>> good morning. we are counting down to asia's market open. shery: welcome to daybreak asia. our top stories this hour, asian stocks set to fall as the fed plans to raise balance sheet by $1 trillion a year and hike rates. the u.s. addition -- latest edition of cinches on russia at

prudence daughters. u.s. futures needed and the early asian session after the s&p 500 fell in new york. we had that consumer discretionary section leading declines. the nasdaq 100 falling more than 2%. we have treasury yields larry liang -- treasury yields rallying again. suffice it to say we did see the yield curve steepening a little bit given that the fed minutes from the latest meeting was a tad less hawkish than feared. we are seeing wti rebounding but still below that $100 level qamar given that we have heard from the iea that they will be contributing an additional 60 million barrels to that huge stockpile the biden administration is releasing from its reserves. haidi: the market seems to

continuously question this idea of whether these unusual types of reserve releases are going to change the structural nature of that supply and demand dynamic. look at the set up for asian session today, it does look like we are going into a difficult open with u.s. stocks falling, the nasdaq dragging. a difficult start to trading when it comes to hong kong and mainland china. sydney futures off by 0.3%, we could see downside of 0.5%. the australian 10-year yield is holding steady at just over 2.9. we got as high as 2.93, as we continue to see bonds dropping after that record eight-month losing streak and that is being amplified in australia after the rba deputy governor said the

country has a good opportunity to get inflation sustainably within 2% to 3%. the markets pricing that in in terms of whether we will see a rate hike as early as may. new zealand equities off by as much as 0.5%. dollar yen c to 1.24. shery: the federal reserve is ramping up its monetary policy engines to do whatever it takes to win the battle against inflation, that is the message from the fomc's march meeting. kathleen hays is here with the latest. the debate is how hawkish is the fed? >> i would say they are pretty hawkish and let me quote our intelligence team saying the fed is reaching maximum hawkishness. yesterday, signaled that some officials had favorite the 50 basis point rate hike over the 25 basis point hike.

jim bullard wanted that 50 basis point hike now. he wanted to start the balance sheet runoff right away. it is the balance sheet runoff that is making its name like, they are going at all to the metal when it comes to hawkishness because they are going to do $95 billion a month, they are going to let rolloff as they mature. they are going to phase in these caps in three months, maybe a the longer, depending on market conditions. in the 2017-2019 balance sheets runoff, the securities caps were set at a total of $50 billion a month. this is almost double that. the balance sheet is not drilling dollars instead of $5 trillion, -- $9 trillion instead of $5 trillion. they want to move policy towards neutral, where there rate is so

low -- is no longer so low that they stimulate the economy. the inflation to the upside they say, strong consumer demand, supply chains are not functioning fully. bloomberg intelligence says we do not think the fed can get much more hawkish, especially if it delivers on what seems like a message of several basis point rate hikes this year. bill dudley, former president of the new york fed, he is a bloomberg opinion writer, he is arguing the fed is going to have to be more aggressive, they are going to have to tighten financial conditions. how do you do that? stock prices cannot keep going up. let's listen to what he said. >> financial conditions have not tightened much. the stock markets are only 4% off its high, still up sharply from where it was a couple years ago. and by yields are still really

low, especially when you adjust for inflation. kathleen: money market is looking for a 25 basis point rate hike in total this year would be the most aggressive federal reserve tightening since 1994. maximum hawkishness, maybe they can get more hawkish than they are now, but it looks like they are setting the sites. i talked to an economist last week, he said, they can say what they want, i want to see what they do. they may be doing job owning, they may be buying time to see what inflation does. you can maybe take them at face value for now, they are going to move more aggressively. haidi: it is never not data-dependent. the new asheville impose new sanctions on russia including on two of its largest banks environment prudence daughters. -- and let prudence -- and putin's daughters. >> our sanctions are likely to

wipe out the last 15 years of russia's economic gains and because we have cut ourselves off from importing technologies and critical components of quantum technology that they need to compete, we are going to stifle russia's ability to grow for years to come. haidi: let's begin our editor. we are seeing the sanctions so far have limited effects when it comes to acting as a deterrent. what we expect the impact of these to be? >> these are attempts to put pressure on russia and president putin directly. there are u.s. entities prohibited from any transactions with russia's two largest banks and those banks will not be able to access any funds they might have in the u.s. the effect of the sanctions are going to be somewhat long-term.

they are so far not created a situation where putin is ready to pull out of ukraine, but they are targeting people who are close to vladimir putin including his daughter's. this is also meant to impact him by targeting wealth that might be hidden through relatives. it is another turn of the screw and they expect u.s. allies in europe will be following suit. shery: despite the sanction uncertainty not to mention the international combination, we have seen countries like india continue to buy russian oil. the u.s. is not happy with this. joe: indeed. the new has has seen india as a counter wave to china in the region in has been trying over the past decade or so to try to draw closer to india and align

india with u.s. interests along with those of japan and australia. this is a message that was delivered by the white house national economic council director today that he said that u.s. is disappointed in nds decisions -- in india's decisions, it continues to buy russian oil, it is also a buyer of russian weapons. the indian government has resisted its own sanctions against russia and has continued to pursue purchases of russian oil. haidi: our senior editor there in washington with the latest on the sanctions. when it comes to the rba, we are seeing a fast-moving market when it comes to rate hike expectations. bill evans bringing forward the rba rate hike to june. bill evans expecting australia

central bank to begin the interest rate hiking cycle in august. had that been the previous call, now they are moving the forward to june. we are seeing some segments of the market believing we will see the first rate hike as early as may. this as we heard from the deputy governors saying that she believes the rba has an opportunity to get that inflation level sustainably within two percent to 3%. the fed sounding more hawkish about going to production of the balance sheet as well as proceeding with rate hikes. we are seeing some big banks moving there rate hike expectations amid tightening cycles. let's get to vonnie quinn now. vonnie: u.s. treasury secretary says the u.s. will not take part in some g20 meetings if russia is allowed to participate. she was also asked about possible action against china in

the event it moves against taiwan. she said the biden administration would be prepared to use it sanctions to was against beijing as it has done against russia. >> our goal from the outset has been to impose maximum pain on russia while shielding the united states and our partners of undue economic harm. we are working with them on sanctions and want to remain aligned with them. vonnie: finance central banks of a fund to rescue financial firms. sources tell bloomberg the pboc is raising an effort to raise several billion yuan to shore up confidence in the financial system. the fund could indirectly help other sectors including property developers. hong kong's number two official has announced his plan to run

for the city's top job, he is a veteran law-enforcement officer who oversaw a crackdown on the pro-democracy protests. he will be the only candidate to receive backing from beijing and a set to stand unopposed. hong kong's next leader takes office july 1. u.s. allies plan to contribute 60 million barrels to the oil stockpile a release announced by president biden. it is intended to soften the blow from a certain energy prices. the iacs russia's oil production slumping by a quarter this month . 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. this is bloomberg. shery: samsung relations first-quarter earnings this hour with expectations for a big jump in profits, we will break down the numbers.

