sophie: welcome to daybreak australia -- haidi: welcome to daybreak australia. shery: good evening from bloomberg's world headquarters in new york. haidi: surging commodities prices stoke inflation concern. traders fear rising prices will spoil the record run to equities. gasoline rally dissipates as

colonial says most services will be back by the end of the week. president biden says russia gave some responsibility. it is budget day in australia. energy to infrastructure. health care stocks will be in focus. shery: this was the picture across wall street. we saw u.s. stocks falling from record highs with the nasdaq 100 underperforming. we have the u.s. cpi report on wednesday. the dollar index held steady. we had more focus on the british pound, jumping to the highest since february after u.k. elections denied scotland's independence party an outright majority. it was all about the inflation narrative. we had commodity prices surging. take a look at wti. we are seeing a little bit of gains. colonial pipeline saying it is

restarting segments of the texas to new jersey line after last week's hacking. we had gasoline's rally dissipating in the new york session. we did get futures in erasing all of the earlier gains that topped more than 4%. heating oil at the strongest since april of last year. let's see how we are setting up for the asian markets. sophie in hong kong. sophie: futures are pointing to losses after the gains we saw on monday for asian stocks that drove benchmarks in seoul and sydney to a record close. seeing pickup with commodities going to overdrive. the aussie dollar trading at a february 2018 high against young. risk proxy above 85. i run or above $200. copper above 10,000. that has helped underpin the rally in aussie miners.

the index has gained more than 50% since the lows we had last march. it is a company -- tech stocks in australia have been flocking to become the worst performing sector your today in the face of higher inflation expectations. optimism fueling optimism we are seeing in bond markets. increasing the large overweight on commodities on this up global growth picture and the anticipated shock of inflation. shery: let's talk about those price pressures. one gauge of inflation at the highest since 2006. our next guest says with the economic growth prospects remaining so positive and corporate earnings coming in stronger than equities should continue to perform well. let's bring in the chief investment officer at visor

capital management. is this all about the rotation into cyclicals and away from the valuations? >> i think so. we are going to continue to rollout the vaccine. more companies are reopening. people are getting out. they are going to restaurants. it is getting more difficult getting a reservation. that is going to flow through the entire economy. at the same time, that employment picture is mixed because we did not see the pick up in jobs we expected. it appears to be a lot of people are reluctant to get back into the job market because companies are reporting they are trying to hire. some companies are seemingly going through desperate measures, offering bonuses and all kinds of things to get people to come back to work. that creates a labor shortage, which is putting upward pressure on labor costs. it is astonishing because this

last report showed that it is very quick, early to see it. labor costs seemingly are beginning to rise and with commodity prices moving upward, it is a clear picture. shery: let's delve into those inflation returns -- inflation concerns. >> you don't want to be preempted. we also don't want to be so reactive you are late. we have the tools to deal with these inflationary issues, but when you use them late, they can have a jarring effect. i think the challenge for us is to find a balance. shery: what do you think about that? >> he is trying to walk a very fine line. on the one hand, he cannot get too far ahead of his colleagues at the fed. they are committed. they are on public records saying they are going to keep

rates down for a long time. they are not even thinking about thinking about raising rates. when you look at the data, it is inappropriate to have a policy that is so fully committed to stimulus at the same time that fiscal policy is also committed to stimulus. we have a very strange set of circumstances and i worry the fed will have to move a lot faster than it intended. haidi: when you have low rates, it is the backbone when it comes to the market's seemingly voracious appetite. i wanted to throughout this chart taking a look at what we have seen so far as far as the froth being taken out of the market. the tech giants seeing some decline. both the chip stocks falling below the 50 and 200 day dmi's.

if you agree with the growth narrative in a longer, when do these stocks become bargains? >> it will be a wild. the bargains i find are in the cyclicals. the banks, the energy stocks, real estate. those stocks are still very cheap, especially financials, banks in particular, insurance companies. if interest rates are going to stay low for a long time, which is not likely to be the case and as rates to rise, that hurts the longer assets. the faang stocks, the chips, those companies that have tremendous growth ahead of them. you discount those future growth years at higher discount rates when rates rise. that is why they are being heard. the more cyclical plays have lots of opportunity to raise profits. the banks will do much better as

rates rise and the interest rates spreads increase. it is a tale of two cities. haidi: what about crypto? i'm curious about your views on that and how much wind gets taken out of those sales once we start seeing indications rates are here to stay. >> the crypto thing is sort of its own unique animal. you often see that gold comes under some downward pressure when rates rise because the opportunity cost of holding gold goes up. i expect some of the same may happen with crip though. -- with crypto. crypto is seen by many as an alternative to money. it can be if it is widely acceptable, but the problem is getting that except ants. -- getting that acceptance. as we have seen, bitcoin has

been extraordinarily volatile. there are too many crypto's. there is no way it is possible for all of them to succeed. i think we are going to see a major shaking out in the crypto space with the less successful ones getting slaughtered when rates rise. that will also put some pressure on the others. i am sure we are still in the very early stages of crypto. it is going to be a long timeline. they have got to survive some difficult times they have not yet faced, namely higher interest rates. haidi: it is always an interesting story. always great to have you with us. chuck lieberman, chief adviser at capital management. let's get to one of our top stories. colonial is in a race against time to overcome a cyberattack that has frozen fuel shipments.

the biden administration has pulled together an interagency task force to address the breach and to ensure fuels rise keep flowing to major cities and airports. >> it is a top priority for the administration. these sorts of attacks are becoming more frequent. they are here to stay and we have to work in partnership with business to secure networks to defend ourselves against these attacks. haidi: let's get more from our energy editor. give us the state of play at the moment. how quickly are things looking to potentially turn positive? >> colonial said today it could be the weekend before they restore total service. their concern -- their ceo told federal officials they want to make sure all the ransomware is neutralized before they do a big restart. just to avoid a repeat.

