haidi: a very good morning. welcome to "daybreak asia." i am haidi stroud-watts in sydney. sophie: i'm sophie kamaruddin in hong kong. kathleen: good evening from bloomberg's world headquarters in new york. i'm kathleen hays. the fed tightened its timetable. policy makers predict two rate hikes as they inched towards tapering. haidi: bond yields jump and

stocks fall as wall street reacts to a more hawkish fed. asian equity futures signal at a mixed start to the trading day. kathleen: joe biden and vladimir putin both claim victories from their first face-to-face summit after tapering over the differences in geneva. haidi: let's take a look at markets, how asia markets have reacted more hawkish than expected. a relatively muted reaction all things considering. how is ava looking? -- asia looking? sophie: we are expecting the same tone was futures pointing to some modest losses. moving to the downside by .3%. s&p e-minis under pressure. could be steady as we go and waiting on policy decisions from indonesia and taiwan. no changes expected from those central banks. we are seeing some moves in the forex space. the kiwi dollar jumping in the wake of the gdp beat from new

zealand. bond markets very much in focus here. yields claim in new zealand and australia, following moves we saw and treasuries and a 10 basis point rise in the u.s. benchmark yield area mizuho -- yield. mizuho noting we did see a limited reaction in treasuries with the 10-year camped below 160. going into that fed decision, he was sanguine, saying a move in the dot plot would not move the earth for him and talking about tapering would not move things very much. the dollar moves in focus. it's looking steady after jumping the most in five months, which had goldman and deutsche's abandoning the bullish calls for the euro, kathleen. kathleen: thanks. the federal reserve appended expectations until 2024. two thirds of policymakers moved the date for their first rate hike to 2020 three.

as chair jay powell said, talking about -- cohead of global economics, chief u.s. economist. did not exactly blast the markets, michelle, but it is leaving a lot of people wondering just what the fed has opened the door to. what do you see? michelle: the dot plot was a surprise. we expected we would see maybe one rate hike in 2023, not two, and i think, in the wake of some of the data that we have seen of late, particularly those inflation numbers, which for two months in a row have surprised market participants, the the move in the dot plot raised concerns that may be, even though the fed now believes that they are not going to be raising rates anytime soon, that the timetable, as you said, might be tightened up and pulled forward. priced in today as a result of what the dot plot shows. kathleen: i want to underscore

this because it strikes me that there is a big change from march to june, michelle. if you look at 2020 22, for example, there is now 70 out of 18 who think there's going to be a rate hike next year and in fact, 13 from seven for one hike, but 11 fomc members nancy two hikes in 2023. there is a big shift here and i wonder if the consensus on the fomc is kind of moving ahead and moving away jay powell's market rid of position. michelle: even -- jay powell's more conservative position. kathleen: you heard from jay powell at acknowledgment -- an acknowledgment that there are side risks to inflation but i do think that, you know, we have gotten to a point, particularly in the wake of the strong economic data, that has

everyone feeling slightly less comfortable in assuming that the fed is going to be able to be as patient for as long as they would like and when you look at it from a risk management perspective, this is something we spent a lot of time talking about and some of the fomc members themselves have been talking about it. from a risk management perspective, you may end up seeing fed officials believing that it is, at some point, sooner than they had anticipated, going to be wise to take some action in order to ensure that inflation is not -- does not move above target too far for too long. haidi: financial conditions is the other thing we have been watching. looking at this chart quite a bit because it is extraordinary. it shows the loosest financial conditions since the 1990's which is why we see the exuberance in the markets as well. is this top of mind for the fed?

particularly the reverse repo rates given the amount of distortion there is in the front end of the money market? michelle: i think you have seen the fed very cognizant of easy financial market conditions. you see in the financial stability report that they are watchful, but overwhelmingly, i do believe you have got a said that is really focused on ensuring that the economy does get to a place where all economic participants are feeling economic recovery. this has been a real shift that we have seen in the fed. obviously, they shifted their inflation framework that they also shifted to keep stressing the point that their mandate is now much broader and they want to make sure that all individuals, when we look at the labor market, across-the-board, that you are seeing unemployment rates decline across all the

various metrics, whether we are talking about gender, ethnicity, so what i think they really want to see is that the economy broadly is getting back to its potential and that is something that the fed -- while they are watchful about overstaying their welcome, they are going to be much more patient now because they do want to see confirmation, you know, of this kind of broader social improvement. haidi: given the fairly muted reaction in the market, given asia is looking pretty, you know, sanguine as well, we have also been looking at emerging markets in particular building ahead of this. does this preparedness mean that we are not going to see a violent reaction when there is finally a reversal policy? michelle: we have got so far to go before we actually see the fed reversing course in terms of

interest rates. even with respect to the taper, we are probably, in our view, six months away before the fed actually begins tapering its purchases, and the bottom line is, as you can get a sense of, even with just respect to tapering, there will be a long set up period. the fed will go out of its way to fully prepare the markets, so if we look at the taper discussion, today acknowledging they are starting to talk about talking about tapering and in the coming months, adding more color to them. in september, getting more definitive about the timing. all of this before actually taking action and it will be the same on interest rates. all of that i think will go towards the markets more gradually pricing and, you know, said action, whether it is tapering or on rate hikes, as opposed to some violent moves. in the fed does not want to take markets nice of eyes. when they reverse course, they are going to go out of their way to make sure it is well

anticipated. haidi: not so much reversing course as a very slow, steady turn. michelle girard, cohead of global economics and chief u.s. economist. always great to have you with us. much more ahead, including progress. we get the main takeaways from president biden's meeting with vladamir putin plus china is quietly stepping up its market interventions. we discussed this and what it means for market freedom -- we will discuss this and what it means for market freedom with our guest. this is bloomberg. ♪

vonnie: this is "daybreak asia." japan will reportedly lift the coronavirus state of emergency in tokyo and other areas when it

expires june 20. class nhk says it may keep alcohol restrictions in place in restaurants in the capital. the state broadcaster says japan may issue vaccine passports in july. the decision to lift the state of emergency will come five weeks before tokyo is set to host the delayed olympics. singapore's government is taking a more cautious approach to reopening after a recent increase in infections even as vaccinations pick up the pace. authorities found 19 community cases on wednesday, the highest since june 3. singapore planned to allow dining at restaurants. cases remain under control. saudi arabia says it will not abandon its cautious approach to opec-plus oil output, stressing the market is not "out of the woods." the cartel is withholding as many as 5.8 million barrels a day of production and international --

what many see as an excessively cautious approach is paying off and proven correct pricing above $70 a barrel. the u.s. justice department is suing a proposed $30 billion acquisition of its rival. the government argues that a merger between two of the world's largest insurance brokers could eliminate competition, raise prices, and hamper innovation. the case marks the first lawsuit by the justice department to stop a merger under the biden administration. shares of both companies slumped on the news. 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: president biden says he confronted putin about human rights violations when they held talks in geneva. the two leaders did agree to cooperate on reducing the threat of a nuclear war and avoiding conflict in the arctic.