a global advisor sees the positive earnings season for the fourth quarter, more on that ahead. this is bloomberg. ♪

>> my colleagues and i've may reach the conclusion that we need to move more quickly. faster is better. if it is appropriate to raise interest rates by 50 basis points, then i would think we should do that. >> 50 basis point is going to be an option we will have to consider. >> maybe a 50 helps, i'm open minded. >> if we need to do 50, 50 is what we will do. >> 50 basis point should not be off the table. >> it could be 25, it could be 50, it could be 75. >> these are methodical hikes. >> their economy is very strong and well-positioned to withstand tighter monetary policy. haidi: fed officials raising the policy of a 50 basis point move in may.

let's begin our next cat who says inflation could surprise to the downside. he is the people for the oh strategist for state street. -- he is the head portfolio strategist for state street. good the data show that the sectors are transitory? >> it could. if we look at the combined effect of the fact that consumers are shifting away from goods, which was driving inflation up, planes are going again, all of that stuff is creating a shift. everything the fed is doing to fight entire natural conditions could result in tightening of conditions. the stock market has still held up pretty well. put all of that together, you

could see some surprise on the downside. >> where are you preferring to see your strategy? you're looking outside of the year but now you are coming back into the u.s. gaurav: we did expecting that a move away from the fiscal come back, the fact that adu was being launched, and expecting that as the covid related opening was more widespread, everything outside the u.s. looked a little better. we look at this in the con taxed -- the context of the ukraine crisis, shinar, the fact that that is putting a damper on energy prices specifically in europe, that has to be more cautious in our take on the crisis situation is they tend to go on for a long time and the longer they go on, the more

pressure. on balance, we decided to cut back a packed -- cuts back a bit on core assets. then incrementally building hedges. we do like commodity still. holding them in our portfolio, also real assets, precious metals as well. shery: in your notes, you have a contrarian market view, which says em small-cap stocks. can you explain this? do you like them or hate them? i do not get that considering what you are saying now. gaurav: i'm large-cap em, we have concerns. on small-cap em, less or so. small-cap em is benefiting from some of the stressors on the supply chain side. small-cap firms are less are dependent on global credit conditions.

smaller cap firms have been able to preserve markets and is one of the sectors where you have seen almost a 4% expansion between december 2019 and december 2021. that makes the segment more interesting. also lesser exposure to china and mortar taiwan and india and those three economies have benefited from the stressors that have occurred. on march cap em, concern still. small-cap, which is exposed to domestic stories, not the stress around oil and all of the things that are global in nature. haidi: that is interesting, especially when we do have prices continuing to rise and you are expecting smaller companies to struggle with margins. what do you think? gaurav: in our experience, starting with the small companies, these companies are

finding they are being able to pass through price hikes and medic of these companies are smaller components in the global supply chain, larger companies to be demand are willing to pass this cost on. that is what is allowing them to preserve their marches -- margins. we look at smaller companies, the fact that there has been a move to digitization, e-commerce, covid re-opening are benefiting these companies. shery: it was good having you on . coming up next, samsung is anticipated to record higher gains in the first quarter, but where he lingers concerning

future growth. this is bloomberg. ♪

haidi: we are tracking the fallout of the supply chain crunch and these are your stories today. the ruble has come roaring back to its prewar level even as tensions pile up. the currency hit a record low. president biden saying it has been reduced to bubble at one point. the s&p -- the energy crunch threatens to clips the oil shock in the 1970's. he cautions the crisis playing out between superpowers, there is nobody placement for russian gas. the biden administration says the semiconductor it --

semiconductor shortage saved a full percentage all of u.s. gdp. gina raimondo had a classified briefing with lawmakers on the chip crunch on wednesday. shery: semiconductors in focus ahead of samsung's preliminary earnings later. this chart showing that chipmaker's production issues are starting to weave, which bodes well for chip supply. you can see the value are broad goods had hit a record high in recent quarters. bloomberg terminal users can read about those stories. samsung expected to report a 40% jump in profits for the first quarter but the company is facing a number of headwinds. let's bring in our asian tech reporter. what are we expecting? >> samsung as expected to report a strong earnings for the first

quarter thanks to rising demand. while the market has been experiencing a downturn, the price declines were quite noticed in the first quarter. prices are improving fast after the issues. it is expected to buys in the second quarter. there are several chips. demand for semiconductors. thanks to the old model. >> there are risks for the outlook, particularly related to

china. >> yeah. samsung is the largest producer of chips, far too much -- smartphones. the lockdown policy in china that is disrupting supply chains at this moment. the cost of making chips and assembling gadgets are rising and samsung is navigating risks. it is going to report the second quarter, next quarter, and they will have a full outlook on the geopolitical abuse, including china. haidi: we will break down those results when we get them.

kiranjeet kaur joining us for that. we have lots more ahead. this is bloomberg. ♪

♪ vonnie: this is daybreak: asia. the u.s. is imposing new sanctions on russia and banning transaction with the country's two largest banks. president putin's adult daughters and members of the security council will also face penalties. president biden will sign an order prohibiting -- in russia. the white house is morning india against aligning with russia. the national economic council

director brian deese says he is disappointed with new delhi's reaction to the russian invasion of ukraine and the could be said for can consequences if it supports moscow buying trade. and yet declined to impose sanctions and is continuing to buy russian oil and weapons. the fed has signaled it will reduce bond holdings by as much as $95 billion a month. minutes from its march meeting also show many officials would have preferred a 50 basis point hike, held off because of the invasion of ukraine. the mass runoff is $60 billion in treasuries and $35 billion in back securities. 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: china has signaled it would loosen monetary policy at an appropriate time as the country ties to combat and excavating covid-19 outbreak, something that is hurting

commodity prices. the pboc is planning to set up a stability fund to rescue troubled financial firms. our coanchor yvonne man joins us. what do we know about the sanctions? yvonne cold in the state council meeting came out yesterday, you mentioned an appropriate time. some are saying we could see concrete steps next week, with the mlf, can we see a cut in that front? they are also seeking ways to boost consumption. this came out hours after we saw that ugly, ugly pmi services number. in march, it came down to 42, lowest since february 2020. look at tourism revenue for the last three-day holiday and we have seen those levels go back to 40% of what it was in 2019. shanghai is still in total lockdown. so, that is putting the government's ambitious growth target of 5.5% in doubt.

