haidi: welcome to "daybreak asia ." i am haidi stroud-watts in sydney. sophie: we are counting down to asia's major market opens. kathleen: good evening, i'm kathleen hays. our top stories this hour, leaders strike a delicate balance on china while they say beijing's ambition present systemic challenges. asian stocks are looking for a

steady start on the back of another record-setting session on wall street ahead of a key federal reserve meeting and a warning from jamie dimon. find out why he says the end of the pandemic trading boom could be drawing near. haidi: let's take a look at how we are setting up for markets. sophie kamaruddin is in hong kong. what are you watching? sophie: steady as we go. a recent chart showing consolidation around the february high, unlikely to move far beyond this trading range given the slight moves we have seen across market in asia and we have them coming back online and pulling up the board, we are waiting on some data from the region including trade data from india, indonesia, and from the rba, we have meeting minutes ahead of governor those speech on thursday -- the governor's speech on thursday. aussie dollar, little changed.

we could see a push above 78 it be a less dovish tone from the rba this week. aussie bonds lightly under fair. the offshore yuan hovering around the 6.41 level after the yuan pushed below its 20 day moving average for the first time since april. kathleen. kathleen: china's growing military might was one of the top items on the agenda at the nato summit in brussels. the communique highlighted the challenges beijing's growing influence on international policy poses to the multilateral order. >> we are concerned by china's coercive policies, which stand in contrast to the fundamental values enshrined in the workshop treaty -- warsaw treaty. china is rapidly expanding its nuclear arsenal with more warheads and a large number of gated delivery systems. >> for more on this, we are

joined by jodi schneider and we have our china correspondent, tom mackenzie, joining us from beijing. nato's response, what do we make of it? tensions in the south china sea. is nato the right group to be brought be looking at these kind of issues? jodi: i think certain members want to turn the page here. we want to -- president donald trump. return to normalcy. they definitely want it to be -- members belong together. not every country for themselves. it's them written in the china statement that they did have a final statement where they agreed and it was a much

stronger statement than the one in the 2019 meeting. it was strong. it was much more confrontational than in the past but there were some in the group who wanted it to be more balanced and german chancellor angela merkel, who is outgoing, basically urged her partners not to close the door on china, saying it was important to keep that dialogue going. even on china, even on that confrontational stance, there was some debate, clearly, and the merkel camp saying let's not close that door. haidi: of course, the language, pretty critical, saying china's coercive policies -- the impact it's having on a global stage. have we heard reaction from beijing? tom: we are still waiting for that official reaction from beijing to the nato communique but you have to imagine that

there will be some acknowledgment here in beijing that you are seeing over the weekend a double whammy when it comes to china's reputation on the international stage. it's very difficult to see how china is going to be walking back any of its policies around cyber or its cooperation with russia or it buildout of its nuclear weapon and its military on the back of this kind of pressure. but there has been an acknowledgment in the last few weeks and i'm still waiting to see how it will play out on the ground, from president xi asian praying -- xi jinping on the need for better image. there does seem to be acknowledgment that work needs to be done. there are divisions within the nato community hungary -- community. they will want to exploit those divisions. kathleen: what struck me from the g7 meetings over the weekend was a comment by xi jinping saying something along the lines

of, the days when a small group of nations determined the fate of the rest of the world is done . clearly, he was taking a swipe at the g7. tom: that was a statement put out by the chinese embassy in the u.k. and they did they that the days when global decisions were dictated by a small group of countries are long gone. it was very dismissive. you had pieces in the global times saying g7 is diluted if it believes that communique will actually impact china. there were also comments in the global times saying we have to acknowledge here in beijing that the u.s. will make a more cohort it effort as its allies about that it will have more friends, and there will be greater pushback on china. it was interesting to see an editorial just acknowledging the fact that beijing will face more pressure. but again, china will also take comfort from the fact that merkel, on the german side, as well as macron in france, did pushback to some extent on

stronger language, wanting to moderate the language and push the idea that there are still areas of cooperation between beijing and the west we had -- and the west. haidi: there are concerns from russia as well that the alliances -- what do we know about this relationship going into that meeting which he says nato supports? jodi: president biden was saying, partly in response to criticism about whether he should meet with putin, given continued aggression from russia on the world stage, he said that 10 or 12 leaders said they were thankful he was meeting with russian president putin and that it was thoroughly appropriate for him to do so. i have the backing of my friends and neighbors to do so.

he did say -- lowering expectations, if you will, saying putin is a worthy adversary. it is in his interest to change the perception the world has of him. he also addressed the issue of alexei navalny. they say if he dies in prison, it would be a tragedy that would come back to hurt president putin. haidi: jodi schneider. tom mackenzie. don't miss a big conversation coming up later on tuesday. the u.s. commerce secretary tells bloomberg about the progress that has been made with meeting with these world leaders. let's get you to vonnie quinn for the first word headlines. vonnie: thank you. the world health organization director general is warning that more vaccines are needed

quickly. while praising the 870 million tobin shots, he says right now, the virus is moving asked her than the distribution of global vaccines. he also said new variants could substantially increase the risk for people not vaccinated. prime minister boris johnson announced a months long delay in lifting the u.k.'s virus curbs as concerns over a rapid rise in covid-19 cases persists. of particular concern is the increase in cases of the highly contagious delta variant, first identified in india. johnson reassured there is an end in sight. >> on the evidence i can see right now, i am confident that we will not need more than four weeks. we won't need to go beyond july 19. vonnie: iran says it has reached a broad agreement with the u.s. over the lifting of sanctions on its industrial sectors including energy, but tehran forms

there is little time left. the chain restrictions have prevented the islamic republic from x oil area markets are watching for any clues as to when the opec member can resume crude sales. the chinese owner of a nuclear plant says its operations are safe even as its french minority owner requests an extraordinary org meeting to discuss gas buildup in the reactor. they want more data about the buildup, which is a known phenomenon. the china general nuclear power says the plant is operating normally. global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie quinn. this is bloomberg. kathleen: thank you so much. still ahead, is wall street's pandemic error trading boom coming to a close -- pandemic era trading boom coming to a close?

