♪ >> good morning. we are counting down to asia's major market open. >> welcome to ""bloomberg daybreak: asia". asian stocks are set to benefit from gains on wall street, slumping oil prices and more cease-fire talks between russia and ukraine. >> negotiations with moscow ahead of a two day nato meeting. >> president biden unveils

a $6 trillion budget request designed to appease moderate democrats and high taxes on the ridges. and the annual spending plan, as scott morrison aims to boost his election process. >> let's get you straight to the market open. we are expecting to see a bit of a lift, coming from infrastructure and consumer stocks. particularly if there is not given to the cost pressures on households are facing, and some sweeteners in the pre-election. a great majority is focusing on the post-covid recovery resilience. we are seeing a pretty flat start to the trade. really set when it comes to the straight day of gains. this month has been exceptionally well -- when it comes to the 10 year, we continue to watch those levels, the global bond continues to be

extended. some of the pressure and the divergence continues to play out when it comes to equities. really what looks like the end of the bull market in bonds. take a look at new zealand. a quarter of 1%. the big story for the market continues to be trading in the yen. $125.86 is the highest for the yen. we have seen the boj maintain yield curve control, expected to conduct a bond buying operation study. that's what accelerated the yen. we can see more weakness still for the japanese currency. as the policy divergence continues to play out. >> really being seen across the treasury space. we have seen that reversal of an earlier fall and treasuries in the new york

fashion. 10 year yields were down to 2.45%. still among the highest since may of 2019. u.s. futures at the moment, muted in early asian sessions. after the s&p gained ground for a third consecutive session. despite this huge rise in yields that we have seen recently. we have seen wti under pressure in the asian session. we continued to see the demand concerns over the lockdown and china. we have seen a huge tailwind when it came to oil prices already. given the geopolitical tensions and the war in ukraine. president biden has clarified his call for regime change in russia, saying he was expressing his own anger rather than calling for a change in policy. >> the last thing i want to do is engage in a land war or a nuclear war with russia, that's not part of it. i was expressing my outrage at the behavior of this man.

it is outrageous, it is outrageous. and it is more an aspiration, that he shouldn't be in power. there is no -- i mean, people like this should not be ruling countries, but they do. that doesn't mean i can't express outrage. -- express my outrage. >> bill, president biden has had to explain himself several times now, with other u.s. officials having to do so as well. what was your key takeaway? >> you are right. there was a lot of alarm from the president's's original comments. -- the president's original comments. he said today he was speaking in a personal capacity. but people who are very critical of donald trump often made the point that when the president speaks, there are repercussions from that. and you never really speak in a personal capacity. i think this will pass fairly quickly. but it does, you no, it did -- know, it did show ultimately

there are some leaders out there who do not think this crisis in ukraine ends with vladimir putin running russia the way he has, and with ukraine in the position it's been in the past couple months. >> we are expecting another round of negotiations on tuesday between the two sides. . are we seeing unity when it comes to how european allies in the u.s. are sounding and looking when it comes to their engagement with putin? >> we are seeing more of a divide. president biden's comments over the weekend accentuated that. i think the divide is between people who are finding the talks to be productive and countries, including the u.s., i think the u.k. is in the category, or maybe not very optimistic that russia is negotiating in good faith at this point. but there are toxic and on tuesday. ukraine has set out -- but there are talks again on tuesday. ukraine has set up goals it

wants to try to achieve. i think you see on the european side several countries, including france, germany, horsing, this is the best chance -- who are saying, this is the best chance to negotiate a cease-fire, either temporary or permanent, and go through the process. >> bill faries there. president has had a business schedule on the domestic agenda as well, unveiling a budget that includes measures amounting to the biggest tax hike in u.s. history in dollar terms. meanwhile, spending plans are announced on tuesday. in what were -- what were some of the key takeaways in the budget? >> it's a very big budget. it proposes some very big tax hikes. and the question is, will it pass? it's not intended to pass. people call this morning messaging device for president biden to signal to the world and

certainly to his own party what he wants to see. he wants to bring along the moderates. he realizes he may not get the progressives with this budget. or at least that's what they are saying and -- saying in washington. when you look at a $5.8 trillion budget for 2023, not too much about how you are going to make that happen -- how do you save the money to do that? 2.3% inflation assumed by next year, that is a bit of a problem. deficit reduction, people like that, you -- new funding for police, it is a tax hike -- this is more like a bargaining chip. probably the president and the white house doesn't expect this to be passed, but a 20% my mom tax and billionaires -- minimum tax in billionaires, in households with over $100 million, why not? seems like they have plenty of

money to do this. but if you are taxing unrealized capital gains, that is the thing that is the problem for people. another thing -- it does raise the tax overall, the corporate tax of 20%. tax hikes overall in here. joe biden, telling the world, telling the country the kind of things he wants to do. >> as you mentioned, the expectations look quite quaint now. are there measures intended to bring down past pressures? >> would cover this so closely, that we know the main inflation threat or is the federal reserve -- fetter is the federal reserve. in terms of that part of it,

the real gdp six expected to falter to percent by 2025. from 4.2% this year. still above trend, it's a good thing. the cpi to 2.3%. through 2030 to. with a 4.7% this year. that's a pretty long time frame. by 2032, i think a lot of people say, we could get this cpi. employment rate stays pretty steady. obviously that's another reason why the economy should be ok. i think the bigger question is early if the kind of things they are targeting again should be relied on. it seems like the government probably could help with investments or families. i think a lot of people would say it's higher rates, less money, supply growth, and that is up to the fed. >> normally, you would get a big spending budget ahead of an election, where the government

is trailing in the polls. what are we expecting? >> i wouldn't expect any tax hikes in this budget today, to be honest. this is a victory laps and a pre-election platform. the government, ahead of this budget, they are pushing a big narrative of, they are the responsible people, they are going to handle australia's economy the best, trickle in of the labor opposition party, and they alone brought australia through the pandemic, in a pretty good shape. but they have to juggle that against the fact that they are facing a lot of pressure to take action on inflation, on cost-of-living pressures. inflation is up in australia. prices are up. petrol prices in particular are up. there facing a lot of pressure from consumers. deposition labour party. to take action on that and put more money into the economy. the real risk is, if they put

more money into the economy, we are hearing rumors that is going to be cash payments. to low and middle income learners. does not overheat the economy more? to those cash furnaces get eaten up in rising inflation? >> it is a tricky situation not only for australia, but globally. what are policymakers doing specifically to tamp down prices? >> specifically, we've got those cash furnaces, $250 for low and middle income earners. probably about 10 million people around, in the upcoming budget. than the big question mark is how much are they going to cut the fuel excised by? we've heard, $.10, $.20, all which will bring down cash prices at the pump for consumers, perpetual. but if you bring down the cost of fuel by $.10 or $.20, it costs the federal budget a huge amount of money. but it might actually be enough pretty quickly, as fuel

prices rise further. >> kathleen hays and been wescott -- ben wescott, looking ahead to the budget. >> russian billionaire and negotiators [indiscernible] -- red eyes, lots of eyesight, and headaches. they received treatment and a stumble and have not recovered. it is unclear what type of poison might've been used. u.k. police may find at least 20 government officials close to the prime minister who held will be parties and 2020 and 2020 11 restrictions prohibited most gatherings. -- when -- 2021 when

restrictions prohibited most gatherings. workers have reportedly been observed taking a new passageway at this site where they conducted previous nuclear tests. south korea mediaset tests could come next month. penalties from the u.s. would require the support of north korea's traditional allies, russia and china. 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. ♪ >> we are seeing the australians on the communications company, trading, rising as there is a cash proposal from the brookfield group consortium. lots of optimism. significant progress has been made. no issue would indicate that they would move to a binding

packed. we are seeing unity trading at its highest, versus the five dollar a share cash proposal. still ahead, they say markets will state volatile and investors should tread with question. we will discuss this, next. this is bloomberg. ♪