maria tadeo is covering these talks. sounds like significant progress is actually being made going into this meeting. maria: the expectations going into this were very, very low. both countries said it very clearly. relationship is the worst it has been since the cold war. coming out of the meeting, it was a frank conversation. the two of them did agree to some extent to work on areas where they could find some common ground. having said that, there was no big major breakthrough. vladimir putin of russia was very much pushing for the kremlin line, saying everything russia gets accused of, the united rates also does. alexei navalny who as you know was poisoned and then arrested, once he got to russia, he said this was very much an internal matter for the russian government to deal with and in terms of cyberattacks, which is

such a huge thing for the u.s. administration, it affects the companies and the political lives of them. he said most of the cyberattacks we see are actually happening from the united rates even though there's much more evidence showing that a lot of this is frankly happening in russia. >> there is some criticism of this meeting biden had with putin that he should not be elevating vladimir putin by treating him like this, like a powerful leader, which of course he is. does putin get a lot out of this, too? maria: he did a press conference that went on for a very long time. this was a question or press conference in which she took every question he was asked. he took questions from the russian media. to some extent, he did play on the world page as a leader that for sure has a huge global impact, and that is essentially catching and making all of the big headlines today and tomorrow. for vladimir putin, this is

something that is very much domestic, and this is a picture he consented to russia. outside of russia, it should be noted that this is a country that is completely isolated from the rest of europe, that is completely isolated from the big developed democracies of western europe, the united states tomato , and it is a country that is in economic decline. it is great for putin to play the tough man but for russia, things are not really looking good. kathleen: there you go. maria tadeo in geneva. china is resorting to increasingly forceful measures to contain risks to the financial system, a move that threatens to undermine xi jinping's pledge to give markets greater freedom. tom mackenzie in beijing. tom, so many examples we can .2. is this a program that's going to succeed? -- we can point to. is this a program that's going to succeed? tom: they don't think it will

succeed because of the dynamics around purchasing power in china for some of these key commodities but at least in the short term and primarily and arguably, that is what officials are looking at as they lead up to the 100th anniversary of founding the communist party, that is what they are concerned about. they are seeing multiple attempts to try and control some of the prices and de-risk some of these areas. whether it is around crypto's, where you are seeing censorship of some searches for exchanges, whether you are talking about the pressure on banks here to increase their holdings of foreign currencies, the discussions about whether or not to cap coal prices, indeed, the pressure on brokers to restrain themselves when it comes to bullish targets, for equity indexes all of these areas and all of these moves by officials and regulators just that again, financial risk and the concerns that bubbled are absolutely front and center for china's government.

the concern of course, as you point to, is that it does undermine this longer-term wish that xi jinping and his team pledged to push through with, which is to liberalize the markets and have the markets play a greater role. when you talk to the likes of michael pettis, the china university professor and china watcher, it does underscore the risks around moral hazard as well and does not do anything to address those. haidi: when it comes to commodities, is xi jinping trying to control the prices of everything from iron ore to corn? maria: state owned -- tom: state owned enterprises have been told it to reduce their exposure to overseas commodities, to reduce risk as well, and notably, the government coming out and saying it was going to -- it will at some point release some of its reserves of industrial metals. copper, zinc, and aluminum onto the markets here to industrial companies, to ensure the prices

do not elevate too high, too rapidly. they are clearly concerned that these input prices will have to be passed onto the consumer. they want to avoid that. they are concerned about the prices and that that will derail the economic recovery here. haidi: tom in beijing. let's take a look at the northern part of china. somewhere in the gobi desert, we are seeing three chinese astronauts getting set for takeoff. the mission crew inside the spacecraft, preparing for launch area it will allow -- for launch. it will launch today from china's northwestern satellite launch center according to the space agency. they will be carrying those three astronauts for a trip lasting three months, the longest manned crew they have attempted. the previous one ran 33 days. the country is also aiming to complete the in orbit construction of that space

station at the national space laboratory by 2022. these are huge ambitions that were built out in the last five-year plan for beijing. lots more to come. this is bloomberg. ♪

kathleen: the imf hopes to finalize plans for a trust, redirecting new reserves to countries by year-end. the managing director says poorer nations are struggling with piles of pandemic fueled debt and desperately need help. she spoke to haslinda amin about the biggest risk they are facing. >> these economies are stepping into the pandemic and climate crisis from a very vulnerable position. they have limited fiscal space. many of them, high-level of

debt, and they are devastated by multiple stocks. we are in a more shock prone world. we are all affected. this group of countries is affected the most. my biggest concern is whether the world would recognize our responsibility to be there for countries and create the environment for them to succeed. of course, they had to do their part. but on shocks that are of that magnitude, more countries need the solidarity of the rest of the world. we must be there for them. haslinda: you have often talked about providing the offer. let's talk about countries receiving national rights. how concerned are you that they will spend the money and in the

end, be unable to pay back the reserves that were borrowed? kristalina: let me first start by the main objective of the issuance. it is to boost reserves of all our members. this is the largest in the history of imf for allocations, 650 million dollars, as you probably remember last time. the global financial crisis. it was $250 billion. this is the most dramatic recession we have experienced, and rightly so. we provide the biggest boost of reserves. those countries are going to get in mid august much needed breath of fresh air by benefiting from the allocation. but we recognize that there is space to do more by counting on

the countries that are receiving -- but don't really need it for the reserve position to lend some of it to the countries that need this boost. our objective is to create highly concessional flow of funds and of course, the details are to come. but we are looking into making sure this country benefits from very low interest rates. the current interest rate is five basic points. and making sure that we can work on maturities that are more appropriate for the needs of this country. in other words, give them space to take advantage of this resource, boost growth, and create the opportunity for growth to feed back into the

sustainability of their finances. haslinda: you also talked about a resilience and sustainability trust. provide some for us. kristalina: the very important signal that the g7 sent during this weekend that they encourage the imf to work on the goal of $100 billion on lending from countries -- means that we are on the right track to expand the objectives. this use through lending channels beyond what initially was agreed, which is to boost lending on concessional terms to lower income countries. the category of countries we are