first, however, state street macro strategist emily weiss says the dynamic of emerging market central banks acting like they are developed -- their developed market counterparts is ending. this is bloomberg. ♪

kathleen: -- one of a series by a global central banks whose policies are increasingly diverging and well the fed may cling to its dovish staff, our next guest sees a different picture for emerging-market central banks who are taking a more hawkish view of rising prices. emily weis joins us now from boston. i think you make a very interesting point in a note that you sent us that emerging markets are increasingly more

likely to maybe even respond to their rising inflation and in the end, this could be a plus for them. emily: that is exactly right. we are seeing an interesting divergence taking place and it's really well highlighted this week where we have the fed that's going to address inflation that they largely view as transitory. they are going to wait and see how that plays out. on the other hand, you have a lot of emerging-market countries where we have this versions, seeing inflation pressures come through, and there is not the same ability to wait it out and see how things develop so we are starting to see more central banks get pushed towards hawkish policy and the few that come to mind are poland and maybe even the czech republic. add-on mexico and she lay -- chile. and we have others who have already started hiking. we have this pack of emerging markets turning hawkish and that could the a positive given that this could really increase the

attractiveness from an investors standpoint headed into the second half this year. kathleen: expand on that last point. break that down for us a little bit more. emily: a key concern for investors right now is when this golden period for emerging markets can come to an end. right now, when the recovery is getting underway, it is a positive time for emerging-market asset. we are probably seeing that play out a question i get a lot in discussions with clients is when does not come to an end? a lot of times, the thought process is that the endpoint can be when the fed starts tapering, brings back memories of 2013 previous episodes where the fed policy has been the thing that derails the emerging-market trade. what is important that's different this time is that in 2013, the fed was embarking on a more hawkish and tighter policy while many emerging markets are still cutting rates so you ended up with this divergence that was

not favorable towards emerging markets. this time around, many emerging markets are the first to hike. that helps stabilize em yields and increasing yields and more attractive news on the carry side, moving ahead of or even beyond where the dollar or other g10 currencies be moving. haidi: emily, what about the impact of the one? as -- the yuan? does it continue to play a key role? emily: we are expecting that to slow a bit given what we heard out of china of late. it does still have a significant amount of prominence, given where it tends to follow. right now, given the control mechanisms we are seeing in china, an emphasis for a bit more control, we are looking more towards the dollar. a particular dollar weakness is the trend driving the overall em discussion. while it's hard to separate out

those two, right now, the dollar weakness story seems to be allowing the rest of the em complex to appreciate above and beyond even maybe where the yuan has. haidi: i want to throw up this chart for the benefit of our viewers, taking a look at the global vaccine rollout, the leaders, and some of the laggards. it does not have the asian nations other than china, which is an outlier. india is on there as well, lagging, but you look across broadly in asia, you are seeing very slow vaccine rollout. part of kind of the u.s. and european exceptionalism has been how quickly people have gotten vaccinated. is that a divergence that is a downside risk for asia and ems? emily: it is something we are watching very closely. i think on the positive side, the reason why some of these vaccine rollouts have been a bit slower was because many countries in emerging asia did such a great job at the start of covid in terms of controlling

the pandemic and adjusting to lockdowns in a way that prevented the sort of caseload numbers we were seeing elsewhere. it was not the hardest hit in terms of actual cases of covid. however, now, we are at this point where the tide has turned but the vaccine has gotten rolled out and the countries that have those faster vaccine rollouts are benefiting in terms of seeing that progress being made. we are hoping that that starts to gain momentum in emerging asia. china makes up a large percentage of the vaccinations and the emerging-market space. even though we are seeing this trend in emerging asia, we expect that to continue to improve going forward but for the immediate term, that does seem to be something that is weighing on the regional -- on the region as a whole in terms of asset market performance. haidi: emily, always great to have you with us. emily weis joining us from boston. you can get a roundup of the stories you need to know to get your day going in today's edition of "daybreak." bloomberg subscribers can go to dayb on their terminals and

it's also available on mobile in the bloomberg anywhere app. you can customize your settings so you only get the news on industries and assets you care about. this is bloomberg. ♪

>> it is exceptional. plug it in. little bit north of 6 billion, which is pretty good, by the way, and probably better than we told you last time. haidi: jamie dimon out with a warning for wall street. the trading boom it may be coming to a close. trading revenue at the largest u.s. bank will drop 38% to $6

billion in the second quarter and that was during a panel at the morgan alley conference. let's bring in hannah levitz. what was the warning we did hear from him? >> thanks for having me. the warning from jamie dimon is what some executives have been saying for the bulk of this year, which is that last year was a complete anza in this year is going to look, you know, a little less like last year and more like the year before as jamie dimon said. he said it will be a little bit more than $6 billion in trading revenue for the second quarter and looking at that number for 2019, it was $5.4 billion. it's looking to be ahead of 2019 but behind 2020. kathleen: a lot of stories about goldman sachs or jbm versus someone like citibank, how the ceo's are handling this and a

lot of it focuses on young people, younger workers, people starting in the work is for the first time. what is your stance? who dominates? people who want the first-hand experience with coworkers or people who say i value my time and i don't want to have to commute to work? hannah: it is an interesting question and the answer here is that no two answers are the same and we are seeing that with the divergence in the banks you just mentioned. no two banks are doing this exactly the same way. today was the first day that goldman was requiring almost all of its employees back. jp morgan has been at the front of the pack here, too. we heard james gorman say at a conference today that he will be disappointed if people are not back in the office by labor day. on the other hand, you have bank of america, wells fargo, who are not expecting broad returns until the fall, and citi is offering more flexibility as well. there's a lot of different

methods going on right now. kathleen: thank you so much. bloomberg finance reporter hannah levitt. the bitcoin rebound continues to gain traction. it may soon be back above $50,000. positive comments from a hedge fund billionaire added support today and earlier last week, su keenan joins us. -- and earlier last week. su keenan joins us. he said he wants to have a certain amount of that coin and wants to diversify -- bitcoin and wants to diversify. is the trend in place regardless? su: finally, someone else decides yuan most is -- elon musk is moving bitcoin. after a volatile weekend, bitcoin back above the 40,000 marked dang. at one point, it was about 41,000, a 9% rally since friday. very volatile weekend, but 40,000, technical analysts say,

is key. the 200 day moving average and passed that is a clear shot to 50,000. look at the year-to-date chart and this is where you see the wild gyrations yet one analyst said the manic run-up we saw in april simply was not sustainable. it was remarks from elon musk, a rebuke about the energy usage that caused the most recent gyrations. the question this all bags is where is the floor? where does it go from here? and that is why the chart watchers are weighing in. tutor jones talked about the inflationary value, as an inflationary hedge, that coin is good. he reiterated those comments, saying he looks at bitcoin as a great portfolio diversifier but you are now looking at a bloomberg chart of the other half of the technical community that says there's vulnerabilities still on a

technical basis for bitcoin. any faltering, and it could slide back to 20,000. haidi: i'm wondering if we have a chart that correlates must tweets with the bitcoin price because if we don't, we definitely should. also going along for the ride. su: it was mostly higher and now talking about close to a dozen rocks that are all tied to either bitcoin or the blockchain and you see mostly green here, although so many analysts are starting to weigh in on that correlation between the musk tweets and the stock's performance and raising a real caution flag there. interesting to note, if we go once again into the bloomberg, the volatility of coin, does, and related stocks tales in comparison to the mean stocks. -- meme stocks.

back to you. haidi: never a dull moment in crypto. primary source says it has received the bigger buyback proposal from oak street. the casino operator is being offered a funding commitment to buy back some or all of the 37% stake held by the billionaire. oaktree proposed a smaller facility in april. the board has not yet formed a view of the new proposal. a hedge fund is said to have built a substantial position and is examining the french company's plans to sell a 10% stake in universal music. several of the minority shareholders voiced opposition to the deal but sources say -- it goes to a shareholder vote on june 22. coming up next, we will be discussing the economic outlook phrase as inflation and only becomes a factor this week.

