shery: from bloomberg's world headquarters in new york, i am shery ahn. sophie: i am sophie kamaruddin. we are counting down to asia's major market opens. haidi: global policy makers are pushing to ensure the g7 tax plan does not lead amazon off the hook. new rules could target its cloud computing business. a company surges as the fda --

controversial alzheimer's therapy. the questions remain over its clinical trials. plus, apple moves tech on zoom, with privateering -- privacy upgrades in its operating system. shery: breaking news out of south korea. the current account surplus for the month of april narrowing to 1.9 $1 billion. this coming at a time where we continue to see significant strength in korean exports and after the surplus actually widens in the previous month. when it comes to the april goods trade, it has fallen to 4.559 billion dollars, almost having the amount that we saw for the previous month. we continue to watch those numbers very closely because in south korea, the may and april export numbers searched to more than 40 surged -- surged to more than 40%.

again, the account surplus at $1.91 billion. haidi: we are heading into what looks like a pretty steady start to trading here in asia after a tepid session on wall street. a look at what we are expecting. sophie. sophie: we may be starting to see sleepy summer vibes. trading for the regional stock index. u.s. e-mini's little changed and there may be little on the data docket to spark some excitement. we have a final read on japan gdp and taiwanese trade data had lighting -- headlining. briefly touching $70 a barrel on monday and we have prices around 2018 highs and we do have 6 million barrels of oil. pulling out the terminal, while we are seeing these elevated prices, bloomberg intelligence says inflationary pressures

could burst the bubble. oil, copper are set to lose if inflation tops 4%. reflation trade's performing well in asia at least with raw material and shipping stocks doing well this year. year-to-date, you have the energy sector topping the msci asia gauges, nearing 14% on the year to date in the region. haidi: breaking news. looks like independence energy is getting closer to a deal to combine with contango. kkr's independence energy is in talks to own a majority of the company. they are said to be near an agreement that would value the new entity at $5.5 billion including that. the aim is to expand the oil and gas according to people with knowledge of the matter. based in houston and operated under a new name as well as

a stock ticker according to those same people. kkr declining to comment that talks are ongoing. no-deal has been reached yet. they seem to be doubling down on exploration and production companies as a lot of entities in that sector are trying to recover for years of poor returns amid the shale boom and bust, shery. shery: let's turn to amazon because it is becoming a focal point in the g7 tax plan. policymakers are crafting their international tax plan to make sure the e-commerce giant is included despite the company's profit margins under the 10% proposed threshold that would give other countries rights to collect revenue. anna anderson has the details. how are negotiators trying to make sure that amazon is included? >> it is a tricky policy question for the people who are negotiating these agreements because they would like to set a minimum threshold for profit so

that not all companies are targeted but amazon has pretty thin profit margins. it's a retailer that invest heavily in that side of his business so if you are going to target the whole company, amazon would not be included in this equation. haidi: what are the next steps after that big g7 statement? anna: we had the g7 statement over the weekend. there will be another g20 meeting in about a month or so and then we are really looking toward the oecd talks that are expected to wrap up i think in october so that is when we are going to see some of the policy details and how they are going to try to target this policy to make sure that amazon is included. one of the strategies they are looking at is kind of segmenting the way that profit is calculated so that some of amazon's operations would fall under that threshold. shery: what would be the impact

for tech companies from this sort of multilateral approach? anna: it was interesting over the weekend because we saw some pretty positive statements from tech companies. i spoke with a few industry groups today who said that they would welcome the chance to kind of harmonize and update global tax policy. because right now, they are forced to comply with different tax policy around the world and that is hard for a company that has global operations. they would like to see a multilateral agreement but they just want to make sure that the digital service taxes that are already in place, that those are withdrawn as part of this agreement. >> and entertain with the latest on the g7 tax proposal in washington. let's take a closer look at markets. mark cranfield joins us from singapore. we have seen a tepid session across wall street. pretty muted in asia as well. is this weighing up inflation numbers? mark: the cpi report this week

is a big one, as always, for the united states and certainly the headline numbers are are likely to be pretty eye catching because we could have a number somewhere near 5%, big base effects within that. but they certainly makes the federal reserve meeting for next week a lot more interesting, and in addition to that, you have two former fed people who have been speaking over the last few hours, last couple of days, that are putting pressure on the fed as well. janet yellen saying that higher interest rates would be welcome and it looks as though yellen is using her position as treasury secretary to try and steer the fed into getting this paper conversation sooner rather than later so she appears to be reminding them that not only is the economy running hot but with the way the biden administration is pushing for more spending, the economy is going to stay strong and it could make this whole idea of transitory

inflation a very difficult one to discuss and then you have bill dudley renting an opinion piece on bloomberg which has come out earlier today, and he is talking about the fact that managing this new inflation approach is getting a lot more difficult the fed in this environment as well so previously, a lot of people thought that this june meeting would be a nonevent. suddenly, all eyes are on the fed and we could expect something a bit more interesting, particularly when jerome powell speaks to the press after the meeting. shery: anything interesting coming from the yuan fixing? mark: yesterday was a big one. that move of 32 pips above the forecast was one of the largest the pboc have ever done, a clear protest that they did not want the you want to get any stronger. overnight, the offshore yuan is a little bit stronger. they probably don't need to act as aggressively today because you can see there has been a falling volume. yesterday was about the quietest

day for months on onshore yuan trading so you can see traders are losing interest of it and trying to push the want to far and there was a big drop in option volumes as well so this is what the pboc would like to see. they are happy that traders are moving their attention somewhere else and no longer so excited about pushing the yuan strength. they will probably still need to keep fixing slightly on the high side but it looks as though their message is getting across that they would like to see dollar yuan in the trading range for the time being and everybody is just quieting down to look at the fundamentals of what is going on in china and the rest of the world. haidi: where is the fx volatility at? mark: it has been declining. we have not seen any major moves in the g10 currencies for a while. it looks as though we are really going into a summer lull. probably, we would need to see a big change in u.s. yields to get

people excited about foreign exchange or we would need to see a big change either from the fed or the ecb. both of those meat. the ecb is meeting this week and the fed, next week. there is possibility we will see some change in the narrative. foreign-exchange market seems to be thinking that central banks, the big ones that really matter the most, are not going to be making significant changes but that's usually just when foreign-exchange market start to get the options market has priced out all chances of a major move, when something is about to happen. rather than seeing this as being a debt market, they are thinking that maybe this is telling me that a storm is about to becoming an implied volatility just got to know and has been a bit complacent. >> thank you. you can follow more on this story and all the day's trading on our market live log on the bloomberg at mliv . you can get a market run down in one click and there is expert commentary and analysis.

