haidi: good morning, we are in sydney counting down to asia's arc it open. shery: welcome to daybreak asia. top stories, u.s. stock rallies led by a rebound and optimism over a positive jobs report. calling for a global minimum corporate tax of 15%, a sharply

lower rate than the one joe biden called for highlighting the challenge of finding a sweet spot for all. israel and hamas to end their 11 day conflict, said to take effect this hour. live pictures out of gaza right now, we have seen is really airstrikes in gaza just minutes before the cease-fire. this is coming at a time that the u.s. brings pressure on israel to dial back its onslaught, the end starting at 7:00 eastern, 2:00 a.m. local time. this will end the hostilities. we have seen more than 200 palestinians and 12 people in israel killed in the violence. now in hong kong for the markets. >> in japan we are seeing an extension of emergency aid in

osaka, develop and's on that, and inflation data from china. numbers from south korea and trade in thailand is right, futures pointing higher. -- leading the charge in the u.s., tencent is also up after the earnings report, the rebound is likely to come from under representatives -- underrepresented industries. the copper rally has lost steam as the commodities advance as hit a speed bump with china giving out more price warnings this week. daniel hynes is focusing on commodities, saying this is a healthy pause and security saying they still make top

2011's high. developments in focus after we saw local bonds following thursday in the report on the financial health of the bad debt manager, giving the 2022 on short note closing a record low, and we have concerns about fallout when it comes to chinese credit. the risk there is the limit. haidi: the u.s. is calling for a global minimum corporate tax of 15%. let us get more from our tax reporter laura davis. are we like to -- likely to see countries agree to this proposal? >> this is yet to be seen. countries have yet to come out and fully react to the proposal but this is a good-faith effort for the united states moving in this direction that talks -- the

previous talks were around 12 or 13%, this is higher but this nudges the conversation forward for goshen's that were stalled under the trump administration. yellen came back and said we wanted to do in line with what u.s. have been talking about so we expected hear a lot of discussions of this in the g7 and g20 the summer, they are hoping to come up with some sort of high-level agreement come this summer and more details in the fall. shery: how long can it take, the process? >> this is unknown. this is a process that started in the early 2011, 2012, it was too difficult to get done, they broke it off, they said we will table listen came back to it in 2018. like a lot of things dealing with congress this has potential to take longer.

we will see if it can happen. haidi: in terms of the biden administration's proposal that china stop tax evasion related to cryptocurrencies, this is an interesting develop and as well. >> yes, this is something the administration is looking to beef up irs enforcement of cryptocurrency as well as broader financial accounts. they came out with the proposal today that they said they think they can raise $700 billion over a decade just from people who are not paying the taxes they owe. they said the irs has more visibility into crypto exchanges and can see the transactions happening as well as into bank accounts that small business owners and others who do not have their income are medically reported to the irs -- they are able to get on with $5 billion from that alone, also asking congress for more money for audits in total to reince --

this part of what they're calling infrastructure. shery: our next guest says investors are not focused enough on potential policy changes and would move further away from the 2020 election season. it is bringing rebecca felton, senior market strategist at riverfront investment. the news out today about more potential tax burden for corporations and continued policy changes in washington, how risky is this? rebecca: good evening and thank you for having me. i think laura said it best, it is hard to tell how long this will take. you know that president biden had what we are hearing are productive meetings with republican senate leaders over the last couple of weeks in terms of explaining to them to bring back a counterproposal and a bipartisan approach. however, if you look ahead to 2022 earnings you are already seeing consensus come down from

2020 two versus 2021, now it is 11% and there is some expectation that it could go lower. dependent on how not just the statutory tax rates change but also taxes on international revenue and particularly when you think about impact to technology or communication services, those are sectors that have led over the last couple of years and those would be some of the most impacted. shery: how much of this ways into your thinking when you are thinking of -- the u.s. and international as well? rebecca: we did just lower our overrated -- overweight, we had a five to 6% overweight and that has grown and our technical indicators say that in the next two or three months the market

could be choppy. we dialed it back a little. we are still overweight equities but back down to that for or 5% levels, those are or near-term measures. to gauge what we need to do in the market. the other issues, they tax issues are going to be longer-lasting and longer into the future for next year so we still believe equities will be higher at the end of 2021. but 2022 does have headwind she'd not. haidi: are the economic surprises enough? rebecca: one would think. we expect that the best of some of the recovery numbers may be behind us and of course the markets move -- last year investors were willing to project forward and so now as we look into next year, we have to be realistically optimistic that we are going to go to a. where -- a period where we are

seeing great numbers, we are of that not just in corporate earnings but we have seen better numbers, even the ceo competence numbers that cannot yesterday were some of the best since they have been tracking and so there is a lot to be positive about here. it is likely to be uneven as we move forward. haidi: we are seeing striation encrypted markets. -- in crypto markets. other investors are coming into by. i know you guys don't have exposure to crypto. what would it take for institutional legitimacy to take hold? it's rebecca: for us we think you have to look at it from a volatility standpoint and as long as there are unanswered questions, the volatility factor is probably too high for our --

absolutely it is appealing for investors who are willing to swing to volatility. but the general acceptance of it, there are questions to be answered, the likelihood of increased regulations and the fact that the transaction costs are still so uneven. so there is so much still unknown and for us it is still going to be a while before we take a look at that as a possible investment for our clients. shery: rebecca felton with us from riverfront investment group. let's get to vonnie quinn. vonnie: jerome powell has announced a forthcoming report on the u.s. -- he wants the bank to wait a leading role in developing international standards and how do currency it would fit into the u.s. system

of banking currently. powell says any currency should replace -- comp might not replace cash. >> this is an important issue. before making any decision on whether how to move forward with this. vonnie: president biden has signed bipartisan legislation to combat anti-asian hate crimes that raised sharply during the pandemic. the bill pays for states to report incidents and wants to help law enforcement with the justice department overseeing the response. another overacted -- overactive a mentor hurricane system, more than 20 main storms could impact the region after a record in 2020. the gulf could see 14 record stores. records last year driven by

climate change drove an all-time high of a budget storms that killed more than 400 people. 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'm vonnie quinn. this is bloomberg. shery: still ahead, president biden urgent diplomacy toward peace for the israel palestine cease-fire. and joining its biggest rebels in a spending binge in the post-pandemic internet arena. this is bloomberg. ♪

haidi: what stood out to you in these results from hong kong? >> it is that pledge to spend more in this competitive environment as of course the chinese economy comes out of the pandemic and into quite a recovery. there is also of course that backdrop of regulatory scrutiny which has weighed on sentiment so they have to find new areas of growth in this new, hotly contested phase, 2, 3, 4, 5 the growth of the internet in china. they are going to see they will spend a lot of their for mental profits in areas such as cloud services which had a good avenue in the last quarter. also games which is their bread and butter as well as short form video content which is being dominated by upstarts like bytedance in quite show. -- quite show -- in some areas.