you mentioned the pboc coming out with this draft outline of its stability fund to support troubled financial firms. no details on the size of the fund yet, but bloomberg reporting last week that the pboc was making upwards the raise as much as hundreds of billions of renminbi to rescue weaker, rural banks and the troubled developers out there, and that would dwarf other pools out there to bailout these financial firms. shery: challenging to contain the outbreak in shanghai, even with the lockdown extended indefinitely. yvonne: the reason is because of the population, a population of 25 million people in shanghai. that is double the likes of wuhan and another city which have seen similar outbreaks. a population density is high. yes, it is lower the likes -- lower than the likes of shenzhen

but higher than juan and if you look at the city center and shanghai, you could see a population density of 23,000 people per square kilometer, which is following what we are seeing in the city of manhattan. you're seeing people in tight living spaces, an environment that could be very conducive to the rapid spread of omicron. and there is a spillover risk as well. yes, the city's under lockdown and transportation has been restricted, but given how shanghai is tightly connected beyond the river delta, that makes them come of that bridge, them not be completely cut off so there is a risk of rolling lockdowns beyond the financial hub. bloomberg economics wrote a great report on this, saying it is a risk now, but the longer it takes shanghai to squelch the outbreak, the bigger the chances that that risk winds. shery: our coanchor yvonne man.

white house medical advisor dr. anthony fauci says it is critical for the u.s. to provide more covert funding including to pay for additional tests. dr. fauci told bloomberg he expects to see an uptick in infections linked to the omicron subvariant ba.2. >> over the next couple weeks, we are going to see an uptick in cases. hopefully, there is enough background immunity so that we don't wind up with a lot of hospitalizations. the best day yes best way to avoid that is as we have always said in previous discussions, get more people vaccinated. and if you are vaccinated, wind up making sure you get boosted when your time comes up for david: we sort of know who has been vaccinated. do we have a take on, new people have some immune response because they had the disease and they were not vaccinated? and how important is it for you to have that data if available? dr. fauci: it would be very

important to know the number of people who have been infected in this country. if you do sero surveys and look at the people who have either been vaccinated or who have been infected and have what is called an indication of immunity, which can be easily measured by looking at the antibody response, you are talking about a very, very high percentage of the population, perhaps as high as 90%. however, when of the things that people need to realize is that immunity wayne. -- community wanes. it isn't like measles. if you measure someone and look at their unity to measles, that lasts a lifetime. the amenity to covid and sars-cov-2 is something that wanes over a period of months. that is the wildcard in this, to be able to predict accurately what level of immunity over time

will prevent us from either winding up getting a large surge or a surge associated with hospitalizations. david: does the fall look like the last couple of falls in this sense? i didn't even hear about falls and pandemics and talk of it, but then i like you have to be careful because i guess we'll go back indoors, and transmissibility goes up. should we expect that again this year, october time? dr. fauci: i think it is likely we will see a surge in the fall. again, when we talk about these things, david, these are uncharted waters for us with this virus. if one talks about flu or other infections in which you have decades and decades of experience, you can predict with some degree of accuracy what you might see. i would think that we should expect that we are going to see some increase in cases as you get to the colder weather in the fall, that is the reason why the fda and their advisory committee

are meeting right now, to plan a strategy. and we the nih are doing studies now to determine what the best boost would be. should it be in omicron boost or should it be a boost of the original, ancestral strain? we don't know. we are going to find out by the study we are doing. haidi: dr. anthony fauci speaking with bloomberg's david westin. coming up on daybreak, central earnings are due across the bloomberg any time, and achy insight into the state of the global chip crunch. idc's kiranjeet kaur joins us. this is bloomberg. ♪

♪ haidi: a quick check of business flash headlines, the application for expansion of its south texas law site has been suspended by the u.s. army corps of engineers, after spacex failed to provide requested information. the army corps informed spacex the process can be reinstituted once the data is provided. a potential bid for italian infrastructure atlantia, sources say u.s. giant is in talks to takes atlantia private in

partnership with the benetton family. atlantia attracted interest from other investors including the spanish construction tycoon sorrentino perez. jet airways india plans to offer a hybrid of services. the arrangement will provide business class passengers with services including free meals while economy section will be modeled after low-cost carriers. the bankrupt airline is undergoing court monitored restructuring. shery: breaking news, samsung fourth-quarter operating profit 14.1 trillion yuan, higher than analyst expectations of 13 trillion yuan. the sales number, 70 7 trillion come of the estimate was for 75 trillion yuan, really both numbers coming in much stronger than analysts expected. already, analysts were expecting a strong first quarter given strong galaxy smartphone sales not to mention a weaker yuan

helping. and chip prices did not fall as much is feared. again, sam swung -- samsung first quarter operating profits beating expectations. we are joined by kiranjeet kaur idc asia/pacific senior manager for client services. good to have you. as you expected, a very strong quarter, what you like about samsung? kiranjeet: the overall situation with samsung is positive. strong sales of the galaxy s 20 -- 22 this quarter -- galaxy s 20 and galaxy s 2022 this quarter. on the back of nervousness on smartphones. shery: what about going forward,

given that chinese demand could be hit by covid? kiranjeet: if we look at the smartphones, samsung phones have only small shares of the china market. but the supply chain disruptions that we see in china because of the lockdowns now, that could have a vital impact on the overall supply situation. and then, that impacts everyone in the market. haidi: so you are not so much concerned about the consumer side of demand when it comes to the risks from china? kiranjeet: it is definitely impacting china. in 2021, we did see strong growth on the rebound in the smartphone market, driven by demand coming from year-over-year before, and there was migration that was happening. but coming into 2022, we expect

growth to slow, more like flat growth. and the reason for that is the slowdown in the china market. people are not buying smartphones as they have in the past. haidi: how quickly do we see moderation of the supply-side challenges, better supply when it comes to screens, displays, going into the second half of the year? kiranjeet: i think there are a lot of headwinds. if you look at the whole supply chain situation, in some cases, we see supply shortages being alleviated, if we look at ntb for example, we see that the market is back up and supply shortages, we don't see them anymore. but at the same time, when we look at other components, for example the pmi, management ics, there is still a shortage at least until later this year.

