haidi: good morning. we are counting down to asia's major market open. shery: our top stories this hour. the world bank slashes the global growth forecast on the invasion on ukraine and has a response to massive crises including covid. the fed warns a rollout of a 70

basis point hike. an exclusive interview with the third-biggest interview in central asia, the reopening path in new zealand. the s&p 500 changed a little, the 43.91 level. we have seen energy leading, not enough to boost the index higher. we are trading with futures steady. this is as treasury yields on the long end of the curve are gaining ground. the asian session is under a bit of pressure after rising above $108 a barrel. we have seen that the libya news where they have shut down the biggest oilfield has been felt through the markets. gas futures are holding around a 13 year high. we have gas rallying in u.s. natural gas prices as oil is

rising above 70% in the past year. u.s. natural gas has been tripled. haidi: take a look at how we are setting up here in australia and new zealand as we get markets around asia going into the long weekend. take a look at sydney, pretty unchanged going into the start of cash trading. the aussie dollar, starting to claw back some of the earlier losses. we saw the u.s. dollar rising and the all the was weakening the most out of that cohort. new zealand stocks are up by about .4%. hawkish comments from an interview saying that we should prepare for a more aggressive rate hikes going forward and that the massive move we saw the biggest rate hike in 22 years was a signal of the pace of tightening rather than a desire

to end up at any certain point. they need to combat inflation quickly without creating -- the need to combat inflation quickly without creating demand. cloaking second days of weakness for the yen trading against the greenback as traders watch the divergence between the doj and the fed. shery: the global recession, the world bank is slashing its 2022 global growth forecast warning that the russian invasion of ukraine will crush local economies and spill over to nearby nations. spiking food and energy prices is hitting consumers across the world. kathleen hays and our editor and asset is your reporter adria. how much is this a down to the war in ukraine as well as other factors? >> just the first part of that,

ukraine, russia, their economies are being crushed. they will have big contractions. a big chunk out of what the world bank thought would be global growth, they took it to 4.1 percent in january, before russia invaded ukraine. it is down to 3.2%. beyond the immediate impact and the surrounding eastern european nations that border ukraine and russia, they are looking at commodity prices, food, energy, or that does to consumers, what it does in the emerging market and developing nations. they are doing a 170 billion dollar aid package. a bigger than the covid package that was around 159 billion dollars. some of the things they are looking at in terms of these broader factors, disruptive supplies and commodities, they are looking at it in the asian

region, increasing financial stress as consumers and businesses need assistance that they cannot get. they brought dampening of global growth helps exporting nations in asia. less growth, more profit they are saying in east asia, it comes at a time when the virus and covid outbreaks has another factor hurting the area and they know that the world bank hike will be an issue for asian growth which brings me to jim bullard, he was at a council foreign relations event he was out and about and set a 75 point -- said a 70 point basis hike was possible. it underscores people who are concerned about the slowdown in

asia. when we asked about the slowdown in china, what does that mean for the asian region? carmen said back when there was a big downturn she said she was worried that the chinese market could pull us out but now the engine has stalled. that is another concern for the world bank. ukraine is a big factor, that spells out in many directions. -- spills out in many directions. shery: trying to rub the engine back with more support -- rev the engine back with more support. comments not just from the fed but the tone of hawkish and as we continue to hear from the rbn as well? >> that is right. we have seen a lot of australian bonds have opened quite lower in reaction to that. 50 basis points from the bed is

probably pretty much what the markets are expecting -- fed is probably what the markets are expecting. as well as the hawkish comments from the rbn, that is unlikely to spook investors. it will be interesting to see how treasuries open here in asia today. we saw the long end of the u.s. to hire. -- tick higher. haidi: we have gdp numbers beating expectations. when you look at the activity data for march, we have seen a considerable weakness. >> we have and we have seen investors pretty much falling out of love with chinese assets. they have some skepticism around

the gdp numbers that came out yesterday, even though they were better than expected. they come out with a backdrop of the lockdown of this covid zero strategy. that is something that investors are now getting worried about. we have seen a global investors, pretty much not putting as much money into chinese assets. that is legitimately part of the covid zero strategy. that is an regulatory uncertainty we have seen in china coming together to make investors think twice about allocating to the market. it would be interesting to see what the prime rate is doing on wednesday. haidi: the latest and some expectations from the market.

as we get the week underway, let us go over to the first word headlines. >> vladimir putin has decorated the army unit that ukraine accuses of war crimes. boudin awarded -- he awarded them the honorary title of guard, signing a mass here is him and father while making no information of the invasion. sri lanka's president says he is open to constitutional changes that would limit his powers. the country's economic crisis grows. sri lanka's credit has been lowered after there was an announcing it would stop servicing foreign debt. 's libya -- libya's oil

production has fell as the energy industry closed the largest oilfield after protesters gathered at the site. dear told other facilities have been defendant for the same reason. u.s. transportation will no longer enforce mask mandate's on public transit. this is after a judge in florida shut down the mandate. the district judge in tampa said it exceeded the authority of u.s. health officials. it was based on cdc guidance. global news 24 hours a day, on-air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries. shery: we speak to the airport's chief executive after new zealand's borders were shut for

two years. wells fargo says despite pressure, they expect mid-single digit gains for u.s. stocks. discussed, this isloomberg. ♪

