>> a very good morning. welcome to "daybreak asia." i am haidi stroud-watts in sydney. sophie: i am sophie kamaruddin in hong kong. shery: good evening from bloomberg's world headquarters in new york. asian stocks set for a steady start after the fed chair reiterates stance on inflation being transitory. jay powell says the jump in prices is tied to the economic

reopening. the wild ride for bitcoin continues, bouncing back after tumbling below the 30,000 threshold. plus, morgan stanley tells staff they must be vaccinated against covid-19 to enter its new york offices as wall street find tunes its return to work policies. haidi: let's take a look at how we are setting up when it comes to the asian trading day. we will give it over to sophie kamaruddin in hong kong. sophie: a study start for asian stocks after the regional index capped the best session in a month on tuesday on that typical bounce back and early in the asian session, u.s. the minis think steady as well. nasdaq futures extending gains after that benchmark hit a fresh, all-time high. switching out the boards, focusing on commodities with the inflation trade debate going on, wti holding below $72 but on the

front foot this morning. $1500 oil on travel demand. gold holding losses as we saw the fed double down on the transitory inflation message. we saw a muted reaction in treasuries with some deepening action on the u.s. yield curve and the offshore yuan holding steady after an eight day drop, looking to test its 100 day moving average as we are seeing some dollar bears head for the exit in the wake of the fed. shery. shery: let's talk a little bit about inflation. policymakers at the fed are betting the recent price surge will be temporary. bloomberg local economics -- global economics and policy editor kathleen hays joins us now. what was chair powell's argument on why these will be short-lived? kathleen: it is a good argument. the u.s. economy has reopened.

there bottlenecks, lots of pent-up demand. all the stimulus checks that got saved, people are spending that money now. this into what he told the house select committee on the impact of the virus on the economy and how the fed addressed it. >> the categories where these prices are going up, you will see that it tends to be areas that are directly affected by the reopening and that is something that we will go through that will then be over and it should not leave much of a mark on the ongoing inflation process. kathleen: perfect storm. the chip shortage is preventing a lot of new cars from being built. used car prices have soared. jay powell said that the impact on inflation -- the reopening's impact on inflation has been bigger than expected and it may be more persistent but he reassures democrats and republicans that we are going to wait and have evidence. unemployment is falling, really high. we are going to wait and see, make sure we are correct that it

is temporary. we will not be preemptive. shery: what did powell have to say when it comes to jobs? kathleen: when you speak to congress, republicans are pushing him on the length between unemployment -- people are not taking jobs, and the unemployment benefits he said that is one issue, but look, a lot of people are worried about going back to work. they are worried about the virus, the kids are not back in school, etc., so that was republicans. the democrats, i want to focus on maxine waters, a powerful democrat, praising jay powell in her time allotted to say what a great job he has done for the economy. he has supported fiscal packages, the lending programs. why is this important? because joe biden has to decide whether or not he's going to reappoint jay powell for another four-year term. another powerful democrat like there's praising him, i think we

have to take note. haidi: for sure. john williams, where does he stand relative to the more hawkish voices? kathleen: he is definitely right in the middle with fed chair jay powell. in an exclusive interview, he said it's not time to even be thinking about -- in a way, i'm paraphrasing, hiking rates. this economy is not there yet. let's listen. >> right now, the key issue for the fomc is when is the economy going to get to this point where we meet these conditions, time for the lift of the funds rate? i think the attention is on the taper. kathleen: as for the taper, he said we are not anywhere near making substantial further progress that needs to be made for things to be starting the taper process. he also said that they need to

be very careful. look at the upside risk and the downside risk for inflation and make sure they are correct that it is transitory. stores open if inflation gets out of control but jay powell and his team at the top are still arguing that there is nothing to worry about now. they will be watchful and wait and see what happens. haidi: kathleen hays. joining us for more analysis, lauren boebert, ceo. always great to have you with us. we appreciate your time. you see the slight caution now essentially, going back to goldilocks. there is not much to worry about at least for now. lauren: it is a reevaluation of where we are, moving from reflation to inflation, thinking about the impact of that, and even though the federal reserve is trying to keep us calm and say it is transitory, many people think that it is more sustained, and i think that time will tell, but we are actually

seeing, when we look at where we are, we are seeing the base case of where we think we should be, and we should not see any more from here, so if we continue to see numbers that show inflation, we have to know it is more sustained. >> in that case, are you hedging for inflation? is there more to the reflation retrade? how is your portfolio kind of structured at the moment? ? loreen: we have like financials. we also like materials. and industrials. with both of those, we see good areas for the market to be in to see continued inflation as well as a value tilt, which people like to receive dividends now versus waiting for future growth. shery: we saw microsoft joining that club. what do you think of these big tech giants? do they have room to run when we

are seeing the fed now sort of get to those rate hikes a bit sooner? loreen: i think you have to have a balance between your technology and growth and value. certainly, the low interest rate has cropped up. nology firms that rely upon having more leverage in place. so when you are really looking at those companies, now is the time to look at what leverage they have and those companies that have a lot of cash have a lot of cash flow and those are the companies in the technology and innovation space that will continue and beware of those that have overleveraged decisions. shery: what about small caps? especially as we see a little bit more rotation going into growth sectors within those -- the russell 2000, for example? loreen: we have over large caps

and that has played out well. value has been on the leaderboard there. so we continue to like it. things looking at those companies that have the ability for perhaps more purchasing power, pricing, that might be more number in a sense -- nimble in a sense. we think that will be an important component going forward. shery: what does it mean when we have a strengthening dollar? as this chart on the bloomberg shows, we saw this strengthening since the post fomc hawkish turn. loreen: yes, i think that is going to be somewhat temporary, and if we look at the trade balance, now, their biggest trade partner is the euro zone. that is that as far as the dollar is concerned. we will continue to see a longer-term weakening dollar so even though you have seen strength, we think it is more of

a longer trend. therefore, looking at international and continuing to look at international equities as part of that overall diversification. shery: always great to have you with us, loreen gilbert. let's get you to vonnie quinn with the first word headlines. vonnie: thank you. the united states is likely to under shoot president joe biden's vaccine target. adults could get at least one covert shot by independence day. the white house says on the people aged 27 and above will meet that target by the july 4 holiday. it will take a few extra weeks to hit the 70% mark for everyone 18 and older. the u.s. is administering 1.1 million vaccines each day. china will keep its covert restrictions in place for another year. officials are concerned about these variants and hosting large events including the winter olympics in february. china has largely restricted new

visas to people who have received the locally made vaccine. the wait time for semiconductors has hit a record 18 weeks. research by the financial group shows that is that by seven days from the previous month. the gap is at the most since the firm began tracking data in 2017 and four weeks longer than the previous peak in 2018. chips that regulate the flow of electricity are a primary resource for the overall interview. new york city voters went to the polls in their first rank choice mayoral primaries ahead of the general election in november. it is expected to reflect their priorities. and rising crime rates emerging as a top issue on voters minds. 13 democrats and two republican candidates are in contention to become the mayor of new york. 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. shery: still ahead, the wild ride bitcoin continues as it bounces back from below 30,000. we will get the latest on crypto's, next. this is bloomberg. ♪

shery: bitcoin trading at the 32,000 level, under a little bit of pressure. this after bouncing back after hitting the $30,000 threshold. mike nova grad thinks it's better -- >> i look at bitcoin in particular as digital gold. bitcoin is a better version because it has the same macro tailwind but it's also very early in the adoption curve.