at this point, we are seeing wholesale gasoline prices already rising in new york. north america's biggest fuel market. atlanta is expected to probably take a big hit because it is landlocked. if you are in new york or philadelphia, you can get shipments of gasoline on the ocean. atlanta is landlocked. they have no choice but to get them by pipeline or trucks. we are already seeing fleets of tanker trucks leaving places like south texas and louisiana where the refineries are to get to atlanta and other eastern cities. shery: this is coming at a bad time for the u.s. as we are gearing up for the southern -- the summer holidays. this chart on the bloomberg showing how demand has started to rise with more drivers hitting the roads. what is the outlook from here on out? can we expect colonial to start negotiating a ransom? what do we know? >> colonial has been tightlipped

about whether they are in talks at all with this group. what we do know is it has never happened on this scale to the petroleum industry here. they have got a few days. it does look like regional reserves of everything, gasoline, diesel and jet fuel will start to run low. then all bets are off as far as how prices go to attract supply and how much does this cripple the economic recovery. shery: joel carroll in houston, our energy editor. we will get more analysis with the -- later this hour. haidi: coming up, it is budget day. the fiscal windfall from soaring iron ore prices and the following jobless rate is set to narrow the budget deficit. we will take a look at what to

expect. this was bloomberg. ♪ -- this is bloomberg. ♪

vonnie: you are watching daybreak australia. israel has launched airstrikes on the gaza strip after palestinian militants fired rockets toward jerusalem. officials in gaza say 20 palestinians were killed including nine children with 65 people injured. israeli prime minister benjamin netanyahu accused hamas of crossing a redline after days of clashes in east jerusalem. malaysian officials say -- is suing more companies in an attempt to recover assets worth more than $23 billion allegedly

linked to the state owned investment funds. the finance ministry says a total of 22 civil suits have been filed. it is the latest effort to recover billions from 1mdb. the u.s. food and drug administration has expanded emergency use authorization for the pfizer beyond tech vaccine to include adolescents 12 to 15 years of age. currently the, the shot is approved for those 16 and above. -- currently, the shot is approved for those 16 and above. as of the end of april, 1.5 million cases in those 12 to 17 are reported to the u.k. prime minister brian johnson -- boris johnson is remaining -- is cautioning people to remain cautious. next week, pubs and cinemas will be allowed to serve customers indoors.

transmission is no longer high or rising. >> this means the rule of six or two households that is applied outdoors when no apply indoors and a limit outdoor meetings will increase to 30. from next monday, you will be able to sit inside a pub and inside a restaurant. you will be able to go to a cinema and children will be able to use indoor play areas. 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. i'm vonnie quinn. this is bloomberg. haidi: australian treasurer josh wright and berg is expected to announce a much smaller than expected deficit. iron ore prices as well as the following jobless rate has seen the economy bounce back from the pandemic faster than expected. what are the expectations from the budget? paul: this budget brought to you

by the v for recovery. the lid year treasury estimate was for 84 billion. that is the largest deficit contraction on record. a lot of this has to do with the iron ore price. the futures hit the record to 26 a ton on monday. the typical estimate you see is for $55 a ton iron ore. this is a blowout number. the typical rule of thumb as everyone dollar movement means 250 million for governorate revenue. -- government revenue. the expensive job keeper program is gone. more people in jobs means more tax. a number of generous measures have been announced. $1.2 billion for apprenticeships. $1.7 billion for childcare subsidies. all of this aimed at getting more people back to work. all of the stimulus keeps on

coming and this government has said never mind the deficits. shery: with more spending on the way, what stocks are most likely to benefit? paul: a lot of the infrastructure spending committed. there is a boost coming in the budget for phrased homebuyers -- for first home buyers. that is likely to benefit banks and some of the construction and real estate firms. there is also going to be income tax breaks for low middle income earners. they are likely to be extended. there will be consumer stocks as well. consumers have been sitting on all these tax breaks so far. 130 billion in savings has piled up in the pandemic. the government would like to see some of that being spent. the private sector can take over some of the burden from the government. shery: paul allen in sydney.

we break down the big budget after it is released. the shadow minister joins us tomorrow. we will speak with jill sheppard. coming up, we look at why amazon has borrowed more than $18 billion it does not need through its biggest ever bond sale. the details ahead. this is bloomberg. ♪

shery: amazon has borrowed more than $18 billion through a bond sale. it is the company's first debt offering in over a year and its biggest ever bond sale. let's bring in kriti gupta. the big question seems to be why is amazon doing this now. give us the details of this offering. kriti: 18.5 lien dollars. that is how much amazon is

putting into or selling -- how much bond they are selling. they are an investment grade company. they also do not issue that often. the last time they did was with a 10 million dollar offering. that was back in 2017. scarcity is a factor. not only are you seeing a high related company, but you are seeing them issue a really big amount. that does not outweigh the demand. you saw some of their pricing come in at 115 basis points over treasuries on their highest trench. it came down to 95 basis points over treasuries. that tells you there is a lot of demand for this bond sale already. this does not even include the fact they are giving some of their proceeds right back to the investors, which is all the more reason to make the bond sale attractive a lot going in amazon's favor.

haidi: you talk about this being unusual. why did they -- why are they doing this now? kriti: it is because they can. the lowest spread over treasuries in three years. they are taking advantage of this barring timeframe, this idea they can borrow and they are trying to capitalize on the fact there are low interest rates and that those rights can go further. it is key they are taking advantage of that while they still can even if it is just to bolster up the cash cushions. shery: what does this mean for other tech companies? kriti: it very much opens the door for other tech companies. crucial when we are talking about apple, microsoft. not just tech but other companies outside the tech couple. -- tech bubble. if you are company and you want to raise cash, now is the time to do it.

try to take vintage of the low rates. the one downside is the amount of duration risk. that is also a reason to issue. this could be the start for a flood of issuance. haidi: kriti gupta with the latest on amazon. get you a quick check of the latest headlines this hour. an ntsb report says the owner of the tesla model vehicle slammed into a tree last month and a while behind the wheel for a short time before the crash. the owner and the passenger were killed appeared both bodies found in the backseat. it appears the automated steering system was not switched on. the u.s. is looking into an issue that could result in the loss of directional control in more than a million vehicles. the review involved honda

accord's made between 2013 and 2015 and was launched after two accidents and 107 complaints. honda says it will cooperate with the investigation. indigo plans to raise $104 million. in january, the indian carrier shelved plans to raise capital, saying internal supports would be sufficient. the cfo has since resigned and has been replaced. shery: we do have breaking news. bloomberg has learned a small group of private sector companies with help from several u.s. agencies disrupted ongoing cyberattacks against colonial pipeline and more than two dozen other victims. colonial was able to recover some stolen data because of the intervention, which stopped the flow of stolen data heading to russia. it is believed to be the

ultimate destination of quitting to three people involved with or briefed about the investigation. they are telling us the private sector as well as the u.s. effort took down servers and recover data and the colonial information had not been sent to russia and russia seemed to be the ultimate destination. the takedown occurred on may -- on may 8 and enacted my companies -- according to sources. the intervention involve the white house, the fd -- the fbi, the cybersecurity and infrastructure security agency as some of those agencies that help in this effort. coming up next, key china inflation effort is due out in a few hours time with a commodities surge expected to show up a factory prices. we will break down the numbers for you. this is bloomberg. ♪

haidi: we are just getting breaking news now. the statement out from colonial, the pipeline situation and the hacking incident has spread some panic across gasoline and energy markets. colonial commenting now when it comes to the situation of operations, their manually operating their north carolina to maryland segment. that segment will only run for a limited time.