>> everyone is focused on headline inflation. they are missing the forest for the trees. the labor market has not been this tight in many decades. if the labor market is too tight, we continue to strengthen and wait is strengthened, we are not going to go back to 2% inflation. >> there was a 75 basis point

increase our one point. i would not rule it out. it is not my base case here. haidi: let us bring in our next guest to see the risk of recession at its greatest during the final quarters of 2023. he is a global strategist at wells fargo. we continue to see more calls that a recession may be coming. this chart showing how things have changed significantly since the inversion. what metrics are you watching? >> the federal reserve, the trajectory of rate increases, they have a leeway to move fairly aggressively early in the cycle. as we get into late 2023, we

think the fed will be more measured. if they are not, they are walking a finer line between economic growth and an outright slowdown. one of the wildcards is the economy's greater sensitivity after years of ultralow interest rates and adjusting to that. >> what does that mean in terms of portfolio allocation. there has been pressure with yields rising as well. >> we should be reducing our risk ratio, risk tolerance in this kind of environment. with an asset classes, rather than moving whole sale into more conservative sectors of the market, in the stock market, we would focus more on technology because of the longer term opportunities there and on health care, a growth area less economically sensitive over the next 12-18 weeks. interest rates moving into maturities.

not a major reallocation across asset classes. >> you talk about the rate move and your positioning. the market is pricing 88 more hikes in december. we are getting pricing starting to rise as well. you talk about technology, typically we see technology not doing very well in this environment. particularly when you take a look at the counterintuitive moves. >>.

>> it creates something of a headwind. -- what happens with the economy and inflation, covid, the impact on supply chain, the war in ukraine, that will shape the trajectory if the fed moves late this year as we move through 2023. haidi: what is more important for you, the pace of tightening, we heard that it is about the pace of combating inflation rather than the end point. is at the end point the rate we arrived at more important? >> both are quite important. as the fed president mentioned, we did have a very rapid increases in interest rates in 1994, one of the most impressive periods of rate hikes was a soft

landing. the environment is different. there is a risk in the moving too rapidly. up front in the cycle, they can afford to be more aggressive. as they move towards a late 2022 and 2023, they will have to be eyeing the economic environment for more closely than i think they will have to upfront. shery: it was great to have you with us. coming up next, auckland airport is ramping up the infrastructure program. we spoke to their ceo for opportunities for growth during the tourism recovery. that is next. this is bloomberg. ♪

>> the new zealand prime minister has touched down in singapore for the first overseas trip in two years. it will help boost the new zealand tourism interest. joining us from singapore is carried, she is at the chief executive at auckland airport. it has been a tough few years for new zealand and a lot of people wishing for the borders to reopen so that we can be tourists again. i am wondering where you are hoping to get out of this trip in convincing asian tourists and the regional visitors to come back? >> to mu and thank you for having -- thank you and thank you for letting me have the opportunity to be here.

the importance of singapore and new zealand goes back to 1965, we have complementary economies and mutual trading partners. restrictions are starting to ease. the opportunity to travel comes again and the second of may, those countries that need a waiver can travel to new zealand. tourism is important for us through tourism and trade and we are here because we want to strengthen the already existing partnerships we have across business, industry, and government so that we can collectively drive a star economic recovery. -- stronger economic recovery. shery: how quickly do you expect visitor numbers to return to some sort of pre-covid normal? >> our goal has been to emerge from this crisis, we are ready

to go. to give some context, we have been operating are international passengers at about 5% of 2019 levels. the same number of travelers passed in 21 as edited -- 2022 as they did in 1972. there's churches have started to ease. we are incredibly optimistic. we have not sit still the past two years. we have been improving air path movements, we have gotten a lot of work done around underground network repairs and maintenance and pavement replacements. so that recovery comes into play, we can lead into that and start to move quickly and respond to demand as it

increases. we are saying airlines starting to return, whether that be from july to our summer peak from october. haidi: what countries are we talking about right now they are expecting these international visitors to fly from? >> with the reopening planned, we have australians who can travel, new zealanders can travel at return. it is visa wavered countries that can travel. that will mean that 88% of countries can fly into and out of new zealand. i know, the countries who do require fetuses, the government has indicated it would be in october that they would look to open borders to those countries. there reserve the right that if there are concerns they will bring that forward. haidi: we continue to see

lockdowns across the country. >> if you look at the pre-covid environment there were about 11% of our international visitors. fidgeting dynamic is that they were 15% of tourism's spend. -- an interesting and amick is they were 15% of the tourism spend. the october timeframe i returned to bef is in the perspective. haidi: is there a demographic that can meaningfully make up for a lack of the chinese visitor? >> i think this recovery will be interesting. we are seeing a strong inbound from other countries that have open borders and are seeing a change in the leisure and visiting family and friends. we remain optimistic we will see

continued growth. it is a question of timing. shery: you had a plans before covid-19, where are you at now? >> we did not want to sit still, with revenue streams changing with borders being closed, we did get out and invest heavily in our work. we are now able to get on and commend programs. we had anchor projects we were looking at in a pre-covid environment. we put a majority on hold both there are four we are continuing on which is across our integrated terminal which will have domestic and international jets together. transport hubs being key at our domestic terminal. we are moving into those. and other four are driven with demand. vmate moved to the right.

they are still relevant and they are on the agenda. it will be linked to demand. haidi: the entire industry is struggling to recover. what are you hearing from singapore air about the intention for new zealand? >> partnerships are vital. one of the things that covid has shown all of us is that working together and solving collective problems or challenges is incredibly important and the shared interest that we have across industry. over the years, airports in new zealand and singapore airlines have had a strong partnership and work together. singapore airlines have been flying in new zealand and flew through the pandemic and maintain an action for cargo and people which has been critical. shery: it was good talking to you. we will be speaking to another

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shery: take a look at currencies right now -- the dollar index gained ground for a third session, gains close to the 2020 high. the aussie and kiwi not doing much after we saw for sessions of losses, we see worries about the chinese economy my fed rate hikes, so the kiwi dollar very close to the march 15 low. the big story right now is the japanese yen.

