haidi: good morning. we are counting down to asia's major market open. shery: good morning. global stocks close out the worst quarter in two years as the war in ukraine, inflation and pandemic risks way on sentiment. >> wti trades near the $100 mark.

opec-plus refuses to increase production may blunt the effect. >> u.s. futures gaining ground at the moment after the s&p 500 fell almost 5% just this quarter. the worst quarter since march of 2020. we have energy for today underperforming. wti is rebounding in the asian session. for today, we have banks becoming the worst performers. big banks are challenged these days, we have slowing capital markets and growth concerns are hitting on angels. the 10 year yield at 2.33. the two-year yield extending gains after the biggest jump.

we continue to see concerns about yield curve inversions. we are watching the stock market closely because the concerns have been dubbed as anxiety. the s&p fell 35 sessions already in the quarter. ubs asset management thanks we are still in a bull market. that we are not going to see a recession anytime soon. it's not surprising that we have these concerns given that we have seen already inflationary pressures acting up. we had mixed data today. real spending for households in the u.s. following more than expected in february. we have seen the inflation numbers that the fed uses pce gaining the most annually since 1982.

no wonder we are seeing the likes of a hedge fund giant now saying that price risks could equal the 1970's inflation stock that led to a recession and to high unemployment. haidi: for consumers in particular and consumer spending, those ricochet on flow effect. so much is the energy piece, how much people are paying for gas. we heard from vladimir putin saying that russia will keep supplying gas to europe. he is demanding that they pay in rubles. the economy minister saying these changes are not likely to affect supplies. it doesn't matter that they demanding to be paid in rubles. these contracts are still being kept and they are not being violated as a result of more and more rounds of sanctions. that is giving a little bit more of an alleviating effect when it

comes to the gas market. shery: commodities are surging. we are now seeing the biggest quarterly gains in decades. we haven't seen such gains since the 1990's, the 1970's or so. not surprising even today the biden administration confirming reports that they will be invoking cold war powers. haidi: president biden ordering the massive oil released from reserves to reduce our dependence on foreign suppliers. xi jinping is set to meet virtually with the eu leaders on the ukraine war. set to dominate the agenda. for more, let's bring in jodi schneider and other guests.

jodi, why did joe biden order this release? what domestic pressures is he under? >> it's all about gas prices and inflation. the last thing the president needs on election year when a voter goes to the gas pump is to have the higher numbers staring them in the face. he basically is releasing one million barrels per day for the next six months from u.s. reserves. he said this should lower gas prices. he calls it vladimir putin's price hike. even though inflationary pressures have been sending up gas prices higher even before this increase in the past month the war in ukraine. president biden in a press conference lay this out. he was talking mostly about oil, but he threw a bit of a bone to the environmental lobby and

those who want to see the u.s. lower its dependence on energy sources from abroad by looking at things like solar and battery powered vehicles and electric vehicles by saying he would spend $3 billion to weatherize homes and for states to do that. and would increase the production of key minerals to get those batteries for electric vehicles. it was mostly about the oil reserve that's what most of the announcement was centered on today. shery: we have oil prices rebounding in the asian session. there is the release of ftr's or opec-plus not doing more. >> absolutely. the reason that joe biden released of this was because gasoline prices are so high.

opec is looking at the market saying the market is balanced, there's no reason for us to increase the supply. we have to remember the crude release was very political. if opec is not increasing, that gives you a sign that this crude release is trying to make up for opec and the lack of uranium barrels that we have right now in the market and russian barrels that we do not have on the market. a lot of traders are looking at this and saying if the fdr gets brought down maybe 180 million barrels down, that brings us down to 1984 levels of the strategic reserve and if there is an emergence where the strategic reserve needs to be topped, then it's going to be much harder for the biden administration to do that. there are these push and pull factors, but oil is up 33% this quarter. not only is the market very tight, but also is contending with the fact that the lack of russian barrels due to the war

has brought up prices. haidi: we could see more pressure on xi jinping when he talks with eu leaders when it comes to china's positioning on the war. >> absolutely. that's what we expect the european president whether it's the commission president or also the european commission president, they will be meeting virtually with xi jinping and the premier into separate virtual meetings over the course of friday in china. clearly, china will want to get a gauge of the level of support that european nations have had toward sanctions that have been essentially led by the united states.