people were scared of bitcoin a few years ago and they moved into the space and hedge are ok with it. we'll money managers are ok with it. insurance companies are ok with it. you are playing an adoption game. i'm still a big buyer of bitcoin. >> let's bring in john dawson to -- john for more. we were talking about what we are eyeing next. we seem to have kind of survived that key level. where do we go from here? is that a show of resilience? >> it is somewhat but this was a very reef drop. it was defended but it does show that there's some fragility here so the next couple of days will be crucial. can it stay above 30,000 or is it going to drop again? >> we are seeing conflicting

views when it comes to bitcoin. we had heard from guggenheim's scott minerd that he is expecting more declined. joanna: yes, and that is very likely. we had such momentum into february, march, april, going up to six 5000, but this drop, we are about half the record level so this is just reminding everyone how volatile it is. there is the narrative about digital gold, but gold does not go through a lot of swings quite like this. you have to expect volatility if you are going to be in crypto and it's possible there could be more declines after this as people question crypto as an investment again. >> is this really still the best narrative or the best comparison? bitcoin as a store of value versus gold? is there a smarter way of looking at this i guess? joanna: the inflation hedge

narrative has not done all that well where people are concerned about inflation and bitcoin has been going down. the adoption is a decent one. maturation of the space as we get more products. hedge funds and other investors. that narrative of adoption is probably a better one. haidi: joanna ossinger there. the national security law imposed by beijing almost one year ago -- we will be outside the courthouse later this hour and get you an idea of what we are expecting. coming up next, we are joined by david westin. he is in new york for special coverage of the key political breaks we are watching closely. david: thank you so much. new york city is choosing its candidates for mayor today in what is being called the most

consequential election in the city for a generation as the whole of wall street struggles to come back from the pandemic. one of the big issues is how safe the city is and we will be joined by ray kelly for his take on what the new mayor will need to do. that is coming up next, and this is bloomberg. ♪

>> this is special coverage of the new york city mayoral primary. i am david westin. voters have been at the polls, deciding who will run for mayor. it is a local election with national and international implications as the city of wall street struggles to come back from the pandemic and deals with lingering issues of empty office buildings, crime, safety, and getting tourists back. new york will choose its candidates through ranked choice voting, meaning we will not have the results for days or maybe for weeks, but we should get at least some indication of which candidates are the voters

favorites paid we begin our coverage by focusing on two of the issues many voters regard as most important. safety and policing. we are delighted to welcome ray kelly, former new york city police commissioner, and currently the ceo of the guardian group. commissioner, thank you so much for being with us. there is a perception by many in new york that we are less safe than we were two years ago. is that accurate and how big is the problem, in your estimation? >> all they have to do is look at crime. shootings are up well over 100%. homicides are up. not only -- the city feels unsafe. there is no question about it not there is a perception that the city is unsafe. that's what you have to find. the reason crime is up is simple. crime is up because police are not engaging with the public.

why? because many of them feel that they may lose their job for simply doing their job. unison polities, counties, they put in a whole host of regulations that restricted the police, greatly restricted the police. certainly in new york city, there's things like the diaphragm law that prevented police officers from using any pressure on the diaphragm when making arrests which is totally unrealistic. so no question about it. that is why crime is up. it is up because of the pandemic. the question is, how do you get the police to engage? all of the mayoral candidates are talking in some way, shape, or form on further restrictions on the police.

police can take action and they cannot take action. it's pretty much up to them. that is what you are seeing now. police not taking the proactive measures that we took a few years ago that made new york the safest big city in america. getting back in that direction will no easy task. david: it sounds almost like a zero-sum game. you are either safer or you protect people from abuses. there have been abuses by police around the country area is there a way to have your cake and eat it, too? we are really going to have the police engaged but we are really going to protect against some of those excesses. david: sure. there's a lot of reasonable regulations that have been put in to address those as i think -- blown way out of proportion not nearly as much as the public

might think, but certainly, there is a balance that has to be reached. right now, that balance is that police officers are being demonized all the time. i don't know if you saw what happened in flint, michigan, yesterday, but a police officer, high noon, directing traffic in uniform, a woman drove up in a car and shot at him. he shot the woman and killed her. no reason. she did not know him. this is the manifestation of a lot of hatred that has been spewed to police officers over the last 14 months at least. that is the result that you get. >> you put your finger on one thing a lot of people are concerned about and that is how many will have guns. that is something you did address when you were a police

commissioner. is there a way to go after that and should we go back to stop and frisk? david: -- ray: people don't understand stop and frisk is a perfectly legitimate, constitutionally approved, supreme court approved activists of stopping, questioning, and then patting down someone who may be armed. it was not done -- less than one stop a week per patrol officer and less than one pat down every two weeks per patrol officer. we can never get that story out. it is a legitimate function of -- it is a tool that should be in every police officers toolbox, but now not used virtually anywhere because the police are being accused of some sort of malfeasance or wrongdoing. in terms of getting guns off the streets, it's very difficult.

particularly here in new york city, where they have eliminated the anti-crime units. that was very successful in getting us -- that unit no longer exists. feeling is that everybody is carrying a gun and there is a rationale for it. i have to carry a gun because the other guys are carrying guns area it is a circular issue and there is no easy answer. we live in a country that has more guns than people. 350 million guns in this country. it is a problem. it is not going to go away anytime soon. for certain measures that you can take, the pipeline coming up , u.s. 95, the nypd worked together on building those things. there is an overwhelming number of guns in new york city

throughout the country and it is a real challenge. every stop they make, potentially, you are running into somebody with a gun. david: briefly at the end, are you hopeful that we can get a mayor out of this might address some of the issues you have raised? david: -- ray: i personally think mayor de blasio is a disaster and went a long way to ruining the city. anybody would be better than mayor de blasio but we are going to have to see. there's a lot of cheap talk when you are trying to gain an office. it is a real problem for the next mayor. the city council's radical right now and it is going to be even more so in the next term, in january of 2022. democratic-socialist's of america have focused all of their attention on all members,

so it will be a tough road for the next man. david: thank you so much to ray kelly. we will have more coverage ahead including talking with ralph. that is coming up

>> we are 29 minutes away from the start of trade in japan and we are watching japanese equities closely with the nikkei rising the first time in five days as we saw the japanese yen fall to a two month low. these are the stories we are watching that could be affecting the markets. agm is set to start at 10:00 a.m. local time. the ceo is scheduled to speak. local media reporting the tokyo governor has been admitted to hospital for severe fatigue weeks before local elections in the capital and one month before

the olympics kick off. the nikkei newspaper now saying japan is set to approve the astrazeneca shot for public use, haidi. haidi: we have been talking about this story, the latest development in the return to work saga. morgan stanley saying employees will need to be vaccinated against covid-19 to enter its new york offices and we are seeing more and more of these wall street firms adopting similar policies. nabila ahmed is joining us with the latest. this is a pretty hard line stance, i guess. seems very weird, talking about it like this given that we are pretty much all back in the office and very few of us have even been able to get the vaccine yet here in australia. nabila: it is a crazy world. morgan stanley's ceo, james gorman, did put everyone on notice when he said if you can go to a restaurant in new york, you can come into the office, and this is just an engine of that policy area they basically said, you have to be vaccinated

to come back. he made it clear he wants most people back in the office by early september. at the moment, 90% of the people who are back in the office in morgan stanley are vaccinated, but he's hoping that number will pick up to around 100% very soon. shery: that is true. we are seeing restaurants and bars pretty packed but when it comes to this office centric midtown manhattan, pretty empty. nabila: morgan stanley is at the more aggressive and in terms of wall street banks so jp morgan was the first bank to mandate people return to the office and that was back in april. goldman sachs followed suit. neither of those banks have a vaccine policy so morgan stanley is following blackrock. it mandated people have to be vaccinated before they will be allowed into the office pit others, like income america, are taking a bit more of a relaxed