the maryland segment is to temporarily run as inventory is available. we have seen a mobilization of a government agency to make sure supplies are being insured in it comes to airports and other transportation. this is all coming from colonial 's commenting. a temporary time manually operating the north carolina to maryland segment. we have seen colonial saying they see the pipeline coming back within days, probably by the weekend. saying it is a restarting portions of the line following the cyberattack. colonial is ace -- is a key supplier of fuel to the eastern part of the u.s. restoration of the operations seen by the end of the week. as we hear now, some limited temporary elements getting taken

place as well. that is the latest when it comes to the colonial pipeline situation. let's get you rest -- the rest of the news with vonnie quinn. vonnie: a summit with companies impacted by the global chip shortage. according to an invitation obtained by bloomberg, -- to bring together chip suppliers and -- the u.s. is unlikely to come up with a quick fix to the global shortage. the blood and white house says it will protect gay and transgender people against discrimination in health care. it is reversing a trump era policy. the policy affirms that federal laws per fitting -- for bidding discrimination also apply to gay and transgender people. opponents and supporters say for the liquidation is -- for the is likely.

movements to contain a rise in infections. the curves will be in effect from may 12 until june 7. most will stay open. social gatherings also banned. travel between states is also prohibited. in india, health authorities are warning about a fungal infection seen in some covid-19 patients, which can disfigure facial features and even killed. india is still in the midst of the world's fastest growing coronavirus outbreak. indian officials tell us they are in talks to import millions of vaccinations to help avert a potential third virus wave in mumbai. talks are underway with the state government.

mumbai is open to any approved vaccine and the financial hub will pay extra to maintain logistics. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i'm vonnie quinn. this is bloomberg. haidi: china's key inflation gauges are expected to post increases in april. this as the price rarely boosts producer prices. kathleen hays is here with a preview. let's start off with the factory gate number. what is being expected? kathleen: we're looking at inflation so closely. a sign that the global economy, which in many places is a rebounding, to see how much inflation is producing. that is why china's producer prices are such a focus. we have a chart -- you can see,

showing you what is expected. 6.5 percent year-over-year, up from 4.4% in march. domestic steel bar prices climbing in april. ready percent year on year. -- 30% year on year. a lot of investors are looking at the demand for steel in china as something that could give them ideas about more investments. these bars make it clear what is going on right now. domestic oil prices retreated from their peak that was around one hundred 50% year-over-year rise early in april. they are still adding to this producer price index. it is always good to see inflation rise to a certain extent because people figure that is a sign china's manufacturing side is doing well. at the same time, i think all policymakers are watching

closely to see how much those kind of price increases are going to feed into consumer prices and what that might mean for inflation expectations. shery: what are we seeing on the consumer side of things? kathleen: it is not a dramatic rise but is still an increase. it is a good sign consumers are spending more, traveling more. the forecast is for a gain of 1% year-over-year. up from 0.4% in march. the big holiday in april is seen as having the transportation prices and recreation prices. there is more confidence to get out and start spinning again. we have phone pork prices and vegetable prices. for the past several months, those skyrocketing pork prices had been a big part of the cpi story. they are balancing the increases we are seeing on the service side. when we put it altogether, for

the people's bank of china, what is going on here is not just they are looking to commodities prices. we can look at rising services prices and maybe look past it because that will not last forever either. for both of these indexes, you know it is something the monetary authorities have to watch closely. shery: that has been a key issue. we saw markets retreating because we thought perhaps the pboc would start to tie in as they continue with their leveraging efforts. what are these pressures mean for them? kathleen: these central banks around the world are broken records because the people's bank of china like the federal reserve can say back in around april, we had some big declines certainly in the consumer prices, the ppi being boosted now by basey fx. when you have weak numbers, the 12 months prior, when you get to the latest year-over-year

number, you're coming off a weak base. the base effect is supposed to be playing out for the next few months. the pboc just like the fed and others is going to say, let's see what happens. they're going to go up and come back down to trend. for now, investors will not take any scary signals from this. shery: let's see if they use the word transitory. our bloomberg's economics and policy editor. some upcoming eco-data out of china. jp morgan's grace. the chairman of the commerce in china joins us later. glad to return to the booming commodities, which is fueling concerns about inflations. iron ore is surging more than 10%. su keenan joins us with the latest. we have seen bloomberg commodity prices reaching multi-year highs

as this chart shows. what are traders saying about a potential tightening of environmental rules in china that could affect this? su: that tightening of the rules has added to the bowl cage for copper. copper is seen as vital to the energy transition taking place around the globe. the change in these restrictions is seen as fueling speculation on iron ore. some buying or frontloading they are buying to get in front of any change in the rules. if we go into the bloomberg, you will see investors have been filing into base metals such as copper. gold also staging a quiet calm. it's best week since november on the jobs data and the dollar gyrations. it has hit a three month high.

iron ore, the raw material used to make steel, has stolen the show. it spiked 10% at the open in singapore, soaring past 226. this is happening as demand for steel both inside and outside of china shows no sign of stopping. we have seen in australia the fiscal windfall from iron ore soaring above 200 being credited for helping narrow the budget deficit. the surge in raw material shifting into overdrive in recent weeks. haidi: let's take a broader view when it comes to the commodities complex. where is the market thinking the next direction is going to be? su: a lot of it has to do with global growth. jeff perry said in his most recent report that the fact we are seeing balanced growth

between the u.s., europe and china has put us in a whole new ballgame. that growth has -- in the -- has set the bloomberg commodity index on fire. the highest level in almost a decade. we are now only seeing the metals rise. we are seeing energy rise. oil is on a path to 70. we are seeing all kinds of agricultural commodities kickoff to the highest levels in asia -- in areas. some of the metals close shared we saw the dollar losses and treasury yields advance. haidi: su keenan in new york. let's get the morning call. sophie is in hong kong. oil is taking a bit of a breather. how big of a drag will these higher crude prices be when it comes to indian stocks? sophie: at deutsche bank, they

say the elevated crude prices are not necessarily a negative for indian prices. the rationale is higher oil prices are usually preceded by strong global growth, which leads to investment prizes. dachshund investment prizes. a key factor contributing to the counterintuitive result. they are recommending buying indian stocks on market dips as oil prices are not expected to fall sharply from current levels. the bank saying corporate earnings are do to recover despite the second virus wave. shery: in the broader emerging markets, currencies meeting fresh all-time highs. what is the outlook? sophie: jp morgan strategists, they are disappointed in how em stocks have underperformed.

noting the risks associated with the emerging markets are not fully played out. earnings are in a downtrend against slower both. vector -- the factor we have seen, we are seeing activity in china slow. jp morgan saying there is scope for a better second have. the bank saying they are looking to use the weakness in em to add to stocks on a 12 month horizon. shery: so far, we will follow up on that. coming up next, we will be discussing the increasing threat of cyberattacks. this is bloomberg. ♪