let us bring up this chart, this terminal chart which is 9207. it shows how much tencent is starting to spend on new investments. billions. this is to keep pace with the likes of alibaba which in their last earnings report said they are going to plow all of their incremental profits into these new areas because again, they are having what has become their biggest revenue generator and that was lending, crack down on by regulators. they need to buy new -- keep ahead. revenue was up 25% overall but net income, while beating because of investment games -- gains, adjusted for taking those

out including investment gains, the net income slightly trailed estimates. this is a concern. particularly why some of the investors on the adr in new york sold off shares about 2% overnight, this investment binge is going to hurt the margins and -- at a time when of course there is increased competition. the good thing you could say, all of them are doing it, alibaba, tencent. they're going to be on a spending binge. shery: which divisions are performing well for tencent that could help carry some costs? asked their bread and butter right now is gaming -- >> their bread and butter right now is gaming and content -- short form content, that is a dip from previous quarters because people are starting to go back to work, they're not staying home when games as much but the first calendar quarter

of last year, the second were big surges in revenue for online gaming. the company is going to roll out more than 40 new ending titles this year to keep that pipeline brush, those are the bread -- fresh, those of the bread and butter but they will have to roll anyone's. spending -- revenue, not spending, the past is in four quarters. cloud division posted its strong as growth ever with sales surging 40% and 7%. but i cannot and this report without talking but the regulatory environment, the president talked about it on the analyst call and he said now they have done internal reviews and they have looked at what the spirit of the regulation means from the regulators. he says it is manageable. so they are trying to assuage the fears of the investment community that the regulatory threats are threats alone and they are particularly manageable. he said in the fintech area in

particular, as regulators want companies like tencent to go back to their core, the payments platform, this is what the company said. they have focused on risk management and have been self restrained, quote unquote, on the side of its nonpayment financial products. shery: that was stephen engle with the latest on tencent. we will get more analysis on the company from cio -- and someone from global advisors later. in terms -- turn to the channel on youtube or more analysis, watch redline, china, and big tech. this is bloomberg. ♪

>> i conversation with president

netanyahu, i committed him for his decision to bring this to a clothes -- close in less than 11 days. i emphasize what i said throughout this consulate, the united states fully supports -- against indiscriminate attacks against hamas and other terrorist troops that have taken the lives against innocents in israel. >> i believe the palestinians an israelis equally deserve to live safely and securely and enjoy equal measures of freedom, prosperity and democracy. my administration will continue our quiet, relentless diplomacy toward that end. shery: president biden praising the truce between israel and among hamas. nick joins us from dca, now with the end of hostility, what is next? >> the big question is whether

the cease-fire will hold. there have been several instances in the past conflict where cease-fires were announced and then -- so we know there were so attacks, barrages being treated by both sides in the hours leading up to the cease-fire. so that is a big question but what was interesting to me about the speech president biden gave was that while he talked about a cease-fire, there was no talk about looking to solve the deeper problem, long-standing, decades long conflict between israel and palestinians. so i think what you are seeing is a temporary reprieve. hopefully the cease-fire will last and they will move on from the current conflict but no indication that they are going to solve the broader problems. haidi: we have also seen president biden praising the troops and -- the truce and the

cease-fire and reconvening the support for israel's defense system. how different is it to the trump administration which through their entire support behind jeanette yahoo!? the diplomacy is being -- between benjamin netanyahu? >> the weight that was so definitively behind the israelis, there was no question of who side donald trump was on moving the u.s. embassy to jerusalem, essentially shunning the palestinians from the peace plan that jared kushner cooked up at one point. so joe biden when he came in had a challenge, on the one hand he had democratic party which once the u.s. to be more responsive to palestinian needs. but also joe biden has his own

unshakable leave from decades of foreign policy with israel, he believes that it is crucial and israel is the most important u.s. ally in the region. in that way, he is much more like republicans. i think what you saw in that speech was a real determination to empathize, regardless of what the party may say. i to believe that israel is a important, perhaps the most important ally in the region and i'm going to stick to that. shery: how does this issue play out at the united nations question mark aging was holding -- united nations? >> the president did address that because the u.s. had three times essentially blocked the state from the u.n. that would have called for a cease-fire. it is more complicated because i wanted to engage in quiet

diplomacy and what the administration suggested is that they thought the statement at the security council would be unhelpful. the u.s. and israel have long said that they believe the u.n. is essentially anti-israeli, that israel is criticized all of the time at the u.n. and it is not neutral. that when countries get together at the u.n., there is a lot of ganging up on israel. that is something the u.s. was determined to avoid. secretary tony blinken said they did that because they feel a statement would be unproductive in an effort to bring peace to the region. haidi: that was nick coming out of d.c. as we continue to watch, 26 minutes of the cease-fire in gaza. -- a $14 million ransom in wet

march, they regained leverage after an attack. the group is not subject to u.s. sanctions, they are also linked to a russian crime syndicate. there was an increase in ransoms paid. that happen has crackdown on u.s. real estate and restiveness -- investors buying property, as investors pour more money into u.s. warehouses than office buildings for the first time. the chinese billionaire who founded a company has died of an unknown illness. they were china's biggest platform for online housing purchases, getting backing from

softbank and tencent. coming up on daybreak, a senior taiwan official talking about vaccines. we will get more