it is important for the audience to scale back on the entire set of orders because if they don't have components, then they have to scale back their entirety in that case. that continues to be a lot of uncertainty in demand for devices, given the ongoing geopolitical and ongoing situation globally. that is something manufacturers have to be mindful of. shery: when it comes to the long-term growth of samsung, at seems they are wagering on this chip foundry business. how challenging will it be to replicate the success that tsmc has not so far? kiranjeet: samsung success, the memory chips are going pretty successfully so far. it is a leader in those segments.

as we look into 2022 and the year ahead, i think that is still going to be strong, even against demand from the consumer businesses for devices. we still expect strong growth coming from data centers, which will keep growth strong. [indiscernible] i think there is a sense of the need for samsung to prove its promise in that case. so, there are some uncertainties but overall if we look at samsung's chip business come i think it is still headed for strong growth. shery: what are key challenges for this coming year? kiranjeet: the biggest is the uncertainty around the supply chain and this again stems from, we are not sure how demand is going to pan out.

we have seen some indications that the demand for smart phones will slow down. they have seen very strong sales in the past two years, but it is expected to slow down. with ongoing issues with the war, with inflation, with lockdowns, there is still a lot of uncertainty in the market on how low it can go. haidi: the u.s. semiconductor industry ambitions are moving very quickly. in the longer term, does that mean for the downside for samsung in terms of reduced reliance on asian suppliers? kiranjeet: i think we still have some way to go. one thing to keep in mind is that that additional capacity is still catering to additional demand. it is kind of making sure there are, -- they are more

sources of supply in that case rather than just being limited to certain asian players. [indiscernible] shery: -- paul: great to have -- haidi: kiranjeet kaur, great to have you with us from idc. lots more to come. this is bloomberg. ♪

♪ haidi: let's look at energy markets at the moment, lots of act and forth price action as markets try to price in implications structurally for the extra release of special strategic reserves. rebounding trading new york crude, up .7% triggered by prospects that potentially, we won't see a longer-term rebalancing when it comes to further crude releases from strategic reserves. wti thinking more than 5% air there in the session after we saw the international energy agency saying u.s. allies would deploy 60 million barrels from stockpiles in addition to the 180 million barrel release confirmed by the white house. natural gas futures, upside .9%. european gas easing over the weather outlook as well as high lng flows playing into the

pricing dynamic and gas main futures holding on to moderate gains. goldman sachs says sanctioning russian oil would be difficult, while sanctioning gas would been air impossible. the head of commodities research, jeff curry, given bloomberg his outlook. >> it would make prices go up. because you have to redistribute oil around the world. so, you're going to get a head in local barrels, particularly the western hemisphere, brent barrels, west african barrels, to replace those russian barrels. the question then becomes, what happens to the russian barrels? they get traded at a discount, likely to somebody like the indians are chinese picking it up. the key point people forgot is that you need the middle east and opec to agree to this because you are going to basically have to crowd out at their market share in places like china and india to replace those barrels in europe, which i think will be a tall order. not easy. >> we know there have been

conversations behind closed doors. how likely is it that this happens? how likely is it we can deal with an oil embargo, even if the weather in europe is not that good? >> i think it would be very difficult, which is why they started with coal. if you think about coal, it is the most fungible gas in the least fungible is oil. goal, you put it on ships and move it around the world that it is easy to read distribute. oil becomes more difficult because it is more sophisticated, pipelines, refineries, things of that nature, and then gas is pretty close to impossible to do, which meets gas would be the very last energy they would potentially boycott. but oil, it will be very difficult to do as well. we will see what happens. i think they already showed

their hand, which is why they chose coal to begin with, because it is the most fungible. haidi: goldman sachs head of commodities research jeff currie . breaking news, latest numbers out of shanghai as the city battles the covid outbreak. we are saying just shy of 20,000 new local covid cases there according to local media news, 19,980 two is what we are seeing -- 19,982 is what we are seeing. essentially, the entire city of shanghai is in lockdown, with an extension made indefinitely yesterday. we have seen the partial lockdown, the idea of locking down half, then the other half of the city, to minimize the disruptions to economic and financial activity. it hasn't worked out, given the surge we have seen in cases as they are trying to go through and get more mass testing done

as well. we are seeing the impact, not just on impacts headquartered and operating in the financial health of shanghai, but on services consumption and the rest. shery: we will see how this plays into the markets. in asia today, counting down to the start of trading in tokyo and seoul. nikkei now reporting the democratic party is preparing a proposal to raise japan's defense budget on any threat to taiwan. president biden, for his visit to japan, will be rescheduled as the japanese government is expected to delay the summit meeting by a month to late may, the broadcaster fn and -- fnn saying that japan does not plan to include a ban on imports of oil in its latest round of sanctions.

there is an asked to return to talks over plans to demolish a hotel that was built by a south korean company. we have the samsung earnings beat and are watching fourth-quarter earnings guidance from lgn electronics -- lg electronics. haidi: going into the start of trading next hour, samsung reporting a 50% jump in first quarter operating profit, eight done estimates. here in sydney, folks are telling bloomberg macquarrie is planning to sell its stake in maryland express lanes, valuing the project equity at $1.25 billion. bank of queensland also, a first and the bank's history. callaway had been deputy ceo for the past three years. there are reports that woven planet, a toyota unit, is working on self-driving tech that would use low-cost cameras

instead of expensive ones. markets open and send yen tokyo next -- markets open in sydney and tokyo next, asian traders preparing for a difficult thursday session. much more to come. this is bloomberg. ♪