you can see what is affecting your investments right now. here is an alert on the bloomberg, a report on the origins of covid-19 by a laboratory concluded that the hypothesis claiming the virus leaked from a chinese lab in wuhan is possible and deserves further investigation, according to people familiar with the classified document that spoke to the dow jones. this study was prepared back in may 2020 and dow jones is now reporting that it was made by the lawrence livermore national laboratory in california and of course, we all know that this news on whether the virus had leaked from a chinese lab in wuhan is gaining traction as we have seen president biden now ordering the u.s. intelligence agency report to him with a conclusion within 90 days so we will be watching this very closely. in the meantime, let's get to su keenan with the first word headlines. su: we start with the fda which

cited granted accelerated approval for the therapy. it reduces a harmful protein that clogs patients brains. it will have to do more research in order for it to stay on the market. drug is going to cost $56,000 a year and it is the first fda approved treatment for alzheimer's and nearly two decades. some scientists point to mixed results in clinical trials. global coronavirus infections are falling dramatically with the u.s. reporting the lowest number of daily covid-19 cases since march 2020. worldwide infections were also the lowest in almost three months. some countries are dealing with rising case counts. the u.k. says it is too early to say if the planned lockdown loosening will go forward. to india now, where prime minister narendra modi has announced three shots for all adults. it follows widespread criticism of his administration's handling

of india's deadly second virus wave. modi says the shots will begin june 21 and that is about to speed up the inoculation drive. the administration will procure the shots -- on wall street, new data points to a lotto's financial firms expecting more than 60% of staff to be back in the office by late september and that is up from a 50% estimate in march. a survey by the partnership for new york city finds about 14% are back already. a 70% occupancy rate. only 27 of the 180 companies surveyed planned to require workers to be vaccinated before returning. global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am su keenan. this is bloomberg. haidi: still ahead, skyhigh prices for iron ore are deterring buyers from china.

analysis of the demand picture is next. daniel hynes joins us. plus, we will be discussing the broader energy outlook in southeast asia with a thai power giant chairman joining us later. this is bloomberg. ♪

>> you are watching "daybreak asia." we continue to see some downside pressure for copper after the weekend. the biggest weekly decline since september and remember, there are concerns about the land outlook -- that demand outlook. when it comes to canola and soybean futures, we saw them rally. we continue to see scorching heat and drought around the u.s. and parts of canada, really threatening the crop outlook and we also have australia raising their canola crop estimates and

outlook by 20% from march, given the soaring prices. we saw a gain in prices for futures. we have seen futures hit a seven-year high last week and we continue to see hedge funds being bullish. we continue to see that recovery from that cyberattack on jbs meat processing facilities, haidi. haidi: let's get to iron ore. it has been on quite the roller coaster ride. they fell to the lowest level in a year. our next guest says high export prices on steel and the ongoing production curbs could be demand drags for iron ore in the second half of the year. joining us is the senior commodities strategist at anz. great to have you with us. we have seen chinese policymakers trying to dampen what we see in exuberance in commodities prices. in particular, steel and iron

ore. is this an indication that we are over the peak now? >> the market was priced -- and clearly, the data released yesterday indicated they are not leaving those expectations at the moment. it has certainly come off on a month on month basis. a little bit of concern. look at it on a seasonal basis. holding up relatively well. tech recorded a small increase on a year on year basis. and clearly, $200 a ton. to get better upside, you need imports to be even stronger than they were. for me, it's clearly a lot of downside risk, particularly when you factor in exports rebate removal on steel.

that could potentially reduce iron ore demand, considering that has been targeting international markets with products. in light of the broadening economic recovery and some of those other major things. competitive on that international basis, saying we could see steel production in china. >> when you look at oil, agriculture as well as copper, is that more downside risks, if the taper risk becomes more real? daniel: it's a fine line. high inflation generally has gone hand in hand with commodity markets. growth is fairly strong and that is what is driving demand.

we are seeing the central banks start to ratchet back some of those stimulus measures and clearly, that's going to weigh on sentiment in particular. i feel like that would be a miner setback in the strong growth. shery: is that why we are seeing a little bit of downside pressure coming from china because they are rolling back some of the stimulus measures? we continue to see their import demand being a little bit weaker than last year. daniel: i certainly will be concerned about that. in the second half of the year, we expect to see cyclicals in u.s. measures starting to leave. that will have improvement in growth in regions such as the u.s. and europe. considering china is the biggest consumer of commodities and that

will be a headwind for the markets. shery: when should we start to be concerned or focus on iranian oil? daniel: i'm taking a relatively cautious view and i think discussions are going to lead to some sort of -- in the very short term. if we look at increases in opec output, and sustainable high prices, then it is something to factor in and that brought some reality after prices at the moment. shery: daniel hynes at and z, great to have you always with us. coming up next, we will get you the latest from the apple worldwide developer conference, including software update to take on zoom.

this is bloomberg. ♪

haidi: a quick check of the latest business flash headlines. tesla shares whipsawed after its decision to drop production of its model less blessed than. -- model s+ sedan. stop recovered to close the day higher. must tweeted there's no need to offer the vehicle because the version is just so good. tesla has been taking deposits for months now. google agreed to pay $268 million after france's antitrust industry said the tech giant abused its power. the agency says google unfairly sends businesses to its own services, discriminating against the competition.

ugo says it will overhaul its ad technology and improve its services to third parties. shery: let's turn to apple. it kicked up its developer congress -- conference. while adding a slew of new features. facetime was focused as the tech giant looks to take on the likes of zoom in the teleconferencing arena. mark gurman has the latest. what sort of changes are we going to see on facetime? mark: facetime is becoming more like zoom. during the facetime call, you can actually create a link or url to send to someone to put in their web browser and they can join and now, this opens up a sign for the first time to third party ecosystems so that link will actually work and this is interesting for apple. it will work on android devices as well as windows.

