shery: from bloomberg's world headquarters in new york, i'm shery ahn. sophie: we are coming down to asia's major market open. haidi: our top stories this hour. oil hits a two year high as opec-plus saying they are bullish on demand. the hack attack on the world's largest producer hits operations harder.

a trade union says jbs has shut all of its beef plants. lines from the jp morgan conference is out. shery: breaking news out of south korea. we are getting the consumer price inflation numbers. it is an acceleration of 2.6%. it has come in line with estimates. it is faster acceleration than the previous month of 2.3%. year on year, this would be the biggest rise since 2012 and also the main inflation reading would be the second straight month the price gains have exceeded the bank of korea's 2% target. when it comes to the month on month number, the acceleration -- the core is accelerating faster than expected. 1.5% instead of the expected 1.3%. remember, we do have these base

effect coming from last year's oil slump. we are seeing the rebound in global commodity prices factoring into the inflation numbers. the euro on your number rising the most since 2012. we are seeing it exceeding the be ok's 2% inflation target. market consensus seems to be converging with an earlier rate hike cared -- rate hike. the earliest in the third quarter of 2022. see how we are setting up for the market opens across asia. sophie: asian futures are hinting at a muted start after global stocks rose to a record high. pressure on the lows for the turkish lira. this as president erdogan -- aussie tenure yields holding at the 170 level. consumers spending likely provided modest growth for the

australian economy. consumer sectors have been lagging in the share market. after the u.s. manufacturing report, it showed some weakness when it came to employment. gold now below 1900 announced. u.s. futures edging lower. energy stocks outperformed. pulling up a chart on the terminal, wti topping 67. brent going towards 70. goldman raising its ban given that opec-plus remains in control. the market seeing brent at 75. morgan stanley listing the crude prize outlook. this on intensifying pressure for big oil to reduce carbon emissions. haidi: the opec-plus alliance expects demand to recover in the second half. officials want concrete evidence before hiking production. >> we will not leave this market

exposed to any lack of attendance. haidi: bloomberg intelligence commodities strategist joins us from now. we are seeing some of the heaviest travel driving, flying activities since pre-pandemic times. all of this is adding up to a bullish outlook. >> it is picking up from the lows. the problem is it is not getting to where was before covid. before covid, the average consumption of unlettered yes was just over 9 million barrels a day and maybe gets close to eight and a half. that was from 2019. that is the problem. flat consumption well before covid for many years. with the market is doing is pushing up prices. there is not room above 70 and a terms of wti. supply is coming right back.

a good way to look at it the average cost of adduction is still $45 a barrel appeared in 2019, it was closer to $50 a barrel. a downward cost of production. we are bouncing from those lows in demand. before covid, demand was already kind of flight. shery: we heard from the international energy agency. what are they saying about demand? >> everybody is optimistic. demand has to pick up. from last year at this time, that was the worst of covid. it is a spiked stage. we are going to get to the hangover stage. the stimulus is going to work through the system. we are going back to the vacations. they are realizing, i don't have to commute anymore. that is changed forever. flexible work schedules are consistent across the planet. that means demand is not going to come back. efficiency and supply is, unless

you don't believe in economics, they most percentage for sales since we did at the peak of 2018 and 2014. haidi: now that parts of the commodities complex have taken a breather, what do the fundamentals tell us about the next leg of the rally? are we still talking about a super cycle? >> i think the super cycle should be looking toward the metals with a little bit of bitcoin and cryptocurrencies. focus on the low elasticity. metals, copper, platinum. demand for metals. copper is in the front. it has reached a new high for a reason. the high elasticities of supplies, corn, crude oil. maybe the metals. it coin and crypto's have to be in there. the world is going digital and it is going away from petroleum. shery: the bloomberg

intelligence commodities strategist. let's turn to commodities. the u.s. operations of the world's largest meat producer are shot after a cyberattack care the prospect of more extensive closures worldwide is upending agricultural markets. the agro porter joins us from chicago. what does this mean -- the egg reporter joins us from chicago. what does this mean for prices? >> it means higher beef prices and lower capital prices for the long-term. it depends on how long these plants going to stay shut. haidi: do we have an indication as to what sort of is behind this? the culprit if you will and whether this is something that is going to become an ongoing problem? >> we don't have a lot of information from the company. it has been confirmed it is ransomware. the company has been quiet about

exactly what the hackers might be after or if the company is playing ball or not with any demands that might be made. we don't know when the plants may start reopening. there are a few facilities in the u.s. that might start resuming production of pork and we are in a wait-and-see mode. shery: talk a little bit about the company because it is an australian meat and food processor and they have a wide portfolio of products. >> jbs is the biggest meat company in the world. we are under the impression it is the jbs usa part of the company that has been impacted by the hacking. that is the arm of the company that has operations in australia and the u.s. and australia. from what we can tell, it is mostly in australia, in the u.s.

and canada having the impact on solder. in brazil, they seem to be operating as normally from what we can can tell -- from what we can tell. they are any beef, pork, chicken, lamb. they could be serious if things do not get restarted in short order. haidi: shares continue to see price pressures on the cost of meat. our agricultural reporter in chicago with the latest on hearing all of jbs's meet plants have shut due to the ongoing pack. vonnie: the world health organization, world bank and wto have all endorsed the imf call to invest $50 billion in covid vaccines and treatments. they say governments must act

immediately or risk continued outbreaks of the virus. the imf last month proposed a grant and loans plan. moderna is seeking full u.s. fda approval for its vaccine. the move could make a shot cleared on an emergency basis during the pandemic into a stable force of revenue for years to come. moderna says its vaccine is shown to be highly effective. the u.k. is said to have had no reported deaths within 28 days of a positive covid-19 test. the bbc says it is the first time that happened since the start of the pandemic. prime minister boris johnson is facing pressure over whether to proceed with a reopening later this month.