dance, but they are encouraging people to get vaccinated, and they are prioritizing vaccinated workers in terms of returns. haidi: this is the phase we are in, getting people back to the office globally. how is it going? nabila: we are seeing that activity in the city centers are still half of what they used to be pre-covid. not surprisingly, it's following vaccination rates. a city like san francisco, which has a 73% of its population vaccinated, has 61% activity back. at the other end, you have hong kong, which only has about 27% of its people vaccinated and activities only at 13%, haidi. haidi: nabila ahmed there. let's move on to microsoft. it is up to 19% year-to-date and has reached a market value of $2 trillion, joining apple as the

second u.s. company to do so. su keenan has more on this and we should point out that it was still a few pennies short. su: it is still across the mark and that puts it in a very exclusive club. let's dive into the bloomberg because what is also remarkable is that it did it despite two significant pullbacks earlier in the year, in february, and again in may, yet rose again. it would continue to dominate in the cloud space. let's look at the intraday chart because, yes, it did hit the mark and it managed to close a bit shy and joined apple, aramco, across the mark into the $2 trillion territory. briefly in december of 2019, but it has fallen back since then.

microsoft crossed the intraday and it fell back by a at the end of the close but history has been made nonetheless and what is also really fascinating to watch is we watch who joins this company next, how long it took microsoft to get to the first one trillion dollar mark. we dive back into the bloomberg and you can see it took 33 years from its ipo to reach its level and it only took two years to cross the second trillion dollar mark and joined apple, and again, there are other tech companies following on their heels. haidi. haidi: how far behind our amazon and alphabet? su: that will depend on how the market continues to rise up and what we do know is that they are not that far behind in terms of the market valuations. amazon actually is at 1.8 7

trillion. if we look at what the drivers have been for microsoft, how did it get across the mark? they really did everything right. they checked all the boxes, and they are really involved in almost everything. gaming, cloud, automation, analytics, ai, which will benefit from the economic reopening and the continuing shift towards the cloud. haidi: su keenan with the latest. we are looking at a steady start when it comes to trading. let's get it over to sophie kamaruddin with a look at what to expect. sophie. sophie: steady indeed. that goes for the aussie dollar as well. commonwealth bank with its latest forecast for the rba policy rates, seeing cash rates in november of 2022. elsewhere, japanese stocks are set to continue the advance. we had the yen holding near

recent lows, barely budging. the offshore yuan holding an eight day decline. the next level of support, the currency, could open up a pass to 650. pulling up the chart on the terminal, when it comes to equities on the mainland, stocks are keeping steady as well with the csi 300 testing that support at the 200 day line which has held since march and market vol staying low for chinese equities but citigroup cautioning it could see more market stability being put at risk in the second half with policy tightening expected to become more pronounced and switching out the chart, ubs noting that contracting the credit impulse on the mainland does bode well for chinese bonds and they are predicting that the spread into treasuries -- another 50 basis points albeit with a challenging month ahead. it could rise on tighter liquidity in the mainland,

haidi. haidi: sophie kamaruddin in hong kong. the indian billionaire is avoiding acquisitions of globally diversified supply chains. they are curbing the movement of products and people and he is preferring regionalization. the chairman spoke exclusively to haslinda amin. >> i think that the whole theme of globalization has a much more regional background now. it is a reflection of the times that we are in. people are looking for shorter exchanges, as we keep hearing all the time. regionalism is a very big thing, regional hubs, regional presence, regional employment, regional demand. so, for example, i would say we are a global company rooted in

local economics. >> how are you now working at mna's across borders? what deals might you be interested and which sectors in particular? kumar: we keep scanning the environment for opportunities that add value to our portfolio. haslinda: you are looking at making acquisitions in the next 12 months? kumar: difficult to make a specific comment. let's just say we are constantly looking at opportunities of scanning global candidates for acquisitions, so to speak. on the one hand, you have regionalization, nationalization, and we are also looking at international acquisitions, cross-border m&a activity, but the important thing is that in these packages we are looking at, there needs to be a strong element of

regionalization. haslinda: how about opportunities within india? you talked about how you are investing $2.4 million for india v-shaped recovery, and now, people are saying that it is not coming. haslinda: -- kumar: it keeps changing. the economy is pretty much coming back into shape. after the first wave, it came back into shape much completely. this time around, it has been a setback, may be one month longer than it was last time around but i pretty much see the economy coming back. i see vaccinations happening. the pace of vaccination is going up. one is looking for a stronger stimulus for the sector which has been impacted much more this time around than the last time around.

i believe the economy will rebound on what is supposed to be an astounding agricultural output and i think the medium, long-term view that i have on india pretty much remains intact. some of the underlying frames -- trends of the economy got accelerated because of this pandemic. for example, mobilization of the economy, digitization, so i don't think anything changes from an economic perspective. this is more an episodic setback than a structural setback as i see it. >> speaking to bloomberg from the qatar economic form. stay tuned for much more, powered by bloomberg. plenty big names during the event and we will bring you the best of them, here on bloomberg television. coming up next, the first trial under the beijing national

security law is set to start. we will be on the ground with the latest. this is bloomberg. ♪

vonnie: this is "daybreak asia." i am vonnie quinn with the first word headlines. jerome powell maintains that the fed will be patient in waiting

to lift borrowing costs. powell said recent price increases are bigger than expected but he reiterated that they will likely wane. while he acknowledged some uncertainty, he said it's unlikely that the u.s. economy will suffer from 1970's style inflation. >> categories where these prices are going up, you will see it tends to be areas that are directly affected by the reopening and that is something we will go through over a period that will then be over and it should not leave much of a mark on the ongoing inflation process. vonnie: the u.k. and the e.u. are said to be closer in a truce. it includes checks on goods moving into northern ireland. exports of chilled meets will be banned from june 30 because northern ireland must follow e.u. health and safety rules. they had asked to extend the grace period but officials want

to hear how the british government will use any extra time. sources tell bloomberg that next steps will be discussed in a meeting on wednesday. india is concerned by china's military deployment along the disputed border. india's foreign minister says uncertainty over whether beijing will fulfill its ominous to reduce troops is a another challenge for political relations. he was speaking to bloomberg at the qatar economic forum. >> the issue is whether china will deliver the commitments it has made, written commitments it has made about both countries not supplying at the border in the larger issue really, whether we can build this relationship on the basis of mutual sensitivity, mutual respect, and mutual interest. vonnie: a new survey suggests australian trust in china has

dropped to a record low. they see the asian giant as a security threat. only 16% were confident that china will act responsibility, down from 52% in 2018. the number of surveyed australians who believe xi jinping will do the right thing in world affairs is halved since last year. 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: the first trial under hong kong's national security law is due to begin in a few hours. a24 no old man is set to face charges of terrorism and suspension, stemming from an incident last year. it will be closely watched. let's get the details from stephen engle, who is outside hong kong's high court, and we learned over the past day or so that this would not be a jury trial.

