haidi: good morning. we are counting down to asia's major market open. shery: welcome to daybreak asia. asian stocks set for a cautious start as bond yields job, traders wait risk from fed and the war in ukraine. president biden trying to temper comments about vladimir putin.

solutions to global energy problems with one of the world's experts on power, technology, and trade policy. let us get you straight to the start of trading in sydney. haidi: we are looking at a cautious start to trading, what we have seen is quite a bit of resilience across stock market. the pullback of volatility in stocks, not everywhere else but stocks have been the outperformer and being seen by some parts of the market as the inflation risk hedge at this point. we are seeing upside as sydney gets underway, most of the action remains in the bond market, the 10 year yield really continuing to surge in the early part of the session. the three year jump to the highest we have seen since december. this is as we have played into the treasury selloff, racing past the limits of what has been

a decade long bull run as traders are pricing in two steeper rate hikes than expected. up for percentage points when it comes to the u.s. treasury 10 year. that is being replicated in australia. new zealand, equities up by .4%. the big story of the past three weeks is weakening for the yen which continues to go on as we see fit speakers -- fed speakers that could drive that policy divergence narrative between the doj and the fed. shery: outperformance in some equity markets but i am watching the nikkei as well. given that as you point out, the yen is losing ground against the u.s. dollar.

looking like that as we have seen that huge rise in yields, the 10 year yield at the highest since may 2019. it is not just in the u.s., it is the global balance rout. u.s. futures at the moment sticking with losses of 2.1 percent. crude is also down, about 2.5%. this is after a weekly gain in three of the eu continuing to debate how we can decrease its reliance on russian exports and last week we had saudi energy assets coming of our -- coming under attack. geopolitical tensions and what is happening in ukraine factoring into the markets. president biden is trying to clarify his comments on a regime change in russia during a speech in warsaw. the uncertainties are shifting the back proper markets as we enter a new week of trades. let us get to wendy and our

process it reporter emily. let me start with you because the damage control is not a lick from u.s. officials. -- not just coming from u.s. officials but the president himself. >> he came out of church to meet a gaggle of reporters and they all asked if you meant regime change when you said this man cannot stay in power. he said no before walking away. he is now the highest level person to try to say that he did not mean the words that came out of his mouth yesterday. haidi: this goes into another week we are expecting these negotiations between russia and ukraine and their representatives to continue. how are we setting expectations? >> the ukrainian president has

said that he has been public about where he is coming into these negotiations. he even said today that russia could maintain a military presence in what he calls the compromised territories in russia occupied ukraine. he is in a way giving something at the table. we have not yet heard what russia would be willing to do. the russian army is being pummeled. even as they go into the country. shery: let us talk about the market reaction because when it comes to the yen, we are not saying it as the reaction of a safe haven asset. >> this is the interesting thing, the yen has been one of those high-quality assets and are not see it now. the yield differential.

. is just so extreme as far as 10 year yields, the u.s. rising, it is widening that cap to the japanese yields -- gap to the japanese yields. we are seeing this hammering of the yen down to six year lows. shery: when it comes to the of trillion bond selloff, that this is overdone and global inflation expectations are overdone. is there a since you will start finding value where we are seeing yields of training up -- trading up? >> in the asian session, once you start to get yields around 2.7 5%, you start to see those value hunters come in. what we are looking at at the moment is some asset members have started to say that we like the long ends now because it has

been oversold. whether or not a has much of an effect on driving yields down, those expectations or rate hikes are getting priced in. we have to see how this plays out. this session should be very interesting. haidi: our deputy managing editor for u.s. government, wendy, with the latest. in china, the country is looking down the eastern half of shanghai. this is a city of about 26 million people, this is four masked covid testing. it will repeat the process in the western part after that. let us bring in our editor. this is an extraordinary undertaking. what are they planning to do? they are trying to minimize, even though it is going to be a massive impact on the city. >> i have said a number of times that they have gone into a full-scale lockdown but this a

pretty significant undertaking. locking down for two days, one a part of the city which includes the financial district and the next four days after that looking down the other side of the city. during those four day periods, there will be mass testing as part of china's covid zero strategy to really root out and suppress virus cases. it is with cases in that outbreak really ballooning more than 2000 cases a day over the weekend. shery: that was m, we are seeing the market impact from the lockdown already on the oil prices which are under pressure in the asian session. lucy 3%, below the 117 level and this is coming after we saw the first weekly gain. this is as we continue to see

the european union trying to veer away from its reliance on russian exports. there are supply concerns, saudi assets came under attack last week. when it comes to the demand picture, that is not looking very good with shanghai locking down half of the city to conduct a mass covid-19 testing. given how much oil china concerns -- consumes, we are seeing the concern about demand being felt across the price point in oil. let us turn to the first word had kinds. -- headlines. >> in nuclear deal with iran may not be imminent. u.s. is assessing the political cost of reviving the deal and talks between key parties have dragged on for more than a year. the second black box from the crashed chinese jet is found

after days of searching. it was recovered around pieces of wreckage. some parts of the device are severely damaged. the nosedive of the plane last monday killed all crew on board. they found no evidence of explosive materials in the wreckage. el salvador has declared a state of emergency in an effort to tame a wave of gang-related killings. loosening rules for as long as 30 days, it is because of a spike in gang brutality at that and said to have claimed 62 lives on saturday alone. officials says it is known as ms 13. president biden is expected to aim a new text millionaires when he unveils a budget plan on monday. it is called the billionare minimum income tax, it would affect megan households more

than $100 million. it has enacted an -- it would create new revenue over the next decade. global news 24 hours a day, on-air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries. this is bloomberg. haidi: we speak to a former executive director of the international energy agency --

[inaudible]

