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. haidi: elon musk bets on

twitter. he has become a big shareholder. we have breaking news out of south korea. cpi numbers for march, rising 4.1% year on year. this will be the highest since december 2011. talking about surpassing the 4% level for headline cpi for south korea for the first time in a decade. this of course would be also double the inflation rate that the bank of korea is targeting, the core cpi year on year at growth around 3.3%. the cpi month on month, also beating expectations at a growth of 0.7% month on month. this, as we are headed to the be ok rate decision next week. there will be more pressure to hike rates as we see energy prices, pricing and different commodities, driving gains of

inflationary pressures and south korea. the march cpi rising 4.1% year on year, the highest since 2011. take a look at the markets. u.s. futures, muted in early asian sessions. this after stocks rose in new york. tech shares, driving those gains . we are watching the treasury space closely. for this session, most curves steepening a little, the 10 year yield rising to around 2.4 percent. this after inversions in different parts of the curve in the last couple weeks. we are watching wti which continues to gain ground in the asian session. this, after the eu said it was working on new russian sanctions and saudi arabia hiking prices for oil. haidi: of course, it is rba decision day in australia. this is what the futures picture is pointing to come a robust gains at the start of the open

in just over an hour. rates investors, bond investors will be scrutinizing the statements from the rba for signs that the government will start tightening next month rather than waiting until june. the aussie priced and by the markets, oscillating well the past few weeks. futures looking like the value is a coin toss. there is sensitivity around language and that will be key. given the upside risks to growth and inflation, missing a little bit of the wage growth, we are watching for a shift in the language around the idea of patients. new zealand equities trading higher by about 0.25%. looking for an upside on kiwi bonds. we are also watching the aussie dollar, flirting with october 2021 highs. it could get more of a lift now that we have pmi numbers for the

composite and the services number, really robust readings for the final march number, 57.1 or 505i should say, 55.6 for the services number. a little lower than the preliminary reading. the u.s. and europe are working on sanctions on russia. global attention, turned on atrocities allegedly committed by civic -- on civilians in ukraine. >> i got criticized for calling putin a war criminal. the truth is, this war, he is a war criminal. we have together information. we have to provide ukraine with the weapons they need to continue the fight, and we have to get all the details so this can be, we can have a war crimes trial. haidi: we will get more from our

correspondent. the president referring to horrific reports and photos most of us will have seen by now. what follows in terms of sanctions? >> there are seemingly more sanctions coming this week, in particular on the energy sector. they are talking with european allies on that. a bit of the i told you so moment from president biden, who talked to the press this morning in d.c. and he wanted to make clear that essentially, they have been calling this right the whole time. there is a statement from his national security advisor talking about what they think is the new russian strategy, namely pulling out of the key region and concentrating in the south of ukraine. joe biden has been sounding warnings over the course of this. his current polling doldrums

again with the chaotic exit out of afghanistan and they think they have been playing this one, unfortunately every fear they have had has come to pass. that is why we have seen him reacting like this. they are cautioning the war crimes process, that takes years. no one should be looking for quick action but they think that is where this is going. shery: what are we hearing in terms of the russian in -- offensive in ukraine? >> they are calling it a retreat but in some ways, it is a doubling back and and, pulling out from kyiv and more northern and western regions to focus on the donbas in the east and south. they cautioned this isn't focusing on the initial area that was claimed in 2014, that this would be an expansion of that.

the downside is, in some cases you have russian troops moving east towards the east, which will encircle and isolate ukrainian forces in those regions. they are wanting to brace for a long, complicated -- they think this won't go away in weeks. you might call this a good news-bad news scenario, where they say putin's plan hasn't gone the way they wanted in the u.s. estimation, that he is retreating from the middle of the country but doubling down in the east and the south. shery: our white house correspondent. the u.s. senate advanced the nomination of ketanji brown jackson for supreme court justice. the vote would happen later this week. this, after senate democrats advanced the supreme court nomination of jackson to the full senate floor through a procedural vote. that happened just now, after

the judiciary committee deadlocked on the domain should -- the nomination along party lines. if confirmed, jackson would become the first black woman to serve on america's highest court. we know of course, this would be a history making ascension, the first black woman on the supreme court. this could be within reach. this would be president biden's first supreme court pick. the reserve bank of australia isn't expected to make policy changes today, as pressure to boost key rates grows. our policy editor is here with a preview. we are not expecting a hike, but we could see a hawkish hold. >> that is what people are figuring. there is so much going on. the rba doesn't have an australia -- and inflation problem. they do have growing pressures.

if you look at the latest numbers, right now the headline rate for inflation in march, up 4% year-over-year, the highest since 2008. you could say the commodity prices, oil prices are surging because of the war in ukraine. supply chain constraints are going to ease. you have to look at the core rates. compared to other central banks, two point 5% year-over-year in month -- in march isn't bad but it has moved to the midpoint of the rba 2%-3% target. the pressures are there, not just commodity prices but the pre-election budget, which gave some financial boost to compensate people for these commodity price surges and other things they are seeing, the labor market is at full employment. this is expected to boost prices. what is the rba waiting for? look at the chart. it is wages. they want to make sure the rise in australia is sustainable.

he wants to see wages not at barely 1%, not at 2.5%, he wants 3% and staying there. he has been maintaining, let's see how far we can drive down unemployment. let's see how strong a labor market we can get and have higher wages, and not have an inflation problem. this is what people are focused on. it is the postelection, excuse me, post-meeting policy statement. does he signal expectations that we won't wait until the end of the year and be patient? we are looking at something sooner? money markets price in july, as soon as may. that is what the markets will move on. shery: kathleen hays with a look ahead. haidi: let's get to vonnie quinn. vonnie: than san francisco fed

says the rate resignation may not be that rare. the economic letter says historical data shows high levels of workers quitting jobs during all rapid recoveries in the postwar period. four point 4 million americans quit their job in february, keeping the quit rate near 2.9%. new research shows the earth may warm by three degrees celsius, twice the go oil -- the goal in the paris agreement. they warn unchecked emissions of greenhouse gases at record levels must peak before 2025 at the latest to keep climate targets alive. sri lankan bonds slumped after protests against inflation and lengthy power cuts led to the cabinet reshuffle. monday's price hold was the biggest among developing countries, suggesting investors and colombo will default.