♪ haidi: the latest when it comes to consumer prices in japan, april core consumer prices coming in at a a contraction of .1%. this is less than market expectations of .2%, overall consumer prices falling .4% in april. shipping out breast -- rush food as well as energy, we are seeing .2%, less than expectations of 0.1%, if you take a look at the

number with fresh food here, a contraction of .1%. this would have been a mixed week when it comes to japanese income -- ranging from the number and also trade numbers as well but we have seen that deflationary streak to the -- be extended for a ninth month in the of the of april. we saw that with mobile phone charges, a major factor. that would be upset by rises in oil prices as well as some food as well. shery: we will stay in japan because we are counting down to the start of trading in tokyo, some stories today. the government has approved moderna and astrazeneca, bringing the number of approved shots to three. analysts are saying a faster vaccine pays will drive assets higher.

some say the rollout is gathering fees and it is being reflected in stocks. plus, nomura among the banks find for colluding on european bond trading. south korea, opening at the top of the hour we are watching export numbers for the first 20 days after we saw double-digit gains the previous month. the president and president biden are holding a summit in washington, the two are expected to discuss vaccines, issues in north korea and the chips will be another focus. on that, sk innovation and ford are teaming up to an effexor batteries. they have signed a memorandum of understanding for the venture. haidi: at the intersection of chips and the vaccine rollout in asia, we are hearing a senior taiwan official saying u.s.

systems in securing more covid protection is critical in the center conductor industry. the surgeon cases has not impact production but it could cause logistical problems if the virus is not brought under control soon. during to discuss is our asian tech executive. one of the concerns here as taiwan mike a number of countries on the region that initially had a great handle on the virus are dealing with these waves? >> that is exactly right. taiwan, like japan and several countries, or held up as early examples of successful's -- successes in fighting the covert outbreak but recently cases have begun to take up. yesterday reported almost 300 cases which was a fair spike in over the past few days, the numbers have gone above 1000 infections, almost matching the number they had in the entire outbreak earlier. the issue is they were

complacent after the early successes. shortened the quarantine times for airline crew who were coming into the country. partly because it is interleague -- interlinked with the economy, they were having trouble doing shipments to overseas as quickly with airline crews quarantined for 14 days of the shortened to three days and in some cases some of those people went out and began infections in the community, including one of the more infectious u.k. variants. that set off an increase in cases you are saying in taiwan and they have not been aggressive in distributing vaccines because of early success so that is causing a problem now. that is why you are hearing appeals to get vaccines distributed more widely in the country. shery: in taiwan, given that a few weeks ago we were talking about a drought there.

>> that is exactly right. they have had a few issues and if somebody described it, taiwan is a critically important island in the global economy. because the semiconductor industry there feeds into so many different industries around the world, of course they make chips that go into smart phones and computers, but there chips are also used more broadly now. in auto, game consoles, appliances. and these shortages of chips have become quite critical which we have seen the auto industry lose out on sales because they can't get enough chips. if the drought or the covert outbreak affects that production capability, that would be a bigger problem for the global economy. haidi: major tech executive editor peter elstrom. with a shortage showing no signs of slowing, chipmakers announced a partnership, a record $7.3

billion in the last quarter of 2020, 70 million chips per day. we spoke exclusively to the ceo about challenges ahead. >> the equipment for flight materials and land are massively complex, they take time to build , deploy and boundaries so it will take time as a result of itself. but i would not call it a situation -- there has never been a dole day but we are in one of the most interesting moments in the semiconductor industry history. the demand is not just from one sector, it's expansion -- the expansion is going on in multiple markets simultaneously and that is in the global situation where companies are going to bring these solutions to market, that will be fascinating as we see this play out.

>> right, not just consumer electronics, phones and laptops but cars, microwaves, washing machines, refrigerators. in your opinion, when do you think this will be behind us? i have heard from others will get more supply in the second half of the year. but some have said it will be a couple of years. for there is a better balance. >> demand is all over the place including a lot going into infrastructure, it is going to fuel the conditions for more technology solutions in the future. right now, everyone is working hard. i think some of the longer-term investments will take a dive. you don't quickly put up a fad and fill it with equipment, it will take time. at the same time, people need to plan out investment for the long term, investments of tens of billions of dollars, investments with payback theory that is not

short-term. you have to think about that over many years. so everybody in the supply chain needs to be thinking about what those longer-term forecasts look like, how much capacity they put in, because as we solve the short-term issues what we don't want to do is break the industry. we end up having way too much supply and that's us -- subsequently drained profitability. and they can't invest in r&d. so it's a careful thing. emily: congress secretary is holding a chip summit today, multiple companies involved in that, to talk about what they can do short-term and long-term. i recently spoke to our ceo about what she thinks needs to be done to prevent this from happening again. take a listen. >> we have incredibly innovative and strong capability here. it is on us to make sure we have

leadership. i would not say i worry about it from the standpoint of worry. i would say i am determined to do our part in ensuring that we are doing the right things and investing in the right areas and developing the right talent to continue that leadership. emily: she is talking about the u.s. more broadly and the u.s. investing in r&d and the talent and manufacturing needed to produce more chips. i am curious, your company's global, you are based in the bay area, are you concerned that the u.s. and europe are falling behind in competitiveness in the chip industry compared to china, taiwan? what do you think needs to be done to prevent that from happening? simon: over the last few decades we have seen the industry become efficient in the way manufacturing is done and r&d is done and that has helped drive baton of innovation and it has driven down the cost of all of the electronics -- drive a

ton of innovation and it has driven down the cost. but there is fragility in that situation. it is good to see governments are realizing the importance of semiconductors to everyone and are looking for ways to ensure we have a robust industry for the future. the challenges ahead are significant, it will require a lot of r&d and it is good to see that is the focus of where government-funded r&d dollars are going. i see this as a larger trend. i think it is important that we are not making sure we design an industry that can keep -- keep expanding in many ways. haidi: he spoke exclusively to bloomberg's emily chang.

