haidi: hello and welcome to "daybreak asia." sophie: i am sophie kamaruddin in hong kong. we are counting down to asia's major market opens. kathleen: i'm kathleen hays. asian stocks face a mixed dart after wall street dipped from record highs with bond yields rising on the surprise surge in u.s. inflation. jp morgan and goldman sachs beat

estimates but failed to impress wall street. what is behind the share drop. the white house was set to one american companies about the risks of doing business in hong kong, ramping up pressure on beijing. haidi: we have breaking korea unemployment numbers. we are seeing the unemployment rate hold pretty steady, going lower. 3.7%. the seasonally adjusted jobless rate. we were expecting 3.8% and that has come down from that 3.8% we saw in the month of may and we are seeing more workers coming back into the labor force. stronger sentiment and lifted activity when it comes to hiring as well and is worse coming ahead of the be ok board meeting on thursday and we have been expecting signaling about the start of raising rates this year as these financial risks build but we will continue to watch that particularly as the covid situation continues to worsen in korea. that's take a look at how we are setting up for the midweek session in the markets. sophie: extra prices this

morning which showed more solid data. covid cases may dent the likelihood of a rate hike before november from the bureau pay according to barclays. in new zealand, markets are pricing for an 80% chance of -- we have the kiwi dollar trading on the back foot, continuing to lose ground after the dollar jumped overnight on that move higher in u.s. inflation and shows how the fed will respond to that which saw u.s. yields rise and we saw aussie yields track that gain this morning. you have new york crude will been about $75 but just a little bit under pressure, trading near a 33 month high after the iea warned the global oil market will see continued supply picture. switching out the board as we have a soft start shipping up in asia, i want to highlight what the survey had to say when it comes to participants. they are trimming the outlook

for global growth and profit prospects so they are scaling back their cyclical value in small-cap spots. we have taper tantrum risks and inflation still top of mind. kathleen: that inflation debate getting a big upside surprise today. u.s. headline prices accelerated five point percent in june, the biggest year-over-year jump since 2008. the core cpi also sides largest advance in 20 years. our earlier guests say inflation pressures will be a top concern for longer than what bond markets are suggesting. corrects we see some of the reopening restart inflationary pressures coming through. what today's cpi number tells us is that the market is switching to worrying about inflation again. inflation is front and center in everyone's minds. corrects the bond markets are sending a very clear message. it is not a big deal area it is transitory. corrects the increases are going

faster for longer. corrects i'm not going to assume it will be transitory. >> a large part of that will have to get passed on to consumers. >> inflation could be worse than people think. >> it will be with us to the better part of next year. >> is not going to be music to the fed's ears. haidi: joining us for more is the head of economics and strategy at mizuho bank. what are the implications when it comes to the direction of the u.s. dollar with this inflation surprise? perhaps a change in tone at the fed and what that means for ems. >> before we get to the u.s. dollar, one to decipher is how the fed interprets this, not just about punditry but punditry in the context of inflation targeting. that will lead us to where inflation expectations will be and where nominal yields will

be. if it will have an impact on real yields. real yields are pretty low now. u.s. real yields are pretty low so they will probably get higher either with the ketchup of nominal yields with inflation expectations or an unlikely catch down in the convergence. if that means the dollar will be slightly stronger or currencies and em markets are bad news on two fronts. the fed will probably need to tackle inflation. it will rattle markets out of ems back into developed markets. on the other hand, you also have the stronger dollar which is bad for ems in terms of their dollar-denominated that and the kind of fragility's it starts to on earth, particularly now that the ems are coming out of the pandemic with much higher debt.

these are the risks to earnings. haidi: a lot has changed from the last taper tantrum. a lot of these asian economies have their houses more in order. where do you see opportunities actually? >> i'm going to be very boring so i apologize for that. i'm going to defer to things like the death assets because that is looking at two things, net operating cash flow of a country and it is looking at the budget deficits, particularly coming out having spent a lot on the pandemic. partially offset by much higher fx reserves and much better hedging and inflation against the data. one is inflation within ems. the higher the inflation in ems, the lower the returns here and that will create more volatility

around ems so currently, the riskier one's -- higher oil and inflation. for indonesia, even though inflation is under control, the outbreak of covid all over again and between -- that is growing, along with some concerns about joe bank debt monetization but also creating wobbles. these vulnerabilities exist. we are in a relatively better position but then the entire -- we are where we were. kathleen: it is always hard for me. haidi just asked about the emerging markets. it is a big, wealthy country. you have concerns about china's economy, chinese growth. if the u.s. is moving more towards the taper and signaling that to markets, china -- does this have any impact on the

slowdown that a lot of people think is starting already may be and could be deepening? vishnu: that is a good point and i think the problem with that is that china is doing -- a tight rope. the u.s. is starting to taper. what china is going to do is spur some of the new growth industries and clampdown on potential property and asset bubbles. there is already a little bit of confusion as to what policy is doing and if capital outflows become a risk and then china will continue to start tightening. markets do not react very well. we may be facing a smaller version of the selloff if policy management going into taper is not optimal. and are the risks that china is holding. in any case, structurally,

china's growth is going to taper off to sub 6% so it is a very different proposition. in the u.s.-china tensions and conflict may not be front and center. kathleen: just really quickly, i want to ask you before i go, where do you see the sweetest investment spot in asia? vishnu: coming out of the pandemic, we are seduced by the proposition that -- thailand could also affect into this and from alisha, that is a good case to be made. kathleen: thank you so much, vishnu varathan, head of economics and strategy at mizuho bank. now to vonnie quinn. vonnie: researchers supported by the national institutes of health say people who received both doses of moderna or pfizer may not need an additional booster shot for years.

they presented a strong, consistent immune response against covid-19. there is a concern about variants that may pose a threat. why than half of all adults in the european union are now fully vaccinated. ursula von der leyen tweeted the news. those doses are said to vaccinate 70% of adults. he authority is analyzing data on a rare nerve disorder reported among a group of recipients of the johnson & johnson back in after the u.s. added a warning label to the shots. health officials say malaysia is covid cases, which topped a record 11,000 on tuesday, may climb even further in the coming days before stabilizing. the health director general says the outbreak is being driven by the contagious delta variant. of asia has been struggling to contain the recent surge despite much of the country being on lockdown. iraq's state news agency says 92

people are known to have been killed in a fire that swept through a hospital coronavirus award. the cause is unclear but authorities at one point claimed an electrical pole that may have triggered an oxygen tank explosion -- they ordered the arrest of three regional health officials. global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie quinn. this is bloomberg. kathleen: thanks. j.p. morgan and goldman sachs standard losses inmate trade with investors focusing on slumps in fixed income trading rather than the record deal making revenue in the second quarter so let's get more from senior analyst allison williams. does this make sense? what is the logic here? >> what we saw was a very strong quarter across the banks with a couple of weeks spots. the number one being the fact that net interest income came in a bit lighter at j.p. morgan.

