> haidi: good morning, i am haidi stroud-watts in sydney, we are counting down. shery: to china's market open. shery: and i am shery and in new york. graphic images triggered a push for fresh sanctions on russia. china finds a new subtype of the omicron variant will shanghai prepares to start a fresh round of mass covid testing.

plus, asian stocks may get a boost after beijing's move to ease an audit dispute with the u.s.. look at u.s. futures right now, under pressure after the s&p 500 managed to gain in the last few minutes of trading in the friday session, in fact, for the week, we saw u.s. stocks gaining ground for a third consecutive week. we are now seeing some downside pressure as we continue to have that uncertainty over where the federal reserve goes from here. we have u.s. job numbers really strong, showing a resilient labor market. also watching the treasury space, we are seeing the treasury route continuing in a new levels of the yield curve in version, the twos and 30's inverting for the first time since 2007. oil markets are also extending their around. wti is now below $100 a barrel. brent also approaching those levels.

and we have the u.s. announcing the unprecedented release of u.s. oil strategic reserves, and the u.k. also expected to join those efforts. haidi: let's look at how we are looking at the start of trading. you said that acceleration into the close is what dominated the narrative when it comes to the friday session on wall street we are the 10-year yield holding steady. a little bit of a move to the upside when it comes to rates on the shorter end, the three year is up 40 basis points higher. new zealand is up 0.1%. dollar-yen is remaining in focus after the world swings in the past few weeks also. but if we look at the three-month implied volatility, it has come down from a two-year high. potentially some of the rate differential, the gap we are seeing being treated may have passed for now. shery: yes, let's talk about what is happening in ukraine.

the country once an investigation into what it says are war crimes by russian troops on civilians. president volodymyr zelenskyy: the actions "in genocide." >> indeed, this is genocide. the elimination of the whole nation and of people. we are the citizens of ukraine, and we don't want to be subdued to the policy of russia -- this is the reason we are being destroyed and exterminated. and this is happening in the europe of the 21st century. haidi: the kremlin has dismissed ukrainian claims of war crimes having been committed by russian troops near kiev. we are expecting more sanctions against russia. let's bring in our next guest. what else can russia do?

>> there is still a lot that can be done. the footage we have she from surrounding towns around kyiv, there still questions, a lot we don't know and a lot that is still emerging. but what is certain is that these are atrocities on the scale of war crimes. these are not new tactics, russians have used these terror tactics in chechnya before. that should really go the nice the west. the oil energy embargo, cutting off russian oil and gas. that will be difficult to sell for the european and indeed the global population, it will mean higher prices, but it is now clear that it has become quite necessary. haidi: to these images galvanize beijing? clara: that is a good question. countries like china and india that have hidden around this russia-friendly neutrality, these images will not get through to their population, certainly not in china, and it

will not get through to the chinese general population, not easily. but this will be very, very hard to explain. and at i think think the scenes it will increase chinese pressure. remember, this is not about the atrocities, but also what the atrocities will mean in economic terms. and for china, that is almost certainly blood needs. haidi: bloomberg's clara ferreira marques with the latest. almost the entire city of shanghai, 20 5 million residents, are under some form of lockdown or quarantine. cases exceeding 1000 on thursday. joining us is emma o'brien. we were expected to see this lifted after the one half of the city commenced. it hasn't worked out that way. emma: a week ago we had moved into this half-half lockdown, which was seen as a compromise,

not locking down one of china's biggest cities, and its financial hub. but the virus situation has deteriorated since then. more than 8000 cases reported in shanghai over the weekend, a significant step up in the numbers they had been reporting. this extension of the lockdown reflects that they are concerned about this and that they think one of the only ways to get this under control is to keep persecuting their covid zero playbook of locking people down and mess testing them, which has worked really well in the past. sheri: and we have a new subtype of the omicron variant. how does this end for china? emma: we don't know much about this subtype. we are hearing that it was reported in a town close to shanghai. yet another subvariant is also reported in the northeast of

china. so, two strains that researchers say they haven't found in the global database that sequences these virus types. this doesn't necessarily mean that we are talking about scary new variants, but it is something to keep an eye on. it does show the risk that an out of control outbreak within china which we are not in yet, but we could see if this does escalate, it was his a risk to the rest of the world if it does unleash a new variant of the likes of omicron. sheri: bloomberg's emma o'brien. now let's get to vonnie quinn with the headlines. vonnie: hank aaron prime minister viktor orban scored a crushing election victory. his lukewarm support for ukraine and close ties with russian president did not stop him. his party is on track to

maintain its two-thirds parliamentary majority, with more than 4/5 of the votes counted. pakistani prime minister imran khan has thrown the country into chaos, calling for a first election after one of his political allies abruptly counseled a no-confidence vote. the deputy prime minister cited foreign interference for dropping the motion brought by the opposition. he then asked the president to dissolve parliament, which was approved shortly afterwards. a member of sherlock's ruling party says the country's's cabinet has submitted brick resignation following protests on rising costs. sri lankan inflation has accelerated to the fastest pace in asia, at almost 19%, with daily power cuts as long as 13 hours, as diesel runs out. hong kong's election season has begun after a two-month delay due to covid.

local media say that the likely contender for the city's chief executive include the former financial minister. the current leader, carrie lam, hinted last week that she might not seek another term. 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: right. still ahead, we will speak with japan's former vice finance minister for international affairs, about the historic intervention by the boj, and what that means for the yen. equities are proving more resilient despite the stampede to tighten policy, we will speak to that with a market analyst next. this is bloomberg. ♪

> it's a white-hot labor market. >> the labor market is white-hot. >> the economy is red-hot. >> this is an economy and labor market that is overheating. the fed has to accelerate. >> the fed has been behind the curve. >> the fed is in their toughest

position. >> they are probably 100 basis points behind the curve. >> it makes sense to get some 50's in whitney have an economy that is moderating. >>. >> we are going to see slower economic growth. >> they will do that in the next couple of meetings. >> the fed is expected to hike much more aggressively than it. >>. >> did in previous cycles today's report only will reaffirm that view. haidi: some guests reacting to the robust u.s. jobs print on friday. our next guest says where equities are proven resilient for now, he does not see a soft landing ahead. joining us is kyle rodda. let me bring up one of these indicators that we continue to look to as the risk of a recession, the risk of a heart blending -- a hard landing. twos and tens is flatter since 2007. the 2's and 30's inverted for the first time since 2007 also.