the regional index could be set for a second weekly gannett, support around that 15 day line and we do have bonds rising for a third day. we do have a change -- >> we did see outputs soften from april and april cpi falling less than expected but still in negative territory for the ninth straight month, the yen and below 109, pickup in vaccination in japan may provide a boost or the narrative of japanese markets. checking in, we could be looking at gains ahead of a sale in japan today. strong demands if the yield rises above 45 basis points. we are seeing a change for treasury futures this afternoon, we saw cash yields slip thursday

but jp morgan not accepting a breakout. the next amount of jobs data is two weeks away and we did have an option that managed to set the pace of the u.s. recovery, we do have gold just a little under pressure but still trading around a four-month high, after capping mid inflation trade. haidi: conversations are coming up with top investment leaders at the hong kong conference so we will be's eking exclusively -- be speaking with flowering tree investment management. new zealand invested more than a billion dollars in vaccination program coming saying inoculations are key --, saying inoculations are key. questions about how they are

paying for the program. >> we should be opening up to more countries, we are open to australia now and we are open to other countries. we will be doing discussions with other countries -- you will see it more -- by next year -- haidi: places like australia and new zealand who have a successful elimination, is it stressful to look at countries that have not gone for elimination and are reopening to the world? even one kisses too many for

these countries. >> i will not make -- even one case is too many for these countries. >> i will not make a judgment. during a. of time when many other countries have this, we are trying to -- we have been allowed to live our lives as normal, businesses are open, concerts happen, we have had periods of lockdown but limited ones. this puts our economy and a strong position. this is a pandemic and we know it will have waves and new variants, that is something we have to come together as a planet to respond to. but we will continue to engage with other countries of what possibilities are but we had a good start in 2020 because we do not have rejections many others had. haidi: what about when it comes to geopolitics, because from your side your government has

said that these differences we are facing are becoming increasingly difficult. is that a risk to recovery for it new zealand, that relationship? >> not the relationship, but the geopolitics and global stability -- [indiscernible] our relationship with china is one that is very important. we hope it is built on mutual respect. we have had problems in the past, but we have continued to build a relationship with china and we want to be honest and upfront with each other about what we can do for new zealand. shery: new zealand's finance

minister and deputy prime minister, greg robertson. university of wisconsin madison senior scientist fuxian yi is joining is next. this is bloomberg. ♪

haidi: china struggling to boost

the birth rate to continue an economic boom build on its labor supply. to give the population stable, the country needs to hit replacement rate of 2.1. our next guest thinks beijing should a limited policies on childbirth. let's get analysis from fuxian yi, they senior scientist at university of wisconsin madison. you have long been an advocate for beijing drop these policies. why are they having such a hard time versing out of the one child policy and what further policies could help increase the birth rate? fuxian: i think china's threat is lower than the world. china's population is 1.1 4 billion -- 1.4 one billion, but the actual population might be

more. so the population is way up. haidi: what are the social and economic reasons why women are not choosing to have children now? fuxian: i think right now the challenge is education cost is higher and housing. because the challenge is the one child policy was more than 40 years and change everything. the economy, the social, everything was based on the one child policy. but with a two child policy --

young people, to get the youth to do the one child policy, the young people -- they were learning from converting that it is best. shery: it's not just china. there seems to be a trend across developed nations, south korea and japan that also prefer smaller families. even if you do relax the two child policy and abolish the one child policy, will it make that much of a difference? fuxian: yeah, it is based on the area. how hong kong and korea and japan -- they are lower than the whole world, that is because --

for europe and america, the marriage age is also leader because in japan and korea and taiwan, the woman gets married -- but in america younger people get married. [indiscernible] shery: professor fuxian yi, thank you very much, senior scientist at university of wisconsin madison. we have breaking news out of south korea, the first 20 day numbers of trade for the month of may, exports rising and

outstanding 53.3% year on year. when it comes to daily average exports, there is also a rise of 59.1% year on year. those are huge numbers and of course we have seen very strong external demand with the biggest rise and export in april and 10 years as well. she exports are a big component, a gain of 26%. now to vonnie quinn with first word headlines. vonnie: moderna has begun importing u.s. doses to other countries. domestic demand has waned. it is not clear where they are also going or how many are going there. data shows two dozen -- the astrazeneca vaccine provides 90% protection from disease.

it has been linked to 13,000 deaths and people age 60 and older. the u.s. has agreed on the recognization of mutually recognizable covid vaccination certificates to allow him -- quarantine free travel. it should be up and running by june subject to formal approval. 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'm vonnie quinn. this is bloomberg. caroline: -- haidi: this is bloomberg. ♪

>> the latest business flash headlines, considering -- credit suisse considering bonuses. sources the lender is keen to send this in the investment banking division. we are told several options are being discussed but no decision has been finalized. it's we still climbed -- declined to comment. you vienna expected to get hit. -- you vienna -- ubs expected to get hit hard.

-- they are joining the electric vehicle batteries for new electric -- >> ford making a electric f-150, they will make two a week by 2025. the ceo says he is trying to lower costs for the most expensive components. haidi: the top investment leaders at the hong kong congress, hearing from ceo michelle in the next hour. also numbers from sydney and tokyo next. this is bloomberg.

shery: welcome to daybreak asia. i am shery on. haidi: and i'm haidi stroud-watts. asian markets open for trade, our top stories, asian stocks that arise after u.s. stock rallies by tech rebounds, optimism over improved jobs report. tencent is pledging an investment spending spree that will up the ante for competitors

in china's post-pandemic internet space. south korean president and joe biden set to meet, the south korean president is making an effort to revise negotiations. shery: was look at the action. sophie: astrazeneca and moderna vaccine's are being approved for -- approved for use in japan but there is also concern about the rising iris and osaka, we are keeping an eye on japanese stocks, the nikkei to do five up for the second week. the yen is trending below one, getting ahead of 20 year options. semiconductors and north korean mines when the president meets

with president biden, we are keeping an eye on chip-related names, gaining 1% of the start of cash trade, continuing to boom with robust -- a faster pace of vaccination. gaining ground background that 1128 heddle against the greenback and this friday we do have the share market, a change. aussie bonds rising for a third day ahead of retail sales data, numbers due out of australia later this morning at the bottom of the hour. little change as we consider the latest market manufacturing figures, the flash number rising to a record high. check out prices, we are seeing a continued weakness as china