looking at for this resilience and sustainability trust is to be determined but i'm sure what would fall into this category are low and middle income countries and especially highly vulnerable to climate shocks. island economies like barbados that was just with us on our panel. where we would be, i would know more after we have in-depth discussions with the membership. but the signal is very clear, the imf is going to have a resource that helps low and middle income countries above and beyond a group of low income countries that are already benefiting from concessional

finance. haidi: imf managing director kristalina georgieva. highlights from our interview with the new york fed president, bill dudley. he is watching the labor market very closely. this is bloomberg. ♪

haidi: just getting some breaking news out of hong kong. we are hearing a number of arrests out of hong kong. five company directors have been arrested for breaching the national security law. ryan more has been arrested -- moore has been arrested. and the apple daily digital ceo has been arrested according to tvb. the government saying the police force arresting five company

directors this morning for violations of the hong kong national security act. four men and one woman, suspected of violating article 29, the crime of inspiring to collude with foreign forces to endanger nasa q -- national security. arrested searches of the person's residence have been conducted as well. we will bring you more details as we get to that. it has been a steady clamp down on the right to demonstrate, some freedoms we have seen in hong kong. kathleen: more breaking news. juneteenth is going to become a federal holiday in the united states. it has cleared the senate. it passed the house. this is something many states have recognized for decades. it is quite a step to make an official holiday and the first

was texas the celebration originated. this was the day when the last slaves learned in texas that they were free. it is a day that the black community has long celebrated. it has come to the fore at this time of more steps to be inclusive, more steps to acknowledge black lives matter. some people think it's a step that could have come sooner, but now the u.s. congress has it into law. looking to the federal reserve, predicting two rate increases by the end of 2023. as the economy recovers. the decision was driven by a better economic outlook. phil dudley told us that the fomc is getting more confident. >> getting more confident about the outlook. pandemic cases start to receive. it's mostly about confidence for the strength of the economic

recovery and the strength of the labor market going forward. it did not change very much. i think it is mostly more that there's confidence. i think that's going to continue. at the end of the day, what they think they will do in 2023, i agree with chairman powell. i would not put a lot of weight on that. the outlook is very uncertain once you get to the next six months to 12 months. markets are reacting to the fact that the fed may go faster than what they previously expected but there's a heck of a lot of uncertainty. we don't have a lot of experiences with how the economy emerges from a pandemic. >> he almost answered a question about -- can we assume, since you took the statement about the pandemic waiting on the economy -- those words out in the latest missive, that you are no longer going to see such a negative weight on the economy?

i think that is the point. it isn't just that they are more confident. the economy has changed substantially. we have a chart. 11 out of 18 people now see two rate hikes in 2023 and the number of people who are looking rate hikes, we can see the dot plots there. that's a big difference. the number of people to look for a rate hike next year is up to seven. it was down four just three months ago. bill: this is due to two things. the economy is doing better and there's more confidence that this is going to continue. that said, this is pretty far out and not something to change between now and then. i always thought that the economy would come back more rapidly than people anticipated. the fed slowness to respond -- they were doing it in part because they wanted to keep the maximum amount of stimulus.

a de facto tightening of monetary policy in terms of financial conditions good people think the fed is going to go sooner and that weighs on the bond market and the stock market and financial conditions are a bit tighter. haidi: i want to take you to our next chat which shows the looseness of financial conditions. that has fed through to asset valuations. in market sentiment out of this equation -- is the fed talking about this now also impart trying to manage expectations so there isn't a violent taper tantrum? bill: they are certainly trying to manage expectations about when are they going to -- asset purchases? that's why they are talking about talking about tapering instead of starting to implement change in the policy. i think over the remainder of the year, they are going to inch closer and closer to beginning the tapering process.

probably starts late this year or early 2022. depending on how the economy unfolds over the next month or so. haidi: that was the former new york fed president, bill dudley, speaking with us earlier. let's bring in garfield reynolds for how markets are digesting the fed move. the dot plot shift coming as a hawkish shock. it felt like markets, you know, were pretty sanguine despite the moves to bonds and the dollar. how does that that up in terms of how asia reacts? garfield: a big help was that bond yields have come down by so much so it started from a much lower base on on yields. that mitigate the damage and that's why stocks are relatively calm rate i do think we will see some strong reaction, especially in the fx base. we have some big moves set up. there will be some initial turmoil, both in e.m. asian fx and inequities as well.

kathleen: are assets about to face a tantrum or two in the second half of the year, garfield? garfield: i think investors are going to move to that. they will move to rapidly to -- too rapidly to price that in. the fed dot plot is a complicated beast. our colleague was pointing out that if you read those carefully, there's one that member expects to start hiking before they inflation target. that's a strange attitude to be taking. i think markets are going to focus very much on that. the dot plot, we have to price and risk and we are going to take money out of equities and perhaps moving back towards cyclical -- back in two's because of what's going to go on with the curve. there's going to be a move to brace for tapering. i suspect quite a few investors are going to regret that move and discover that they braced

too early and left a bit more money on the table than they might have life -- have liked. kathleen: you can follow more on this story and all the day's trading on our market live log, on the bloomberg at mliv . let's get to sophie kamaruddin in hong kong for the latest on the markets. sophie: just to flesh out what garfield touched on, we have a floor potentially in place for the greenback. that may have derailed the rally we merging currencies around the world -- over at citi, they are reducing their shorts by adding an underweight on mexican peso while keeping overweight on the brazilian real, which is staying at the chagas level after we saw them hiking rates for a third time and forecasting 75 basis points of tightening in august. on that, switching out the

chart, focusing on india and pulling up this chart on the terminal, our colleagues on the team noting that hedging opportunity could be cropping up following the record run we have seen for indians box. there are signs of potential correction looming for the nifty , showing some bearish divergence with the indicator for the benchmark below its 2021 people while we are seeing the nifty hitting new highs, haidi. haidi: coming up next, talking about china's increasing market interventions. our international strategist is with us. this is bloomberg. ♪

vonnie: as is "daybreak asia -- this is "daybreak asia." president biden says he confronted president putin about human right violations, including with alexei navalny. 16 types of critical infrastructure should be off-limits to cyberattacks. the two leaders agreed to work together to reduce the threat of nuclear war and needs to cooperate on iran and arctic activity. treasury secretary janet yellen argued before a senate panel that if congress were to pass a

capital gains tax hike, effective in april 2021, that would not count as a retroactive increase. president biden's proposal to raise the capital gains tax rate to those earning $1 million or more was first announced in april. debate over the start date of any tax changes is likely to be a source of tension as the issue is debated in congress. china has stepped up its campaign to reign in commodities prices and reduce speculation. they owned enterprises have been ordered to control risk and limit their exposure to overseas commodities markets. authorities also announced -- stockpiles of metals including copper, aluminum, and zinc. 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. >> we will china's markets -- we will stay with china's