>> the yield curve is inverted in certain places. >> it's not great for equity markets. >> the potential for a recession is growing more and more. >> the yield curve can tell you a recession is coming. >> the curve inversion -- >> a lot of money can be left on the table. >> the fed knows it is late. now we are going to make a policy error trying to fix a problem that they should have tried fixing last year. >> what central banks are doing sadly can only work with demand destruction. >> it is hard to see how the world managed to bring down inflation without participating to some demand destruction. >> there's growth in the end,

equities are making a claim, and that's the biggest risk. >> this is what the sort of yield curve is trying to invert. >> was our earlier guests on bloomberg t -- on bloomberg tv. they think the yield curve shows a tendency to was a recession. briefly imparting in the morning session. but it bounced back. how concerning is this, tempering inversion that we are seeing in parts of the yield curve? >> we are keeping an eye on it. no doubt, it is something that we keep an eye on. the best case scenario right now is we don't see a global recession,. the global growth forecast one from 4.6% to 3.7% because of the ukraine work, oil prices.

3.7% on our forecast i still above the historical -- is still above the historical average of 3%. there's no doubt inflation is concerned, but on the other the equation, you've got economies slowly reopening, as covid eases. that would provide a boost to global economic activity. it is a war between the easing of omicron and at the same time high commodity prices and inflation. the structure will send economies into a recession. >> you're talking about the shanghai lockdown after the change in lockdown, it could be a greater hit, since the beginning of the pandemic. how concerned are you especially about the chinese markets and the uncertain outlook? >> well, you're right, the

lockdowns and china is it something investors should be keeping an eye on. but we have seen this happen elsewhere in the world before. the lockdowns are not permanent. they help to curb the situation in china. in some states, they will be eased. not enough to derail the chinese economy. the chinese economy could grow between 5% to 5.5% this year. the pboc, the government could, use policy -- the government could ease policy, decrease fiscal spending. the lockdowns are making headlines for now, but they are not a fixture. they will help these the situation. i think china will be in a better position. the time will come. >> what's your strategy when it comes to getting exposure to the commodities and energy rally? >> well, we think, yes, that is an area for investors to focus on. if you look at the breakdown in terms of sectors, the energy sector is the best performing

sector so far this year. the msci world energy index is up more than 30 her percent or so. essentially -- 35% or so. essentially, there are stocks investors can invest in, but we caution investors not to overinvest in the commodity space. commodity prices are elevated, but going forward, we have also seen commodity prices are cyclical. we are not encouraging open investment. we believe in a more diversified investment. commodities have a place in the diversified portfolio. >> used to prefer asia -- >> do you still prefer asia to japan? even with the yen seen the weakness that it is? >> once again, the yen is weak because of short-term factors. but japan is a major oil importer. all prices are elevated. the economy will be affected.

the political situation, it is all about relativity. on a relative basis, we are not negative on japan, we are neutral on japan. on a relative basis, we see better opportunities in asia and japan. especially in the run-up to the parliamentary election, the government would provide support to the economy in the market. i think that will benefit the rest of asia as well. >> always great having your thoughts, vasu menon. executive director at the ocbc bank, wealth management. terminal subscribers, you can search tv anywhere on the bloomberg app.

this is bloomberg. ♪

>> we are tracking the fallout of the global supply chain crunch. these are the top stories today -- some companies, including china's biggest to producer -- chip producer, are continuing to operate during the city's lockdown on a closed loop system, keeping employees in a bubble. the nikkei is reporting apple plans to cut output of the iphone se's by about 20% next quarter, compared to its original plan, because of signs that consumer electronics demand is being hurt by the war in ukraine and rising inflation. tsmc and samsung are urging the u.s. to allow foreign companies to join the $52 billion federal program aimed at boosting chip production on american soil. both companies are spending billions on new plans in arizona and texas, but until has said

washington should only subsidize american firms. >> take a look at these prices. the gauge for ammonium prices and temper has surged to a record, putting a large portion of the world's supply at risk. the war is also pushing up the cost of natural gas. the main input frontmost nitrogen fertilizers, forcing some producers in europe to cut output. >> bloomberg terminal users can read more about those stories and our newsletter -- in our newsletter supply line. a quick check of the headlines -- source astellas byron is looking to raise capital to fuel growth. to gauge investor interest. they are among a group betting on becoming a powerhouse, reducing the reliance on the u.s.. the company that not -- did not

comment on specifics in the middle of one reason. profits searched last year, as cost cutting and local investment helped cushion the impact of american sanctions. they led the results briefing for the first time since their release from house arrest in canada. they are aiming to hire 10,000 plus college graduates this year. shares of alumina, adding to pressure on the russian aluminum giant to find new suppliers. they have not been able to -- they band exports of the material to russia a week ago. >> we are getting an apology from will smith, posted on instagram to chris rock, saying violence in all of its forms is poisonous and destructive, and

that his behavior at the academy awards last night was unacceptable and inexcusable. the headlines being made, after smith stormed the stage and slapped chris rock. an investigation i

♪ shery: breaking news out of japan. the job applicant ratio coming at one point to one trader slightly higher than the 1.2 with that we saw for the month of january. for february, the jobless rate coming in at 2.7%. the rate a little lower than expected at 2.8%.