13 consecutive sessions of weakness against the u.s. dollar, a 2002 low against the u.s. dollar as we continue to see the governor double down on monetary easing. haidi: the boj stark divergence, the stark contrast with the fed, pointing to the rapid moves again, this is feeding more into the yen weakness. let's bring in our senior fx reporter. the longest losing streak in at least half a century for the yen and no signs of a let up. what are the key thresholds we are watching now and will we see a stepping up when it comes to verbal intervention? >> all eyes on the yen every single day considering how it stunned investors from tokyo to new york, just how ferocious its losses have been.

no one can predict yet what the endgame will be because of the multiple levels taken out day by day. to recap in terms of what people are expecting, some investors are saying 130 could be reached within weeks. something you would not have thought of last year, considering it has lost 10% against the dollar. you have calls from society general saying 150 is achievable because of the bank of japan's policy divergence with the fed. definitely something to keep an eye on. shery: are we going to see more verbal intervention coming from japanese government and boj itself? ruth: definitely that is the view of the market. we saw bank of japan wanting for that yen -- every minute you are seeing a bank of japan official coming out to voice their concern about the effect on the yen, saying it can be negative. but markets are willing to

really test their resolve here and try to see some of the intervention purely because of the divergence play. the market versus the central bank here. shery: so much has been priced in and the market around the fed tightening and also inflation that our next guest says it could lead to the dollar stumbling. that's the view from an emerging market strategist who joins us now. always great to have you with us . when it comes to the rate sensitivity we are seeing around the dollar-yen come what are your views given that a lot of it could have already been priced in? >> that's right. we do think a lot is in the price but that said, each day, we seem to be seeing more aggressive fed comments and the

latest overnight was from the fed bullard who would not rule out a 75 basis point hike. that is keeping the dollar very well supported. you talk about dollar-yen but the fact that boj is maintaining and importing its yield curve control about a quarter of a percent, the dollar-yen remains the currency to watch and that means dollar-yen continues to move higher and we would not rule out a break of 130 in this environment unless japan does something significant, which we don't think they will. that's going to continue to keep the dollar in front in general. shery: it is interesting you're talking about a 130 level. this chart showing the longest moving streak on the yen against the u.s. dollar on record. 13 sessions of losses. let me ask about where the dollar stands because that has a lot to do with capital flow. not to mention there has been investor chatter given the

sanctions on russia. where does the dollar stand on itself when you have the euro on the others of as well? mitul: at the moment, no other currency looks particularly attractive. with yields moving higher, of course real yields are worth watching and real yields are up and moving higher and that is keeping the dollar supported. when you look at the euro where you've got concerns about the impact of the war in ukraine, at the same time there is the ecb which is -- i would not say dovish but certainly nowhere near as hawkish as the fed. all this combined is keeping euro-dollar under pressure. it is hard to see the euro recover in this environment. one thing i would add is the french elections and uncertainty around that this weekend.

my caveat here is historically, the dollar is strong into fed rate hikes and just after the fed begins to hike but it starts to lose ground in the weeks and months afterward. i imagine we are not far from the topping the dollar but i would not want to catch a falling knife at this point. there may be more upside and we could see a peak in the dollar in the next several weeks. haidi: when it comes to china, there's lots of conflicting data points to look at. gdp was surprisingly resilient. still trying to strike that balance between easing and moderation. where does that leave the yuan goes in itself and as an anchor currency for the rest of the e.m. complex? mitul: i think the yuan story remains firm. it's hard to see the currency weaken significantly. as you say, the data has been mixed.

the pboc is cautious about monetary easing and that's why we only saw a quarter percent cut. we will be focused on the loan prime rate. we may not see a cut in the loan prime rate. there might be more stimulus on the credit side, but after the yuan, we continue to think that will remain firm. the reality is china has a strong external position. one thing we are keeping and i out on his capital flows. equity flows have weakened significantly. the end of the line position is still strong. you need to see a more active move to weaken the currency to see any weaker trajectory from here. haidi: how strong our economic

and currency fundamentals across asian markets? when you talk about the potential for 75 basis points, how much vulnerability is there across asian fxcm? mitul: i don't think we have had the same vulnerability as we have in last several years. there clearly has been an improvement in asia will -- an asian external positions. we are seeing -- just because current account positions improve, capital flow picture has improved, but asia is not invulnerable. what we will see is further pressure on the currency. indian rupees are higher. i think we are going to see some pressure across asian

currencies. haidi: always great to have you with us. let's get you to vonnie quinn who has our first word headlines. vonnie: the world bank has lowered its forecast for the year to 3.2% from 4.1%. it's president says the 170 billion funding dollar package is being discussed and will be bigger than the covid-19 response. he expects the debt crisis for some countries to worsen this year. u.s. treasury secretary will attend some meetings of the g20 finance meetings after u.s. officials threatened to boycott the meeting if russian officials attend. a senior treasury official said yellen will take part in the discussion focused on the economic fallout from russia's

