of the flow into the stock, especially the large cap, has been concentrated over 50% this quarter. it might be a flow issue here. kathleen: i am curious to take a look at the macro side. how is the korean economy going to look over the course of the year going into next year and what does it mean for the bank of korea? >> right now, it is a tug-of-war

between the earnings recovery and rising inflation. rising inflation is a risk because korean retailers could -- put in more than a hundred billion dollars of money into the domestic market. the household debt has increased by over a hundred billion dollars and the government has increased a lot of their debt. the debt level is very high in korea. it especially rose sharply last year. as the year progresses and the recovery starts to begin -- it will be a pressure for the be ok to raise rates because inflation is already above 3%. it rose to 2.3 percent in april. that was driven by fresh food prices.

a lot of the economy including oil has gone up. inflation pressure will continue throughout the year. haidi: always great to have you with us. paul from clsa. next, the indian capital extending its locked down for another week as cases and death continue to surge. we have the latest. this is bloomberg. ♪

vonnie: this is daybreak: asia. bloomberg sources say the hackers who forced colonial to shutdown the biggest gasoline pipeline on friday began their blades against the company a day earlier. the hackers are part of a cybercrime gang called dark side. we are told last thursday, they stole 100 gigabytes of data in two hours before locking systems with ransomware and demanding payment. india's capital has extended its lockdown for another weekend. restrictions that had been set to end monday will run until at least may 17. india is battling the world's fastest-growing outbreak of the virus, recording more than 100

43,000 new cases on sunday. the e.u. has agreed to resume long stalled talks. the agreement was struck at a virtual summit between e.u. leaders and india's prime minister. it is aimed at boosting cooperation in fields including digitalization, health and climate change. dogecoin tumbled after an all-time high after elon musk appeared on saturday night live. when asked on the show if it was a hussle, elon musk replied it was. >> it is an unstoppable financial vehicle that is going to take over the world. >> it is a hussle? >> it is a hussle. vonnie: global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries.

on vonnie quinn. this is bloomberg. kathleen: as china was closer to rolling out the first sovereign currency, speculation has reached fever pitch. let's cross over to our shanghai bureau chief. charlie, i guess some are glad to see it not having an impact so far? >> you're right. people are not hugely interested at the moment based on our reporting, people -- participants of the trial currently in the seven city of shenzhen were interviewed and showed little interest. there is a lot of reason for that such as views of we chat payments, the apps that

currently account for the majority of the country's payment system. there are also concerns about privacy issues. they are afraid the government might use that to do surveillance on them. for business, that is also a problem because they don't want the government to monitor their performance. because they are in competition with state owned enterprises in the country. haidi: is that lack of trust something that could be a problem for progress being made in the digital currency? >> yeah, the pboc so far has offered a few details about how the digital currency might be used overseas, but the new response to the currency so far underscores the challenges faced by the government and pushing

for its international use. even if the authorities eventually convince or force citizens to embrace the e.u., it is -- the yuan it is far from clear they can do with international businesses. because of such caution, yuan's share of global payment system is totally out of proportion with the size of china's economy, which is the second largest in the world. kathleen: isn't it partly that the challenge that any other country's currency or any digital currency has to displace or begin to compete with the u.s. dollar, which is backed up and made attractive in many ways by having the world's most illiquid treasury market, it seems to me that is another place where china is making strides. it still has a ways to go. >> you are right.

it is a long way to go. the international use of the currency remains negligible as i said. it only accounts for 3% of the total payment system. it is an interesting development. we will see how it goes. haidi: tencent backed insurance tech firm water. is one of the fintech in companies that has managed to pull off an ipo this year. the company plunged nearly 20% in its debut as those regulatory and geopolitical concerns hold. the co-founder told stephen engle when he plans to put the ipo proceeds to work. >> we are leaving the platform. we are the second largest online distribution platform in china.

we are confident in the prospect of the company. we believe the stock price will reflect the potential of the company and we are confident in the future development of the company. >> you are betting on the potential. how far down the road until you reach that potential? right now, there is lots of regulatory uncertainty in china in the space you do business. you have not been profitable yet. >> the recent regulatory remediation is more fintech related and tailored to insurance. we are not -- we operate our activities in compliance with the regulatory framework.