they are dealing with inflation and the collapsing currency. germany and france are expelling more than 70 russian disk -- diplomats in response to the alleged killing of ukrainian civilians. they are linking them to spy agencies. germany says it will initiate measures against russia with allies, including tightening sanctions. russia denied it has killed civilians. global news 24 hours per day, on-air and on quick take by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i'm vonnie quinn. this is bloomberg. shery: still ahead, the war in ukraine is impacting zero carbon policies pledged by g20 economies. that is later this hour. the fed expected to deliver 75 basis points of hikes in the next two meetings. more on that, next. this is bloomberg. ♪

haidi: bond investors will watch the rba closely today as we get that rate decision. no expectations of the move but any shift in language around the rba's patients thing forward could change expectations, which have swung while the recently. -- wildly recently. the outcome is a coin toss when it comes to the odds of a hike coming in may as opposed to june. the 10 year yield, australia holding steady just under 2.8%, the 10 year treasury bond future trading like this after we saw the market ending on a curve, helped by a large block trade we saw. that played out across bond futures in that session. new zealand 10 year yield, 3.25, watching for interest when it comes to kiwi government debt

after its inclusion into the ftse index. that and, they really do have one of the highest yield opportunities among developed targets. the nominal yield spread, about 90 basis points, the treasuries above japan. that is where the 10 year government bond yield is sitting at the moment. there are extenuating circumstances that can explain the flattening treasury curve, according to our next guest. he joins us now. great to have you with us. the internal debate as to whether the inversion we see across more segments of the yield curve does portend recession rate conditions or is it different this time? >> i think it would be too confident to think it was different, but we do know the signal from the curve has a long and variable lag.

our response, it does imply more caution ahead so exposing the bond funds to growth, we are probably at the low end of that exposure so taking a conservative approach. haidi: do you see opportunities, given the sharp way we have seen rates been lifted -- being lifted? >> yes and i think that speaks -- large central banks around the world, we don't agree with the fed expanse. let's not forget, the aggressive policy stance by the fed with rates towards 3%, we will see a negative real interest rate. at the other and we have markets like the bank of japan which came out and strongly defended its yield curve control, capping the 10 year bond at around

0.25%. there is policy divergence. shery: the idea behind the fed moving aggressively, they believe the economy is strong enough to withstand those rate hikes. what do you see in terms of the economic health of the u.s., whether it is imbalanced due to any leverage or from the corporate or consumer side of things? >> at the aggregate level you have to say u.s. households and corporate balance sheets look robust. i don't think that is the first stress point we are likely to see as the fed goes through this aggressive hiking cycle. i think the stresses are likely to be found around the globe. we are seeing evidence of that. the energy importers in emerging markets, the impact on agriculture and food prices, are

having a significant social and economic impact. protests in peru, violence in sri lanka, i think the first signs of the fed going too far are likely to be in emerging markets. shery: before we let you go, there has been a lot of optimism over the chinese bond space for a while. what do you think? >> a good call on chinese bonds. we lightened up on chinese bonds in february. there is some room for the pboc to may be lower rates a little further. i think that is largely played out. stability is good in bond markets. more about stability rather than a strong rally. that is relatively attractive

throughout the markets as yields rise in the region. shery: sometimes boring is good. brad, good to have you with us. coming up next, teslas ceo elon musk has become twitter's biggest shareholder, acquiring a 9.2% stake. could a shakeup be on the way? this is bloomberg. ♪

>> i will say, this could be setting up for another leadership change at twitter. you never know. i'm not jumping to this conclusion automatically. i am saying it is one of many possibilities. it will either be changing the policy of the company to really

open source the censorship, or call people out on censorship, or it will be a management change. i don't know what will happen. shery: arc invest's ceo. ed ludlow, what sort of changes should we expect at twitter? not to mention the broader social media industry. >> elon musk's 9.2 percent stake was filed as a passive stake, but analysts expect he could increase his stake or become more activist. as cathie outlined, on march 2015 tweeted a poll asking if twitter adhered to free speech. there was a responsive know no from the polls. he has free speech concerns.

the other side is more complicated. in december, when jack dorsey stepped down and twitter's cto took over as ceo, he tweeted a meme that showed the new ceo as stalin purging jack dorsey, imitating historic events as stalin did to his secret police chief. you see it on your screen. the inference drawn was twofold, that musk wasn't a fan of the new ceo and also, reading further into the image that he may have ideological differences with the new ceo about content on the platform. haidi: the idea of a passive stake, but potentially becoming an activist investor, is interesting, particularly when you look at what else

potentially elon musk i'd have his sights set on. >> there is a long list of reporting that elon musk as the ceo of tesla, spacex, is very involved in the companies he runs. let's be honest, 9.2% makes him the single largest shareholder, whether it was an individual or institutional entity, there is not a bigger shareholder. the stake is more than three times what jack dorsey has. the reaction was one of surprise that it was labeled a passive stake. that is why you see analysts suggesting this could become more. keep your eye on regulatory filings in the week to come. shery: ed ludlow with the latest on elon musk and twitter. counting down to the start of trading in tokyo and seoul. in japan, softbank lined up at 11 banks, including j.p. morgan and goldman sachs, and a term loan

for the arm unit. mitsubishi is working with bakken energy unclean hydrogen. labor cash earnings for february, and pmi's for march, set for release shortly. we will bring you the latest numbers. in korea we have some eco data. consumer prices rising to the highest level since december 2011. a number the be ok will be watching closely next week. asset reserves at the end of march falling to a little more than $457 billion. sk shieldus could raise $864 million in its ipo next month. that would put it among the top three listings in asia so far this year. haidi: it is rba decision day.

this is the picture when it comes to markets that are trading at the moment. we are about half an hour out from the start of trading at sydney. we are likely to see a bump at the start of the session. we are also watching at xfinity, we live and work in the same neighborhood as you. we're always working to keep you connected to what you love. and now, we're working to bring you the next generation of wifi. it's ultra-fast. faster than a gig. supersonic wifi. only from xfinity. it can power hundreds of devices with three times the bandwidth. so your growing wifi needs will be met. supersonic wifi only from us... xfinity.