really falling and actually seeing a little bit of a better picture when it comes to the labor market condition, despite the fact that we had more virus curbs in place in the month of january. we are talking about restrictions in areas account g that could probably have hit the labor demand outlook, but we are seeing that the jobless rate fell to 2.7%. of course, we are watching japanese assets closely. investors focusing on not only the yen, which is seeing incredible lows against the u.s. dollar, but take a look at this chart are to be long-term value discount for japanese stocks versus the u.s. has been around since 1994. that has widened even further during the pandemic to set a fresh record and emphasizes the risks for investors betting against japanese government bonds. as i said, the big focus is still on the slumping yen this month. the seventh of your love and

that is raising questions -- a seven year low. that is raising questions about the currency. let's bring in ruth carson. ruth, what can we expect on this front, given that the understanding so far has been at that the boj and policymakers in the government also prefer a weaker japanese yen in order to boost exports. ruth: there is talk in markets at least about the prospect of intervention and how that would play out. japan's chief cabinet secretary said on monday that the government is paying very close attention to the currency markets and the yen's fluctuations. japan may prompt the central bank to raise the bond yields to support the yen. and they could also invite some jawboning from the boj. japan does need inflation, but

this volatility and uncertainty are not going to be welcome among japanese policymakers. and definitely not in households. haidi: talk to me about the sustainability ultimately of the boj sticking to yield curve control at a time when the fed is in this type of aggressive tightening cycle. ruth: yeah, it is definitely a point of contention and we can see the tension playing out really in the yen. and so one of the most liquid incidents in the world, you know, to buy in short. so it was an absolutely wild session indiana for example last night. in terms of sustainability, it shows how people are willing to test of the boj's resolve in sticking to its policy. there are lessons learned here from overseas, for example with the rba giving up on its yield curve policy last year. as we have seen. because of market volatility. so the difference obviously is that the boj is a mega doll but.

so i think time will only tell whether they will stick to their policy and how much yen volatility they are willing to stomach. haidi: bruce carson there with the latest on the yen ahead of more expected boj buying operations today. this is with the other stories are watching out of japan. japanese prime minister's administration is set to drop economic measures by the end of april aimed at countering sharp rises in fuel and other prices. kkr's attempt to stall kk holdings has stalled. industry players could match kkr's value expectations of value of more than $2 billion. financial groups exposure to russia is about 2.9 billion dollars and the bank will record reserves for possible losses as uncertainties brought on by the war in ukraine continue to cloud

the outlook. let's get you to vonnie quinn with our first word headlines. vonnie: president biden says he was not announcing a u.s. policy change when he said vladimir putin cannot remain in power in russia. he says he was expressing his own anger at rejected complaints of foreign governors that he was as quitting tensions. the unscripted comment in warsaw sparked concerns from european allies that the president had reinforced the kremlin's narrative. president biden has meanwhile unveiled a 5.8 trillion dollar budget for fiscal 2023. the plan will aim to cut deficit spending by $1 trillion over the coming decade and contains more than to have trillion dollars in tax hikes on the wealthy and large corporations. the proposal also includes additional funding for police and veterans and one of the biggest increase for the defense budget. the australian government is set to often -- offer a strong outlook when it unveils its budget on tuesday. the budget announcements have revealed several measures aimed at boosting spending including a

one-off cost payment and support for first-time homebuyers. economists expect the deficit to now run strong jobs growth and rising commodity prices. the academy of motion pictures has opened a formal review into will smith after the oscar-winner slapped presenter chris rock during the ceremony. he also screened expletives after the presenter made a joke about smith's wife. the academy says it condemns the actions and will explore further consequences. smith as since made a public apology on instagram. global news --global news, 24 hours a day. on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries. i'm vonnie quinn. this is bloomberg. shery: coming up next while weight usa chief security officer andy purdy speaks with bloomberg on how the tech giant cease sanctions over russia. this is bloomberg. ♪

haidi: energy security has become a risk amid several threats to fill supply. that is placing the spotlight on hydrogen, predicted to become more mainstream as production methods become more viable. china is the latest to adopt a national strategy added to 28 others that have formerly

signaled a commitment to develop an ecosystem to produce and consume to hydrogen. our colleagues over at bloomberg think the plan which revolves around fuel-cell trucks and fossils is far less ambitious than industry expectations. let's bring in nef hydrogen specialist martin. talk us through the key points of the strategy. where do you think it falls short? martin: sure. so i would say there are really two key parts to this strategy. first one is the supply side, so the production of green or clean hydrogen for renewables. china is planning some 100,000 to 200,000 metric tons of green hydrogen to be produced per year by 2025. then there is the demand side. so hydrogen and -- where is it going to be used? china is focusing this on a fuel cell vehicles, responding to 50,000 cars running on hydrogen in the road by 2025, up from

about 800,000 today. targets for other industries where we think there is high potential like refineries, petrochemicals. but there are no concrete numbers there. finally, it offers no financial support. compared to european countries, that is definitely one of the less -- one of the bigger surprises to see funding for hydrogen. shery: so what does this then practically mean for the hydrogen sector overall? martin: for china's energy sector i would say the short-term, less than the industry may have hoped. those hundred thousand, 200,000 i talked about of green hydrogen that is about 0.5% of china's demand for hydrogen today. we expect this target to be hit regardless of the strategy because large companies are already building projects and

have been building them be for the target came online. before the target was released. on the demand side, those 2000 cars or fuel-cell vehicles i mentioned by 2045 commutative lake is testing notably half -- china sells more than 50,000 battery-powered vehicles. compare that to plans to sell cumulatively till 2025. it is very small. the other sectors like ammonium ethanol, oil refining will be expected and bloomberg nef sees more potential for hydrogen. there are no concrete targets but companies are working on hydrogen projects, so even without a strategy, china will be a leader in the hydrogen field globally. haidi: how does the plan compared to those of other countries then? martin: i have already alluded to that earlier. it is relatively unambitious, especially given how the industry has been waiting for this plan.

so let me give you a comparison. denmark with a population that is more than 200 times smaller than china's has released a strategy a week before china did and it is planning for enough green hydrogen vastly to produce two to four times what china is planning. and it is just so much smaller as a country than china. the plan is also missing funding . compare that to europe, which is spending billions of euros per year. the u.s. has committed $9 billion to clean hydrogen. but to end on some positive news, the government has signaled in china to support a gradual development of green hydrogen. the more -- the word gradual is important. the next plan from 2026 to 2030, they expect china to very well set ambitious targets. in the meantime, as i have already said, china might still be a leader in clean hydrogen because of what companies are already doing strategy or not.

shery: bloomberg nef hydrogen specialist martin tinkler there. we are focusing on one chinese company, while way. it saw its net profits search despite deep revenue declines across its businesses. and of course fallout from sanctions. the company's chief security officer of its u.s. relations andy purdy spoke to bloomberg exclusively about cybersecurity in the company's relationship to washington. andy: we are studying approaches of companies and governments around the world to try to come up with whatever approach is going to help us on this troubling issue. >> does huawei need to abide by sanctions? what if china imposes sanctions? andy: that is part of what we are studying is what the terms are. one of the things that we've been doing even before the pandemic was improving the diversification of our supply chain. not just for semi conductors. so if there is a disruption in certain areas, we can pursue

other areas. with our investment in r&d and some impure research, having the ability to find value and to create value and frankly, turn work into the information -- telecommute occasions industry to move toward carbon negative. our work in digital power, we've got a lot of flexibility and products and components. >> what is huawei doing to address security concerns? i know you don't agree necessarily with all of them, but clearly these concerns remain. andy: in light of the recent cyberattacks that demonstrated the axiom about trust and suppliers no longer valid, we are working with competitors, the major carriers in the world and the major standing bodies, to try to strengthen and improve standards for 5g and particularly, standards for telecom equipment. and working to create conformance programs and independent testing programs could we are open to the u.s.