does this tell you that will stocks may be the least-worst thing you could invest in at the moment, that perhaps investors are underpricing a hard landing? kyle: i think it comes down to the different timescales that equities look at compared to the bond market. the bond market looks years to decades ahead. equities are 12 months in advance with any confidence in what you can price. for me, what we are looking at is the beginning of the end of a cycle, a boom bust cycle. the fed will tighten above neutral, the yield curve is predicting that. we have all this talk at the moment that this time is different, that this isn't a signal we should be worried about,, at least by some market participants. but if you look at the last eight u.s. recessions, this has been a pretty reliable indicator. it fits well into the narrative that inflation is running too

hot. the way to bring it down, at least in certain stages in history is to, do much tighten aggressively and engineer a recession to slow down growth and inflation. i think that is what the bond market is pricing in. there is still optimistic about the short-term economic outlook, but in the long run, the bond market is basically saying that we are on the clock now and that will have to be discounted into equity prices. haidi: we have also seen a breakdown of the usual correlation you have with rising yields and the slowdown in. big tech in fact we have seen this re-rotation back into large caps. how long does that continue? kyle: i am not so sure. basically, the split up the line is whether you can say this is the market still behaving efficiently. that rests on the argument that may be equities responded to that real yield element, where

there is still no alternative other than equities. and we are seeing the rebound as a result of growth in tech names. we are also seeing volatility come down as well, a story for ukraine and russia. the other thing is that the market is bouncing basically for reasons that are irrational. that the weight of that but market is eventually going to bring stocks back to earth. and we will see this, bear markets now continue to unfold. for me looking at the charts, looking at the s&p 500 which had a really weak close last week, it signals the longer run, it may be rear on the cusp of another pullback by tech stocks. there is no rationale to describe where we have seen this rebound in equity prices. it might be justified. but there is no cogent story

that can be told because the bond market and the stock market are different things. shery: especially when you factor in the uncertainty from covid-19 cases in china. take a look at these calls when it comes to gdp estimates for the chinese company for 2022. citigroup is seeing a one point cut. morgan stanley cutting china growth forecasts to 1.6% given the lockdowns. how much of this is priced in, and how much more could heighten the uncertainty for markets that are really dependent on the economic outlook for this country? kyle: often, what we say in times when global financial condition start to tighten and the u.s. economy is starting to see if reduction in expansion, the growth story is proven by what is happening in china. at the moment that is not materializing because since the start of the pandemic, policy tools are pretty much

ineffectual if you have to look down vast swaths of your country to try to suppress the virus and stop the health impacts of. the virus. this dynamic zero policy, the breaking down of the covid zero policy has not been priced in yet. when things go wrong, everyone had confidence that china would be able to run the economy, that it will continue to work even in the face of. omicron. that is breaking down. we have to consider that is another risk to growth and now a risk to higher inflation because supply chains will be disrupted, and it will extend this strength lectionary dynamic, which i think everybody's worried about now in financial markets. sheri: how about the impact when it comes to currency changes? we have seen a resilience in the chinese yuan, but also in the u.s. dollar.

kyle: it will continue to move higher. we might see a pullback if the euro and the pound strengthened because there is a de-escalatio in the conflict in ukraine. but in the longer run, the fed is taking dollars out of the system, it is tightening policy, and the u.s. economy is in a stronger state compared to other advanced economies in the world. i think we will continue to see the dollar push higher. that is just based on what happens historically. i think it continues to move higher, albeit that russia-ukraine dynamic could bring some weakness. . but long term, though, the dollar will continue trending higher. shery: kyle rodda, ig australian market analyst, thank you. you can get more of what you need to know to get your day going. bloomberg subscribers, go to tv

. . it is also available on mobile and the bloomberg anywhere app. this is bloomberg. ♪

haidi: let's get you a check of commodities. the committee in oil continues after the biggest weekly retreat in more than 10 years. oil extending declines. we are getting get more cases of covid over the weekend in china, as well as the city of shanghai,

with over 25 million people, under lockdown. wti dropping to $98 a barrel. . it lost 13% last week as we continue to see the impact on the demand-side equation being worked out by pricing. natural gas futures are looking flat. really interesting implications for australia. the economy standing to gain from the surge in energy prices. the government said in its latest report that some consumers have already switched from russia as a source of natural, gas and lng which suggests an increase in prices. we are seeing moves in copper as well, edging lower within pre-trading. shanghai is china's major metals trading hub as well, and that is intensifying supply-chain hurdles for raw materials used for everything from rechargeable batteries, to window frames, when talking about copper. we are tracking the fallout

from the global supply chain. here are other stories were following today. this nejra term consultancy says more vessels have switched their flags to other countries in march, possibly to conceal their ties to moscow and avoid being caught up in sections. as commodity trade shifts rapidly, the austrian government is expecting the boost to resources and energy export revenues. australian officials expect it to keep prices higher. and supply chain issues continue to weigh on automakers in the first quarter. all major carmakers reported sales with steep declines. still, toyota remained ahead of gm when it came to sales in the u.s. we. will be looking at the local food prices. the index hit an all-time high last month, with the war in ukraine threatening to create further chaos and push prices even higher. bloomberg terminal users can read more about those stories in

our newsletter, supply lines. a quick check of the latest business flash headlines, tesla delivered a record of 310 thousand cars worldwide in the first quarter, after what he learned musk calls an exceptionally difficult period. sources tell bloomberg that teslas factory in shanghai will remain closed on monday. the u.k. is reportedly preparing to nationalize gazprom's local retail arm as soon as this week. london may take over the struggling utility if the company fails to reassure international counterparties about a change of ownership signaled by its parent company last week. the unit supplies roughly 30,000 u.k. customers. the chinese fast fashion app she in his set to be weighing another funding round and evaluation about $100 billion.

