haidi: good morning and welcome to daybreak us show you. we are counting you down to asia's major market opens. shery: the top stories this hour -- the u.s. and eu may impose more sanctions on moscow on reports russian troops masker civilians in ukraine, allegations denied by the kremlin. -- massacred civilians in ukraine. haidi: elon musk buys a share in

twitter. shery: and with the rba under pressure and height and policy. this is the picture on wall street. teachers under pressure asked her the s&p 500 with gains led higher by tech stocks. the nasdaq gaining higher than 2%. a deepening of the curve with the 10 year yield reaching 2.4% after we saw inversions in different parts of the curve in last week. also having oil gaining above $100 a barrel. we continue to see those prices rising. we had saudi arabia hiking prices for all of its buyers, not to mention they are concerned with more russian sanctions to come. we are watching some of those names in the stock market moving big time. we are talking about twitter that at one point gained more than 30% after tesla's elon musk

came out and reported he has a 9% stake in the company. we saw starbucks losing ground, given that they rolled back that share buyback plan they had in place. we also have the golden dragon china index with china adrs seeing rallying with alibaba and baidu gaining ground on chinese authorities loosening the key hurdle when it comes to u.s. regulators. more than 200 companies in china lifted in new york. haidi: a little bit of that pressure being lifted. we are seeing asian equity futures on the way up. it is a holiday session with different markets close for different holidays. we are seeing a bit that -- we are not expecting a move off the 0.1% of the rba but watching for

a shift in language around patients. that missing puzzle piece is still quite tepid but we are watching the 10 year yield and any response to the tapering and language. when it comes to new zealand, equities up and watching kiwi bonds because we had the inclusion of the kiwi government debt into the world government bond index. that could potentially drive more gains as we see things spread between kiwi bonds and the likes of japan, as much as 300 basis points when it comes to the spread there. more broadly, it is all about the rba and whether or not we see that move off the language -- patients is an interesting narrative when you continue to

see this incredibly tight labor market, brisk inflation but still a wait to see whether wage pressures will come into that and more broadly speaking, so much uncertainty around inflation and demand as well as the geopolitical peace. shery: when it comes to russia, we have heard more comments coming from jamie dimon about how energy prices leads to surging inflation could make things more difficult, rising substantially. he said the war in ukraine and the sanctions on russia could minimally slow the economy and easily get worse. this as we are seeing the eu preparing for more sanctions against russia. let's discuss all of this with the u.s. saying they may impose further sanctions this week. we have global attention on alleged atrocities committed against civilians in ukraine.

president biden once again calling russian president putin a war criminal, a label biden was criticized for using just weeks ago. ed: we have to get -- >> this guy is brutal. what is happening is outrageous. shery: let's bring in a bloomberg's political news director, jodi schneider. what other sanctions could we see in place? >> that is the question -- what more is there to sanction? president biden was not specific. he said given the alleged atrocities in bucha and the targeting of civilians that it was time for more sanctions. he said i'm going to continue to sanction russia but was not specific. 70 sanctions and bands have been -- so many sanctions have been imposed on the europe has done

less of that. secretary of state antony blinken will be going to brussels later this week to meet with european allies and he has said he wants to see them impose more sanctions. part of this will be the u.s. trying to work with its allies to continue on the sanctions front but so much has already been sanctioned from the u.s. that it is unclear what more there is to do and how the u.s. would go about that. haidi: what are the procedural steps in war try -- in war crimes? jodi: president biden was not specific about that either. he has repeatedly called vladimir putin a war criminal. he has used that phrase and he did again today. one thing we need to be looking for is what the u.s. is going to do on the world stage, given what the allegations of these

large numbers of civilians massacred. one of the things that will happen is president biden will put nato allies and will -- and european allies to try to take steps again with these meetings in brussels over the weekend with antony blinken also has said that because of anybody responsible will have to face account ability. shery: we've seen strong action coming from the european union. what can we expect? jodi: we heard from the french president and germany as well, saying that this does appear we will be entering a new phase of international reaction with the war at about the six week mark given these allegations. it is much more difficult for europe to come up with bands on things like oil like the u.s.