♪ shery: welcome to daybreak asia. i'm shery ahn. haidi: i'm hady stroud-watts in sydney. age's major markets of just open. asian stocks and bonds are set to fall as the fed plans to cut its bonds by $95 billion per month. china signals it will boost monetary policy to combat covid and property woes plus spiking

commodity prices per at samsung earning stopping estimates in the first quarter comest on that strong demand for chips and new smartphone models. shery: the open, japan under pressure with the didn't -- under pressure with the nikkei and topics moving, the yen holding steady after weakening for the past four sessions. perhaps a little strength against the dollar right now. the 124 handle against the greenback at a time when we are seeing the 10-year yield again testing the boj up or limit tolerance. talking about the 25 basis point level. this, as we continue to watch treasuries continuing the selloff, the global bond rout continuing, had perhaps a little relief because we saw yields not rising as high as feared,

because of the fed minutes. we are watching samsung, earnings beating expectations for the first quarter. we can switch the board and see that the korean yuan is holding up at the 1218 level after seeing its worst day in more than two weeks. we continue to seek down wide -- downside pressure for the equity space as well. haidi: let's look at trading in sydney. it has been a difficult start, given headwinds from the overnight session, particularly going into the start of trading in china and hong kong. but we are seeing the sx lower by .25% -- asx lower by 2.5%, it deputy governor of the rmb a saying it is a chance to get inflation down to 2%, adding fuel to the fire when it comes to rate hike expectations, one chief economist shifting his

call for his first move and the tightening cycle to begin in june. the 10-year yield above 2.9%, it has left out a little bit for pressure we saw in the previous session, where we really saw that massive jump in yields begin along with the global bond selloff that's continues. look at the u.s. 10-year at two point 58% as well as s&p 500 futures looking negative at this point. we have seen a rebound in crude, when it comes to the asian session. we did see a pullback in wti after the release of the iea reserves, but crude is off morning session highs still. shery: our next guest says the backdrop with higher inflation and slower growth is becoming more challenging for asian markets. kiranjeet kaur is aberdeen asia equities senior director. good to have you backward what

we focus on when the environment becomes more challenging and perhaps returns won't be as high as before? kiranjeet: good morning -- pruksa: good morning. good to be back. given the challenging backdrop with higher inflation and slower growth, it affects our quality. what we mean by this is doubling down on the quality of the stocks and making sure we are invested in either industries or stocks that have a clear growth trajectory or companies that mitigate the downside risks of higher inflation. this could be companies that are market leaders that will be able to pass on rising costs because they have the pricing power to do so. shery: we have seen this huge rise in yields as well. are you in line with the positive sentiment surrounding financials at this point? pruksa: yes, we are.

over last year, what we have been doing is getting into financials and we have been adding a bit more, partially because the economy is opening and countries like singapore are faster in terms of hiking rate expectations as well. but i think generally through the course of this year, you have demand adding to financials elsewhere. talk about financials in china and financials in australia as well, rate hike expectations have increased. haidi: you are preferring green energy over traditional energy, are you concerned the inflation environment of the soaring cost of energy at the moment will slow that transition? pruksa: it is partially driven

by how short-term energy prices and stock prices will be driven by the geopolitical considerations happening in europe at the moment. and therefore, what is clear to us is that on a structural basis and a longer-term basis, the growth trajectory of renewable energy is much clearer. and as what happens in europe goes forward, the need and the speed to diversify into renewable energy and as a result, we see a stronger case for renewable energy on a longer-term baseness and that is while the share price has not really moved very much. haidi: samsung is one of your top-five holdings. i wonder if you had a chance to pass through the latest numbers yet. it was easily a be done expectations. if you delve deeper, are you concerned about the longer term

impact does longer-term impact on china and supply chain issues? pruksa: i think we went through the semiconductor space for samsung last year, they went through disruption given that there was a power cut at one of their main plants. samsung had that experience and managed it pretty well-paid this time around, -- pretty well. this time around, i think the lockdown situation, last year they prepared themselves for that and we are actually seeing this across many parts of the text supply chain where this time around, either the factories have set the level of inventory, they have managed to operate under what you call a bubble arrangement where the factory workers stay within the factory compound and then production goes on as normal. so far, it has been slightly

productive, but the impact has been more manageable, but i think it depends on how this lockdown situation develops, and the longer-term impact. but if you talk about longer-term trajectory, it is quite clear samsung is a leader in the memory space and construction of semiconductors will continue with the the long-term digitalization we are going through right now. shery: good having you on, pruksa iamthongthong, kriti aberdeen asia limited, samsung first quarter operating profit coming at at desk coming in at 14.1 trillionyuna. this puts the stock at the lowest level since december 2020. third consecutive session of losses, perhaps going with a

broader downside that we are seeing in the kospi. the kospi also down .9%, and you can see other chipmakers, whether in south korea or japan, all losing ground. haidi: we are watching jd.com as well, i shakeup -- a shakeup. jd.com has named a computer -- as named a new ceo, the old ceo will remain as chairman. the appointment effective immediately. jd.com falling 3% as of the last quote. and a broader downside in u.s.-listed chinese stocks. that's a talk -- that stock coming under pressure as we have been speculating about companywide layoffs and the impact of the lockdown in shanghai adding to the downside. let's get to vonnie quinn with first what headlines. ♪ vonnie the federal reserve has signaled it will reduce its

holdings by's much is 95 billion dollars a month. minutes from its march meeting also show many officials would have preferred 50 basis time, but held off because of rush's invasion of ukraine. the massive -- the maximum runoff total is $60 billion in treasury and $35 billion in mortgage backed securities compared to the $50 billion peak monthly rate 2017-2019. the u.s. imposing new sanctions on russia and banning any transactions with the two largest banks. president putin's adult daughters and members of the national security council also face penalties per president biden will sign an order prohibiting new u.s. investments in russia, and more sanctions on russian state-owned firms will be announced thursday. u.s. allies in the -- and the international energy agency plan to add another $60 billion oil -- 60 million barrels of oil to those already added by president

biden, destined -- designed to soften the u.s. -- the russian energy -- the russian invasion of ukraine leaving a gap in global supplies. the u.s. wanted yet against aligning itself with russia. u.s. national security council director says he is disappointed by the new delhi reaction to the invasion of ukraine and there could be long-term consequences if it supports moscow by increasing trade. and you declined to impose sanctions on -- and continues to buy russian oil and russian weapons grade the hong kong number-two official, john lee, announces plans to run for the top job. lee is a better law enforcement officer who oversaw the crackdown on pro-democracy demonstrations and the implementation of a national security law. local media report that lee will be the only local candidate getting backing from beijing. 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. ♪ shery: take a look at equities trading across asia. still early in the session, but risk off sentiment spreading with japanese equities sing their worst day in almost a month, talking about the lowest levels in over two weeks. the risk off sentiment revealing itself in the japanese yen which is strengthening for the first time in six sessions. it weakened so much against the greenback that it briefly tested a 124 level. but the kospi is also down .6% on one sector losing the most the day is energy. nuts are pricing, given we are seeing wti and brent rebounding of the a's and -- asian session, wti still below $100 a barrel. the iaea is adding $60 billion to the reserve release. haidi: chip stocks underperforming in the asian session. still ahead, the energy outlook,

iaea countries adding 60 billion dollars 2 -- 60 million barrels to the u.s. oil release. we will discuss that later. plus, a rapid balance sheet reduction and a call for 50 basis point cuts. a look at hawkish messages from the central bank, next. this is bloomberg. ♪