we continue to wait for loan growth and so you saw not only j.p. morgan but citi, bank of america, and wells fargo trading down on that news. we will have to see what the banks have to say on that front. the second is appointment with j.p. morgan's higher costs. we have raised costs about five times since early september. part of that is higher business finds which is a good thing because you need to spend to make money and part of it is investment. we think it is good that they are investing for the long-term but it does perhaps signal that it is a higher cost to compete. on the equity side of things, most interesting from a global standpoint is that both banks cited record plan balances. they both had better than expected equity trading revenue. these were broadly better, led

by significantly better m&a, and so that was really a strong point. goldman sachs, a record investment banking pipeline heading into next quarter. j.p. morgan also very strong. those bode well for morgan stanley who reports on thursday but we are also going to be looking to see if companies like citi and bank of america who want to build up their equities business are gaining share and that is in the week of the arcade goes fallout related to mass -- ok goes -- archagoes fallout. kathleen: this is act one out of two acts. going into act two, what are the indicators to tell us whether the missing pieces, whether the consumer side, whether the loan growth, whether the interest rate environment is going to come in favorably. allison: -- >> the number one thing that banks need in terms of what investors are looking for is a cup in loan growth in

the second half. the second half is the key period. for most of the year. however, head of that, we see weaker card balances for j.p. morgan and citigroup so we all expect trading to normalize. we are getting better fees in the pipeline although that is a little bit smaller. the other good thing on trading revenue is that it is normalizing higher than 2019 levels. net interest margin line continues to be weak. what banks really need is an uptick in short-term rates but we do not expect that. the market does not expect that for some time as the market is expected to be on hold and that is why we need loan balances to kick in. kathleen: -- haidi: allison williams. we will get more from goldman, still ahead, as it is teaming up with apple on a by now -- buy

now, pay later scheme. we will be speaking with a vice president and former acting deputy u.s. trade representative, wendi cutler, who will be joining us about these white house moves to counter china's digital influence in particular. this is bloomberg. ♪

haidi: sources say that the u.s. will warn american companies this week about the increasing risks of operating in hong kong. it comes as washington looks to dialect pressure over beijing's crackdown of the financial center. antony blinken has warned when it comes to the misuse of chinese tech. >> to date, we also know that it is harder to ensure that american innovations are used for commercial purposes only. countries like china do not differentiate between civilian and military in the same way.

and emerging technologies, including ai applications, blur that line, too, so we have to think differently about how to protect our innovation and industries against that kind of misuse. haidi: let's bring in john liu in beijing. this is part of a spate of various measures we have seen from washington this week alone. when it comes to the expected warning on hong kong, what are we expecting and what does it tell us about how washington now views the -- john: we are expecting them to issue a business advisory which will make several points to american companies operating in hong kong. the biggest of those will be that there is an increased possibility that the chinese government will be able to access data and information that companies and support in hong kong and that is one concern

among many others being the rule of law in hong kong, whether the national security law that was implemented earlier has undermined that in hong kong. in general, it speaks to that greater sense of washington about the difference between hong kong and mainland china. that the former one country, to systems regime, whether that is still in lace. there is greater suspension -- suspicion that hong kong is being rolled as greater china is. kathleen: have they given any indication they are concerned about these moves by the u.s., particularly hong kong? it looks like there is no more, you know, two different rules of law, etc. seems like they are potentially shrugging it off. we are going to do what we are going to do and it doesn't matter what the rest things. john: -- what the u.s. thinks. john: the one country, two

systems regime continues in place, that hong kong operates with a high degree of autonomy. there are doubts about that. i think with the recent actions against dd, with -- didi, with all the new regulations around chinese companies listing overseas, it does make hong kong more important as a financial capital for china, for chinese companies to raise financing. beijing wants the tech sector to be well-financed, to be innovative and growing so over the last year, 1.5 years, hong kong has become much more important to the regime in beijing than it used to be. kathleen: certainly if you look at it from china's standpoint, there is a strong logic and what they are doing. thanks much, john liu from beijing. more perspective on u.s.-china ties ahead. wendy cutler joins us later this hour. meanwhile, another big chinese listing in the u.s. may be moved. sources say chinese logistics --

a chinese logistics company is shifting its ipo to hong kong instead. the firm is reportedly worried about a lengthy delay in going public amid the regulatory crackdown. they remain optimistic about prospects in china even after two of its major investments were sideswiped. the singapore state investor, which backs didi and aunt group, -- ant group posted a return. we spoke to the head of the investment group say that there is plenty of runway in china. >> our portfolio in china stands at 27%, which is a large part of the port olio. we see plenty of opportunities in china, and we do remember that we invest according to the trends that we have established for ourselves and when you look at trends like digitization, sustainable living, longer lifespan, or even the future of consumption, these are very

prevalent in china today and we believe they are still very early days. there will be plenty more to go going forward. >> to your point, in terms of market trends and themes, you are invested in didi, ant financials, valuations plunging after the regulatory pressure. how do you view this? >> look, at the end of the day, what drives us is the long-term outlook of the country. -- country we invest in. regulations are what they are. it is not only the case in china. we have seen regulatory changes all over the world. we are used to that. this is part of our intrinsic value. we look at every risk including around regulation or other aspects. we make the decision accordingly. as i mentioned earlier, there is still plenty of runway left in

china around some of these trends and it will remain as an important destination for us. >> many of your chinese investors are listed in the u.s. or planning to list in the u.s. well the u.s. ipo ground be less desirable from now on? will it impact valuations? >> if i were to give you an answer on what we are seeing now, it is clearly a current can turn for some companies, as we have been hearing. fast forward to what happens down the line. nobody can tell you. there are different ones for chinese companies to list and it's not only in the u.s. that is not the most critical consideration for that. clearly, the tensions between the u.s. and china here are prevalent amongst us and we have to keep monitoring what happens.