the world health organization has validated the sinovac coronavirus vaccination for emergency use. a brazilian government study found the chinese made shot effectively controlled -- johnson & johnson must pay a $2.1 million award to a woman who claimed its talcum powder was contaminated with cancer-causing asbestos. the largest verdict in the almost decade long indication over the one-time household product. j&j asked the court to reconsider the findings of a st. louis journey -- st. louis jury. the court declined. 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: still ahead, return to

office resistance. ports from employees who would rather quit than give up working from home. plus, a big exclusive with a chinese ev maker. this is bloomberg. ♪

shery: ev stocks are making a comeback. vehicle makers and suppliers rallied on positive news for the industry. this could not have come at a better time. after intense market enthusiasm in 2020, electric carmakers have had a tough time this year living up to those expectations. on tuesday, u.s. traded shares surged after the two chinese ev makers reported strong sales for may.

citigroup was did their estimate for the industry. risks remain. we do have more competition from automakers. the global semi conductor shortage. not to mention some reluctance among investors to hold onto those riskier assets. haidi: let's get more on ev's. we cross over to the jp morgan global china summit. the event brings together investors and industry leaders. stephen engle is in hong kong standing by with our next guest. >> that is right. we are going to have a full slate of interviews this morning and tomorrow including later, we will have the asia-pacific ceo of jp morgan. coming up in the 9:00 hour hong kong time. we are kicking things off with the president and vice chairman of a chinese ev maker. he joins us now.

good to see you again. good numbers for may. 5687 deliveries in may. that is on top of another 5000 plus in april. this is coming off a record first quarter were you had 13,340. you know them deep down. what does this tell you about demand and how you're going to fair the rest of the year? >> [indiscernible] shery: it seems we are losing our guest but we will try to go back and hear about their business performance. we will have more guests from the jp morgan global china summit. will be speaking to the bank's

asia-pacific ceo and the vice chairman of global banking. this is bloomberg. ♪

haidi: the chinese president has urged officials to declare a trustworthy, livable and respectable in a bridge for the country in a sign the country is looking to smooth it hard approach. i'm envisioning a new mascot in terms of lovable. what are the changes president xi is looking for? tom: it is this change in rhetoric that is likely to lead to significant raised eyebrows across the west. you would imagine. president xi telling comment as party leaders he wants china to

make friends extensively and expanded circle of friends. he added china should be open and competent but also modest and humble. i think you would be hard-pressed to find anyone in the halls of power in london or canberra or brussels china is showing itself to be modest and humble. it is quite the change from the wolf warrior of diplomacy we have seen that took its grip the last 12 to 24 months. the actions china has taken against anyone who is seen to be crossing lines from beijing. you have seen trade measures being put in place. travel bans. fiery diplomatic protests and strong language from state media. wolf warrior diplomacy arguably is not working very well. you have had the likes of the european union, the philippines who up until 12 months ago a look like they wanted to pursue closer ties with beijing. that does not seem to be on the

agenda for amendola or brussels. -- for manila or brussels. president biden building up his alliances with u.s. friends. also, china's image has taken a hit as a result of the endemic weather -- this pandemic. whether or not this changes policy is what will be watching closely. shery: how close is china in reaching herd immunity given their vaccine rollout is accelerating? tom: they are about a few months away according to the experts because it was slow to start. the vaccine rollout has picked up pace. you are seeing 20 million vaccines every day in china. they vaccinated 660 million people out of a population of 1.4 billion. there is concern china is going to be much lower to reopen its border. they have no playbook to reopen

the borders at this point. experts we have been speaking to say you're going to need a mind shift among policymakers will have to accept china will need to live with the virus going forward otherwise it is going to be behind other nations opening to the world. we are a long way from that shift in mindset. shery: tom mackenzie joining us from beijing. it's get back to the conversation with stephen engle with our special guest of the hour. >> all right. let's reconnect with brian. he is the president and vice chairman of a chinese ev maker. we are joined at the jp morgan global china summit. you are our first guest. i posed the question earlier about the delivery numbers. may and april look really good. that is coming on top of a record first quarter. are we looking at the second quarter going to be a record and

what does this tell you about chinese demand? >> i think we have just announced a record may delivery number for us. this is on top of the record-breaking quarters we had. we are on track to meet or exceed our forecast target of second-quarter delivery numbers, which means chinese ev demand is still very strong. after a short pause during the chinese new year in february, the industry has rebounded quite strongly and i think the whole your outlook is very strong for us as well. >> does it change your outlook for profitability? i think you have a breakeven target for 2023. you have not turned a profit yet. has that been accelerated because of the recovery? >> if you look at the growth margin line, we have been

steadily improving our growth margin in the first quarter. we expect the full year to see steady improvement as well. that is an encouraging sign as we are building scale and probability on a vehicle level given our investment phase and fast growth of our operations. we will be a couple years away from the whole company profitability. the growth margins we will be focusing on. >> what are your biggest challenges right now? commodities have had a big rally. copper is used in ev's. are there shortages you are facing? what is your biggest challenge even though you're having these record deliveries? >> right. the whole industry right now is experiencing chip shortages across the board. we are -- we have not been spared from that. we have been trying to deal with the situation.

that is why we are showing month over month growth compared to peers who are not growing in recent months. that situation will probably start to ease in the third and fourth quarter. by the early -- by early next year, hopefully we'll be back to normal again. >> how has it hit production? some banks have been looking at the production shortages of up to 10% because of this chip shortage. >> i would have to say it has impacted and constrains our ability to deliver. despite that, we continue to meet and exceed our targets. it is because we have tried very hard to address those chip shortage issues by being proactive, establishing a relationship with suppliers and partners and also the fact that we are not dealing with hundreds

of thousands of volume compared to tradition. in a gives us flexibility to be nubile here. -- it gives us flexibility to be able here. >> that is right. you also have two cars on the market right now. how critical going forward will the rollout be of the new sudan, which i assume is going to require a lot more chips as well? >> i think the p5 will be an exciting product. we have high expectations. we are one of the very few ev companies in china that has a brand-new model rolling out this year. it gives us divisional catalyst for growth. the third product is a very different product from her existing portfolio. it is targeted at the family sedan segment with additional focus on smart cabin and autonomous driving capabilities. it is the world's first ev

equipped with a production level. it is an exciting product. we are confident by the time we target delivery in early fourth quarter, it will be able to meet demand with reduction schedule. -- with production schedule. >> thanks for joining us. as we kick off our coverage here from the jp morgan global china summit. back to you guys. haidi: coming up next, the largest wealth manager in australia. the ceo joins us to talk about the deal and that share price. this is bloomberg. ♪