>> watch this. >> that is the new hike. >> i do not see what the argument is to not go 50 in june , july, september. >> 50 basis points, or wooden day? >> go closer to 9%. >> inflation will be insane for march. >> the average consumer is losing ground. >> the american public has less than $1000 of savings. they are getting killed by inflation. >> it is how the sector responds to the surge in energy prices. >> is in an inflation fighting about and it will be a wild ride. haidi: guests talking about a

fit right hike expectations. what is being done to remove expectations on the federal reserve that has kept cryptocurrencies within a trading range while not anymore, bitcoin is now erasing all of the losses for the year. year to date is up .6%. we are seeing those gains right now with bitcoin above $46,600 at the moment. either gaining 1%. double-digit gains when it comes to the march lows. the crypto index is not trading at the moment but we could see it pop up at the open as we see this cryptocurrency being led higher. we have the downside pressure not only to the central bank hike rates but also the scrutiny on digital currencies given russian sanctions. that seems to be reversing now. shery: let us get more on the

deepening bond market selloff being accelerated in the sydney session. we are seeing the like of kiwi and australian bonds picking up. they are plane kept up or catch down when it comes to the extended treasury selloff. when it comes u.s. treasuries, picking up a little bit. look at the tenure and the three year, you are jumping 11 basis points earlier this morning. the highest level since december 2014, a 10 basis point job when it comes to the 10 year in a move in the kiwi tenure as well. traders have priced in 204 percentage point rate hikes in from the fed. let us bring in our next guest to assist the equity rally over the past couple of weeks has been a little bit counterintuitive given the risks that are in the studio. one of the risks is what we are seeing with the accelerated

development in the bond market. at what point does not become a reality check for stock investors? i have been using equity trading as an inflation hedge -- they have been using equity trading as an inflation hedge. >> what has been leading the rally is the growth stocks or tech companies. they are long durations, they tend to be sold off when a market goes through this generation. it was a bit of a rebalancing after a couple of months for those growth companies, very soon, we have the uncertainties playing out, we have the were going on, the commodity price spike and all of the inflation prints, particularly as we move closer to the 50 basis point increase in the next month or so. the market will start trying to price in what does that mean soon -- what does that

mean? haidi: energy exposure? >> we tend to keep neutral, those energy spaces and communities will be the beneficiary of what is to play out, particularly energy equities. the share price has not moved up much. on that basis, the company would do quite well in terms of cash flow and dividends. for us, a lot of important things, we tend to look at the sectors as out of favor, that is a growth cover we are talking about, not your traditional would i call it, the company that does not make cash flow? it is in the likes of health care and if they will provide structural works without the need for the economy to be higher for a long period of time. this will come back in favor at some point. haidi: is that commodities play we were optimistic about the

australian equity market despite your broader caution on stocks? >> the equity market, it is probably because as you said, it is well-positioned because of our exposure to commodities and financials. they should do reasonably well. also, the australian economy has lagged in terms of growth. we have very strange lockdowns, we have really just been playing catch-up. our corporate earnings going to grow into the double digits over the next 12-18 months after taking out the resources companies. at the same time, our inflation is not quite yet runaway like the u.s.. our underlying implement market structurally differs from our employees employment space. it is underwater, things does not really as fast.

we are looking pretty good, the australian markets. haidi: how is the japanese market looking? there was a lot of optimism towards the cyclical tilt and we are saying the weakness in the japanese yen as well. will that help? >> it will help, but unfortunately, what with his to take place in terms -- with what is to take place in terms of trade, there is wood to be a challenge. haidi: you can get a roundup of the stories in today's edition of daybreak. it is also available on mobile in the bloomberg app. this is bloomberg. ♪

haidi: these are the top stories

today. tesla plan to suspend production at a shanghai plant for at least one day as the local government incentivizes covid restrictions after a surge in cases there. the factor that builds tesla for the chinese market, russian tankers also carry oil chemicals and products are concealing their movement. new phenomenon that some market experts one casino an intensely vague -- say could signal an intensely vague sanctions and -- gazprom under increasing pressure. response to the war in ukraine, the company is said to be facing liquidity problems as banks delay transactions and peers refuse to deal with them. haidi: take a look at energy prices, how much it has risen

over the past month. up to 40% across our markets, the u.s. and european union did agree to boost the natural gas european countries by the end of 2022. it is trying to displace russian gas. criminal users can read more about those stories in supply lines, that is a nitrate nl. the fd is reporting that they have equity niche editing any reference to war in ukraine. the committee has have softened language across multiple reports including changing the world war ii conflict. this comes as the lender is under pressure to do in closing business in russia. buying 6% stake in national chris -- added $30 billion, the u.k. company announced plans to sell it last year, the transition to a low carbon

future, the gas business is one of the largest in the u.k. and includes a 7000 kilometer pipeline network. lagarde is boosting salaries by up to 20%. employees see a round of phrases to match goldman sachs and deutsche bank. it is facing increased competition from buy side and technology companies. buys will submit final bids on april 11. it has been asked to put $1.3 billion in future development. it was put on sale last month when a russian billionaire owner was hit by a sanctions. shery: we are weighing the opens in japan and south korea and i am. what will happen to the japanese equity market -- curious what

will happen to the japanese equity market. the longest winning streak since 2019. we may see a bit of downside at the open, look at nikkei futures, down point 2%. equity futures under pressure at the moment, the late rally on friday for their second straight week of gains. gaining .3%, perhaps reversing a little bit of the weakness we are saying in the rest of the region. not surprisingly, materials leading to this, we have the huge commodity surge. not to mention the financials are also higher. the global bond rout has been seen in australia and new zealand, when it comes to the kiwi three year yield, it is at the highest since 2014. kiwi stocks reversing gains we saw in the previous session on friday.

look at the commodities space, we continue to watch what is happening here as we have the inflation concerns, all around the world and we are seeing downside pressures for wti, in the asian open. we have supply chain issues. we have supply concerns. we have the energy assets coming under attack, the european union healing to debate how they can decrease reliance on russian exports. we see the shanghai lockdown and that is leading to those command concerns. -- demand concerns. haidi: when it comes to when we see the momentum in the oil story going, you really want to see what happens to the yen as we get into the start of trading in tokyo. we have not seen a huge amount of moves in the japanese yen but that comes after three consecutive losses.

we have had a trading at a six-year low against a case of traders focusing on the rate differential stories as opposed to the yen trading more as a hating that shaven. -- if you're a small business, there are lots of choices when it comes to your internet and technology needs. but when you choose comcast business internet, you choose the largest, fastest reliable network. you choose advanced security for total peace of mind. and you choose fiber solutions with speeds up to 10 gigs to the most small businesses. that's virtually everywhere we serve. the choice is clear: make your business future ready with the network from the most innovative company. comcast business. powering possibilities™.