haslinda: so what is looking attractive in china? nagi: anything related to trends. when you look at sustainability focus, you look at autonomous vehicles, companies with software, the agri-space companies that provide drones or water efficiencies and others's, when you look at the innovation and this is a big area for us, and we are trying to tap on our network or ecosystem of companies by trying to put companies together. we have an investment in a large company in the u.s., trying to put it with the chinese company, singapore, southeast asia, it is very important and china gives us plenty of opportunities there. haidi: wendy cutler --nagi hamiyeh. for more on china's crackdown on

big tech, you can check our special on youtube. don't miss out on another big interview later on. we will be here with the joint venture between two of the world's leading steel companies. the ceo joins us exclusively. this is bloomberg. ♪

haidi: a quick check of the latest business flash headlines. broad, and an institute have ended talks after the founders of the software firm changed their minds. some employees were said to have thought the company would be a strange fit for the efficiency focused broadcom. earlier, the wall street journal reported the two sides were discussing a deal. a company jumped by 7% tuesday amid media reports of a trademark application. the report suggests korea's e-commerce giant will launch an online business selling office

supplies or launch a b2b brand focusing on business operators. coming up next, another bloomberg's group. apple and goldman teaming up. we have the details, up next. this is bloomberg. 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 dollars. and they're number 1 in customer satisfaction. his number? delete it. deleting it. so break free from the big three. xfinity internet customers, take the savings challenge at xfinitymobile.com/mysavings or visit an xfinity store to learn how our switch squad makes it easy to switch and save hundreds.

vonnie: this is "daybreak asia." i am vonnie quinn with the first word headlines. the u.s. budget gap group. treasury department data shows the shortfalls for june, 174 billion dollars, as the federal government tried to stem the economic devastation by covid. the congressional budget office says fiscal 2021 will see a $3 trillion gap even without additional spending, close to the record $3.1 trillion of last year.

janet yellen says u.s. businesses will likely provide crucial support in pushing congress to support a global corporate tax plan. ellen told bloomberg the push may be needed to help overcome republican opposition. the g20 meeting in venice approved a preliminary pack aimed at multinationals. diplomatic officials say nuclear talks with iran are not likely to resume until after the islamic republic installed new president heber him -- the new president next month. a dispute between the uae and saudi arabia is preventing opec less from boosting supplies as economies emerge from pandemic lockdowns. deadly protests in south africa following the jailing of jacob zuma show few signs of letting up. the government deployed soldiers to help police. major highways have been blocked

. it accounts for half the nation's economic outputs. security forces say 72 people have been killed. global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie quinn. this is bloomberg. kathleen: thanks. international oil companies are diverting more and more money to sustainable investments, whether it is wind, solar, and hydrocarbon. the bp ceo joined our colleague, alix steel, to discuss the agreement energy transition and the importance of hydrocarbons to that strategy. >> we have to continue to invest in that hydrocarbon base because it is core to our strategy and without those hydrocarbons, we do not get to transition, so the hydrocarbons provide the cash flow that is necessary to make sure that our investors get the return that they deserve. they have been patient and it is

time for them to get the return that they deserve, make sure we have a strong balance sheet and that we can invest into the transition so this will evolve over time. it is not an overnight switch that some people would wish it were. this is a complex transition but it is one that i think our plan is hopefully very, very clear on and that will play out over the coming years. >> do you think oil majors like yourself that are making these tough calls on where to invest money, are you guys setting the oil market up for a super cycle or do you think you can stay flexible enough to prevent that from happening while also spending a lot of capital and time into other types of investments? bernard: a lot of people are talking about our commitment to reduce production by 2030, about 20% by 2020 five. even by reducing our volume by 20% by 2025, we will still grow our earnings at our cash flow from that business through that

period. why? because we don't want to run the biggest oil business. we want to run the best oil and gas business, and as you well know, that means you focus relentlessly on your portfolio, focusing on value, not volume. we focus religiously on margin. our margins will go up 20% on a unit basis over the next five years so this is a strategy for focusing on value creation and that means we don't worry about volume. we focus on value. i think there is a good chance that oil prices would be robust and high over the coming years. there is a good possibility that they will be volatile. we are not planning on them being high. we are building a company that is resilient to a low price. i can tell you and assure you that if they are high, we have a portfolio that will absolutely benefit from that. because we have the share buyback program that we have

that says that 60% of excess free cash is used for buyback purposes. that could result in material share buybacks over the coming years if prices remain at the levels that they are today. >> if you needed to, could you pick up the pace and prevent some sort of super cycle or is that going to be the discipline? alix: the discipline -- bernard: the discipline will be the discipline, in your words. this, we believe, is the right way to run a hydrocarbon portfolio. focus on value, focus on margin. take cost out of the business. digitize everything that we can. i have just come out of a meeting on digital and agile. we have what we think is the largest organization working in an agile way in the energy sector. 7000 people working in a structured, agile way.

decisions being made 40% quicker. that is what running a good oil and gas business is for us and that means we can grow that business over the coming years even as we shrink volume. haidi: that was the bp ceo speaking to alix steel and you can catch more of those conversations as part of bloomberg's sustainable business summit that is underway this week. japan is set to report industrial output ahead of the boj's decision on friday. let's take a look at how markets are stacking up. sophie: mckay futures in singapore pointing to losses, trading near a one-week low and we have jgb futures going lower although boj bond buying may cushion the drop for cash jgb's after overnight moves we signed treasury markets that were focused on the fed reaction to the inflation surprise from the u.s. who had the yield curve flattening and steepening on a week 30 year -- weak 30 year

sale. debt supply pressures with the gap at 62 basis points, the biggest premium since january 2019. they say that there are expectations for large-scale spending from japan before the general election and that 30 year yield is seen as the target. kathleen. kathleen: sophie joining us from hong kong. let's get on to a bloomberg's group. apple is working on a service that will let consumers pay for any apple pay purchase in installments over time. it is a response to the pay later offerings. we are joined by bloomberg technology reporter, mark gurman. great story. how is it going to work? mark: thank you for having me. this is pretty simple. any purchase you make using apple pay you will be

able to separate into installments over several months or four installments every two weeks over eight weeks at no interest with goldman sachs as the lender. if you buy something for $1000, you can pay in four installments of $250 at no interest and this will work with any credit card attached to your apple pay account. they can do installments under several months with interest. you have two different plan options at the base for this new service to launch that apple is internally calling apple pay later. haidi: what did they both get out of this partnership? mark: apple gets a percentage of every apple pay transaction made. it is a low double digit number and this is going to spur, they assume, additional adoption usage of apple pay to make apple more money over time and then i can only presume that as part of the monthly installments plan, with interest, that apple and

goldman sachs will split some of that interest. of course, apple is making over $50 billion a year from their services division and this will likely add to it. goldman sachs has been pushing their new consumer oriented products. they are making millions now on these types of offerings, too. haidi: mark gurman. for an in-depth look at the power struggle between regulators and the technology sector, do not miss out on our upcoming bloomberg tv vessel. you can catch that, starting this weekend at the times on your screen. coming up next, the former deputy u.s. trade representative, wendy cutler, joins us to discuss countering china's influence including this potential digital trade deal. this is bloomberg. ♪