this is going to be a great expansion for facetime and make it more zoom like. you can integrate facetime with your, under, schedule facetime calls, and it is great stuff coming from apple for facetime and it is a huge push for them this time around, but maybe a year too late. haidi: what were the other innovations and tweaks that we saw? mark: some of the other tweaks we saw were to the ipad. the ipad got the biggest revamp to the home screen since the first version launched 11 years ago. what you can do is you can pin widgets and these are pretty nifty and interactive in all sorts of shapes and sizes for your calendar and email, for the weather, for stock, anything you want. it makes better use of that large screen space that you get with the ipad and there's miner new enhancements and there's notable improvements on the

iphone. >> mark gurman with the latest on those apple updates. counting down to the start of trade in tokyo. we have been watching the partner after its controversial alzheimer's disease therapy was approved by u.s. regulators and it looks like it will be opening up. at least 25 -1 right now -- 25-1 right now. the biggest gain ever for that stock. we are watching as june will take a 40% pay cut for three months to take responsibility for a scandal over executive dining with japanese government officials. the boj did not buy any etf's for the entire month of may, the first time since haruhiko kuroda kicked off its easing campaign in 2013. prompting sam in the market to believe the central bank is getting serious and pulling back from such purposes. we will have more on that story,

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>> this is "daybreak asia." i am su keenan with the first word headlines. sources tell us policymakers are crossing a global corporate tax plan to ensure amazon is included and that is despite the u.s. profit margin falling below the 10% proposed threshold. amazon is estimated at 7.1% global operating margin this year. one scenario involves focusing on individual operations targeting amazon's more profitable cloud computing business rather than the entire company.

the u.s. will discuss trade and investment possibly, taiwan advancing ties between the two economies. secretary of state blinken told a house committee about the plans in response to a question from a kentucky lawmaker. it revives a framework that has been dormant since the obama administration. it is a thorn in relations between washington and beijing. the washington -- cryptocurrency ransom that was paid to the colonial pipeline cyberattack. they retrieved 63.7 bitcoin of the 75 coin ransom. it means the recovered bitcoins are worth $2.3 million. they paid a cybercrime group $4.4 million. israel's parliament speaker says the vote to approve a new government will be held in the coming weeks and that would end

benjamin netanyahu's 12 year rule after israel's fourth election in less than two years. if the coalition is approved, a nationalist will become prime minister for two years followed by the centrist. kamala harris warned central americans not to migrate to the united states, saying they will be turned back. she made the comments after meeting the guatemalan president. president biden added tariffs to stem the surge in migration. global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am su keenan. this is bloomberg. shery: shares surged on monday after is controversial alzheimer's disease therapy was approved by u.s. regulators, a landmark decision -- debilitating brain condition.

michelle spoke to bloomberg tv shortly after the decision was announced. >> there might be additional hypotheses but this will take many years before we can see scientific proof and today, you have three compounds with similar activity and we have the first one in the market in a few years. we invite them because the market is so large. >> joining us now to discuss is jodi schneider. it is almost 20 years since the fda cleared and alzheimer's treatment but this medication is very controversial. jodi: this approval is the first clearance of an alzheimer's therapy since 2003 and it is a huge decision, obviously. it's very good news for the company. welcome news.

at the same time, as you know, a lot are skeptical about the clinical trials. the fda said they were approving this under accelerated approval, which means it needs more trials. it is a harmful protein that clogs the brain. we don't know exactly the role that this plays. this is the treatment and these clinical trials have been -- there have been some successes. shery: what do we know about the market for this drug? jodi: it seems already 6 million

people have alzheimer's but with an aging population, it is expected that there could be many more. -- [indiscernible] two and. that is the japanese partner. the stock has been doing very well today as well. >> jodi schneider. let's look at how we are setting up. muted session, it looks like come on the day ahead, sophie. >> asian stocks looking like a fairly quiet session. nikkei futures just marginally higher in singapore. jgb futures little changed ahead of a 30 year auction. we have the yen trading near a two-week high. flipping the board, not going

anywhere fast with the japanese currency down 6% this year, the worst g10 performer in 2020 one. there is room for more underperformance against the dollar and the euro. at nomura, slipping this year. given that japan's economy is stuck in a rut. the yield spread between the u.s., japan, and the outlook for widening policy gaps with local peers. may not be too much of a boost for stocks in tokyo. >> japan's central bank did not buy any exchange traded funds for the entire month of may. a first since horror haiku kuroda -- haruhiko kuroda kicked off his campaign. let's get more from the tokyo stocks reported. do we have any idea why the boj is pulling back now? >> it appears to be a

combination of two things. there is this view that stock prices are at levels where it does not necessarily need so much boj support. one thing is that when the announcement was made in march, it was when the -- it was a bit before the markets came tumbling down on inflation worries and prices were hitting fresh highs and secondly, there has been continued worry over the size of the boj's presence in the market. central bank buying at historic market prices and this has been especially so for the nikkei 225, which the boj has now decided to stop buying altogether. so those two things. haidi: investors have been pretty positive on this withdrawal because there was criticism that the boj's involvement was distorting the market. min jeong: exactly. especially for long-term investors, it has been -- this

decision particularly does not have a huge impact on their long-term strategy, whereas it will help the market restore what they view to be a healthier condition where market prices are decided purely by the market -- and it gives them more opportunities to buy stocks at lower levels in the market declines because now, you can no longer expect the boj to buy a certain amount. 1% or 2%. instead of boj having them coming in and buying at low levels, you can have investors who have been waiting for cheaper prices to buy stock. to come in and buy in the market. shery: that sort of strategy that we are going to see by investors when they approached japan now? min jeong: that is one of the things they say you can

anticipate from investors who have been kind of waiting for cheaper prices to come in and buy. there is the other possibility of people who are kind of anticipating big drops, wanting to go short on japanese equities. the short-term traders including day traders that will give them an opportunity to potentially go short on stocks as you can no longer expect the boj to kind of continental against that. haidi: our tokyo stocks reporter, min jeong lee, with the latest. one of the largest renewable power firms in asia. he joins us to talk. the ddr been a station -- the decarbonization campaign across the region. this is bloomberg. ♪