continued to flag concerns over high raw material prices, iron ore. haidi: let's talk about the commodities rally, has it right out of steam question mark there's a sense that. >> we are looking at a reassessment here. what we have seen is there is a lot of pricing in of the economic reopening. as people became more comfortable with the idea that the major economies around the world would be largely reopened, probably by the middle of this year, plus the distortions from last year, demand for growth, you are seeing a big rally across a variety of commodities that is pricing -- priced in now. people are getting back and saying what comes next? they are waiting to see the

second-quarter data from around the world and if it justifies having the commodities priced as they are. particularly for things like copper and iron, some of these are rarities, overstating the demand we are going to see the rest of the years of people are now looking for this. they are justified, they want to see hard data from the economies in europe and the united states to show that yes, not only were our projections correct but we are actually setting up a faster pace of growth than some traders anticipate. your public going to see consolidation. . -- consolidation period. we are quite sure the world is growing and becoming a place that has been priced into this extra near commodity rally. shery: we saw the weaker dollar helping that rally on wednesday, it bounced back, now drifting down again. what is driving the greenback

right now? >> in the interim it is a lot to do with foreign an implied yields in the united states. there is a true menace amount of liquidity in the short-term u.s. market. that is helping for some of the yields in the tech markets to be softer, relative to europe as one of the key factors going on here. the numbers are not that big. in absolute terms. but the incremental change is significant. or a foreign exchange trader, you are watching these closely. the move of the euro and particular, that is why it is trading at 122 and there is no pushback from europe so far. they typically -- you would expect when the euro gets about 120 two the u.s. dollar it would be uncomfortable for the european central bank but so far they have not said much. as we get closer to 125, you would expect they will become a little stronger in their wording to try and force it down but for now the euro is justified by

this changed particularly between bond -- bund german yields in the treasury. you will probably see increment on most for the dollar to go slightly weaker. until someone says that is enough. it hasn't happened yet. shery: -- haidi: meanwhile, all quiet on the crypto front. >> will you can't rely on it for too long. the gyrations have been extraordinary. we have seen volatility -- up to 140% 30 day, the must year when we saw in march a crater in financial assets even though they do not reach 100 so we can tell it is quite extra near and, but people will be thinking that possibly 30,000 is a short-term for bitcoin after it bounced off

of that. i think we are coming into it particularly for retail traders, there will be a lot of retail traders who have been caught out and they have to set up assets to pay for losses in crypto. we have a while to go before volatility to stop but people will be looking to see what those 30,000 are before -- are for with bitcoin and it might justify some traders getting involved. it will be volatile for some time. shery: that was marc renfield. you can follow more of the story at all of the days trading on our live blog, let us now turn to vonnie quinn with first word headlines. vonnie: federal reserve chair jerome powell announced he wants the central bank to play a leading role in developing

international standards and he is focused on how cryptocurrency will fit into the current u.s. banking system. he says any kind of currency is to comment and not replaced cache. >> we are committed to hearing a wide range of voices before deciding whether or how to move forward. vonnie: president biden has praised a cease-fire agreement between israel and hamas and their 11 day conflict. in gaza, thousands gather in the street to celebrate and cheer after the mediated -- egypt mediated truce went into effect at 2:00 local time. they wanted to stop the offenses that in killed 200 people in palestine, 12 people in israel. >> i think palestinians and israelis equally deserve to live safely and securely and enjoy equal measures of freedom, asperity, and democracy.

my administration will continue our quiet and relentless diplomacy to that end. vonnie: a senior taiwan official says u.s. assistance giving kobe vaccines could help to protect the industry of semiconductors. -- giving covid vaccines could help protect the semiconductor industry. this will help them to the pandemic. most tech companies are located to the south of taipei and so far the islands surge has not impacted chip production. 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'm vonnie quinn. this is bloomberg. haidi: still ahead we take a look at tencent first quarter results. coming up next we will be heading for a conference in hong kong hearing from capital management founder and ceo michelle leung.

this is bloomberg. ♪

shery: the conference in hong kong has wrapped for another year, one of asia's biggest hedge fund events where leading players reveal their top investments. we are talking with one of the speakers. sophie: we have with us michelle leung. you came into 22 anyone maintaining your company's preference -- the name itself -- we talk a lot about the target markets for the company, the local high -- you are saying it enjoys a moat for now but is

there increasing risk we may see competition on home turf? >> good morning sophie. currently, they are the market leader in this niche sector and they are the only listed brand. the customer actually sees them more as a lifestyle brand, the high-end apparel brand that customers think it is suited to a new lifestyle that the gen x consumer is focused on. the brand signifies more leisure time, a healthier life style, more sports, and the price is higher, more aligned with the money. think that because the brand is very local and knows how to target that local customer, give them the right fit for their body type and shape, give more attention to services to that vip customer, because of those reasons, it has built a strong

competitive moat and has built a large footprint across china. believe the company is at an inflection point to higher growth. we believe that we should see a higher -- yes, we think the gross -- growth will accelerate from here. sophie: so that could mean that shares see more upside, the officer made was seeing the base case of a doubling in the share price in three years tracking revenue growth. what are the risks? >> obviously the risk would be the target growth plan would not roll out as they had forecast it. we think the apparel sector is actually a very interesting sector to look at today. and this stock in particular has a very niche -- clearly arrest

cut covid -- clearly a risk that covid delays or the consumer is not as strong as we predict. but overall we would say that the sector is ripe for consolidation, new players will have a hard time entering and current players will see higher growth from here. this brand is very unique and positioned in a way that has no domestic competitors and the foreign competitors are not coming close to being able to offer what they offer to the local consumer. >> in order to reach your case for a command of 25 times, what else needs to be done russian mark what --? >> we need to maintain operating margins, it needs to be able to track all of the growth targets it has in place. and it needs to be able to maintain that by controlling

costs. there is a number of factors in play but because the stock is valued below the sector average, 16 times, we do believe that our base case should be achievable. the 100% target share price growth in three years. that will depend on other factors that they have in place and we believe it is achievable but that will be what is in place for them. sophie: margins are key, the company is sitting on a comfortable cash pile. they're looking to add 300 stores annually over the next three years. when you look at how important the off-line channels are, but we half to look at the online capacity being beefed up because the pandemic, it has delivered higher conversion rates. are you seeing more of a race toward a digital strategy at the company question mark >> yes,