>> we have taken sanctions and we are working to implement the sanctions. we are aware there are loopholes that are possible that his wife we have started a commission to ensure we are able to close as soon as possible the loopholes. >> we agreed to look deep into the loopholes we discover now where the circumvention's that some try to take, and to do everything within their own

respective systems to close loopholes and make the circumvention possible. shery: european leaders talk sanctions about russia. germany's ambassador to the u.s. says they plan to and their russian -- a lot -- reliance on russian coal by this year. >> it is a sea change in germany thinking. previously, hyper connectedness was considered to be part of stability, and i think the war, putin's war against ukraine, has buried that notion. we understand getting away from energy dependence on russia is a requirement for national security. the announcement you mentioned

before of the american president and exports to europe would be a huge part of that picture. estimates say it may replace about one third of the energy imports in germany, to europe, from russia. our thinking right now is, by this year, the german economic minister said we want to slash imports from russia by half. we want to get out of this by september. we want to get as far as we can totally from dependence on oil by the end of the year. the markets are built different because they are not global

markets. this may take a slightly longer time. we want to be free of energy dependence on russia. shery: the ambassador in new york. the german economy minister returned from qatar, securing long-term purchase agreements. exports are ramping up from the united states as well. can you speak about nordstrom one? is germany willing to halt purchases from the pipeline? >> we are focusing on oil. to be free of gas main -- may not happen overnight. the gas market is not global and the oil market is. make no mistake we are determined. we are doing a lot to replace gas imports from russia. you mentioned lng purchases, from qatar and the united arab

emirates. we are talking to norway. we are taking note of the announcement of the american president. we are building terminals in germany. we are altering the architecture of our storage, accelerating renewables, all of that designed to cut off our dependence on gas imports. shery: germany's ambassador to the u.s. speaking to bloomberg. oil, falling in asia. the bile -- the virus resurgence in china worsens. futures in new york and london losing, and james, we continue to see supply concerns but the demand outlook isn't looking great. >> that's right. you hit the nail on the head in terms of why we have seen that retracement so far this morning.

the situation regarding covid in china, looking not so great at the moment. concerns over what kind of impact that will have on economic growth in asia's biggest economy, and added to that, geopolitical tensions in the middle east. we had reports of who the rebels in yemen -- houthi rebels in yemen attacking saudi arabia. so perhaps potential disruptions to supply there. that could put a floor under the market. i think what is going on in russia at the moment, the price will be underpinned and historically we are at quite high levels. haidi: have we seen any support, or any change to the fundamental supply situation with these talks and agreements between the u.s. and the eu to alleviate the russian supply element?

>> i don't think there is anything concrete yet. moving towards that, that there are a number of moving parts. the u.s. would like to put a deal on a rat -- with iran back on track but that is some ways off. russian supplies are cut off for the short term. the countries that rely on that russian supply will have to find an alternative. it takes time to sort that out. with no end in sight to the ukraine conflict, it is clear the market will be well supported. the longer-term risk is demand instruction. people paying fortunes at the pump, we will see more people moving to electric vehicles. in the long run, this could be a long-term negative for oil. but in the short term with the supply difficulties, we will see the market underpinned above $100.

haidi: looking at some of these challenges when it comes to oil supply. let's get to vonnie quinn. >> the united states has attempted to clarify president biden's call for putin's removal. his aides are stressing the u.s. hasn't adopted a policy of regime change. france and the u.k. distanced themselves from his comments. biden made unscripted remarks feeling tensions with russia. china is locking down shanghai for mass covid testing after more than 2600 cases saturday. the city will lock down areas in the east of the city first, including -- and the west will go for the same period following that. residents are banned from leaving home. the u.s. is set for a fourth

dose of a vaccine approved for adults age 50 and over. the authorization may be as early as next week. the fda is expected to stop short of a full recommendation, meaning the option will be open for people to decide for themselves. china is said to put on -- an australian news anchor on trial. according to australia's foreign ministry, the trial will start thursday. charges carry a maximum sentence of life in prison. she has been detained for 19 months. global news 24 hours per day, on-air and on quick take by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i'm vonnie quinn. this is bloomberg. shery: coming up next, we speak to one of the world's foremost experts on energy policy about the impact from the war in ukraine, the future of nuclear power and japan's energy dependence.

they join us next. this is bloomberg. ♪

haidi: japanese markets will open in just a few minutes. we will see how the yen trades at the start of this week. we have seen the yen trading at

six against the dollar, weakening for three consecutive weeks as we continue to see the driving narrative being the gap in interest rate differentials and expectations between the boj and the fed. the fed moving faster and further when it comes to the rate tightening than we expected. the boj says they are not worried about the weakness in the yen. they see it as a broad upside for the economy, saying they won't hesitate to add easing, let alone reining in easing at a time when we see other central banks tighten. that divergence, continuing to drive that trade. dollar-yen trading just over 1.22 that the moment. ozzie-yen the other big pairing, analysts say that is unwinding soon but the aussie-dollar has been sticking -- has been in outperformer, the second-best when it comes to currencies and the best year to date within the g10 space.

watching the euro-yen as well as we continue to monitor a week that will yield more talks of resumption of talks between russia and ukraine on the ongoing war. shery: the weakness across currency pairs has been remarkable. aside from the yen, here are plenty of other stories we are following in japan. a company planning to double wealth management clients by tapping newly minted millionaires low on cash. we will be watching that stock. the prime minister, poised to order a package of measures this week as he seeks to address the deteriorating economic picture for japan. the finance minister says there needs to be a solid response by the government to reduce the impact of rising oil and grain prices. haidi: most asian energy importers have paused by an card go -- buying cargo from russia.