war on ukraine. china's central bank has pledged more for individuals facing headwinds from covid lockdowns. the pboc announced when he three matter -- 23 measures expected to used spending by billions of dollars. long return cheaper loans to enterprises. hong kong's government has confirmed the city's former number two official is the only candidate nominated for chief executive. that clears the way for the former police officer to take power after an uncontested leadership election. that will be next month. roughly 1500 people are eligible to vote and more than half have no made it lee. 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: coming up, we take a look at what is in store for south

korea's energy transition under the next stray should. this is bloomberg. ♪

haidi: take a look at commodities -- natural gas moving toward the eight dollar level which it surpassed at one

point in chicago trading, the first time since 2008. supply concerns being felt across markets and sending prices to a 13 year high. same issue with oil, under a little pressure after surpassing $108 a barrel earlier in the new york session. libya closing an oil field that sent prices higher. corn also toward a record high. gold at the moment under a little pressure around a five-week high. a lot of safe haven demand for those commodity prices leading to inflation concerns, not to mention a risk of recession. iron ore surging to an eight month high because we had seen economic data out of china not being very strong and we had met -- we had bets about policy makers in beijing and we see mixed moves in the commodity space right now. haidi: south korea is at a

turning point in its energy transition. our bloomberg analyst join just now. -- joins us now. what signals are you looking for or seeing when it comes to positioning on energy and climate change policy? >> we expect to see the new administration maintain the current climate target, 40% eminent -- emissions reduction by 2480 and net zero by 2050. the current government but strong emphasis on nuclear versus renewable energy, so we expect to see two nuclear reactors that had been scrapped in the previous administration resume their construction over the next few years and we expect to see lifetime extension of six nuclear reactors that will end their life time during the new president's term. we expect a scaling down both on

the policy and subsidy side. south korea currently imports 20 million tons of coal from russia and that is around 17% of south korea's coal consumption. we are already starting to see market movements and a number of state of power generators have said recently they would no longer buy stock purchases of russian: no longer sign new contracts for long-term coal from russia. given the conservative political orientation of the administration, we will likely see efforts to reduce all russian imports. haidi: this struggle to balance security and sustainability for

countries at the moment, what's the best approach that could work for korea? david: it would be important for korea to reduce its exposure on all energy commodities and that includes uranium for nuclear power generation. if we look at the latest hydrogen roadmap, it relies heavily on hydrogen, which is not an ideal strategy. it would be important for korea to scale domestic renewable energy to catch both the energy security and sustainability goals over the long-term. shery: coming up next, twitter launches a poison pill defense to stop elon musk from taking the company private. we will have the details ahead. this is bloomberg. ♪

haidi: let's take as a look at the elon musk link shares -- tesla more than quadrupling. she sees the electric vehicle maker shares at $4600 by 2026

sub skeptics see it falling as low as $150. last year, those shares hitting $3000 by 2025 but it has dated its price target amid new expectations. also watching twitter -- the drama continues. up about .8% after a pull of global that apollo global management said it would be interested in help financing the bid for twitter following musk's unsolicited offer to take the company private. we hear apollo is considering backing a potential deal that could provide musk or another bidder with that equity or debt shery. shery: we do have breaking news right now -- the cdc in the u.s. saying the public transport mask requirement is no longer in effect.

we had seen a federal judge striking down the mandate for mask wearing on monday and u.s. transportation security administration saying they would stop requiring passengers on planes, trains, and other public transportation to wear masks. we are now hearing from the cdc directly saying public transport mask requirements will no longer be in effect and we have heard from the likes of delta saying they will no longer require masks for workers and travelers. united also ending the mask mandate on domestic flights and the cdc saying public transport mask requirements will no longer be in effect after a judge struck down the mandate earlier on monday. let's take a deeper dive into twitter, tesla, elon musk and twitters poison pill defense. must -- musk's -- su keenan

joins us with the latest. let's start with the interest by apollo global. what do we know? >> it raises the question whether must could team up with someone else to make his twitter dream come true. apollo global is one of the biggest private equity buyout firms out there and bloomberg has learned from people close to the matter that after his 43 billion dollar offer but the social media company in play, apollo began discussions and is considering participating in the bid for twitter. they would do this either through credit or debt and there is no guarantee twitter would be receptive to that or any other deal but this certainly does thicken the plot. it was last week that musk but his bid out there and if we drop into the bloomberg, you can see it is a premium on last week's price. we have seen twitter stock rise since then as the board has put

in this poison pill defense. that poison pill defense makes it very expensive and difficult for anyone to take over the company, let alone someone perceived to be in that addition to buy more shares. it is another layered of intrigue that now you've got someone like apollo coming in and offering financing muscle. a regulatory filing by twitters board in the latest monday session confirmed and detailed the poison pill strategy. there has been no formal rejection of musk's bid at this point. haidi: what can shareholders and others expect the steps will happen next? su: probably the next most likely thing is we will hear from the board about what they think on the bid. we are not hearing a lot from musk over the weekend, which is unusual, but some -- a puzzling

tweet that he put out there quoting an elvis presley song, love me tender. that might point to a hostile bid, going to shareholders and asking them to tender their shares at the given price and that would give him the power to go forward. it would also require musk to file an sec form that would indicate how he's financing the bid. you might recall musk is still dealing with the legal follow from back in 2018 when he tried to take tesla private. he tweeted he had the financing and it turned out he did not. he is still in a bit of hot water over that. that's another interesting level of play in this bidding process. if enough shareholders find a way to support musk, they might remove the poison pill defense and that could lead to a sweeter