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kathleen: time for a look at how the trading day is shaping up in asian markets. for this, we go back to hong kong and sophie kamaruddin. sophie: in japan, nikkei stocks may extend gains. the yen is trading near a one-week low, above the 110 handle against the greenback. gold holding losses near a four-week low well treasury futures are slightly higher after cash bond steepened on monday ahead of a 20 year option and the fed meeting and pulling up the chart on the terminal as markets consider if a hawkish

turn from the fed could spook emerging markets. we are seeing the one rally following -- forecasters not anticipating much more strength for the currency through the rest of the year as you have seen the chart right here with the median forecast seeing 638 for the renminbi by the end of december. investors are ramping up bets that they will not be a shift when it comes to why cc -- wcc. it is hard to make the case for more stimulus so she is shorting three to five-year bonds in australia and buying paper, haidi. haidi: as we continue to discuss central banks including the fed, the boj and bank indonesia are meeting later this week. we are talking about this spike in inflation. investors watching the language on central bankers guidance on tapering paths. joining us now is sonal varma,

the chief economist for india and asia at nomura. taking a look at the producer price side when it comes to the asia-pacific. we have seen a huge spike when it comes to china and india as well. at what point does it start really passing through to the consumer and central banks -- 13 of them are meeting this week will bully. they are going to have to make a move. sonal: i think itlly boils down to win the consumption side really picks up across asia because consumption has really been a vanguard in this entire pickup we have seen since last year and that is tied to the pace of vaccinations in asia so asia has been lagging so far. as we look out over the next six months to 12 months, a number of indian countries -- vaccine pivot point. as of now, as you said, the ppi and inflation are high.

but over the next six months to 12 months, as there is ongoing vaccinations, we could see some past. not imminent. haidi: india, we saw that quickening when it comes to the consumer inflation in, retail inflation rate, and we have seen deepening supply-side issues. our policy makers likely to look through this as a combination of basic facts and the lockdowns -- base effects and the lockdowns? sonal: they did look through the spike in april of 2020 but this time around, there is an actual change in prices as a result of the law down in the crucial shame is, to what extent the price leases will change as the

lockdown sees. the prices are downward in india. therefore, even as the lockdowns ease, there will only be a partial reversal. when you look at it altogether, asian is running about the target range of 2% to 6%. and you know, india also with its reopening. on the whole, right now, there is growth. towards the end of this year, we think because the normalizations will begin in india. kathleen: i want to ask you about indonesia. bank indonesia meeting as well and they are another country where there's many things they are struggling with but one of their main drivers is the strength or weakness of the currency area how do you see this feeding into their policy

decision and the guidance they give this week? sonal: expectation is -- given that. there are two issues here. one is the external risks for the current account impact and the deficit. indonesia is vulnerable to any spike in fed policy so that is something that is going on. second, the domestic pandemic after the very long holiday, we have seen cobit cases pickup in indonesia and this could become a risk for domestic demand around indonesia and fiscal finances. third, inflation has been quite low.

we think we are at an early point where inflation goes to the top end of the range. i think the big concern has been inadequate adequate transmissions from banks. otherwise, in terms of guidance, we think it's going to be more -- at this stage. kathleen: breaking news, headlines from the bank of japan meeting, at the end of the week, seeing no need to act again on market functioning. there's been concerned about that. the bank of japan is said to be determined to keep -- the boj not wanting to spur fluctuations with buying plans, so is this consistent in your mind with the boj just really probably not doing much or signaling much of anything right now? sonal: yes, that's probably the expectation.

-- april outlook support. there has not been any major shift. the only thing that we think would -- the boj may extend the measures to support cash flow during the pandemic. that is set to expire in the end of september and we think that could get extended by six months. outside of that, not expecting any big surprises. kathleen: certainly consistent with the concerns about the economy and the renewal of the emergency lockdowns and more. you so much. sonal varma joining us from nomura -- thank you so much. sonal varma joining us from nomura. he does not think inflation will run away. >> the fed wants to separate the bond buying from the ultimate --

ultimately, from the short rates. what we will see either sometime this summer or by jackson hole is they start to talk about the bond buying being related to the tapering so they want to separate that that is pandemic related but they are not going to shift their focus ultimately on the average inflation targeting that they rolled out a year ago. they are fully committed to that. that is a more accommodative monetary policy and it ultimately means that inflation will run hotter than in the past. the fed has to generate 50 basis points per year because of technological change and all the transparency it creates so i think we will have higher inflation but i don't think it's going to run away the way some people do. to that end, i don't think the bond yield will move higher, but not too unattractive levels. >> to be specific here, henry, what does higher mean? three percent, 4%? what number should we be

penciling in? henry: 2.5%. when you look at the past couple of recoveries, bond yields have actually gone up about 160 basis points from the bottom during the first parts of the recovery. we have only moved up about 100 so there's actually more wiggle room that can get you north of two. that is the case on why rates are going to go up. let me give you the offset. one is transitory inflation is probably peeking right now. in the bond market, even when we got the huge cpi printed last week, it started to rally. the second thing, i believe savings are supposed equal investment. i don't think that is the case. there is so much money in the system that savings ultimately will be above investment and the urine for yield is going to remain huge -- yearn for yield is going to be huge. we own an insurance company. what central banks have done it is they have taken away from savers and that has created

pent-up demand for yield. you see that in the way that we are ultimately starting to see clients need income in their portfolios. >> there are huge long-term implications of that. that is still so low. higher inflation, growth that is going gangbusters, more savings, and lower rates. that would imply that investors are going to have to go out of the risk curve. henry: i think they are right now. ultimately, i think it will be this combination where what happens when that unfolds is that you will see some of the more speculative parts of the growth reckitt, under pressure -- growth market, under pressure. we are in -- growth market come under pressure. it is rising faster than the consumer price index or the output cost and that creates a margin squeeze we saw that when china built out its fixed investment to decades ago.