government recently emphasizing the importance of greater information and sharing when it comes to cyber incidences. in other words, don't wait until really bad things happen, try to share information more quick, sooner, so the dots can be connected. we are open to having the u.s. government come into our facilities and hopefully those of our competitors, to give advice about how we and other companies can be more transparent. how can we make sure that we're doing what is necessary to address real risk, to promote resilience, and helping find ways to do that before really bad things happen, whether it is data breaches or cyberattacks. we need a graver -- greater capability as a global community to find out where we stand in terms of imperatives to avoid bad things happening. ultimately, the united states will get more active internationally in these efforts as well. >> what about the chinese government? we have seen them crackdown on chinese tech companies. how can you assure your overseas partners, business partners, that you can avert this kind of intervention and that it will

not negatively impact business? andy: that is one of the reasons we're partnering with different companies. we have 30,000 partners around the world, covering every different line of business. we are continuing to strengthen the global assurance and privacy protection program that we -- shortly before i joined 10 years ago, we launched it. the idea of internal testing, external independent testing, per dissipating in the standards where you have to have certain qualifications for your products and environments and trying to have ways to be increasingly transparent so our customers and the customers of others know what we're doing. so we have been one of the most tested companies in the world and we believe that the folks that have been our customers in those countries recognize that we are committed to following the laws of those countries. and we are committed to the best practices in cybersecurity and we are open to ideas on how to improve. haidi: huawei chief security

officer andy speaking with bloomberg's anna edwards. coming up next, bankers who choose to stay in hong kong are getting seriously, generously rewarded. we have more on that story next. this is bloomberg. ♪

shery: shanghai's intake to of

its phased lockdown and we are learning more about how many factories are allowed to stay operational through the use of so-called closed-loop systems of keeping workers on site. for that story let's cross over to our chief north asian correspondent stephen engle and see if we have heard of sleeping bags on trade floors across shanghai. what is happening? stephen: it's not just financial services. you know, companies that are called and workers before the lockdown started at 5 a.m. yesterday morning. it is the factories. shanghai is the financial center but on the outskirts there are factories. it is the base of so many other international companies that are doing business in china. like pega tron which makes iphones and shanghai, said to be operating normally because of the closed-loop system. essentially keeping workers on site in the dorms or thereabouts. where they can work and then also test with rabid antigen test on a daily basis and

observe the strict covid restrictions. but not necessarily having to be locked down at home and closing off the economic production that these companies liked semi conductor manufacturing international, the chipmaker, as well, said to be operating normally under a closed-loop system. shanghai is the financial center and it is a big economic powerhouse, creating about 3.8% of china gdp in 2021. shen jen which also went into lockdown a couple of weeks ago, contributes 2.7%. so shanghai potentially, if it does get completely locked down, which it does not look like it's going to be as far as everyone has to stay home and no economic out but, that could the pretty disastrous for an economy that is already struggling to hit this five-and-a-half percent or above five-and-a-half percent gdp growth set by the national people's congress. in fact, one economist saying right now the current situation probably will shave about 0.4 percentage points from china gdp in the first quarter and the

second quarter because of the loss of productivity, but also consumer demand will probably wane as well during those lockdowns. haidi: speaking of powerhouses, we've been talking about the mass exodus of talent, particularly in the financial sector for hong kong. are we seeing incentives being rolled out to try to convince people tuesday? stephen: you would think so, right? and that is what we're hearing at least anecdotally, because the numbers do not play out well as far as the talent shortage that is happening in hong kong. there were more than 140,000 more people who have departed hong kong this year there and have arrived. ok, some of them will return, a large number of them will return. but some, let's face it, probably will not. do the says issued to foreign financial services workers in hong kong felt the 2569 last year. down nearly 50% from 2018. there is a talent drain and if

were going to focus on financial services sector, they are saying it is known as walking across the street pay increases. if you want to get more remuneration, you might have to go to a competitor or go to your boss and say i want to -- i don't want to go but you got to pay more. people are telling bloomberg that in normal times on that happens and you have high demand, you can command about a 15% a. and editors are telling bloomberg there saying upwards of 35% because of the talent in financial services. so it is just something that carrie lam, the chief executive, acknowledged in why we have had a relaxation of 19 and the flight and the like of late. because she said there seems to be fading tolerance for now into two years of covid restrictions in the global international finance sector. haidi: chief north asian correspondent stephen engle with the latest. check the latest business flash

headlines as credit suisse has stopped pursuing new business in russia and is countering exposure internal memo. clients exit holdings as moving staff away. the bank was asked by lawmakers about sanctions compliance after reports that the bank asked investors to destroy information about dealings with wealthy clients. aig has announced a partnership with crop -- blackrock to manage $150 billion of assets including 60 billion of its global investment portfolio and 90 billion of its retirement portfolio. that is pending regulatory approval. the news coincides with the insurer filing an ipo for its life of retirement unit. aig will rename that business financial. apple looks to stop its loss -- winning streak following a nikkei report that they are cutting iphone sc production, its entry-level smartphone. the

manufacturing cut comes on signs that consumer electronics demand is being heard by the war on ukraine and rising inflation. shery: we are getting breaking news out of japan. the boj has released a summary of opinions from its march policy meeting. remember, this is the meeting where they left the interest rate unchanged as -- asset purchases unchanged but they did downgrade their assessment of the economy. one boj member saying it is appropriate to continue with the current easing. one member also saying that it is vital to help the economic recovery with easing. this of course follows the boj now offering to buy an unlimited amount of 10 year bonds over the next three days as it tries to cap yields amid the global debt selloff and that is of course eroding the currency's appeal and the 10 year yield now at around the highest in six years while the japanese yen is at the weakest in around seven years against the u.s. dollar. we are seeing of course with this summary of opinions from the march policy meeting, saying

that one boj member sees that it is appropriate to continue with the current easing. the boj is really an outlier, right, when it comes to rate hikes that we have seen from the federal reserve, from the boe as well. right. it is time now for some stocks to watch as we open in tokyo and seoul at the top of the hour. energy stocks, we need to keep an eye on those, given that crude prices continue to fall in the new york session, in the asian session. we are seeing wti at around $104 a barrel. this of course as we continue to see demand concerns over china issuing more lockdowns, this time in shanghai. plus also signaling it is going to stick to a modest supply increase when they meet this week. haidi: let's take a look at how the equity session so far is going as we head into the start

of trading in tokyo and in seoul and continue of course to be on the yen watch. but six rate session of gains on budget. watching for some outside's performance in infrastructure and consumer stocks, depending on what is in that budget released tonight. new zealand extending some of those gains. we are seeing weakness going into the start of trading in tokyo next. this is bloomberg. ♪

shery: welcome to daybreak asia. from bloomberg's headquarters in new york i am shery and. haidi: and i am haidi stroud-watts. hs markets are open for trade crude our stories, how asian stocks are set to benefit from