stephen: that's right. the application to have a jury trial was heard by the appellate court yesterday afternoon and they denied his request to have a trial by jury. under the new national security law which came out nearly a year ago, article 46 to be late that the second -- has a right to request the judiciary to hold the national security law cases without a jury so as to not pose difficulties to the family and relatives of the accused as well as to not undermine the administration of justice. so he appealed for that to be overridden because of article 86 of this, the basic law, the constitution, which states common-law right of trial by jury in criminal cases shall be maintained and this is one of the big issues here, the

conflict that the national security law trials, this being the first one in the high court, that have conflict with the basic law, and we are hearing -- we don't have a president yet. this is the first trial that will be taking place and it will last 15 days and that is why so many eyes are watching this case of the 24-year-old former waiter who allegedly rode being his motorcycle into police officers on july 1. just within hours of the implementation of the national security law, promulgated onto hong kong from beijing and really put into place this conflict because of course, riding a motorcycle into a police court and would be illegal in just about any jurisdiction. however, he is charged with not only terrorism for that but also inciting secession as one of the main charges under the national security law because he allegedly carried a banner calling the liberation of hong

kong, so that is what we will be watching, how the panel of three judges, not a jury, will rule over those 14 days of whether he is guilty of those new charges, which were not in place just hours before he allegedly committed the crime. we are watching it quite closely to see how this common law will interpret the national security law. haidi: how does this case compared to the jimmy lai situation? stephen: he is the founder and former editor of the apple daily next digital, a highly controversial case here because on the one hand, there are a lot of people here in the city who don't like this form of tabloid journalism. others say it serves a much-needed purpose. in an international finance center, it needs a free flow of information.

it is quite a polarizing issue. he is being charged -- he is serving a jail sentence for 20 months for illegal assembly, however, he has been charged under the national security law for allegedly calling for foreign powers, perhaps the united states, to impose sanctions on hong kong and the chinese government as well as a couple of other collusion charges, so it is a sensitive case because it brought up issues of whether this is a criminal case under the national security call -- law, if it is legitimate, and that will be played out in the courts. there are those who, you know, allege that this is perhaps a suppression of the media. i want to read a quote yesterday from the chief executive. she got quite heated up on this issue and she said do not try to accuse hong kong of using the national security law as a tool to suppress the media or stifle

freedom of speech. these accusations by the united states government are wrong. this is why this case will perhaps be even more highly watched than the one that will begin today with the first national security law trial since that implementation of the law almost one year ago. shery: stephen engle joining us from hong kong and here is a quick check of the latest business flash headlines. hsbc says hong kong customers can continue to access online and mobile banking services outside the city. the lender issued a statement after it's updated terms caused concerns among customers, with one journalist tweeting that the regulations are to prevent cash flow from hong kong. a spokesperson said they have no plans to amend any services. fitch trading has downgraded evergrande into junk territory after fears about the company's financial health grow.

bonds slumped alongside reports that several chinese banks are restricting credit to the firm. evergrande, the world's most indebted real estate company, insist its relationships with things and financial firms are normal. google is facing a new antitrust investigation by the european union, and this time, they will look at whether the tech giant is in favor of its own advertising services, the first time the e.u. has examined online advertising. our next, an update on the state of play before the post -- new york city mayoral primary. david westin returns in a moment. this is bloomberg. ♪

david: this is special coverage paid i am david westin. for more, welcome wendi benjamin, who i think of as our politics group. great to have you here. let me ask you the most basic question. we hear it said that this is the most consequential election for new york city in a generation and yet there are early indications that the turnout is not that big. what might account for that? wendi: people are worried about being in crowds, trying to get their lives back together and get back to work and figure out where the kids are going to be and there are 15 candidates and

there is this new system of voting, which is very confusing, and a lot of people may have just said, you know, forget about it. david: for the people who are voting, what do they care about? how big is safety on the streets? wendy: that is the issue. there has been a rise in the shooting rate. there has been a rise in subway crime. we talked to one voter who said he felt like it was back to the 1980's when crime was rampant in the city and even though the statistics do not bear that out, if that is how voters feel, that is the top issue. david: does that give an advantage to eric adams? the polls happen slightly ahead in the lead and he is a former police captain. wendy: that helped him tremendously. he is focused on law and order and it is fascinating that after a year of talking about cutting police budgets and police brutality and george floyd, everything that has happened since george floyd was murdered,

that the biggest city in the country is about to enact an ex- cop because he wants to bring back tough policing tactics. david: we have 13 candidates on the democratic side. a lot of diversity. we had an awful lot of white men. we have had one black man. david: -- wendy: you can almost rest assured that the winner of the democratic primary will not be a white man. a couple of white men that are running our polling so low that it is either going to be a black man, a woman, or an asian man. david: fascinating. we may not know for some time. wendy: we may not know until july 12. this is going to be a long process. david: exactly. we will see how popular ranked choice voting is when we get out of this whole thing. thank you so much to bloomberg's wendi benjamin -- wendy benjamin. we will have an interview with a

broadway theater owner and evercore's ceo. we will talk about the effect on wall street of whoever we end up choosing for the next mayor. the 110th mayor of new york city, and this is bloomberg. ♪ (announcer) do you want to reduce stress?

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>> hello and welcome to "bloomberg daybreak." i'm shery ahn in new york. >> i'm sophie kamaruddin in hong kong. >> and i'm haidi stroud-watts. looking at the major markets opening around asia. stories this hour, asian stocks are set for a steady start after reassuring comments on inflation from the fed chair. chairman powell says price pressures will be transitory. hong kong prepares for the first trial under the beijing-imposed national security law. and the key signals on how

authorities plan to handle the legislation. will yous evergrande's debt woes deepen. now the developer must prove it can pull off an -- an aggressive deleveraginging plan. and the things we are watching into the mid week trading session. let's get straight to the market open. >> we have the b.o.j. meeting minutes to digest inhich one d.o.j. member said the delay in vaccination that will mean slower growth. these minutes are off a back yard looking. early in the session in tokyo we are seeing the divergence for japanese stocks. the top ex- topix losing ground after bouncing back 3% on tuesday given the rebound we saw in cyclicals and value. and the global markets and how morgan stanley saying don't abandon the value trade just yet. when it comes to stocks to watch in japan an eye on astrazenaca in japan on media reporting the vaccine will be approved for people aged 60 and above.

the open in south korea this morning, we are seeing the kospi adding a third of a percent while we're seeing the korean won, trading above the dollar. and we have banc of america, merrill lynching saying we could see further rally for the korean won given the current account will become the primary driver as the portfolio flows look steady. we have that strong trade surplus as well for south korea. turning to australia where the r.b.a., kick-inning off tightening next year with a series of hikes and takes the cash rate to 125 by the third quarter of 2023. and earlier, than what the forecast was, reaffirming the call for the first r.b.a. in early 2023. not much action when it comes to the aussie dollar as well as bonds. stocks are opening a little changed as well in sydney after rising most in march for the a.s.x.200. keeping an eye on copper, prices under pressure. keeping an eye on stocks and the copper sector on china's plans

to stockpile sails, and noting that beyond these measured sales, that could create a disinflationary impact. we've seen the u.s. 10-year yield edge up slightly early in the asia session while the offshore u.n. is gaining some ground. this after an eight-day decline that had it testing that 100-day moving average and we're seeing the volume pickup for the currency but stocks on the mainland have been steady. shery: mixed when it comes to the asian markets trying to shake off the shock last week with the fomc's hawkish turn. especially in china, right? and coming out -- at a time as the communist party is getting ready to celebrate that 100-year anniversary next week. >> yeah. stability is going to be the name of the game. we already know like policymakers with all -- when it comes to commodities, prices, and various other asset bubbles that may have been emerging those don't quite work when it comes to dampening these price rise expectations. but always constant vigilance. and we have perhaps a surprise,