market intentions. our guest joins us now. we have been looking at china starting to do stealth interventions in various parts of the market again, right? to what extent does an overheating in commodities prices threaten the policy goals here? >> if you look at the inflation number last week, the upstream price and downstream price pressure -- it's at an all-time high. the upstream is experiencing very severe and ration and for some reason -- not fully recovered just yet. so you know, that paints a relatively passive, negative picture of the chinese economy. you have strong upstream inflation, but the consumption line -- peoples consumption

power is not fully back online. >> what do you make of the ppi/ppi? -- cpi? does that mean that there should be a change to investing strategy for those that have been looking at cyclicals? hao: if you look at the historic correlation between the ppi/cpi gap, you can see almost a 1-1 correlation between those two variables. if you think that the upstream inflation pressure is peaking or has peaked, what that means is that the cyclical relative performance has also peaked, so you know, previously, for the last 12 months, we have been advocating for people to take on more cyclical risk so you can enjoy the rally more because these are high data, low

valuation names. after a substantial rally, you have seen upstream price pressures at unprecedented levels. it's time to take some bets off the table. >> we keep talking about this as the missing puzzle piece, right? does this suggest a permanent change in post-pandemic spending? hao: right now, it's a little bit tough to tell. there is a dichotomy between discretionary spending and the cyclicals. that cautionary -- discretionary spending has been in part because people cannot go overseas so they spend some of that on luxury goods. but at the same time, consumption is -- as a result, the retail sales to consumption level as a whole, it is still lower than before the

pandemic so it is not a very positive picture. kathleen: what is it going to take to get the consumer to spend our money? is this a question of people with good jobs and money in their pockets, they can drive? the people who are not in that favorable position are waiting for what? better jobs, more wages? hao: um, it is hard to tell. i think right now, the consumer confidence is also at a high level. it's turning lower. historically, what that means is that the consumption spending and also the bond yields are lower as well. i think recently, there has been policies on the property sector, so the authorities are trying to curb public price inflation. it probably is a mixed bag

sector in the sense that people like property prices going up but at the same time, if people don't have properties, they cannot buy into the property sector anymore. so that is affecting consumer confidence. kathleen: what do you expect from the people's bank of china? there was a little bit this -- of disappointment over the lack of extra liquidity, the seven-day repose fell short. is this just the ebbs and flows of what a central bank has to do to keep the reserves stable or is there something starting here? hao: i'm not surprised at all. and's main last month, basically, the pboc has been taking back liquidity. even though people -- more liquidity so equity prices can go up further. that is basically the plan of the pboc. also right now, because the bond market is in china still

yielding a decent yield for the bond message. it has been quite strong since this year. early this year. what this means is that the pboc is forced to expand its balance sheet at a time when inflation pressure is building though at the end of the day, that will translate to more risk down the road and it is a picture that the pboc does not want to see so that is a result -- liquidity. kathleen: hao hong, thank you for joining us, head of research and chief strategist at a company. we will zero in on the recovery of the hospitality sector with trip.com's ceo. be sure to check in on that in half an hour. this is bloomberg. ♪

>> a quick check of the latest business flash headlines. blackstone group is offering $3 billion to take over office developer soho china in its biggest deal yet on the chinese real estate market. the new york-based firm put the offer price at five hong kong dollars per share. it said in the stock exchange filing that the chairman and yell have agreed to sell most of their shares and plan to keep a 9% stake after the deal closes.

hsbc is set to announce the sale of its french retail unit private equity firm, serapis. the transaction has been agreed to and is acted to be announced in the coming days according to people familiar with the matter. the sale is part of the banks worldwide overhaul to cut assets by more than $100 billion, along with 35,000 jobs. the asian insurer backed by billionaire richard lee is said to be moving ahead of preparations for a long-awaited ipo in new york. they filed with the fcc for the planned share sale later this year which could value it at more than $15 billion. the business -- kathleen: here's some of the big stories we are watching today. in japan, local media reports the government will lift the covid state of emergency for tokyo and most other areas when

it expires later this week. still, japan's top advisor on the virus is dampening the mood around the olympics. he wants to ban spectators. last, softbank -- plus, softbank is making its first investment in chile. it is investing in a health technology company. let's take a look at korea, a wannabe softbank copycat. it plans to take on a more dynamic role. details on ebay's plan to sell its korean business, it says it submitted a final bid. busy day ahead for central banks in the asia-pacific as we turn to sophie kamaruddin in hong kong. sophie: busy indeed with taiwan and indonesia set to decide on policy. both are seen standing pat on rates at record lows. it will be a fourth straight months of holds for indonesia with the governor cautious on market volatility.

stabilizing the rupiah is a priority. reaching the 14,200 level against the greenback. more downside risk for the currency as demand led imports may widen indonesia's current account deficit, haidi. haidi: with pride month celebrations taking place across the u.s. in june, many companies are trumpeting their commitment to diversity and equality. some asian auto companies don't quite translate to their domestic markets. joining us now to discuss is our bloomberg reporter. what are japanese and korean automakers doing to reach lgbtq customers? >> many have spent decades courting this group of consumers, lgbt consumers in the u.s. they have a lot of spending power and companies like subaru, toyota, hyundai, have done a lot in their advertising.

they have done a lot to support lgbtq organizations. they also have worked to include protections for lgbtq employees. those three companies i mentioned, they have scored 100% perfect ranks in the human rights campaign, which is a large lgbtq organization, their annual ranking of best places to work for lgbtq people, so they have done quite a lot to reach this community in the united states. kathleen: how is that different from what they do at home? bruce: well, companies that are often quite vocal about their support of lgbtq rights in the united states sometimes are less so in places like japan and korea, where there is less popular support, where the government is less supportive both in japan and korea, which

don't recognize marriage equality, for instance. and so, some of these companies that have a lot of very progressive policies in the united states don't do nearly as much to protect their lgbtq employees at home or to market to lgbtq consumers in those countries. kathleen: even so, are things overall changing for the better? bruce: it is spotty, but yes, we are starting to see some change, especially in japan. the big japanese automakers, led by toyota, also nissan, honda, they have all started offering benefits in japan to employees in same-sex partnerships. things that they have done in the united states for many, many years. they are now starting to do that in japan. we also note that popular opinion is starting to change, especially among young people in japan and korea.