kathleen: the u.s. will issue an advisory this week warning american companies of the increasing risk of operating in hong kong. sources say that includes beijing's ability to gain access to data that foreign companies store in the financial center. to discuss further, we are joined by the vice president at the asia society policy and toot and former acting deputy u.s. trade representative with many

years of experience working with asian leaders, asian policy. what about this morning on hong kong stocks? it is one of many things the white house has been pushing out against china with. what do you expect to hear and can it really make a difference? >> it is the responsibility of the biden administration to inform u.s. companies about the risks of operating in hong kong in this new environment over the past year since the national security law has been passed. and implemented. >> we have a story coming out in the last hour or so on bloomberg talking about how biden is continuing the tough on china policies. while trump was in the white house, democrats did not seem too much on board with most of what he did in this area and now joe biden himself seems like,

you know, tough on china 2.0. wendy: i don't think it is correct to say that democrats were not tough on china during the trump administration. this is an area where there is bipartisan consensus. the need to be realistic about our relationship with china and to take the steps necessary to boost our competitiveness while at the same time responding to the unfair practices that china is employing in third country markets. haidi: we are six months into this administration and we are planning to get a more clear picture of what that policy towards beijing looks like. do we sort of eventually get to the point where we are setting up with just as much pain and uncertainty as we did with the trump administration or do you feel that this administration is different in its approach? >> it is a different in many

important respects, particularly with respect to really working with allies and partners and not going it alone. furthermore, the biden administration its time to develop a strategy towards china and not just kind of seeing which ones stick so i see a much more deliberate and thoughtful policy. it may turn out to be as tough or tougher than the trump policy but that is more of a factor of the state of relations between the u.s. and china rather than any partisan approach. haidi: that leads me to my next point which is wondering whether this relationship fundamentally, regardless of the approach and the niceties that could be taken by either side, is there a fundamental strategic competition that is going to drive the tensions going forward? wendy: that is my view.

we are in competition with china, but i think that there is a recognition from the biden administration that we need to address our own strength at home in order to compete with china. we cannot blame china for everything, establishing a level playing field with china is important in the trade and economic area but also we need to boost our competitiveness at home and i think that is fueling the bipartisan drive to pass this innovation and competition act in congress so the united states invests money into our own equities, our own assets industries, and make ourselves more competitive. kathleen: how about the potential digital trade deal which would not include china but many of the leading asian nations? what kind of response do you expect to see from these other countries to joining an agreement that does not include china? enthusiastic or little bit

hesitant. wendy: the emphasis of not including china is not the correct way to go. i think the administration is looking at what they can do in asia to kind of promote our values and our view on where things should be going and to participate in the rulemaking. many economies in asia already are working among themselves on setting rules and standards so now is the time for the united states to join those other countries as the rules are still being made so we are not left with kind of accepting what is out there. if you look at the recent regional comprehensive economic partnership agreement in which china participated, with respect to the digital chapter, there are lots of exceptions and even though the rules may seem robust at first glance, you need to look at the footnotes and it basically says it is up to each country to decide what it wants to implement.

i think there is a huge opportunity here for the united sates to help make the rules with other countries in this area. it may not include china, but so be it. haidi: always great to have you on your views. former acting deputy u.s. trade representative, wendy cutler. the u.k. international trade secretary downplaying hopes of getting a trade deal before the end of the year. they spoke with annmarie hordern on the sidelines of her meeting with the u.s. trade representative, katherine tai in washington. >> i have never set a deadline for any trade negotiation because the important thing is to get the right deal that works for both countries. there is a huge amount we can do together. the u.s. is the u.k.'s largest single country trading partner.

a million brits work in the u.s., one million u.s. citizens working the u.k., u.k. businesses, so there are huge opportunities to build a close relationship and that is why i'm going over to the west coast to meet leading figures from the tech industry, meet politicians on the west coast as well. i am interested in getting the right deal that suits both of our countries rather than being in a hurry to do it. >> i used to be one of those americans in the u.k. working. and there is loads of us. if you are looking for more of a comprehensive -- the correct deal, is it fair to say that that cannot be done by 2021, by the end of this your? >> that would be a very rapid timeline. we have just concluded an agreement with australia from start to finish and that was a very rapid timeline. i agree that the kind of timeline you are talking about would be extremely fast, and

what i am interested in is getting a high-quality agreement, having those discussions right across the united states about how we can work more closely together, because we do face threats from elsewhere in the world, nonmarket economies, market distorting practices, and this is i think a strong basis for not just the u.k. on the u.s., but also other like-minded countries to work together. >> i want to move onto the potential for travel corridors. we have heard time and time again that the u.k. and the u.s. are working on some sort of travel corridor coming out of the pandemic. i have left the u.k. twice when i was a u.k. resident to come to the united states and because i had a blue passport, i was able to enter pretty freely and that is not the same for british individuals, even if they are vaccinated. is there any progress that they -- with the u.s. government on this?

>> this is an area we are keen to see progress on. of course, i have been talking about the level of investment of u.k. companies in the u.s. and vice versa. of course, we need to make it easier for business people to travel because ultimately, that is what helps drive trade. it drives economic growth. there is only certain amounts you can achieve on a zoom meeting. we would like to see easier flow for business travelers. >> liz truss, u.k. trade secretary. he sure to tune into bloomberg radio to hear more and get in-depth analysis from the daybreak team. you can see them broadcasting from our studio in hong kong, listen via the app, or bloombergradio.com. plenty more ahead. stay with us. ♪

haidi: let's get you a quick check of the latest business flash headlines. it posted its biggest annual return on the rally in global equities but warned that a temporary rise in inflation could be a risk. the singapore state investor saw a 25% gain for the fiscal year ending in march, taking the value of its portfolio to 280 $2

billion that marked a turnaround from the drop of 2%. it made up 27% of the portfolio followed by singapore at 24%. sources say the move is considering shifting its $1 billion ipo from the u.s. to hong kong as chinese regulators crackdown on overseas listings. the on-demand logistics and delivery firm is said to be concerned about movables from authorities in beijing and potential delays to its ipo. we are told deliberations are ongoing and they could still proceed with the u.s. listing. a unit of a chinese asset management company has transferred funds to pay local bonds. it repaid the principal and interest of the bond that matured on tuesday. the debt manager has reached funding agreements with state owned banks to ensure it can pay through the end of august. it has emerged as the front

runner to purchase citigroup's australian retail assets. discussions are said to be in advanced stages with the unit valued at $1 billion. an agreement would make them the second-biggest credit card player. they added that discussions would not necessarily lead to a deal. kathleen: for now, counting down to the start of trade in tokyo and seoul. some stories we are watching today, starting with korea. daily covid cases will hit another record as the country added 1440 confirmed infections as of 9:00 p.m. local time. looking at the economy, south korea's june unemployment rate came in at 3.7%, slightly below the estimate of 3.8%. we will be keeping an eye on coupon today. the stock jumped on reports it had the new business trademark. the stock climbed about 15% in the last three trading days. let's move over to japan now. a lot of focus now.