it is in talks with other investors, including general atlantic. the 100 billion dollar valuation would make it the third most valuable start up in the world, after bytedance and a six. haidi:. haidi: let's get you a check of the markets. we are half an hour away from the start of trading in australia. this is where treasury futures are. 10 year bond futures. we continue to watch for segments of the yield curve that continue to show signs of inverting. the twos and tens flautist since 2007. 2's and 30's also seeing that inversion since 2007. the 10-year yield is holding pretty steady, dropping a basis point in morning trade. the three year is seeing further upside pressure and it comes to the three year yield. new zealand bonds are holding steady. we continue to watch for the situation in japan. this battle between the boj as

well as the currency traders, potentially seeing whether the battle of the bond vigilantes, whether that will continue into another week. shery: given the boj determination to cap yields at whatever cost, we have seen the japanese yen weakened. it didn't bounce back to the 122 level. nikkei futures at the moment are under pressure. u.s. futures also down, after the u.s. stock market advanced for a third consecutive week. we saw a bump in the final minutes of trading on friday but. we are talking about uncertainty with where the fed is going, and of course the treasury yield curves and different, parts of the curve continuing to invert. coming up next, we will discuss the path ahead for the federal reserve. it looks to steady monetary policy and find that neutral rate, but that is really challenging. . where that is?

we will discuss. this is bloomberg. ♪

♪ >> this is daybreak: asia. china adds more than 13,000 new covid-19 cases. all of shanghai's residents are in lockdown. the epicenter of the countries worst outbreak since the early days of the epidemic. -- was isolated from a patient with mild covid-19 symptoms. china has -- a decades long move from shannon --

>> according to chinese regulators, there are rules that lead a requirement for on-site audit instructors should be done i mainland agencies. u.s. secretary sid ente blinken says the global rebound is being clued -- fueled by manipulation for russian economies. the capital -- the currency goes around $85 to the dollar. almost marking the exchange rate when russia began. australia is faith -- facing -- spending fuel inflation concerns for the central bank >> 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. vonnie: bloomberg goal -- global economic advisor kathleen is here. we have more hints coming from a from fed officials speaking over the weekend. what did we get? >> john williams is president of the federal bank of new york, that makes him part of the triumph earns vice chair who said the three main speakers of the federal reserve board, where they are, where they're heading, he had a lot to say over the weekend. starting with a balance sheet runoff, this is another way for the fed to tighten policy. he kit as she said it could come -- he echoed the kansas city fed, it is important is the john williams online as well, this was a second tail.

balance she runoff, when new start running off the balance sheet and shrink it, that is the removal of stimulus, that is cap a set of what the fed needs to do. he said -- could actually address the level of inflation which has been "particularly acute." a well-known dove who has been coming around to the view that is -- that it is going to be necessary, she said the case for the rate hike has grown, barring negative surprises. she said a chair the labor market is very strong and tight to its unsustainable level. unemployment at 3.6% in march, it has only been that way three times in the past 50 years. you get the since they are revving their engines and they are ready to move faster and there does not like there's too much between now and their next

meeting. >> assad weather -- neutral rate. what does john williams have to say about that? >> also broadly, john williams may be, not in his prepared speech, but in answer to a question, this has been right on top of his head, they don't have to rush to get there. they can do it in steps. what is the neutral rate? he said we need something that looks more like formal or neutral, whatever that means. i am showing you the bloomberg chart, two hundred 25 basis points of hikes this year, to encapsulate the neutral rate is the rate that when you get it high enough, but not too high, it is inflation, but it does not push into recession. that is tricky right down, especially when you are fighting inflation.

how could we be sure we know what a neutral rate is? the median estimate for the federal reserve is 2.4%, but the range goes up to 3%. they themselves are not sure. -- our columnist saying i cannot doubt any confidence. jay powell in his first speech in jackson hole gave his first speech about our star and how difficult it is to guide a shift, or even policy with these traditional guideposts food that is becoming true right now. something in this meeting, i suspect not only will we get something in terms of discussion, but certainly a lot of questions for jay powell and that press conference afterwards. >> president biden has already moved to tackle one major

inflation driver, energy prices, to release extra oil reserves. the former secretary of -- says washington should commit to buying back. he told bloomberg that what's send a powerful message. >> i think the president should stop, stop all talk of windfall profit taxes as the single most important thing he can do to incentivize oil companies. the use of the strategic petroleum reserves is a good idea, but i would favor doing get in a different way. the government can lock in profit. whether government should do is sell the soil, and commit to a buyback of oil using the forward market at the substantial discount that is available. so, the government can sell oil at above 100 dollars and promised to oil -- promise to buy that oil back at a range of $90 and then a year from now's

-- a year from now, we will have the same reserve we had before and we will have $10 a barrel times say, 100 million barrels of oil. which is $1 billion. more generally, we need to take a more moderate, modern financial approach to these strategic reserves ran we think about using the futures markets and locking in profits at the same time we are achieving stabilization. >> that makes sense. i'm not an oil trader, how do you fit this together with the climate agenda that president biden has -- do we put that to the side for the time being? >> that is why it is such an important idea, to commit to -- we are not trying to lower the price of oil, we are trying to smooth the price of oil with this policy.

so, if we are adding supply now and we are adding demand a year from now, we are climate neutral. but, we are positive for stability. that is why the swap idea seems to me to be much more powerful. >> larry summers speaking with david westin. coming up, the japanese yen was at the epicenter of market drama last week as the boj took an historic intervention. with the pressure return? -- joins us next on japan ahead. this is bloomberg. ♪

>> the tokyo stock exchange has seen its biggest rebound in over 16 years. critics say the changes are symbolic. we are watching -- and we reaffirm his commitment with

u.k. after -- reported its company would be making cars because of government plans to shift to fully electric vehicles. on the eco-front, we will get the rates from march. shery: take a look at how the yen is shaping up. we are seeing the u.s. -- japanese currency weaken against the u.s. currency. the week this against the u.s. dollar as the boj continues unlimited bond buying and further weakening the yen and players really -- training. the story when it comes to the japanese yen and the u.s. dollar. when it comes to the dollar versus the you -- the aussie dollar, we have seen strengthen the aussie. not surprising, we sell a 2015-the aussie dollar against

the japanese yen, right now holding about $91 per let's discuss boj's determination to stick with long-term bond yields. this of course, as we try to keep -- near zero, even as we are increasingly at odds for the weekend -- we can consider the -- we can currency. the minister for a national affairs oversaw policy, thank you for your time. tell us a little bit about perhaps what differences, if any, you are seeing from the weakness of the japanese yen now to previous bout the past? >> even though the last week, it hit the 25. i think -- [indiscernible]