the prospects of cease-fire talks between russia and ukraine. kyiv sets out goals for negotiations ahead of a two day meeting. nato allies are split on whether they should talk to vladimir putin. plus, china's covid lockdowns are set to deliver the biggest economic hit since the start of the pandemic and could jeopardize that gdp goal. shery: japan and south korea coming online with a nikkei at the topics gaining ground. after seeing the worst gain for two weeks. we have seen the japanese yen also strengthening against the u.s. dollar after falling to that mere seven year low against the u.s. dollar. not surprising, given that we have seen the boj continuing to aggressively use with unlimited purchase of 10 year bonds. and that is really putting more pressure on the japanese yen as the 10 year yield holds at around the six year high. we are seeing also data coming out of japan. the jobless rate at around 2.7% for the month of february. take a look at the kospi because

we have already seen in a lot of pressure on the korean stockmarkets and we are seeing a little bit of a rebound in today's session. of course, this after we saw foreign investors continuing to sell which is also pressuring the south korean one which is holding at the 12 .20 22 level. haidi: yet we are seeing the upside for the greenback playing out a little bit when it comes to the strength that we have had in the australian and kiwi dollars. these are risk commodities linked currencies. this is what we are seeing trading here in australia on budget they of course, the equity session up about 6/10 of a percent. this is the sixth straight day of gains when it comes to the asx 200. in fact, we've only had to down sessions and about the past 11. so the rally continues, particularly as we look to see strength in consumer facing names, that is up by about 2% as well as an for structure names as well that could boost from extra spending in this budget. of course, when it comes to new zealand, we're seeing gains extended by about just about

have a percent at this point. the kiwi dollar trading under 70 u.s. cents. we are seeing just a little bit before -- a pullback when it comes to the aussie dollar as well as the u.s. dollar rising to a one-week high. in fact, pretty close to a year to eight high as well. take a look at u.s. futures as we see the extension of this narrative of preference of equities versus the bond market. that risk appetite is still there, but we are seeing a flat session when it comes to s&p futures at the moment. of course continuing to watch the u.s. 10 year yield, it is at 2.4 for the moment as we watch. this is unprecedented bond is selling off continuing. of course in asia, in play is that divergence between what the fed is doing and what the other central banks, namely the boj, is doing at the moment. crude seeing further downside there just over 100 and four dollars a barrel. shery: let's bring our next guest, who has seen more room for stabilization and upside for asia as well. let's bring in julia, executive director and global strategist

at j.p. morgan private bank. it is good to have you with us. which markets do you like? julie: sure, thank you for having me on the show. we do think that we are going to time of stabilization and could potentially look at upside in equity markets in the region over the next two -- one to two months. so the markets that we like are twofold. we like the semi conductor markets still because we still believe and in that story long-term. korea and taiwan are still favorites. we also continue to favor the reopening plays like thailand, indonesia has been a top market for us so for this year. it is obviously benefiting from the commodity price surge so far as well. japan, we still like. it has kind of quite a bit so we are still favorable on it. and lastly, china, we are seeing a policy finally being put into place. so i think that should be

favorable for the asian market which would prefer it over the offshore market. so probably we see tailwinds for asian markets in the next couple of months. one being that a lot of fed rate hike expectations are now starting to be priced and by markets. the market has taken a lot of bad news already. and secondly, as i mentioned earlier, we are seeing the policy being put in by the chinese policymakers. shery: what about the inflation hedge across asia right now? some investors are saying you should be adding real assets? is that something you would consider? julie: yeah, i think, you know, as long as our forecast horizon expands for the next one or two years, we really don't see inflation coming back down to policymakers target, let alone reversing back to their trend growth pre-pandemic. so that means that we are still faced with a higher inflation regime over the next one to two years and that means that it

still makes sense for investors to think about inflation hedges as part of their portfolio. but we would say that the horizon for these types of investments should be a little bit longer, because you are heading against a long-term trend. when it comes to tactical opportunities, we will have to see what is already being priced in four markets per for example, you can look at oil prices. clearly it is kind of circling around this range of $110, so if it exceeds that range significantly, they will say that ab tactical opportunities are not there -- maybe tactical opportunities are not there. you have to see where prices are going to trade tactically. long-term, we think it makes a lot of sense to have real assets in your portfolio to hedge against rising inflation. haidi: and julia, of course we continue to watch this unprecedented bond sell off as well and the yield curve and version in some parts of the yield was really a talking point out of the opec session. it takes us to a question of the day good which curve do you hit

the most if you're worried about it being a signal for inflation? is it still a signal for inflation? is that something that is still worthwhile, looking as a forward indicator? julie: yeah, so, i think that the yield curve flattening has been a major driver of some of those recession talks lately. i think what the yield curves are telling us is that some for dissidents in the markets are worried about the growth prospect. so regardless of which part of the yield curve you look at, that should be the main conclusion that you have. of course we favor maybe the three months to tenure a little bit more than the two tens, but i think the broad story is the same. at the end of the day, you have to take a step back as well from that recession probability and think about just how much it is telling you. and we think it does not tell us a whole lot about the timing of the recession. so, you know, if we look at where the u.s. economy has

started -- the developed market economy has started the year with, it is a strong place. so we really don't see recession in the next 12 months as a best case. still, we are preparing for in our portfolio, in terms of investment, is a slowdown scenario in the second half of this year rid we will make the necessary shift in terms of investments to prepare for a slower growth. slower growth environment in the back half of this year. as we enter into 22 any three, we think that maybe growth will have a higher chance -- 2023. we'll have a higher chance of sliding past lower growth. that is when we will see recession probably's taken seriously in our portfolio and make it more defensive. we would still have quite a bit of a runway from here, so we do think that it makes sense to think about those growth risks really from a slowdown perspective and not a recession perspective for this year. shery: j.p. morgan global market

strategist there with us. let's get you to vonnie quinn with our first word headlines. vonnie: thank you. president joe biden says he was not announcing a u.s. policy change when he said vladimir putin cannot remain in power in russia. he says he was a stress in his own anger and rejecting complaints from foreign governments that he was escorting tensions. the unscripted comment in warsaw on saturday sparked concerns from european allies of the president had reinforced the kremlin's narrative. russian billionaire roman and ukrainian negotiators are suspected of being poisoned after a meeting at the beginning of the month it according to sources they experienced peeling skin, red eyes, loss of eyesight and headaches. they received treatment in istanbul and recovered. it is unclear who was behind the attacker what type of poison might've been used. a u.s. judge says it is likely that former president donald trump committed crimes in relation to the capital diet last year when hundreds of his supporters disrupted 2020

election certification proceedings. under the ruling, emails between trump and his lawyer john eastman are required to be turned over to the january 6 congressional committee. to decision carries no direct legal ramifications or trump. -- for trump. after will smith has apologized to comedian chris rock for slapping him on stage during sunday's oscar awards. in an instagram post, smith described his behavior as unacceptable and inexcusable and said that he was reacting in an emotional way to a joke made by chris rock about smith's wife. the academy of motion pictures and scientists have -- science has opened a review into will smith. global news, 24 hours a day. on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries. i'm vonnie quinn. this is bloomberg. shery: still ahead, as covid lockdowns disrupt tesla's operations in shanghai, we get the outlook for the ev market in china with blue lotus later this hour. but up next, talks between russian and ukrainian

negotiators on tuesday. the minimum goal is addressing the humanitarian situation on the ground. this is bloomberg. ♪

shery: taking a look at european futures trading right now. seeing a lot of upside given that we have seen a little more risk on sentiment the asian session. right now, this after stocks closed with little change in the previous session given that of course we continue to see risks from rising bond yields, not to mention the ukraine or risks as well. the stoxx 600 now on course for its first quarterly slump since the pandemic started in the fourth quarter of 2020. we are seeing the euro holding steady after actually falling to the lowest since mid-march against the u.s. dollar. haidi: of course president biden has clarified now his call for a regime change in russia, saying he was expressing his own anger, rather than calling or a change in policy. president biden: the last thing i want to do is engage in a land war or nuclear war with russia. that is not part of it.