haidi: liver cash earnings, labor crash earnings for the month of february 1 point 2%, accelerating from january's number of 0.9% and beating expectations of 0.6%. this is another market with a bigger than expected rise, giving consumers a buffer against higher inflation. economists were expecting the spurt to likely fade given we see the increase in overtime pay

. companies trying to make up for loss during the supply chain problems and lockdowns. real cash earnings coming in flat but better than expectations of 0.7% contraction. household spending for february, one .1%. that is much less than expectations of 2.7% and a huge slow down from 6.9% in january. we are potentially looking at that preliminary number being revised down when it comes to labor cash earnings. the household spending is expected, seeing slowing given the extension of virus curves early covers areas accounting for 90% of gdp, likely to weigh on the weaker reading, retail sales pointing to a weaker reading. hearing from p.m. because she do in japan talking about inflation, the government will acknowledge uncertainty when it comes to the situation in

ukraine. they will have countermeasures in april. for inflation, he says there must be certainty that the price rises they see will not hurt the economic recovery. inflation, different in japan but we have had that pressure of the weaker yen when it comes to households in particular. dollar-yen trading at the moment, calm being restored to the yen. dollar-yen holding steady at 122.79. the aussie-yen is more interesting, given the strength we have seen in the aussie dollar. the outperformer in the gtn's -- the g10 space. less dovish from the rba in this statement today. vonnie quinn has the first word headlines. vonnie: president biden is calling vladimir putin a war criminal. speaking to reporters, biden

warned putin could face a trial for war crams -- crimes, saying he must be held accountable for atrocities against civilians. he vowed to impose sanctions on moscow. the kremlin denied allegations that forces killed civilians. >> we have to get all the details so we could have a war crimes trial. this guy is brutal. what is happening is outrageous. i'm seeking more sanctions, yes. vonnie: the united nations top human rights official is calling for an investigation into what happened in ukraine. you -- they you and high commissioner -- they you and high commissioner for human rights is horrified and says they will address questions about war crimes. a former goldman sachs banker is accused of embezzling for glory and greed.

he will go to trial in the scandal. the prosecutor told jurors he hoped to make partner by arranging a lucrative series of bond deals for the fund. he is accused of seeking tens of millions of dollars in kickbacks. global news 24 hours per day, on-air and on quick take by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i'm vonnie quinn. this is bloomberg. shery: j.p. morgan says jamie dimon may stay on as chair of the board when he steps down as ceo. this after he called for ratcheting up sanctions against russia and said the fed may raise interest rates more than market expectations. our finance reporter joins us with the latest. let's start with the succession plan for jamie dimon. >> thanks for having me. j.p. morgan's board close -- disclosed today that they plan to separate the ceo and chairman roles at the next ceo transition, when jamie dimon

retires as ceo. what that might look like is, dimon stays on as chairman. it gives more clarity to the eventual post-dimon era, although that remains years away. shery: what were the comments when it comes to sit -- the situation in russia and ukraine? >> jamie had his annual letter come out this morning, that is what he does every year, it was quite long, 44 pages this year. on ukraine, he said, he called for increasing sanctions and said he is not worried for j.p. morgan's exposure but the firm could lose $1 billion over time and they continue to look for secondary impacts around the globe. haidi: hannah, our finance

reporter, with the latest. the u.n. report on climate changes warning the world it could warm up. we discuss that with a research fellow, coming up next. this is bloomberg. ♪

shery: g20 countries are responsible for 80% of global admissions and have made ambitious promises to cut those emissions. haidi: new research shows not one of them has actually put the policies in place to meet their goals. a new report shows the earth is on track to warm by more than three degrees celsius, twice the paris agreement target. if you look at g20 countries policies on decarbonization, how does it compare when you look at the progress? >> members of g20, led by germany, italy and france, along with the u.k., are doing relatively well. the average score in our scoreboard looking at major areas, they came out to an average of 75%, 3% higher than

last year. they are improving, but as you mentioned, they are not perfect. when you look outside of the eu members, the performance has been worse. if you look at the asia-pacific numbers of g20, south korea is the best-performing one, 68 percent, followed by japan at 61% and china 59%. for all these countries, the performance declined relative to last year. the remaining three, particularly indonesia and australia, did pretty poorly. shery: has russia's invasion of ukraine had any impact on the policies of these countries? >> in the eu, we have seen a clear impact. the european commissions plan that was announced last month, they are taking this as an opportunity to accelerate deployments of technology like

solar and wind as well as things like heat pumps. they are looking at it as a challenge at, and opportunity to accelerate the energy transition. outside the eu, unfortunately, in a pack the silver lining has been a shift in sentiment around nuclear power. but we haven't seen any shift in terms of policies in favor of accelerated decarbonization. shery: let's discuss these issues and bring in emma aisbett , a research fellow that focuses on environmental policy. great to have you with us. what do you think will be the implications of the russian war in ukraine? emma: i think long-term, it will accelerate the shift towards renewable energy that the geopolitical problems associated with the relatively concentrated

distribution of fossil fuel resources around the world has long been a problem, the source of many wars over decades. and one of the best things about renewable energy, aside from the fact that it is cheaper to build renewable energy then build, renewable energy resources are much more widely distributed around the world. you will see less concentration and hopefully fewer geopolitical tensions. shery: in the short-term, we are seeing disruptions of fossil fuel deliveries. what will that do to the drive towards carbon zero policies? emma: you are right, we are seeing short-term reactions going the opposite way to what we need in terms of climate policy and energy. in australia, as with many countries, particularly the price of petrol at the pump is a hot button issue. australia is about to announce elections.