♪ >> so far, financial condition seven tightened much. stock market only 4% off at science still up sharply from a couple years ago. 2.5%, two point 6% is still really low, especially when you adjust for inflation. shery: blumer's bill dudley on the impact of the fed and the stock market. let's get more as it sets the stage for a 50 basis point rate hike and start of a rapid reduction of its $9 trillion balance sheet. bloomberg's kathleen hays joins us. how hawkish is the fed now?

kathleen: they are telling us they have the intent to be as hawkish as they need to be. they need to get inflation down. fed vice chair brainard hasn't been confirmed yet, but she gave a landmark speech where she put a lot of this on the table already. that is why some are saying it is not a big surprise that it is hawkish. 50 basis point ray kites -- rate hikes have been signaled by many fed officials that they are on board since the march meeting. at the time, it wasn't just a jane bullard from the st. louis fed who dissented publicly and said i want 50 when they went ahead with 25. had it not been for ukraine, many fomc members, according to the minutes, would have voted for a 50 basis point hike themselves. what else? the balance sheet runoff is going to be aggressive. it is going to start at the may meeting.

that is the signal. 95 billion dollars a month, double what the fed gave when it was coming out of the great financial crisis and reducing the balance sheet from 2017-2019. there is another aggressive move. they may want to move aggressively to get back to neutral. all the risks on the upside like supply chain, energy prices, consumer demand at that is why one source says we don't think the fed can get much more hawkish and if it delivers on the 50 basis point rate hikes as is signaled, it would be the fed's most aggressive monetary policy move since 1984. the only time it has been more aggressive than this in the postwar period would be the late 70's and early 1980's. people are talking about a potential paul volcker move, not there yet, but what people are looking for. haidi: and with it comes

increased risk that this ends up being the cause of a recession. is it a big risk? kathleen: when you listen to what everybody is saying, the idea is that it could fast and you are going to change expectations. if you shock the market, bill dudley, former fed official today writing a bloomberg opinion piece and saying he think that is go to happen. bond yields are so low, stock prices are so high, you have got to tighten financial conditions. but he also said that in order to get unemployment to move up a bit and get inflation down, you run that risk here's what he said on bloomberg television. >> the current environment of 3.6% that wages rising well above a rate of 2% consistent with inflation, the fed will have to tighten up to push up the unemployment rate. when the fed is on that in the past, it has resulted in a recession. that is not their intention, they are going for soft landing, but their chances of pulling it off are very low.

kathleen: bill dudley is looking very closely at financial conditions. the most loose in decades. if they remain so loose, and the fed tightened enough to change the landscape, change how much markets are fueling stronger demand, stronger sentiment on keeping inflation expectations? skeptics are saying watch what they do, not what they say. i had a conversation with a former, very, very top fed official who said he thinks yes, the fed is going to top this aggressive again but this year, they are job owning. he doesn't think they're going to move rates that i are are going to have to move fast on anything, but he thinks this is how it is going to turn out and this is why they are playing the game now to change inflation. shery: global policy header kathleen hays. you can get around up of the stories you need to get your day going in today's addition of

daybreak, on your terminals. this is bloomberg. ♪

♪ >> just in one year, our sanctions are likely to wipe out the last 15 years of russia's economic gains. and because we can't rush off from important technologies like semiconductors and encryption security and components of quantum technology that they need to compete, we are going to stifle's russia -- stifle russia's ability to grow its economy for years to come. shery: look at european futures not coming online. we saw the worst day in almost a month for european stocks and could see more declines as we

continue to see the asian session also seeing this risk off sentiment spread. we are talking about msci europe down 1.4 percent doctor we saw gains in european equity markets given the lower valuations and some bid to the last few days. haidi: we have really seen this recovery when it comes to the ruble. president biden mocked it, calling it rubble, we have seen it roaring back, recovering to prewar levels even as sanctions continue to pileup. we have seen foreign oil and gas buyers offering pugin's government a lifeline. we saw the record low of 121.5 per dollar as really improving since then, currently 79.7 in moscow on wednesday. we see this increasingly wide

range of sanctions being applied to russia as atrocities in bucha and other towns around kyiv pushed the u.s. and its allies to step up restrictions on the country. china instead has doubled down on pro-russian talking points in its rhetoric and official propaganda. let's bring in our bloomberg opinion columnist and clara, we are the u.s. warning india about its alignment with moscow. could this also be leveled that beijing? because of all the diplomatic overtures, we have not seen beijing coming close to what the u.s. and allies would have liked. clara: we have seen china doubling down from this neutral position that is really pro-russian. you can see it in the diplomatic rhetoric. you can see it in the propaganda. and the reason is, china sees

this conflict through the prism of its own relations with the united states add it sees little incentive at this point to back down from this uncomfortable juggling position they have put themselves in. shery: especially since china has always been betting on territorial integrity. what are we expecting from beijing? clara: beijing will do its best to keep doing what it has done so far. there is no incentive for them to change. in the fall, xi jinping will be appointed to an unprecedented third term in office. it has been a difficult year for china with covid, and not a stable to the party congress as much as he would like, so picking a fight with russia is not in the cards and more importantly, acknowledging xi made a mistake. they would have to of knowledge that perhaps backing an aging

autocrat bent on destruction wasn't a great idea. shery: bloomberg opinion columnist clara ferreira marques . let's check markets and stocks that are moving, especially chipmakers after the samsung beat in its first-quarter results, still down .2% while tokyo's electronic reading of japanese equities is lower, we are talking about two sessions of losses for tokyo electron. sk hynix, also under pressure in south korea. this, as we continue to see rod or downside pressures. samsung at its lowest since december 2020. sk hynix at its lowest since november 2021. haidi: take a look at how we are talking when it comes to the asian session, saying downside sentiment continuing after we saw the s&p 500 off by just 1% of the nasdaq golden dragon index falling close to 2%. we talk about chip names

dragging the overall nikkei to to five down lower by the most in about a month. the kospi also lower, off despite the beat when it comes to samsung. disney stocks up paul: --