[inaudible] >> -- the political -- is going to be a little higher. i think there will be more discussion independent -- in japan as to that. but i think the policy and also the -- market in tokyo. >> let's talk about political pressure, because they weak japanese -- a week japanese yen -- can a week yen go together with prime minister to sheila's rise in equity? >> i think he has no more the

sentiment in the market. i think the current regime first has food and energy and is giving somewhat the sentiment that this -- [indiscernible] >> but, i think those under 25 are not so much the range to do that. it is clear to have -- to have some -- question marks and small to medium-sized enterprises. even though -- could not -- even for the enterprises. to get aside they are going to have some pressure to protect

the yen, i guess there is going to be appreciation. i think the japanese economy is not -- at this moment. or so, the company shows some parts of the declining sentiment. i think the boj is going to keep with this position of lower interest rates in the interest of japan economy in the next three quarters. >> if equality is a goal, should the prime minister and the government be spending more to support households and corporations and companies when it comes to rising costs? >> -- some discretion -- the parliament -- i think over the last year and throughout 2020, they hamper hot -- they have provided a huge amount of money

to the country and the people. the government is going to give some assurance. there will no longer be super high. -- superhigh inflation. even though the hike in the food prices -- some part to mitigate it in coming days. [indiscernible] sometime in two months or three months, that is the -- government predicted at the moment. shery: -- -- control, given we have an increasingly tightening fed? is that sustainable? >> i think japanese inflation is not so high. even though the u.s. is going to have a very quick -- of the raising of interest rates, the market has swallowed such

sentiment. i think there will be more big change. i think the -- in the last week to that. i think it is a kind of a friend of a molding of the market for that. so, market people believe. [indiscernible] >> i think it has maintained the market. i think the boj would -- at this moment. >> what change does japan need most desperately right now? >> i can't -- japanese industry is somewhat to be keeping the sentiment that -- and those are

the -- inflation coming from the gop 26. we are struggling, how to rebuild the japanese industry. i think they governments and the people are going to have -- what kind of future does the japanese industry need to take? i think of monetary policy, and also the sentiment towards markets and people and in the markets, is not a make -- is not a main concern. how do we pair -- how do we prepare japan yet -- japan? also, the -- needs to be given. that is the main concern of our issues. >> president of the institute for international monetary affairs, we appreciate your time. you can get from that interview

more and tune into japan tv ahead for the leading aides and japanese business at 8:48. -- a $6.23 trillion to stop from perpetual. we are selling that offer for the april 1 closing costs. this is the investment management company year in australia. there advisory services, that proposal was for consideration of perpetual shared for -- plus one dollar 60 seven cents ozzie cash for each share. we will be watching the market reaction to that. lots more to come on daybreak: asia. ♪

>> bitcoin under pressure. we are seeing a breakout of the range between $30,000 to $50,000. at has broken out of that top of the range and we are talking about the lung goods rain -- the longest ranges july 2020.

we are watching where bitcoin is headed. ether seems to gain .7% and is staying above the 3500 dollar level. haidi: the u.k. has reportedly prepared to nationalize gas pumps for national, local regional arms. london may be taking over the struggling utility come a company to reassure parties about the change of ownership. speaking of the parent company last week, -- roughly 30,000 u.k. customers. -- abandoned its takeover proposal for telecom. if it does not get the deal, it has been requesting since november. kkr will express and wants review the finances even more than before its market conditions change. kkr is said to be -- to make a bed. we are watching trading getting

underway in tokyo after the company may have bested gm again. initial reports to the japanese carmaker retaining its crown, overtaking gm and the ones prior. strong demand for its models. -- more inventory and fewer trim options. still, sales dropped 15% in the period. we have commitment to the u.k. after a newspaper reported may halt making cars in the country because of the government's ev policy. we will be watching softbank, it is said to have closed most of its positions. -- was reportedly to -- needed for semiconductors. this while kia in dss chip shortages are selling concern for the korean automaker. we are seeing a little bit of pressure for the ozzie dollar

and the kiwi dollar, but of course we are talking about significant strength following the commodity prices. at the moment, 74 level -- while the qb is trading $.69. japanese yen holding steady, getting further away from the $125. remember, that was a 2015 lope you the greenback, given the boj had limited bond buying to cap yields we saw last week, we will be watching the yield curve as well when markets open japan. -- open in japan. even with unprecedented operations. we are watching the euro versus the u.s. dollar. haidi: going to the side of accuray trading, it is also a holiday. in asia, china and taiwan

markets have closed for holiday. when it comes australia, it looks like we will come back from two days of losses. just about six minutes away from the start of trading in sydney. what is the energy in terms of material things, given we had a new report from the government suggesting this commodity and energy demand will continue to work out advantageously for australians and some of the profits from big energy and oil? when it comes to new zealand, we are seeing a flat trading session at the moment. nikkei futures looking negative as we get -- nikkei futures looking negative. how is that picture when it comes to energy and commodities playing into the equation as well as reporting a new subtype of the omicron variant that will be weighting -- weighing on sentiment. coming up, we will be talking with david chow about the

outlook for markets and shanghai's president and his view on plans for the last covid test. we have the market up. took u.n. sitting next. this is bloomberg. ♪