prime minister yoshihide suga see those report -- suga's support has fallen. meanwhile, residents and scientists are raising concerns about the stench and levels of bacteria in tokyo bay, the venue for olympic triathlons and swimming marathons. the complaints, as tokyo has spent months and millions of yen to improve the water quality. we continue to watch japanese automakers push towards electrification. nissan ceo says it is 1.4 billion dollar ev making hub in the u.k. is just beginning. now back to sophie in hong kong for stocks to watch. >> sticking with that ev at bank of america, they raised their forecast for penetration to 23% by 2025 due to high production targets for major carmakers over the past six months. among the top picks and the

battery space, that would be panasonic. keeping a close eye on samsung after the company was ordered by ho chi minh city along with other firms to suspend operations in the high-tech park amid the virus outbreak in vietnam and over in australia, we are keeping a close eye on reaction in the buy now pay later segment, a new service that would allow consumers to make purchases in a similar service to rivals that we have. heidi. haidi: coming up next, we will take a look at china's tech crackdown with the leader, plus we will be getting markets insight from an international investment corporation. in the market opens in sydney, seoul, and tokyo are next. this is bloomberg. ♪

kathleen: hello and welcome to "daybreak: asia." i'm kathleen hays. sophie: i'm sophie cover wouldn't -- i'm sophie kamaruddin. haidi: i'm haidi stroud-watts. our top stories. wall street dips from record highs. the surprise virgin u.s. inflation. the dollar gaining along with bond yields. kathleen: the white house set to warn american companies about the risk of doing business in

hong kong, ratcheting up pressure on beijing. haidi: j.p. morgan and goldman sachs beat estimates. we take a look at what is in store for bank of america, citi, and wells fargo. kathleen: breaking news. singapore's second-quarter gdp coming in close to estimates. the year-over-year number up 14.8%. it is comparing with a year ago, where the gdp fell 13.2%, the worst of the pandemic damage. the numbers being watched very closely, the quarterly numbers. in the second quarter, down 2%. a a little bit stronger than the forecast -- a little bit weaker, i should say. let's bring in bloomberg's chief asia economics correspondent to give us the details on what it says. we know there is some pandemic restriction dynamics buffeting

these numbers. what is the real story? >> two things going on. it reflects where the pandemic was a year ago. there was always going to be a base effect. singapore's exports have been doing well. so the base effects were always going to drive up the year on year. the quarter on quarter is more interesting. that reflect what is going on, in terms of containing the virus. in may, singapore met its toughest restrictions in about a year to curb the virus. it hits the food and beverage sector, hospitality, tourism. that is dragging the domestic story. that is what people are looking to to see where singapore's economy goes. can they hit their vaccine target and work their way out of this? haidi: the vaccines, how key is hitting these goals for the recovery? >> it is everything now.

especially looking at the numbers. they talk about getting two thirds of the vaccinations -- population vaccinated. the external story is holding up, exports, the financial services story. domestically, they have to figure out this middle path, where they can open up businesses gradually and allow the retail sector and consumption story, and recreation side of things to get moving. that is purely what is missing in all of this, in terms of driving the domestic economy. i think people are looking at how singapore navigates it. kathleen: is what happening in singapore a warning for other countries, as well? >> i think it is. there is something of a ring of fire when it comes to the virus around the asia-pacific. a lot of capitals are implementing their strictest virus restrictions in some time. singapore talking about what they describe as a middle path. not a big bang opening like the u.k., neither refer china or

australia, in terms of zero cases. they talk about getting the vaccination targets hit by august 9. gradually reopening business and recreation, tourism sector. the classic open economy, it is a trading center, travel center, it already lost the world economic forum it was set to host. very much in their interest to find the middle path. a lot of economies will be watching if it is successful in doing so. haidi: bloomberg's chief asia economics correspondent, enda curran. let's get a look at the markets with sophie. sophie: early in the session, the nikkei 225 losing .10%. jgb's losing ground. overnight in treasuries. the surprise jump we saw in u.s. inflation that had market abating of the fed may respond. checking out the open in seoul on the back of the latest jobs data. 3.7%.

kospi losing ground. the korean won trading now. climbing above the handle against the greenback. start of cash trading in sydney. we have stocks on the back ever so slightly after a big laggard. probably the most since may 11. apple and goldman working on a pay later service. and we see vons and focus of the back to back inflation report. the aussie 310 year yield moving higher, steepening. the kiwi dollar trading near ahead of the policy decision. we will see if there are any clues around a path for a rate hike from new zealand. brent staying above the six dollars. softening, retreating from a 33 month high. we could see even tighter supplies for the physical market.

when it comes to global growth, that is being weighed down by concerns of the delta variant in asia. we have seen cases picking up. malaysia topping 11,000. singapore seeing a jump. haidi: our next guest says the virus surge is likely to slow the recovery momentum for asian companies and weigh on sentiment for a short-term basis. market valuations remain on the upside. joining us is banny lam. when you take a look at the surge we have seen in cases, not just in asia, but globally, is this the key concern for this part of the world? >> i think like last year, we have gotten used to the way the virus has hit the economy. so i think going back, all of that economies may be reintroducing -- i think the lockdown measures. but we get used to the economic

activity. on the second half of this year, the virus recovery coming back may not hit the economy so hard. at the same time, we have to get used to the way, how to introduce the business activities in the second half. that is the main part of the asian companies that we have to watch. haidi: i want to get to your calls on japan and korea. financials and consumer discretionary, other sectors you are overweight. talk us through those as you look at economies struggling with a resurgence of the virus. there are two of them. >> i think the market right now is looking at low base, where you compare the first half and also last year. but i think in the second quarter, there is a slowdown of the virus hitting the economy. everything is doing much better.