haidi: white house medical advisor dr. anthony fauci says it is critical for the u.s. to provide more covid funding, including for additional test. he spoke to bloomberg about his predictions for the omicron subvariant ba.2. dr. fauci: over the next couple weeks, we are going to see an uptick in cases. hopefully, there is enough background immunity so that we don't wind up with a lot of hospitalizations the best way to avoid that is as we said in our previous discussions, david, to

get more people vaccinated. and if you are vaccinated, wind up making sure you get boosted when your time comes up. david: it remains the case that we still don't know who has been vaccinated. do we have a take on how many people may have some immune response because they had the disease that were not vaccinated? at how important is it for you to have that data if it is available? dr. fauci: obviously, it would be invariant -- it would be very important to know the number of people who have been infected in this country. if you look at the sero surveys at look at the number of people who have been infected or have an indication of immunity, which can be measured by looking at the antibody response, you are talking about a very, very high percentage of the population, perhaps as high as 90%. however, one of the things that people need to realize is that immunity wanes. it isn't like measles.

if you measure someone and look at their immunity to measles, that last lifetime. the immunity to covid and sars-cov-2 is something that wanes over a period of months. that is the wildcard in this, to be able to predict accurately what level of immunity over time would prevent us from winding up getting either a large surge or a surge associated with hospitalizations. david: does the fall look like the last couple of falls in this sense? i didn't even hear about falls and pandemics until covid, but then i look you have to be careful because i guess we'll go back indoors and transmissibility goes up. should we expect that this year, should we brace for something october time? dr. fauci: i think it is likely we will see a surge in the fall. again, when we talk about these things, david, these are uncharted waters for us with

this virus. it -- if one talks about flu or other infections in which you have decades and decades of experience, you can predict with some degree of accuracy what you might the. -- might see. i think we should expect that we are going to see some increase in cases as you get the colder weather in the fall. and that is the reason why the fda and their advisory committee our meeting right now, to plan a strategy. and we had the nih are doing studies now to determine what the best boost would be. should it be an omicron boost or a boost of the all original ancestral strength? we don't know. we are bro to find out by the studies we are doing. haidi: dr. anthony fauci speaking with bloomberg' is david westin. shanghai continues to record a rising covid cases with nearly 20,000 new infections reported for wednesday. the city' is 25 million

residents are almost under full lucked out. the bloomberg managing editor for asia business, brian joins us. just shy of 20,000, but yet another record. we have seen indefinite extension of the citywide lockdown now. >> -- ,: you really get the feeling that they are scrambling to get this under control. it may not be hike compared to western country living with the virus, but they are record high levels for china. they are a reflection that the city is a lockdown on they are doing a continuous mass testing on the ground there. they talk about getting tested every day. but, i mean, corresponding to that, you are seeing thousands

of isolation beds being set up throughout the city, and stadiums, and the shanghai complex center. a key part of china's policy is to isolate all cases regardless of severity. shery: emma, what are we hearing from residents? report say there is a lack of medical care and food shortages sometimes. emma: there is a palpable sense of frustration coming out of shanghai. it is outward facing and traditionally has had much more engagement with the west of than other chinese cities. we guessed with the west -- engagement with the west. there have been reports of people in housing lockdown's getting food. food is an issue because you

have delivery drivers locked down or in isolation in shanghai. and those protests on social media, there is lots of concern around the way children are being isolated, separated from their parents. there is speculation around why there haven't been any deaths in such a large outbreak as well. yeah, lots of frustration on the ground in shanghai that we haven't really seen before with the chinese people, until now, pretty supportive of the covid-zero policy which is cap them pretty virus free for the shery: shery: past two years. -- for the past two years. shery: emma o'brien. let's get the vonnie quinn. vonnie treasury secretary janet yellen says the u.s. will not

take part in summit meetings if russia is allowed to participate. janet yellen was also asked about china. she said the biden administration would prepared desk would be prepared to use sanction tools against beijing as it has against russia. >> the call from the outset has been to impose maximum pain on russia while, to the best of our ability, shielding the u.s. and i were partners of undue economic arm. and we are working -- undue economic harm. and we are working closely with them on sanctions and want to remain aligned. vonnie: the chinese central bank says it will set up a fund to help struggling firms without saying th= -- the amount of its funds. the new fund could help

distressed property developers. president biden's tiki phenomena advisor says the semiconductor shortage shaved off of a percentage point of gdp. economic officials will hold a briefing for lawmakers on supply issues as the white house calls on congress to enact a bill that includes $52 billion for the chip industry. 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: -- shery: a veteran law-enforcement official, john lee, has announced his candidacy to replace carrie lam as hong kong's next chief executive. he could find himself running unopposed as beijing's only endorsed candidate. let's bring in chief north asia correspondent stephen engle. what does his candidacy tell us about beijing intentions in hong kong? stephen: it is clear that

beijing is going to be backing john lee. we are hearing that is the only candidate they're going to be backing. we could have just a one-horserace, more of a selection rather than an election on may 8, if that is the case. and the new chief executive will officially replace carrie lam as chief executive on july 1. now, what we know about john lee is that, except for the past 10 months when he became the chief secretary, the number-two official in hong kong after carrie lam, he spent his entire career in law enforcement, dating back to 1977 when he joined hong kong police. he rose to be deputy police commissioner in charge of the management branch of the force, then became the security secretary on the dates you see there, 2017-2021. that means he oversaw the implementation of the national security law as chief of security and also spearheaded the crackdown of pro-democracy

activists following protests and 2019 and 2020. he has been a vocal critic of the news media. he oversaw the crackdown on jimmy li and the apple daily. he accused the apple daily of using journalism to endanger national security and call journalists people elements -- people -- called journalists evil elements. he has proposed a fake news law in hong kong. you can see that his security credentials are front and center edit looks like beijing has prioritized somebody with security can doug jones -- security credentials rather than financial credentials as their next chief. haidi: does this mean perhaps business confidence is not a top priority? stephen: as we know, as news

organization catering to the business community, there has been uncertainty here. there have been people who left the city and welcome back when there is more clarity on covid restrictions, but there is uncertainty definitely. if he is going to become chief executive, he is going to learn on the job quickly about the business community and their needs and the international status of hong kong as a global financial center. he is going to have to learn about government policy. he doesn't have experience except for the last 10 months. i am going to read you a quote from an associate professor at the university of macau, his words, not mine. he tells bloomberg news, "china seems to have given up on the idea of hong kong as an international financial hub, at least in the short term. they are likely focusing on first taking control, beijing he talking about, essentially of the national security camp -- essentially, the national

security camp has won the game." hong kong is whirling after five years with the unpopular leader carrie lam, so changes welcome, but we will have to see what kind of change will come. haidi: bloomberg's stephen engle. up next, ubs says global oil inventories are likely to withstand downward pressure after stockpile releases from the u.s. and the ieae. next. this is bloomberg. ♪