companies were not ready for that. 86% of the companies in the s&p next year are supposed to have rising margin. it is not going to happen so there's going to be a focus on reflation investments, a focus on pricing power, and ultimately, when you think about what we are doing across private equity, in our real assets portfolio, that's where we are driving our balance sheet and forming capital and partnership with our limited partners. >> that was henry mcvey there. coming up next, climate was one of the main topics of the g7 summit. the final communique seems to have brought a commitment. we will get more on that, next. this is bloomberg. ♪

vonnie: this is "daybreak asia." i am vonnie quinn with the first word headlines. president biden warned vladimir putin that relations between the united dates and russia will be severely damaged if alexei navalny dies in prison. he is the political opponent of putin and the victim of an apparent assassination attempt. the u.s. president made the comment following the nato summit. biden will meet putin in geneva for the first time as u.s. president. pres. biden: every world leader here, as a member of nato, who

spoke today, and most of them mentioned it, thanked me for meeting with putin now. every single one. vonnie: german chancellor angela merkel urged allies not to close the door on beijing following a meeting of nato leaders in brussels as the group seeks ways to strike a balance in its response. the nato secretary-general raised concern over what he calls china's coercive policies but said that there are opportunities to engage with beijing on various issues. >> a strong convergence of views among allies. based on our interests, we see opportunities to engage on issues such as arms control and climate change. but china's growing influence and international policies present challenges to alliance security. vonnie: china quickly moved to

the -- after the group took beijing to task over human rights in xinjiang and hong kong. china's embassy in london put out a statement saying the days when global decisions were dictated by a small group of countries are long gone and urged the group to stop interfering in its internal affairs. global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie quinn. this is bloomberg. haidi: g7 leaders stopped short of setting concrete measures to limit global warming as the u.s. rejoined the paris climate deal. it lacked firm commitments. shifting away from polluting cars. let's bring in the head of aipac research. what was announced at the g7 summit regarding climate and why does it seem like they fell short? >> good morning.

as you mentioned, essentially, they rehashed a more concise version of the communique that the climate and energy ministers from g7 had together at the end of may. this statement has a very specific phrase. it calls for an end to new, direct government support for unabated international thermal coal power generation by the end of 2021. the reason i emphasize this phrase, it was probably written in tokyo rather than coming from someone in whitehall in london. it essentially is conforming with japan's use. japan has been the largest source of international financing for coal among g7 members and it is the country in g7 which lies on coal power for most of its generation today. and it is not an imposition to

want to move away from coal quickly. kathleen: it seems that you think perhaps the announcements on coal were not so meaningful. how about climate finance? >> exactly. it was fairly weak. on climate finance, it was even weaker. they reiterated their $100 billion pledge but not only did they not recognize but they have failed to meet the 2020 deadline . they extended the deadline to 2025 and this is a bit problematic. it's unlikely that developing economies will receive this pledge with a positive attitude. haidi: are we seeing alignment when it comes to climate action? coming from australia, we know that some of the destinations that attended this are not in alignment, but is there broad consensus? henry: indeed. i mean come on that statement, pry minister morrison was asked

lightly and he said that australia is conforming with that statement. the way it is written, australia is in compliance. on a high level, the current g7 leaders are probably aligned with their views but the countries are not necessarily that aligned yet. canada and the europeans are probably closer to each other. in the case of the u.s., the current administration is certainly sharing the name goals and europeans but it remains to be seen if it can actually legislate its views on climate and energy so that they can be long-lasting and not solely on executive action on the japanese side, while the government is starting to move towards the european position, its views on energy and climate are a little bit in a very traditional mindset. there's concerns around japan can move away from reliance on fossil fuels. kathleen: thank you so much, the aipac head of research.

be sure to tune into bloomberg radio to hear more from the days big newsmakers and get in-depth analysis from the daybreak team, broadcasting from our studio in hong kong, as you can see. listen via the app or bloombergradio.com. plenty more to come. stay with us. ♪

kathleen: we are counting down to the start of trade in tokyo and seoul. i'm stories we are watching today. in japan, kyoto news reporting that a no-confidence motion against prime minister yoshihide suga cabinet will be -- suga 's cabinet will be on tuesday. and toshiba's chairman has apologized to shareholders and vowed to improve corporate governance with new directors after a scathing report exposed unfair practices in last year's board selection. i want to take a look at korea. the bank of korea will release the minutes of its may 27 eight decision meeting at 4:00 p.m. local time. -- rate decision meeting at 4:00 p.m. local time. the economy's solidifies. president moon is visiting spain following his participation at

g7. the ongoing rift between japan and south korea shows difficulties washington faces in mending trade ties between it two asian allies that are key to the u.s.'s wider strategic fight against china. haidi: u.s. lawmakers say they will probe the trump arrows move to subpoena cloud providers after the new york times broke that story last week. microsoft is among those tech giants who received one such order. the ceo told bloomberg's emily chang that gag orders on requests of personal information undermine freedoms and are hurting u.s. tech firms are bad. >> i don't know that we know everything about what led to these investigations but what we do know is clear. the doj used its authority in the trump administration to pursue an investigation of these are orders and these people connected to congress rather than serving a warrant on the

individuals themselves. they went to the tech companies that had the emails or text messages and the like. they went to apple, google, microsoft, and they not only served the warrant, they impose gag orders and a nondisclosure order and it was not until those expired that we were able to inform the targets of these probes, which i believe all of our companies did, and in some cases, that is when we first found out the magnitude of this and now it has come to light and it raises very squarely just a critical issue about the way that this law enforcement process should work. >> what do you still not know and what are you still trying to find out? >> there are broad questions for the public as a whole. do not live in a country where is typical practice to see a law enforcement agency seizing records of recorders and elected members of congress.