did given they are so dependent, so energy dependent on russia. there had been all kinds of claims of trying to reduce that energy dependence, but it is difficult to do in a short time. the language we heard them european allies was very strong, as strong as the language we heard from president biden and secretary of state blinken. haidi: our political news director at bloomberg. the bank of australia is under pressure to begin tightening monetary policy. potentially feeling inflation concerns. our economic reporter here in sydney joins us. things have changed from the last meeting since the rba. >> the economy is also a lot stronger but we saw a lot of spending brought forward in the budget. it was a one-off cash payment

for middle and low income households. we have seen a huge amount of household spending that has boosted the economy and this is further expected to add to that growth. government spending has been a big part of australian economic growth in the last couple of years, so there is a fear that this was part of inflation that would move the rba to a hawkish statement as soon as today. shery: how does us trillion is economy compare with other economies were interest rate hikes have already begun? sawti: australia's economy is actually going pretty strong, even if we compare with the likes of the united states. the only issue is we have not seen the same level of inflationary pressure that we

have seen in other parts of the world. in australia, underlying inflation is about 2.6%. in the u.s., in new zealand, and england, you have seen about 5%, 6%. wage growth has been strong in other parts of the world. in australia, it is still in the low twos. these are the biggest reasons the rba keeps saying that we would remain patient because he wants to see the rise in inflation we've seen in the recent quarter and that could only happen if we see faster wages growth. haidi: let's go to vonnie quinn with the first word headlines. vonnie: germany is temporarily taking control of the gas in that company to take security of the gas supplies.

gazprom owns an energy supplier and a gas storage firm and will come under the trusteeship of a national regulator. gazprom said on friday it no longer owned its german subsidiary but did not disclose new ownership. new research shows the earth may warm by three degrees celsius, twice the international goal. reports from the international panel on climate change warns on still unchecked emissions of greenhouse gas pushing to record level. scientists say it such pollution must peak by 2.5 at the latest to keep climate targets alive. a former goldman sachs banker has been accused of helping embezzle from the malaysian estate fund for greed. he's the only goldman banker to go to trial. they told jurors he hoped to make partner by arranging a lucrative series of deals. he is accused of seeking tens of

billions of dollars into the 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. i'm vonnie quinn. this is bloomberg. haidi: the rba's under pressure to begin tightening monetary policy. the economy has been gathering speed. we will have a preview this hour. our next test says attempting a soft landing and it is like mciver defusing a bomb. this is bloomberg. ♪

>> the yield curve inversion. >> the inversion of the yield curve raises the >> risk of recession. that is a more challenging environment for equities. >> it's telling you the economy is strong today but may not be in the future. >> you need to dust off the checklist for a recession. >> it's telling us the fed policy reaction function right now has moved very much toward fighting inflation. >> in terms of the bond market of yield curve inversion -- >> this is where the debate is being had. >> this is the markets adjusting

at a much faster pace. >> the fed needs another level -- another letter to pull on. >> expect them to be even more hawkish. shery: some of our guests on bloomberg on what the yield curve inversion could mean, including recession risk. our next guest says jay powell attempting a soft landing is like mciver diffusing a bomb. with us now is the ceo of altec's free. when i can remove her from a diver, he always got the job done. are you saying we are going to get a soft landing? >> great question. there's two things about mciver. number one, he he always had very limited tools and i think jay powell has a paperclip, which is raising interest rates and a pocket knife which is trimming the balance sheet. he's got a very complex bomb and there will be a cliffhanger that we will be waiting for a little

while. setting the terminal rate above the neutral rate has cut the wire that made the timer on the bomb move a locker. that's why we are talking about the recession because the yield curve has inverted as a result of that. i do you think he's got as good of a chance as heading a soft that hitting a soft landing, i think it is a bit of a coin flip. shery: what does that mean for inflation? if we get inflation, we will get prices slowing down, what does it mean for markets? max: first of all, investors want to stay outside the blast radius and should not be going into bonds. i think we are going to see further problems in fixed income marker -- markets. we just came off one of the worst quarters and treasuries in history, so i would go into defensive sectors that would be