♪ >> overall capex is down 35% yet demand is higher. ed if you look at every producer with the exception of uae and saudi arabia, they are producing less today than in january 2020. so, when we think about supply constraints, they are broad-based. haidi: goldman sachs head of commodities jeff currie speaking to us but let's look at energy pricing in the agent -- asian session, bounce back when it comes to trading in crude prices. they fell after the iaea and asked they would be releasing, in addition to what we heard

from the biden administration, more from the strategic reserves. we have seen an advance resuming in the asian session, brent prude rating up over 1%, new york crude up by about the same amount, now over $97 a barrel, had fallen under $97 after we saw the retreat at more than five dollars. let's look at natural gas, prices holding steady as well as gasoline futures, seeing a gain of over 1%. our next guest says global oil inventories are likely to stay under downward pressure. joining us is dominic schnider, global wealth manager of ubs. you don't believe these stricter tech releases will have structural rebalancing effects? dominic: absolutely not. obviously, it will help in the short run to make sure the front-end doesn't rally away. it is a little bit of attempting

effect, but it doesn't really change, investment is down a bit, 30%, that is one factor. if you look at the demand side and look at air travel, that remains robust. we think the demand-side can hold up quite well and you have governments who have basically ensured that the pain of the consumer is not that high. we haven't really solved supply challenges at this point. that means the new york price needs to stay at $105 to $125 depending on how much we lose from russia and there could potentially even be higher sanctions. haidi: when you look at the fact that oil markets are starting to see spreads significantly, what does that tell you about leveling out in the markets in terms of volatility? dominic: two things. clearly within increase of such magnitude from the strategic reserves, there is no -- there

is less need for prices to spike. if you lose 1.5 million barrels for brush up or day, then i think we can start to find equilibrium at current levels, and volatility in crude could come down a little. that is one thought. who says that we just lose one million to one and a half million barrels for russia. if we lose more and there is reentering -- and there is reorientation of crude supply from asia to europe, it could be challenging giving increase -- given increased sections are on the table. i wouldn't say where we are today is stable equilibrium, and the bias is to the upside for the investor. some exposure to crude oil is highly desirable. shery: what about exposure to the chinese y that chinese -- chinese yuan, so far during the pandemic, the yuan has been

resilient? dominic: it has very strong supporting factors. some supports are crumbling. we had very good growth forward and that is not there either. and also on the trade side, you see things deteriorating a little bit in terms of the surplus we have seen. all these pillars are going away, nothing that calls that you need to hedge your see ny. we are seeing see ny head towards 6.4, 6.5, that is just a gradual uptick and at this point, just a worry of anycny long exposure -- any cni long exposure. shery: with the witness of the euro, are we going to see more dollar strength? dominic: i think so. there is a lot of combinations, but historically, the dollar support is the number-one real yield expectation.

it can still fire given aggression by the fred -- it can still -- it can still move higher given the aggressive posture by the fed. it can also down the second half, but who's going to slow down more? if i look at the commodity shock europe is facing, i think europe is going to slow more rapidly. these expectations built into the ecb seem to me to be excessive. still looking at 1.05 is the lower bound in europe. haidi: limit get your views on winners and losers, the aussie dollar, how much further upside is there given we are seeing more expectations for the rba to get more aggressive? at how much more aggressive -- i much more weakness is there the yen -- and how much more weakness is there for the yen? dominic: that has not leveled off. the best currencies to bnr commodities currencies.

the move in the u.s. and also massive trade shifts, balance payment improvement and if you look at data on trade today, there is room to surprise to the upside. this massive improvement in terms of trade for me, the aussie dollar is going to probably go to 1.7 eight and possibly 1.8. that is pretty much in plant we should not forget that in the case of australia, while the world is decelerating, utterly should accelerate. you have that growth of urgent send investors will pay more attention to that and keep currency high. on the weakness side, to highlight the yen, boj not moving, still looking at 25, maybe a move above. then you may get more concerned. shery: dominic schnider, good talking to you, ubs global wealth management. next, china signals it will be

five -- beef up policy support. what that means. this is bloomberg. ♪

♪

haidi: china has signaled a loosening of monetary policies as authorities come back the escalating covert outbreak that is hurting the property market and spiking commodity prices. let's get to our guest. sophie, how are these measures being greeted and is that enough? sophie: the specific measures, there was intent to clarity -- wasn't any clarity about which measures were being considered, which is interesting because the last time the bank cut the rrr, which releases liquidity into the banking system, this was signaled a few days earlier by the state council, so an indication that it might be coming friday might be overblown. but we could see an interest rate cut to the medium-term lending facility friday, april 15. that is the monthly liquidity

operation in the central bank alaska that interest rate in january. but really what the state is signaling is that pressures on the economy are worse than feared, there are domestic and external difficulties, and it needs to ramp up support. this is the third time since mid-march that we do have a bow to support the economy and use monetary policy to do this. but there hasn't been any concrete measures done so far. shery: investors have been waiting for this for a while, has most of it been priced in, what are the implications? sophie: interesting question because the liquidity part of it has not been priced in. people are expecting a targeted approach from the central bank because it doesn't want -- there is a problem on the consumption side so they need to figure out how to boost consumption and

manage this as well. nothing announced this week would be a disappointment for the markets that we need to see at least more clarity over what the central bank and government plan to do on the fiscal side as well. shery: bloomberg's chief china markets corresponded sophie horta e costa. banke plans to spend up to 393 million dollars buying back its a-shares. security earnings resulted in a probe into possible violations. cathay pacific among at least six airlines slapped for breaching hong kong's so-called circuit breaker mechanism. watching jd.com, which just named its president as its new ceo. haidi: that is it for "daybreak asia," we look ahead to the

start of trading. this is bloomberg. ♪

david: this is my kitchen table and also my filing system. over much of the past three decades, i have been an investor. the highest calling of mankind i have often thought is private equity. and then i started interviewing. i have learned from doing my interviews how leaders make it to the top. >> he said to 50. i did not negotiate with him. david: i have something i would like to sell. you don't feel inadequ