i was exposing my outrage at the behavior of this man. it is outrageous. it is outrageous. and it is more an aspiration that he should not be in power. people like this should not be ruling countries, but they do. they do but that does not mean i cannot express my outrage. haidi: let's bring our asia government managing editor dan here. and we saw allies seeking to distance themselves as we got clarification on what president biden said. how does this particularly play into the way that the perceptions of how the u.s. has handled the situation? dan: yeah, clearly, the comments bye-bye didn't have sort of opened these fissures in the nato alliance -- the comments by president biden. behind closed doors during the past week. and now, this has kind of made things spill into the open, particularly over the question

of whether the government should be talking to vladimir putin. you know, how much can they trust him in negotiations question mark france in particular, pushing for a cease-fire first. before talks get underway on what happens with russian troops in the country particularly. so the question really is how much can you trust vladimir putin in talks? how much should you push for a cease-fire now before the other questions on territory integrity are resolved? and how much weapons should you give ukrainian forces? this is another question that came up in the nato summit. particularly -- excuse me, not wanting to provoke russia into using weapons of mass destruction. shery: it seems that humanitarian situations, relief from that side, could be one of the minimum goals set from ukraine and now that they are restarting talks with russia.

dan: that's right. that's kind of the main thing and even we have heard that from the europeans as well, in particular, saying that the goal should be to stop the fighting first. stop the killing and then talk about these other issues. noting horrific scenes that have been coming out of there. the question really is how much the russians are willing to give in these talks. that is the main question. how much are they just talking to keep the talks going while they continue the fight on the battlefield versus actually trying to seek a solution. that question remains unknown right now. there are differences of opinion on how much negotiators can trust vladimir putin now, particularly after a lot of what was said before has been contradicted by actions on the ground. haidi: daniel, our asian government managing editor there. oil continuing to fall in the

asian trading session. shery: this is already after sliding 7% in new york. this of course as we have the lockdown and shanghai increasing concerns over global demand. opec-plus meeting on thursday also to discuss supply. let's bring in energy and commodities editor david springer. dave, when it comes to these virus restrictions and the likes of shanghai, the new lockdown, we've had the lockdown. we've had a lockdowns across china. how long does the impact last on the oil space. david: boy, well, as you say, we have seen oil extend those declines. this morning, that reflects the fact that china -- yes they are looking at the specifics of the shanghai situation and the potential for weaker demand their for capability in shanghai. but i think most important, what we are seeing is a market that is worried about the potential for a wider resurgence of cases across china. and the impact that that would have on global oil demand.

china of course accounts for about 15 million barrels a day. so any indication of any sort of wider curbs of a spread of restrictions to more cities, that would have a much more serious impact. and i think that is what we are seeing people just starting to worry about a little. haidi: what is being forecast is how much these could dampen demand. david quandt yet, i mean, in shanghai -- that does only account for a small percentage of china's overall demand, but certainly if we look at yesterday, we saw clear impacts on ability. morning congestion on monday was about 45% lower than a year ago, so you can see that there are fewer cars, fewer public transport on the street. you know, we have seen forecast already from consultants, energy aspects today. they trim their projection on demand by 700 thousand barrels a day. and by 600,000 barrels next month. so certainly there are expectations that use specific

curbs will lower demand. shery: so what are we expected from the opec-plus meeting this week? david: at this stage, very little. the expectation is that opec and allies, they will, when they meet on thursday, go ahead with the long-standing plan to increase production. that is only for quite a modest used to output -- modest boost. it's an increase of 430,000 barrels in may. one note of caution, we heard on monday from the energy minister of the uae and he was indicating that the group is looking at the situation. and he did say that if the market is in balance, then potentially producers would want to be putting more resources into the market that is in balance. so we expect them to go ahead, but quite clearly they are taking a careful look at the situation. haidi: our energies and

commodities editor, david stringer and melbourne. plenty more to come on daybreak: asia. this is bloomberg. ♪

shery: the yen's biggest plunge into years has now forced the bank of japan to alter its aggressive stance -- has not forced to the bank of japan to alter its stance even as the federal reserve is set to increase rates. kathleen hays is here with more. kathleen, if anything the boj seems to be doubling down. kathleen: as soon as the boj got boring, all of a sudden is one of the most interesting entry banks around. of course, after it intervened twice, yesterday, it is standing by for march 29, 30 and 31 to buy more bonds. let's set the stage. this long slide in the yen really got going when the fed

made its big hawkish pipit and the yen it started weakening. and then after the last meeting, when governor kuroda's made it clear, he might out of his way to say he will not remove stimulus. it is still needed even if inflation jumps. just because the other central banks are, like the federal reserve. look what happened. this move in the yen, it is down 7% this month alone. they had that seven year low of 125.09. dollar-yen rate. it is breaking this long-term trend line that goes back to the 1990's. that is a very powerful signal for a lot of tradeers. that is one of the things of the boj is up against as they do bond purchases. what is going on there? well, they waited. last friday in asia, in japan, around the world, people are saying the yield is up to 0.23. the cap 0.25. yes, they're going to move. in fact, they waited yesterday, the first operation did not do

anything, so they came in again around 1:00 in the afternoon in tokyo. when it the yield was at 0.245 percent, it's like they waited boom and then it did push it back down. it is backed up today. and bloomberg economics very importantly is saying what this shows, even if they are not saying anything yet, even if they have not changed their position, the moves they are taking show that they are concerned and they are at least beginning to take steps. the question is now much further do they go? haidi: kathleen, the existential question of how sustainable this is, yield curve control against the backdrop of the fed tightening, what are we expecting in the longer term? kathleen: first of all, one thing i would look to add, citigroup, for example, thinks that the operations desk at the boj asked to wait until 0.2345. so for the next few days, you're going to have to get almost to the top of that cap before they move anything. definitely more broadly, what is going to happen? if they want