japan is one exception. the one tender including a clause requesting the shipment not come from russia. the move could be repeated by buyers across the region. tightening available supplies as the market is grappling with a shortage and skyhigh prices. let's discuss with nobuo tanaka. he served as the executive director of the international energy agency. it is good to have you with us. thank you for your time. while you are here, you pioneered the concept of comprehensive energy security, making the agency focused on climate change, renewable energy, the transition to low carbon energy economies. we are seeing the transition all over but when it comes to veering away from russian supplies, how feasible is it to you within a short time? -- do it within a short time? >> the ukraine crisis makes

energy markets very tight. i was in the iea meeting last week and the ministers were talking about energy security. it -- in an important manner, concerned about short-term oil markets especially. the united states says oil production will help. maybe the jcpoa, the iranians, that situation may improve and a rainy and oil may come to the market -- iranian oil may come to the market. the japan situation is a key element. covid-19 certainly, the european situation is getting better. now more into how to live with covid-19, but other economies like china is a little worrisome in this situation. japan is not open for tourism

yet. so we will see. there are mary -- many elements. we want to see more movement of the u.s. shale and that will be very much a determinant for the oil market in the future. shery: what about nuclear? when it comes to japan, it has its own issues. the recent earthquake around the fukushima plant, bringing forward the old concerns we had since march 11. how will the energy crisis play into that debate? >> that is a good point, thanks for raising that. after the fukushima accident in 2011, the japanese public is concerned abouthowe use nuclear power. the ukraine situation puts more

of a kind of pressure on the japanese public. recent public polls show the use of nuclear power has gained more support because if japan can contribute to the global market, especially for natural gas, restarting the nuclear power plant as soon as possible to reduce the consumption of gas for the power sector. then, we can turn the cargo studio up to help them with the supply shortage from russia. so japan can get the gains by selling very high prices in europe and maybe use this kind of profit for the japanese domestic market of gasoline. helping gas prices.

restarting nuclear power will certainly be the key element of making a difference. both in japan and the global community. there are countries belgium -- like belgium that have extended the phaseout. germany may, france has started building a new nuclear power plant. there is a very strong following to the nuclear power at this moment. haidi: you think this will be key not just for japan? european leaders are debating it as well. how broadly can the use of nuclear be as an answer to the crisis? >> i think nuclear certainly is very useful for the energy sector, as well as carbon dioxide emission reduction. there are concerns about the use of the nuclear in the future. european commissions taxonomy for sustainability shows maybe

the issue of high-level waste should be treated properly to make nuclear sustainable. we can say to minimize the risk of accidents is another important element of the sustainability condition for nuclear. small modules may be a solution. and technology that can prevent accidents. another important element of using nuclear power, after the ukraine crisis, is weaponization. ukraine gave up nuclear weapons after budapest agreement, but if ukraine kept some of the nuclear power, a nuclear weapon, russia, does russian invade -- does russia invade? these are important issues for smaller countries.

they will continue to keep nuclear weapons. there are some tendencies for smaller countries, iran, even saudi arabia, to have a weapon. how can we make these countries preventing from having weapons while using the nuclear power is another very important sustainability condition after ukraine. haidi: may i ask, broadly speaking, what change do you think japan needs most desperately right now? >> i think japan announced about a year ago, about how to proceed carbon neutral. the prime minister has a policy for carbon neutrality by 2050. it is a very significant decision.

that gauge, the private sector as well as government, the general trend which we must follow by using more renewables, using probably the nuclear power, and changing the industrial structure very much. how can we live with a coal power plant is another big issue. i think the key element for the japanese energy transition is hydrogen. clean hydrogen, which could be generated by the renewable energy. it is called green hydrogen. another one is carbon dioxide from the natural gas, and ccs, put it under the ground. that bruise hydrogen -- the blue hydrogen. you think clean hydrogen is

probably the way to reduce carbon dioxide emissions from a sector like industry, steelmaking, cement, and also the power sector. japan's energy transition is how to reduce carbon dioxide while using coal power plants by mixing the clean ammonium generated by clean hydrogen, or putting more hydrogen, coal firing hydrogen with gas turbines. using some of the current, but gradually reducing and they be dedicated hydrogen power or dedicated ammonia power, we will be at zero carbon dioxide emissions. germany is now thinking about using coal with coal firing ammonia hydrogen and reducing

carbon dioxide because the russian pipeline gas is going to be limited in the future. nuclear, may germany will think about nuclear also but expending -- extending coal power plants in the future is an interesting question. how we can use in supply chain of the hydrogen is a key element. japan started lng 50 years ago. natural gas is a very expensive commodity at that time. this year, they have led this transition and lng is now everywhere. after ukraine on the pipeline gas, it is a risk with russia. lng is probably the one element a very important, let's elements for european security. and hydrogen will be the next future.

that is my view. haidi: thank you so much for your time. nobuo tanaka, tanaka global ceo. our conversation is on the bloomberg terminals to subscribers. tune in for japan ahead every week to hear from leaders in japanese business on bloomberg television. shery: we are seeing demand concerns over oil, and that is leading to pressure in the asian sessions. we had seen the first weekly gain in three weeks given the european union continues to discuss how to veer away from russian energy imports, not to mention the saudi energy asset. more on the attack. we saw oil prices rise, but not anymore because you have supply concerns but this time demand concerns are weighing on the price, given those lockdowns in shanghai. we are seeing gold just below

the $2000 level, given that we have seen three weeks of gains perhaps a little bit of consolidation there. but i know you have breaking news. haidi: yes. we are looking --

shery: looking forward to the japan open as we continue to see the yen weakened against the dollar after touching the 2015

low. continuing to see its breakout from the long-term trend. haidi: we are looking ahead to this half and the lockdown and shanghai. cases at 3500. that is another record. this is bloomberg. ♪

♪♪ ♪♪ haidi: welcome to "daybreak asia" from bloomberg's world headquarters in new york, i'm shery ahn. haidi: i'm haidi stroud-watts in side. a cautious start, the war in ukraine. president biden's team tries to people per his comments about vladmir putin staying in power,

why talks with moscow will resume. and 25 million residents are in a staggered lockdown, the biggest breakout yet. shery: remember, the nikkei has gained for nine consecutive sessions, the longest winning streak since 2019, well, that's now taking a hit given of course as risk sentiment spreading across asia right now and the japanese yen continues to hold declines against the u.s. dollar and is now on the lowest level since 2015. the differential stories continuing to be felt as then loses about .2 of 1%. remember, it has the worst week since march of 2020 against the u.s. dollar and it's really interesting to see that, it's really not playing that safe haven role that we're seeing it play for the past few years and this as i mentioned, rate differential being an issue, the 10-year yield near the highest

in six years, but, of course, that differential with how the fed is hiking rates but the b.o.j. is not moving. we continue to watch the future space as well. take a look at what the kospi is doing. this is one market that has been hit hard by the rise in commodity prices. remember they are a commodity importer, the market has been seesawing all of last week, we are seeing downside pressure .7 of 1% and the korean won is losing against the u.s. dollar given the risk of sentiment. we have seen it gain ground in the past session given a little bit more positive sentiment across markets, haidi, that doesn't seem to be sustained in today's session. haidi: and really thatten unraveling continues to be a major story driving this week. take a look at what we're watching when it comes to trading here in australia. we're seeing that commodity exposure driving a lot of the materials and utilities higher.