>> welcome to "daybreak: asia." >> asia's major markets have just opened for trade. our top stories, asian stocks with a boost. bond markets send more recession signals. ukraine asking for help prosecuting war crimes by russian soldiers, amid a push

for fresh sanctions. plus, shanghai preparing for more mass testing. >> japanese and korean markets coming online. take a look at japanese equity markets, up three tens of 1% after three sessions of losses for the nikkei last week. the japanese yen continuing to weaken around the 122 level against the u.s. dollar, after falling to a 2015 low and piercing through the 120 five level against the greenback. this as we continue to see these boj operations in the jgb space. the jgb curve steepening despite the boj's amendment to cap yields, despite weakness against the yen, when it comes to rate differentials and u.s. dollar differentials as leading to more weakness. take a look at the kospi. we've seen already a session of

losses for korean stocks and we continue to see the downside pressure with the tech heavy losing almost a percent. risk off sentiment has been soft across the korean markets, but we are watching for reopening trades because we may be seeing more buyer's restrictions being eased across the country. haidi: this at a time when we see shanghai under lockdown. we see potentially a new subvariant being identified in china. all of this will have an impact on a lot of these markets that rely on chinese growth. this is what we are seeing when it comes to trading in sydney. out of the gate, and downside from today's of losses in australia. we are also seeing a 10 year yield holding pretty steady. we have a move of about four basis points higher, but the tenure not much changed. both the kiwi and australian

dollar with downside, but the aussie the best-performing currency in g10, still close to the 75 u.s. level. looking at u.s. futures after the last minute rally into the close of trading friday. another strong drugs were -- a strong jobs report feeding into expectations about the fed. s&p futures sluggish. the 10 year yield, we keep talking about inversion and different segments of the yield curve continuing to flash signals, potential recessionary conditions and a hard landing by the fed. looks like more volatility in the crude market. this is the worst performance for crude and about 10 years. we continue to see the back as well, brent trading lower by 9/10 of a percent as the worsening virus outbreak in china in addition to

inflationary concerns create a push-pull momentum in pricing for crude. shery: despite the uncertainty, our next guest is overweight on equities. david, good to have you with us. is this a valuation narrative, how cheap a stock market in asia that you like, and how do you factor in covid-19? david: i think asian equities are quite attractive right now from a valuation perspective, especially compared to the u.s., and the growth profile also very attractive, given strong fundamentals in asia. it is worrying what we are seeing in china and the covid outbreak, and what is going to be very important is to see how the pandemic policy and china evolves. i think many of us are watching that closely, and already policymakers have shifted to tracing covid infections and

categorizing them, traceable or untraceable. shery: how do you hedge for all of this uncertainty? what is your defensive asset of choice? david: i think right now there are so many different, unknown variables. from the pandemic to geopolitical risks, to rising inflation and rising rates in the u.s. i think investors would want to be part of spaces that have little risk of tightening or over tightening monetary policy. we are lucky in asia that inflation is relatively in check , and many asian central bank's have the luxury to sit on their hands and let the cycle run a little further. from a reasonable perspective, aipac is attractive. investors should look at alternatives like commodities and real estate, too. haidi: how much cash are you

holding as a buffer and why preference the dollar? david: there are so many macro uncertainties right now, and i think especially some of the geopolitical concerns that the conflict may be lasting a little longer than many expect. i think having exposure to the u.s. dollar makes sense. also as the fed tightens mont -- tightens monetary policy this year, there could be a pivot of capital back to the u.s.. haidi: talk to me about expectations when it comes to china. at least in the short-term, the covid zero strategy and the lockdown from testing remains a huge worry for investors. longer-term, what kind -- what will it take as a catalyst to get chinese and hong kong equities out of the doldrums? david: i think a lot of it will be contingent on government support, and already we've seen

beijing enacted in terms of policy makers coming out more forcefully or indicating they will come out more forcefully with monetary and liquidity injections into the market. also we haven't really seen significant fiscal stimulus in china and i expect that to be ramped up over the next couple of quarters. i am watching the credit impulse and china and whether privately owned enterprises and sme's are taking loans out, further activity. we haven't seen the credit impulse pickup but i think it would in the next couple of quarters. shery: i think the data hasn't supported all of this narrative we are expecting to come from china when it comes to more policy support. what about the monetary tools? what can we expect from the pboc and what would that mean for markets? david: unlike the fed, the pboc has around seven tools, compared to the two the fed has been they

have the luxury to tinker with the different tools they have. i expect in the second quarter, and additional cut to the risk reserve requirement, and perhaps another cut around 10 basis points to the mls. and additional liquidity injections through open market operations. i think there is additional liquidity measures i expect the pboc to enact over the next couple of quarters. haidi: david, great to have you with us. let's get to vonnie quinn. vonnie: the pakistani prime minister has thrown the country into chaos, calling for a special election after one of his political allies canceled a no-confidence vote. he was a member of the ruling party and cited foreign interference for dropping the motion brought by the opposition. he then asked the president to

resolve parliament shortly afterward. and sri lanka's ruling party says the cabinet is calling for resignation. it's unclear if the prime minister will accept the resignations. inflation has accelerated at almost 19%. daily power cuts as long as 13 hours. china added more than 30,000 near covid-19 cases and nearly all of shanghai's residents are under some form of lockdown. the financial hub has emerged as the epicenter of the country's worst virus outbreak since the early days of the pandemic. state media also reported a subtype of the omicron variant, patients with mild symptoms. and a decade long rule has been removed for sharing data,

opening up room for u.s. companies. according to chinese regulators, the revised rules deleted the requirement that on-site audit inspections should be mainly done by mainland agencies. global news 24 hours a day on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie quinn. this is bloomberg. haidi: we have some alerts when it comes to some of these distressed chinese property developers. fantasia saying they will realize a net gain on the disposal of the unit of about 3.7 9 million dollars, and saying the shares are 20 and a half million dollars. they are looking to sell the entire holding. fantasia earlier announced at the end of march, expecting a delay in the publication of its 2021 annual results, citing the

ongoing restructuring efforts, loss of financial personnel and the covid-19 situation in mainland china. we are hearing from agile that they are seeing disposal of one of their companies as well. 661.2 million there. the share in fantasia had a lot of analysts concerned it might be in breach of on the covenants as the restructuring continues. agile is trying to raise funds to restore the liquidity conditions. still ahead, we take a look at the impact of the pandemic induced lockdown in shanghai. our guest says production is down with supply chains severely disrupted. this is bloomberg. ♪