>> the industry understands that we are a target. >> criminal networks in russia and eastern europe, in the united states have incredibly sophisticated cyber capacity to destroy things. >> it tells you how utterly vulnerable we are. we are seeing all these examples of ransomware attacks. >> we are preparing for multiple possible contingencies because that is our job. >> the ongoing investments are going to be substantial. >> if it is short, it will end

-- it will mitigate the impact on consumers in the east coast. >> market pricing is a very transient short-lived event. >> the impact could be much more extreme. >> we are prepared to take additional steps depending on how quickly the company is able to bring its pipeline back to full operational capacity. haidi: major names are reacting to the pipeline hack. our next guest says recent ransomware attacks illustrated by their numbers the severity and range of targets and why we need to treat them as a real national security threat. let's bring in christopher pater, who is the coordinator -- who was the cornet are for cybersecurity under president obama. we have heard that russia has some responsibility to bear for the attack cared we have just heard details about the interagency coordination as well as the private sector companies

that coordinated to disrupt the flow of data that was headed to russia. is this how you expected this to play out? what are the improvements impressed by the response we have seen? >> the response so far has been good. this is having that has been building for some time. these ransomware attacks have become greater, more frequent, more sophisticated and more impactful in terms of the kind of disruption they have caused. we really need to step up our game. this response we have is good. we need to build on it. we need to have a comprehensive response in the u.s. and around the world. haidi: what does that response look like when you talk about alliances? here in australia, we have had multiple hacking attempts, some involving foreign actors. the finger is pointed at china but often they are not named. >> we focus a lot on nationstate actors.

certainly the solarwinds and microsoft exchange incidents really -- recently illustrate that. we also worry about transnational groups and criminal actors. a lot of these ransomware groups may be in a state that russia might turn a blind eye to. it is far too easy for them. it is an attractive target. they make lots of money. have very little risk. we need to increase that risk and go after this i every level. we need to have the potential victims but protecting the system. we need to make sure we are disrupting the chain including the cryptocurrency chain a lot of these ransomware actors years. we have to build alliances and make sure we are doing this as a global issues and work to prevent the safe havens some of these criminals are fighting. of course they are going to do it. they are going to do it more. we need to up the pressure.

in the u.s., you talked about the number of agencies coming together. law enforcement, financial and others. we have got to do that together with partners in australia. partners around the world because this is not a localized problem. shery: let's talk about the federal response because we had the white house releasing increased security when it comes to utilities and suppliers. how long does it take to prepare these companies in the cyberspace? it takes skills, right? >> and these are things we have been trying to do for many years. i was looking at the u.s. 's 2003 -- the u.s.'s 2003 cyberspace strategy. a lot of the things we said we should do then we are still trying to do now. getting that level of preparation is not easy. it is getting these critical infrastructures to take this risk seriously to make sure they are taking the precautions they

have to. cybersecurity is a cost center. it is not a revenue center. it is hard to convince these entities it is important until a big incident like this happens. it is not something you can switch on overnight. you have to take time to have a plan in place. you have to do the kind of risk management you do for anything else. we have a long way to go on that. the u.s. and others have been somewhat avoiding of the idea of regulation except for certain kinds. we need to rethink what those balances are cared if we have more -- i want is our. if we have more incidents like this, it will affect all of us. if we have attacks on the health-care system -- just recently in the u.s., there was an attack aimed at the d.c. police department. we cannot leave this to chance. shery: the d.c. police department, the illinois attorney general's office, really a wide array of attacks

we have seen recently and more brazen attacks at different levels. how difficult is it to shore up defenses in all of these levels, which is not the federal agencies but also the local agencies that do not have the capital, do not have the resources to shore up there cybersecurity? >> this is precisely the problem. we saw a wild ago when there was a big computer worm, from north korea, that knocked out the national health system in the u.k. partly because they had older technology and did not have the funds to protect their systems. we have to figure out how to get resources to them. the one thing i am more bullish on, more optimistic on is the biden administration, from the day they came in, they said cybersecurity is going to be a priority at every level of their administration.

we have seen our department of homeland security say they're going to do a sixty-day spread on cybersecurity. one change i have seen is this administration taking this issue more seriously from the top down. you have to do that. i know there has been a lot of great activity in australia. there has been great activity in other places in the world, but we need to do much more. haidi: you spoke about blockchain technology being part of this. does digitalization hinder or help these kind of attacks? >> technology is neutral. technology is neither good or bad. it is how it is used by various people. the bad guys are very used at seizing -- are very good at seizing on new technology. people from different backgrounds came together to do a ransomware task force where we released a report a week and a

half ago and we talk about that kind of issue. how we can deal with these groups. how we can deal with people helping to defend themselves. there are various aspects of the as we go forward. shery: it seems with all the cyberattacks, every day is a timely day to have one of those reports. >> i think the words i hate most is now we have another wake-up call because we have had wake-up calls over the years. shery: hopefully we take it. thank you for joining us. coordinator for cyber issues at the state department under president obama. plenty more to come. this is bloomberg. ♪

haidi: let's take a look at the day ahead for us truly appeared energy infrastructure, health care stocks in focus on budget day. the budget deficit is narrowing. the government is expected to deliver spending firepower to push the economy toward maximum employment. we are watching lng exporters after two of china small natural gas importers have been told to avoid buying cargo from australia. this is the latest development in tensions between canberra and beijing. watching fixed income. a long-term bond sale happening today. australia to sell 20 50 --

shery: here is a quick check of the latest headlines. better is set to go public. dow jones reports the transaction could lead to a valuation of around $7 billion. and be completed this week. softbank group may put up $1.3 billion after recently investing 500 million dollars in the start according to the report. bloomberg learned blackstone group is asking for u.s. staff to return to the office full-time starting june 7 provided they are fully vaccinated. sources say the asset manager announced the move internally monday. j.p. morgan became the first u.s. bank to mandate a return to u.s. offices on a rotational basis. coming up, we will speak with jp morgan and ey ipo leader. daybreak: asia is next. this is bloomberg.