they are the outperform materials, a quarter of 1%. the 10-year yield holding pretty steady at this point. we have the 10-year moving as much as 10 basis points earlier in the session, four basis points more recently. that is still a two-year high for the 10-year, the three-year hitting a high since december 2014, we see the extended global bond route continued to be play out in this part of the role. janis henderson saying this is looking overdone, this yield levels, we're seeing some opportunistic traders coming in given the sort of benefit that we're seeing at these levels for yields. the kiwi trading situation would not reverse those earlier gains, less than positive numbers when it comes to the labor market, kiwi stocks down by half a percent and the kiwi dollar under 70 u.s. cents, the kiwi and the aussie have been outperformers and a lot of analysts say there is further upside to go when it comes to

these commodities risk pegged currencies. taking a look at how u.s. futures are shaping up as we get into the start of the trading week, big gains when it comes to u.s. stocks last week and a huge pullback when it comes to volatility in equities trading compared to the bond counterpart. s&p futures looking pretty muted at this point. low expectations on earnings are largely priced in policy actions could be the next catalyst when it comes to trading in china. joining us now is the head of asian equities at b.n.p. paribas asset management. first of all, are you expecting this divergence and the ability of equity traders to ignore some of the red flashing warning signs on the bond markets to be able to continue? >> good morning, haidi, thanks for having me. i think so. i think what we're observing right now is clearly that the expectations were low coming into the next season. we're seeing some of the e-

commerce names reporting ok revenues but disappointing earnings, spending more. i think the resilience that you're seeing on the earnings front is going to help because it hasn't become quite cheap in our area of the world. haidi: we talk about riding chinese equities and you make a fine point, it's the catalyst of policy action and policy easing that investors have been banking on. that hasn't come though. are there expectations it won't happen, at least not to the magnitude that would render these assets relevantly discounted? >> i think what we thought in the last couple weeks have been quite volatile. the speech by the vice premier has put a flaw in terms of expectation on policy, but so

far i think investors are taking a step back after the very quick adjustments in the bounceback to say that we want to see more concrete measures basically fulfill what they're counting on in terms of their concern about growth and about access to companies to foreign capital. we need a bit more follow-up to follow true to give us some confidence that this is indeed going to come down the pipeline in the overall growth of this company. shery: how much have markets priced in the latest lockdowns of china given that it doesn't seem that china is backing away from its covid zero policy? >> i think that's going to be a dent on sentiments for sure. two days ago, it showed they were quite adamant there wouldn't be a whole city lockdown. they're locking down half a city, so that with sentiments

for sure. the policy works well for them, they're concerned clearly about the stability of the medical. as the mortality rate that could happen, shall we say in less wealthy province within china. that is a dent on investors sentiments, more destruction in the supply lines that we'll seeing right now given that two of the most wealthy provinces are in some form of lockdown at this point in time. haidi: let me turn to the question of the day on our blog, this is a good one. has the dollar peaked for the year and i want to add, what would that mean for asian equity markets? >> that's a question, i'm not a specialist, i think you look at the major currency, at this

point in time, more things are going for the dollar versus against the dollar. we have now heard more and more hawkish speech from the federal reserve. it looks like rate hikes and jumbo rate hikes, 50 basis points of more and more that we hear from the financial press, that will provide a tail wind for the dollar. it all depends on how bad the contraction on the economic growth will be with the higher rates going into the rest of the year. this is a very fine balance but at this point in time looking at the past, you see some more winds on the dollars than in the past. shery: how are you getting exposure to the energy and commodities story? >> not an easy way in asia, obviously, given the expectations that a lot of people have. there are some companies that we

can find exposure to. they're probably not the well known companies that we have in asia, in spots in asia, we have finding exposure to companies that probably aren't as, how should i put it, they're not binonial and the companies that are operating in the sectors that are less, how should i put it sensitive to the overall price. that is now we're getting the exposure in the last couple of months. haidi: good to have you with us today, head of asian equities with his calls on the broader markets. take a look at some of the movers that we're watching across asia right now. in japan, revealing plans to almost double wealth management

clients tapping millionaires low on cash, up .6 of 1%. we're following a boost of a net income guidance for the full year and watching the swedish industrial group agreeing to sell its wheel system unit for $2.3 billion and that company right now gaining almost 4% while hana tour is under pressure, this as the travel agency seeks to sell $110 million of new shares. let's now get to vonnie quinn with the first word headlines. vonnie: thank you. the u.s. has -- biden's aides are stressing the u.s. has not adopted a policy of regime change. france and the u.k. distanced themselves from the president's comments in warsaw, biden has recently made a series of unscripted remarks fueling tensions with russia.

china is locking down shanghai for mass covid testing after 2,600 cases on saturday. the city of 25 million people will first lock down areas in the east of the city including the financial district for four days starting monday. the west for the same period following that. residents are banned from leaving home and public transport will be suspended. the second black box has been found after days of searching, the flight data recorder was recovered among 33,000 plus pieces of wreckage. some apartments of the device are severely damaged. the mysterious nosedive last monday killed all 132 people onboard. officials say they found no evidence of explosive materials in the wreckage. the u.s. says the revival of a nuclear deal with iran may not be imminent, this following recent requests from tehran including that washington remove the revolutionary guard corps as part of its terrorist

organizations. talks between key parties have dragged on for more than a year. global news 24 hours a day on air and on bloomberg quick take powered by 2,700 journalists and analysts. i'm vonnie quinn, this is bloomberg, haidi. haidi: on "daybreak asia," we'll be discussing supply chain issues with dell. we will also learn about potential investments as they expand into a.i. more on the biden administration's damage control efforts after the president's remark prompted criticism from allies and risks inflaming tensions with russia. this is bloomberg.