so we are seeing the government moving to reduce taxes on fuel, which is a short-term measure. it has almost no impact when it compares to the actual magnitude of the price rise we are seeing. that is what we need to be doing, helping predict, helping vulnerable people to buy energy stocks tied to policies. we need to be speeding up our transition towards electric vehicles. haidi: a lot of these will be election issues in australia as we get closer to the election. l -- australia has an outsized role when it comes to our own emissions and the role our exports play. are you hopeful government policy could change? emma: i am. one of the things we have been working on is a grand challenge on zero carbon energy, which

looks at how australia could play a transformative role for oats own export profile and the whole region. australia is a major exporter of embedded emissions to the region. the consequential downstream emissions from processing australia's coal and gas and iron ore and aluminum in the region are responsible for 8% of total emissions in the asian region. australia currently is a major exporter of emissions for the region, but we also have this incredible renewable energy resource. we have so much land and sunshine and great wind breezes. australia could start to export embedded renewable energy and help drive decarbonization in the region. that could be in the form of direct electricity exports, like the sun cable proposal, or in

the form of hydrogen exports. we have many players, including future industries, looking at mega-scale hydrogen production, using a renewable energy resources. and there is room for australia to value more than it traditionally has. in recent decades we have been very much about digging things out of the ground and exporting them overseas. we could partially process some of our own materials using renewable energy and australia, bringing value to australia and the region and helping the carbonized. haidi: how do you keep the attention on the transition to green and climate change? feels like every time there is a sizable disaster of some sort, we have dealt with and continue to deal with covid and the

pandemic and now we continue to deal with geopolitical situations, the war in ukraine. it seems to come at the expense of progress when it comes to the transition. emma: that is an excellent question. tragically, the evolving climate crisis is helping in australia. the fact that we have endured catastrophic bushfires and most recently, the her us floods on the east coast, means the climate crisis will continue over time as we get further from our historic climate averages, to force us to pay attention to the climate crisis. one of the problems is that increasingly, our resources will need to be split between dealing with the adaptation and paying the price of not having acted on

climate change earlier, and continuing to try to mitigate to make sure the crisis doesn't get even worse than it otherwise would. so climate will continue to force itself into our attention, but obviously things going on in the world, we have seen the news cycle over the last couple years dominated by covid and more recently, dominated by the war in ukraine. it is a tough situation, but i think climate change will continue to command attention. shery: emma aisbett, to her point, some countries are turning their support for fossil fuels, given the geopolitical tensions and supply disruptions. we are hearing south korea will be expanding oil product tax cuts to 30% from 20% to help ease the burden on citizens.

this according to the finance minister, as we see march inflation coming in at the highest level since 2011. the tax cut on oil products will be affected from may to july. plenty more to come on daybreak asia. this is bloomberg. ♪

shery: elon musk's new ownership stake in twitter may open the door to a management shakeup at the social media company. the twitter investors spoke exclusively to bloomberg. >> i think for the moment, it is passive but he is making a statement. it is a statement about censorship. he doesn't agree with censorship. for a smooth, functioning democracy, as he has tweeted. i think he is sending a signal to the new ceo, and i also know there is controversy about why jack left having to do with the new ceo. a few messages there. >> have you talked to elon about it? >> i have not. >> would you be buying more tesla or twitter on the news? let's throw on tesla also having a record first quarter. is this a catalyst to buy more shares in your view?

>> on tesla, we post our traded -- trades at the end of every day so many will know we have, it is the largest position in our flagship portfolio and more spoke for leo's -- most portfolios where we have it. but it has done well relative to the rest of the stocks in our portfolio. it has levitated relative, and has been a good source of cash. we have redeployed them into other stocks that we thought were being unfairly penalized. i think one reason for that is, tesla is in the broad-based indexes and most other stocks are not. that is a big problem out there in terms of the way capital is being allocated these days in the public equity markets. >> how much would tesla have to fall for you to start buying again? >> we will put out another model

on get hub -- on github i'm going to say within a week. our last one is from about a year ago. you will see from that model that our price expectation at that time was free thousand dollars. so -- $3000. so there is room ahead for tesla. relative to other names in the portfolio, although that is nearly a triple, other names we believe will deliver much more than that over the next five years because they have been hit so hard. they are not in indexes. so when there are risk off periods, traditional investors diversify and sell our stocks as they move closer to their benchmarks, the benchmarks against which they are measured. it is a great buying opportunity for us. i can't believe how long that buying opportunity lasted, february from a year or two, to

two weeks ago. we think the concentration towards higher conviction names will pay off. for twitter, it is having a beautiful day today. i think there are investors relieved because someone is willing to speak up and say, you were going to ruin this platform if you continue to censor it. in somewhat random ways. so i think that is good. i will say, this could be setting up for another leadership change at twitter. you never know. that will bring perhaps uncertainty and dislocation, so especially as it relates to advertisers. so we shall see. >> uncertainty potentially at twitter, potential leadership change. who are the names you would like to see lead twitter? who could do a great job? >> i'm not going to speculate on that. to be honest, we haven't thought

about it that carefully. there are names flying around, but i wouldn't want to throw out anything unless we felt strongly. we will wait to see whose names are put forward. but whoever is put forth, and i'm not jumping to this conclusion automatically, i'm saying this is just one possibility. it will either be arthur wald changing the pauses see -- the policy of the company to open source the censorship, or call people out on censorship, or it will be in management change. i don't know what will happen at all. haidi: cathie wood there. breaking news when it comes to covid numbers out of shanghai, over 10,000 covid infections, over 10,000 for the first time, another record high for covid-19

cases in shanghai. this, as reports of a new subvariant are being reported. the situation continues to remain on a knife edge. the lockdown of the financial hub, intensifying going into this week as we see a surge in new cases and reports of new sub-strains. this is the worst covid-19 outbreak we have seen china deal with since the start of the pandemic. we have seen 1300, -- over 1300 infections for monday, so over 10,000 cases for the first time. they are preparing to test all 25 million residents to weed out infections. they had plans to lock down of the city -- half of the city, but all most all of the population is under some form of lockdown or quarantine. the latest business flash

headlines, barclays is eyeing a move into the private credit market. plans are in the early stages. they haven't reached out to external investors. there is an asset management arm so lending strategies would be launched using the lender's balance sheet. credit suisse says investors should brace for a fight to get their money back. the lender says litigation is necessary to enforce claims against individual debtors and insurance companies. the main insurer says securities avoid, it doesn't expect to have to make any payoffs. softbank lined up 11 banks for an $8 billion loan secured by shares in the unit arm. the loan comes as the group is seeking a valuation of at least $60 billion when arm goes public.

markets open in sydney, tokyo and seoul. no expectations when it comes to the right move in australia but the language will be everything. lots more to come. this is bloomberg. ♪