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haidi: a very good morning. we are counting down to asia's major market open. shery: welcome to daybreak: asia. our top stories this hour. asian stocks set to fall, surging commodity prices are

stoking inflation concerns. north america's biggest petroleum pipeline says most services will be back by the end of the week, but colonial faces a difficult decision. whether to negotiate with the hackers. it is by today in australia, soaring iron or prices will help the government deliver more spending firepower to boost the recovery. let's see how we are setting up for the trading session. here is sophie and hong kong. sophie: after we saw benchmarks in sydney close at record highs with materials leading gains, we are seeing futures hint at a down day in asia. nasdaq under pressure, this after the index fell 2.6% on monday. this as we saw tech stocks take a tumble in the face of rising inflation expectations. we see commodities take a bit of a breather.

in australia, we are waiting on the national budget update. head of that you have the aussie dollar holding above 78 and trading at a february 2018 high against the end. -- the yen. tokyo stock set to snap a three-day game. the nikkei is holding steady. watching for changes in japan to modernize the nikkei 225 which could mean nintendo is added to the benchmark. also waiting for names like nissan. pulling up the terminal, rising inflation expectations backdrop. we are seeing dollar weakness being sustained with the greenback trading at 10 we close, it looks like we could see that continuing. haidi: let's take a look at that inflation debate, looking like it is spewing firmly one way. inflation gauges are rising,

that breakeven rate is the highest in more than 15 years. let's discuss the marketing locations with a global market strategist at j.p. morgan asset management. great to have you with us. let me pull up a chart that shows you the five-year breakeven is topping the 2000 a high, now it is at 2006 highs. we are seeing these expectations at 15 year highs as you can see in that chart. how does this inform your investment outlook, do you have greater conviction when it comes to cyclicals? how much further downside is there for some of the growth sensitive stocks? guest: good morning. i think the debate and the reinforcing nature we are seeing in terms of the inflation out look potentially changes central-bank policies, we must focus our attention on cyclical and value plays, and the rotation will continue around

the world. it is not all happening at the same time. it has been led by the recovery in china, now we will see it moving to europe. that does mean the rotation can keep going and keep shifting and that's great opportunity for investors, and also means there is room for equity markets to move higher, even if we see some factors around tech start to feel the pinch of those high yields. crucially, not just thing about that rotation, but the companies that can actually offset some of those prices in terms of earning outlook. haidi: when it comes to the tech names, we have seen chip stocks falling. at what point do you look at the stocks and think, not to talk about a bargain, but would you buy on the dip given the prospect for a long-term disruption post pandemic? they really have not changed.

guest: i think a lot of the things about why people like technology oriented name before the pandemic is still there. what changed is the valuations which moved increasingly higher in the early part of 2020, as the valuation comes down there still will be attractive opportunities. we think about the technology surrounding artificial intelligence, cloud computing, payment systems. it's just a case of finding the right price. as yields to move higher, inflation expectations rise. it is the case that the tech sector will start to be weighed on more heavily and everything they get dragged down without, but it will be a case of thinking of what does come through and allowing the market to sit on the inflation outlook, and digest some news around the federal reserve and other central bank policies, if a change of might have these inflation expectations.

there are other stories which are quite strong to come back as valuations come down. shery: does that mean we should be more positive about the tech heavy industries broadly like taiwan or korea? this chart on bloomberg showing the kospi has hit an all-time high. guest: the reason we will look into some of these markets is because of the way they have handled the coronavirus. the fact that you see a lot of developed markets coming back through. semiconductors being key. these are parts of the world that are going to benefit mostly from the lift in global growth, particularly in europe and the u.s.. they are not seeing the same drag from the virus spread that you might be seeing in other parts of asia. there are key supports of these north asian markets still in the air. we expect them to perform quite well as we look at the rest of this year. we can trust that some of these asian markets [indiscernible]

most likely going to happen because of that. shery: how do you like europe? guest: europe is looking quite favorable. it has been very good this year, outperforms the u.s.. we think about the dollar terms. a lot of that strength has been there because of the reopening in the last six weeks or so, as people focus on potential. europe is an equity index with a greater weighting towards cyclical sectors, materials, financials. it should stand to benefit. it does not have the big weight of the tech sector which could be impinged by high yields. i have problems with growth outlook and inflation outlook being low, but we are offering that because of the political developments of the political recovery fund. that rotation has been china and

u.s. is now moving into europe. it will be another cylinder in the engine of growth across the rest of this year, and definitely an opportunity for performance to come back in terms of the market at lower valuation than elsewhere in the world. haidi: in terms of opportunities , we finally have the record close in australia. it is budget day, we are expecting a buffer budget in terms of recovery from the pandemic and commodity cycles doing better than expected. is this finally the catalyst for a breakout for aussie stocks? what are you liking? guest: always in terms of budget, so much more news comes out before the actual release. not sure how much positive the market can be. thinking commodity prices lifting the market, certainly there is support as long as there is the imbalance between supply and demand at the moment which is behind a lot of those commodity price moves. when i think at the iron ore

price in particular, some concerns about the australia and chinese relationship. a price that height is not great for china and they may try to talk it down or make moves to bring out the heat of that which could weigh on the market as well. fundamentally, we do believe there is a good story around the materials sector because of those prices. they can't stay elevated -- they can stay elevated for a little bit longer, there is demand there. they have become quite high and we expect a pullback on that which could weigh on the australian market, and at the same time we think about the prospect for the government to spend, but also realizing they are pretty much focused on the size of the budget deficit and probably are not going to go all out spending in terms of what we have seen in other markets around the world, and maybe more reserved to what we saw in the u.s. for example. shery: always great having you on. the global market strategist for jp morgan. let's not get to vonnie quinn.

-- let's now get to vonnie quinn with the first word headlines. let's turn to the first word headlines. president biden says there is no evidence russia is involved in the ransomware attack has a bold the colonial fuel pipeline, but the president says the perpetrators may be based in russia, so moscow bears some responsibility. colonial says it expects the pipeline to be viable again by week's, but the shutdown is prompting frenzied moves by traders and retailers to secure alternative supply. >> over the weekend at my direction, the department of transportation issued an emergency order to loosen restrictions on truck drivers in order to allow more fuel to be transported by tanker. we are prepared to take additional steps, depending on how quickly the company is able to bring its pipeline back to

full operational capacity. shery: sources tell us the u.s. is planning a summit with companies impacted by the global chip shortage, including intel, samsung, and amazon. commerce secretary will convene the meeting may 20 to discuss ways to bring together chip suppliers and consumers. last week, they stressed the u.s. is unlikely to come up with a quick fix to the global shortage. israel has launched airstrikes on the gaza strip after palestinian militants fired dozens of rockets towards jerusalem. officials in gaza say 20 palestinians were killed, including nine children and 65 people injured. the rocket fire slightly damaged to houses outside of jerusalem. benjamin netanyahu accused thomas of prompting a redline -- crossing a redline after days of classes in east jerusalem.

malaysian officials say in an attempt to recover assets worth more than $23 billion, allegedly linked to an investment fund. the finance ministry says the total of 22 civil suits have been filed, the latest effort to recover billions of allegedly siphoned after the government successfully recovered $3 billion from other firms, including goldman sachs. those are your first word headlines. haidi: still ahead, we have someone saying the first three months of 2021 was the best-performing quarter in 21 years, in terms of ipo's. coming up next, i look at inflation expectations out of china. cpi and cpi numbers two out in the coming hours. -- due out in the coming hours. this is bloomberg.