it gets to almost fundamental issues of democracy but i also think it gets to a very important issue around technology. before the cloud, if the government wanted your information, they basically had to go to your door. they had to give you, the homeowner, a search warrant. you knew they were there and you could stand by and watch what was happening in many instances while they searched your home. you could then go to court yourself and file a protest if you thought the government went too far. we fundamentally believe i think across the tech sector that we need to restore that kind of balance. because if we fail to do so, we undermine long-standing fundamental freedoms in the country and frankly, for those of us in the tech sector, are put in the middle and that's not where we should be. this should be an issue where the government has to go, most of the time, to the individuals whose information they are seeking. >> you have a very passionate op-ed about this in the

washington post. you tried to fight the government on this before and it keeps happening. can you share how often the government asks you information on your users and how off and you cannot tell those users about it? henry: we file out transparency reports every six months and if you look at those, you will see we do get across the united date search warrants and subpoenas that typically are in the thousands per year. as of the time, they are looking for account records. but we do sometimes get these requests for data, email, documents, and we sometimes get these nondisclosure orders. it is not a trivial percentage when you get to the consumers that are affected. it is very small when we get enterprise data but we do typically fight them whenever we see a legal basis to do so and one of the concerns that we have is that this is not only an issue that is important for the united states. it is an issue that has

broad ramifications because the european governments are concerned about this area they are raising this today, every day in recent months, with the biden administration. they want to see new assurance is and safeguard that the u.s. government is not going to go to a u.s. court to ask a u.s. company to turn over data that belongs to europeans and until we get that sorted out, it's basically holding back the tech sector in europe. kathleen: that was brad smith speaking to emily chang. coming up, we will look at the chinese market reopening with thomas. and more markets outlook from east spring investments portfolio manager -- the market opens in sydney, seoul, and tokyo are next. we will take a look at the nato meeting, vaccine news, and a whole lot more. keep it right here.

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>> welcome to daybreak asia. i'm kathleen hays in new york. sophie: i'm sophie kamaruddin in hong kong. haidi: i'm haidi stroud-watts. asian stocks eyeing a steady start on the back of a record-setting session on wall street and a bond rally stalling ahead of a k-fed leading -- meeting a key fed meeting.

germany urges nato not to shut the door on beijing. the u.k. and australia, poised to announce terms of a trade deal as britain pushes to expand commerce beyond the eu post-brexit. let's get a look at how the markets are opening. sophie: we are seeing upside moves for the nikkei and the topix, the yen trading at a one-week low. keeping an stocks, one stock proven expect -- effective so keeping an eye on one pharmaceutical company which is contracted to produce astrazeneca doses. the central bank says there is no need for extra bond buying tweaks for now. the open in seoul, after getting

the money supply data this morning, ahead of that the korean won, slightly on the back foot while stocks gained some ground on the kospi, up about zero .1%. lg display was downgraded on a weaker pricing outlook i jp morgan. may meeting minutes, korean bonds have slumped on of an early -- governor li -- bond futures ticked slower. ahead of the rba meeting minutes, the aussie dollar come a little change. bonds under pressure as investors wrap up a shift not on the horizon. stocks open to the upside in sydney. the reopening in china, trading near a three week low, hovering around 640. forecasters not seeing much appreciation for the renminbi. cash treasuries opening slightly higher.

below the 150 level. on monday, more strategists bracing for the fed. haidi: cyclical sectors in developed markets, a recent drawdown in value stock temporary. joining us is nupur gupta. great to have you with us. when we look at commodities, and at housing, it shows may be the inflation is starting to cool. if you look at the boost in cyclicals, how much does that depend on the reaching of peak inflation? >> a part of it is dependent on reaching the peak of inflation but at the end of the day, the inflation rise we have seen has been driven by positive base effects and also the time as the economy reopens. we think over the medium to long-term there is more room for

upside in inflation but the cyclical sectors at the moment are dependent upon the increasing macro recovery we are seeing in the u.s. and broadening to the rest of the world. haidi: when it comes to rising consumer prices, do you see opportunities in the value place? >> rising consumer prices if ackley effect -- typically affect the yield kurds depending on what the market expects them to do and what the sector is. if it is not a direct data that is tracked specifically, we look at instead the earnings upgrades and growth momentum in the economy. u.s. industrials, u.s. material sectors look pretty attractive at the moment, even as the economy reopens and the world is

broadening outside the u.s. u.s. financials, which we are positive on, slightly more dependent upon the inflation trajectory. you need the u.s. treasury yields to continue to rise for the back stocks to do well across the world. haidi: i want to bring up a chart to look at the dollar and real rates. what we see is the dollar spot indices, the turquoise and yellow lines are 10 year treasury yields. it says, you can see the dollar in real rates moving sideways. you said you can see the dollar weakening as the rest of the world picks up. what if the federal reserve signals that yes, it is looking at papering, getting closer, acknowledging a stronger economy and price pressures, they are wondering if they will be transitory or not? could that change the trajectory of the dollar? >> that is a good question. there are two opposing forces. the u.s. dollar, we don't think

the fed is quick to taper and we think the fed will signal this week that they will be patient and want to see more signs of warming of the labor market. if they take a turn and make a more hawkish stance, the dollar could be stronger. we need to be aware that the u.s. is dealing with a twin deficit situation. both of which tend to be weaker, which will tend to be weaker for the dollar. if you see growth broadening out , so far it has been concentrated in the u.s. economy but if we see that broadening to europe or emerging markets, generally the dollar does take a beating. kathleen: interesting. you are looking at emerging markets and saying you see opportunities within this space

including latin america, and equity markets. this is a pick over china. you say china will have to outperform where it is now for you to change your mind. >> absolutely. we have kind of been slightly underweight waiting emerging markets relative to the u.s. but we think that might be turning, getting towards a turning point as growth broadens out. within emerging markets, we think the value is in equities rather than in china from a macro perspective and because if you are looking at chinese macro outlooks and growth outlooks, the relative eps earnings in china are still lower than broader ems. the data surprises on the macro front are lagging. generally, policymakers are signaling towards a tightening

of policy so we need to see china outperform for us to get more positive or may macro perspective. if you look at markets like brazil, the market is looking safe. the economy is looking strong, the central bank shows confidence in the growth recovery and politically, it looks stable. for us that is where the value lies in emerging markets. kathleen: thank you so much. nupur gupta, portfolio manager. let's go to vonnie quinn. vonnie: german chancellor angela merkel urged allies not to close the door on beijing following a meeting of nato leaders. the group seeks ways to strike a balance in a response to china's increasing military power. nato's secretary-general raised concern over what he called china's coercive policies but said there are opportunities to engage with beijing on various

issues. the u.k. is set to announce the broad terms of a friedrich -- free trade deal with australia. a source tells bloomberg the deal is expected to cut tariffs on products like scotch and clothing. it is due to reduce levies on agricultural products, which has drawn backlash from some in britain. this is the u.k.'s first deal since brexit with an ally outside the eu. boris johnson announced a one-month delay in the u.k. virus curbs amid a rapid rise of cases. of concern is the increase in the delta variant, first identified in india. johnson assured citizens there is an end in sight. >> on the evidence i can see, i'm confident we don't need more than four weeks and we won't be