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shery: welcome to "daybreak: asia." i'm shery ahn. haidi: i'm haidi stroud-watts. investors are focusing on flat or inverted yield curves. ukraine says russia is

regrouping. the prospect of more russian penalties hitting oil prices offsetting the impact of major relief. . from u.s. reserves. shery: the japanese yen holds steady at the one 122 level. we have seen it pretty range bound. this as we continue to see jgb yields broadly on the decline, but still the yield curve steepening slightly, given the superlong sectors are outside the boj's yield curve control. we have been watching some eco-data out of japan. labor cash earnings beating expectations. household spending missing big time. we get bmi -- pmi numbers in about half an hour. the cpi numbers out of south korea, coming in the highest 2011, a gain of 4.1% for the month of march, the first time in over a decade that it has

topped the 4% level. kospi gaining about 0.4%. the korean won has been weakening for the past three sessions. haidi: take a look at where we are sitting when it comes to australian equities. the aussie dollar, ahead of the rba decision. no expectation to see a move on that rate. we will be watching out for any tweaking around the language from the governor. he has been reluctant to move too quickly, given the perceived weakness in wage growth. we are expecting potentially some tweaking around that language about patience. australian stocks, swinging between gains and losses, unchanged at this point, but still close to the record high that we see when it comes to the asx 200. the 10 year yield is holding steady. a big day for markets. bond investors will be passing rba -- parsing rba statements.

it's pretty much a coin toss when it comes to the may rate hike probability at this point. new zealand, with the upside of about 0.25%. the kiwi dollar just under $.70 u.s. the aussie dollar had been the best performer in the g10 space. we may be running into a little bit of resistance before the rba meeting, shery. shery: our next guest says he is holding a more moderate conviction in markets. with us now is kerry craig, global market strategist at j.p. morgan asset management strategist -- asset management. you are still not expecting an outright recession. why? kerry: good morning. there is not much in the economy to signal we would see that kind of weakness that would lead to recession.

we still have very strong household balance sheets, strong corporate balance sheet, and we still see decent momentum around the world. we still have parts of the world that are reopening from covid. with inkwell slower growth --we think while slower growth rates are possible, contraction of the economy -- it's a bit of a stretch at the moment, given everything else that's happening. there are some headwinds. you think about the inflation outlook, what they can do to drag on the consumer. we have higher wages that will offset that. we think that the economy will continue to expand rather than contract. shery: policy mistakes are one of the things investors are watching when it comes to markets in the u.s. is that also the case across asia? we are seeing cpi at its highest since 2011. we have the rba also deciding today. kerry: yes, across asia, we've

seen banks hiking rates for some time as they look to normalize that policy as their economies are behaving differently than what we've seen in developed markets. in terms of what's driving inflation higher at the moment, it's about the headline more than the core. if we come back to what the rba is really focused on, it's been realized inflation, but also realized wage growth, which we don't have. i think they are willing to be a little patient and wait for that to appear before they hike rates. the market may be getting ahead of itself thinking about a may rate hike. i still think those rate hikes might not come through until july or at least into the third quarter. haidi: what are the biggest risks when it comes to the growth outlook for australia, given that a lot has changed in the period when the rba last met? kerry: i think some of the biggest growth risks happened

domestically. there was a collapse in the housing market. we didn't have the deleveraging happening in the housing market that we had in the u.s., which allowed for the rates to rise. curbing the wealth effect, curbing spending and the economy is large. anything that would be negative towards china. there's a lot happening in the commodity price space. thinking about some of the sectors in australia. that could be quite a strong hit to the growth outlook. more broadly, there is a case for saying australia has been relatively insulated from what's happening around the world, given the geographical distance and what's come out of the covid lockdowns since the third quarter of last year and they are still experiencing some of the benefit of that. while we do expect that the growth outlook will moderate as it wanes, still pretty decent

growth in australia, compared to the rest of the world. the outlook for interest rates -- also what the currency is doing as well. haidi: where do you see opportunities across government at the moment? the big move leave -- we have seen in yield, there would be some opportunistic buying going on. kerry: we would still be underweight duration as a whole. yields will rise a little bit. admittedly, the sharp move we've seen this year would pique the interest. the treasury yield in the u.s. -- you could put that in the portfolio as a distant -- defensive hedge. we wouldn't want to be earning in that -- owning in that environment. relative to u.s. and europe, the pressures will be different. the credit markets have been

relatively well behaved. investment grade not blown out. you have defensive bias in your portfolio. the high-yield space, you have default rates at a fraction of 1%. there is a positive outlook to the economy. there is still a case that you can pick up a bit of carry compared to what you would see in the government bond market. shery: kerry craig with us. haidi: we are just getting some breaking news. kuroda, speaking in parliament. he expects cpi to increase. the is seeing unstable moves when it comes to global financial markets -- he is seeing unstable moves when it comes to global financial markets. the governor, acknowledging there are uncertainties. they intend to continue persistent easing. the boj has doubled down when it comes to its commitment to add more easing if they have to, despite the weakness we are

seeing in the yen at the moment as well. which has been pretty range bound. fairly steady and stable since we have the verbal intervention from the japanese government. this all comes after we saw japanese household spending, far less for a second month on the virus hit, the impact of virus restrictions playing out when it comes to sentiment. the economy probably did contract last quarter. let's get to vonnie quinn now with the first word headlines. vonnie: haidi, thank you. germany and france are expelling more than 70 russian diplomat in response to the alleged killing of civilians in the ukraine town of bucha. germany says it will initiate more measures against russia with allies, including tightening existing sanctions. russia has denied that its forces killed civilians. germany is temporarily taking control of the gazprom unit in the country, to safeguard the

security of gas supply. they will come under the trusteeship of the national energy regulator until september 30. gazprom said on friday it no longer owned its german subsidiary, but did not share the new ownership. new research chairs the earth may warm by more than twice -- shares the earth may warm by more than twice the target. scientists say such pollution must peak by 2025. i'm vonnie quinn. this is bloomberg. haidi? haidi: we will be analyzing the deepening political and economic crises in sri lanka.

plus, the u.s. and allies raise more sanctions on russia as ukraine says moscow is regrouping its troops. this is bloomberg. ♪

pres. biden: you may remember i got criticized for calling putin a war criminal. you saw what happened in bucha. he is a war criminal. but we have to gather the information. we have to continue to provide ukraine with the weapons they need to continue the fight. and we have to get all the details, so this can be -- actually have a war crime trial. haidi: president biden speaking on russia's alleged war crimes in ukraine. what's happening in bucha is not a one-off event when it comes to kremlin tactics, our guest says. shery: how important is it to see additional sanctions against russia to see all of this stop? >> it's extremely important.