haidi: european futures open for trade after we saw stocks falling last week for the first time in three weeks, we are not seeing a lot of movement at the moment, but this of course as we're seeing broad risk of sentiment across asia right now. we have seen last week for example, concerns over soaring raw material costs not to mention more aggressive rate hikes coming from the federal reserve really playing a role in that equity selloff that we saw across europe. a little bit mixed right now with stocks 50 futures up and dax gaining .2 of 1% haidi as the major indices in europe have slowly moved away from the technical bear market territory. haidi: and of course we continue to monitor the situation when it comes to the war in ukraine. now senior u.s. officials are working to clarify comments made by president biden after he capped a speech in warsaw by hinting at regime change. take a listen. president biden: we will have a

different future, brighter future radiologisted in democracy and principal, open light and decency and dignity and probabilities. for god sake, this man cannot remain in power. haidi: let's get details. dan, we heard from the president himself earlier rebutting this essentially, a reporter had asked him whether he was calling for a regime change and he said no. so what do we know about this and the repercussions? dan: yeah, i mean the line appears to be just an unscripted kind of ad lib remark that he made off the cuff after meeting some refugees and so, you know, u.s. officials are saying this was a principaled human reaction that was the u.s. ambassador to nato, not a policy change. this is something the secretary of state has said, but still there has been a lot of cleanup

necessary, the french president macron in particular, you know, mentioned that nato allies shouldn't escalate with speech or words. this is really kind of to cap off a trip where he was trying to show unity among the allies, it's caused a bit of, a rift. haidi: quite a divergence and the german chancellor saying russia regime change was not the goal for nato. tell us a little bit what we're expecting from russian ukrainian negotiations this week. dan: yeah, there appears to be more progress. we heard from zelenskyy over the weekend basically acknowledging that the russian troops that are in the region that were really already there before the full scale invasion could stay there.

he didn't say that in so many words, but that was the implication. so there appears to be a bit of, you know, coalescing around some of the parameters that would be necessary. we have already seen russia kind of back down on the goal to demilitary riize the country saying they could have some sort of army. it remains unclear, putin hasn't spoken to zelenskyy, so this is still at the negotiator level and even though the ukrainian president is weighing in a lot, until he sits down with putin and starts to hammer this out and until putin sees it as in his interest to cut a deal, it's hard to say when exactly that could take place or how much the negotiations will bear fruit. haidi: and coming up next,

residents in shanghai are scramble for daily essentials, especially food as the city of 25 million heads into lockdown. the details ahead. this is bloomberg.

haidi: a quick check of the latest business flash headlines, hsbc has been editing research reports to remove any reference to a war in ukraine. committees have softened language in multiple results including changing the word war to conflict, this has the lender resists pressure to closing business in russia. potential buyers of chelsea football club will submit their final bids on april 11. bidders have reportedly been

asked to pledge future investments. the owner was hit by sanctions. profits soared thanks to surging energy prices and china's economic recovery. annual net income of $11 billion, more than double the 2020 figure and beating estimates. capital expenditure is estimated at $31 billion, pressure to boost natural gas drilling and keep oil production high. shery: after days of searching, investigators have retrieved the second black box from the china eastern airline crash, the record other could provided vital clues as to why the plane nosedived in its attitude. what do we know so far about why the plane crashed? phil: right, investigators here

in southern china haven't said yet and they're still piecing the pictures together, but they got a big boost to their investigation by finding this second black box yesterday. this gives them information, should give them information on the movements of the planes and performance of the engine and goes along with the black box that was found earlier that records like what was said in the cockpit. to be sure, though, there is concern that these black boxes might have been damaged beyond use and no one has said yet that they're in perfect working order. so we're sort of looking to see what comes next from that. shery: what are we hearing from the china aviation authorities about the investigation so far? phil: over the weekend they said that no explosive materials had

been found in any of the samples of wreckage so far and they also declared everyone onboard the plane, the passengers and crew dead. and so the information sort of coming steady and slow from china authorities. >> give us a little bit of context about the china aviation, these sort of crashes are not that common? phil: they have been pretty uncommon over the past decade. china had a pretty good, has a pretty good flight and safety record over the past, you know 10 years or so. you have to go back that far to find a crash this bad. so this really surprised china where flying had become pretty popular for its convenience, from one town to another. it's pretty routine for people

to do, it became very popular and really shocked this nation because it had been safe for so long. after the weekend, the authorities here led journalists near the crash site, not to the crash site and they showed all the, you know, the efforts that are going into the search. they showed drones, they showed all of the manpower and the equipment that they had and they're really trying to send a message that we're going to get to the bottom of this and our aviation industry will be sort of back on its feet quickly. >> china bureau editor with the latest on that china eastern crash. we'll stay with china and the government is locking down the eastern half of shanghai, a city of about 25 million people for four days of mass covid testing. it will repeat the process in

the western part. after that, let's bring in bloomberg's bureau chief, charlie, tell us about this lockdown. why the strategy is being really approached as the way they are approaching it as we see these record numbers for case numbers? charlie: right. as you mentioned, so they will lock down the east of the river which is the financial district of the city for four days and then lock down the other side for four days. it looks like shanghai is abandoning the previous approach which is to avoid a full-blown lockdown to minimize social impact. that's because despite rounds of tests and targeted lockdown of residential compounds,

infections are still surging, just recorded 3,500 cases for sunday which is not the record. in the northeast as the country's biggest covid outbreak. >> charlie, quickly, how are residents preparing? charlie: many residents are already surprised, so before the announcement, many have been logged down in their compounds for a few days with limited access to supplies and necessities, especially fresh produce like fruits and vegetables. that's because people are stocking up in groceries because uncertainty of the movement restrictions. last night which is also very surprising, the government said to insure, promise, it will insure basic supplies such as electricity, but still many are rushing to groceries because they want to stock up. >> not surprising. bloomberg shanghai bureau chief

charlie zhu with the latest on the shanghai lockdown. we are following the japanese markets as we continue to see the weakness in the japanese yen as well as the equity space. this is bloomberg.