so financials, consumer discretionary sector, they have performed real good. the second half, korea and japan, we have to watch -- i think the olympics may have impact on the consumer discretion. and also the financial sector. and i hope like everything, it goes smoothly. kathleen: the kind of sectors, even with the virus, why they can move ahead, but when you look at commodities. you are overweight material sectors i think across the region. in some ways, over dependent on what the pandemic did to slight -- supply chains, how it affected the commodity-based goods across borders. if it calms down, is your commodity play, you are overweight, become a different position? >> i bet on my overweight under

commodities related to stocks. because now, we look at the virus. it is coming back again. we see the economy, even the stock market responding to the marginal improvement of the sectors. once, everything -- once everything gets under control, everything is going back to demand. the demand has pushed the commodity prices. kathleen: we see a stronger dollar. people set ahead of the u.s. cpi it was strong. it was stronger than forecast. we could see the dollar, which has made a small rally, continue rising. could you see the dollar getting stronger? does it reflect any of your positions in the equity markets? >> i think now, a strong u.s. dollar is not so favorable for asian markets sometimes. at the same time, i think the

cpi or core cpi in the u.s. is on a transitional spike. not really a permanent one. so in the next two months, a high level. but once it goes down, maybe three month from now, you will see the u.s. dollar weakening. the weakening u.s. dollar is favorable for second half for the asian market performance. kathleen: banny lam, thank you very much. now to vonnie quin to get the first word headlines. >> researchers supported by the national institutes of health say people who received both doses of the messenger rna vaccine, such as moderna or pfizer, may not need an additional booster shot for years. the shots presented a strong persistent immune response against covid-19. there is a concern about possible new forms or variants that may pose threats. more than half of all adults in the european union are fully

vaccinated. the european commission president tweeted the news. 70% -- the health authority's organizing data on a rare nerve disorder reported among a small group of recipients of the johnson & johnson vaccine. this after the u.s. added a warning label to the shot. u.s. first lady jill biden will travel to tokyo for the opening ceremony of the olympics. pressing ahead, despite authorities closing events in the city amid a surge in covid-19 cases. all olympic events in and around tokyo will be held without fans. japan declared a fourth state of emergency that will run through august 22. global news, 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i'm vonnie quin, this is bloomberg. haidi: still ahead, another chinese company knowing a change to its plans. now looking at hong kong

instead. we will get the rpi outlook from ringo choi. didi investor -- staying optimistic on the china bid amid the regulatory crackdown continuing. that conversation ahead. this is bloomberg. ♪

>> it's not enough to highlight the horrors of techno-authoritarianism, pointing to what russia and china are doing, and saying it is wrong or dangerous, even as it is. we've also got to make the positive case for our own approach. then we've got to deliver. haidi: that was u.s. secretary of state antony blinken saying the u.s. must respond to china's

techno-authoritarianism. tougher rhetoric from washington has come amid a spate of recent hardline moves. bloomberg understands the u.s. will warn american companies about the increasing risk of operating in hong kong. let's cross to our greater china executive editor. a story on the bloomberg in the last couple of hours, biden's china policy hinting at more trump style pain. what is your sense of the policy stance the biden team is taking? will they have more impasse than the trump team? >> impact, i think there could be greater impact from what the does. the overall tone has changed. they are still very competitive, it is a rivalry. the biden administration is in a place where it is trying to compete and make sure the relationship doesn't fall into direct conflict. otherwise, in terms of hong

kong, beta, technology, ai, semiconductors, it is very competitive. the u.s. is doing what it can to try and gain an advantage in that rivalry. that has not changed from the trump administration. haidi: what do we make of what is going on in beijing? we hear the elevation of a specific intergovernmental agency to deal with this. what comes next when it comes to its own crackdown on restrictions on the tech sector? >> what has happened with didi, the greater role of the cyberspace administration of china is playing in ensuring data security, that is the new normal. they have realized how important data is, especially in the struggle with the u.s.. i expect beijing will take a more proactive stance to protect the data and the ability to develop its own technology.

that doesn't seem like it will change anytime soon. haidi: our greater china executive enter -- editor in beijing. -- about prospects in china, even after major investments by the ongoing regulatory crackdown. the singapore state investor backs didi, and a 25% return in the fiscal year. we spoke with the joint head of investments. he says there is plenty of runway in china. >> our portfolio in china stands up 27%, which is a very large part of the portfolio, but we see plenty of opportunities in china. do remember that we invest according to the trends we have established for ourselves. when you look at trends like sustainable living, longer lifespan, even the future of consumption, these are prevalent in china. we believe they are still very

early days. there will be plenty more to go. >> to your point, in terms of market trends, you are invested in didi, and financial valuations plunging after the regulatory pressure, regulatory clampdown. how do you view it? will it affect your appetite for chinese tech? >> at the end of the day, what drives us is the long-term outlook of the country we invest in, of the companies, and space they are in. regulations are what they are. not only in china, we have seen regulatory changes all over the world. we are used to that. it is part of our interesting value exercise. we look at every risk, including around regulation and many other aspects, and we make a decision accordingly. we still believe -- as i mentioned the trends earlier -- there's plenty of runway left in china around some of these trends.

it will remain as a very important destination for us. >> it is about valuations, retail, many chinese investments of yours are either listed in the u.s. are planning to list in the u.s. will the u.s. ipo route be less desirable from now on? will it impact evaluations? -- valuations? >> if i give you an answer on what we see now, it is clearly a current concern for some companies, as we have heard. fast-forward to what happens down the line, nobody can tell you. the good thing is that in any way, they are different tools for chinese companies to list. it is not only necessarily in the u.s. we don't include it as the only and most critical consideration for that. clearly, the tensions between the u.s. and china are prevalent amongst us. we have to keep monitoring what happens. >> what is your impact in china?

>> anything related to trends. . i can give you a few examples. even our sustainability focus. you look at autonomous vehicles, comedies providing's -- companies providing software, companies that provide drones or water efficiency and others, when you look at the innovation and life sciences, it is a big area. we are trying to tap on our ecosystem of companies, trying to put companies together. we have an investment in a very large company in the u.s., then we try and put it with a chinese company, company in singapore, southeast asia. the conductivity, i believe, is very important. china gives us plenty of opportunities. kathleen: that is nagi ham --nagi hamiyeh. for more, watch our bloomberg special, red vines on youtube. this is bloomberg. ♪

>> the consumer, house value is up, stock value is up, incomes are up, savings are up, the pandemic is coming to the rearview mirror, and they are ready to go. you see the home crisis, auto purchases, it would be much higher but for supply constraints right now. kathleen: a very upbeat j.p. morgan chase ceo jamie dimon on his bank posting second-quarter revenue, which in his view, shows consumers are emerging from pandemic lockdowns and opportunity is abound. many see things differently, despite jp m and goldman.