it's also important to understand what we mean by additional sanctions. ahead of bucha, there was conversation in the european union about additional sanctions , but that was really about tightening the old. what we need to see after bucha is something much stronger, something that makes the war in ukraine not just expensive for moscow, but intolerably so. until we see that, we should expect to see scenes like we are seeing in bucha again and again. these are tactics we seem here, we sought injection -- we see here. we saw it in chechnya. it dehumanizes the country. shery: there accusations of war crimes. what happens from here? historically, war crime trials have been important and significant to set a precedent so that this kind of thing doesn't happen again. do we expect to see steps being taken on that front? >> absolutely.

steps will be taken. a speech last night, this morning asia time, talked about the differences between now and world war ii and how much easier it is now to gather the evidence we will need. the fact is that war crimes tribunals take time. that sort of prosecution takes time. much tougher sanctions are necessary now to stop this today. war crimes are something we will have to deal with subsequently. it's not going to stop soon enough. haidi: our bloomberg opinion columnist with the latest. the bank of australia is expected to maintain it dovish tone -- its dovish tone today. record lows. our editor, kathleen hays, is here with the preview. the question is, will the governor sound a little less patient today? kathleen: a little less patient,

indeed, may be what we call a hawkish hold from the reserve bank of australia. it keeps its key rate at -- it has signaled it's not ready to do that. they are not going to wait till the end of the year. they are going to have to make a shift at some point. inflation, let's start there. inflation in the latest reading, up to 4% on the headline. for australia, that's a pretty high level. the highest since 2008, in fact. surging commodity prices, lingering supply chain constraints. like every other central bank, the rba focuses on this. it's now at the midway point of that target. that's when you start talking about full employment, strong retail sales, strong consumer demand. you have a budget that is -- many debate how stimulative it's

going to be, but there are steps to offset the pain everyone's pocketbooks are taking from the higher prices they are facing. in the face of inflation and low rates, why is it still low? the rba governor will say let's get off that record low because he wants to see more wage growth. the latest reading, 2.3% year-over-year. he wants to see something more like 3%. he keeps saying, let's see how low we can get unemployment, how strong we could get the labor market, before we have to start raising rates. that's why people are going to look so closely at the policy statement. markets are pricing in a move, consensus is around july, june. some people say maybe may. what they are going to be looking at, how stimulative is this budget -- that's one key question. what is the inflation outlook? and financial stability.

there's always some risk when you keep your rates so low for so long. all kinds of things. those are the kinds of things investors will be looking for. shery: kathleen hays with the latest. coming up, elon musk's raid on twitter could lead to a shakeup on the platform. this is bloomberg. ♪

haidi: checking in on some of those u.s. listed chinese tech stocks. alibaba. a 93 billion-dollar rally on the nasdaq golden dragon index.

you are looking at the long-term chart, showing how bad the selloff really has been. the index is still down about 60% from the peak, despite the surge. it is now closing in on the 50 day moving average. akr -- ark invest cathie woods spoke exclusively to bloomberg earlier. cathie: well, i think that the government is showing that, at the margin, it is going to make moves, but they are going to be marginal moves. in this case, i think there are three years to comply with our audit requirement. so, there -- they're talking. they're talking. so, we will see what happens. common prosperity, to us, means that profit margins -- high profit margins are not a good thing. we have steered away from anything with a high profit margin, and we have focused on

those companies -- in our flagship strategy, we are out completely. we have shifted towards something like c limited in singapore. in a more specialized strategy, we are looking for very low margin companies that are consistent with common prosperity, really distributing goods and services into lower tier cities, for example, or providing transportation. we have bought very low margin. it's all about nexgen transportation, in a world where human driven cars are still relative to the eligible drivers, still very low percentage. we're interested there. jd logistics, in the logistics area, using drones, lots of innovation. they are doing a lot. again, pushing into the lower

tier cities. we are a bit gun shy. we don't think that the chinese government is thinking very much about creating capital well. but we know there are huge opportunities consistent with common prosperity. we will have an allocation, but until things change dramatically, meaning more of -- more friendly to capital, we will probably keep that exposure pretty low. carol: you and your team are very good about research. you open it up to the world. you want to have these conversations. i am curious, when we look at the world, specifically what's going on in ukraine and russia, china's relationship specifically with, it seems like wanting to continue some sort of relationship with russia -- how is that problematic, do you think, for investors going forward and ultimately chinese companies? is there everything on what are -- there a rethink on what our

global markets will be like longer-term? you are a longer-term individual. cathie: china is a survivor. it really does want to be -- it really wants to be in the lead in terms of innovation. we, given our sole focus on disruptive innovation, are not going to dismiss china, but these geopolitical strains are not going to be good. it is capital unfriendly. we do know that innovation solves problems. starting with covid, we have a lot of problems. now with the ukraine-russia -- the russian invasion of ukraine, we have a lot more problems. we think innovation generally is going to help solve those problems, so we are happy that the market is now turning its cycle back to innovation being a good thing and non-index stocks being an area of great opportunity.

shery: here is a quick check of the latest business flash headlines. citigroup is said to be amongst -- underwriters who have -- that's until they get more clarity on the potential legal risks. sources say the bank now awaits legal -- among other topics. it has no plans to exit the business. jp morgan says jamie dimon may stay on as chair of the board when he eventually steps down as ceo. the lender plans to separate the roles. many shareholders to support a policy that would enable dimon to serve as nonexecutive chair. dimon has been ceo of jp morgan since 2005 and became chairman at the end of 2006. barclays is said to be eyeing a move into the private credit market.