haidi: southeast asia's past decarbonization has lagged its global peers has many continue to rely on fossil fuels for their growing power needs. let's bring in bloomberg's caroline who covers southeast asia's power markets. how far behind is the region when it comes to reducing greenhouse gas emissions compared to the rest of the world? caroline: the southeast asian countries have yet to reach peak greenhouse gas emissions. energy demand around the region are still expected to grow quite

significantly due to electrification efforts and growing economies. these increases are largely met through fossil fuels. it has been the -- of choice within the last decade and fossil fuels still dominate the regional parliaments. 50 to 85% of stock generation capacity. shery: which country's leading in southeast asia when it comes to decarbonization? caroline: over the last two years, we have rarely seen vietnam emerge as the regional leader, especially for solar and wind developments. they have brought in a way investments into these two sectors. in just two years, vietnam built 19 gigawatts of solar capacity, over 100 fold increase from the 2018 levels and the country is seeing a wave of investments.

based on current policies we have seen come out of the country, the focus on renewable energies is only going to grow and we expect them to continue taking the lead in terms of renewable energy developments in the region over the next few years. >> we have to talk about the lack guards then. -- laggards then. caroline: it is the largest and among the top 10 in the world. historically, they rely very heavily on their cheap abundance of supply to meet increasing demand and it has often led to the country being called a final frontier. we are also beginning to see the directions change in the country. shery: caroline covers southeast asia's power markets. we will be discussing more on the energy outlook of renewables for the region. thailand's fourth biggest power

company by value. they are active in health care, energy, and real estate. one of its units has expanded into solar and wind and most of their growth tries to be green. we are joined by the president, harold. thank you for your time today. tell us a little bit about your renewable investments. what is the target for the propulsion of generation capacity from renewable energy in total capacity? >> thank you very much. we started to be a supplier to industries in industrial parts because 25 years ago, that was trying to get investors into -- reliable. electricity day and night. thailand opened the market for solar and other renewable power. we went into it quite strongly.

recently, -- mainly in the renewable sector. we have 30%. you see the solar plant we opened in 2019 was the largest solar plant in southeast asia. 420 megawatts, nearly 1000 acres, built on 300,000 -- 200,000 -- >> so what is the target then? harald: the target is that we are now going into -- we are going into renewables. we have two countries where renewable power in korea -- we have a number of projects which are wind power in vietnam and also -- indonesia, we have solar

plants. hydro plants. working on hydro and solar plants. we are going strongly into that. we put a lot of solar on the rooftops and we have assistance. the airport in thailand, we built the first hybrid plant, which is to find electricity in the power plant. the system and solar. the issue in the moment is that the storage system were expensive. 100% supply by solar or wind.

so they are still -- it has a combination of gas and wind and solar. >> how do you -- harald: [indiscernible] >> how do you assure governments that are concerned that renewables and the transition to greener energy does not come at the threat of energy security? harald: well, the good part is that those involved with plans for electricity, they are engineering oriented so i understand the systems. we have a combination of renewables and we are also very good in the distribution network so we understand the technology as well. the transformation of our country will have really smart systems so they can handle solar

and wind. apparently, a stable supply to industries. we are just in a transition period where the technologies are improving, where the systems are getting better, where you have two main technologies. it had certain advantages in certain errors. if you look at figures, in 2050, people think they are going to be nuclear and gas-fired power plants. it will be in renewable power. the other part is we have to go into carbon capture with technology coming up and some technologies are still effective. there is time to offset the

remaining carbon emissions, and i think there are many technologies developing now. on the other hand, the est. that is in the mind of investors, which is having a -- haidi: really great to have you with us. harald link. be sure to tune into bloomberg radio to hear more from the day's newsmakers. you can get in-depth analysis from the daybreak team now. they are broadcasting live from our studio in hong kong. listen via the app, radio plus, or bloombergradio.com. lots more ahead. this is bloomberg. ♪

haidi: we are getting japan gdp, the final first-quarter number, and it is a significant revision upwards, actually. quarter on quarter coming in at a contraction of 1%, better than the contraction of 1.3 percent and slightly better than expectations as well. we are seeing the annualized seasonally adjusted quarter on quarter number, a contraction of

just 3.9%. that is revised down from a contraction of over 5%. we are seeing nominal seasonally adjusted quarter on quarter numbers coming in better than expected, a contraction of 1.3% as well. we did get the number when it comes to the gdp later but when it comes to also be private consumption number, we are seeing slightly worse than expected, a contraction of 1.5% and the business spending number that is slightly better than the previous number that we had as well so certainly when it comes to the gdp numbers, a little bit better than the preliminary numbers. shery: and perhaps those exports and shipments, strength of external demand helping here. take a look at the trade surplus. the current account surplus for the month of april coming in at 1.32 one trillion yen. -- 1.321 trillion yen.

imports were pretty strong. semiconductor products from asia, pharmaceuticals from europe probably rose sharply in the month of april. exports likely continue to increase, but not as strong as imports. not current account surplus narrowing to 1.321 yen. -- trillion yen. also the trade balance coming in at 289.5 billion yen. and a huge covid-19 study by 23 and me has found losing taste and smell is more common in women and younger patients. the ceo spoke to bloomberg technology's emily chang about the research revealed. >> this is something where we asked our customers to participate in research over a year ago and we have over 80,000 customers who have had covid and over one million people who have

participated in the survey and we were able to find blood type was associated with susceptibility and severity. it has been really confusing to understand what is happening with the loss of smell. we did find there is a genetic variant that looks like if you have this variant, you are 11.5 times more likely to actually lose your sense of smell if you have covid and it is between two genes associated with the ability to smell, all the factory, so it's a really important clue in being able to understand the biology of the disease. it is the first time we are finding something. emily: basically, you found that younger people are more likely to lose their sense of taste and smell and also women are more likely to lose their sense of taste and smell if they get covid. is there more that you could potentially unearth here? could genetics impact the