chinese equities, and even not really react with much of a blip when other assets globally were going wild in the wake of last week's fed announcement. >> very interesting, p.s.i.300 barely budging and how long will this last? joining us is banny lam, head of research at international investment corporation and great to have you with us. answer this, how long will this stability last? banny: i think the stability you see like a mystical world coming down to markets. i think the market right now, the key point i think is -- the inflation is transitory or upside on a long-term basis? that is the market wants to know more. so i think just telling you the story first. but remember, and there's lots of data coming up, a busy year and lack of industrial or price data and is it so i think the

market right now will be ups and downs like maybe the next couple of months on a data response. but i think like in -- looking at the market right now is we've just tried to look for something like a related to interest rates and something related to domestic prices. >> let's talk about the material prices. because we have seen those efforts by china to tamp down on commodities prices. this is what the c.e.o. of glen corps had to say. take a listen. >> underlying the demand-supply fundamentals are putting commodity prices to the levels where they are. i know recently the chinese have tried to push it down to bring it back to lower levels. >> so where do they expect the commodities rally to go from here and what will that mean for the stock market? >> i think because we are on the recovery cycle on a global

basis. so looking for more production actually to post economic growth. so large demand, but at the same time, the supply side actually big imbalances and also you see a -- or put the prices back on the upside. but i think this is also like a temporary stuff. and i think for the china side, and try to do more things like -- different things. and more local production and importing from other sources or things like that. i think the commodity prices you see like maybe in the next three to six months you still have upside. but the upside not like the last six months. and we have to come down a little bit. and i hope this would not be transmitted into lower supply chain actually will be

increasing to stay inflation pressure. so i think overweight, actually on the -- in the next three or six months. >> bane, i want to get you to the question of the day. and the forecast when it comes to whether we could see a recovery in bank stocks. this is the question. to what extent the highly anticipated fed stress test already bakes into asset prices, what are your thoughts on that? banny: yeah. i think for the best test for the fed you'll see there's a bunch of liquidity action for the market. and i think banks actually maybe on the -- actually have a -- have big increases in loans. and that depth may be like -- endanger the banking systems. but on the -- looking at the u.s. right now actually, the growth, like the momentum is much better than expected. so i think on the bank side, the asset value, asset quality actually is much better than

expected. so i think the stress test coming out may be a very positive to the whole banking sector. and that would be like -- i think the fed also hopes the banks can do more to boast economic growth for the u.s. because if you don't continue, the growth that would be more problems coming up. >> and talk about some of your key calls. one of them is banking on a recovery in the -- in hong kong. banny: in hong kong, i think the pandemic right now actually is getting better and better. and also i think companies actually going back to work, you see the whole sentiment is the people, bank properties, you see a transaction value, the prices of properties and everything actually is going on the positive side. so i think in the second half, this year, you see a lot of property stocks actually will outperform others.

>> bane, always great to have you with us. banny lam head of research at c.e.b. here is vonnie quinn. vonnie: haidi, thank you. the united states is likely to undershoot joe biden's vaccine targets. he wanted 70% of adults to get at least one covid shot by independence day. however, the white house says only people aged 18 -- beyond 27 will meet that target by july 4. it will take a few extra weeks to hit the 70% mark for everyone 18 and older. the u.s. is administering 1.1 million vaccines each day. china will reportedly keep its covid border restrictions in place for another year. dow jones said officials are concerned about new variants and hosting large events including winter olympics in february. china has restricted new visas to people who received a locally made vaccine. it's also enforced hotel quarantines with at least 14 days upon arrival.

and new survey suggests australian -- in china have dropped to a record low. the poll found more people see the asian giant as a security threat than as an economic partner. only 16% were confident china will act responsibly in the world and that's down from 52% in 2018. the number surveyed australians who believe president ping will do the right thing in affairs since last year. the u.k. and e.u. are said to be closer to a truce than a post-brexit trade dispute. it concerns checks on goods moving into northern ireland. exports of chilled meats from great britain to the northern constituents will be banned on june 30 because northern ireland must follow e.u. health and safety rules. the u.k. has asked the e.u. to extend a grace period but e.u. officials want to hear how the british government will use any extra time. sources tell bloomberg next steps will be discussed in a meeting wednesday.

news 24-hours a day on the air and quicktake in 120 countries. i'm vonnie quinn. this is bloomberg. still ahead, we get with more insight into the hong kong national secure law hearings that are going on today. georgetown center for asian executive director thomas thomas will be with us. his views. and coming up next we hear from the head of india's biggest private sector employer and tells us how the pandemic has changed the nature of work. this is bloomberg.

>> india's top private employer has ushered in a new era of working amid the pandemic. many units have turned to a hybrid model which gives staff greater flexibility. the chairman natarajan chandraserkaran told bloomberg that the world won't return to

the pre-covid norms at the qatar economic forum. >> if you see what the pandemic has done is fundamentally activated the digital adoption at least by a decade. it's not about only making the technology relevant. yes, the technology has made relevant, and the investments in these tools have -- but the more important thing is everyone whether rich or poor, educated or not educated, people living in bolivia and rural whrif -- so become mainstream. so people are very comfortable doing things like we are doing this session. the second part is the hybrid

model, let's not think of it as only -- there is going to be a concept of a third place. whether you call it -- i call it a third place. and wherever large communities live in this third place, people can come into -- network. because the technology in terms of network efficiency, productivity, privacy, all those security, all the things, and the level of collaboration will continue to increase. so that third place will certainly -- you'll see that 15 minutes more a metaphor and that

will be an impact in every part of the world due to this concept. so i really think that the future of work really -- we will try to get the best of both worlds. >> the chairman natarajan chandraserkaran speaking to bloomberg at the qatar economic forum. and here's a quick check of the latest business headlines. morgan stanley has told employees they will need to be vaccinated against covid-19 to enter new york offices. c.e.o. james gorman said about 90% of returned staff have already had their shots and the bank has yet to mandate a full return to the office like j.p. morgan and goldman sachs and apprehensive staff could go to a restaurant they should be coming in. microsoft joined apple in the exclusive $2 trillion club. and shares rose as much as 1.2% on tuesday. to krosh the threshold shy of the mark. so far this year, the stock is

up 19% outperforming both apple and amazon. microsoft has been boosted by its dominance in cloud computing and enterprise software will continue in the post-pandemic world. coming up, evergrande's debt woes are deepening and struggling to convince banks and ratings companies that it can execute on an ambitious deleveraginging plan. we'll get you the details on that a little bit later. >> up next we're joined by bloomberg balance of power anchor david weston here in new york for the latest on the key u.s. political race, david. david: thank you so much, shery. yes, we are having a primary in new york city today. it's been called the most consequential election in a generation. new york city chooses its candidates for mayor as the home of wall street and broadway. struggles to come back from the pandemic. we're going to speak with james neederlander president of the neederlander organization that owns nine broadway theaters but much more than that, it produces broadway shows and not only in the united states but around the world including in london.

we're going to talk about what it will take to get back people into seats and how important it is for tourism in new york. that's coming up next. this is bloomberg.