china will try to mimic what we have heard from a state editorial this week saying that the united states is almost leading this unilaterally. they will try to split some of that thinking in the european but europeans will be step last. they will be pushing china to clarify their stance toward the war in ukraine and their support for vladimir putin and russia. eu officials telling bloomberg they suspect china may be ready to supply semiconductors and other tech hardware to russia. the big question is how hard will europeans push xi jinping and others for answers and how hard will beijing try to convince the eu to assert its independence from u.s. centered vision of the ukraine war? there is a lot to be discussed.

the first three topics probably surrounding ukraine war. one last thing, we did get strong words from germany's finance minister. he said china does not respect the principles that germany stands for and is a systemic rival to its economy. he says china does not respect our social model, our understanding, our recognition of international law. he said while they may be strong, they are not in the same league as his views toward russia. it sets the tone a little bit terse ahead of the virtual some later today. the first one and a couple of years between the eu and china. haidi: let's get you some news crossing out of australia in terms of the pmi data.

the final number for march coming in at 57.7. that is a pickup from the prior reading of 87.3. we continue to see this robust recovery in the australian recovery coming out of the last round of lockdowns and the omicron disruptions we saw in december and january. it is on track to start tightening it has been fairly more doug -- dovish when it comes to the likes of the fed. what a quarter it has been. u.s. stocks falling, the first losing quarter since the pandemic bear market. as look at sidney stocks. it looks like we are setting up for a second day of losses after we snapped the seven-day rally yesterday. sidney futures looking like indicated declines.

a little bit of a haven bid although dollar again -- dollar-yen -- let's get over to vonnie quinn. >> president biden says vladimir putin may have fired some of his advisers or put them under house arrest. he told reporters he doesn't have much hard evidence. joe biden also built on indications of dissent although russia has refuted those remarks. pakistan's prime minister says he will face a no-confidence vote on sunday. he said he would fight to the last. the local media there is reporting the opposition has enough support to unser pete -- to on sort -- to unseat the former start. india says it plans to sell $112

billion of government bonds. that is 59% of the target and largely in line with previous years. traders say the government borrowing may push up local yields already under pressure from higher oil prices and u.s. rates. 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, the director general joins us to discuss flight bands to hong kong and what it means for cathay pacific. also rate hikes and why a recession is the only way to stop inflation. this is bloomberg. ♪

haidi: you are watching daybreak australia. some are forecasting two 50 bones -- 50 basis point rate hikes. our global economics and policy editor kathleen hays is here. what are we expecting from the jobs report? does it change anything from the fed? >> it may underscore something from the fed. who can get more aggressive with the rate hike prediction? three banks all see 50 basis point rate hikes in may and june. citigroup sees 50 basis point

hikes in june through september. they believe this is something the economy is strong enough to take. today we saw a big consumer spending report. it's all the spending. everything you by. it looks like maybe this surging inflation is starting to affect the consumer and a couple of ways. spending was down 0.4% in february. up 1.5% in january. part of it is the inflation adjustment. the other part might be prices are up so much, people aren't buying so much. what are we looking for in the jobs report? payrolls are seen rising 490,000. still a strong report even

though it has pulled back a bit. the range of estimates, there's a lot of big question marks. the unemployment rate is expected to fall to 3.7%. that's the lowest since march of 2020. the bottom line we are expecting a tight labor market supporting the fed's view we have to fight inflation and the economy can take. >> let's bring in our next guest to says the only way to stop inflation is a recession. it's good to have you with us. take a look at this chart. it shows how inflation is already biting into personal spending. where you go for cover in this environment? parks value stocks, cyclicals,

energy. you have to be careful about the bond market because you don't want to burn your portfolio from both ends. a lot of people select their funds and investments and look at their trailing for the five-year returns. suddenly they realize in january or february. in march, the equity markets rallied but the bond markets didn't. i think you want to keep her foothold in stocks. you need stocks to fight inflation. you have to make sure you keep up with inflation. you're probably getting .01% in your checking account. you have to be careful how much you are parking on the sidelines. shery: when it comes to

investing in energy, what do you like? energy related stocks? commodities themselves? >> both are a good place to be. we like cyclicals and generally we are overweight energy stocks. i know today's news was not great, but you saw the oil market wall off 7% down to $100 per barrel, but you did not see oil and gas stock all that hard. a lot of people look at the strategic reserve release as windowdressing. it's not an actual fix to the problem. we are producing 11.7 million barrels per day. that is down about 10% off of pre-pandemic levels. when you add from the reserve, you add some, but the breakevens are 30 or $40 per barrel.