severity of the disease, for example? emily: that is the beauty of research, that you are constantly asking questions and learning. it is a really important first clue. that is that there is a genetic association with why some people are more likely to lose their sense of smell. that is a first clue. there was not more associated we found with the women and the agent while we see that with loss of smell occurring in different populations, we do not have a genetic reason why those populations are having more susceptibility. what we do find is one third of americans do have this genetic variant that would make them more likely to lose their sense of smell if they had covid. it is the first in a puzzle. it is a complicated puzzle so we will keep discovering and that is one of the reasons why 23 and he keeps the research going and keeps engaging our customers because there is more to be

found. emily: what other puzzle pieces are you looking at? what other possible genetic links to covid are you researching? anne: personally, the thing that is most interesting is severity. it's one of the reasons why we announced we were giving away free kits for anybody who had been hospitalized with covid because we had some of these extreme stories of people who are in hospital for -- the ultimate concept of death. that is one area we are still looking at. second is we are starting to look at long covid. we all hear about these issues when people get covid because they have months and months or years of, you know, symptoms still. we are starting to look at that as well. one thing we will be doing in the coming months is starting to

update our covid calculator. our covid calculator, that is something that we will continue to update as we make more discoveries. >> the market opens in sydney, seoul, and tokyo by next. -- our next. this is bloomberg. ♪

haidi: welcome to "daybreak: asia." shery: looking at the major markets across asia. stoxx with a steady stark -- stocks with a steady start. the dollar slipping along with treasury. haidi: the fda approves a

controversial alzheimer's drug. shery: and policymakers pushing to make sure the g7 tax plan does not let amazon off the hook. haidi: let's look the start of trading, major markets in asia. sophie: japan adjusting data, first quarter gdp less than expected, not providing a lift for japanese stocks. the nikkei and topix little changed. more weakness is anticipated for the yen. we are keeping an eye on biotech names and asia. you have jeffries targeting ¥11,000 on the stock.

in seoul, korean stocks looking it'll changed after hitting a record high monday. the kospi gaining this morning. we are keeping and i on -- eye on others. looking at the open in australia, checking in on the asx 200 this morning. some downside moves, up about 1/10 of a percent. the election very much and focus. some upside for copper prices early in the session. iron ore in singapore, made 90 levels this morning. oil on the back for, wti heading toward $69 and imprint losing ground early, down -- and rent losing ground early, -- brent losing ground early.

jp morgan staying overweight on cyclicals. shery: our next guest say he favors value and cyclical sectors and could be a good entrance point for em equities. great to have you with us. we continue to see the summer doldrums, not a lot of movement in the u.s. markets. what will be the next catalyst toward any sort of movement him and it seems the global economic recovery is priced in? >> i think it will largely be vaccination progress, particularly in the areas where you have seen it. economic activity, we seen indicators that eking could -- p eeking could -- peaking could continue. but i think we wille throw reopening of service

sectors and travel, sectors that have been downbeat by lexa vaccination and consumer consciousness. shery: which regions are you talking about? in china, vaccinations not so much of an issue because infections are so low, as opposed to japan, where vaccination rollout has been really slow. alex: it is really an issue i think for the entire region. china has been slow and not necessarily an issue because they've been able to contain the virus, but still causing cautionary savings to rise in china and has brought about a change in behavior as well. you've seen an uneven recovery in china between exports and industrial production and consumption. you don't have a completely thorough reopening or recovery. there is still a fear of rolling lockdowns and a new cluster of cases. even more so for southeast asia, dependent on open borders. it is an issue for the entire

region and potentially more impactful for southeast asia, but broadly in the region, that would bring about a fuller recovery. haidi: what's interesting about the china recovery is the lack of recovery in the consumer. is that worrying when you look at the narrative across the rest of the region, maybe that will be the missing puzzle piece, the post-pandemic consumer enthusiasm? alex: i think that is a big question, whether we are in a new normal of consumer behavior, and if some of the adjustments consumers have made throughout the pandemic will last. looking at developed markets to the west, we say that is not necessarily the case. we are seeing a quick return to how consumers have spent in the past and pent up demand. we see it as an impact more of vaccines, not necessarily recovery. consumer behaviors, particularly spending on services and

domestic travel, that is more cautious. savings are slightly higher. we expect savings to come down and consumers to go back to the way they were pre-covid, but more in line with a full or recovery from vaccine process. haidi: we are still seeing the likes of mining firms to trade, as a popular trade. at what point does inflation fear overtake that? alex: i think those -- we looked at what performs well in an inflationary environment when inflation rises above average and more significantly, to standard deviations above average. -- two standard deviations above average. energy stocks have held up through multiple periods. as inflation is volatile, we will likely see high trends in

inflation, those of the areas that can outperform because they have historically held up well and are the most supply constraint parts of the global economy. you tend to see prices in line or even hold up relative to inflation. haidi: when you take a look at how fully christ and and potential delay, -- how fully priced in a potential delay is across the world, do you think it has been adequately priced into valuations across the world given the risk is asia gets left behind? alex: i think so. we have seen large divergences and uneven recovery across the world. both last year with containment in this region and the virus

doing much worse in the u.s. and elsewhere, and this year with a reversal of sorts. i think even in the region, you've seen diverge in -- divergences and pricing. -- in pricing. you've seen those divergences priced in. i don't think you've seen blanket multiples increase or a lack of discrimination amongst global investors. that's an area where we see some pickup in areas that have been beaten down as we see the recovery continue. haidi: alex, always great to have you with us. let's get you to su keenan the first word headlines. su: we start with the fda, which it granted approval for an alzheimer's therapy that reduces the protein that clogs patient brains.

they will need to do more research. the drug will cost $56,000 a year and is the first fda approved treatment for alzheimer's in nearly two decades, with some scientists pointing to mixed results in clinical trials. the u.s. will discuss trade and investment with taiwan, advancing ties between the economies. the secretary of state told the house committee about the plans in response to a question from a kentucky lawmaker. the latest effort would revive talks that have been stalled and see obama administration. global coronavirus infections falling dramatically, with the u.s. reporting the lowest number of daily covid 19 cases march 2020. some countries are dealing with rising case counts.