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>> this is "daybreak: asia." -- with a plan to hike oil output in july, even as the saudi oil market keeps them guessing. the alliance will increase inventory by 841 thousand barrels after hikes in may and june. after july, it will hold steady until april 2022. a cyber attack on the world's

largest meat producer has forced a shutdown of all of the u.s. plants. the hack has disrupted some of the biggest slaughterhouses globally. the group had earlier -- five largest in the u.s. after the hack. doing 1/5 of u.s. production. australia and canada are also affected. the white house is assisting. iran says the 2015 nuclear accord revises is unlikely before presidential elections later this month. they had hoped to restore the landmark deal before the presidency ends. however, a finalized deal is likely in august after rouhani is exiled. he is likely to be replaced by a hardliner. it leaves in doubt when they can ramp up oil exports. president biden has visited tulsa, oklahoma to mark the 100th anniversary of a massacre

in the prosperous black neighborhood of greenwood, also referred to as black wall street. a white mob destroyed the ones thriving business district, killing up to 300 people. thousands of forced into internment camps. he is the first sitting president to officially commemorate the massacre. global news, 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i'm vonnie quin, this is bloomberg. haidi: australian wealth management giant completed its acquisition this week. it sees over 400 mlc advisors joining the newly expanded businesses. doubling to $494 billion. let's discuss it with the ceo of australia's largest wealth manager. great to have you back on. let me start off with the hard question of shareholder destruction.

clearly shareholders think you overpaid for this. shares are down 21%. they are looking at annualized returns with a contraction of almost 2% versus a gain of 3% for industry peers. how do you reverse this trend? >> it is good to be here. i don't agree our shareholders that we have overpaid. we have always recognized to acquire, we had to do a large capital writing. we were always conscious of the short-term headwind it would create. that being said, we remain very confident, both in terms of the realization short and long-term, long-term in terms of improved growth prospects, but short-term of 20% growth. we are now in control of our own destiny. it is up to us to execute our

strategy. haidi: most of the industry is still reporting hefty losses and reforming the broader reputation after the world condition. how do you get to do that given we have seen losses in 2020 by most well-managed licensing -- wealth management licensing? >> they are at an inflection point. the last two decades have been characterized by a bank assurance model. suppliers were -- banks. we have seen the bank assurance model. we will go to a more traditional industry structure with standalone focus players representing the what capabilities. ioof is positioning itself at the leading point. but i think others will coming. shery: it has been a tough year on the regulatory front. what are your expectations when it comes to regulation? will they remain elevated? what else do you need to do? >> i think we have seen a reset,

with respect to regulation. all players, certainly us included, have worked very hard to uplift the governance. -- other people's money. that is what we take quite seriously. we will continue working with regulators to ensure the people who get their money to us is safe. shery: there has also been a reset with the pandemic. the work from home environment. what are your expectations? are you planning to bring staff back to offices? >> we view the work from home will continue to be a strong feature of our workforce going forward. i'm currently in a lockdown working from home. we think the office plays an important feature, particularly when it comes to building culture. we think the future will be a

hybrid environment that looks to use physical locations to build culture and collaboration. there will also be a strong feature of work from home. i think that benefits our workforce. haidi: the expansion and hiring plans over the next couple of years, are they part of the business that can expand or be revised? >> when you bring two organizations the size of either together, there is a natural duplication of effort. i think the focus has been there is a lot of simplification to be had. and the benefits to help shareholders and members. how do we simplify the businesses? areas of expertise, we are looking to expand our workforce. probably digital. expanding our capability in digital assets and digital analytics. but also, the advisory area.

there will be an emergence of financial advice. that will play an important role expanding our footprint. haidi: with the completion of the acquisition, $494 billion. do you expect that will change or further grow in the coming period? >> we are confident we can continue to grow. the sizable footprint we have today. it provides us with significant. it is also important to scale that into outcomes. we are not interested in scale, but we want to take the opportunity and make sure we deliver results. shery: surveys essay clients change their wealth manager when they have better fintech offerings. how strong are you on this front? >> i think it is an area across the globe we are learning more about. trying to expand our horizons,

we take a lead on the u.s.. the u.s. is a more mature market. but i think the covid environment in 2020, we will see a new inflection point. we saw that in the lockdown environment and work from home. i think much of that ability to implement and use technology will be and how we look to interact with clients going forward. i really think it is the start of the fintech generation. thank you so much for joining us today. we are about 20 minutes away from the opens of trade, japan, south korea, estrella -- australia. >> a muted start for equities. but more action in currency markets. the turkish lira getting battered by the renewed call for lower rates. falling by as much as 2.8%.