sources say plans are still in early stages. the lender hasn't yet reached out to external investors. barclays doesn't have an asset management arm, so any lending strategy would sit in its corporate and investment bank and would be launched using the lender's balance sheet. haidi: we do have some breaking news when it comes to noble group. this long afflicted commodities trading house seeing yet more changes. we are seeing that -- there is movement at the top. ajay mishra has resigned as the executive director. the executive chairman has also stepped down. the 2025 notes have been canceled as part of this announcement. this is just another twist in the noble group collapse and restructuring efforts, multiple restructuring efforts we've seen. this continued downfall of the commodities trading house, which was once asia's largest, has

taken so many twists and turns. late last year, we saw the group laying out plans for a second restructuring in three years. we heard that they are already canceling their 2023 notes. this

shery: we are getting japan's pmi numbers, a composite number for march coming in at 50.3, revised upward from 49.3. remember, this is after two months of contraction for the pmi composite numbers, finally popping above 50. when it comes to the services side of things, though, we continue to be in contractionary territory, 39.4. this would be the third month of

contractionary territory for pmi numbers from the services side of things given, that we continue to see these restrictions across japan for the month of march. let's now get to vonnie quinn with the first word headlines? vonnie: thank you. president biden is again calling vladimir putin a war criminal. speaking to reporters, biden warned putin could face a trial for crimes, saying russia should be held accountable for atrocities against ukrainian civilians. . biden also vowed to impose additional sanctions against moscow. a kremlin spokesman has denied allegations that its forces killed civilians in bucha. >> we have together all the details so this should be a war crime trial. this guy is neutral. what is happening in bucha is outrageous. i am seeking more sanctions, yes? vonnie: the united nations top human rights official is calling

for an independent investigation into what happened in bucha. the commissioner for human rights said she is horrified by the images of alleged atrocities, but it is essential to preserve evidence to address questions about possible war crimes. ukraine's president says he will address the u.n. security council on tuesday. the sri lankan currency slumped after a cabinet reshuffle. monday's price fall on that do in july was the biggest in developing countries, suggesting that investors fear that colombo will default. sri lanka is looking to renegotiate payment terms, well dealing with asia's fastest- rising inflation and a collapsing currency. the san francisco fed said the so-called rate -- may not be that rare after all. historical data shows high levels of workers quitting jobs occurring during all rapid recoveries in the postwar

period. roughly 4.4 million americans quit their jobs in february this year, keeping the quit rate near a record high. 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: -- shery: shanghai has reported more than 13,000 covid cases on monday, the first time since the beginning of the pandemic. the sweeping two-phase lockdown in shanghai aims to test all 25 million residents, to uncover the spread of the highly infectious omicron variant. we have emma o'brien for the latest on this. what do we know, and what is the latest when it comes to these infections? emma: yes, a very lofty number today, 13,354 from just over 9000 cases yesterday, so a significant pickup. it will be said that it is

because they are intensively mass testing. the lockdown initially was in two phases, lockdown one part of the city for four days, opened that back up and then lockdown the other for four days. but the reality on the ground is that most of the 25 million residents of shanghai are under some form of restrictions, as they step up the mass testing to weed out cases. haidi: what are we hearing as being the implications for the broader economy and businesses located or headquartered in shanghai? emma: you have companies like tesla saying that their production is shut down. a bit of confusion as well as tweak at the start of the lockdown, over whether they may be able to keep operating. some companies told us that they were able to institute these bubble arrangements called close

loops, where they have workers living on site, the workers only go to and from their dorms, tested very regularly. but it appears that it is not all companies, and tesla is not among them, because its workers don't live on site. so it is having an impact, for sure. good to remember that a lot of the shanghai economy is services, financial services, which can pretty much be done with people working from home. haidi: our managing editor for asia global business, emma o'brien, there with the latest. hong kong will have a new leader as of july 1, after chief executive carrie lam announced she is not seeking a second term. it has been a tumultuous five years for her, marked by the antigovernment protests, and the introduction of a beijing-imposed security law.

and of course, there was the management of the pandemic. let's get more from our chief north asia correspondent, stephen engle. it has been a big five years. who would want this top job? juliette: that is the big question, right? we have a few outliers that have put their name in the hat. they are not likely to get much traction. the big names that we are hearing would be -- the obvious choices such as #2, juwan lee, the former chief secretary of securities, a lifetime police man since 1977. he came into that #2 job last year, a couple of months after what carrie lam said was her giving her intentions of not seeking a second term. so you sort of connect the dots to him. and there has always been paul chen's name bandied about, he

would be perhaps the pro security choice. then there is another candidate, the former chief executive of hong kong. he oversaw the umbrella movement , the occupy central, and he was highly unpopular. we are going to find out a lot more coming on july 1 when the new leader will take over. the nomination period has begun. none of these three gentlemen have officially said they will be campaigning internally and figuring out if they will do it over the next couple of weeks, and in that selection committee, a very select 1500-member group, will pick whoever will take over. it will be time to see whether carrie lam's unpopularity is due to her personal style, or tied to beijing's exertion of its influence on the city. shery: and yet toeing the

beijing line will be part of the job description. stephen: i think so, at least that we saw during carrie lam's five years. you will get a chief executive who will have to have their own personal style, but also address the concerns and the needs of beijing. no chief executive, and there have been four of them so far since the handover, has lasted a full two-terms, showing how difficult and thankless a job this is. they have to serve two masters. carrie lam acknowledged yesterday, you have to serve the hong kong people, but you also have to serve the needs of beijing. university professor tells bloomberg news that the chief secretary, john lee, may be beijing's ideal candidate. his quote -- "it is a real concern that hong kong could become a police state. beijing wants hong kong to

better align itself with the realities of how china operates, controlling its people through big data and mass monitoring." that may be a more orwellian outlook, but alfred wu, the professor there, thinks it is a possibility. shery: ever stephen engle with the latest from hong kong. we are hearing from the bank of korea saying that inflation may remain at the 4% level for a while, this as we had the march cpi number at 4.1% year on year, the highest since 2011. the bank of korea is expected to decide rates next week and it is saying that the 2022 inflation will be exceeding february projections. this as we continue to see airport information -- upward inflation risks increasing. even when you strip out energy prices, core consumer prices in south korea have risen 3.3% year

on year, also the highest reading since 2011. so we will be watching debbie ok's rate decision next week. -- we watching the bok's rate decision next week. sri lanka's economic crisis is going from bad to worse. we will be discussing that next. this is bloomberg. ♪