the u.k. says it is too early to say if the june 21 lockdown loosening will go ahead. airlines from britain and the u.s. have issued a plea for travel to resume between the countries. they are lobbying for the u.s. to be on the green list, allowing customers to skip quarantine. this days for president biden is set to attend the g7 summit in england. new data points to wall street expecting more than 60% of staff to be back in the office by late september, up from a 50% estimate in march. a survey found a portion is back already. real estate has 70% occupancy. only 20% of the companies surveyed plan to have employees required to be vaccinated. 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 su keenan. this is bloomberg. shery: breaking news out of canada, they are set to relax quarantine rules for vaccinated travelers. at the moment, they have a 14 day isolation period for people who have had to vaccine -- two vaccine doses. this is coming at a time when there is a center of urgency, given it could be the last opportunity to open the border in time for the summer season. pressure has been growing on the canadian and u.s. governments to relax restrictions. we are hearing canada will be set to relax of the quarantine rules for vaccinated travelers from the corn -- the current 14 day isolation period if they've had two doses. let's get another check of the markets. sophie: sideways trading looking to persist in asia this tuesday. we have a bit of regional

consolidating. look at the rsi, back above 60, which could indicate positive momentum could be building for regional equities. at blackrock, the research arm is seen persistent inflows for asian assets, so they are tactically overweight on asian equities. this is part of a strategy in part of the global tax plan. haidi: still ahead, the bloomberg scoop on that global tax plan. amazon's profit large and is too low. the possible workaround being talked about. china is facing nationalist anger over a u.s. plan in taiwan. details later. this is bloomberg. ♪

haidi: amazon is becoming a

focal point in the g7 tax plan. our scoop reveals policy makers crafting the tax plan to make sure the e-commerce giant is included despite the company's private -- margins being below the threshold. we have the details. we spoke to a previous guest earlier and he was saying these companies have the most resources, so if there is a loophole, they are likely to work with it. why is amazon a special case and how are they trying to make sure it is still included? >> despite being an enormous company, amazon is different than other big tech companies that are hugely profitable because amazon is an online retailer. a lot of its revenue is invested in its retail business, the distribution network, and the margins on some of those items is very thin. it is a different calculation so policymakers are looking at how

to maybe even chop up amazon's different businesses to make sure part of its operations fall under the profit threshold set by policymakers in these global talks. shery: what are the next steps after the g7 statement? anna: we had the g7 statement over the weekend and we will be looking for a g20 meeting in about a month, but we will get most of the details when it comes to oecd talks in october, when global policymakers will be getting all of the policy details ironed out so member countries it can then take those details back to their home countries and try to implement them either through tax treaty ratification or domestic legislation, which will be a difficult step to make sure this global political agreement ends up as legislation around the world. haidi: is multilateralism a good

thing for tech companies? anna: it depends on who you talk to. i spoke with some industry representatives and people from tech companies today, who said they are looking for certainty for their global operations, so it is good to have a multilateral agreement that will apply to every country where they operate rather than the unilateral approaches, with different countries implement in their own digital service tax, it is difficult for a coming like amazon to comply with. moving some of the unilateral taxes would be a good thing even if it ends up increasing amazon's overall tax bill. shery: what are the next steps in the united states? we have this international remit -- agreement but you have to have congress pass it. anna: it makes it hard for janet

yellen to go to these negotiations, take a leadership role and hashing out the details. she has to take this plan back to congress in the u.s.. we have a midterm election coming up in 2022. by the time this is finalized, we could be looking at a different makeup of congress that could include republicans controlling one of the chambers, which would make it really hard to implement a deal negotiated by the democratic biden administration. shery: anna edgerton joining us. you can get more on the tax plan and other stories you need to get your day going in today's addition of daybreak. you can customize your settings on the app so you only get the industries and assets you care about. next, a breakthrough for biotech. the fda has approved an alzheimer's drug, setting a new precedent on how to treat the disease.

this is bloomberg. ♪

shery: we are waiting for shares to trade in tokyo after the company soared in u.s. trading, getting more than 50%. we are seeing bids at a 20 to one ratio. the fda granted accelerated approval to biogen's alzheimer's therapy. there was a brief trading halt. biogen needs to continue research on the job -- the drug. it has received criticism from scientists about mixed results,

and it could change alzheimer's treatment. we spoke to the ceo. >> nowadays you have three treatments that have shown that finding characteristics to the plaque that is toxic in the grain -- brain the way plaque is toxic in the heart. we can gradually remove the plaque and that is critical. there are three compounds. the next in the line is the one we have in collaboration. it is now in phase 3, for which it will be out in a year from now. the fda has done a thorough analysis of the entire data set. we have more than 2 million

pages of scientific data being shared. they have been thoroughly evaluated. >> i understand that but there is pushback by some scientists who question whether these are the key to solving alzheimer's. you have a drug that may be successful in targeting those, how confident are you that is the problem to be solved? >> it removes gradually the underlying cause of the disease. down the road, there might be additional, but this will take many years before we can see the scientific proof. as i was saying today, you have three compounds with similar activity. we are the first one in the market. in a few years, there will be others and we invite them because the market is large. >> tell us about the pricing

strategy. you are saying it is about $56,000 per year. for an average consumer, including infusions and m.r.i. scans, what will it cost? >> i think we need to consider that the stopping point is $600 billion society is spending in direct and indirect costs on this disease in the u.s. only. it is going to triple by 2050. yes, there will be treatment and diagnosis, and i wish we had diagnosis reimbursed soon. technologies are advancing fast in that space and i hope soon we will also have blood diagnostics that will ease the broader population to have a biomarker in addition to the

clinical diagnostic. >> do you think we will see other regulators look at the decision in the u.s. and approve it? >> i believe so because the u.s. fda is so important. and we've been working on the global data sets for more than two years. we are at a similar level of scientific engagement and respect working with japan, australia, canada, switzerland, brazil, where they product is filed and currently under review. our aim is to make the product available everywhere. shery: the biogen ceo. we have an alert on the bloomberg. the peruvian candidate for the presidential election denouncing

irregularities in the election that took place sunday. she says she is awaiting votes from peruvians abroad, this coming as we saw peruvian assets tumble in the u.s. session. partial results from the election showing her opponent, the schoolteacher who promised to redistribute wealth, took a slight lead. she is also the daughter of a former peruvian president. she is under investigation for corruption and campaigned while on bail and has vowed to save the country from communism. she is denouncing irregularities in the vote and saying she is waiting for votes from abroad. haidi: let's get you a quick check of the latest/headlines. apple is giving -- latest business flash headlines. apple is giving a preview of its

new products. they announced facetime tools that rival conferencing software like zune, including the ability to schedule calls and send links for others to join the call. apple also addressed inconsistencies and and unfair playing field criticism. tim cook shared a vision for fostering more diversity in tech. >> we continue to look for ways to cultivate the next generation of developers, with an emphasis on those underrepresented in technology. we host entrepreneur camps for black and female developers to foster the talent of future industry leaders. our developer academies, including the newest in detroit, prepare the coders of tomorrow with valuable tools and training. haidi: tesla shares whipsawed after a decision to drop

production of a sedan. the stock later recovered to close the day higher. next, beijing facing anger at home after a u.s. visit to taiwan over the weekend.