more protected from inflation spiking and that would be utilities, minors and biotech. when it comes to inflation -- >> i have a follow-up on tech and how that goes from here. max: when it comes to inflation specifically, i believe it will be in the second half of the year. there could be investors that think because inflation is slowing down, the fed is going to become more dovish. we need to remember the fed's fate is sealed and as they let inflation run quite hot, they are going to let it run below target as well. i don't think we are going to let it get to such levels -- we

should be careful of any market rally that happens because inflation is just starting to come down in the back half. haidi: i'm looking about what you said about who's going to buy peloton -- you usually see that kind of the correlation at levels versus what happens with tech but does that not continue? max: i think we are going to have to be a lot more careful with what tech we are talking about. i think tech like peloton is going to see a lot of struggles. more b2b companies will be much better off. there will be an increased push for productivity boosting as they try to maintain margins. we will see continual growth in the economy and i believe we

will have growth for a while at least. that is going to give companies the ammo to spend. that is where i would focus. i looked to offset that with the profitless tech sector and consumer tech a bit more broadly. haidi: talk to me about your views on china specifically and how beijing could be convinced to bring an end to the war in ukraine. max: right now, russia is a closed economy run with a closed mine and china is perhaps the only entryway into that economy. the u.s. can't really do enough and sanctions against russia to sufficiently pressure putin. europe is not in a position where we can because of their

energy independence, but china has the resources and low enough linkages to russia and big economic incentives to the west that it could be propositioned to shut russia off, thereby putting real pain on the country that even putin couldn't resist. what we need to do from the u.s. perspective is switch from a stick approach to a carrot approach and we really have to offer incentives to china. some of those could be politically a win for biden like rolling back some of the trump era tariffs. in a midyear election cycle, i would say that could be a win/win/win, but a dramatically different geopolitical approach than what we are currently doing with beijing. haidi: always great to have you with us. coming up next, elon musk becoming triggers biggest shareholder must ending the stock soaring as much as to pay

7%. -- as much as the 7%. this is bloomberg. ♪

haidi: elon musk has taken a 9.2% stake in twitter to become the platform's biggest shareholder. this is a week after hinting he might shake up the social media industry. let's bring in ed ludlow. we know he's a close to jack dorsey. any idea on what was the motivation behind doing this? ed: it is hard to say. the filing day was march 14 and it was march 26 when elon musk tweeted that pole about whether the platform twitter is adhering to free speech principles. overwhelmingly twitter followers voted that it didn't. he continued to say the outcome

of the pole would have big consequences. there you see it on your screen. he said he might start his own social media platform himself but you have to remember, the whole time he was doing it, he did hold that 9.2% stake in the company which is technically based on the filing type he used -- a passive state. whether he becomes active, wall street can speculate all day. haidi: we spoke to cathie wood earlier and is speculating this could throw the door open to a shakeup at twitter. ed: right. the point is this was a shot across the bow for the current twitter ceo who became ceo in the first week of december after jack dorsey announced he would step down. at that time, elon musk needed some memes which most took to mean he either didn't approve of

the ceo change or had some ideological concerns around the data incoming ceo. he and jack dorsey have had a back and forth on twitter, they have discussed more recently about the idea of open sourcing the algorithm behind twitter. that was cathie wood's theory. it was either a shot across the bow and you will see either two things happen -- a change in leadership or a changing content policy. haidi: elon musk is not your ordinary shareholder or ceo or founder. what could it be in terms of this passive stake, leveling the amount of influence we are talking about here? ed: that is probably a bit of an understatement because it is the first public stock he has held that she has stakes in spacex and those are companies where

he's at the helm. all we know is he held the securities because the filing day at the time he was tweeting these questions about free speech on the twitter platform. but he's not afraid to hide his opinion. if he's not going to be an activist, he's at least trying to initiate some kind of change on the platform. shery: ed ludlow with the latest on twitter and elon musk. here's a check on the bloomberg business flash airline. -- business flash headlines. the lender plans to separate roles during the next ceo transition saying many shareholders support a policy that would enable jamie dimon to serve as a nonexecutive chair. sources say plans are still in the early stages and the lender has not reached out to external

investors. barclays does not have an external management arm so any lending strategy would fit in and be launched using the lender's balance sheet. more to