in asia, the offshore yuan one of the best performers, even after pushing above 638 on the dollar. china, the pboc move. the aussie dollar little change. tone for the korean won trading offshore as it underscores the economic recovery. looking forward to the open in tokyo. it is shaping up for the start of cash trade. nikkei futures under pressure. the yen is steady. research cues for the outside of the u.s. jobs report. jgb, the first bond bite of the month is today. coming after the benchmark issue did not trade for the first time this year. traders will also be watching for a speech by the board member, where there is room for a further cut in the negative

rate. haidi: the bank of japan has urged the financial institutions to better prepare for the transition. the benchmark rate that attracts trillions of dollars due to expire this year. 81% of yen level linked assets have no fallback positions. we spoke to the point man on this. >> there are two main aspects for the alternative benchmarks. first, how much progress has been made switching to replacement reference rates for new transactions. a second, how much fallback is in existing transients. some have been made with fallback privations, especially for derivatives. 96% holding derivatives in compliance with the swaps have already signed off on or have decided to sign off on the fallback protocol. the protocol sets out the

alternative replacements robustly. we can say the fallback is nearly complete. on the other hand, the response still has a way to go. according to a survey, only about 20% of the outstanding amounts of products were covered as of december 2020. many don't set out successor rates. while we can figure out how things will turn out, we can say the process of setting up fallback positions is underway. we hope the moves will continue. >> there are concerns that it has been -- >> i understand there's concern the transition process for yen libors has been slow. i think it is new transactions. the relevant parties have made an effort to speed up the process. the rates for one of the alternative benchmarks, the tokyo term risk-free rate, have

been published since april. that will speed up the transition for new transactions. also, the review committee made its post-libor recommendations for yen interest rate swap markets. these are consistent with global standards. as market participants follow the recommendations, it will further encourage the use. we only have a month left to go. we are no longer at a stage to wonder whether it is doable. we are at the stage where we have to get it done. haidi: he was speaking with bloomberg. coming up next, the drive to get people back into offices is clashing with workers have embraced remote work, some preferring to quit if forced. this is bloomberg. ♪

shery: we have an alert on the bloomberg. we are hearing from the u.s. department of agriculture that they are working with jay bs, the white house, and homeland security after the cyber attack shut down all of jay bs' beef plants in the u.s.. the u.s. ca need to ease supply price issues after the cyber

attack. jbs had to shut down all of the original beef plants in the u.s. following the hacking over the weekend. this coming from the usda secretary, noting they are working with the white house and homeland security, as well as the company. turning to deutsche bank, which launched its new remote working policy. germany's largest bank promising to implement a hybrid model once pandemic conditions allow for a return to the office. joining us is our bloomberg asia finance reporter. many have been grappling with what to do about the return to work. what is deutsche bank saying? >> they are saying it is all about finding a balance, the right balance. they still say they would like employees to continue to use the office as their main base, but

say it probably makes sense working 40% to 60% of the time from home. haidi: we are also hearing regulators weighing in on the issue. >> the hong kong monetary authority said banks need to get staff vaccinated, so it will open the borders and bring cities back to life. and somewhere like hong kong, and international finance hub, needs them open to keep the economy going. shery: what are the consequences of getting it wrong? >> the consequences are you lose your staff. a recent survey in the u.s. with 39 people saying they would rather quit than be forced to come into the office. for younger staff, that is worse. 49% saying "i don't need to come into the office, if you make me, i will quit and find another job." haidi: meanwhile, one of the biggest gainers and

beneficiaries from the remote work era, zoom just reported earning, sales almost tripling. the company delivering a strong forecast for the full year, signaling confidence as workplaces reopen. our analyst joins us now. the most important metrics the u.s. is focusing on, it seems there is banking on the trends from the pandemic still staying on. >> absolutely. from the previous segment you had, any trends are here to stay. when you look at the customer growth, it has remained stable. i think the focus is going to be the larger customers zoom has. 100,000 dollars or more in sales.

it is still slightly being accelerated. so i think the focus will be what zoom could do to keep growing that customer. shery: what is more likely to happen, organic growth or m&a? >> obviously, buying is the quickest way. organic might take longer. we have seen zoom boosting its balance sheet with more cash. also, free cash flow positive. that goes to some m&a impossible. but in the process of the probe, that might take longer. competition in this market is accelerating. it is almost a race against time. haidi: what do we see when it

comes to enterprise adoption? >> you look at the major players in this industry, microsoft, google meet, when we see the customer, it has accelerated in the pandemic, because it has key tools zoom did. so that has been seen for customers. but zoom now has significant improvements. so we see companies with more cooperation that have added to their voice. they could get more market share. that is why zoom might need to improve. shery: our bloomberg intelligence analyst. tune into bloomberg radio to hear more from the newsmakers and getting analysis from the daybreak team.

listen on the app or bloombergradio.com. stay with us. ♪

haidi: a new development. jbs meat supplier's hacking story.

the texas beef plant will partially restart operations wednesday after hearing earlier from sources and the united freedom workers union that all of the meat plants and producer plants would be shut down in the u.s., potentially wiping out facility output. just about a quarter of american suppliers. the usda working with the company, white house, and homeland security to ensure supply and price issues are smoothed over after the hacking. it comes at the start of -- from a grilling season. analysts said if it is shut down, we will see the impact on supply chains and exports in this part of the world, australia, as well. shery: it is important during the summer season. we are also counting down to the start of trade in tokyo. in japan, the boj wants

financial institutions to speed up preparations to transition away from libor. expectations being set for the g7 talks in london. consensus on a global minimum corporate tax break is unlikely. we will be watching drinks brand e as it sees a rise 20% this fiscal year. president moon jae-in meeting with leaders. we are talking lg, samsung, and honda executives being present. honda sales jumping. also kia, despite the chip shortage. also, keeping a close eye on bank stocks. bloomberg intelligence saying it may jump 20% on a brighter margin outlook and found loan quality, as well. haidi: let's get a quick check of the business flash headlines. marjorie capital has sold all

stock in amc. the theater chain said they had bought $230 million of fresh shares to support acquisitions upgrades. it sold the shares after concluding the stock was overvalued and propped up by day trader enthusiasm. one of the main stocks we talk about. they are moving forward with plans to build a $12 billion chip plant in phoenix, arizona. the construction is well underway month after the city approved financial incentive for the project. governments around the world are looking to ramp up local chip production amid a local squeeze. at the u.s. proposed $52 billion to strengthen domestic chipmaking. fedor atlantic set to be weighing options for the stake in indonesian food and beverage company met bogota. sources say they are in early talks, for a public offering, but it may decide to keep its stake, worth about $300 million.