>> we also made very clear that china should, if not support, at least not interfere with our sanctions. so prolongation of the disruption to the world economy is in no one's interest and certainly not in china. >> we call on china to help in the war in ukraine. china cannot turn a blind eye to violation of international law, and these principles are enshrined in the u.n. charter

and principles sacred to china. >> even europe has been conducting normal business with russians. our trade with moscow should not be affected. shery: european and chinese officials speaking after a virtual summit. european futures coming online after european stocks climbed higher on the first day of the quarter. we had investors looking past the strong inflation numbers we had in the euro area. right now, futures looking mixed. remember, european stocks are at the cheapest on record against the u.s. stock market. perhaps some bargain-hunting happening. msci europe higher than half a percent. this at a time when high inflation has brought forth concerns about the economy. this as russia's invasion of ukraine sends prices higher.

ukraine wanting an investigation into when -- what it says are war crimes by russian troops against civilians. president zelenskyy calling the actions genocide, although the kremlin has dismissed the claims. let's get more on this. what do we know about these gruesome pictures we are getting out of ukraine and what it could prompt in terms of sanctions? >> we are seeing, as you say, gruesome pictures and details emerging as russian forces retreat outside kyiv and ukrainian forces advanced. we've seen a mass grave, civilians shot in the head, sometimes with hands tied behind their back. there's a lot we don't know, but we do know that war crimes have been committed. these are people not involved in the fight, sometimes in their homes. these were tactics we've seen

from the russians before in chechnya. the question now whether this galvanizes the west and can push china off its pro-russian neutrality. haidi: when it comes to the west, how likely are we to see unanimous support for more sanctions, energy being key? and you mentioned beijing, this this change their risk of the war? clara: in terms of the worst, i think we would hope to see that remember the russian economy was hit very hard at the beginning with sanctions but has stabilized sense. the sort of sanctions europe had been planning before, technology, bank sanctions, that will be -- that will not be enough. we have to think about the maritime trade, painful for the west. we have to decide whether this is pain we are happy to take in order to make the war too costly

for moscow. for beijing that is a tougher question. it citizens will not see the photos and footage we have seen, certainly not easily. but the economic disarray will also become almost intolerable for china if this is to continue. haidi: clara there with the latest. shanghai has reported a record 9006 new virus cases to begin a new round of mass testing on monday. almost everyone in the city is under some form of lockdown. state media reporting a new subtype of the omicron variant found in a nearby city. of on man is here with more. the idea that they could limit the economic impact by doing this in halves, it hasn't worked out. yvonne: when you have basically the entire population of shanghai under some form of quarantine because you look at

what happened in another city, lifted out of the lockdown you see most of the population, the east side, still at home because either they have someone in the building who tested positive, people asymptomatic or mild system -- symptoms have been placed on editorial quarantine or moved to facilities around the city. this is fast, solid and hard management, according to one expert, and they are maintaining this covid zero strategy. this goes to show how much more difficult and challenging it is to keep this in place. they cited why we are seeing a renewed surgeon cases after things -- surge in cases, it's because of the mass testing in shanghai. 14 million people tested over the weekend. again today, thousands of medical stuff around china, they headed to shanghai on sunday to

help make sure we have another round of testing today as well. you have the people's liberation army mobilizing over 2000 medics to help with fibrous control as well. you are seeing multiple fronts where they are going through with this. we've been talking about this, add the concern of the subtype variant, it could be another worry. shery: what do we know about the subtype variant? yvonne: we heard about it over the weekend from authorities. they did say they found traces of this from a mild covid patient about 40 or so miles away from shanghai. the new subtype variant of omicron is basically not something that was making -- matching the coronavirus china has had. it is interesting to see how this plays out. will it be something more transmissible or deadly than omicron? that is a key question we will

ask in the coming days. certainly will be interesting to see, as now this city of shanghai has turned into a ghost town. shery: yvonne man with the latest on the covid-19 pandemic in china. next, china has changed a long-standing rule that limits financial data sharing by chinese firms listed overseas. what that means for firms in new york. this is bloomberg. ♪

shery: we are talking about the golden dragon china indexing the best day in more than a week.

this on news that we would see chinese authorities prepared to give u.s. regulators for access to reports. we have confirmation on that news, which is now for most of the 200-plus companies in new york and could happen by the middle of the year. this is lifting a key hurdle for u.s. regulators to gain full access to those reports. let's bring in our managing editor for asia finance and investing. what do we know about these latest changes the securities regulator has proposed on sharing financial data? >> can you hear me? shery: yes, we can hear you could -- here you. candace: the regulator is modifying the ability to share financial data. the old rules said on-site

inspections had to be conducted by chinese regulatory regulatory's or rely on the reports. by removing the rule, the securities regulator is opening the door to compliance with u.s. law, which requires firms listed in new york give their regulators for access to auditing reports or risk being delisted. haidi: what does it mean for the 200-plus chinese firms listed in the u.s.? candice: it is extremely positive news for the u.s. listed chinese firms. as you mentioned, we saw a big rally on friday after a bloomberg report that regulators in beijing were working on a framework that would allow these firms to comply with u.s. law. the issue of audit access, which has been a conflict going on for two decades, has weighed on markets recently. investors keeping a close eye and how this plays out and

whether chinese leaders eventually decide to meet the other side. i think the other thing is if we get a resolution, it will open the door for chinese ideals in the u.s. haidi: our managing editor. let's get a quick check of the latest business flash headlines. a chinese company is saying to be weighing evaluation round, and is in talks with investors. a data provider would be the third most powerful -- valuable startup in the world. the u.k. is reportedly preparing to -- london may take over a

struggling utility if the company fails to secure financials from a change of ownership it. tesla delivered a record more than 310 thousand cars worldwide in the first quarter. this after what elon musk called an exceptionally difficult period was supply chain disruptions and covid restrictions. the factory in shanghai will remain closed on monday. next, e-minis and shanghai lowering revenue forecasts because of the -- companies in shanghai lowering revenue forecasts because of the covid lockdowns. this is bloomberg. ♪