they are just printing cash and they are not putting it back in the ground. they are giving it to shareholders. haidi: we've seen a strong rebound when it comes to large-cap stocks. does that continue given its counterintuitive to what you might see in the tightening rate environment? >> i like to say we have to pick through the charcoal to find the diamonds. there are some areas got hit hard. we are bullish on semiconductors. everybody is taking a hard look at their current cybersecurity and beefing it up. we think there are pockets of potential. your to be careful about the growth prospects. we're going to be in a rising rate environment. they need to be companies that produce things now and have cash flows now and not just hypothetical products in the future. you want your portfolio to focus on cash flow, companies that are

making money and making profits now versus the potential unicorns in the future. i wouldn't go chasing unicorns or rainbows right now. i want companies generating cash. haidi: do you also look at companies vertical integration where supply chains are contained? you say the world will continue to look inward when it comes to supply chain logistics issues. >> i think the world is going to get smarter and that's unfortunate. eog has all of their equipment contracted out for 2022. you have to be careful, but you already had steel being manufactured in the u.s.. supply chain and labor are two -- you have to understand the

risk. citigroup or mcdonald's cut out a little bit with russia exposure. i am very bullish at understanding and i still bet on the u.s. consumer. the u.s. economy lives and dies on the u.s. consumer. a lot of companies are passing on the inflationary pressure directly to the consumer. oil prices have come down 25% off of their high. gas prices are down like $.11. even if we get this spr move, oil isn't that great. we have to see if that's going to bring down prices at the pump. shery: it was good having you on. if you want to follow more on today's top stories when it comes to markets, this blog is

your destination. there's, tory and analysis from bloomberg's expert editors. this is bloomberg. ♪

haidi: taking a look at the day ahead for australia. the labour party unveiling its economic prediction ahead of an election. shery: gamestop shares surged in late trade after it announced plans for a stock split in the form of a dividend.

the retailer will seek shareholder approval. it says the split will provide flexibility for future corporate needs. petrochina net income rose. quadruple the level in previous results. the oil giant is under pressure to boost output. the director general of the association of asia-pacific airlines joins us with the outlook for the aviation sector next. this is bloomberg. ♪

at xfinity, we live and work in the same neighborhood as you. we're always working to keep you connected to what you love. and now, we're working to bring you the next generation of wifi. it's ultra-fast. faster than a gig. supersonic wifi. only from xfinity. it can power hundreds of devices with three times the bandwidth. so your growing wifi needs will be met. supersonic wifi only from us... xfinity.

haidi: the lockdown in the eastern half of shanghai will be lifted on friday. certain compounds will be sealed off as the government continues to fight covert infections. what are we seeing in the first half of the city being locked down and the effectiveness of these measures? >> 9 million people or locked

down for the last four days or so. you mentioned caveats that people are living and buildings with positive cases. they still have to go through a quarantine of another 14 days. also nearby buildings near these compounds that have positive cases, you have restrictive movement for seven days. this is what you are seeing, this whole concept of study and is meant. this is how they're going to do this particularly when we start looking ahead to the western part of the lockdown. we are dealing with much more people and a larger geographic

area. if you are living with your family, maybe you should isolate and stay in your room, avoid sharing food. it goes to show the great lengths that they are doing. perhaps this is the toughest test yet for xi jinping as he tries to make these dual goals of eliminating the virus at a time when they're trying to mitigate the impact on the economy. keep in mind, that was basically due to the effects of the tech hub lockdown. we haven't felt the full impact from the shanghai lock just yet. shery: we are already seeing the impact when it comes to the financial sector. sleeping bags on trading floors. >> it's tough because you're

talking about shanghai where you have 470,000 employees that work in banks, brokerages and the like. the issue coming to work and pack a bag and be ready to be away from your family. everyone is trying to make sure things are running smoothly, but it's a tough task because you have multiple fund managers in different locations. when it comes to managing and doing cross training checks, that's when you run into errors. compliance issues are also saying fund managers should not be making trades at home.

it logistically it makes things more complicated. shery: travelers from the u.s., u.k., canada, and six additional countries can travel into hong kong today with the city lifting flight bands. more social distancing rules will be eased later this month. dining and hours will be extended and up to four people will be allowed for social gatherings. these measures are regarded as a strong signal of hong kong's strategy shift after the city closed the border for over two years. the reopening is expected to boost business sentiment and slowdown the great departure of firms and talent as its rival asian hub singapore take steps toward living with covid and reconnects with the world.