there's a lot more acceptance of lgbtq people in those places among the younger people, and so, as society changes, we are seeing that slowly, companies are changing as well. haidi: bruce einhorn on some of the more incremental progress being made this pride month. let's take a look at the markets because we are focusing of course on the hangover from a far more hawkish fed. the federal reserve officials seeing two rate hikes by the end of 2023, inching towards that paper. we are setting up for a little bit of a lower session here in asia, the new zealand trading pretty flat at the moment. the big mover being the kiwi dollar after that first quarter gdp do expectations out of the water and sydney looking like we will start trading -- blew expectations out of the water. we are going to take a look at the bond market's reaction to

the fed decision. tim, portfolio manager, and more markets insight analysts jeff will be joining us as well. ♪

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kathleeni: hello and welcome to daybreak: asia, i am kathleen hays in new york. haidi: and i am haidi stroud-watts in sydney, the main markets opening across asia, our top stories this hour, the fed has a timetable, they see two rate hikes by the end of 2023 as they talk about tapering. bond yields jump in u.s. stocks

and investors react to the feds hawkish tilt, asian equities are starting lower and china stepping up its commodity prices and the post-pandemic rebound. kathleen: sophie is in hong kong for a look at how the asian trade is shaping up. sophie: reacting to the feds hawkish tilt, we are seeing pressure following a cash trade in tokyo but gaining ground, the spec index up, the yen could be looking up at 2/10, 111 today, the most jump since january. we are watching for updates on the state of emergency that may be lifting in tokyo according to media and japan, the open and south korea where we are waiting on announcements of a third quarter covid vaccination plan, a soft start after a five-day

gain to a record high, but markets have improved and analysts expect this will broaden further. korea will have second expansion almost perfectly, that was about 11:30 this morning. we had newly -- new zealand out with first quarter gdp numbers giving estimates but a look at the 71 handle and in australia we are waiting for speech from the governor, shares a little changed after a four-day gain to a record high, we are seeing the aussie dollar study and yields are jumping in australia and new zealand. the 10 year yield backup 1.63, in the u.s. we see treasuries estate capped below point -- 1.6 on the 10 year, treasury market reactions to the feds hawkish tilt is limited. haidi: let us ring in a guest

who expected the fed to be as dovish as possible in this meeting, did not think a temer tantrum could be avoided. -- temer tantrum could be avoided. joining us is jeffrey halley. jeff, you expected a lot less in terms of the town we have had from the fed. were you surprised? jeffrey: very, i guess the market reaction to the dot plot announcement yesterday said that the risk was in the same camp as well. i was not expect them to start talking about tapering until september at the earliest. this came as a surprise. even more so because they have been pushing their transitory inflation, everything is ok, all about unemployment mantra before the meeting. they have actually wronged the

market, i don't think this is been done well in this case. haidi: interesting because i think that is what they are hoping to get right so there is no shock and all when they are getting to where they are not just talking but tapering. in what world do you see a smooth sailing scenario for asian markets especially emerging markets? jeffrey: i have got to be honest, it is sounded like the writer of the apocalypse, i don't see them being -- i did not see their not being a taper tantrum at some stage, they have limited money from the central banks around the world. decisions are made from it, we are seeing a huge amount of appreciation and inflation across all kinds of asset classes of it. there was no way to avoid it. -- classes because of it. there was no way to avoid it and i think it will weigh heavily on asian markets today.

the fed were hoping that it would slip under the radar but it clearly is not going to. asian markets even more so than u.s. markets will be very -- to the prospect of tapering and those expectations being brought forward. haidi: when you look at the dots, it is not just this, we have a chart in 2023 which shows how the outlook changed from march the last time they calculated it. the number of people who are looking for the rate in 2023 is something like 13 out of 18, but we have seen two hikes and if you look at the forecast for next year there is seven officials who now see a rate hike in 2022. it is a big difference. how does the market absorb that and hasn't yet -- has it absorbed it yet? -- has it

absorbed it yet? jeffrey: i don't think so, if you -- they are tracking lower than wall street. they are down badly because they were expecting and pollution -- inflation to be lower in the long run and then this meeting, they are saying we are going to improve communications and let everybody know. i think this is a huge surprise to the markets and i think the asian stock markets probably always make money when rates go up, they will do quite badly today. i think it will also pressure some of those currencies around the region as well because most of asia either runs a direct or indirect to the u.s. dollar and with rates are at 0% at the moment as well. kathleen: interesting headlines right now from the bank of korea, results were more hawkish

than expected. an interesting comment coming for -- from them, i guess they agree with you. also from the bank of korea, they are going to take market stabilizing measures if volatility increases. the want is lighting as much as one point 5% -- 1.5%, when we look at what bill dudley told us, he things by the end of the year the fed could be in the tapering and a maybe sooner. but he things there is a risk the fed could move too slow. it is listen to what he told us. >> i think the risk is it is going to be too slow because they are going to start take it off until -- 2% inflation, excellent unemployment, -- that is late in the game, starting to reach -- raise short-term interests. kathleen: jeff, do you agree?

jeffrey: yes and no which is not a good answer. my opinion is we don't know, we don't know the answer yet. a lot of important people have stuck their claims in the transitory or structural wage price, there's not much in the middle. my opinion is we don't know yet whether we are finally starting to see sticky inflation after a 20 year absence or whether this is being caused on an underlying basis by the logistical logjams caused by the pandemic as the world ask and aides itself, a lot of these problems will go away. eventually we are getting into a slow down before the pandemic arrived. i am doubtful we have a situation where we have sticky -- sticky inflation that

requires action from central banks. i'm in that corner but i don't and the world knows yet because we are still getting conflicting data points from around the world, particularly from the u.s., we are seeing -- rising but retail sales are not as good as suspected so there are mixed signals. kathleen: thank you to jeff halley, asia-pacific senior market analyst. i wanted to go over the headlines coming out of korea, the won is having a slide, as much as 1.5% to the lowest since may since after the fed moved. -- fed's move. our market reporter told us earlier from sydney that he thinks the markets would have a lot of reaction in asian trade and certainly the won is doing that. the currency rising as much as

1.6% to 35, the highest since may of 2018. these fed words, jay powell talking about talking about tapering, all of this is filtering through asian markets. haidi: yeah and we are looking ahead, those highly anticipated -- in queensland he is saying that in some scenarios the rate rise conditions will be met during 2024, in other scenarios they are not met by 2024, that is not terribly helpful when it comes to forecasting when rates will rise. he is predicting they will continue with some version of qe, viewing a range of possible scenarios for the cash rate. the situation when it comes to yield curve control, it will rise in the next three years. there will be materially higher wage pressures but there are

concerns about wage pressures given that international borders are closed as a demographic of foreign workers is not happening. the governor also saying that options that were outlined in the rba art on the table, when the company has inflation pressure they remain subdued and are likely to remain so and we have heard from the board saying it is premature to consider the seizing of the program, they have sketched out a variety of -- bond purchases and it will be depending on inflation prospects. pretty dovish sentiment coming from phil low. let's get you vonnie quinn. vonnie: president biden says he confronted russian president vladimir putin about human rights violations at the summit in geneva, including the imprisonment of alexei navalny.