it is one of indonesia's biggest starbucks operators and holds rights for krispy kreme in the country. blubaugh capital has -- to investigate of the universal music group. vivendi hasn't leveled shareholders over key terms of the deal. it is asking regulators to ensure they provide more information ahead of an annual meeting on june 22. the universal music spinoff will go to a shareholder vote. shery: just away from the start of trade. sophie, what are you watching? >> turkey -- asian companies. also keeping an eye on julie packard. and lg display. this after the lackluster forecast for the current quarter, which missed estimates. the outlook is singling it is

lying expectations. also keeping an ion retail store stocks. falling monthly sales data. also keeping an ion nissan. a media report in the coming weeks. shery: we will be watching those. and we will take a look at how crypto and nfts are shaking up the art world. we will get more market insight with eli lee. the market open is next. this is bloomberg. ♪

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haidi: welcome to "daybreak: asia." i am haidi stroud-watts. shery: i'm shery ahn in new york. we are looking at the major markets opening. oil hits a two-year high as opec-plus sees a tightening global market and six to the plan of easing supply probes through july. a hack attack on the largest

meat producer, a trade union says jbs has to shut down all u.s. beef plans. korean inflation accelerating at the fastest pace since 2012 as the rebound gathers pace, adding pressure on the bok to normalize monetary policy. haidi: taking a look at the market open. sophie kamaruddin is in hong kong. >> continued divergence for benchmark sales. nikkei 225 looking to extend losses after the today drop. trading in the mid 109 zone. could see a move towards 50, given the technicals signaling about the push. we may see some movement under the bond buying for the first time this month. we did get inflation data showing cpi hitting a 2012 high.

higher oil prices. inflation pushing up bond yields. korean bond teachers with little change. the korean won, a little bit softer after hitting the high. the kospi higher after the three-day event. turning to australia. stocks opening higher by a quarter of 1%. iron ore prices fell, potentially seeking to ease steel production curves. gold staying below 1900 following the u.s. manufacturing report that beat estimates. after opec-plus had its supply plan. brent coming alive among $70 a barrel. quickly want to highlight the turkish lira. it had been under pressure as president erdogan called for lower rates.

shery: if history is any guide, we could be setting up for a solid start across asian equities. some of these hard-hit in may. the rotation out of growth. communications grew. usually sees a stronger sector in june and july. data showing in the past 10 years, we have seen an average monthly gain of 2.6% and 3.2% for the month of june and july. let's discuss the markets and what is happening across asia. our next guest has downgraded asian equities. eli lee. great to have you with us. why have you turned more cautious about asia? >> i think the elephant in the room is we think asian markets have a lot of challenges. one, the fact we will have to

navigate the scenario of peak growth and stability as we draw closer to 2022. history tells us it tends to be a period, where there are new positives, but far lower. the second issue we have is the fact in china, policymakers are normalizing monetary policy. again, when that happens, this is a very carefully calibrated process. there is high risk for accidents to happen. as we saw with the normalization. we think it is -- to be neutral the way up, but become easier where you could face consolidation. haidi: -- shery: i'm curioius -- curious about where you go from here.

the fact remains, valuations across some of the asian markets, whether in hong kong or korea, are low. in the u.s., record high price of earnings, price of book ratios. >> that is a great question.somy closely. if we see a period of consolidation, it is difficult to see a scenario where emerging-market equities will outperform u.s. equities. we do prefer u.s. equities at this point in time. in the next phase of the market we are moving into, i think there will be a lot more returns. alpha instead of beta will dominate. looking for stocks that will still give you solid earnings growth, solid cash flow profiles. in our view, many of the tech names in the u.s. market.

haidi: i want to get your views on our question of the day, talking about their direction of the u.s. dollar. is that the downside? we have seen the bloomberg dollar index suffering. do we see any signs of a rebound? how does that play into risk sentiment and other assets? >> our view for the u.s. dollar is it will moderately weaken over the rest of the year. that indicating it is very much in play. the focus on biden pushing through his infrastructure bill in terms of the headline number will weigh on the dollar. the wildcard is how inflation will pan out. that is what everyone is focused on. if we see inflation data proving to be more worrisome than

expected, what could happen -- the market could expect it to turn hawkish faster than anticipated. that will likely create a backlash, in terms of a strengthening dollar and risk off across risk assets. haidi: we are getting more news and headlines of hackings, tech disruptions. is it a geopolitical, or otherwise risk that companies need to be more concerned about? >> i think the second hack we have on the headlines is quite concerning. in a sense, this is related to the fact that asa we increasingly digitalize our businesses and increase more

data in the cloud, it will have to be a risk we factor into the markets. at this point in time, investors are still taking a wait and see approach. also in the currencies in a large way. it is something we are watching closely, but not systematically pricing into the valuations. shery: eli lee, thank you very much for your time. we are watching closely what is happening with jbs. breaking news out of jbs usa saying the majority of their food plants will be operational tomorrow. this coming at a time when they are announcing progress in resolving the cyber attack. we have heard earlier that several u.s. pork and poultry plants were operational. they were making progress in resuming u.s.-australia plant

operations. we are getting the latest. the majority of the food plants will be operational tomorrow, according to jbs us after we got confirmation from the workers union that all of the u.s. beef plants have been shut down by we will be watching that very closely as they follow through the inflation concerns. let's get to vonnie quin with the first word headlines. >> opec-plus sticking with the plan to increase oil output, even as saudi arabia is guessing. wondering if they will add supply later in the year. the alliance will increase inventory in july by 841 thousand barrels after increases in may and june. after july, it will hold production steady until april 2022. iran says a deal on the 2015

nuclear accord is unlikely before the presidential elections. the world's powers hoped to restore the deal before the president ended his presidency. a deal is likely in august, after his exit. he's likely to be replaced by a hardliner who might be more hostile to the deal. it is in doubt when iran could put out oil exports. johnson & johnson must pay untoward to women who say their talcum powder was contaminated with asbestos. the largest verdict in the almost dedicated -- decade-long litigation. -- reconsider the findings of -- it is assigned to do so. they still face more than 26,000 losses. moderna is looking for full u.s.