bloomberg economics has warned the pace of hong kong's reopening is still uncertain. the government could bring back virus curves if numbers search again. hong kong could revert back to the covid zero path in alignment with the mainland. >> airline talks managed to outperform the index in the first quarter. people are starting to travel again, but the prospect looks shaky. we have had russia's invasion of ukraine sending oil prices above 100 prices -- $100 per barrel. we will get to hong kong in a moment. this immediate issue of energy prices. among the membership, what are you hearing about how will hedged they are? >> a mixed bag.

some hedged upwards of 50%. summer are hedged below 50% and some are not hedged. if you recall in 2020 when oil prices went down significantly, a lot of airlines were caught out. hedging is a difficult exercise, but oil prices are also being affected. because of the ukraine crisis. there is a shortage of supply. this is pushing up the oil prices plus a lot of airlines have to do a lot of rerouting of flights because of the closure of airspace. costs are going to go up with this event. haidi: we just spoke about the uncertainties as hong kong begins to reopen. you think it will take a lot more certainty? what will it take for asian airlines to fly through hong

kong again with conviction? >> the hong kong government is still pursuing zero covid strategy. every little bit of relaxation is good. we have to bear in mind that there's still quarantine even though it is shorter. we hope that hong kong will also follow the example of many other countries in the asia-pacific region. reopening of borders. have to bear in mind that the 50 largest markets only 37% have been completely opened compared to other regions, 90% to one hunter percent of their markets are opened. >> we were talking earlier about

inflationary pressures whether it's coming from fuel prices or labor costs. tell us about those cost pressures are your airlines. >> there are several factors. oil prices are just one of them. there's also inflationary pressures because of the shortage of raw materials and supplies. at the same time, the ukrainian crisis demand -- the pressure for profitability has gone up significantly. >> wendy specht -- expect to see meaningful recovery? >> before the ukraine crisis, the industry was expecting recovery to happen globally into a 24 in the asia-pacific in 2025.

the ukrainian crisis brings more uncertainty to the circumstances. perhaps there will be maybe six months the on 2025. >> what long-lasting changes do you think will be coming from this pandemic on travel and the air industry? >> generally speaking, three or four years of downturn is not going to have a huge impact in the scheme of things. asia-pacific was expected to see a tripling of traffic by 2050. we might see a slight dip on that estimation. there are some good things that have come out of this covid. because of the suppression of demand, most airlines have shifted to leaner and smaller fleets.

more modern fleets. that is very good. it helps to fulfill the sustainability agenda when they consider that the industry is already committed to net zero emissions 2015. >> india has spoken about the priority of making airlines more green fuel powered and sustainable airports for their pledge to get into zero by the deadline. is that something within the current context of energy prices that is a priority has been hastened or is it make the transition more difficult because of costs? >> the transition is going to be affected by the increase in fuel prices. international, the most important factor is sustainable aviation fuel. it is several times the price of current fuel prices. there's going to be a cost element and government

commitment is very important. airlines are a huge user of fuel. we need an impetus from government and the finance industry to help make the transition successful. >> during the pandemic, i have heard talk and analysts that business travel will take a fundamental hit. given remote work, we may never see a recovery back to 2019 levels. what are the bright spots for you and what sectors are you most worried about? >> business travel will also bounce back. fairly quickly. people have been forced to stay at home for a very long time. i think it will come back. the pent-up demand is there.

you can immediately see the surgeon bookings. there is -- you can see the search in bookings. it will be a bit slower, but it will come back, the people we call the market warriors by those who travel conducting sales and meeting negotiations. that will take more time to come back because people are making sure they are safe and the environment for their staff to work in safe. >> great to have you with us. coming up next, losses mounting. for holders of russian bonds. we will have the details ahead. this is bloomberg. ♪

vonnie: oil is trading around $100 after president biden's order to release 100 million barrels per day from reserves. he also criticized u.s. oil companies as he is hoping to see

other countries boost supply. >> i'm waiting to see whether or not how many barrels our allies release from their supplies. my guess is it could be as high as somewhere between 30 million to 50 million barrels. the higher the number, the more likely the prices will come down. vonnie: the opec-plus group has refused to deviate from its schedule of gradual production increases. in its meeting, opec-plus also opted to exclude data from reduction estimates. the change is intended to a public snub as the agency -- to the agency. russia plans to keep supplying gas to european customers even as they demand payment in rubles. vladimir putin says the country values its business reputation and will comply with all contractual obligations.