they identified -- he also talked out cyberattacks and identified 16 parts of creek liver sector that should be off-limits. reducing the threat of nuclear war and cooperating on iran, china has stepped up its campaign to rein in commodity prices and reduce speculation. an enterprise has been ordered to control risks and limit exposure to the commodity market. they will also soon have stockpiles including copper, aluminum. the coronavirus state of emergency in tokyo and other areas expires on june 20, they may keep alcohol restrictions in place and restaurants. they also say japan may increase vaccines -- the decision to lift the state of emergency is weeks before tokyo is set to host the delayed olympics. singapore's government taking a

cautious approach to reopening after a recent increase in infections even as vaccinations pick up pace. authorities found 19 new community cases on wednesday, the highest daily total since june 3. singapore had planned to allow dining in at restaurants and reopening of his news -- business is it cases are made under control. global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm vonnie quinn. this is bloomberg. haidi: ahead and inside look at the bond market reaction to the fed decision, stephen chang will be with us. next we get an update on the state of the travel industry, trip.com ceo jane sun joins us, this is bloomberg. ♪

kathleen: china's domestic

tourist revenue rose on hundred 40 percent during the dragon boat festival last weekend where it recovered 75% of what it was before the pandemic. while recovery of international travel is slow, china within -- travel within china is rebounding thanks to its steps to containing covid-19. let us bring in jane sun, the ceo of online travel platform trip.com. i just got back from a vacation myself going home to the seattle area, but the dragon boat festival numbers look good. what does this mean for trip.com? what numbers did you see and what does it mean for your company? jane: thank you for happening --having me, our government has been excellent in controlling the virus the country has demonstrated its ability to rebound very strongly. so starting from may 1 to labor day and also going out, the

business has been booming and for domestic travel it has recovered very well. people go back to travel and during the long weekend people tend to travel further away from the coastal area. if you look at labor day weekend numbers, the hotels highest that day growth demonstrated 70% year-over-year growth compared to 2019, pre-covid. for air tickets, the highest day was 30% year-over-year. kathleen: summit recently said they are concerned about your owning's because -- earnings because of the slow recovery of international travel. that depends on the reopening of china's border, what does that

mean for trip.com? jane: our business has three problems, the first is domestic travel which we expect to recover soon due to the control in the country. the second is -- the demand is very strong and the rate of vaccination hopefully we will be able to also have more people be able to travel abroad. the third is to welcome people around the world to come and visit china. that is also a lot of pent up demand. i think what we need to look at is vaccination rates from over the world and to make sure when people start to travel it does not pose issues in terms of the control of the virus. haidi: are you privy to conversations about when the reopening in either direction could happen and what conditions

could be? are there talks about a potential travel bubble? jane: certain countries have already opened up for chinese tourists, for example if chinese tourists are going to singapore people do not need to be quarantined. it is still under the testing stage, with rates increasing significantly every week. the difference will be wise and prudent in terms of opening that area. kathleen: -- haidi: how much has the lack of outbound travel hurt your business? jane: we have about 30 to 40% of our business that is international travel, so that peace still needs to take a lot of efforts to recover. but we feel during this stage it

is the best time for us to really get prepared. from -- the pent up demand is already strong. with vaccination in play, with borders open we will have a huge search for the demand and we need to be well prepared. kathleen: it is certainly true a lot of parts of the world, take thailand, depend heavily on chinese tourists. it is not just china, it is what it means for the rest of asia and a lot of mark -- europe, u.s.. jane: yes, we have talked to many travel bureaus in different countries, older travel bureaus are waiting and eagle -- eager to host taurus in their country and we want to also -- tourists in their country and we also want to make sure local transportation and hotels and airlines already.

from our results on the data search, the customers want to travel, we just need to wait for the right moment to make sure our customers demand a -- are well fulfilled. haidi: what do you think travel will look like in a few years time given the expectation that covid will stay around like a seasonal flu rather than something that can be eradicated? jane: i am very positive in the long-term. from the data we have seen in china, china was the first country which was affected by the coronavirus but it is also the first country coming out. when the government has demonstrated its ability to control the virus, people are very enthusiastic to go back on the road and travel. i think in two years time, our tourism will -- we are excited

for the future of growth. i think the trend we have observed is three items, the first is people are paying attention to safety measures. we encourage hotels, airlines, local tour operators to join that for the safety network by providing hand sanitizers and masks and such to make sure our consumers are well protected during their trip. the second is people prefer to travel within smaller groups, normally we would see higher drivers, tour guides and traveled with close families and friends rather than big groups. the third trend is that suppliers offer flexibility in this environment.

also well by consumers, for example if you have to cancel, freight cancellation, -- free cancellation. haidi: always good to have you with us, jane sun, ceo of trip.com. in queensland we will hear from the rba speaking at the forum, he has been talking about the review of scenarios that included raising the interest rate in 2020 four as well as scenarios where those conditions are not met. he is talking in the context of next month's critical board decision on whether or not the rba will roll over its three year yield targets to november 2024 from the current april 2020, the probability of the cash rate is key. we are seeing a strong move downward when it comes to the key, we are also accounting for

the huge change in q. week gdp. lots more to come. this is bloomberg. ♪

kathleen: i check on the latest business flash headlines, and asian insurer backed by billionaire richard lee is moving ahead with preparations for a long-awaited ipo in new york. sources say the company has filed confidentially with the sec but could value at more than $15 billion. india's digital payment startup has hired a bank for its proposed ipo, jp morgan and goldman sachs are among those giving board -- giving board approval to help with the sale. they are hoping to raise $3 million through an initial share sale, india's biggest.

a telecom company planning to spend $5 billion in a bid against softbank, the biggest will carrier is focusing on telecom and investment growth and ipo's. the new company, sep investment has $5 billion to spend over three years. about $2 billion will come from plant ipo proceeds from five telecom subsidiaries. facebook showing advertisement in virtual reality games on its oculus quest headset and a push toward turning the expense of carper business into a moneymaker, and the next two weeks they will have a futuristic shootout game and at -- gaming companies will earn a portion of revenue generated by the advertising. up next, analysis on the bond market, reactions to the fed meeting with portfolio manager stephen chang, we are already

seeing the korean won diving, a story getting some steam as the hours go on an asian trade. keep it right here. this is bloomberg.. ♪ in business, it's never just another day. it's the big sale, or the big presentation. the day where everything goes right. or the one where nothing does. with comcast business you get the network that can deliver gig speeds to the most businesses and advanced cybersecurity to protect every device on it— all backed by a dedicated team, 24/7. every day in business is a big day. we'll keep you ready for what's next. comcast business powering possibilities. so many people are overweight now and asking themselves, "why can't i lose weight?" for most, the reason is insulin resistance, and they don't even know they have it. conventional starvation diets don't address insulin resistance. that's why they don't work. now there's golo.