on july 19. vonnie: the world health organization general warns, more vaccines are needed quickly. he said right now, the virus is moving faster than the distribution of global vaccines. he said new variants increase the risk for people not vaccinated. rising cases in africa are especially concerning. global news 24 hours per day, on-air and on quick take by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i'm vonnie quinn. this is bloomberg. haidi: breaking news out of tokyo, a no-confidence motion has been submitted by the japanese opposition parties against the cabinet. this was expected given that we were hearing that the opposition party was set to introduce a low confidence motion against the prime minister because of the

pandemic. party officials have said essentially that there will be ruling party makers to vote on the motion after it has been submitted, saying there is no read -- no reason for the no-confidence motion. we heard a recording from the nikkei that more officials are seeing the prime minister calling a snap election in september once the vaccine efforts start to bear fruit, saying japan could hold an election under herd immunity if the election is held in autumn. we are seeing some of these numbers when it comes to the japanese cabinet approval rating rising 2% to 37% according to the latest poll. let's take a look at the slow and steady session in asia markets. sophie: slow and steady.

asian stocks tick higher this morning. oil gaining ground. brent above 73. more signs of the global oil recovery coming from china. a survey from the mainland's top oil companies show consumption rose 5% in may, higher than what we had seen in the same period for 2019. in the gold corner, gold near a four-week low while treasuries, there is a little change ahead of the fed meeting. authorities are bracing for a hawkish turn. they see 136 on the 10 year as a primary bear trendline. jp morgan is overweight on reflation, inflation reopening and value. kathleen: we will look at the chinese markets reopening with harvest global investments cio thomas kwan.

we will have more on nato's delicate dance on china strategy. this is bloomberg. ♪

>> there is strong convergence of use among allies -- of views among allies, based on our interests we see opportunities to engage on issues such as arms control and climate change. but china's growing influence and international policies present challenge and's -- challenges to security. haidi: that was the nato secretary-general. china's growing military might was one of the items on the agenda at the nato summit. we are joined by our senior editor. there was broad consensus but we

heard from angela merkel calling for a measured approach. >> it was a confrontational statement from nato, the nato alliance come about china. the statement had stronger words than the one sentence reference to china at the last summit, where they put this on, and -- in 2019. [indiscernible] really want to see these tough words, but some, as you mentioned, including angela merkel, who will not [indiscernible] urging balance. [indiscernible] important to have this kind of balance and be able to not forget about the challenges that

remain in the west even as they respond to china's growing military power. haidi: what can they do? they can say china is a growing threat, they can look at their growing military might, but what if anything can nato, or should nato do? >> these statements tend to be just statements. there has been unity among western nations, saying this is a concern. the way they word it is important. the nato secretary-general said to reporters, this is a convergence of views on climate [indiscernible] fundamental values. that was interesting, [indiscernible]

currency and military and cyber, those kinds of things. the secretary general mentioned expanding the nuclear arsenal [indiscernible] kathleen: thank you very much. the chinese owner of a nuclear plant says its operations are safe as its french minority owner requests an extraordinary board meeting to discuss a gas buildup in a reactor. joining us for details is our asian energy reporter. on the face of it, we don't know much, but it looks like a serious issue that could be pretty dangerous. >> what has happened is, the fuel rods that fueled the reactors, the coatings have deteriorated on a couple of them, which is leaking gases into the reactor.

the french company that designed the reactors and is a minority owner, they have said this has happened before, it is a known issue and they can operate with it depending on how severe it gets. sometimes what has happened in the past is, the fuel rods were constructed improperly or could have deterioration. they are trying to understand that. so far, cgn, the chinese operator, says its environmental standards, all the monitoring it does, nothing has shown anything outside of normal operations. so far, it seems like there hasn't been an issue, but with nuclear reactors you can't be too careful. haidi: what impact do we see on broader nuclear developments in china? dan: this is a key question.

china is really the last place that major large-scale nuclear developing -- development is happening in the world. they haven't had any kind of dig -- any kind of big -- if there were to be a serious issue ahead of it and nuclear loss, it could put a halt to that or a pause to it until they can figure out the safety issues, which would make a major impact on china's ability to have clean energy and reach its carbon neutral goals. haidi: our agent -- asian energy reporter there. we will be hearing about the coronavirus vaccine. this is bloomberg. ♪

haidi: a check of vaccine related stocks, a decent day of trading after novavax said it's shot is proving highly effective against variants. the company hopes to get regulatory approval soon. the company, trading lower by over 100 -- by over 1%. one of the other things with novavax, they are key to license around the world, including asian manufacturers. novavax's ceo spoke to bloomberg about the trial results. >> we just finished running a phase 3 trial and the u.k. and we got good results. and we started the trial in the u.s., which is 30,000 people, we enrolled in a time period where in the u.s., the variants started circulating and 82% of the trial, people who got sick

were sick from the variants. there has been no efficacy trial against variants. our trial, while it got 90% overall efficacy against the variants, which were 80% -- 82% of the trial, we got 93% efficacy so that is important to talk about future vaccination. there are a couple other important parts. you worry about severity of disease and classified them as mild or moderate or severe. we had zero severe, 100% efficacy against severe disease. that is really what we were looking for and we got it. we also got 82% of the trial ins -- in variants, the rest in

non-variants, mainly viruses that were similar to the original strain. there was 100% -- 100% protection against that. a lot of good data coming out but it shows our vaccine works consistently in different clinical trials and different geographies. we are pleased with the results. that combines with vaccine safety, that is paramount. we have probably the most benign safety profile of any vaccine. >> i have your fact sheet in front of me. it shows 93.2% efficacy against variants but i'm not sure which ones. people are focused on the delta variant that seems to be more verlin to -- more virulent. you know how it does against the delta variant? >> we don't. we didn't have enough cases of delta during that time period in

the u.s., so most of the variants where the u.k., the alpha variant but we did have some beta and delta but not enough numbers to be able to really tell. we feel the vaccine stimulates a broad enough immune response that it will be effective against the delta and others but this trial didn't show that. >> you have a vaccine that is efficacious and safe. what stands between you and getting shots into arms? >> a lot of work that we are running 24-7. when you file with the fda or europe or the u.k., you need a package of data that includes clinical efficacy, which we have the probably the best in the world, clinical safety, we probably have the best in the world, and we have to show we manufacture the product consistently. we have taken an approach which