approval for its covid-19 vaccine. they will submit data on a rolling basis in the coming weeks to support the authorization. it could make the shots cleared on an emergency basis during the pandemic into the source of revenue. it has shown to be highly effective. the u.k. is said to have reported no deaths within 28 days of a positive covid-19 test. the bbc says it is the first time since the start of the pandemic. prime minister johnson is facing pressure on whether to secede with the opening. officials are in -- concerned about the surge linked. global news, 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie quin this is bloomberg. shery: let's go back to sophie for another check of the oil markets. the gains being extended. >> crude topping 68.

brent above $70 for the first time since october 2018. some upward momentum still remains. go long brand as they welcome opec-plus supply in the coming months. morgan stanley lifting the long-term oil forecast, giving the intense buying pressure for big oil to reduce carbon emissions. wayne gordon at ubs told us demand is primary for commodities. with this, we have seen a strong start for the commodities concept with the bloomberg commodity index now at 10 year highs. you have material and energy sectors among the best performers for the aipac index. financials also in the lead. so we do have the msci asia index at three month highs.

so we have some momentum. haidi: still ahead, cryptocurrencies entering the art world. digital coins accepted for the first time. we will speak to the asia chairman later this hour. coming up next, the hack attack on the world's largest meat producer. we hear from the u.s. operations soon to come back online. a fast developing story. we will get the latest next.

>> jbs says the majority of its u.s. food plants will be operational tomorrow. they were targeted in a cyber attack and had to shut down the north american and australian

computer networks. the hack was the latest threat to the supply chain. joining us now is our editor. we don't necessarily have a clear picture of how many facilities were affected globally. what do we know what this point? >> the news that just came through, jbs u.s. says food plants are expected to be operational tomorrow. but we don't know whether it is just the usa, or other facilities, like australia, that can come back. we saw the u.s. plants shut, which shut down about a quarter of american operations across australia. and canada's largest beef plant was idle, as well. canada has also come back. if things do return in the next day or two, the impact on supply

chains may not be as severe. but if we see these in other parts of the world and they continue, it is more worrying. the other plants that were affected were like pork and chicken facilities. it looks like six u.s. pork facilities cut back on operations. we are trying to figure out how bad it will get. haidi: is this a problem with how the media companies are set up? was there any way to avoid -- more importantly, avoid this in the future? >> i think the biggest criticism we are hearing is about how the industry is so heavily consolidated with these companies in the u.s., that can control more than 80% of u.s. beef processing. it has been a concern for a long

time how there needs to be more diversification. we've had a u.s. senator talking about how he would like to see the meat processing capacity. also, there has been more than 40 publicly reported ransomware attacks against food companies since may 2020. so as we saw, there is a lot of consent whether companies are investing in protecting facilities as there is more digitalization going on in the industry. and concerns around consolidation will come up again. shery: there have been lots of concerns about inflation accelerating globally. soft commodities, prices surging. whether brazil or parts of the u.s.. what would be the impact of the supply chain disruption? >> in the short-term, and we did see a slight change.

sheets just slumped a little bit. in terms of the longer-term impact, inflation is a concern. but again, if jbs is able to get plants back online in a day or two, hopefully the impact should them be too severe -- should not be too severe. but the fallout, if it carries on for longer, we could see impacts across asia. with jbs in australia, especially being a huge importer of countries like china and japan. we will be keeping a close eye on panic buying, as well. haidi: our managing editor with the latest on jbs. coming up next, the process has almost come to a halt in hong kong. the implications for their future. this is bloomberg.

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haidi: once a frequent occurrence, process have come to a halt in hong kong. the government has repeatedly extended rules banning gatherings of more than 4 people and refused applications for gatherings as virus cases remain near zero. the schools have reopened, much have returned. let's go to our reporter. in some sense, a return to normality and reopening in hong kong. we have already seen warnings for people not together for june 4. the process used to be tradition in hong kong. what does it mean for the future of the city? >> there's kind of two things

converging. one is the criticism a lot of activists have that the hong kong government, despite reopening all of these different parts of the economy, you have people gathering in the crowded subway system, malls, schools, but you are still not allowed to gather in a group of more than 4 people. the science suggests transmission outside is quite low risk. a lot of people saying the hong kong government is extending the covid rules and applying them selectively to try and quash the protests that rocked the city in 2019 and only dissipated when the government imposed those covid social distancing rules in early 2020. there is a little bit of that and the issue of whether the protests can ever happen again in hong kong. it is the second year in a row

it has been banned. everyone in hong kong wears masks. the gatherings are quite safer than other places. but hong kong now has a national security line. people think it might be banned forever. shery: what does it mean for the future of the pro-democracy movement? is it the end of it, or could we see more unrest if people are not allowed to express? >> i think there is an element of the government quashing more formal types of traditional protests. you have seen the legislative council now do new did of any real opposition candidates or pro-democracy activists. there are election rules in place that could -- any candidate or disallow anyone from running for office. the biggest protest of the year is now essentially banned in one

way or another. it's basically a government dispersing protests and pushing everything underground. people warning it could explode in the future if there is no real legal route for dissenting hong kong. that is the real worry. shery: are asia senior government reporter. we continue to see the political crackdown in myanmar. the military has moved the civilian leader from her residence to an unknown location. the ex-president has reportedly also been shifted. our southeast asia government reporter joins us. what do we know about the movements? >> not too much. ahead of the legal the -- the head of the legal defense team for both sides before the court as parents -- court appearance said they can move to an unfamiliar location.