haidi: let's take a look at the day ahead for australia and new zealand. the reserve bank of australia is likely to extend path that two days meeting, given we see the strengthening economy. take a look at the aussie dollar -- the best performer on the g10 overnight. seeing october 2021 highs and a potential for further strength if we get the shift around the language around patients around

the rba today. also seeing the band of exports of luxury goods to russia from australia. just one of these more incremental moves when it comes to global sanctions against russia for the war in ukraine. some porton talks to revive business and australia according to reporting in the australian financial review. let's bring in someone for more analysis now. great to have you with us. when we look at the confluence of factors when it comes to the job market, a lot has changed in these factors that we will be weighing going into this decision from the last meeting. >> indeed, a lot has happened since the early march meeting. while policy settings will remain unchanged, we do think it

will lay the ground work in the coming months. from our perspective, there have been three key developments since the board last met. the first is around the much more aggressive rate hike and we expect the fed to deliver to 50 basis point hikes in june. the bank of canada next week, we expect to do 50 basis points, so you can see a fairly aggressive stance coming from global's entrance -- global central banks and that will factor into the rba's thinking today and in the months ahead. the second is around the ongoing strength of the australian economy. particularly the labor market numbers pretty much at full employment. resilience in retail sales from

fuel and energy but also the impact on food prices is something they will think about. and the budget last week definitely stimulatory and the new term so an added benefit to the economy. when we look at the key developments recently, it does suggest they will be fairly positive. maybe signal that they are not so patient and thinking about lift off in the coming months. haidi: on the missing puzzle piece of wage growth, this chart paints a picture -- we know the labor market is very tight and has all of these very robust readings about wages are still not there yet. is there a concern the psychological fear of inflationary pressures that it is going to be tough to get wage growth going? su-lin: i think wage dynamics

continue to improve. the increasingly tight labor market, multi-decade lows, it's also much lower underemployment and improvement in record highs. these are signs of a healthy labor market and the ongoing, elevated nature of job vacancies suggests it will continue. the dynamics are there to see wages grow over the course of the next 12 to 18 months and as the backdrop around cost-of-living pressures, we are seeing ongoing inflation expectations that may start to build into wage demand in a tight labor market. in particular, there are real skill shortages, so it is improving. probably not quite as fast at

that key aggregate level. shery: we continue to see signs the chinese economy is showing down with lockdowns in different parts of the country. how is that being factored into the calculations? su-lin: i think the rba and all of us are very mindful of development and china, what we have seen really over the last couple of years is the price of commodities, the key ones in terms of bulk, liquid natural gas, that is what matters in terms of australia in terms of trade. we continue to see strong surpluses and that dynamic continues. despite the weaker china

backdrop, it is the commodities story, particularly in terms of price. shery: today will be the first meeting with the newly appointed deputy governor. how does that change the dynamics? su-lin: that is a good question and an interesting one. she is responsible for financial security and the rba report is due out friday, so she has a very busy week. she bring something from that lens. we know as rates rise, mortgage rates lift but some households are going to be feeling more pain than others. i think she will bring some interesting discussion to the table around how households will fare over the coming years with higher rates, particularly those with higher debt to income ratios and increasingly, there's

a bit more discussion around that and more macro in australia. a important perspective to the bank as it deliberates today. shery: always good having you with us. let's now get to the first word news with vonnie quinn. vonnie: residents biden is again calling vladimir putin a war criminal. speaking to reporters at the white house, he warned and could face a trial for war crimes, saying russia must be held accountable for allegedly's committed against ukrainian civilians. biden also vowed to impose additional sanctions on moscow. background on spokesman has denied allegations its forces killed civilians in bucha. >> we have to get all the details so we can have an actual war crimes trial. this guy is brutal and what is happening in bucha is outrageous. i'm seeking more sanctions, yes. vonnie: a top human rights

official at the u.n. is calling for an independent investigation into what happened in the ukrainian town of bucha. the high commissioner for human rights said she is horrified by images of alleged atrocities but it is essential to preserve evidence about possible war crimes. sri lankan bonds slumped after protesting and soaring inflation left a cabinet reshuffle. the price fall on debt due in july was the biggest in developing company -- in developing countries. they are looking to renegotiate terms well dealing with a collapsing currency. the san francisco fed says the so-called rate resignation may not be that rare after all. it's latest economic letter says historical data shows the high level of workers being jobs that occurred during all rapid recoveries during the postwar time. the rate is there a record high of 2.9%.