let's bring in su keenan to explain it to us. wells fargo's security bank analyst was almost upbeat on the banks, where they are, where they are heading. > where they are heading is the question, and can this last? record revenue from j.p. morgan, best quarter ever. second-best haul ever for goldman. all on the flurry of mergers and acquisitions. analysts point out when mergers, acquisition fees, and credit are driving the prophet, that is not sustainable. investors focusing on a lot of things driving these stocks lower. j.p. morgan chase down by 2.5% at one point on its best quarter ever. that is concerned about is the good stuff already priced in? what drives things going forward? notably, the incredible trading frenzy that kicked off the

pandemic and took both banks to record profits last year. trading revenue from currencies and fixed income, and commodities, is down about 45% for both banks. j.p. morgan chase's ceo, jamie dimon, says inflation is here to stay. he does not believe it is transitory. and there are a lot of questions from investors about costs and lending, and that is what has stocks down. let's talk about the good stuff. the mergers for jp m saw a 29% boost in net income. the bank released $3 billion in loan loss reserves. there were not needed. that was actually double what was expected from analysts. compensation is one of the reasons noninterest costs were up from 4%. it concerned analysts. dimon saying "we will be

competitive and pay what we need to pay to our people." notably, goldman sachs also saw big gains from mergers and acquisitions. 83% gain from m&a advisories. it led to a 36% increase in investment banking. haidi: bank of america, citi, and wells fargo still to come. what are we looking for? >> we are looking for them to do a bit better than goldman and jp morgan in convincing investors there are drivers ahead. bank of america and wells fargo report before the open. wells fargo will be in focus. they are putting the most amount of money from the loan loss reserves back on their bottom line. borrowing demand is a big question for all of the banks, particularly wells fargo. to be able to distract from the easing up of trading revenue is the issue. haidi: su keenan with a look ahead and what to expect from the big banks. let's get a check of the latest

business flash headlines. apple working on a new service to let consumers pay for any apple pay purchase in installments over time. goldman sachs will be the lender for the service, which will be called apple pay later. provide offerings from the likes of paypal. the companies with fintech firm after pay, this and -- the news. asset management has transferred bonds to repay a 500 million yuan bond. it has repay the principal and interest of the bond that was short on tuesday. the manager has reached agreements in state owned banks to make sure it can pay debt through at least the end of august. considering shifting its $1 billion ipos from the u.s. to hong kong. chinese regulators crack down on overseas listings. demand from the delivery firm -- part of it in the u.s., but is to be concerned about new rules

from authorities in beijing and potential delays to its ipo. deliberations are ongoing, they can still proceed with the u.s. listing. more to come. 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.

♪ >> i just didn't for july coming in at 1.5%. the previous month we saw a contraction of 5.2%, the consumer confidence index coming in at 108 .8 from 107.2 the previous month. interesting to see how that develops, given that we have that renewed state of lockdown in sydney and parts of new south wales as well, but we've heard

of a business support package coming through as well. let's take a look at how markets are faring in this midweek session. >> we'll show you what's been going on, in the face of a stronger dollar on the back of the u.s. inflation, we do have korea leading the drop of .5% this morning. check out the malaysian ringgit, as were seeing what would spike in the country, topping a record 11,000 on tuesday. and also seen a move higher for regional bonds after -- lower after we saw treasuries move lower overnight. stocks of note across the region, a buy rating on the

company, the content licensing business is growing faster. and the furniture brand founder to sell a majority stake, with a report that apple is working with goldman. >> let's turn to vonnie quinn for the first part headlines. bonnie: warning american companies of the increasing risk of operating in hong kong, sources say it includes beijing and its ability to gain access to data. were told the move comes as washington tried to ramp up the crackdown. the u.s. budget got ballooned

past $2 trillion in the first three quarters of fiscal 2021. treasury department data showed the shortfall was $174 billion. the federal government tried to stem the economic devastation caused by covid. the congressional budget office said there will be a $3 trillion gap even without additional spending. diplomatic officials say nuclear talks with iran are not likely to resume until after the islamic republic installs the new president next month. that all but eliminates the chance of a jump or a potential revival of the accord struck six years ago wednesday. is preventing opec-plus from boosting supplies as economies emerge from pandemic lockdowns. deadly protests in south africa following the jailing of former president jacob zuma shows no signs of letting up. the government has deployed

soldiers to help police. hundreds of stores have been looted, major highways blocked. security forces say 72 people have been killed. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i'm vonnie quinn. this is bloomberg. haidu: we do have some breaking news on south korea. 1650 more rotavirus cases today, record high number as we continue to see these issues with the resurgence across large parts of asia with authorities putting in stricter distancing restrictions to try to curb the spike in infections. the economy has powered ahead and were looking ahead to the bank of korea, expected to provide further guidance on their plans when it comes to

rates but it's been clouded by the resurgent cases we've seen. over 600 cases out of the 615 in seoul korea. >> let's move onto another big story, the chinese crackdown on u.s. ipos has put the pipeline of potential listings at risk. the latest is a chinese on-demand logistics and delivery firm. it is seeking to raise $1 million, bytedance also said to have met with officials before going public. joining us is the asia-pacific ipo leader at ernst & young. this move by the chinese government, this crackdown, this uncertainty now, people are stepping back. they don't know what to do. how does it play out in china?

will we have the same numbers, just in different places? >> first of all, i think this crackdown is surely something the government wanted to do to protect the country. that's why they would like to make sure that they should not leak any information of china. this industry is important and the ipo has proven to be important for the economy. that's why i would say that the ipo will continue to be booming in the longer term. country wise, i think surely the u.s. is one of the best places for chinese company to go public. they may choose to be in hong kong or stay on the mainland for the ipo. kathleen: in the long run, is it

just a matter of how much money you make when you do your initial public offering or maybe do better because the u.s. is a bigger market and you can raise more money there? or is it a lasting impact? does it make that much difference in the long run where they launch their ipo? >> i think right now they would love to see the valuation for this important sector. you can see in hong kong support for the secondary listing. some companies listing in the u.s. may be able to come back to hong kong. that may also happen for the asia ipo in the mainland. that's why i would say they would have more chance to come back to the mainland for the ipo.

haidu: at what point do we start seeing the spreading across other sectors other than tech? is there just going to be further disturbances when it comes to the pipeline in hong kong across the broader area? >> what we describe as a smaller size red chip, for this small size ipo, first of all the variable structure [indiscernible] for those smaller size red chip companies would be the holding company.