they have had no contact with her at all. during the meeting, she had vowed that her pro-democracy political party would continue its work, despite being cited for dissolution. of those were her first public comments since the military coup . she was defended the brutal crackdown on minorities in the international court of justice, facing criminal charges, including -- haidi: what are we hearing from the shadow government? >> the national unity government is expressing concerns for their safety. they have labeled the regime a terrorist military council and reiterated its efforts to ensure accountability and justice, and assured him to take responsibility after the coup. but it is also expressing a call for action on u.n.

organizations, developmental partners for implementation of emergency humanitarian aid amid increased fighting. shery: how much inside, and how much reached these organization -- reach to these organizations have? >> there is -- particularly countries in asia that have a wider reach with investment prospects in myanmar. we have recently seen japan overtake as the top investor. so there are avenues for asian governments to do something on the diplomatic front. from the west, we have seen most of the sanctions coming. very little investment from western countries. in terms of what they are able to do -- shery: our bloomberg southeast asia government reporter with the latest on myanmar. we will get you the latest from

the opec-plus meeting on tuesday, and why the cartel sees the oil market tightening. this is bloomberg. ♪

bonnie: this is "bloomberg daybreak: asia." monitoring what china's government thinks may be the first human case of one strain of bird flu. a 41-year-old went to the hospital in april and is in stable condition. is that no human case has been reported elsewhere in the risk of large-scale transmission is low. the world bank and wto -- in a

statement they say governments must act immediately or risk continued outbreaks of the virus . the imf last month proposed a grants and loans plan to immunize at least 40% of the global population by the end of the year. hong kong is ramping up its return with the central bank asking financial institutions to urge staff to be vaccinated. they want to strongly encourage staff to get vaccinated. bank of america says it plans to have all of its hong kong employees back at their desk by the end of the month. the world health organization has validated the sinovac coronavirus vaccine for emergency use. a government study found it effectively controlled the virus

in a small town. it was criticized for lack of transparency. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i'm vonnie quinn. this is bloomberg. haidi: australia's latest gdp numbers are due out within the hour and economies are expecting a modest increase from the first quarter. what are the details we are expecting an is the vaccine rollout remaining as an uncertainty and unknown? >> following some partial indicators we receive, now expects growth up to 1.5% in the quarter. most importantly if we look at gdp on a year on your basis, the economy is expected to overcome all the lost ground from the pandemic last year. as you mentioned, there is a

real uncertainty with the lockdown. the economic impact is expected to be minimal, with rba reiterating that they expect growth over 2021. an economic hit is expected to be greater. shery: tell us a little more about that outlook because it still uncertain when it comes to infections across australia. >> in data we surging in the quarter. the largest on record. we also saw building approval for new homes hit a new level as well. fundamentals were shaping up to be really strong for economic

growth over the next year and ahead. i guess the risk is if we do see an extended lockdown, we could see sentiment derailed which it obviously have further consequences for the economy. a silver lining is that we're expected to see a faster vaccine rollout which perhaps dissipate some of the hesitancy toward the vaccine that had been apparent in the community. haidi: let's look at this chart about how good the mining boom has been to australia. rising to the highest ever in the first quarter on this ecb chart. when you look at the breath of the recovery, is it an even one? alexander: i still think we should expect some volatility in the data. as some of the big moves we saw

last year recalibrate toward a new trend. for example we are expecting a positive trend in exports, whereas if we look at q1 gdp data we were expecting exports would contract six percentage points from growth in the quarter. so it is to be expected that we will see volatility as we recover and move toward a new trend post-covid. across infant structure and consumption as well -- infrastructure and consumption as well. haidi: let's take a look at how markets are setting up today. sophie is in hong kong. sophie: we're seeing a mixed picture in tokyo with the nikkei under pressure and the topix gaining ground payment in

sydney, aussie shares being led higher by energy and financials, jumping nearly 5%. iron ore futures climbed back above $200 in singapore and the kospi extending gains for fourth straight session. he on day in kia gaining ground, exports booming. pulling up a chart on the terminal, korea's economic recovery is being accompanied by the blue chart showing the pickup we are seeing hitting a high in may. topping the target for a straight month. bond yields have tracked at the pace of inflation with 2018 highs. pulling up a chart on the terminal, opec plans on sticking to its plans, clearing the way

for brent to climb above $17 a barrel. inventory seems solid and goldman seeing $75 in the second half of this year. shery: still officials want concrete evidence before hiking production and they are pledging to keep a close watch. >> we would not see the market exposed to -- shery: mike joins us from miami. how does all of this bode for prices? mike: i think prices are near a ceiling, basically pricing the best case scenario. the man has to come back and there is a lot of optimism for that and supplies to come back.

the greatest amount of spare capacity ever, and the stock market has been rising. we just had a little bit of a blip as it heads toward 50. what has happenedllapse? supplies have increase and demand has not increased that much. haidi: we are seeing the december 2021 contract looking at the highest premium for december 2022 futures. a lot of indicators indicate the market is very bullish. is the problem that we will not go back to pre-pandemic highs? >> i think what you describe is backwardation. that's what's happened in the u.s.. u.s. shale producers are adding cost production to investor costs.

it's 50% above their costs of production. what they are doing is selling forward and hedging forward so they can bring in more production. in some cases sometimes it is bearish. every time we've seen this since 2014 it's an indication of supply coming on and the market going lower. one thing that has changed his human nature. people are just not getting in the car and driving to work and some may never go back to that. you can just click in from home and work from home and not use that much gasoline. haidi: r bloomberg intelligence commodity strategist there. we appreciate your time. coming up next, will speak to jonathan on his move toward cryptocurrency as payment. this is bloomberg. ♪

shery: take a look at the crypto space, gains across the board with bitcoin around the 36,000 level. still not reaching the 200 day moving average. we are seeing all these gains after bitcoin saw the worst

month in three years. this coming at a time when prices seem to be stabilizing a little bit. remember those double-digit percentage moves last week. we are not seeing that this week. a little bit more consolidation right now and stability back into the crypto markets. haidi: and cryptocurrencies becoming increasingly accepted. philip saying it is accepting digital coins for the first time. the artwork is expected to fetch up to $4.1 million. joining us is the asia chairman at phillips. different from what we've seen

at previous cryptocurrency sales for example. what made you guys want to enter into accepting payments by cryptocurrency? >> it's a way of opening a new pool of potential buyers. a lot of people have made good money in cryptocurrency. it was only a matter of time for the traditional world. we will be conducting a cell in hong kong dollars here in hong kong but we will be offering either ethereum or bitcoin.