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'm vonnie quinn. this is bloomberg. haidi: hong kong will have a new leader as of july 1 after carrie lam announced she is not seeking a second term. it has been a tumultuous five years marked by antigovernment protest, the introduction of a beijing imposed security law and a revamp of the city's electrical process and that's before we even got to covid. let's bring in our chief asia correspondent, richard engel. what now for hong kong? who would want this top job? richard: that's a question i've asked a lot of people and some people have said i'm not interested. it is an impossible job. of the four executives, including carrie lam, since the 1997 handover, none of them have completed the two terms allowed to them potentially.

it shows how difficult and thankless this job is in trying to serve two masters. you have to serve the hong kong people come your main constituency, but you also have to serve the interest of beijing. carrie lam perhaps got caught in that trap because of the various different challenges she faced over the last five years. the biggest coming in the last couple of months with that fifth wave of covid and at one point, having the highest death rate per capita in the world because of covid outbreaks. it leads to the question who has the metal to put their name and hat to become chief executive? there are some fringe candidates who have put their name in but the wide speculation is there is essentially is a three horse race. that could widen. we have a two-week week nomination time before the may 8 election by the select committee. you are seeing the gentleman

here, john lee, perhaps the number one candidate, the chief secretary. he became the chief secretary just last year and is widely believed to be the front runner. shery: is the only certainty at this point is that whoever comes next will have to toe the beijing line? stephen: it is kind of part of the job description, isn't it? we have put this question to a number of people. there are a lot of different concerns for the business community, locals, beijing -- who do you appease and who do you make happy? the ideal candidate needs to bridge the differences in society. he needs to restore confidence in the city. also making amends to the ex-pat community and making sure they have the good graces of beijing. there is a chance in a chief

executive could be even harder line then carrie lam. let me read you a few quotes and i will wrap up. essentially, alford wu is at the singapore university for public policy says in his estimation john lee may be beijing's ideal candidate. there is a concern hong kong could become a police state. beijing wants hong kong to put a clean and structurally better align itself with the realities of how china operates -- controlling its people through big data and mass monitoring. change the pace to bring up kenneth chan. hong kong baptist university. says hong kong has witnessed the biggest fall in confidence during her term in office. she has dealt a fatal blow to the core value of the city, the rule of law, civil liberties, political rights, democracy, and global outlooks due to her total reliance on beijing. pretty damming assessment of

carrie lam, but like i said at the top, there are many people welcoming the change. just be careful what you wish for because it could be more hard-line for hong kong. we will have to see. shery: coming up next, crude push is higher as the eu readies more sanctions and saudi arabia lifts prices for all buyers. we break down the moves ahead. this is bloomberg. ♪

shery: you are watching daybreak us show you. time for morning calls ahead of the asian trading day. morgan stanley says the bear market rally is over and seek refuge in bonds. michael wilson is doubling down on a defensive buy-in as he sees the economy heading for a sharp slowdown due to a range of things including last year -- high food and energy prices from the war in ukraine. barclays sees downside risks for credit spreads. high-grade corporate bonds have typically performed worse than treasury for the three months and six months after two and 10 yield curve and versions choosing securities carefully

now is particular important. haidi: lots of geopolitical risk there. the eu plans to impose new sanctions as a rally in oil prices. saudi aramco is raising prices it charges its buyers to never before seen highs. su keenan joins us with more. another volatile session and the biggest weekly decline in 10 years. seems like there's no upper limit when it comes to gains. su: a big change from last week with oil prices rising as the european union announces is looking at imposing new sanctions on russia and at the same time, saudi arabia's oil company saudi aramco hiking its oil prices. for instance, the price for one is four dollars 41 cents higher than one month ago.