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haidi: shanghai's 20 million residents are almost all under some form of lockdown of quarantine as they struggle to contain the omicron variant. according to a new survey, more than half of american firms say the country's outbreak and lockdowns have tendered production or drifted supply chains. joining us is our guest, representing 3000 members from their teen hundred companies. great to have you with us.

just about 100% of the members you surveyed said they have been impacted by the lockdown. in terms of the severity, the operational and output side, what are you hearing? >> right now when you have a city this size and lockdown for an extended earring of time, it is going to -- extended period of time, it is going to disrupt. particularly for manufacturers, this is a tough time to operate. you have issues with your ongoing operations and supply issues as well. right now, it is really difficult for member companies and chinese companies as well to deal with this extended period of lockdown. haidi: we've also seen for the longer-term almost 30% of responsys delaying investments, 17% have -- respondents delaying

investments, 17% have stopped investments. is this reducing these companies's long-term commitment to shanghai and china? eric: at this point i think it is too early to tell, but obviously if this zero covid approach continues for an extended period of time, possibly into next year, that will have a huge impact on these companies's decisions on future investments. at this point, our members are hopeful this is a temporary solution, and at some point they will have to find a way to live with the virus and hopefully business can go back more or less to normal later this year. shery: when i saw that china was trying to modify the covid zero policy, especially after the shenzhen and shanghai lockdown,

that some factories could still operate with workers in the so-called closed-loop system -- how much has that helped? eric: it helps to a certain extent. there are companies that cannot stop their assembly line. companies and automotive industries, for instance. they have to figure out a way to create almost a bubble, having all staff living and working there 24 hours. it is a very temporary solution, not sustainable in any way. even if you have ongoing operations, production, you have an issue with supply chains. you need to move parts around and bring in inputs, even within the country, and you can't do that. you can't deliver your products to the airport either. this is not sustainable in my view. hopefully the government is

taking another look at the current situation. in theory, tomorrow my april 5, is the deadline to make a decision on the next phase of containment strategy. haidi: in the survey, more than half of respondents are still satisfied with china's efforts at controlling the spread of covid-19. what are your members telling you about what is being done well and what needs to improve? eric: obviously in the past, china had very few cases relatively speaking, compared with other countries. so it was quite safe to live in this country. obviously until recent weeks when you had this outbreak. right now the issue is, are we going to change our strategy?

zero covid, is that a sustainable strategy? particularly you see other countries like the u.s. and u.k. and even singapore opening up. people are asking questions, are we going to modify our approach to dealing with this? particularly the new virus, the omicron variant. haidi: what about the limitations on mobility? is your membership tired of that even how long borders have been shut -- given how long borders have been shut? eric: for sure. we've been voicing our opinions about not allowing our executives to come to china. this is becoming a huge issue for mobility, particularly ex-pats. not only with visa restrictions but also flight restrictions. right now i think this is

another issue, how to deal with people, people's mobility. at this point, the government's top priority is to find a way to stop the spread of the virus. the mobility issue is secondary, but we will continue to talk to the relevant authorities about allowing our members to return to china at some point. shery: to that point, what will the long-term impact be on broader shanghai, the broader chinese economy? not being able to attract foreign talent? eric: yeah, this is definitely a huge concern for amcham shanghai and other chambers. we have our members doing business here. you need talent from other countries, particularly from the u.s., and hong kong to a certain extent. the past few years, since 2020,

it has been very difficult to bring in people. we certainly understand there are practical concerns about bringing in imported cases, but right now i think the omicron virus, when you look at the cases, they are mostly cases without symptoms or very light symptoms. is this a time to take another look at this tight control on the import of people coming to china? we believe we cannot stick to the old model of 2020 two deal with the new situation in 2022. shery: eric zheng, great to have your thoughts. let's get to vonnie quinn with the first word headlines. vonnie: hong kong's election season has begun after a two-month delay because of covid. local media say likely contenders for the next chief executive include the current number two executive.

also, a former chief executive among others planning a run. carrie lam hinted last week she might not seek another term. the hungarian prime minister has clinched a fourth consecutive term despite criticism about democratic backsliding. his lukewarm support for ukraine, and close ties to vladimir putin. the party is on track to maintain a two thirds parliamentary majority. the u.s. secretary of state says the rubles rebound is being filled by manipulation by russian authorities and will not be sustainable. speaking on nbc, he said the capital controls were artificially propping up the ruble. the currency code is about 85 to the dollar on friday, almost matching the exchange rate when russia's invasion began. the bank of australia facing pressure to start tightening policy as strengthening policy

fuels inflation concerns. the central bank is expected to stay on hold when it meets on tuesday, but there is anticipation of -- 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: next, oil extending losses to start the week as the outbreak in china worsens. wti under $100 a barrel. we have the outlook ahead. this is bloomberg. ♪

haidi: let's check on shares of trading. a review of a proposal for about 2.3 9 billion aussie. we are seeing upside of about 20% at this point. the board has begun an assessment of the proposal that would value the share, comprised of one perpetual share every 7.5, cash on top. shareholders would own about 48% of the merged company and the proposed terms of the offer.

almost a 39% premium to the april 1 closing price. quite a bit of recent volatility playing into public market valuations that asset managers worldwide, the company saying it might not reflect the long-term potential given market volatility but we are still seeing pendal group surging over 20% in the early part of the sydney session. shery: we are also looking at the commodities space, especially when it comes to base metals, with copper under pressure, not surprising given chinese virus pressures. we continue to see the spread of the omicron variant. we're also watching gas futures, holding steady after a spike to the highest level since january. inventory levels continue to be tight, especially with colder weather in the u.s.. when it comes to oil prices, look at that, we are extending those losses after the biggest

weekly loss in a decade already, wti below $100 a barrel. let's take a deeper dive into oil futures. the world's largest independent oil trader sing current prices don't fully reflect the risk. su keenan joins us. they are saying the risks from russia related supply disruptions could still send prices higher. su: they do not want that to be overlooked because right now, the huge losses from last week are rolling over into this week bit it was a one-two punch, the u.s. releasing an unprecedented amount of oil, a million barrels a day for six months from strategic reserves, and china having this locked down combating another resurgence of the covid virus. if we look at the seven day chart, down i the most -- by the most in a decade, seeing it

below 99 in asian trading. brent crude and futures also knocked down heavily last week. at one point brent crude had been on hundred $40 as russia invaded ukraine. it is now in retreat. the head of asia trading is saying oh prices could be higher given the risk of russia related supply disruptions that exist and says people are lost calculating what that could be. he is also in the camp believes china will get the covid situation under control and there will not be a big hit to demand. he does not see a resolution to the iran nuclear deal. weeks ago an agreement was thought to be imminent, perhaps more oil would be on the markets. he does not see that happening. the direction of oil still a big question hanging over trading this week. haidi: bitcoin in the meantime, erasing the losses for the year so far.