>> this is "daybreak asia," i'm vonnie quinn with the first record headlines, president biden is expected to propose a new minimum tax aimed at billionaires when he unveils his 2020 budget on monday. the proposal called the billionaire minimum income tax will assess a 20% minimum raise on households. it will generate $360 billion in new revenue over the next decade. the u.s. is set to clear an additional booster shot against covid-19 with sources saying a fourth dose will be approved for

adults age 50 and over. the authorization may come as early as next week. however, the f.d.a. is expected to stop short of a full recommendation meaning the option will be open for people to decide for themselves. el salvador has declared a state of emergency in an effort to tame a wave of gang-related killings. it grants the government special powers. a spike in gang brutality that has claimed 62 lives on saturday alone and comes from talks between officials and a criminal group known as ms13. china is said to put an australian news anchor on trial in a case that contributed to tensions. ka cording to the foreign ministry, the trial will start on thursday. she is accused of endangering china national security, a max sentence of life in prison. she has been detained for 19 months.

global news 24 hours a day on air. i'm vonnie quinn, this is bloomberg. shery. shery: take a look at the broader market space right now because we are seeing downsized pressure for equity markets. the nikkei at the moment down .7 of 1%. lower by materials and communication stocks and what this means is also halting the longest winning streak since 2019, despite the fact that we do have a weaker japanese yen against the u.s. dollar which continues to lose ground after its worst week since march of 2020. we're also watching the 10-year yield at the moment which is still at the highest in six years. the kospi down .4 of 1%, kiwi stocks reversing those gains that we saw last week. although take a look, this remains supported by materials and financial stocks, not surprising given the financials are really getting a boost given

that yields continue to rise at the global bond route continues. take a look at the f.x. space, this idea of rate differential is being felt in the japanese yen which is now at the 1122 level. i have to say i'm really surprised at this level, heidi, given when i lived in japan, the yen was around 108, 109d, it was really surprising to me to see this level of weakness. haidi: and surprising in may when it comes to, shery, these day traders in japan betting on a turnaround for their currency. we have been on a six-year low. retail positions are climb to go a record of more than $2 billion, let's bring in bloomberg's senior f.x. and rates reporter ruth carson. what is driving these big bets for retail traders given historically they actually tend to be net short the currency? ruth: just as everyone from

hedge funds and asset managers are betting on yen, the day traders are doing the complete opposite. positions on the yen have climbed to 260 billion yen, the highest in history. the loans are against the dollars and euro. in terms of what is driving that, fear, fear and worry about ukraine and when japanese retail investors are worried about what is happening offshore on geopolitical risks they bring the money back home and prefer to hold the yen against other currencies, the volatility is another fat cow driving this trend. that puts a damp enner on trade, japanese investors are going this is enough, bringing the money back home. >> what is the outlook from here, the governor seems to like it as it helps the economy according to him, although he does acknowledge some of the

fallout such as incomes really not being as good as the japanese households given the weakness there? ruth: absolutely, caution happening in the world here. talk to anyone in london, sydney or new york, people are betting on a weaker yen. we have forecasts of the yen falling to 1990 easy level, 150. so a couple of facts driving the weakness, incredible dovish bank of japan compared to the federal reserve who are beating the drums on inflation and raising interest rates. so japan is sticking to its monetary policy. as long as they do that, the yen will weaken when its peers are raising interest rates. it's down 6% against the dollar this year and it's only march with no sign of that weakness

letting up just yet. >> the policy moves, but despite the fact that we're seeing easy monetary policy from japan is not the case with the rest of the world. we have seen so many central banks starting to tighten. that has really affected the it price of bitcoin. this is a digital currency that of course really benefits from more cash around the world and now that's really been taken away from risk assets. bitcoin has stayed within the very narrow trading range for a while. finally it seems we're breaking out and getting past that $45,000 level. we have heard that would be a technical level that could really give, really leeway to more gains from here for bitcoin, not to mention the first digital currencies have been under scrutiny given sanctions, that is letting off

right now. let's discuss the trajectory with cross editor, what are we expecting now that we have crossed this very important technical level? >> hi, shery. this is really a sign of momentum as you say, bitcoin has been in a kind of narrow range pretty much all of 2022. and so the fact that it's crossed over 45,000 is starting to give people some encouragement that it could go even further. and actually, there was an analysis that shows that when it crosses as high above its 50-day average as it has, it actually is a sign of more gain because bitcoin is so momentum driven that when you start to get the gains, you can often get more and six months, a year out, it's often doubled from these levels and more. >> some analysts, we're start to see a deep coming to how bitcoin

and other crypto trades. talk to me about this. this idea that crypto could be more of a haven, more of a stable low volatility asset compared to others is really not where we started out this bitcoin conversation. >> right. i mean, crypto certainly hasn't been that to this point. it's been really struggling amid the geopolitical tensions, like it went down when russia invaded ukraine, this sort of thing. there is a lot of talk about people getting into crypto as they try to work through these tensions and as they figure out where they want to be in the future, plus just in general, people are looking at it as something as a space where lots is going on that there could be a lot more in the future. so it's definitely a factor that you could have -- you could have more people going into crypto on

geopolitical tensions. >> back with the latest on bitcoin. coming up next, we will be speaking with dell asia pacific and japan president about digital transformation in the region and the impact on their business. this is bloomberg.

>> we are tracking the fallout of the global supply chain crunch. these are the top stories today. tesla plans to suspend production at its shanghai plant for at least one day as the local government intensifies covid restrictions after resurging cases there. the factory builds for the china market and exporting to other parts of asia and europe. russian tanker as carrying oil, chemicals and products are increasingly concealing their movements a phenomenon that some maritime experts warn could evade vankss. there has been 33 occur republicans of dark activity last week, more than double the weekly average the past year. and the trading on the russian gas giant is under increasing pressure as clients flee in response to the war in ukraine. the company is facing liquidity problems as peers refuse to deal with them, shery.