somehow that may be restricted but there is some interpretation that is other countries not allowing the company to be from the mainland. hong kong may have a chance but we will have to wait and see from the authorities. kathleen: what about hong kong's latest regulatory reforms and what more we might expect there? >> i think the reform will also be helpful for the company to go public here. they support a lot of companies and also those with voting rights, there are some policies that try to encourage companies

to go public in hong kong. for those u.s. companies that may have some problem with the u.s. government's policy, they may choose to come back to hong kong for this. haidu: it's great to have you with us. coming up next, a record 11,000, officials saying it could get higher this week. will have the latest, next. this is bloomberg. ♪

haidu: malaysian health officials are warning that covid risk may climb higher before stabilizing. there were 11,000 cases on tuesday. what is the state of the situation across broader malaysia? >> good morning, thank you very much for having me. malaysia has been struggling to contain this recent outbreak which has been driven by the emergence of this new and more contagious delta variant. despite much of the country being under lockdown since june 1, there was a record 11,000 on

tuesday. the country's health director general said the new cases may climb further in the coming weeks before stabilizing because the delta variant is airborne and has faster transmission. kathleen: its the seventh week of total lockdown and yet were seeing cases rise in the delta variant is having a bigger and bigger impact. do the health authorities and the government have any further plans to help rain this in? >> at the moment it is still looking at the lockdown situation and also to increase the vaccination rate. if i could just point out the situation in terms of the health care situation, it has been quite dire with the surge in infections that has left hospital short of icu beds, staff, and medical equipment to treat covid. this is an area including the

capital city which is the nation's most populous state. the covid impacts here have accounted for more than 60% of daily cases and in response, the health ministry also has promised to increase capacity at hospitals and mobilize resources to the area which excludes -- includes thousands of health care workers. kathleen: it seems trite at times to say it, but stay safe. let's move on to new zealand central bank. its success in eliminating covid has given its economic recovery headstart and that's fueling his vacations at the bank of neuss -- i could signal tightening at their opening just over an hour. matthew, it seems like we could have a little drama here. i know you're not convinced the

rbnz will signal an earlier rate hike, but why should they, or with day? >> there are signs in new zealand economy, there are shortages of goods and labor increasing cost to companies. but there are strong demands on the company meaning the company is able to pass on those higher costs. some economists are saying the rbnz is already meeting inflation and its employment goals and it can't leave this money sitting in place for too much longer. haidu: the market is pretty much christ an 80% chance of a raise. could they be disappointed by the rbnz today? >> they certainly could. we are still in the middle of a

pandemic and there are a lot of risks out there. today is just an interim rate review, it's not a full monetary policy segment. traditionally the rbnz doesn't like to fly changes in policy at these types of reviews. on balance, there is an expectation they will acknowledge the strength of the local economy and that may be enough to validate the market pricing for a third straight hike in november this year. haidu: of course the travel bubble remains. is that the biggest risk to the outlook? matthew: i think certainly the virus, they've been extremely lucky to date and have managed to keep the virus out but it is

so easy for the variant to take off. if that were to happen that would be a major downside risk for the economy. new zealand borders are still largely close to the rest of the world. tourism obviously suffering there. there's still a lot of things out there that could go wrong. haidu: matthew there with a preview of the rbnz in the coming hours. will look at where the latest crypto crackdown is ending up, next. this is bloomberg. ♪

kathleen: let's get a quick check of the latest business flash headlines. in abby has emerged as the front runner for citigroup's retail assets. said to be in advanced stages, valued at more than one big and. an agreement would make it australia's second-biggest biggest credit card player. it added that discussions would not necessarily lead to a deal. reports of trademark application forb couponiz.

it could launch a brand focusing on small business operators. the stock has climbed about 15% in three days and has gained 31% since it debuted in march. the dow jones reporting and into talks after the founder change their minds about a sale. some employees are said to have thought the company would be a strange fit for efficiencies. the wall street journal reported the two sides were discussing a deal whose value range from 15-20,000,000,000 dollars, including debt. and the biggest dam return since 2010 on the rally in global equities but temporary rise of an nation could be a risk. singapore state investor saw 25% gains on the fiscal year ended in march taking the value to 282 billion dollars. it marked a turnaround from previous years drop of about 2%. china remains the biggest market

maker followed by singapore at 24%. apple working on a new service that lets consumers pay for any apple purchase on installments over time. shares of paypal are down on the apple news. haidu: and were seeing a mixed to lower session in asia. wall street tumbling from the record high with the upside inflation surprise from the u.s. and during the ongoing debate about how long the fed and other central banks can keep up policy measures. look at the nikkei to 25, down by 2% -- .2%. the bank of korea meeting to

decide on the longer outlook for rates. we are also looking ahead to the rbnz today with expectations of 80% chance of a move in november. let's look at some of the stocks were watching around the region. sophie: alibaba shares we're watching, analyst got the impression that june quarter earnings will be masked by investments spent. apollo, which analyst says has long-term potential with policy monetization. we're watching the open in kuala lumpur. with the spike of cases, the stock benchmark is the biggest laggard in asia.

the ringgit is trading at the weakest level since last august. kathleen: beijing's -- scrambling for alternate sites everywhere from cause extent to texas. that's what shaping an industry once dominated by china with implications far beyond the crypto space. how many bitcoin machines are being moved out of china? this is quite a step. >> it is estimated that china's bitcoin mining's operations at least one meal mean computers to mine bitcoins. from our interview, i think basically around half of the

operators today said they are intending to move machines out of china. so the numbers could be massive. because of the current circumstance, the logistics are being largely disrupted. we see some relocations, still moving quite slowly. kathleen: where are they going? alfred: because expand -- kazakhstan has a geographic advantage because of its borders. it accounts for about 36% of computing capacity according to the latest calculations estimates.

it is naturally a very good destination to move the machines to the neighboring country. kathleen: how will such immigration impact their daily life for the future of bitcoin? alfred: it's a very complicated topic. a lot of people didn't realize how massive bitcoin machines consume electricity. basically through some local surveys, tens of thousands of machines could consume 45 billion gigawatts or worse of electricity a month. we also read some reports from

different parts of the world saying how bitcoin mining disrupts local areas and causes huge blackouts. regarding the fact that it consumes a lot of power, and power disruptions in some areas, there are several anecdotal cases about the negative impact to the power usage and power consumption. so that affects people's daily life. the power suppliers may supply power to these miners for other

uses. haidu: coming up next, ahead of fx macro analysis, daybreak asia. this is bloomberg. ♪

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♪ >> it's not :00 a.m. in beijing and shanghai. welcome to "bloomberg markets: china open." david: were counting down to the open of trade on the chinese mainland and in hong kong. top stories, yields on the up, equities taking a hit and sticker shock on u.s. inflation. yvonne: bigger flashpoints has president biden reveals a hard ed