david: this is special coverage of the new york city mayoral primary on bloomberg television and radio i'm david westin. for the view from broadway and the tourism industry welcome jim nederlander president of the nederlander organization. jim, thank you so much for being with us. as said in the tease before you own nine theaters that i'm aware of. you have theaters all around the world including in london but the real question when it comes to new york what will it take to get tour -- get tourists -- tourists on the great whiteway? >> restaurants opening, theater opening. i do believe that public transportation needs to work a little better. and i think with all those coming back people will be

gravitating to new york and broadway. david: what are plans for opening your theaters? >> we're working on some of the protocols but on sale with a lot of shows and people are ready to go. david: people are buying tickets and my friends are eagle tore get back to broadway. >> people are buying a lot of tickets. september if you think about it is tomorrow. and people are excited it come. david: broadway is really exciting and we all want to go to it but an important part of the economy of new york city and not just because of new yorkers like me that go to shows but the tourists. jim: tourism is gigantic for broadway and new york. and i do think once we get hotels open, restaurants open, i think tourism will be back more than ever this fall. david: one of the things that there's a lot of talk about in this election, right now, is safety. >> yes. david: and policing. we had ray kelly the former commissioner talking -- >> a good guy. david: how big of an issue is that for people going to broadway? >> i think security is huge. people want to see some kind of

police presence. people want to feel safe. broadway is always safe. but you know we get 10,000 people a show come to broadway. so i think what people do they want to make sure there's some kind of presence there. david: when i come back into a nederlander theater how how different will it be, show a bar code that i've been vaccinateed? >> that's a great question. things are changing every week. you might come september. you might not. we'll see how things -- we're rolling with -- we're rolling with the times right now. david: how important is this mayoral election as a practical matter for what you do? how much difference does a mayor make? >> well, i think whoever becomes mayor, they should at least for the broadway world concentrate on mass transit. they should concentrate on security. and bringing tourism back. all three are very important for broadway. people need to ride public transportation. david: i'm not going to ask you a to -- ask you to pick a candidate. but what sorts of traits are you

looking for? you've dealt with a lot of mayors. what do we need in terms of a mayor and personality traits and character we need? >> someone who deals with everybody from all walks of life. i think people really want to feel safe. and economically they need to be stimulated as well. not running for mayor. so that's about it for me. david: people say it's the second hardest job in the country after president of the united states. it's not an -- i've never tried to do it but it looks hard from a distance. >> it's not easy. david: how much experience do you need running a government or something like a government? >> that's a great question. you know, there are a lot of people who aren't political who have gotten into the office of mayor. david: one of them named bloomberg. >> yes. and he did a great job. david: as majority owner but he was not a politician. >> the individual who's -- who's most qualified needs to know the city. needs to know how it works. needs to know how people think

and react. keep safety at a maximum. and give economic stimulants. david: and what could you i -- what do you think about the path back? what do you expect? let's take percentage capacity perhaps. maybe that's a way you think about it in your theaters. >> yes. deached if you go out in the fall next year, when do you hope to get back to something like normal 100% capacity? >> well, that might be sooner than we think. we're selling a lot of tickets for our shows. i do think, you know, the first few weeks are going to do well. then we're going to go right into the holiday weeks. so i think we're -- i mean, we're going to play to 100% capacity if we can. i may -- i'll see it sooner than later. david: is it different new york than other places and you have theaters in a lot of different places and produce shows a lot of different places. is new york different in the reopening than other places? >> only because of the state and sanctions and counties and cities. we're going to be opening, knock on wood, hamilton in los angeles august 17.

so it depend on the city and state. david: let me ask you a question about a candidate that's really well-known to bloomberg. and again, i'm not asking you to take a position on it but explain something that -- and i know him and a lot of us at bloomberg know him and a lot of our audience knows him that's may mcguire from citi. a lot of us think very highly of ray mcguire. i'm not endorsing anything here. >> no. david: why hasn't he done better? >> i don't know. i'm not a political analyst. i mean, irwish -- i wish i saw his name out there with everyone else. i'm a big fan of ray's. and i couldn't tell you. if i could, i would. david: fair enough. so another question on your business, though. we tend to think about your theaters but there's a lot of ancillary businesses that i assume really depend upon them. there are a lot of other jobs. >> totally. david: give us a -- how big that ecosystem? >> 90,000 people in new york alone. stagehands.

you arers. ticket takers. treasury actors, actresses. so it's a whole industry. david: let me go the other way. there is concern in some parts of the economy we can't get the employees back and gone off to do other things. >> a grate question. david: any challenges in getting people back to work? >> i certainly hope not. i hope live theater will never die as they say. so i -- i don't see any problem. but we really haven't started hiring people back as of yet. david: what have those people been doing? the actors and the people who -- stagehands and things like that? what have they been doing in the meantime? it's not like they can get another job right with a away. >> anything they can do. being a waiter or waitress is difficult and a lot of them moved home with their families. very tough. david: do you have a sense whether they got a lot of government support? some of the -- >> some did. some unions did. some did. i'm not sure about the actors and actresses. i'm sure they got something as

well. but for 15 months, it's crazy. david: this is a big event. reopening. >> yes, it is. david: how are you going to do it and make a big event out of it? it's something to celebrate. >> i'm hoping bloomberg and all these other news networks are going to cover us. you know, the three big shows again hamilton, lion king and wicket are going to open the tame i'm on the 14th. there's a couple of other shows, a guy from new jersey playing saturday night. david: yes. i've heard about that guy, yes. tickets are pretty expensive, though. >> they're pretty expensive. rumor has it. david: we're talking about the first -- our worldwide audience here. >> i do believe with help we will get a wideoff sendoff. broadway is the number one tourist attraction in exork and want to get anyone with a pulse who wants to come back. david: jim, you got an open invitation to come back and talk any time. an important part of the question. thank you very much. that is that is james nederlander president of the nederlander organization. from bawdway to wall street, the

polls are closing. and all over new york city at 9:00 p.m. eastern time. meanwhile, we're going to talk with ever corps c.e.o. about what wall street wants to see out of the next mayor. wall street is awfully dependent on this city and a lot of concern about the wanna help kids get their homework done? well, an internet connection's a good start. but kids also need computers. and sometimes the hardest thing about homework is finding a place to do it. so why not hook community centers up with wifi? for kids like us, and all the amazing things we're gonna learn. over the next 10 years, comcast is committing $1 billion to reach 50 million low-income americans with the tools and resources they need to be ready for anything. i hope you're ready. 'cause we are. ♪ ♪ look, if your wireless carrier was a guy you'd leave him tomorrow. not very flexible. not great at saving. you deserve better... xfinity mobile. now they have unlimited for just $30 a month... $30. and they're number one in customer satisfaction.

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>> we do have some breaking news. crossing the bloomberg when it comes to the -- for japan, we are seeing the bank japan, manufacturing, the preliminary number for june coming in at 51.5 pulling back from 53 in the prior reading. we are seeing the services component a little bit stronger actually which perhaps is surprising. given the state of emergency that has prevailed for a third time. 47.2 is what we've seen picking up from 46.5. the composite number coming in at 47.8. softer than the previous reading

of 48.8. overall we are seeing the slowdown in manufacturing but they're very well was expected given we have had that state of emergency and just the closure of a number of businesses and sectors across japan. overall, we did see in that first quarter a revised g.d.p., second quarter weakness ahead. but still a milder drop than was expected, shery. shery: and not much reaction when it comes to the markets in japan. the japanese yen still about two months. and sophie for what to watch across markets. sophie: yeah, taking a broader view of asian markets little change on the regional index. financials, seeing a choppy week of back in the red with banking. subsector losing about a third of a percent this morning. energy also under pressure. this even as we see oil prices steadying with brent around 73, benchmark 57 and w.t.i. around 73. and we can see $100 oil next year on travel demand. and materials also moving to the downside. keeping an eye on copper miners