to, they could start jawboning for a while. that is what central banks used to do in the 80's when there was all kind of currency market intervention before the days of the arrow. there were more currencies, more pairs to trade. and that's one thing they could do. people are also saying that for the near term, maybe the next month or so, seasonals are bad for the yen in march. they should get a little bit better in april. technically, it is very oversold. it is hard to say isn't it? it seems that perhaps the governor wants to ride it out for a while, but another commentary on one of the banks was that look, they can't do anything until the next meeting on april 28. this is going to be a big policy change at this point to widen that implicit and -0.25 two plus 02.5. so april is not that far away. could be a lot of volatility between now and then and maybe they are counting on technical factors to calm down for a

while. but it is certainly good to make an trading and again watching very interesting for a while, isn't it? haidi: very interesting. kathleen hays are global economics and policy editor. let's get you a quick check of the latest business flash headlines. rusal cannot access aluminum, adding pressure on the giant to find new suppliers. according to bloomberg sources, they have not been able to get stuff from cleans land aluminum in which it owns it when he percent stake. but it is operated by rio tinto. german band exports of the racial material -- a crucial material to russia a week ago. credit suisse is cutting exposure and russia according to an internal memo. this was bank is helping clients as get -- exit holdings. the bank was asked by u.s. lawmakers about sections compliance about reports that the bank asked investors to destroy information about dealings with wealthy clients.

lots more to come here on bloomberg. daybreak: asia, i should say. this is bloomberg. ♪ as a small business owner, your bottom line is always top of mind. so start saving with comcast business mobile. flexible data plans mean you can get unlimited data or pay by the gig. all on the most reliable 5g network. with no line activation fees or term contracts. saving you up to $500 a year. so boost your bottom line by switching today. get the new samsung galaxy s22 series on comcast business mobile and for a limited time save up to $750 on a new samsung device with eligible trade-in.

♪ haidi: aussie retail sales numbers, coming in at a big 1.8 percent, beating expectations of 0.9% and keeping up the pace of 1.8% that we saw in the previous month. clearly the strength that came out of the post-christmas sales season is being sustained into february as well, 1.8%. the aussie dollar has been on a tear, still sitting just under

$.75. but that is likely on account of the strength that we see in the greenback at the moment, on a year-to-date high. in the equities session also, ozzie stocks on a tear for another sixth street session on the day that we will get the federal budget unveiling on tuesday. we will see retail consumer facing names like this payments platform seeing over 5%. on the downside, weaker trading due to energy. energy stops sinking along with oil on chinese demand worries. shery: it is really interesting to see that the biggest gainers on the asx 200 are checked and consumer discretionary stocks, kind of the same picture we are seeing in the nikkei, off half a percent. energy was down, same thing for the nikkei. the energy sector is the biggest

loser at the moment. not surprising given that we continue to see that outside pressure for wti and brent. it is down five dollars a barrel for wti. let's get vonnie quinn with the first word headlines? vonnie: u.k. police may fine government officials close to the prime minister who broke lockdown rules after investigations into reports of officials holding parties in 2020 and 2021 went public health restrictions prohibit gatherings. the first batch of penalties could come tuesday. the prime minister says he was assured that no rules were broken. what career looks set to detonate its first new air bomb in four years. workers have been observed digging a new passageway at a site where pyongyang conducted all six of its previous nuclear tests. south korea says a test could come next month. further penalties from the u.n. would require north korea's

traditional allies, russia and china. president biden has unveiled a budget for fiscal year 2023. it contains more than $2.5 trillion in tax increases for the wealthy and large corporations. the proposal also includes additional funding for police, veterans, and one of the biggest ever increases for the defense budget. the austrian government will offer sweeteners and highlight a strong outlook when it unveils its latest budget tuesday. several measures are aimed at boosting spending, including a one-off payment, and support for first-time homebuyers. the economy is expected to narrow. the u.s. senate has passed its version of a long stalled bill to aid the domestic shipping industry and boost competitiveness with china, needed to kick off negotiations with the house on federal

legislation. the senate voted 68-28 for the plan, which includes more than $50 billion for the tech sector. global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie quinn. this is bloomberg. shery: china's swift action to quash spiking covid cases in shanghai over eight days is likely to have an even greater impact on the economy. more than the recent closure of shenzen, thanks to bloomberg's kai: economist, who joins us now. how much will this hurt china's ambition to grow 5.5% this year? >> this is truly very bad. shanghai is very big. 3.8% of the gdp. anti-lockdown came after, shortly after the lockdown in

shenzhen. unlike previous episodes, omicron related lockdowns have affected production, mostly conception. china set the target at 5.5%. so -- [no audio] -- we saw challenges for the country meeting that target. this outbreak in shanghai and shenzhen will make the target even more challenging. haidi: we have seen companies from tesla to she, say, saying there -- to shiseido say that operations will be impacted. will this impact supply chains? chang: for now the impact is limited. there are further arrangements

that could cushion the impact emanating from shanghai and shenzhen. but if the lockdowns stay -- [indiscernible] -- very well connected with the rest of the world in terms of its exports and its port capacity. its port capacity is the biggest in the world. so for now, this is affecting ports. beyond that, it is grantor to hurt the global supply chains. shery: our bloomberg chief asia economist, chang shu. next, we will discuss the outlook for china's ev sector, as shanghai's lockdown forces

tesla to close its factory there. this is bloomberg. ♪

haidi: tesla is extending the production parts as it shanghai land through thursday as half of the city lockdowns.

the factory exports to other asian countries, as well as to europe. let's bring in the blue lotus auto analyst, dan zhuang, for the latest impact. this is a temporary pause to the production. how do you quantify the impact when it comes to output? >> it is about four days. they have already lockdown and the sector suspended two weeks ago. last march, there were six days. so basically, that will impact about 15k units. that is about 20% of teslas february sales. so from march, the impact is about 20%.

haidi: so it is sizable, even if it is just a few days, the lockdown. we also have reporting that expectations are pretty much in line -- the results are pretty much in line with expectations. the stock has been so beaten down. what stood out to you, particularly when it comes to the numbers staying high for deliveries? chang i think for this year , investors put more focus on gdp margins, especially as the costs increase, and commodity prices. so i think the concern is that they just increase the price. demand seems a little bit slower after the increased the price of their models.

the battery costs will pressure the margin in the first and second quarter. so the loss is basically in-line with the fourth quarter, but that will continue in the first quarter. i think the major concern is still if the company can manage their costs and also their costs and also there margins in 2022. that is still a bit different from last year, because last year we were more focused on the delivery. shery: when it comes to competing in this very difficult environment, as you mentioned, rising material costs and other issues like lockdowns, who is better positioned? we have foreign automakers operating within china and the e.v. space and then we have the local automakers as well? dan: i think these companies usually have a good management

of their operations and of their margin. compared with the other two, the use of different technology is a smaller battery, so less impact on its cost and margins from the battery sector. haidi: e also have a buy rating for neo. why? dan: i have a buy rating for all these three. for this year, they still have a very strong model. neo is going through a new cycle. they are about to launch three models this year. those are all very exciting.