shery: let's discuss how supply chain bottle necks are affecting the p.c. industry. amit midha joining us for an exclusive conversation. amit, good to have you with us. give us an update in terms of what you are seeing in component shortages and the supply chain disruptions we're seeing us this year. amit: good morning, thanks for having us. i want to say by saying 2021 was a historic year for us. we had a tremendous growth rate and driven by customers really looking at digital transformation as the essential nature of doing business and it's happening globally. it's happening all across segments, everything else and so our revenue in the region was up 34% and we're continuing to innovate including the edge, the hybrid work and again, we see a great future ahead for digital

transformation and our business associated with it. now, coming to your question on supply chain, i think clearly this is an impact that is global and its impacting every aspect of it, shortages of semiconductor and global challenges are affecting goods and components including us and what we have now done is we have built long-term relationship with our suppliers which is now a competitive advantage. we're the largest industry with about 70 billion and so that multidecade direct relationship is really helping us have the conversation, plan the business together and navigate these supply chains. we do expect this to continue until mid next year. >> mid next year. that's quite a long time to go still. given as you mentioned the positive demand outlook, what does your backlog look like across asia, we have seen

globally in your earnings report, you have talked about backlogs for dell servers and storage and networking hard away, specifically in asia, how is that looking? amit: yeah, so we clearly ship his storal numbers, 59.3 units last year despite the shortages. we were ache to navigate this and again the customers, we are buying business better with our suppliers. that is helping us navigate clearly and remains a channeling situation. our backlog grew to 52 million. we expect it to grow even in q1. the global numbers, operations of globals, this is impacting every region and we expect it to go in q1. >> where do you see the biggest challenges and shery spoke to you about the broader supply chain and logistics issues, are

there specific pressure points that you'll be watching very carefully this year? amit: well, what we want to do is we want to get into our customers operations and understand how they're going to use technology to create new outcomes. so how are they going to have multicloud, work from home and understand that they're centrally related, cloud related, device related, all of those things are kind of important to our customers. cybersecurity is becoming very, very important and the resilience of the basis despite the geopolitical tension otherwise also is very important to our customers. finally, we'll continue to work with customers on sustainability, building data centers, building new ways of creating infrastructure that is more carbon neutral is exactly what we're doing with our customers. a lot of areas to focus on and clearly supply chain, if you plan it right with our

customers, we can help them navigate much better as well. >> the pandemic and lockdowns working from home, working remotely was obviously a big unexpected boost for the business as the world and the region normalizes and economies open back up and people return to the office. where are you seeing the next wave of growth coming from? amit: digital health is on the cards across the board. we're seeing a tremendous turnout in terms of the edge and multicloud. let me give you a few examples. the soft bank, we are helping build the 5g infrastructure. we are helping the department of health, other health management. we are helping the bank to reimagine the banking area. there is tremendous investment

happening and what we see is the data is the goal. all of these customers are basically saying we need to use our customer data, we need to take on automation to create a better outcome. they're using the add -- adjacent sis to help their shareholders. >> you mention 5g and that transition. how much of a hit has that taken given the ongoing covid restrictions? >> what we saw is two years ago, we pretty much had a lot of long term projects come to a halt. starting last year, we started to move away from just keeping the lights on to doing business and for last year, we saw a lot of these projects are on multicloud telecom edge kind of go to the next level. we are seeing a lot more focus on security as well.

we are providing a data vault and cyber vault to our customers to help them in their operations and more and more of service prices that means they can be agile and scalability. all of those details aside, if technology is your core, digital is your essential, how do you imagine your business going forward. that's how customers are looking at it. in the past it might have been hey, that was a nice way of doing things, this is essential. a lot of banks are saying do i need branches or focus on digital infrastructure and then branches become an extension of that digital infrastructure. people are reimagining businesses and creating a future that is resilient, automated and scalability. >> good to have this conversation with you. global digital cities president there joining us. and coming up next, bloomberg terminal users can read more about those stories in our

newsletter supply line. this is bloomberg.

>> and here is a quick check of the latest, buyers long time

everis said to be pushing for the removal of chief executive officer over the company's operating performance and success planning. he has communicated a displeasure about the current leadership with the advisory board and is considering a no confidence vote at next month's shareholder meeting. star entertainment has resigned following allegations of misconduct against the casino operator during a public inquiry. he will step down from the board immediately while conditioning his responsibilities, his final departure date is yet to be determined. star has been accused of disguising hotel expenses on chinese debt cards to fund gambling. profits soared last year thanks to surging energy prices in china's economic recovery. the biggest oil routiner posted net income of $11 billion, more than double the 2020 figure and

beating estimates. capital expenditures this year is estimated at $31 billion as they face pressure to boost drilling and keep oil production high. germany's ambassador to the u.s. says the country plans to end its reliance on russian coal this year. emily spoke in an interview. >> first of all, it's a sea change in german thinking. previously hyper connectedness was considered to be part of the stability and i think that the war, putin's war against ukraine has buried that notion. we understand now that getting, ridding ourselves from energy dependence from russia is a

requirement is important for our national security. so the announcement that you have mentioned just before of the american president for energy exports to europe would be a huge part of that picture and estimates say that it may replace about one-third of the energy imports to germany, to europe from russia. so our thinking is right now. the german economic minister said that we want to slash our imports from russia by half. we want to get out of dependence from coal by september. we want to get as far as we can totally from the dependence by the end of the year.

the market as you know are a bit different because they're not, below the markets that may take a slightly longer time to manage. we want to be free of energy dependence from russia. >> the ambassador in new york. the german economy minister returned from qutar and the exports are starting to ramp up when it comes to l and g from the united states as well. can you speak to us about nord stream one, is germany willing to halt purchases from that pipeline? >> to be free of dependence from gas will not happen overnight. the glass market is not a global one as the oil market is. but make no mistake, we are determined and doing a lot to be able to replace gas imports from russia. you mentioned energy practices,

qutar in the united emrats, we're talking to norway. we're taking note of the announcement of the american president. we are determining energy in germany, we are altering the architecture, we are accelerating renewable, it's all of that and it's designed to cut off our dependence on gas imports. >> germany's ambassador to the u.s. emily haber there. the opening in china and hong kong as we continue to watch the fallout of the shanghai lockdown. major airlines could see some pressure with the covid conditions deteriorate. others could move on the news that the car maker will need to suspend production in the city.

still ahead, an exclusive interview as borders reopen, restrictions recede and singapore looks to regain its position as a major travel hub. you don't want to miss that as we head toward the china open. this is bloomberg.

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>> it is not :00 a.m. in beijing -- 9:00 in beijing. this morning we are focusing on china, covid-19 cases surge. tesla plans to suspend output therefore at least one day. president biden clarifies his call for putin's removal, saying he is not seeking regime change after allies and critics raise concerns.