>> this is daybreak asia. policymakers are crafting a global corporate plan to make sure amazon is included despite the profit margin fallen below the 10% threshold. we are told one scenario involves focusing on individual operations targeting amazon's cloud computing. in india, modi has announced

free shots for all adults following criticism of india's handling of coronavirus and the botched vaccine rollout. he says the shots begin june 21 and that the administration will procure the shots from other states. a vote to approve a government will be held that would end israel's benjamin netanyahu rule. if approved, -- he would become prime minister for two years. the u.s. justice department says they have recovered most of the crypto ransom paid last week -- last month to the perpetrators of the pipeline attack. the sliding value of bitcoin

means the recovered coins are worth $2.3 million. colonial had paid $4.4 million. jeff bezos will go to space next month when blue origin lunches is their first passenger carrying mission. he plans to travel alongside his brother, saying it will be the greatest adventure with his best friends. the lunch will be two weeks after he steps down as amazon ceo. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. i am su keenan. haidi: let's look at asian markets with sophie. sophie: nikkei 225 is inching above the level but there is a clear outlier jumping more than 2% in tokyo. we are keeping a close eye on a

biotech company. still untreated for now. the kospi is retreating from the red high it hit monday. while gaining ground, copper players are under pressure amid the crude election. i want to check on reaction to lg energy solution, including pacific metals with a 12,000,000,001 investment. shares jumping for the sixth straight session. they mine battery materials, including lithium. shery: the biden administration is set to launch trade in talks with taiwan, which will add to tensions that add tensions with beijing.

there are criticisms with nationalists at home. lucille is in beijing. the anger at home underscoring pressure on china's redline. lucille: that is right. china's rhetoric might be that crossing china's redline would be ground for an attack. but red lines have remained ambiguous of the years. a chinese diplomat said a visit to taiwan by an american worship would be grounds for attack. and taiwan crossing the redline. so this is why internet users are getting so warmed up -- worked out. some of them see this as crossing china's redline. haidi: what does the vaccine donation tell us about biden's taiwan policy?

lucille: the donation shows that president parted -- president biden will continue the trump administration's effort to extend ties with taipei. since taking office, he has sent warships five times and it matched last year's total under trump. the trade talks might be in beginning stages. haidi: lucille in beijing. next, global policies workers -- makers and the impacts on asian economies with rob carnell, who is with us next. this is bloomberg. ♪

shery: the new secretary general says making companies pay a minimum of 15% tax would be a significant step toward global reforms. in the first interview since taking up the role, rob carnell told us the agreement must go well beyond 27 nations.

>> there will be other -- beyond g7 nations. >> there will be other steps to follow. it brings together jurisdictions from all around the world and ultimately at the g20, a formal agreement will have to be arranged. the g7 economies, the biggest around the world, will have the great to perform is a significant step forward in making sure there is globally a price. >> agreed to a minimum at least a 15%. do you tax rate going above that -- do you see the tax rate going above that? >> it is important to ensure we strike the right balance. when the average corporate tax membership at present sits at

21%, 22%. some countries are below the 15% . quite a few are above. if we were able to achieve a circumstance where all multinational countries operating globally are required at least 15% on their profits, i think that is a very significant step forward. of course there is still then competition between different jurisdictions based on fiscal policies in respective jurisdictions. >> there is still a lot to do and tom referenced how u.s. legislator might take a lead role. what are the main hurdles you see in the ongoing negotiations we had at the g20? >> clearly it is very important to have all the g7 countries

reach an agreement but we need to expand the level of agreement well and fully beyond that, and that is what the inclusive process will do, with more than 100 countries and jurisdictions involved. around the g20 you have a significant number of other large economies around the world as part of the process. so i am quiet lee -- quietly optimistic that when it is said and done, we will be able to reach an outcome in the next little while. haidi: that is general matisse corbin. let's bring in rob carnell. ing is shrugging their shoulders when it comes to the 15% minimum tax. let's go to the chart to look at

corporate tax rates by country and the terminal. in the purple, japan at over 30%. across asia, the averages well over 20%. do you see much of an impact here substantially or on sentiment? >> i think there are two things to think about. one, do we have any economies that are headquartered companies trying to evade global taxes. the answer is no. they are in japan so they would be paying the highest tax rate. so were not going to see an exodus of these companies -- so we are not going to see in accidents -- exodus of these countries. and over the last 18 months, government finances are wrecked. everyone spent money trying to get out of the covid hole. what is everyone looking at now is a source of revenue. this provides one.

so google, amazon, whatever company it is operating in these economies will now be paying some tax revenue to those authorities when perhaps they were paying little or nothing. that's good news for the receiving countries. hopefully not having too much of an impact on the prices customers pay. haidi: so if asia doesn't have to worry about tax, let's look at the other parental -- perennial worries like inflation. wherever you sit on the argument , i keep going back to janet yellen saying, is inflation really that bad, even if it is not transitory? we have spent decades trying to get out of deflation across the world. >> i am with janet yellen on this. as long as it is not very much. the difference between two point