any successful brand has to do online and off-line now. we believe the company is able to execute that for the brand. but they are very good at building it based on local programs, they have about 17,000 members and they offer them tailored services like -- the numbers can hang out with leaders and stylists. they feel like they are getting special attention and that is like they are joining a club in many ways. that is a very smart way to build and we believe that loyal customer base is going to grow over time. but they can use a lot of online strategies to tap into that loyal customer group and grow that base. sophie: for customers outside of the golf club, you have the brand carnaval which was established -- could be an

attempt to attack a wider market? >> that is interesting. i think biem has built a lifestyle brand, their focus on the main brand now but they have another when they will be rolling out so there's a lot of optionality to build on the core brand and to do brand extensions. we have seen that in multiple cases with other sportswear, other apparel brands in china where the multibrand model has really been successful. so this is still early stage but we believe that both for the build of the core brand and the attempt to expand the offering, the growth should be interesting from here. sophie: i want to get your thoughts on the brand in china, we saw shares underscored by shareholders but -- they do not see that naturalism board to messick brands persisting.

-- domestic brands persisting. what do you see at play? >> the geopolitical factors are not that relevant because these are all strong, domestic brands with have very strong domestic or following. to answer case in point, it has been very successful with another brand, they have 2000 stores across china and they are the most -- one of the most successful apparel brands we have seen in the past years and we have seen other domestic brands being able to do that, expand into other brand offerings and consolidate market share. sophie: thank you michelle for explaining, a chinese golf course maker. haidi: we will have more conversations with top

investment leaders from that hong kong conference. we will be speaking with more later. ♪

haidi: the chance of another covid surge in the u.s. is extremely low if 70% of adults are vaccinated by july 4 which is the government's target. we spoke with david westin at the businessweek conference. abigail: -- david: we are coming down and is significant matter, we dropped cases down to the 30's which is good news. we don't want to declare victory prematurely but if we can get the 70% of adults vaccinated

with at least one dose by the fourth of july the where the president has set the goal, the chances of there being a rebound is extremely low. that is the reason we want to continue to get people vaccinated and even get to that somewhat recalcitrant groups that really doesn't want to get vaccinated because the more and more we get the higher the percentage, the less likely they will be a problem and that would mean we could safely get back to normal, get the economy back to where we wanted to be, people enjoying things that they have not had the opportunity to for over a year. we are going in that direction but we have to keep putting on the pressure as it were to continue to get people vaccinated. david: give us a sense about vaccine hesitants. last i checked about 60% of the

country have their first shot, we are approaching 50% that are fully vaccinated. it is perceived there is a significant plurality of the country whose resisted to the vaccine. to mama sense of how large that is, 30%? -- do we have a sense of how large that is? >> it is looking like 15% but those numbers vary whenever you look at it from a different survey. but whatever the number it is unfortunate because we are so fortunate that we have, dealing with the most devastating pandemic and will over 100 years, and we happen to our benefit have highly, highly effective vaccines that could protect us, our family, our society. the idea of not utilizing that, often you have a situation where you have a really serious

problem but you have no solution. here we have a really serious problem and we have an absolutely proven solution. it is so frustrating when you see -- and you know, not to point fingers at all because people have individual reasons that you would like to try and explain to them why it would be so important to get vaccinated. if for one reason or other they don't want to. but i think if you look at the benefit to you as an individual, to your family and to society, it is so overwhelming, leaning toward getting vaccinated, that i hope warren more people see why it is so important to get vaccinated. it is very interesting, the very people who don't want to get vaccinated don't like the restrictions that are put on them by public health. and if you want to get rid of the restrictions, get vaccinated and the restrictions will

disappear. i promise you that. david: is it a matter of time that there is a variant that is resistant to the vaccines we have? >> not necessarily, david. and one of the ways you can prevent that from happening is treating this as a global pandemic and trying to get the entire world vaccinated. there is a very important tenet in virology, viruses don't mutate if they don't replicate. if you prevent it from spreading from person-to-person and replicating, and is not going to mutate. the easiest way to prevent the emergence of a problematic mutant which would lead to a variant, the easiest way to do that is to get as many people throughout the world vaccinated as quickly as you can. shery: a quick check of the latest business flash headlines.

credit suisse considering special attention bonuses for top performers following a green cell scandal. the lender is particularly keen to send it in the investment banking division. ubs expected to take a hit of up to a million dollars in the second quarter, polluting on euro government bond trading during the crisis. ubs says they took action years ago to improve its processes and is considering am appeals of the fine. cna financials paid a ransom to regain control of its network after a cyber attack and data reach. they say it was because of a hack that is not such -- subject

to u.s. regulations and is subject to malware. 2020 saw a 311% increase in ransoms paid. still to come, tencent has promised to boost investments this year.

>> take a look at japan. we are getting those pmi numbers for manufacturing. the preliminary may number coming in at .5. this would be the fourth month we are seeing an extension territory. -- seeing it in expansion territory. manufacturing is a little bit of a downhill from the previous month, but the composite number also into contraction territory, falling to 48.1 after going into

expansion in the previous month for the first time in over a year. we are seeing the japan jibun pmi numbers coming in weaker than the previous month. we continue to see those states of emergencies being widened across japan, although we have seen a huge increase in exports and external demand. pmi numbers a little bit weak in may. haidi: let's get some reaction on those tencent results, and particularly investment plan. the company pledging to sharply increase spending after posting a 25% gain in quarterly revenue. analysts start to view the stock as more favorable as the regulatory uncertainty looks to clear. let's get to brendan edward ahern, ceo of krane shares.

this will eat into shares. will the market appreciate this approach for future growth taking market share? brendan: tencent is amongst a number of companies in the chinese internet space where we have seen a commitment to fund future growth by ramping up spending. we saw that in the past quarter. it is something investors will have to recognize and deal with. haidi: this stock is still a market darling despite all the regulatory uncertainty. just overwhelming positive positions on it. do you assume the regulatory stuff will sort itself out? it is trading at a pretty big discount compared to what we are used to seeing for tencent. brendan: i would definitely agree. this is the second largest company within msci emerging markets.