as we're seeing copper prices under pressure. as traders consider china's planned sales of copper stockpiles. when it comes -- the upside in asia, health care, communication names and steapless are gaining ground and tech names also among the biggest. so you have a fresh record high and putting up the board for some other stock movers of note we're seeing also clinching an all-time high yet again. this company is the fifth largest by market cap in south korea. in sydney, edging higher, morgan stanley raising its price target for the market flee cash flow generation and capital return process -- prospects under appreciation. and based in the city, they are jumping on the -- welcoming two baby pandas. haidi. haidi: we love a panda market story. well, we've got a lot on the

agenda this mid week session as well. central bankers in thailand, they're meeting later and philippines will post their rate decision on thursday. let's get a look ahead as senior asia economics reporter is with us. and michelle, let's start off, there has been a number of positive developments since the central bank in thailand last met. >> yeah, that's right, haidi. neither is expected to change thailand, northern philippines, the benchmark interest rate continuing a pattern this year in the region after so many cuts last year. but each of these central banks will be highlighting how to stimulate their economies even as the virus continues to rage. and vaccination is a little bit slower certainly than europe and the u.s. so for thailand they're hoping yes, to turn a corner from their worst virus ways yet. our own bloomberg economist tamara henderson sees that cresting. we expect the b.o.t. to revise down their march forecast of 3% growth for the year, though. and talking about some debt issues. earlier this month, they extended a debt moratorium for small businesses through the end

of this year. but they're dealing with a fragile calculation also and the p.m. already has said that they need to move on and continue vaccination progress with about 11% having one dose already. and continue to reopen parts of the country with the goal to fully reopen to foreigners within four months. so for the philippines tomorrow, they should also be somewhat on track with what they've said for some time that inflation is temporary. we now see that coming down a bit. that really is some tightening pressure for them. and they'll try to stay accommodative for as long as necessary as they say. but again, the vaccination and growth story, and they've kind of struggled to inoculate their citizens. haidi: what's the general reaction of asian central banks being -- to the fed's more hawkish turn recently? >> well, there will always be angst about those knock-on effects and you hear that across emerging markets with analysts looking at who will be the better buy going forward. you do see some other eyeing emerging markets like brazil, czech republic, poland and

hungary that mute yoit pace the fed and see their -- that might outpace the fed and see their currencies strengthen. the mood is things are in better place than 2013 when we have nightmares of the fed's taper tantrum that caught so many countries off guard. inflation here is -- little threat broadly with many countries comfortably within their target bands. so that's not pushing them to tighten. the focus remains as i said who -- these two central banks this week on growth and getting vaccination going. and as we heard from the bank indonesia governor earlier this week, policymakers seem to still appreciate two things the fed has done this time that were different in 2013. and they have more forward guidance and transparency. we heard from powell just yesterday. and powell has been saying they're a ways off from tightening at the fed. so that and the dollar liquidity,000 crisis zero programs has helped provide another backstop to economies in this region. and we also heard from -- on b.t.e. or earlier this week,

that the capital inflows surge that preceded the taper tantrum wasn't set up this time. and so we're not expecting to see as much of a reversal or snapback in capital flows across when the fed does tighten this time. so it could be a wild ride but there are reasons for calm here in asia. haidi: michelle, our economics reporter there. and concern with the evergrande financial health are mounting. but indebted developers struggling to convince banks and rating agencies they can execute on its deleveraginging plan with bonds slumping after a fitch downgrade and the bloomberg report that several lenders are restricting credit to the firm. and let's cross to asia finance editor. candace, it's been a volatile week for evergrande to say the least. >> good morning. it's wednesday. but already there's been a lot going on with china's most indebted developer. and a four-year low and bounced

back as much as 10%. and squeezing out the short positions that have been watching the bad news and building up this month. so what's been going on? we've been checking with banks and what we've learned is that among those that lended to evergrande, three with a combined total lending of about $7 billion have decided in recent months not to renew loans to the company that come to you this year. and alternative lenders the so-called trust companies are also a big source of funding for developers in china have begun to turn cautious on the lender. and to top that all off, as you said yesterday, we had fitch downgrade evergrande, further to junk territory and cite ongoing pressures to downsize the business and reduce its debt. the outlook remains negative. so evergrande remains sort of under a cloud there. shery: is it all bad news? >> it's not all bad news. i mean, i think what you have seen in the past few days is on,

when he's in a really tight spot. just this week, we have seen the company announce sales in its internet unit and the property unit on the mainland. and that's $900 million. and i mentioned some of those checks we've been running with lenders to evergrande, some of them have said that no, in fact, they will continue to go over bonds, and the prior financial stability and evergrande is considered to be an important company. given its messages both in the financial system and its importance to real estate market in china. but unfortunately, for the developer, it has about $50 billion in interest trigger debt coming due this -- in interest bearing debt coming this -- so a lot of ground to cover. haidi: what should investors be on the lookout for? >> i think in the short term you have speculators really keeping an eye on buybacks with evergrande's ability to continue to buy back -- we've seen them come out now for last few weeks.

and the company also has $1.5 billion bond maturing on monday. so we'll keep an eye on that fom event. but more broadly what we will be looking at is more efforts to shed assets and perhaps list -- and some of the other units to release cash for the investor, for the company. and eventually, with china, they want on a policy level is workt the -- for developerrers to de-- on a policy level developers is for deleveraging being. haidi: latest on evergrande. coming up next hong kong's first trial under the national security law is set to start today. potentially setting the tone for the city's future. georgetown's thomas thomas joins us to discuss -- thomas kellogg joins us to discuss. this is bloomberg. bloomberg.

>> this is "bloomberg daybreak." i'm vonnie quinn with first word headlines. federal reserve chair jerome powell maintains that the fed will be patient in waiting to lift borrowing costs. speaking before the house subcommittee on the coronavirus crisis, powell said recent price increases are bigger than expected. but he reiterated that they will likely wane.

and some uncertainty around the timing. he said it's very unlikely that the u.s. economy will suffer from 19 certainties style inflation. -- 1970's file inflation. >> you'll see that it tends to be areas that are directly affected by the reopening. that's something that we'll go through over a period that will then be over. and it should not leave much of a mark on the ongoing inflation process. vonnie: india is concerned by china's military deployment along their disputed himalayan border. the foreign minister said uncertainty over whether beijing will fulfill its promise to reduce troops is another challenge for political relations. speaking to bloomberg at the qatar economic forum. >> the issue there is whether china would live up to the commitments it has made, written commitments it has made about both countries not -- outside

the border. the larger issue really whether we can build this relationship on the basis of mutual sensibility, mutual respect and mutual interest. vonnie: tokyo's governor is reportedly in a hospital. local media said he was admitted on tuesday due to severe fatigue. the government has confirmed that she will take the rest of the week off to rest. it comes at a critical time with local elections in the capital scheduled in the coming days. the tokyo olympics are also set to begin in a month. the wait time for a semiconductorror has hit a record 18 weeks. researched by susquehanna financial group says that's up by seven days from the previous month. the -- already at the most since the firm began tracking data in 2017 and four weeks longer than the previous peak in 2018. power management, semiconductorrors that regulate the flow of stick city are a primary reason for the overall

increase. global news 24-hours a day on air and on bloomberg quicktake powered by 2,700 journalists and analysts in 120 countries. i'm vonnie quinn. this is bloomberg. haidi. haidi: hong kong's first trial under the national security law imposed by beijing is set to start. offering the first glimpse into how such hearings will be conducted. you are looking at live pictures just outside hong kong's -- where we are expecting the trial of hong kong waiter to begin in just under two hours' time. before three judges that were appointed by the chief executive. the 24-year-old which -- has been held without bail for just about a year is facing charges of incitement to succession and engaging in terrorist activities. over his actions during a protest. with more i'll bring in thomas kellogg who is an executive director at georgetown center for asian law. so thomas, in the hours as we get into this trial, of course, we heard that the court had already rejected the application for a trial by jury.