one analyst says it is a massive increase. 60% of saudi oil shipments go to asia. you got china and japan, and south korea the biggest buyers. so there's going to be a big hit here. if we look at the impact this is having on the market, we are already seeing prices go higher in the u.s. a 4% gain come up pushing oil above 100 three dollars. in the asia trading session, we are seeing west texas intermediate up another dollar. brent crude jumping in the latest session back above 107. and as heidi mentioned, we saw the biggest drop in brent and west texas intermediate that we've seen in two years. over the weekend, the largest independent energy trader put out a warning or comment that

these depressed prices where we saw oil retreat are unlikely to sustain because you still have risk related to russia and the supply play out. analysts thought prices would move higher and just before hours later, in that play out. shery: many countries still buying their metals from russia. su: metals remained largely untouched by sanctions and many fabricators are locked into long-term contracts where they cannot get out of them even if they want to. we are told many are trying to drop in the bloomberg where you see commodities have been on fire. we had a record surge in commodity prices. metals make up a big part of this index. one of the reasons we see prices move higher is the fact that supply is short. russia produces a lot of the key metals -- copper, aluminum,

palladium, steel, nickel and many of these traders and fabricators depend on russia and don't have a choice. then there are the commodities merchants with a well earned reputation of being buyers and financiers of last resort. the bottom line there is still a flow of these russian metals into the rest of the world. last month, 12 copper industry reps at the london metal exchange were asked if russian metal should be blocked, most said no. but when it came to aluminum and nickel, advisory groups were asked whether they should block these metals and the consensus was no. they really need them. so it is a quandary for a lot of the metal industry. those trying to get out of there contracts are trying very hard to do so. coal prices in the u.s. surging

above $100 a ton. this has to do with the surge taking place around the world after the russian invasion of ukraine. shery: su keenan there with the latest on how sanctions or filtering through the commodities space. plenty more ahead. this is bloomberg. ♪

haidi: a quick check of the latest business flash headlines. evergrande has agreed to pay the advisor fee of a bondholder group to restructure debt and share more with creditors. evergrande has around $300 billion of liabilities. airbus made further delay its -- may further delay its wide-body jet due to sanctions on russia and a legal fight with qatar airways. they are pushing their target from early 2023 to the end of the year. airbus had already slowed the production ramp up by six months. credit suisse says investors in springfield link funds should brace for a fight to get their money back. in a letter responding to shelter questions, they say it's necessary. the funds share says the policies included a void and

doesn't expect to make any payouts. softbank headlines -- softbank says the agreement comes as the group is seeking a valuation of at least $60 billion when they go public. shery: for today's session, we have been watching the tech rally. given twitter spend -- sent the whole space higher but it has been a story about how the stocks will perform with a surgeon yields. right now, we are seeing the rally of tech stops -- tech stocks could last given what we are seeing on the volatility side of things. haidi: it just is weird when you take a look at the correlation you usually seen between realized volatility in tech and

they lack of correlation when it comes to big tech rallying. against the background of rising concerns for the economic future, but the spread between realized volatility for the nasdaq 100 over the past 30 days, this is what we are seeing. generally negative and it has ballooned to the most positive in about a year. we spoke earlier with someone who said not interested in profitless tech in this environment. another voice saying you have to be choosy when it comes to this extended tech rally. let's get a check on the markets as we head into the start of trading in this asian session. kiwi stocks up about a quarter of 1%, watching kiwi bonds in particular.

that could give it a little bit of a push, which it's already getting in terms of incentive with the debt spread between treasuries and kiwi debt. sydney futures looking like we are seeing and rba on decision day watching for a shift in tone and language from the rba even though they are not expected to move beyond the 0.1 percent rate yet but we could see language around patients change. nikkei futures looking a little flat at the moment after we saw the tech-led rally overnight looking more or less flat. shery: take a look at the bond space. a little pressure for yields with the aussie tenure holding about 2.7%. the kiwi benchmark is also down and then new zealand 10-year offers the highest yield among developed markets that make up the world government bond index. so this bond is very closely watched as we continue to see

the flattening of the yield curve when it comes to treasuries. coming up in the next hour, we will discuss the claimant policies of g20 economies and the rising cost of fuel and gas. plus the u.s. treasury yield curve is flashing more warnings about the economy. this is bloomberg. ♪

haidi: good morning. we are counting down to asia's major market open. shery: welcome to daybreak asia. our top stories, the u.s. prepares more sanctions on russia as ukraine says moscow is regrouping troops to target the south. asian stocks may follow wall street higher on gains in the tech sector. investors focusing on inverted yield curves