it is widely held, widely loved. yet you do bring up a great point. on a relative basis, to its peers, many of its fundamental ratios are at or near five-year lows versus its five-year historical average. we are at a slight, not significant discount to those averages. for bloomberg terminal users, i highly recommend the eqrc functionality where you can see how tencent, the valuations, how inexpensive it looks to its peer group. haidi: tell us about their potential. we have seen this huge optimism about their video gaming sector, but at the same time this regulatory concern is an overhang. some saying gaming may not be upsetting those. brendan: certainly a regulatory

sentiment has weighed on the sector as a whole. tencent has not been fined. at the same time, we believe that, similar to alibaba, a fine is to minimize -- is de minimus. it would probably not be as bad as it was with alibaba come as high as it could be. at same time, one of the areas investors have been most worried about in tencent has been fintech, yet fintech was the strongest business arm in q1, growing 47%. rmb revenue reached almost 49 billion. it was the strongest part of tencent for margin expansion. the fintech business in q4, analysts bombarded martin allow on the conference call. he kept saying we are dealing with the regulation. i think they put the fintech

regulation behind them by adhering to the new rules. sophie: we are seeing strong results from chinese tech companies. which are some of those companies that could benefit or get hurt by these regulatory issues? brendan: we like to think that in the case of alibaba, by paying the fine, they have put it behind them. that leaves a number of players that have yet to be fined. at the same time, this regulatory overhang has weighed on the sector in the second half of the first quarter through the start of the second quarter. the size of the anti-regulatory segment. you have the archegos unwind. you have a cyclical rally at the expense of work from home growth securities. the fundamentals have never looked stronger for the space, and yet the charts to some degree don't look very good. i like to think charlie monger

recently bought alibaba for the first time. if one of the great investors of all time is buying, maybe we should as well. haidi: who wins out in this rivalry? there are players like tencent who have an enormous head start, but is there room when you look at the chinese consumer and market for all these players, given how fierce the competition is? brendan: historically, these companies have not played very nice with one another. that is the unfortunate consequence -- the unfortunate consequence is the regulation. china's urban middle-class now spending $7 billion u.s. purchasing parity annually. there is a lot of renminbi flowing in china, continued urbanization should see that urban middle-class grow in the coming decades. there is plenty of room for these players.

they will compete harshly with one another, yet the opportunity is very strong. we at krane shares are looking forward to taking and vintage of that. sophie: we will have more tencent analysis later with a global advisor. this is bloomberg. ♪

vonnie: this is "bloomberg daybreak: asia." janet yellen's team has proposed a 15% global minimum corporate tax. the treasury department says it seeks to lure corporations to a cheaper tax rate. this says 15% is a floor, and the rate could go higher. it is more than the 12.5% rate preferred by the oecd. president joe biden has bipartisan legislation to combat -- has signed bipartisan legislation to combat anti-asian

hate crimes. the bill establishes hotlines to report incidents and instructs the federal government to help local law enforcement. the justice department overseeing the response. pres. biden: the department of justice is strengthening its relationship with the community to take on violent extremism and domestic terrorism. vonnie: in an effort to boost vaccination rates, new york is offering lottery tickets as an incentive. the state will offer $20 scratch off tickets to those who get a shot. the tickets will be distributed at 10 mass vaccination sites. new york city has topped 4,000,001st doses. the state has relaxed its mask protocols for those who have been inoculated. moderna has begun exporting u.s. produced covid-19 vaccines to other countries.

madera advisor have been the backbone of the u.s. vaccination drive -- moderna and pfizer have been driving the backbone of the u.s. vaccination drive. astrazeneca gets set to host the other picks. global news 24 hours a day on air and on quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm vonnie quinn. this is bloomberg. haidi: let's get a look at the markets. sophie kamaruddin is in hong kong. sophie: asian stocks set to end the week on a firmer note. asx 200 bouncing off the support of the 50 day line. a health care company in the losses we are seeing. one index bouncing back about 2%. losses has pushed it into a bear market on monday. focus more closely on the moves

in seoul. carmakers among the biggest boost. this after the latest industry data from europe shows sales to the eu jumped four fold from a year ago. another signaling of the reopening of major economies, which has kept export growth momentum coming this month. latest numbers from korea showing chip exports growing 20 c percent. chip names in seoul boosting the index there. pulling up the chart on the terminals, as we are seeing korea's economic outlook brighton, thailand's prospects remain quite dim. bnp paribas pointing out the differences in the fiscal outlooks. they are expecting this spread will continue to widen. haidi: let's delve into the semi conductor industry. the ford motors ceo believes the

chip shortage will improve in the second half of 2021. he was speaking with bloomberg's david westin. >> it is a big deal right now. we think second quarter is the trough for our chip supply shock. we think the second half will improve. we cut our production almost 50%. the chip issue is complicated, but we see the facilities that impacted us in japan are back up and running. they had a fire that burned the planned don -- plant down. the demand is so high for new vehicles now that i am not sure we will get all of what we need. we rescheduled all of our summer vacations for hourly workers into this quarter. so the third and fourth quarter we will be flat out on production. it will come down to how many chips. the chips we use in these vehicles is complicated.