is a bit unusual. we started as a biotech company one year ago today. we had zero manufacturing capacity. we have established ourselves in eight different countries, eight different manufacturing sites and we need a package that shows every time we make a batch of product, whether we make it in the czech republic or the u.s. or in india or korea, each batch is the same. that requires an analytical package showing comparability, and we are in the middle of putting those data together. when we do, we will submit the package to all agencies at the same time. with the expectation that there will be approvals in different time periods, but approvals from all agencies. haidi: that was -- kathleen: that was the novavax ceo. next, chinese markets reopen

from a long weekend. the pboc moved to drain liquidity two weeks ago. more room for gains. we discuss with thomas kwan. this is bloomberg. ♪

haidi: let's look at markets so far this morning. sophie: green in the early asia session, the nikkei 225 leading gains. the kospi extending gains at a record high and the asx 200 gaining ground. checking on commodities, wti staying above 71, brent above 73 as markets weigh the inflation

above the demand recovery. when it comes to inflation, we are seeing signs concerns could be peaking. copper prices continue to fall, easing further from all-time highs. soft commodities under pressure, corn and wheat futures extending losses. corn futures trending near a mid april low. there is a prospect of debtor crop -- better crop weather in the u.s. kathleen: the yuan weekend passed the 20 day moving average for the first time since april. u.s. treasury yields climbed ahead of the u.s. fed meeting wednesday. our next guest says the weaker dollar creates a good environment for bremen be appreciation -- for renminbi appreciation. thomas, i am thinking about the

relationship between the dollar, the renminbi. i want to throw up a chart that looks at how the dollar has flattened out right now and u.s. real rates have flattened as well. the big question is, for a lot of investors, if the fed is dovish, nothing changes. if the fed suggests we are looking at tapering bond purchases, what that might do to the dollar, to bond yields, and how that might spillover to china's bonds and currency. >> if you look at last year, china's equity was at record highs. the momentum dropped in the first quarter, but in the last two months we see a resumption of flows into china. in terms of yield, china has a meaningful pickup. interest rates are stable in

china over the last six to seven months, so return has been steady. that continues the trend of influence on china's bond market. kathleen: in terms of where you are looking to put money right now, i know you are still positive on stocks, certain tech stocks as well. the tech stocks of china, i guess that's what you are talking about, even though there is still concern about how the chinese government has reined in some big tech companies. >> i think we will see that settling in the next couple of months. if you look at the positioning valuation, they are very

supportive. positioning, especially among global investors, has been -- you cannot underweight sectors for a long period of time. names in the sectors trading at almost the lowest level of the last two to three years. the expectation for earnings is also reduced. haidi: we are seeing a boom when it comes to chinese dollar bond sales. is it the fed tapering expectations or pboc deleveraging that's pushing that? >> can you repeat the question? haidi: the chinese dollar bond sale bill, do you anticipate that is going to continue given

that it is being driven by expectations of the fed tightening as well as the pboc starting to deleverage again? >> i think there is the expectation for monetary policies -- they are less free on monetary policy tightening in china and the u.s. haidi: the recovery of the chinese consumer has been lagging, the indicators we have seen. what does that mean for consumer facing stocks in china and do you expect that will catch up? >> definitely. there is some supply overhang in the consumer tech sector. we are seeing some easing in the

coming months. i think many high-growth sectors -- kathleen: i know you have strong positive views on esg. you have written that china's decarbonization drive is going to create investment opportunities and push esg development to a higher level. is there any part of esg you would suggest people who want to get involved? >> [inaudible] we are more positive in the second half.

haidi: thomas -- i think thomas kwan, we might have lost him. cio at harvest global investments. the u.k. and australia set to announce deals -- details of a free-trade pact. we have that story next. this is bloomberg. ♪

haidi: a free-trade deal between australia and the u.k. could come closer today. the leaders of the countries are expected to sign an in principle agreement. paul allen joins us. in the grand scheme of how long trade deals take, this is no tpp. paul: this happened very quickly. it was about a year ago negotiations began and we are on the brink of an announcement by boris johnson and scott morrison. they had a three hour dinner last night and will meet again today to put the final touches on what will be a free-trade agreement & an in principle agreement. there will be a revamping of these are requirements. it's -- of visa requirements. it will be easier for

professionals to live or work in australia and the u.k. it will boost australia trade and boost the u.k. trade by a little less. really a drop in the bucket in terms of numbers for the u.k., but symbolically important because this is the first trade deal the u.k. will have struck since leaving the european union. haidi: any sticking points? paul: a few. a group of farmers and food producers from scotland complained the deal has been rushed. it has been quick. they said there has not been enough consultation and that will set a bad precedent when it comes to negotiating future deals with the likes of the united states. also concerns from u.k. meet producers about quantities of australian beef and lamb that could be arriving in the united kingdom. australian federated farmers have been trying to calm those nerves, saying the volume of

meat that currently goes to the u.k. is proportionately tiny and what does get exported is going to be determined by demand. australia's biggest exports to britain are gold, alcohol, and services. haidi: almost an unusual amount of drama around the reserve bank of australian minutes being released from the june meeting. maybe a little hint about what the road some tightening could be. paul: that's right. that's what we are watching for. the june meeting, not a great deal happened. policy settings did remain unchanged. governor phil lowe and his colleagues have been signaling july is going to be the big one. we will be looking at the minutes of june to see the path forward. when july does rollaround, phil lowe has a press conference scheduled for after the policy decision and that almost never happens. that signals something big.

a couple of key decisions are going to be taken, whether to extend the three year yield curve target from april to november, and the future of the bond buying program. the cash rate is expected to stay anchored at .1% for some years to come. haidi: let's look at trading here. not quite the highs we saw on wall street overnight. another record-setting session for u.s. stocks. we are seeing some record highs for the asian region, the kospi hitting a record high, up by .1%. sydney stocks also a fresh hi at .7% higher. new zealand trading .5% higher. the nikkei 225 up by .1% -- by .8%. we have been watching the bond rally taking a breather ahead of the key fed reserve meeting. let's get you to vonnie quinn. >> president biden saying he has

warned vladimir putin that relation between the united states and russia will be damaged if alexei navalny dies in prison. navalny was the victim of an apparent assassination attempt. the president made the comment at a news conference. biden will meet with putin on wednesday, the first time he meets him as u.s. president. pres. biden: every world leader as a member of nato who spoke today, most of them thanked me for meeting with putin now. every single one. vonnie: iran says it has reached an agreement with united states over the lifting of sanctions on its industrial sectors. tehran warns there is little time left before key elections for world powers to revise the

nuclear deal. the trade restrictions have all but prevented the islamic republic from exporting oil. markets are watching for clues as to when the opec member can resume sales. in illinois, the national guard has been called to evacuate residents after a fire at a chemical plant. an explosion start fires that sent plumes of black smoke skyward. the plant is owned by a unit of warren buffett berkshire hathaway and makes lubricants and other fluids. no injuries reported so far. the chinese owner of a nuclear plant says its operations are safe even as a minority owner request a board meeting to discuss gas buildup in the reactor. the owner which owns 30% wants more data about the buildup, which is a known phenomenon.