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kathleen: breaking news from singapore, nonoil domestic exports, these numbers are important for an export heavy country like singapore, disappointing on a month the basis down. they were supposed arise 4.5%, big minutes. on a year-over-year -- big miss. on a year over your basis, it rose 8.8%, good news but that is barely half of the estimated 16%. electronics look good, up 11% year-over-year, pharmaceuticals

down 18.1% year-over-year, chemicals a hefty 55.7%, electronics up 11% as well, pharmaceuticals are just mentioned. it is interesting, last month our economics team writing they had risen to a more sustainable pace but maybe this will have -- still pretty strong. sophie let us take a look at the markets and what you are expecting. sophie: we are seeing asian markets fall over bonds, the dollar pressure flipping to a mid april low, the euro below that 120 level, deutsche abandoning -- pricing for u.s. yields especially on the front. kiwi under pressure, switching up the board we checked in on

the korean won losses, earlier falling more than 1%, still on the truck. it earlier reaching 11.3 and out a low, also lower for a fourth straight second, dutch session, steady there, the most since march 29, now above that 624 level -- 6.44 level. on the china terminal that is putting currencies on shaky ground. after a two month gain, we saw that rise to a record high, that is stalling. john hardy noted the following after the update, and we are seeing this pivot putting global bond returns at a low. haidi: more on the bond market,

the reaction is what you expect for a hawkish day. yields in australia and new zealand following suit. let's discuss the implications of the beds hawkish turn on bond markets with stephen chang, managing director and portfolio manager for pimco, i want to start with this child. it really gave some -- chat. give some context. you look at the standard deviations and lit up to a one-year timeframe, it has not moved. is there a numbness in the market that is surprising? stephen: i think it's what we are accepting in terms the bed, it's an event where they could talk about the tapering. i think from our standpoint with yields, 10-year around 1.522% --

1.5 or 2%, we were surprised by this reaction but the picture has been at a low level coming from the liquidity, the different qad and other assets of central banks. while we are talking about beginning of tapering, the general picture is still for liquidity condition to remain and the volatility expected to be benign at this point. haidi: i'm also wondering about the reverse repo rate. has the fed given itself more space by addressing one of the main aspect of distortion in the front end of the market? stephen: there is a move on that but i think the bigger picture for us is how they would talk about the difference may be in future meetings but we are looking also at regional central banks here in asia and debating

which one could move earlier than projections. some of that could be moving ahead of the fed as well. kathleen: who do you think might move earlier? haidi: i think we would be looking at her example the reserve egg of australia, whether they will have -- the reserve bank of australia, whether they will have a decision in july, whether they manage to get control and the pace of qad, we are looking at the bank of korea and whether they can move forward on the normalization. there's also from a career standpoint the change of governor early next year where that would lead to a different reaction function. kathleen: is this going to affect other central banks? european center bank has made it clear they want to stay beyond just behind the fed, is there anyone else on that list? stephen: i think there is a demand for central banks to stay put given those who have not

done as much as these on transitional policies -- in china, they have not done much and we expect the rate to remain steady throughout. it might be a market where we think they will still outperform for some of the embedded risk premiums or rate height -- rate hike expeditions to be priced out. kathleen: were going to have to look at the data, he is the managing director and portfolio manager for asia at pimco. speaking of other central banks, the first central bank in asia to follow the fed on its decision ahead of the bank of japan on friday. let us bring our senior asia economics reporter michelle, what do you say? how will the fed decision impact these decisions? >> good morning kathleen, i wanted in tunisia today, taiwan has -- indonesia today, taiwan has a jump in

inflation and virus cases and its currency is at a two ticket high. a tricky dynamic but i see them hold through year end as they try to manage those effects. indonesia always has the ruby only spotlight which has given them reason to remain -- ruby -- rupee in the spotlight which as given them reason to remain -- that remains a threat and is not the focus of the policymakers. the boj tomorrow could be a decision, we had officials this week say they will not be making quick judgments on policy freight marks made in march and the impact they had on the bond market. they expect their covid funding programs for businesses and keeping the encz mark policy rate unchanged, overall -- benchmark policy rate unchanged,

overall the global recovery -- and many channels and has been helpful as policymakers try to choose their economy on the rebound. haidi: the memory of the taper tantrum past, i feel -- are we seeing asian banks and economies being better prepared? >> i think they are aware, you hear officials talk about it and being asked about it for historical comparisons. a lot of what you hear from them is that we are in a different place now. they are less reliant on the dollar than they used to be, they have more stimulus in place to combat the effect and they have a circuit of foreign investors and keeping their profile up. it is a bit different this time. but they already remain concerned about any surprises out of the fed, this hawkish

surprise, we are going to see the market reaction in this region mimic what happened in the u.s. but we are hoping every thing goes smoothly. haidi: our senior asia economics reporter michelle jamrisko, next why asian hedge are pushing more into private investments, what that means for venture capital. this is bloomberg. ♪

vonnie: this is daybreak: asia and i am vonnie quinn with first word headlines. hong kong police have reportedly arrested by people jailed -- based on a -- violating national security laws. jim eli is serving a two month sentence for his role in unauthorized -- jimmy lai is serving a 20 month sentence. these are pictures in hong kong. president biden says he confronted russian president putin about human rights violations at the summit in geneva including the case of imprisonment of alexei navalny. he also talked about cyberattacks, identifying 16 types of critical infrastructure that should be off-limits.