he is insisting on being paid for the fuel in rubles signing a decree that says shipment will be stopped friday for those who don't. 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: for more, let's cross to our global markets reporter. what do such exclusions mean for investors? >> it will have huge consequences for the industry. more than $800 billion worth of assets tracks the index which is the at this point. the next day or so it be key in seeing how this impacts actual holdings.

haidi: what do someone do when there is no one looking to buy? >> it gets tricky and this is something that investors are trying to figure out. we have done some to try to figure out what is happening. if there are buyers out there and if it passes on the tracks the gauge, they would have to write the assets down to zero and put them in a side pocket for the time being. for asset managers there's more freedom where it doesn't need to exactly replicate the index. the russian exclusion will be big for investors that hold russian debt. shery: have investors kicked out whole countries before? >> it is rare for it to happen so suddenly and broadly. with the jp morgan index in particular, they are excluding government bonds as well as

corporate debt all at once. march 31 was the date of exclusion. in venezuela, assets were also removed however this case is unlike anything we have seen before. haidi: we have breaking news when it comes to star entertainment. the leadership of the board, star entertainment saying that john o'neill will be the interim executive chairman. he will lead until a new permanent ceo will be found. earlier in the week, a ceo and managing director tendering his resignation. that coming after we heard some of the issues raised in the first public hearings in connection with the review of the casino operations in sydney. he said he feels accountable for the adequacy of the companies

policy and culture then -- therefore was resigning. star entertainment has appointed john o'neill to be interim executive chairman until new leadership is found. shery: for other stories you need to know to get your day going, bloomberg subscribers go to the terminal. you can customize your settings so you only get the news on the industries and assets you care about. this is bloomberg. ♪

shery: time now for morning calls. the yen slump may find resistance. ahead of global markets research said given the choppy markets, the yen could hit 124 without any particular trigger. new factors are needed for it to drop past 125 per dollar. authorities are stepping up warnings about the excessive weakness. the s&p 500 recent rally may be running out of steam. that is the view of goldman sachs strategists. the s&p 500 is close to the

year-end target of 4700. the firm sees the index dropping more than 2% in a downside scenario. this recommendation suggests focusing on -- >> the reaction to gamestop was swift and dramatic. the stock closed down slightly. the company filed a regulatory filing saying they were seeking a stock split in the form of a dividend. the plan to ask shareholders at the upcoming annual meeting to approve the increase in class a shares of one billion up from

300 million. they also said this would provide flexibility for future corporate needs. some read that to mean for future fundraising. investors have given it a big thumbs up. >> we had already seen the stock with a rebound last week. what was the catalyst than? >> let's talk about the trends we are seeing in the buybacks or stock split's. all of the major tech heavyweights tesla, amazon, alphabet all announcing plans in recent weeks and they have shot the stocks higher. down in the recent session, but they all ran higher in the weeks after they announced. retailers like to see a cheaper stock and gamestop is the poster child for the meme stocks in that it was up 700% last year

partly because it created a short squeeze. we saw that rally fade in november. shery: here is a quick check of the latest is this flash headlines. toshiba's largest shareholder has agreed to tender. in a filing it said it would tender its entire 9.9% stake if it was offered to acquire two thirds or more of toshiba. this is reunited -- reignited speculations. nothing has been decided. volkswagen has chosen american banks including goldman sachs and bank of america for its porsche ipo. j.p. morgan chase and citigroup are also among the coordinators which could value it at up to $100 billion. the listing is planned for the fourth quarter and would provide

volkswagen for funds for its push into electric cars. >> the u.k. withdrawing in order to plug wells. it's >> coming up in the next hour, how democracies can push back against authoritarian rule. plus why a management company is positive on japanese equities and heard them to outperform the u.s. and europe over the next six months. that's it for "daybreak: australia." "daybreak asia." is next. this is bloomberg. ♪

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™.

haidi: good morning. we are counting down to asia's major market open. shery: welcome to "daybreak: asia asian stocks set to come under pressure since the bear market. the u.s. orders from its reserves. plus, russia and ukraine