bid, so stay tuned. haidi: we do have breaking news when it comes to covid cases -- the data just released for shanghai -- the headline number, 20,416 covid cases for monday. that's significantly down from the record highs we have seen. we haven't seen numbers like that since earlier in april but more significantly, reporting seven covid deaths for monday. reporting its first deaths is prompting more chinese city to impose restrictions. we heard on sunday three people died in shanghai according to the municipal government. we now hear another seven covid that stripped on monday. these numbers -- seven covid deaths reported on monday. it is key when it comes to china and its covid zero strategy,

which is continuing to apply a much of shanghai remains under lockdown. many other cities under lockdown causing that economic and mental toll. shery: around 45 cities are under partial or total lockdown across china. but we are counting down to the start of trade in tokyo and seoul. in japan, the yen's getting toward its longest losing streak in at least half a century against the u.s. dollar. traders weighing the path of monetary policy in japan in the u.s.. the bank of japan giving more detail about their central-bank digital currency plan. they want to take measures's that a step rather than pressing ahead like china. mitsubishi building truck deliverable nuclear reactors.

a parliamentary hearing for the bank of korea hearings, set to release its monthly data of fx deposit. and having sold more than a billion dollars of 10 year bonds. the market opens in -- market opens in sydney, tokyo and seoul are next. this is bloomberg. ♪

shery: welcome to bloomberg asia. i'm shery ahn. haidi: i'm haidi stroud-watts in sydney. asia major markets have just open for trade. jim bullard refusing to rule out a 75 basis point hike for the fed. the world bank

take a look at japanese equities coming online right now. gains of about 1%. we have a very weak japanese yen, 13 consecutive sessions of losses against the u.s. dollar, a 2000 too low and the longest moving streak on record. we are waiting to hear in about half an hour from the finance minister to hear what he has to say. to pay attention to that press conference. we have the 10 year yield very close to that upward level of tolerance. take a look at korean stocks because we have two sessions of losses for korean equities already. the korean won after two

sessions of losses holding at that 1234 level against the u.s. dollar. we are watching the korean bond space closely as we have rising treasury yields, rising u.s. dollar having an impact on the korean assets. but as we did have the social distancing measures being relaxed, we are watching the reopening trade across korea as well. haidi: watching the reopening when it comes back from the long easter weekend in sydney just getting underway. lackluster when it comes to not much movement in the futures session and the impact of the lowest -- the aussie dollar, the greenback strength and against everyone of its g10 peers but we see more strength when it comes to the aussie and kiwi dollar. we have seen some moves when it comes to the bond side of

things. both across the 10 year into year in australia. kiwi stocks down by 1/10 of 1%. more hawkish comments clarifying the outside move, the biggest rate hike in 22 years is just the start of things to come to prepare for further rate hikes. his focus is on the pace of tightening as opposed to moving to that endpoint or the peak any actual rate itself. take a look at the commodity side of things. when it comes to net gas and the pressures we've seen across oil markets as well, u.s. natural gas surging on the global's crop -- global supply crunch issue there. new york crude under pressure,

edging slightly lower as we way the extended china lockdown and libya closing in oilfield and more deaths from shanghai, albeit the covid case numbers are coming down from the peak. we are going to stick with china. a mixed bag when it comes to the eco-data and policy signals. the domestic numbers showing more pressure. analysts are little concerned about the grim picture when it comes to the economy. our next guest says chinese equities should improve. a lot of the hope attached to the rebound when it comes to chinese stocks is more action from the be boc, more action when it comes to fiscal and monetary easing. is that going to be enough to drive more positive expectations?

>> when you think about policy in china, it's on the fiscal side you need to be focused on. you can see it moves clearly in the credit numbers. ate cuts.pboc is doing in terms the price of money in china has been secondary to the quantity of money. when you look at the quantity of money which is the credit data, that was very strong. that continues and we think over the course of the year, there will be further easing ahead and target programs on the fiscal side as well. so things like this will pick up through the year and we expect china's growth will be able to hold on strong. when it comes to the impact of the lockdown, supply chain issues, what sectors and stocks are you looking at?

mixo: when you think about the covid experience, the last two years, it's difficult to forecast how things will turn out but eventually they do fade. the case numbers and shanghai are already starting to come down. the second thing is the impact of these shutdowns for a little while doesn't really impact equity markets that much because gdp will be impacted and macro data will be impacted. as long as the longer-term situation does not deteriorate significantly which means if you don't get some sort of permanent damage, we will go back to normal once we get past shery: this. in the u.s., we continue to see more signals of a potential recession, goldman sachs putting

it -- the answer to that is no. but there are a lot of things investors like to worry about, fed hawkish this being one, pressures from commodity prices, all these things are there but incrementally, the bad news isn't pushing out anymore. markets being able to hold that pretty strongly. shery: what about the fact commodity prices continue to rally? that seems to be translating to political instability. mixo: i would say that's

probably a bigger concern for us here in asia, but the good thing is for asia, the staple grain it's rice, not wheat or corn. rice prices have been better behaved. the supply chains are different, so that is not rising so far which is why food inflation in asia remains well contained compared to other parts of the world. the other issues related to fiscal buffers, so we have a little bit of space. if food prices continue to move higher, it will become an problem for asia. shery: always good catching up with you thank you. let's get to vonnie quinn with the first word headlines. vonnie: ukraine's is the battle for the donbass region in the country's east has begun. in his nightly video address, president volodymyr zelenskyy talked about russian troops