5% and 1.5% inflation is marginal -- 2.5% and 1.5% inflation is marginal. whether or not is transitory, the wages go up and it pushes up prices and then government wages go up and you see a spiral. that's a problem. but at the moment, these instances are protracted. we have a lot of factors pushing into this, commodities, semi conductors, bottleneck of the labor supply because of unemployment benefits and other things. these things could all come to an end but it could take a while. so we might get at a higher price level for some time but if that is all it is and it eventually settles down, wrinkly, they should not worry us at all. -- frankly, that should not worry us at all. shery: so will inflationary

pressure have a snowballing effect? >> when you see actual wage rates going up, it is hard to measure at the moment. it is measured in quirky ways. but what we want to see is evidence of actual year on year which is beginning to pick up and that would begin to have an impact on inflation expectations. this is the point where it stops being transitory and starts becoming a self reinforcing power. shery: let's talk about the data out of asia this week. japan gdp numbers. what catches your eye at this point? >> the japan numbers are historic, the second quarter is more highly affected by

emergencies, so that will be a horrible number. ppi figures because they touch on the inflation story are more interesting. 8.5% year on year, that's an effect for sure. china for some extent is driving its own inflation higher with hoarding commodities that is apparently taking place and sneaking into these ppi numbers. so i expect to see the authorities get more against those actions in the next couple of months. haidi: what of the asian consumer post-pandemic? if you look at the cautionary tale in china, it's not coming back. there were no stimulus checks. are we setting up for permanently spending patterns in the post-covid era? >> the interesting thing about asia is many of us are not in a reopening situation now compared to the u.s. or europe.

people are flooding back into restaurants and bars. that is something we are looking forward to, hoping it will happen. but we are entrenched where we sit at home and go for walks and there's nothing else for many of us to do. so i think until that changes, which will be a function of the vaccine rollout, that remains the future for us for the next quarter or so. shery: rob carnell, great to have you with us. please join us again soon. up next, occlusal -- a closer look at the variants of covid and whether they cause more severe cases of covid. and we will get in-depth analysis. we are broadcasting live from the studio in hong kong.

listen on bloombergradio.com. plenty more ahead. stay with us. ♪

shery: here's a quick check of the latest headlines. -- for two years after investigating the forced closure

of six credit funds. the asset manager has been ordered to pay a fine of $700,000. last year, $4.1 billion of indian debt funds after compounding to -- compounding from withdrawals. india's atm is set to be advancing the ipo. the digital payment start up is asking employees to decide whether they want to sell stock in the offering. in the board has approved the offering plan in principle and could file a draft as soon as the first week of july, raising around $3 billion would make it india's biggest ever ipo. as the world's top producer cap -- cashes in on the diamond

industry, which has roared back to life after stalling during the pandemic. india has been replenishing replies, allowing users to escalate prices. haidi: the coronavirus variant that drove india's pandemic is the most infectious to reemerge so far. doctors are looking into whether it is more severe and finding unusual symptoms. let's bring in our senior eddie are. -- senior editor. this sounds awful side effects that we are discovering now. >> yes. doctors are reporting atypical symptom including hearing loss in covid patients presented to them. it is sparking concern that the delta variant may in fact be more severe than previously circulating strains. shery: what do we know about the

effectiveness of vaccine so far this area? >> we are seeing reduced efficacy from the first dose of both pfizer and astrazeneca shots. after two doses, there is greater efficacy, but overall, we are seeing a reduction in the effectiveness of the vaccines compared with the alpha variant and wild type variant circulating beforehand. so that is the concern and may be what is contributing to an increase in cases in england and scotland that is associated with a rise in hospitalizations there. haidi: it means pharma companies are now under pressure to develop new vaccines or booster shots to target the new variance -- variants. >> absolutely.

we know the mrna vaccine made by pfizer and moderna are more broadly protective against variants. so i think what we will see is where alternative vaccines have been in use, we may see mrna vaccines be offered as booster shots when they become available later in the year and they will be better targeted at the variants that are spreading across the world. shery: a huge covid-19 study by 23 and me has found that side effects are more common in women and children. we spoke about what research reveals. >> we have over 80,000 customers

who have had covid and over one million people who participated in the survey and we found that blood type is associated with susceptibility and severity and it has been really confusing, like what exactly is happening with the loss of smell? there is a genetic variant and it looks like if you have it, you are 11.5 times more likely to lose your sense of smell if you have covid. it is between two genes, with all the factory. so it is -- with the ability to smell. so it is an important factor in understanding the disease. emily: basically, you found that younger people are more likely to lose their sense of taste and smell, also women, if they get covid. is there more you could potentially unearth?

could genetics impact the severity of the disease? >> i think that is the beauty of research. you are constantly asking questions and constantly learning. the thing we found now is an important first clue. there is a genetic association with why some people are more likely to lose their sense of smell. that is a first clue. there was not more we were associated yet. with the women and age, we see that with loss of smell occurring in different populations but we do not yet have a genetic reason why those populations have more susceptibility. but we find that one third of americans have this genetic variant that would make them more likely to lose their sense of smell if they had covid. so it is the first piece of a puzzle. research is a complicated puzzle. we will keep discovering. i think that is one of the

reasons 23 nb keeps the research going, because there is more to be found -- 23 and to me --and me keeps the research going, because there is more to be found. i think the most interesting thing is on severity, we announced a year ago that we were giving away free kits for anyone who was just hospitalized with covid. because if you have some of these extreme stories of people who are in hospitals or have the extreme response of death, that is one area we are looking at. second, we are starting to look at long covid. we hear about the issues that people get covid but then have months or years of symptoms still. so we are starting to look at that, as well.

so one thing we will do in the coming months is update the covid a calculator. we put this out for free for individuals and we will continue to update as we make more discoveries. haidi: let's look at stocks we are watching ahead of the china open. sophie: in taiwan, a big test chip -- chip testing plant had to shut down. june sales could fall by 35%. asian biotech in focus. the partner is still untreated but look at biogen, biologics gaining ground and the partner for dementia treatment is gaining ground. this is on the back of the alzheimer's treatment getting

approval from the fda. that is it from daybreak asia. standby for bloomberg markets china. this is bloomberg. ♪

>> it is not :00 a.m. in beijing and shanghai. welcome to "bloomberg markets: china open." i am tom mackenzie. david: and i am david ingles. let's get to your top stories. stocks across the region consolidating as investors await more clues on things like inflation, stimulus, and the pandemic. the central bank guiding the currency into a narrow trading range. tom: