haidi: a very good morning. we are counting down to asia's major market open. shery: welcome to daybreak asia. our top stories this hour. the imf cuts global growth outlook and warns of risks from central banks tightening. we will discuss with the japan mission chief. investors look at a surfer treasury yields and more oil

prices. netflix plans major changes after losing subscribers for the first time in a decade. u.s. futures under a little bit of pressure right now after the s&p 500 saw a broad-based rally in the new york session. gaining ground -- the wg -- we have the wti losing ground in new york, $102 billion a barrel. we have growth concerns with those forecast being cut around the world and that is leading to demand concerns being heightened. we have treasury yields rallying across the curve and leading those gains. the 10 year yield touching the three year high. after hours, we are very much focused on what is happening with netflix. we are talking about losses of more than 20%. they lost 200,000 users in the quarter and they are also expecting to lose another 2

million in the following quarter. haidi: we will be watching these media stocks in the asian open and it looks like we are setting up for a pretty solid session. we are on the cusp of the asx erasing its losses for the year. we continue to see that robust action price coming through from energy and materials in particular. looking like we are setting up for a gain of just over .5%. and watching the aussie dollar, it looks like support is being found at 73 u.s. cents. and also looking for higher momentum swings when it comes to the kiwi dollar as well which is nearing overflow territory. asx is firmly focused on dollar-yen at the moment. yen falling for a 14 today.

that 1.30 level against the dollar may come today. and today we could potentially see intervention. what ford does that take? we get more -- what form does that take? potentially we get more job earnings and we hear a discussion on coordination between the u.s. and japan as well. take a look at this chart. this was when japan last intervened to combat weakness during the financial crisis. that widening u.s. yield over japan will continue to drive those losses. the kind of interventions available can be quite politically sensitive when it comes to cooperation and some sort of agreement in japan's trading fund. it will be very expensive when it comes to buying and selling within the market. at the end of the day, the

fundamentals, the yield differentials, the trade quotes, the carry trade's are not going to change. they are difficult to counteract with any form of government intervention. shery: let's talk about the fundamentals of the global economy. the imf has cut its growth forecast by the most since the early stages of the pandemic. it says global expansion will slow to 3.6% this year, down from 4.4% forecast before russia's invasion of the ukrainian china's lockdown. let's bring in kathleen hays andrew garfield reynolds. kathleen, we have already seen the world bank growth downgrades and now the imf. what stood out for you? kathleen: the fact that this is a significant reduction and there are so many risks for the global economy. the war in ukraine is the big hit to the economy when you look

at ukraine and russia. but there are reverberations when it comes to surging commodity prices hitting asia and emerging markets. it is hitting consumers around the world. i want to give you some specific numbers. the imf sees the ukraine economy contracting 35% this year. an impact that is going to last. sanctions, harder to trade with its counterparts, etc. there gdp is set to be two point 8%. that is still growth, but down more than 1%. germany hit hard and italy hit hard by higher gas and energy prices. you look at china, there gdp forecast cut to 4.4% by .4%. a lot of people think that is overstating growth. it is not just commodity prices. it is a week property market,

the lockdowns in shanghai and shenzhen. could more of this happen? all of these things are concerns. japan was hit by higher energy prices. gdp was cut by nearly 1% to 2.4%. let's look at the u.s. gdp for the u.s. only cut by about three percentage points to about 3.7%. that's due to tightening. there has to be a fight against inflation not just in the u.s. but other parts of the world. everyone is bracing for a 75 basis point hike. we have not seen that since 1995. but it could be on the table. charlie evans, the chicago bank president saying today that he does think the rate will have to go above neutral. but he thinks it will bring inflation down.

he would be surprised if it didn't happen. it would be reassuring. some say hiking rates too far too fast above neutral could cool off the economy. when you put it altogether, you've got china's slowdown, the war in ukraine, and this big inflation surge. these are a few of the big threats to the global economy the imf is listing. >> that is why we see the continuation of global bonds reeling. even as a not base case scenario, it is something that investors are paying attention to. garfield: investors in general continue to see no reason to buy bonds. it has been fascinating to watch. there was plenty of talk when treasuries were approaching 2% yield on the 10-year. 2% would start to be the good sort of territory, start buying

treasuries and earn the 2% coupon. treasuries just keep on crashing and buyers keep on staying away. the more aggressive the fed has become, the more unwilling investors have been to buy the dip because it looks less like a dip and more like a fallen value. they need to see to meetings before they get a good handle on what is going on and they need to see some serious signs that inflation is going to come down. monetary policy usually acts with a lag. if you get 50 basis points in may, 50 in july, you are still not going to be slowing inflation down. it's no surprise that investors don't want to buy bonds. >> and jgb yields are capped by

the boj. take a look at this chart on the bloomberg. we have not seen policymakers come out. what are the chances that this will actually happen? garfield: it seems unlikely for the moment. the difficulty is for japan to do this on its own, it needs the u.s. to agree. it has massive foreign exchange reserves. again, it is much harder to intervene and strengthen the currency. you have to take the u.s. dollar reserves and by yen rather than just printing yen.