starting an offensive following a long time of hibernation. it forces the -- it's forces were already showing the area heavily and sending large numbers of troops there. >> russian troops began the battle for the donbass for which they have been preparing for a long time. a significant part of the entire russian army is concentrated on this offensive. no matter how many russian troops are driven there, we will fight. vonnie: the president of sri lanka says he will vote for constitutional changes. the country's economic crisis grows. moody's has downgraded sri lanka's credit rating following similar moves by s&p and fitch. they u.s. cdc says requirements for people to wear masks on trains and public transit is no longer in effect. this after a federal judge in florida struck down the mandate

put in place in february of 2020 one. a district judge in tampa deemed the -- the white house called a disappointing and continues to recommend the use of masks. libya's oil production has fallen by more than half a million barrels a day as a wave of >> as a wave of political demonstrations -- libya's largest oilfield was closed after protesters gathered at the site. we are told other facilities have been suspended for the same reason. >> we get the outlook for

china's economy after the biggest decline in consumer spending and the worst unemployment rate since the start of the pandemic. up next, carmen reinhart says they won't rule out more growth courts as social instability continues to rise. this is bloomberg.

>> russian troops have begun the battle for the dundas for which they have been preparing for a long time. a significant part of the russian army is concentrated on

this offense. we will fight. we can confidently say that such sanctions towards russia have failed. moreover, the initiators themselves could not get away with the sanctions. >> i think the most important thing for the united states right now is to remain united with our nato allies to continue to put pressure on the sanctions and try to squeeze them and enforce them enter provide the weapons that are absolutely essential if ukrainians are going to continue their great fight against the russians. >> q voices there. we are watching european future coming online. we had seen more markets close and come back online after easter. last week, we saw some gains

after the ecb was softer when it came to monetary tightening compared to the federal reserve. but risks are still there. we are talking about supply chain disruptions, we are talking about the invasion by russia of ukraine. it is not surprising that the world bank has cut its 2020 two global growth outlook specifically on the invasion of ukraine. carmen reinhart spoke to bloomberg about the rapport and what actions the bank could take. >> a range of disruptions from china. from the impacts yet to be fully felt of the russia and ukraine were on food prices, on global supply chains and if bad came to worse, could there be another episode of financial contagion? these are risks on the downside.

but will it be cut again? it is -- i would not rule it out but the point i am making is we are living a period of exceptional uncertainty. >> what could that package that the president of the world bank with whom you work, what will you do without money? where do you start? do you give the money to ukraine? do you feed it to the countries facing food crises where the concern of unrest is growing? >> absolutely. look, food crises, you can go back to the french revolution, the price of bread. food prices have been on the rise. we are not at the crises mode a la 2008, not yet. how does the world bank provide support?

support for social safety nets. when food prices rise, very often governments panic and put up rise controls. price controls are costly and not very effective. a much better mechanism to help those households is through social safety nets. at is a big emphasis of what the bank does. >> carmen you said we are not yet in crisis mode but you look at countries like sri lanka and pakistan, it does feel like they are in crisis mode or very close. there is a sense that the price pushes are feeding into political pressures. how worried are you from that aspect of being able to bring this under control and what the world bank and to to help? >> it is very troubling. look, the bad times read

discontent with governments. they also read all kinds of civil unrest. if you look for example at the indices published by freedom house, what you see is, the last few years accelerating a decline in democratic values. the idea that, especially as the low income countries are disproportionately and middle income countries are also disproportionately affected by higher food prices, continued slow growth, and governments that are overspent and cannot do much about it, social unrest is

something to be concerned about. >> world bank senior vice president and chief economist carmen reinhart there. and a current -- and occurring enda joins us now. >> this is significant when you look at the numbers. in january, they were looking at 4.1% for a year. down from 5-7 percent last year. -- 5.7% last year. carmen reinhart detailed the issues. a lot of issues coming from the russian invasion of ukraine. there is concern about inflation and rising debt levels and food security. another initiative the world bank is talking about is the idea of another package that

will go to the low and middle income countries. there is a lot of debt stress there. a long-running theme is protracted negotiations at the g20 level to get some agreement around restructuring of debt for those countries. perhaps with the world bank weighing in, there may be some new urgency on those talks. i would say a material downgrade for global growth even if it was expected by anyone's standards. >> james bullard floating the possibility of a 75 basis point hike. >> in that cycle, there was a 75 basis point hike at that point. i would not rule it out. >> how much of this is posturing?

how much of it is a real -- is it a real possibility? >> i think mr. bullard seems to be ahead of the curve. he was pushing the 50 basis point idea before many others were. he made the point that the 75 basis point issue has happened before. it goes to show you where the fed is in terms of its mindset. esther bullard a few months ago was out on his own with the 50 basis point. now others are talking about it. that is all about trying to get the fed rate back up to something neutral. he says 75 is not his face case today but who knows where we will be in a few months especially if inflation continues to accelerate. 75 may be the new 50.

>> the latest on that slew of concerns. you can get the stories you need to know to get your day going in today's version of daybreak. we have plenty more ahead. this is bloomberg. ♪

>> we are tracking the fallout of the global supply chain crunch. volkswagen says it has gradually resumed up production at two -- at two of its plants in china. the status of another base in shanghai is still under evaluation. sources say tesla has restarted production at its shanghai

factory but with stringent measures. according to a memo, the ev maker will provide a mattress and a sleeping bag and people will be required to sleep on the floor. employees will be given three meals a day and dead extra stipend. there are signs that the situation in shanghai is improving. elsewhere, the supply chain continues to be snarled. a copper fabricated -- a copper fabricator is warning of a standstill. shery: we are seeing wti pair back earlier declines that we saw in the asian session as brent is above the $113 level. we saw a surge given namibia has shut down its largest oilfield

given the instability in the country. natural gas continues its way higher towards the eight dollar level that it took for the first time since 2008. on supply chain concerns. natural gas has actually tripled . we are also followingommodity concerns. >> twitter shares posted the biggest gains in two weeks. before elon musk's unsolicited educate -- bid to take the company private. global management has held discussions about the banking must did with the social media company. bank of america joins wall street rebels as market

volatility surges. stock trading revenues jumped. goldman sachs and morgan stanley also posted surprise gains in training last week. stepping down after nearly nine years in the position. the lender says they will be assigned to another unspecified post. china will step up efforts to root out all of this. >> take a look at what we are currently focusing on. this is 2002. your differentials are still being played there.

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>> >> shanghai continuing to report for the 20,000 david covid -- juricova cases. this is increasingly the chinese cities as well to affect everything from local consumer demand as well as key supply chains. we are also seeing everything from the key money as well.

despite some restrictions, there being lifted. they continue to be under some form of lockdown. we are also seeing the report of another seven deaths after the first death in shanghai was reported over the weekend. let's bring our managing editor for business. the headline numbers continue to come down. the significance of these deaths despite comparatively being so low, this will be key for the covid zero strategy going forward. >> it is pretty clear that beijing is usually sensitive to that. it is something they found of. it is something that is the main thing that is keeping them closed and stuck to the covid

zero strategy. this concern that even if they did open up at pretty high vaccination rates, they are going to see an increase in cases. we are at this point in the outbreak in shanghai where we are going to start to see some more death come through. it is not usually surprising. not at as high a level as we would expect for an outbreak of this size. what we are hearing is a lot of pressure on officials to contain community spread with a lot of cases of people who are already in isolation. >> they are locking down five districts and actually taking out mass covid test. this is a city coming out of lockdown after three weeks of

restrictions. >> we are starting to see the virus coming into different parts of china. they -- it is quite natural that they would start in other places. because the country is sticking to that covid zero platform, you will start to see more places imposing these sorts of curves. trying to get these outbreaks under control early. you will probably see this more intensely early on as different

places start to see cases. >> downgrading her forecast for full-year growth in china. 4.2%. this is mainly due to covid. it is always good having you with us. tell us a little bit about your rationale behind your call to downgrade growth forecast for china given that we have seen pretty resilient trade. we may see more economic support coming. >> yes. we have seen resilient trade and more policy support. i think data from yesterday shows that much economic activity was already affected by covid. industry production was a good week.

also, the lockdown has continued in april. we have seen a lot of logistics travels and truck blockage and so on. now we see the stent about 28% across the country and passenger traffic down. we think april will be bigger. at the moment, we are seeing the government effort to unblock some of these issues. i think that we are looking for a week in second quarter. maybe a contraction. >> we have heard from shanghai, they want to plan more of these coastal systems. we heard from other local media reporting on these companies

that will be allowed to continue operating. when we are trying to bring this into the gdp forecast, how do you quantify that? >> the first half of april is over. we already know the impacts on this. for the rest, in terms of unblocking, we are assuming in the next couple of weeks, things will rebound. but this is not very smooth operating it. you need a pcr tests. there are a lot of controls and chats. i think we are seeing a bit of an uptick in city congestion. but it is certainly not back to normal. it is very hard to quantify. you also have to assume that some of these policies, covid

policies with ease a bit in the next few months. also, the logistics problems, they would find a way to deal with it. but there are risks of zero covid continuing with a rolling lockdown across the country. there is a lot of uncertainty. >> we are seeing debt expanding faster than growth for the first time since 2020. we know deleveraging has taken a backseat for policymakers but at what point does this add to a broader systemic risk in the longer term? >> last year, china has had deleveraging that go down.

this year is -- they need support for credit. that means we have to re-elaborate. that is supposed to go up. we expect credit growth to be 11% in a couple of months. the nominal gdp growth will decelerate. we will see a debt increase. i don't see that as a big risk at the moment. i think the biggest risk is actually about downward pressure on the economy. i think the government needs to push through more credit and also have the government borrowing more. i think it is a more targeted approach to deal with those issues but macro economically, i think increasing debt is the thing to do right now.

>> we saw new homes following the most since the intensification of the debt crisis back in july. >> it is very difficult for people to go out and buy properties. it is very natural to see properties as going down. before the second half of march, we already saw some positive signs of the property market rebounding. mortgage down payment requirements here.

they are stabilizing and rebounding in the next couple of months. >> always great to have you with us. coming up next, the latest downgrade to sri lanka's credit rating as the country barrows toward this series. this is bloomberg. ♪