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shery: we are awaiting data out of china and a couple of hours. key inflation gauges are expected to post significant increases in april. however global economics and policy editor is here. let's start with factory inflation. what are we expecting? reporter: a rather significant year-over-year increase. watching factory gain inflation in china is often not just a watch for inflation getting stronger, it's also how about the manufacturing sector? demand for all of the goods china produces. that is what we look as a second way. six and a half -- 6.5% year-over-year, up from 4.4% in march. it is largely about commodity prices. domestic steel rebar prices up

30% year-over-year in april. china is back, the global economy is coming back. manufacturers have been doing well the last several months, even before we see widespread openings boosting sales around the world. that there is domestic oil prices. at the beginning of april, they were up 150% year-over-year. they have come back down from that, but it is another reason why we are seeing this very hefty gain, probably price into the market, probably not something that will get anyone two worried. the wholesale price, early stages active, maybe the more important part is the consumer price index which tells us what the retail and consumers are doing. haidi: you talk about the consumer price elements. what is driving the increase? reporter: good news for china again, because services prices are starting to rise. we are seeing people spending more money, this is what the government wants to see. you can see this chart. the magnitude of numbers is not as big, but look at the changes.

1% year-over-year for the april cpi, where than double what was seen in march. as i mentioned, services prices are a big factor. the four-day holiday in april lifting transportation and recreation prices. on the other side of the ledger, poor prices which were skyrocketing for months, vegetable prices are also falling. that is helping but i cap on the actual size of that number. when you step back and say what does this mean for the people's think of china, they are watching these big numbers. base effects. last year about this time, there was some decline in consumer prices, also in producer prices. when you are looking at the base which was much lower, your normal increase gets even bigger. that is the way to look at the year-over-year comparison. the past that, and again, central banks around the world are saying we are coming out of this period that was tough year ago, prices fell, now they are coming back. we are going to see where this

goes, is it a trend, is a transitory? that is probably how people in china will look at it, at least for now. haidi: bloomberg's and economic policy editor. we get more on china's economy ahead. hearing from jp morgan. this is bloomberg. ♪

haidi: duke energy provides electricity to around 7.8 million customers in the u.s., the ceo told bloomberg it was not impacted by the pipeline have. >> we took immediate steps to determine, do we have an impact from this. i am pleased to say no, impact.

it gives us an opportunity to step back and monitor our controls, our approach. we remain in a state of vigilance on cybersecurity. it's extraordinarily important to our customers, to our communities. >> as you look at what the grid is going to look like in 10 to 20 years, it is going to be a tighter connected grid or a smaller microgrid way your own house can be its own grid. that puts cybersecurity even more front and center. as we go down this path, what are the risks? >> the ongoing investments are going to be substantial. when you are painting is the future of our dependency on this important grid, and that is the case. our industry is actively working together. we have very strong information sharing, not only among the industries but industry partners. we are making investments, new technologies, monitoring, recovery, and we have robust

stranded -- standards. i would say this industry continues to maintain a level of vigilance, because we understand how important we are and are working hard every day to protect our systems. >> this has been a big fear. a cyberattack knocking off a major utility. i know you are working hard, but how worried are you? how worried should we be? how vulnerable do you feel? >> i would say a level of vigilance is required, but i would also say that the industry understands that we are a target and those standards and information sharing in the focus is something we have investing in for some time. president biden also announced a 100 day plan to look at cybersecurity and the electric rate and we will actively participate. along with the concern with a lot of investment around how we can be prepared, in that state of vigilance is important for

all of us. >> a lot of companies are looking at supply shortages of workers, dealing with rising wages, margins. what part of that are you experiencing right now? >> we are beginning to see a little bit of that, tightening up the labor market. parts of our business, i would look at our call center specialists is being an area we are beginning to see. that gives us an opportunity to expand the net, the four employees and a broader area. let's interesting is those [indiscernible] we have learned a lot from covid. that gives us an opportunity to cast a wide net geographically. >> there is a debate in the economic community, how hard is it to find workers as you are casting a wider net. >> it takes a lot of attention and time. you bet on top of that the we are also working actively around our diversity and inclusion initiative to make her our workforce is diverse. we have a number of initiatives

directed towards finding the right talent, because it is not just the tight labor market, but our industry is going through transformation. making sure we have the right talent and the right place all the time is a high priority at duke. >> we are also seeing a huge commodity radel -- rally in a lot of metals. >> we do see some input costs that are rising, what i would say is we try to look at our needs over multi-periods with an eye towards minimizing costs. if you have a need for a certain type of commodity, you're going to have to take advantage of it and look for ways you can lower cost to customers, because the price of electricity becomes the key input to our economy and maintaining affordability is always front and center at. shery: the duke energy ceo and chairman. let's discuss the colonial attack and more details. the company may be getting help

from private cybersecurity experts, but it is largely alone facing a number of choices, including whether to negotiate with the hackers. our cybersecurity reporter joins us now. this seems like an old-school extortion scheme, right? how do companies deal with this? what is colonial doing right now? >> it is a really difficult position for them to be in. they found out that they had been locked out of their system on friday, and one of the first thing they did after getting their consultants onboard was figure out whether they needed the data that had been stolen from them back in order to rebuild their network and get their pipeline back online. that process of accounting for the lost data often takes not days but at least a week, if not longer.

right now, they are really auditing their systems to understand exactly what has been stolen, how important it is, and whether they need to engage with the adversary to pay to get it back, or if they have sufficient backup systems to restore the system themselves. haidi: we also heard earlier it was a small group of companies that help them stem the flow of the data that had been accessed. do we know that this is the typical playbook that happens in terms of a response? reporter: colonial has hired the threat intel and incident response unit of one company, they are widely seen as the gold standard of incident response entities. they are on the job here to not only audit the stolen data, but also to make sure that the malware that was used to infect

colonial's network has been removed from not only the administrative systems, where employees check their email, officials may schedule the transfer of fuel, but also the operational system which is where the machines communicate with machines to actually execute the core business of colonial, which is the distribution of fuel. haidi: when it comes to how insurers deal with this, i'm curious what the process is there? reporter: they have a couple of insurers. i know the first one has covered them up to $10 million and we are in the process of confirming the rest of their insurance policy, but what they are being forced to ss right now is whether colonial has to pay. they have to figure out whether the price of paying for the stolen data is worth it, or if

they are better off rebuilding. ultimately, they are essential to the process and determining the cost of the company as well. haidi: let's martyrdom. -- lots more to come. ♪ ♪ look, if your wireless carrier was a guy you'd leave him tomorrow. not very flexible. not great at saving. you deserve better... xfinity mobile. now they have unlimited for just $30 a month... $30. and they're number one in customer satisfaction. his number... delete it. i'm deleting it. so, break free from the big three. xfinity internet customers, switch to xfinity mobile and get unlimited with 5g included for $30 on the nations fastest, most reliable network. wanna help kids get their homework done? well, an internet connection's a good start. but kids also need computers. and sometimes the hardest thing about homework is finding a place to do it. so why not hook community centers up with wifi? for kids like us, and all the amazing things