shery: sri lanka is trying to avoid a political and economic collapse, some saying the default over sovereign debt is unavoidable. our correspondent joins us now with the latest. give us a bit of context about what really led to this crisis. ramsey: good morning. the current political and economic crisis accelerated quite quickly since the weekend. on thursday, protests started around the president's house, friday they declared an emergency, friday night, the cabinet of her to resign, and the central bank governor offered to resign as well. we are expecting --, but has

been postponed indefinitely. the government hedging holding back on the protests and sort of dragging its feet on the crisis, but politically, things accelerated over the weekend with the protest and now we are waiting for them to form a new government. haidi: this latest crisis, though, is built on multiple steps. what we have seen over the past few years. ramsey: this has been a long time coming. when the party came into power in 2019, the finances were already but they decided to cut taxes, they took steps which they thought would be more popular and were expecting to beep oil growth -- pro-growth. but as what happened everywhere, the pandemic hit. they made a few other mistakes that did not help them bulk up

there foreign exchange reserves, and then they have another large amount of debt coming due, $500 million in january, another billion dollars in july. they only have $2 billion in fx reserves, they have $7 billion due, so they are trying to hold onto what they have. inflation is the highest in asia, 19%. they have put import controls in, their our power cuts 13 hours a day, so the economic -- they came in very economically weak, the pandemic made things worse, and now they are running out of money and that is what has driven this crisis, this public unrest. haidi: ramsey al-rikabi with a summary of what is going on in sri lanka. let's get more with chulanee attanayake, a research fellow at the university of singapore. ask for joining us. that is a long list of mismanagement that got us into

the situation in sri lanka today. where does the government again to start in fixing this? chulanee: i think at the moment, the government has to reach out to the government. it has gone through the imf seeking a bailout, it is looking for -- from other countries. but probably, these will be short-term solutions to the existing crisis. because it has accelerated to a very unmanageable situation. so looking at it over the longer period of time, i think the government should have both short-term, midterm, and even long-term plans where they have focused on tax reform, economic policy reform, and debt

restructuring, in order to bring the credibility of the international investors --. so at the moment, immediately, they have to mitigate the current political crisis. because political crises eventually lead to losing the credibility internationally, and it will also affect domestic businesses and investors. their immediate focus should be mitigating this crisis at the moment. haidi: this is also turning into a geopolitical battleground for beijing, and for india as well, right, because the main party has moved closer to 18, in sri

lanka is reaching out to india for aid. how does this influence the outcome here? chulanee: i think if you look at the past couple of months, sri lanka has been going between india and china. i can't say that china has moved very closer to china. chinese investment has also been postponed or stopped, et cetera. this will provide more opportunity for these two players to get their foothold in the country. they will try to see how they can impart their influence in the country through loans, credit lines. shery: so in your expert

opinion, what are some of the immediate measures that the interim government can take in order to mitigate some of these issues that have been a really long time-coming? chulanee: from the immediate situation, i think providing potential for the public is essential -- essentials for the public. they have been relying on loans from china. they are trying to mitigate the situation. sri lanka has negotiated with the imf for a bailout package, because sri lanka will not be able to obtain the necessary forex for the country. and also, data suspension in order to keep [indiscernible]

for a long period of time. it is high time for the country to make macroeconomic and microeconomic reform. shery: chulanee attanayake, research fellow at the national university of singapore. thank you. we are hearing from governor kuroda in japan speaking in parliament, saying that the current yen moves are rapid, saying it would be violet for the policy to reflect fundamentals. he says he will continue to watch currency moves closely. this as we have the japanese yen weakening to a 2015 low against the u.s. dollar you. can see that after his comments, the yen has appreciated sharply against the dollar. this follows comments from the finance minister earlier today that the stability in the foreign exchange market remains important, and the sudden moves require the most attention. remember, we had seen the boj's unprecedented jgb purchase

operations last week. that has led to more weakness in the japanese yen. now governor kuroda is saying that the yen moves are somewhat rapid. his comments leading to that spike in the japanese currency. plenty more to come on "daybreak: asia." this is bloomberg. ♪

haidi: elon musk was asked on twitter, do you want an edit action. this has been a hot button topic among twitter users, most of which have asked for an edit button to be able to correct their tweets. we are seeing about 23,000 votes cast, 79% voting yes, 21% voting no. elon musk taking that passive stake in twitter belies the influence of his name when it comes to his stake in twitter, not so much when it comes to his influence. twitter stocks surging the most since the ipo, on the back of musk announcing that 9.2% stake by failing his 13g there. we know that elon musk is not

the type to stay passive when it comes to his opinions. he is putting it out to the followers, "do you want an edit button?" so [laughter] watch this space. a quick check of the business flash headlines. evergrande has agreed to by the advisor fees of a bondholder group to restructure debt and to share more information with creditors. evergrande has around $300 billion of liabilities. airbus may further delay its production plans for a351 jets due to russia and a legal fight with qatar airways. the plane maker is pushing its targets of building six of the planes per month.

airbus had already slowed the production. ramp up by six months credit suisse says -- airbus had already slowed the production ramp up by six months. credit suisse says investors in greensill should brace for of weight up to six months. shery: and we are watching the currencies space as we are seeing the japanese yen rebounding from losses early in the session, as we continue to hear from governor haruhiko kuroda speaking in parliament, saying that the change in the yen has been a positive for the economy overall. but the impact of currency differs depending on changes in the economy. this, of course, following his comments that the current yen moves are somewhat rapid. the japanese yen fell to the 2015 low last week, given the

boj's jgb purchase operations. we continue to watch the rest of the currency space. we are also seeing the korean won staying at the 2014 level. we have seen a weakness in the korean won, as we await the be ok's meeting next week. also watching the aussie dollar as we head into the rba's which rate decision. we're also seeing the nikkei gaining ground, 0.2%, as the kospi is under pressure. it will be interesting to see what that rba does. coming up, we analyze how the covid lockdown in shanghai is

impacting markets and investor strategy. plus,, why markets have priced out extreme growth risks. haidi: still thinking about that edit button for twitter. our coverage continues. ♪

♪ david: it is 9:00 in hong kong, beijing and taipei. welcome to the "bloomberg markets: china open." i am david ingles with yvonne man. yvonne: our top story, oil prices climb again as a europe prepares fresh sanctions against russia. shanghai alone reports more than 13,000 covid cases for the first time, as