a lot of investors are wondering whether we are being kind of set up i guess for the next leg. su: or disappointment. a breakout or fake out? that is the question. even though there's been a lot of green on the screen, a little bit of red. the question a lot of investors are asking as of the coin approaches another threshold, is whether it will fall back again. it is approaching a bigger threshold than its 2022 losses. as of friday, it was trading below the average for 95 days. it got really close last week, within 1% of getting back to its 200 day moving average, and now it is 4% below that. a lot of investors are going, are we stuck in a trading range? you have a billionaire bitcoin bull not recalibrating his original prediction of 30,000

and 50,000 range. he had warned with the fed raising rates, it is not going to be a big year of gains for bitcoin. that said, look at the bloomberg, you have bitcoin rebounding at a much better rate than a lot of crypto related stocks. and it has become popular among the bitcoin bulls, trading with stocks. correlating between the two asset classes were -- classes remain strong. to ensure that crypto remains popular, data shows digital asset etf's attracted roughly 550 million just over the past two weeks. so volatility likely to continue but popularity has not gone away in recent weeks. back to you. haidi: su keenan there. the biden administration has accused u.s. oil companies of greedily hoarding oil leases.

an advisor says the president is right to call out companies. >> the president actually recognized the companies, the oil companies, that are responding to this price environment, responding to the supply shortage we are in and announced extraordinary increases in capex and reinvestment in the united states in bringing on additional production. he is recognizing them and saying that is progress, and he praised them for doing that. but there are other companies, and you know that, that are saying look, i have the ability to increase production, when prices were at 120 or 130 a week ago, and said i am not going to do it. he called out some of those, even $200 and $300 a barrel, they said i'm not going to increase production. some of them are saying the

funds that back me or are my show -- shareholders or holders of my debt, are saying don't do that, give us increased dividends. there is no well that is not profitable at 120 and 130. if you're liking -- making a decision for a prolonged period of time over $85, which we've been in a few months, you cannot make more investment to bring on production, i think the president is 100% right to call them out, especially when other companies are saying this is exactly the kind of environment we are going to increase production. we did two things, the president announced we will release one million barrels a day to increase the certainty of liquidity in the energy markets and make sure there's enough oil on the market to support the u.s. economy as well as the global economy. number two, he's said we are going to replenish the reserve at a time when we finished

dispersing and releasing the oil and when prices come down. so we will sell the oil now at high prices and by a back later. that gives incentive to the oil companies to say i know even though the u.s. is going to release these reserves, i will have a buyer in the u.s. government later on, so it continues that incentive to increase production. i think this is what we needed. we needed to put something into the system where we can bridge. it will come a subset look at exxon and chevron, conoco, they have said they will increase production. 900,000 to one million barrels per day this year. but that means it's only going to come on in the middle of the third quarter to the end of the year. we have a gap between now and then. what the president did yesterday is to say the u.s. government is going to fill that gap between now and then. shery: u.s. department of state

senior advisor for energy secured he. next, shein is said to be weighing a funding round that would value it at as much as $100 billion. this is bloomberg.

shery: sources say chinese fast

fashion startup shein is weighing a funding round of a valuation of about $100 billion. joining us is our correspondent. are they talking to investors already? >> yes, they are. it has been interesting in two ways. the valuation is going to be $100 billion. it will make shein the world's most valuable startup after to others. this is a fast fashion brand. it is an interesting funding round we have to watch out for. haidi: how could they manage to achieve such a high valuation or expectation despite covid? >> a number of factors. according to sources, they

jumped a lot in 2020. a lot of shoppers were at home and buying online. also supply chain success, they can turn around lines to production in 10 days. it helps a lot in fast fashion commerce. we don't have information on their revenue, but we can imagine $100 billion, their revenue really jumped again in 2021. haidi: let's get you a quick check of the latest business flash had kinds -- headlines bid the u.k. planning to nationalize gas pumps of a company. they may take over a struggling utility if they fail to secure financing. the gas supplies roughly 30,000 u.k. customers put -- customers.

a takeover proposal was abandoned, if the company doesn't get due diligence it has been requesting since november. it stressed it wants to review the phone carriers finances even more than before as market conditions have changed. tesla delivered a record of more than 310 thousand cars worldwide in the first quarter. this after what elon musk called an exceptionally difficult period with supply chain disruptions and china's covid restrictions. shery: as you mentioned, the mainland market closed for the holidays, but here are some stocks we will be watching when trading in hong kong opens in about half an hour. watching shares of chinese firms in the u.s.. we had news that aging plans to remove a key hurdle for washington regulators to gain

full access to audit reports. that could affect the companies listed in new york. the best day for some in more than a week. we will see how that translates to trading in hong kong. coming up, we discussed the stress of a new covid subtype discovered in china, were cases continue to surge as we have shanghai continuing under lockdown and undergoing mass testing. plus, credit suisse tells us why chinese stocks are looking up despite geopolitical risks and challenges. haidi: that is about it for daybreak: asia. markets coverage continues. we look ahead to the start of training in hong kong. some of the markets are off for the holidays. stay with us, bloomberg markets: china open is next. this is bloomberg. ♪

>> 9:00 a.m. in hong kong and taipei. china markets are closed today. we are counting down to the hong kong open. david also off today. shanghai reports more than 9000 new covid-19 cases and puts most of the city's 25 million residents under lockdown. chinese tech stocks on watch after regular's remove a key hurdle to giving u.s. counterparts access to its audit. plus, prices grip south asia