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haidi: march outputs mending numbers for japan. you're on year coming in at 6.2%, much higher than expectations of 1.5% for the month of march and a rebound from that contraction of 6.6%. we continue to look ahead to the spending patterns, given we are in another's state of emergency with lockdown restrictions. parts of japan headed into the tokyo olympic games. for now, that month of march household spending number, gain

of 6.2%. let's take a look at the markets now. sophie: we are setting up our down day in asia, the tech lead drop in the u.s.. cyclical plays away from growth. higher than expected inflation bets could be a drive for asian stocks given the heavier weighting towards food and energy. we get a pulse check on that with china reporting cpi later tuesday morning. flipping the board, inflation bets rising. commodity price rally is stalling. iron ore futures in singapore, golds trading near three-month eyes. the dollar under pressure. the dollar trading near a four-month low and wells fargo changing their technical view on the greenback. the aussie by comparison could be looking to break into a fresh year-to-date high, while the

yen, little change. downside pressure in the face of higher u.s. yields. the offshore yuan holding above 642 after flipping for the first time in three days. pulling up the chart, seeing that 650 level, very much a key or near resistance level for both the onshore and offshore rates when it comes [indiscernible] the yuan jumping to a three-year high in the face of dollar weakness and strong capital inflows. dbs saying appreciation for the currency look continue even if the pboc moves to slow those gains. shery: let's turn to south korea. sk group which makes material for lithium ion batteries has become the largest color reenlisting in four years, they raised $2 billion in its ipo, underscoring global demands for electric vehicles as well as the potential for the south korean market. analysts seeing 2021 shaping up to a record year for listings in

the country. let's get some analysis from ey's global ipo leader. great to have you with us. how much of this outperformance by sk i.e. has to do with the company itself, and the broader exuberance over the sector that they are in when it comes to electric vehicle technology? guest: thank you, good morning. first of all, it is not very surprising because sk ie is in the right industry. the hot industry, electric car batteries, components. electric car industry as we all know is expected to grow very fast over the next five to 10 years. they are in a very hot industry right now. also, we are seeing oversubscription close to 1000, we think it is 1 -- 1183 times oversubscribed.

there is always a large retail investor base in south korea. in the past, individuals can make a successful ipo application by using different accounts with different security houses. the general public is seeing this as one of the last opportunities to duplicate application by using different accounts they have with different security houses, before the security regulator looks to clamp down and actually limit or reduce or eliminate the duplicate applications by the end of next month. they see this as a last chance to enter the lottery, the general public is expecting the share price of sk ie to reach the ceiling when it makes its market debut. shery: what can we expect for the rest of the year probably among korean ipos? they had a very good 2020. look 2021 match that?

guest: so far we are seeing 2021 we expect to be a very busy year for the south korea ipo market. there are many companies in but we call those industries that will come to the market. batteries, while science, internet and gaming sector companies. there is a very healthy pipeline of companies which are expected to come to the market. we are also seeing the south korea company going abroad to do outbound ipos. one company completed a new york stock exchange listing in february this year. we are expecting the ipo activities to continue to be very busy, given there is actually proposed changes of using a bigger allocation of the ipo shares to do retail investors, the proposal is to

increase from 20% right now to 30%. haidi: as we see a global pullback in tech shares, the rally running out of steam, does that mean we will see fewer tech companies joined the frenzy? guest: we are seeing this phenomenon very recently about the tech sector companies share price retreat. so far, we are seeing in terms of ipo process, the tech sector accounts for close to 44% of all of the ipos from 2021 year-to-date. the application process is something [indiscernible] we are seeing a healthy pipeline of technology companies looking to complete their ipo in 2021. in terms of valuation, these companies may need to adjust to a more realistic valuation

level, given what is happening with the current market sentiment on the tech listings. haidi: we are seeing spac not really take off as much in asia. if the underperformance and disappointing results on returns part of that story? or do you expect it to circle through to this region? guest: spac was at the top of most asian stock exchanges in the first quarter, when there were over 100 stocks -- spac ipos a month between january and march. in april it has declined significantly to only 15. there are a few stock exchanges in the asia-pacific region which are discussing about allowing spac ipo to happen. given the decline that happened in april, it remains to be seen whether a spac ipo can be

successfully completed and then asian stock exchange in 2021. that said, there are many asian-pacific companies which are eligible, or are looking to maybe consider to do a spac merger with one of the already listed stocks -- spacs. one company announced they will be competing a spac merger. shery: how do you see the regulatory headwinds unfolding this year, especially given china's tightening of the vetting process? guest: we are seeing in 2021, number one the market liquidity, number two the market volatility which impacts ipo activity. the regulatory impact will be very significant, because shanghai and shenzhen have been the busiest stock exchanges in recent years.

tightening the vetting process has put on a big impact in terms of slowing down ipos that have come to the shanghai exchange and market. similarly, and the u.s. with the sec. oversight will be a major factor to determine how good the rest of the year for ipo activity. haidi: the global ipo leader joining us from hong kong. let's get you not to vonnie quinn. reporter: the number of new coronavirus cases in the united states rose at the slowest pace since the pandemic began, as more americans get vaccinated. more than 286,000 infections were reported, tatts also rose at the slowest pace of the pandemic. the fda has expanded

authorization for the pfizer vaccine. the shot is currently approved for those ages 16 and above. the agency says the decision comes after a rigorous review of all available data. as of the end of april, 1.5 million cases have been reported to the cdc. in india, health authorities are warning about a fungal infection seen in some covid-19 patients which can kill. health officials say patients who have been on medication for some time or had prolonged stays in the icu are particularly susceptible. india is still in the midst of the world's fastest-growing coronavirus outbreak. meantime, indian officials tell us they are in talks to import millions of vaccinations. talks are underway with the state government to provide as many as 40 million doses from global manufacturers. mumbai is open to any approved

vaccine. global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie quinn. this is bloomberg. shery: up next, japanese auto earnings kick off with the chip shortage in focus. testing time for an industry trying to accelerate a shift toward electrification. plus, don't miss a big interview coming up. we speak with the head of one of the biggest crypto traders worldwide. also the cofounder of crypto derivatives exchange. this is bloomberg. ♪