it will be calculated in terms of either ethereum or bitcoin. it will be paying from that digital wallet into ours within 24 hours of the auction. shery: are you holding on to bitcoin or converting them? jonathan: it depends on the seller's wishes. [indiscernible] it will be passing into hong kong dollars after the sale. shery: is this a trend you see ongoing among asian buyers? are you seeing more interest in this?

jonathan: it's very much dipping our toe in the water, it's the first time we've done this. we're starting with the work by banksy. as well as the power that can be drawn with cryptocurrency, beyond the control of any central government. haidi: is it an acquired taste? obviously banksy is an artist who wants to up in the status quo and subversive. this is not going to be to everyone's taste. jonathan: absolutely, and it speaks to the risk tolerance of

the consignor essentially. these are not people who are well-versed in the world of cryptocurrency but this particular consignor is willing to experiment with banksy. shery: we've seen it plummet from the peak when it comes to artwork. is it a bubble? no doubt there is movement being built in as well, but apart from this? jonathan: i wouldn't necessarily say it is a bubble. i think it's very much early days. at phillips we've had two very successful auctions, one with the work of nigel james and another sale last week by

another artist. it sold out completely last week. when it comes to nft's, the blockchain technology behind it, there are some really talented digital artist who as of yet remain undiscovered any traditional art market. it's an exciting development. shery: have you factored in regulatory concerns in the future? jonathan: the future is something i can't really speculate on. i don't see consumer pacing in the currency anytime soon. in traditional art, people have made money in the cryptocurrency world. we'll have to see what the future holds. shery: jonathan crockett, thank

you very much for your time today. coming up next, breaking ground on a $12 million chip factory in arizona and a win for washington. the details ahead. this is bloomberg. ♪

shery: we will be closely

watching one stock when the taiwan market opens in a few minutes. that's psm see, the chip giant says it's moving forward with plans to build up $12 billion plant in arizona. it looks to address reliability and security. debbie, how is the arizona factory progressing? >> last night during an annual address, the ceo told the audience that construction of the arizona plant is well underway and this is the first time we got a confirmation that they are finally kicking off the construction of this project. the ceo repeated that the company is expecting to start production of chips in 2024. management told investors that

the company has acquired a large piece of land in arizona. haidi: so this is all part of the pressure that's coming on companies like tsmc to address the supply shortage. is it actually able to come online quickly enough to be able to help? >> it will only come online in 2024, so it's probably not going to help with the current shortage for the auto sector and other industries. but at the same time, the administration is posing to allocate $52 billion to domestic semiconductor manufacturing. it could of the biden administration to realize its mission to have the u.s.

semiconductor production in line with china. haidi: the fintech firm traded in his first day after going public, hoping that fintech firms may help reverse the trend. >> history has shown there's a number of different ways to go public. there's three primary ways of direct listing. a regular ipo and a spac holder ipo. the spac merger ipo was the right choice for us. as a research analyst covering media from 1999-2007, i've seen dozens of ipos. every company has different facts and circumstances. so if i had a couple of unique things to solve four. -- sofi need to change both to

be a licensed national bank in the united states and also to be a public company. we also had to raise capital which we are working on privately to pay off the seller's note in march of 2020. then we wanted to capitalize the company for the long-term as part of our bank application process. we were raising money privately and along the way we continue to accelerate in the fall and the holiday season. we are in a great position to have a lot of options, so we decided to really execute three legs of the stool. one was a private investment from t. rowe price at $375 million as an investment and we closed on about december 27. then we announce the spac on january 4. in total, we're wary's $2.4

billion and converted -- capitalize the company for the foreseeable future. as well as funding our businesses in the future. so a really great outcome for our shareholders, our team, and our partners. i cannot be happier with where we are today. emily: sofi, can you have any hope that retail traders might pick up on sofi itself, or do you prefer to steer clear of the potential volatility that could involve? >> i would first say that we focus on giving access to sofi investors. we want them to be long-term investors. a broad-based diversified portfolio is best for the long-term. when you say retail trader, in

the back of my mind i think day trader. we're fortunate that less than 1% of our brokerage accounts have more than three traits in a day. so we are trying to educate our investors on recurring investments. we also have robo accounts which is another way to drive diversification. like the gig economy and others. as it relates to the retail trigger mentality, i do think it's really important in this world in which we have a significant sector acceleration in people accessing public markets and they do it in an educated way. it's a responsibility of all the brokers to ensure that assets are being bought in a way that is suitable. shery: let's go back to sophie

for what we're watching in the markets. sophie: the sinovac company got the nod, flipping the board ahead, with stock futures signaling looking steady as markets consider the government's plan to revise gdp and fiscal deficit forecast. finance minister indicating there may be more borrowing to find the latest relief package. some comfort may be had on fiscal measures like cost-saving that the government could direct. haidi: coming up, more market research. that is it for "bloomberg daybreak: asia." our market coverage continues with the start of trading in hong kong, shanghai and shenzhen.

standby for bloomberg markets, china open. that's next. this is bloomberg. ♪

>> it's not :00 a.m. in beijing in shanghai. welcome to "bloomberg markets: china open." i'm tom mackenzie. david: today were looking at oil trading, opec-plus nations signaling they are upbeat.