here they will have three new models coming. so they are going through the new model cycle. and the volume increase will be exciting this year and next year. shery: blue lotus auto analyst dan zhuang there with the latest on the e.v. space across china. in the next hour, xpeng vice chair hongdi gu will join us to discuss the latest results and the potential impact of shanghai's lockdown. and of course we are watching huawei. we saw a net profit surge 60% last year despite revenue declines across its businesses and fallout from american sanctions. the company's chief security officer spoke to bloomberg exclusively about sanctions against russia, and always

relationships with other countries. >> we are starting various approaches of companies and governments around the world, what our approach will be on this very troubling issue. >> does huawei need to abide sanctions imposed on russia by other nations, and what if china imposes sanctions on russia, what are your contingency plans? >> that's part of what we're studying, what the terms are. even before the pandemic, we were improving the diversification of our supply chains, so if there is a disruption in certain areas, we can pursue other areas. with our investment in r&d and research, having the ability to find value and create value and, frankly, working as part of the information and telecommunications industry to help move towards carbon-negative and our work in digital power -- we have a lot of flexibility for different kinds of products and

components. >> what is huawei doing to address security concerns raised by foreign countries, in particular the united states -- i know you don't agree with all of them -- but clearly, these concerns remain? >> in light of the recent cyberattacks, trust in suppliers is no longer valid. we are working with our competitors, the major carriers in the world, to try to strengthen and improve standards for 5g, particularly for telecom equipment, and working to create conformance and testing programs. the u.s. government recently emphasized the importance of greater information sharing when it comes to cyber incidents. trying to share information more quickly and more sooner so that the dots can be connected. we are very open to having the u.s. government come into our facilities and hopefully those of our competitors, to give advice on how we and other companies can make sure we are doing what is necessary to address real risk, to promote

resilience, and helping to find ways to do that before really bad things happen, whether it is cyberattacks or breaches. we need greater capability so that we can avoid really bad things happening. and hopefully the united states will get more active internationally in these efforts as well. >> what about the chinese government, we have seen them crackdown on chinese tech companies, how can you ensure your overseas and business partners that you can avert this intervention, and that it will not negatively impact huawei's business? >> that is one of the reasons we are partnering with so many different companies, we have 30,000 partners around the world covering every different line of his nose. we continue to strengthen the global assurance in privacy protection program that we launched shortly before i joined huawei almost 10 years ago. the idea of internal testing,

external, independent testing, participating in standards bodies where you have certification of your products, trying to find ways to be increasingly trans-and so that our customers and others know what we are doing. we have been one of the most tested companies in the world and we believe the folks who have been our customers and stakeholders recognize that we are committed to following the laws of those countries, and committed to the best practices in cyber security, and we are open on ideas on how to improve. shery: the former usa chief security officer andy purdy, of huawei, speaking to bloomberg's emily chang. coming up, chinese markets face a number of risks from the lockdown in shanghai. we look ahead to the open, next. this is bloomberg. ♪

shery: a quick check of the headlines. aig has announced a partnership with blackrock to manage $150 billion of its assets, including $60 billion of its investment portfolio, and also its retirement portfolio. it is pending regulatory approval. the news coincides with aig filing an ipo for its retirement is missed. aig will renamed that

business. apple looks to snap its streak this year following the company announcing that it is cutting production of its smartphone by 20%. the cart comes on signs that consumer-electronics demand is being hurt by the war in ukraine, and rising inflation. sources tell us chinese chip designer by run is looking to raise 314 within dollars to fuel growth. -- $314 million to fuel growth. it looks to become a chip powerhouse and reduce its reliance on the u.s.. the company said it could not comment on deal specifics in the middle of fundraising. haidi: we are just over half hour away from the start of trading in china and hong kong, investors are still facing risks. the lockdown in shanghai, the yen's tumble adding pressure on

currencies like the yarn. sofia horta e costa joins us. let's talk about the impact of the china lockdown. the impact on tesla for example, when it comes to dropping their production. and companies like shiseido will all be affected. sofia: exactly. add this to the lockdown in shenzhen and what is happening in hong kong, economists are expecting this to impact the chinese economy, the biggest impact the chinese economy since january 2020. so this is not to be underestimated, at a time when china is already grappling with a lot of risks to growth, and the 5.5% gdp target set for this year was taken by the market and by economists to be already quite ambitious. so how are they going to achieve this? that is the big question.

this is just shanghai, we don't know what is going on in other cities, other manufacturing hubs . china has more cities than most countries in the world, so it is a big problem not just for china, but for the rest of the world, given that china propelled global growth last year. and the inflation risks the rest of the world is grappling with, they will get worse. shery: yet the hang seng index actually rose in the previous session, boosted by meituan 's earnings. how much of a boost could this give to the session today? sofia: looks like a stronger session in hong kong. the golden dragon index had a bounce. what's interesting is where the money is flowing. looking at northbound flows yesterday, march is said to be the biggest outflow since the two trading links began. if you look at the u.s.,

investors are making extreme bets in either direction. there is three times leverage of the etfs for currencies. also the hedging costs are effectively, if you want to bet in the direction of chinese stocks, the cost is going up dramatically. so there is a huge amount of betting on a bigger move in chinese shares. it is a very binary market. the upside is so good that nobody wants to miss out. that is a sense i am getting from international investors, who lost a lot of money last year with chinese markets. the bounceback we can get can be so, so fast, that the positioning is getting very heavy now. shery: yes, fomo. nobody wants to miss on the good bounceback. sophia oka acosta, with a look at what to expect in the chinese trading session today -- sofia

horta e costa. we keep watching stocks on the mainland and in hong kong. while -- we could see moves from suppliers after huawei reported a big profit jump in its results. so keep an eye on the suppliers for huawei. also it is a big day for chinese financials. we have the likes of bank of china, china construction bank, hi securities all reporting results. investors may not need to look any further, dividend yields more than doubled the csi 300 as well as their u.s. peers. haidi: yeah. let's look at u.s. futures. after a robust session overnight, this is where we are sitting, as asian stocks continue to rise. s&p futures are flat. taex futures are up 0.5%.

we will be watching for tsmc. also watching the start of trading would it comes to the mainland markets, but also focusing on what we see as the direction for onshore and offshore dollar china, given the volatility around the yen and the how that is playing into the basket of currencies. taking a look at the markets that are already trading, the nikkei 225 is up 1%. the kospi with modest gains. in australia, tech and consumer names are leading gains, a sixth straight day of gains. new zealand seeing some more modest gains of about 0.3%. shery: and coming up, an exclusive interview with xpeng's 's vice chairman and president brian gu. he will break down the results after deliveries beat

expectations. we will chat about ev price hikes. that's it for daybreak: asia. haidi: our markets coverage continues, looking ahead to the start of trading in hong kong, shanghai, and beijing bloomberg markets: china open is next. this is bloomberg. ♪

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david: happy tuesday morning from hong kong, 9:00 in beijing here, beijing, and shanghai. i am david ingles with yvonne man. yvonne: our top stories this morning, watching out for talks between ukraine and russia set to resume in instant bow today, with the prospect of a cease fire boosting equities. oil prices falling