global news 24 hours a day, on-air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm vonnie quinn. this is bloomberg. kathleen: myanmar's military junta started the first trial for the ousted leader. the former president had been in detention since february 1 and face multiple charges. he appeared in court monday. philip brings us the latest. it is a tough road for her. what do you see now? what's coming next? >> she just appeared in court. this is the first trial brought against her in's the coup -- against her since the coup. she is being charged for violating covid-19 restrictions as well as incitement. these are charges brought by the

junta as an effort to discredit her after her party won more than 80% of available seats in november. that prompted the military to declare widespread fraud, even though international observers said it was mostly free and fair. the result was in line with a landslide victory in 2015. it is a tough road for suu kyi and this could drag on for quite a while. haidi: is this an attempt to gain some semblance of legitimacy? >> could you say that again? haidi: i am wondering about the military going down this road. is this an attempt to gain a sense of legitimacy? philip: the military regime has struggled to contend with a shadow government, civil conflict with armed rebels, and

the stance from western partners on a deadly crackdown on protesters. the government has struggled consolidate power and is yearning for international legitimacy. this attack on suu kyi's at the core of the pro-democracy movement she has spearheaded for decades. haidi: be sure to tune into bloomberg radio throughout the day. you can hear more from big newsmakers, get in-depth analysis from the daybreak team. you can listen via the app and bloombergradio.com. we have more ahead. this is bloomberg ♪

kathleen: a quick check of the latest business flash headlines. crown resort has received a bigger buyback proposal from oaktree capital management. the operator is being offered a funding commitment of nearly $2.4 billion to buy back some or all of the 37% stake held by james packer. oaktree had produced -- proposed a smaller facility in april. china's moving motors is forming a joint venture to produce electric vehicles. the venture was cofounded by several courier forms -- firms

with the aim of popularizing low-energy vehicles. partners include zto express. they aim to sell 10,000 vehicles by the end of 2022. jp morgan is expecting a 30% trading revenue decline compared to a year ago. at a virtual conference, jamie dimon said revenue would be just about $6 billion. it is a sign the pandemic era trading boost could be drawing to a close. he was more upbeat on investment banking revenue, saying an m&a surge was driving a bumper quarter. a food producer is working with goldman sachs and bank of america on a public offering. the new york-based maker of greek yogurt and oatmeal is set to go public in the second half of 2021. the wall street journal reported that chobani could be worth up

to $10 billion in an ipo. as alibaba a trojan horse for hong kong? since the listing, more than half the biggest ipo's in hong kong have been from overseas tech companies. haidi: we talk a lot about these homecoming listings. hong kong is doing more to smooth the path for secondary listing applicants. not everyone is convinced this is a good thing. matthew booker is a columnist with bloomberg opinions. this started between 2013 and 2019. hong kong authorities softened their stance on alibaba's structure. has not opened the floodgates -- has that opened the floodgates? matthew: you see a lot more overseas listed chinese companies coming to market in hong kong. it has opened the floodgates. what the exchange is proposing

is to consolidate a range of different standards into one set of core standards that will effectively pave the way or make it even easier for the remaining chinese overseas listed companies, most in the u.s., to come to the market in hong kong. haidi: we get these big tech companies listing in hong kong, part of the reason we are seeing capital markets in the city remaining robust despite the economic downturn and political uncertainty. what's the downside for investors? matthew: it's understandable that the exchange wants these, the finance industry and government wants these companies to come to the market. they help keep this a pretty vibrant place over the last few years. if you look at the proportion of

ipo's in hong kong that have come from these types of companies, it has been more and more significant over the last few years. the downside is whether there are enough protections for shareholders. that is the concern we are seeing from the asian corporate governance association, which is largely funded by big institutional investors, which really feels the exchange, to go by their response to the exchange's consultation paper, they seem to think they are going too far on the side of issuers, bending over backwards to make it easier for these companies to list and not thinking enough about having adequate safeguards for investors. kathleen: what's the issue with weighted voting rights? matthew: a lot of these overseas listed chinese companies do have weighted voting rights.

it's been a controversial issue globally, obviously, for several years. originally the hong kong exchange rejected alibaba's application to list here because they objected to the weighted voting rights structure. the issue with it is potentially you could have companies that act against shareholders' interests and outside shareholders don't have enough leverage to affect what they do. for hong kong particularly, the issue is in the u.s. you have a well-developed legal system. if companies act against the interest of shareholders, you face a class action suit. you don't have class action suits in hong kong, therefore you need the regulators to play a more proactive role. that's really the concern about having these types of companies listing in high numbers in hong

kong. haidi: does that mean the distinction between a and h shares and the level of risk traditionally assigned to them is blurred now? matthew: i think a and h shares is a different issue. they have a well-developed regulatory structure and are subject to the exchange's regulation. the problem is you have companies coming here for secondary listings that are being given a whole bunch of different waivers. they are not subject to the takeovers code, not subject to rules on connected transactions. they don't have to file esg reports. they are bypassing the exchange's conventional mechanism for regulating companies. haidi: really great piece, matthew brooker, bloomberg

opinion columnist and editor. let's get a look at markets. we had u.s. stocks pushing into record highs on wall street overnight. u.s. futures still pretty robust. we are seeing markets trading at record highs around this part of the world. korea one of them, the asx another, as we count down to rba decision day as well as a speech from the rba governor, looking at language around tapering. taiex futures up .7%. ftse china, a bit of a bounceback from the holiday. dollar-you on, -- dollar-yuan, the weakness in the dollar calling into question whether we will see more yuan strength ahead. let's take a look at other markets. fortescue is on of australia's most actively traded stocks at the moment on the account of a

potential deal in the congo. we are also looking ahead to kiwi gdp later this week. a big week for central banks. 13 central bank meetings to make decisions. that's it for "daybreak: asia." we will get to the china open next. this is bloomberg. ♪ (announcer) back pain hurts,

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>> it is not :00 a.m. in beijing and shanghai. welcome to yoshihide suga desk welcome to "bloomberg markets: china open." >> top stories, nato leaders take a strong stance toward beijing and the group because china is systemic challenge to international order, and highlights what it calls coercive policies. >> asian stocks push higher in the bond rally stalls as invaders -- investors brace for the fed m