we have hundreds of them. we tend to use the 22 nanometer and bigger chips because our requirements are different than your phone. our trucks have to work at 40 below in alaska. we tend to use those older feature set chips. that is not the capacity that is going in. you hear these big announcements on chip capacity. those tend to be the smaller, more advanced nodes. we use a lot of those, but not all of those. it will be a big transition to get more capacity for us in the chips that we mostly use. david: i would be remiss if i did not ask about the competitive front when it comes to chips. ford took a hit. gm appeared to come across as being in a better position. is that fair? the street right now thanks gm is managing chips better than ford. jim: i can't influence other

companies, but here is this management team's commitment. we will tell wall street everything we know. our plan is to be transparent. how it falls out in the market, i think it will take time. let's see how the end numbers work out. our management team, we want to share everything we know. that is what we knew. we shared it as transparently as we can. we were able to offset almost all of the chip impact, 200,000 units in the first quarter. let's see what this team can do in the rest of the. -- of the year. >> jim farley speaking with david westin. chips willoughby -- will be among the talking points when the korean president meets president biden. bruce, what will top the agenda? bruce: tops on the agenda for president moon will be trying to

salvage what he had done with north korea during the trump administration. it seems that the biden administration is probably going to issue some sort of a statement that makes it seem that the u.s. is willing to build on the agreement that president kim jong-un made with president trump back in singapore in 2018. but also, the u.s. is also likely to say they will build on some of the agreements from previous administrations. >> we are also expecting china to be on the agenda as well. bruce: yes. there will also be some trade issues on the agenda, as the u.s. looks to have better collaboration with south korea regarding the global semi

conductor shortage. >> bloomberg news reporter bruce einhorn. we will be heading to art basel in hong kong. it is opening its doors to the public this weekend. we look at how crypto nft's are playing a part. this is bloomberg. ♪

>> art basel hong kong opens its doors to the public this weekend with a hybrid model. online viewing rooms and virtual walk-throughs. crypto art and nft's are also playing a bigger role. a crypto advisor spoke with bloomberg about how to start collecting nft's. >> when you are taking your first steps, go to a platform which has a wide array of different artists and spend time to look at the art and see what calls to you, see what ideas, really look at the artist's practice and try to understand the ideas behind it. when you are comparing temporary

and nft art, there is no magic to it, it is a different medium. once you have something you like, your next step will be to jump in and buy something. don't spend a lot of money, just get your feet wet. spend $100 or whatever is affordable. there are so many nft's available. don't buy what people say is hot. if you are speculating on art, if the bottom drops out, you will be left with something you and nobody else values. the most important thing is you like it. >> what are the pitfalls? >> the pitfalls of nft's is it is not the easiest technology to get your head around. there are mechanics when it comes to how to pay for it. people think i have to buy cryptocurrency before i get my first piece of art, but actually some platforms allow you to pay with a credit card. so in five minutes, you could be up and running with a new account, buying your first nft

for $100. it is very seamless. >> what does the digital art sector look like at the moment? there was a lot of focus with a sale earlier in march. do you think it is settling down and we are going to find a better level now? >> digital art and nft's came out of the gate with a big boom. there was a lot of hype. even now there is a lot of hype. it is good to see things are starting to calm down. prices are coming down a lot. what we are starting to see is nft artist, the quality is getting better. people are not just throwing money on any old nft that comes to the market. they are starting to really look. do i want to pay $20,000 for this nft? what exactly is it? the art and nft market is maturing. we saw it with china's contemporary art. this time is is about digital

art and nft's. >> what does liquidity look like in the traditional -- look like in the nft world? in the traditional world, people may not sell it for a long time and it stays with them for many years before it gets turned over. what is it like in the nft art market? >> during the first bull run, some works were being sold 15, 20 times and would go from one dollar to $100,000, just being turned over and turned over. that was a bit of a fall start. -- false start. now people are buying nft art and holding them. they are collecting them and valuing them as artwork rather than as an investment. ultimately that is where people should be looking at the nft art world, as collecting, not a new way to speculate on some asset they don't understand. these are not stocks.

these are not even cryptocurrencies. these are artworks with intellectual property and ideas. it is important that people who collect art and nft's understand that. we are starting to see nft's and the whole crypto art movement show up in art basel, where even just in the next booth nft's are being shown. nft's are made by artists at the top level. the two worlds of nft's, of crypto art and fine art, are colliding. it is an exciting development. haidi: a quick check of the latest business headlines. manhattan has lost its top spot among foreign real estate investors by u.s. property. overseas investments in the borough plunged 79% in the 12 months through march to $2 billion. it came as investors poured more money into u.s. warehouses than office buildings for the first time. seattle is now the top

investment spot. the chinese billionaire who founded a property giant has died of an unspecified illness. he also built the company into china's biggest online platform for housing transactions and services. getting backing from tencent and softbank, he made his market debut in the u.s. last year just short of 15 billion dollars. ford reached an agreement to build electric vehicle factories. the new electric f150 lightning pickup. they will build two factories in the u.s., aiming to produce 60 gigawatts of capacity annually by 2025. the fort ceo says the move is potentially lowering costs for the most expensive ev components and hedging against outside supply threats. let's take a look at stocks we are watching this friday. sophie: tencent on the back of its earnings report card

pledging to boost investments as alibaba heats up in the chinese e-commerce space. we have tencent market cap come under pressure, losing over $195 billion since the peak hit earlier this year. analysts are seeing a potential to reclaim the milestone. switching up the board ahead of the open in taipei, we are seeing taiex futures moved to the upside. thailand lawmakers scheduled to read a bill to add a further $7.5 billion to cushion the taiwanese economy from the pandemic. an outbreak has curbed social gatherings. we have the export outlook from taiwan. orders rising 42.6% year on year, beating estimates. the government forecasting orders may rise in may. broadly speaking across asia this morning, asian stocks set for a second weekly gain. gains of more than 1% -- gains

of more than 1% in tokyo. chip stocks gaining ground has of president moon's meeting with president biden. a rally lost a bit of speed this week as china flagged more caution around elevated prices for raw materials. oil prices did gain a little bit this morning, but still set for a weekly loss. iron ore in singapore has fallen under $200 a ton. gold trading near four-month highs. we are seeing this reflation trade very much in focus. haidi: still ahead, we will have more conversations with top investment leaders at the hong kong conference. plus, we will be hearing from one of taiwan's largest hotel groups as the island continues to grapple with rising cases. one executive chairman is on bloomberg markets. that is it from "bloomberg

daybreak: asia." "bloomberg markets: china open" is next. this is bloomberg. ♪

>> happy friday. it is 9:00 a.m. in beijing and shanghai. welcome to "bloomberg markets: china open." i'm tom mackenzie. david: just counting down to the open, your last session of the week on the chinese mainland and hong kong. stocks across the region on the tup after -- the up after tech leading the rebound. investors optimistic over a positive u.s. jobs report.