>> we are watching the japanese yen. the finance ministers is speaking in tokyo. saying the stability of the foreign exchange market is important. any sudden movement is not desirable. remember, this is as we continue to see the weakness the japanese yen. we are talking about a 13 session of losses. the longest losing streak here. it really did not help that the bank of japan said that a week yen is good for the economy. he will continue to monitor with

a sense of vigilance by the japanese yen is not budging and that weakness is continuing. let's get to vonnie quinn with the first word headlines. because the world bank has several growth forecasts here. this includes russia and ukraine. the president said this package has been discussed and will be bigger than the covid-19 response. this is the 64th motorized brigade. the honorary title saturday mass heroism and valor making no mention of the invasion. 250 bodies have been connected to this. almost all of them shot. janet yellen will attend some

meetings in washington this week. senior treasury officials say that she will take part in this. joe donnelly is the only candidate nominated for chief executive. this will allow them to take power after an uncontested leadership election. 1500 people are eligible to vote for hong kong next liter. -- hong kong's next l -- leader. i am vonnie quinn. this is bloomberg. >> the country is barreling toward a series of defaults. pakistan officials also facing a tough economic challenge.

the nation can't afford to import call. the latest on these crises here, we are joined by daniel. let's start off with the situation in sri lanka. is there any sign of hope in this broad restructuring they are trying to make? >> there are sri lankan officials in washington dc speaking with the imf to try to hammer out those details of what that restructuring would look like. the government said they could not make those payments. we are going to default on these and save the money we do have for food and fuel. a lot depends on what goes on in washington. a lot of tough choices have to be made by the government. basically a plan but the financial health back on track and find some way to raise revenues.

>> pakistan could also be falling into this financing crisis. we are hearing the government can't afford to supply electricity. how bad is the situation there tomorrow -- how bad is the situation there? >> prices are skyrocketing around the globe and now we are seeing that and we have new government in charge there. they have to negotiate with the imf as well. they are seeking loans from china. a lot of work to do for the new prime minister there. he is blaming the outgoing leader for his problems but it is a poisoned chalice and away. he has to make some tough decisions over the next year before an election is due in pakistan as well. >> you mentioned china.

that country has become a supporter for the economy struggling. what can we expect from them? >> we do expect china to deliver some money to both of them. china is also becoming more hesitant to break out the textbook and right a blank check. what china would prefer at this point is to go to the imf, get a proper debt restructuring in place. that includes the money owed to china as well. china has been pushing both of these countries to seek out the imf and play a supporting role as part of that. china's role is very interesting and all of this but we are not seeing them running to rescue both governments here.

>> don't miss out on an interview with sri lanka's main opposition party. that is coming up at 10:30 a.m.. we will continue to watch the developments when it comes to trading in the dollar yen. the 13th day of weakness when it comes to the japanese yen. investors continuing to follow the training diversions between the yield differential and this will be between the fed and the beer j. they are really trying to do this. the fx rate is decided by the market but they will monitor the fx with a sense of vigilance and we continue to see the relentless weakness in the end. the longest ever losing streak

as the beer j continues to stand darvish. extending to the lowest since may of 2002 with a number of key thresholds coming up. it is not just the yen. this tele-strength is playing out when it comes to a number of other currencies including the lowest in about a year. we have had just a little bit when it comes to pretty good strength here. all of this coming under pressure with the strength of the greenback. the aussie dollar is another one. the worst performer in the g 10 space. we are seeing a little bit of a call back from the aussie dollar. the qa dollar just a little bit softer at the moment. lots more to come on daybreak asia. this is bloomberg.

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>> a quick check of the latest business/headlines. they are weighing a merger between a publicly traded software firm competing with global digital giant.

amazon has agreed to undergo joining companies such as citigroup to perform such reviews. they will be led by the former u.s. attorney general. amazon says it will publish results once completed. goldman sachs here -- a string of exits. they were most recently the head of global capital solutions. they were in top with bueckers to start talking on infrastructure. and a growing list of risks. let's bring in bloomberg's cheap china markets correspondent. for previous on the market open

in china. for more lockdowns to solve econ data. how will investors be watching the latest market move? >> more lockdowns. we are not sure what the impact on the economy will be yet. it does not really matter what the pbs he right now. the big risk is the big pressure on china and sentiment. this is from the covid zero policy which appears to be something that china will continue for the foreseeable future. that is the big overhang for markets right now. for investors, the risks are really outweighing the awards. not only do we have risks to the economy, risks to what happens to shareholder rights, we see dd listing in the u.s., this will happen before the companies are allowed to list in hong kong but

also, the rewards are getting smaller and smaller. prism global funds i am talking to, the question is is it worth having greater exposure to china or is it time to get out and trimmed that exposure and the answer is very much a letter for a growing number of funds. >> but about the potential disappointment that the pbmc is being so measured and some would say conservative when it comes to that targeted easing? >> exactly. the problem is the poc has to do targeted easing because the impact from covid zero has to do with consumers not spending. when you have a lockdown economy, why are businesses going to get more loans? when are households going to get

more loans if they can spend more money? the pbs he has to continue on this targeted policy. that means the broad-based silver bullets that the markets may hope or expect from the pbs he is not going to happen anytime soon. we could get a rate cut from chinese bangs tomorrow. a lot of problems for the pbmc here. >> here are some of those thoughts we are watching for the open. they could see some action after data shows the semi quarterly production here since 2019. food manufacturers focus on those. we have a surge in corn and wheat prices. that is it for daybreak asia. we will look ahead to the start

of trading in hong kong. all of this as traders continue to weigh these covid lockdowns in china. this is bloomberg. ♪

david: welcome to "the china open." let's get your top stories today. china's central bank announcing measures to support individuals and small businesses. that is as covid lockdowns squeeze the economy. jim bullard says rates need to get to 3.5% this year and does not rule out