how significant is this? how damaging is this for the defendant? thomas: oh, it's a big deal. i mean, look, jury trials are an important way to ensure judicial expense independence and an important way to ensure judicial transparency and an important way to ensure that the community has a voice in the criminal justice process as a whole. and so the fact that the government moved to provide a jury trial and that he is only going to be tried before a three-judge panel, that's not a good start to the first national security law criminal case. haidi: of course, hong kong has a long and respected tradition of common law and is part of why such a vibrant and popular investment destination. to what extent does this style of conducting a trial bring it closer to beijing's system? thomas: that's absolutely right.

what we've seen in a number of different cases so far is a more beijing style approach to the rights of criminal defendants. as you mentioned, just now, kit has been denied bail and has been sitting in a jail for almost a year as he waits for his trial to get under way. that's a real departure from hong kong's rich common law tradition. and it's much more akin to what we see on the mainland in politically charged criminal cases like this one. look, we still hope that tong-kit will get a fair trial and still hope we will see a vigorous defense as the case moves forward today. but there's a lot of cause for concern. haidi: is there any way to reconcile hong kong's basic law with the national security law? thomas: you're absolutely right. that there are a lot of conflicts there. and the basic law over and over again cites specific human

rights protections, the national security law points in the other direction. and eliminates basic rights. we talked about bail. we talked about the right to a jury trial. those are just two of many examples where the national security law and the basic law are sort of again pointing in really, really different directions. and it's going to be up to the judiciary to try to reconcile those differences. and they're just under enormous political pressure right now. if beijing keeps its hands off, if the hong kong government keeps its hands off they can do their job. and i hope that's what happens here. haidi: exactly. because courts do have the power to sort of narrow laws, right? what are you expecting object this -- on this case? >> loopholing -- look,-the-really too hard to say. one thing i will say is that there certainly is credible evidence that tong-kit broke the law. broke laws in hong kong related

to assault, broke laws in hong kong related to, you know, traffic safety. but whether or not the national security law and big tickets for criminal charges that carry heavy criminal penalties like terrorism and subversion they might not be the right fit here. so we'll just have to wait and see what happens as the case moves forward and we'll have to wait and see how the judges handle some of these very difficult questions. haidi: australian lawyer for a lot of people, practicing in hong kong, due to the similarities in the system, right? do you expect that there would be an exodus of talent in the industry, particularly when it comes to these very prominent, experienced high court judges from the u.k. and australian tradition, should they stay in hong kong given how the system has been changing? thomas: well, i certainly hope that many young lawyers will continue to stay in hong kong

and to engage with the legal system that needs all the help that it can get right now. here at georgetown, we send newly minted lawyers to hong kong, shanghai and beijing every year. and we think they have a role to play in supporting the rule of law and -- in all of those different places. there's no doubt that the rule of law is under threat in hong kong right now. and what's needed is more engagement by the international community, by smart young lawyers, and by all of us to try to get past this difficult moment. shery: and we do have more high pro feel case with jimmy lai and the apple daily as well. what is happening on that front and what does that really mean for the freedom of the press in the city? thomas: look, anytime you have several hundred police officers storming into one of the leading newsrooms in hong kong, you have a problem. and you have a real threat to freedom of speech and freedom of the press and -- in hong kong.

and what's particularly troubling about the events of the past week is that you have according to press reports apple daily being targeted over its journalistic product. in other words, they're being targeted for specific articles that they have run over the past several months. now, i'm a regular reader of apple daily. both in english and chinese. and i have not seen anything that would constitute a legitimate threat to national security. so there's a real question mark here as to what's going on in terms of that particular raid, the arrests that have stemmed from that over the past few days. and just one last point which is to say that it does seem that apple daily is being targeted. and a lot of people are asking if the goal here is more political one to shut down apple daily rather than to enforce the law in an evenhanded way?

shery: right. and you can say whether you appreciate the tabloids' style of journal e or editorial coverage. thomas: that's right. shery: but most people are saying they have a role to play in a healthy free press and democratic society, right? last question for you, are we seeing this sort of operational reach of the security law go beyond just journalism, the press, as well as the court of law? because anecdotally where seeing it across education and other areas as well. thomas: no. that's absolutely right. and that's another troubling aspect of the national security law. and its rollout over the past year now. look, all of the attention in the first couple of months after the national security law was passed was on who is going to be arrested? who is violating the national security law? what's going to happen to jimmy lai? and those are all very important questions. put now as you're -- but now as you're saying we're seeing much more attention being paid to how is the education sector? how are the education officials

handling the national security law? how are union officials handling the national security law? what kind of movies will be censored under the national security law? shery: right. thomas: so we're coming into a much more complicated phase. shery: thomas kellogg at georgetown center for georgetown law. thank you very much. we continue to reach out voices on all sides of the debate over hong kong's future. up next, we'll bring you the latest as voting draws to a close in the new york city democratic mayoral primary. david westin returns in a moment. and you can of course turn to your bloomberg for more on the new york primary. go to tliv.go to get commentary and expert analysis. this is bloomberg.

david: this is special coverage of the new york city mayoral primary on bloomberg television and readio i'm david westin. polls will be closing minutes from now at 9:00 p.m. eastern team as candidates gather with their supporters for celebrations all around town even though no one expects results anytime tonight because of that ranked choice voting system. for the latest on the state of plea as we wait for the polls to close, we welcome now bloomberg's henry goldman. henry, thank you so much being here. >> thank you. david: what do we know and what don't we know? turnout. do we know anything about turnout? >> we don't know for sure. but they had about 200,000 early voters. and while that's not the same as the presidential race, it's the

democratic primary, it's a local election, it shows some significant enthusiasm for picking the next mayor of new york city. david: we know it's a rainy day. a -- >> a rainy day and that may have suppressed some turnout today. yes. david: so as we talk here, we're talking not just in new york but we're talking to the nation and even the world on bloomberg, what is the potentially larger snin cans of this mayoral -- significance of this mayoral --contest? >> it's a good question. new york at a crossroads and had a miserable year, death, economic deprivation, and the voters of new york have a choice. the democrats, whether to go for a candidate who is appealing to people who want a tactical response to crime to figuring the economy and getting the city back on its feet or the ideological approach that led to blassio's victory in 2013. david: just to be specific a

couple of examples. mile wylie on the more ideological -- ralph: she is reaching for the coalition that elected bill de blasio. it's a coalition that believes that income inequality is the paramount issue facing the city, that you can't have prosperity unless you attack income inequality. the other point of view is we've got crime, let's deal with it. let's have policies that deal with -- david: it could be eric adams. ralph: it could be -- >> it could be eric acams dorr for kathy garcia or scott stringer. those who take a more practical approach. this is a progressive city. but they are looking at attacking problems one at a time tactically, not delivering this kind of overarching ideology against income inequality and unfairness. david: henry, thank you so much being -- for being here.

that is bloomberg's henry gold map. man. more coverage ahead on bloomberg television and radio including evercore c.e.o. ralph schlosstein as polls close across new york city. this is bloomberg. bloomberg.

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tom: it is 9:00 a.m. in beijing and shanghai. welcome to "bloomberg markets: china open." yvonne: we are counting down to the open of trade in the chinese mainland. jay powell says higher-than-expected price increases will not last. >> a pretty substantial part, or perhaps all of the overshoot inflation comes from