>> how are you concerned or how concerned are you the united states under the biden administration is going to continue their scrutiny of u.s. chinese listed companies? i am not saying you are under scrutiny but there is always the potential chinese companies could be investigated and eventually be delisted. >> we are confident in the business regime. >> when you plan to be profitable? i was looking at some of the numbers. you had a net loss of $101.7 million in 2020. that is about double what it was in 2019. you are growing the business so there is more cost at that time. when can you tell investors as you go public, when are you going to be profitable? >> it is a little bit early to

predict profitability. we believe we are on the right track to strengthening our profitability. kathleen: moving ahead, be sure to tune in to bloomberg radio to hear more from the day's big newsmakers and get in-depth analysis from the team broadcasting live from our studio in hong kong. listen via the app, radio plus, or bloombergradio.com. more ahead. this is bloomberg. ♪

kathleen: find time for a quick check of the latest headlines. a cochair of facebook's independent oversight board says internal rules for banning content are a shambles. michael mcconnell told fox news sunday facebook needs to fix the process to win credibility. >> they needed some time because there rules are a shambles. they are not transparent. they are unclear. they are internally inconsistent. we made a series of recommendations about how to make their roles more consistent. kathleen: tiktok's owner has set

its sights on china's e-commerce market, hiring thousands of staff and roping in big-name sponsors. bytedance is planning to generate 180 $5 billion in online sales by 2022. the bet on retail could help the firm surpassed its $250 billion valuation as it prepares for one of the worlds most highly anticipated ipo's. the chinese ride-hailer issued a statement discussing how fares were divided between drivers and the firm. drivers say drivers earn an average of 79% of what customers pay. haidi: sharply higher on the sydney session.

blackstone increasing its offer for an australian casino. the move comes after the arrival is putting forward its measure. paul allen joins us with the details. we also had the ceo being named. it has been a busy morning so far. paul: it has been quite the morning for the gaming stock in sydney. it is nonbinding. right at about $14 per share. star says it is offering 2.68 of its shares for each share. that values to 14 per share. crown has been beset by all sorts of problems. it has a casino on the waterfront which it cannot open because regulators refused a license after acting -- after

accusations of money laundering. the star bid is an elegant solutions to all of that. star saying it has a track record of operating casinos. and by emerging, it would create combined casino giant worth $12 billion. we have blackstone, which interestingly previously partnered with star to win over crown, going it alone in raising its own offer for crown to about $12 and 35 per share. kathleen: when you put it all together for us, you have all these things happening at once. investors want to know, where is this likely to go next? is this it? you think blackstone steps aside and says it is over for our bid or which ball is in whose court? paul: there are multiple balls

in multiple courts. one that really matters is crown, which has not formed a view. crown is considering what has been put in front of it today. for investors, there are various ways deal can play out. star is seeing a merger would bring some cross savings. the star chairman saying in a statement there is significant scale and diversification options here that could unlock $2 billion in certain energies. -- in synergies. we will have to see where this goes. who moves next, whether either party sweetens the deal. it does put the new ceo of crown in interesting position. he was just announced as the ceo

today and now he is placed in a situation which will have have asking questions about how long his tenure is going to be. kathleen: sounds like a couple chapters in a made-for-tv movie. we are going to speak to the ceo at 12:15 p.m. hong kong time. if you are watching from sydney, that is to: 15 p.m.. what we are watching is stocks. will be back to sophie in hong kong. sophie: we are watching chinese copper stocks as 15 major smelters have agreed to trim purchases by nearly 9% on a yearly basis as part of decarbonization efforts. last month, smelters recommended limiting capacity. this has developed a goldilocks scenario.

copper prices in london surged to fresh record highs. topping 10,500 bucks. i run or prices rising to a record in singapore. this as chinese material stocks were an outlier. gaining ground as we saw other sectors gaining pressure. china stocks cap the worst week since march on friday. putting the cs 300. -- haidi: coming up, we get more markets analysis with ben powell. we will be hearing from the powell pacific cio at the bottom of the hour. let is just about it for daybreak asia. our markets coverage does continue. we're looking at the start of trading for hong kong, shanghai

and shenzhen. this is bloomberg. ♪

>> this is bloomberg markets china open. start of the trading day in the chinese mainland and hong kong. a equities starting the week higher. the u.s. jobs miss strengthening the case for ongoing stimulus. investors looking to tuesday's inflation reading. this surge is the strongest in almost 10 years.