leaders worked together to reduce the threat of nuclear war and agreed to cooperate on and ran and -- iran. president yellin -- a tax hike in april 2021 that will not count as a retroactive increase. president biden proposal to raise the tax gains to over a million dollars are more was announced in april, the debate over any capital gains tax is likely to be a source of tension as the issue is debated in congress. saudi arabia says it will not abandon a cautious approach to oil output, saying they market is not out of the woods. they have as much as $5.8 billion -- 5.8 billion barrels a day. the energy military says what many see is proven correct with

prices above $70 a barrel. global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm vonnie quinn. this is bloomberg. haidi: agents at hedge funds are pouring hundreds of millions of dollars into private investments , muscling into an area that was long the reserve of the equity capital. joining us is -- what are the drivers we are seeing for this trend? >> the region -- it is harder to generate the types of return investors are seeing in private markets. we are seeing that private companies, essentially -- is a -- they are staying is private companies longer potentially with the help of investment from

funds like tiger global and softbank. we are seeing a proliferation of this trend where hedge funds are -- much earlier and not focusing on the public market that they used to. kathleen: what kind of investments are they interested in? >> most of them are looking at investments in companies three years prior to lifting, some earlier, asia is a pretty rich hunting ground for these hedge funds because out of the global unicorn, the 700 or so private companies worth more than a billion dollars, more than a quarter of them are in asia. haidi: there are very different risk profiles with this type of investing, right? >> that is true. i think there will be risks just

like in public market investing but the risks here is that these companies are facing the chances that they we -- might not public, we do see private markets tend to have more valuations these days. there is also a conflict as well as they share information cap -- gathered in private markets and use it for public market trainings there could be violations. they can also create internal firewalls to avoid these competitions. kathleen: thank, bloomberg's lulu chen. a check of the latest business flash headlines, adopting more than $3 billion to take over office developer in china and its biggest event on the chinese real estate market. a u.s. -- a new york-based firm

took five hong kong dollars per share, the chairman and ceo have agreed to sell their shares and plan to keep the 90 -- 9% stake after the deal closes. indonesia faces a debt deadline on thursday, the airline missed the distribution on a payment of a 500 million -- a two week grace. is ending but there is a standstill for the carrier which is struggling with pandemic travel to help it restructure and avoid bankruptcy. announcing the sale of a french retail unit to private equity firms, putting an end to a lengthy process that began more than 18 months ago. the transaction agreed to is excited to be announced in the coming days. the sale is part of the banks worldwide assets by more than $100 billion along with 35,000. -- jobs.

haidi: howard marks eyeing downtrends as an opportunity including in china -- he spoke to bloomberg about buying and selling. >> if you look at where we were 15 months ago, it was a disaster and with the potential to get worse. now we are in good shape and all of our markets and the economy are strong. you sure can't say they got it wrong. should they continue? to stimulate and make credit easily available? or is there a threat of overheating and inflation? this is a key question and it is unanswerable. nobody knows the answer. i have a lot of respect -- they are more concerned with undershooting than strengthening -- on strengthening the economy

than they are with overshooting and creating long-term inflation. and that is why i say the merits are valid but i am in a neutral stance. >> and yet there are a lot of funds, pensions and others that are looking for extreme returns of 8%, i call that extreme. compared to 1.5 yields on 10 year treasuries. how much does that amp up in this nirvana. for credit -- period for credit as peoples it is question mark people are shooting for something that is not that attainable without taking more extreme risk? >> you are exactly right, the biggest challenges had to get good returns in a low return world, with treasuries -- with cash at zero and treasuries and high-yield bonds yielding four

and stocks expecting to return five and six -- in the long run, we are looking at seven or eight. many of my clients, u.s. clients , they need seven to keep -- to make the math work. it is very challenging. you can't get seven today safely and reliably doing the things you always used to do. you have to push out on the risk curve and push into unfamiliar markets -- market sectors but there are risks. lisa: what are some of the best risk-adjusted return possibilities when you push into risk? >> i think private markets are usually the less efficiently priced, that is to say they --

the deviations are priced for value. usually more so than the public markets, so you want to go to the private markets but then you have liquidity is, so you want to go into alternative markets like real estate structured credit, complex instruments, instruments that are not homogeneous. but then you have management risk because you need somebody to help you make selections and have to get that right. these are the areas -- you want to look at the things that are downtrodden, the things that did not hold their own last year and suffered from the pandemic. you want to get the ones of those that will recover, not the ones that walked. maybe china and the foreign market in general, they have the expertise to do that. but we don't think that the rest of the world economies are necessarily as strong as ours although china is doing well. these are the off the beaten

path locations where you might get some better risk adjustment returns, but there are risks involved. kathleen: that was howard marks, oaktree capital management co-chair and co-founder speaking to limericks lisa brown vix. -- bloomberg's lisa braun of x -- lisa. kathleen: -- five years. the launch is that to happen in the next half hour, this is bloomberg. ♪

haidi: china is about to send three astronauts into space in its first crude space mission in five years. we should become fully operational by next year. let us bring in our asia correspondent. what do we need to know about this launch? >> space cadet reporting for duty. 9:42 is when the next spacecraft will be launched out in in mongolia, 922 this morning -- 940 tooth, within this half hour, it is -- 9:42, within this hour, the three astronauts, the

captain -- his first space trip. the captain, this will be his third trip. it is an interesting time for the chinese space program. they will be sending spacecraft into orbit and they will be going to the space station which china is building. they will spend three months in this main section of the space station which was placed into orbit april 29. it will form a complex with the cargo trip -- cargo ship that was self piloted up to the space station earlier this year. china is moving fast. they are going to have another 11 space missions over the next year and a half, to get the space station up and operational. this mission, the manned space

plates they will go up and fix and kit out the space station ahead of the operations scheduled for the end of next year. it is going to be quite a rapid rate to get that going. kathleen: very exciting, but the space race with the u.s.. where does that stand because obviously china is moving fast. >> they are and the united states is as well, nasa as well as the private companies, spacex or virgin galactic from richard branson as well as of course jeff bezos blue origin all have space aspirations. the united states through nasa plans this decade to send men missions to the moon, china just landed a rover on mars, there are other planned trips to mars but by the united states and china. this is a --. kathleen: stephen engle watching

the latest in the space race, also waiting to see if stocks are taking off. sophie: stocks to watch in hong kong, suspended from trade, executives from apple daily newspaper has been arrested but china is resuming trade in the city following the takeover, $3 billion, 31.6% close at five hong kong dollars apiece, that is a discount. ahead of that yield, china shares are rallying nearly 50% last week, the most since they went public in 2007. haidi: coming up, a hawkish fed could ease -- we have vincent for the market open. -- we will get the outlook next,

with equity strategist sean darby. that is it for daybreak asia, market coverage continues, we are looking at the, shanghai and shenzhen. this is next -- this is bloomberg. ♪

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♪ david: this is my kitchen table and also my filing system. over much of the past three decades, i have been an investor. the highest calling of mankind, i've often thought, was private equity. [laughter] and then i started interviewing. i watched your interviews, so i know how to do some interviewing. [laughter] i learned from doing interviews how leaders make it to the top. >> i asked him how much he wanted. he said 250. i said, fine.