shery: counting down to the start of trade in tokyo. some stories we are watching today. in korea, we are on watch or export data. numbers are due shortly. the battery material unit, later we hear from you why that many investors see this company as a last chance to invest in the industry. also, the kospi at a record high. over in japan, the nikkei is proposing changes to the rules for calculating and selecting members of the stock average

index. also, local media reporting that hitachi has taken all class 800 trains out of service. the u.k. first suspended them after finding some hairline fractures. earnings watch. we do have nissan coming out with their earnings report today,. on tuesday. haidi: every one of the major japanese automakers sting results throughout the week, in sharp focus will be the chip shortage. the crisis has been a historic test for the auto industry which of course is trying to accelerate a shift towards faster electro vehicles. the likes of nissan is already stripping to keep production moving ahead. what does this all mean for a push into electrification? let's bring in the head of aipac research. let's start off with nissan's. plans what kind of an impact do we see? [indiscernible]

ambition to get the burden onto electric vehicles. guest: thank you very much for having me. certainly, the chip shortage has been a challenge for automakers. some have been better prepared than others. overall, on top of the pandemic that they experienced last year, this is something they were not hoping for. for nissan specifically, but will be interesting to see in the call later today is what they will say about their suv. the new electric suv that they launched, announced they would be launching in the second half of this year. i believe analysts will be looking to see what they will say about their targets for this year, to graphic plans, pricing details.

and further information around the ambitious plan unveiled in late january that talked about electric options for all my -- models by 2030. comity models are expected in the short-term. shery: what is their outlook? guest: bernie sound there are challenges. they were very ambitious on tv, much more than other automakers. the challenge nissan has had is that over the last few years [indiscernible] we see that happening again.

we have the earnings call later today, tomorrow the former executive makes a court appearance. it is a little bit of a challenge. for other japanese automakers, honda announced a very ambitious target to phase out the internal combustion engine [indiscernible] targeting 40% ev in major markets. investors are looking to hear what hondas and will be -- honda's plans will be. unfortunately for honda, yesterday was the news that in the u.s. they are having a challenge with some older models that they may have to recall. investors will be looking at how they will balance these day-to-day challenges with their long-term objectives.

haidi: great to have you on. bloomberg's of aipac research. be sure to get more in-depth analysis from the daybreak team, broadcasting live from our studio in hong kong. listen on the aft, or bloombergradio.com. sunday my head, stay with us. -- plenty more ahead. stay with us.

haidi: amazon is said to have sold $18.5 billion in bonds to refinance debt and buy back stock and biggest ever debt sale. sources say the bonds were issued in eight parts, taking 40 years to reach maturity and yielding 95 basis points. amazon has tens of billions of dollars in cash after a record quarter, but is taking advantage of spreads at three years lows. indigo plans to raise about $400 million through share sales as india's new virus surge puts air traffic recovery on hold. in january, the indian carrier shelved plans to raise capital, saying internal sources of ash were not sufficient. the cfo has resigned and been replaced.

they startup mortgage lender has been planning to the public through a spac deal. dow jones report the transaction could lead to a valuation of around $7 billion, and will be completed this week. one company might put up $1.3 billion after investing in the startup according to that report. shery: we are getting the summary of opinions for the april meeting out of the bank of japan. one pog member -- doj member saying they must support the funding of businesses. they have been focused on supporting firms during the coronavirus pandemic. this april meeting and that left the policy unchanged, no plans to reduce the 2% inflation target. another member saying it is appropriate to focus on addressing the virus impact. they have made some adjustments to etf purchases in the past,

and in this meeting day said they are not aimed at an exit, and the governor added that it is clear that monetary easing has helped. we are now getting those summaries of opinions for their april policy meeting. haidi: of course it is budget day here in australia. the treasurer is expected to announce a much smaller than or cast facet while delivering more spending when he unveils those numbers later tonight. of course, the commodities rally has been a big part of this. soaring prices as well as the following jobless rate has seen the economy and the stock market bounceback from the pandemic faster than expected. let's get over to sydney, our at the markets for order is joining us. shares closing at record highs. what are investors watching for? so much information has come out as always before the budget itself. >> there certainly is a lot for

investors to digest. the company is benefiting from high iron ore prices and a falling jobless rate. they are set to deliver a wide-ranging spending bill to help push the economy forward. it also said that the budget is likely to boost confidence over the country's rebound from the impacts of covid-19, and give some head to corporate activity and earnings outlook. there are high expectations for substantial stimulus, covering issues such as infrastructure and women's health. let's also coming out as australia has seen setbacks in its vaccine rollout and ahead of the next federal election. investors will have both of those issues on their minds as they come through this budget. shery: what are some of the key stocks and sectors that could be impacted by the proposals? >> has haidi mention, we do know quite a bit about what in this is in this budget.

a lot of it has been preannounced. as i mentioned earlier, infrastructure spending is going to be a huge part of this budget. that could affect stocks. childcare providers, they might benefit from proposals to overhear childcare subsidies. analysts have said that these have the potential to increase occupancies across the sector. some other sectors that are going to be highlighted in this budget include h care providers, health insurers and tailors. -- retailers. haidi: jackie edwards taking a look ahead to the market reaction when it comes to budgets. we are delving deeper into the aussie budget on wednesday. joining us is the australian shadow treasurer, and that international relations

professor with reactions. shery: we have breaking news out of south korea. we are getting those trade numbers for the first 10 days of those -- this month. they are very strong, export gain of 81.2%. the daily average exports gained 64.7%. this is really coming from very strong chip shipments, 51.9%, car exports, and financial jump of 358.4% as well. this is coming on the back of those export numbers in april, we cite rising the most in 10 years. it seems we may be headed for strong gains ahead for the month of may. imports also showing increased demand domestically, rising 51.5%. let's turn to sophie and hong kong for some of the stocks we need to keep an eye on. sophie: in south korea, the

kospi sustaining the momentum after closing at a record even as shortselling tenured. trade figures to continue, as well as earnings outlook. that is help valuations -- that has helped valuations [indiscernible] amid the road tech selloff. over in japan, keeping an eye on you some -- nissan. we have earnings on watch. also watching the reaction or proposed tweaks to modernize the nikkei 225, which may make the way for intended to be included on the benchmark. haidi: we do have the market opens in sydney and tokyo next as we continue to watch how the markets are going to price in

these higher inflation expectations, and we are looking ahead to the australian budget, and whether we see sydney stocks continuing to push higher after closing at that record high. lots more to come. this is bloomberg. ♪

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shery: not come -- welcome to daybreak asia. haidi: regional equities under pressure, surging commodity prices are stoking in patient concerns while investors away earnings. how far will