you would set up another situation where traders could see what you're doing. they can judge how far you can go and they might continue to be quite willing to defend those positions. and also it will emphasize what is driving this is the doj -- boj's policy to keep 10-year yield at 2.5% or below. treasuries are close to 3%, it does not look particularly tenable. that will make it extremely hard for the boj or japan by itself to do much to slow down the yen. haidi: garfield reynolds and kathleen hays with a timely interview. japan -- the head of the imf of

japan will join us to talk about what they can do. shery: take a look at the after hours. netflix losing 200,000 subscribers for the first time in more than a decade. 2 million more will go. shares fell more than 26% at one point in extended trading. disney and roku plunging with them. let's bring in su keenan with the latest and how is netflix explaining all of this? su: they are pointing to rising competition from hbo max to disney and paramount. they are also talking about the sharing of passwords that has taken place for a long time. they are looking at ways to crack on it. the conference call was prerecorded. they also talked about market penetration. in other words, anyone that has an account has already tried it out.

it is really a scary thing for wall street. it was his view that investors would panic. after a decade of meteoric growth, what netflix is saying that they have see the biggest subscriber growth since 2011. the only real bright spot in the entire universe, asia saw millions of subscribers due to popular titles coming out of south korea. the major stunner was the projection of a 2 million drop in paid users in the second quarter. the cfos had on the conference call not to look at that as a full-year event. that they "will grow revenue." they have also zeroed in on the password sharing issue and made it a priority, looking at ways to monetize it possibly as a premium feature where users pay more to share their passwords.

they also said they are open to a cheaper ad-supported description. it is something they said they may never do. and ahead of the call was the mention of huge spending that netflix is known to do for its marquee productions. they are going to slow content spending to protect market. >> the potential for advertising a key takeaway. let's get to vonnie quinn with the first word headlines. vonnie: ukraine's army says russian forces are attacking along the line of contact in the donbass region. ukrainian president volodymyr zelenskyy says moscow launched a new campaign. president biden has vowed to provide more artillery for ukraine. and u.s. and its key allies are continuing to ramp-up sanctions against russia. sri lankan police are said to have killed at least one person

and injured several others when they opened fire on protesters, marking the first fatality since demonstrations began over the country's economic crisis. investors say that they fired live rounds in central sri lanka after tear gas failed. pakistan has appointed a new finance minister. he confirmed his appointment via text message. economic aid, among the officials responsible for steering the nation, dwindling reserves and ongoing protests. global news on air and powered by more than 2700 journalists and analysts. this is bloomberg. >> look -- still ahead, we will discuss the yen as a currency.

it is focusing on high-quality companies with strong balance sheets and -- flow. this is bloomberg. ♪

>> obviously if inflation for some reason began to reaccelerate, i think that would be a cause of great concern. i think that, you know, on a path that included these nine increases for this year by december, on the way to december, you would be looking for any confirmation of the storyline. shery: chicago fed president charlie evans. stocks trading at high valuations against the backdrop of rising inflation and rising rates as well. joining us is the chairman of investments. a great to have you. we keep hearing this term unprecedented to describe the myriad risks we are addressing at the moment as investors. is there a way to sidestep that?

>> we invest in what we consider good companies, strong balance sheets, strong cash flows. and run by management who is very competent and whose interests are aligned with shareholders. we know that that is the best way to protect ourselves. with market coming down, there is only so much protection you can provide your portfolio unless you are short. but the best thing you can do is look for high-quality companies that will do well and have the opportunity to gain market share. so that's what we do. shery: so looking at value and stability in japan as well as korea. belita: we are finding they are very good companies in japan. the problem with japan is that

it has gone to a period where it has not kept up in performance compared to the u.s. or europe. with the ends decline, these japanese companies will be well-run. they are even cheaper than before. and there is this rising tide of increases in dividend, share buyback, and dividend with rebound valuation. shery: you mentioned a cheaper yen. how much is that helping now when it comes to the equity space in japan? and how big is the correlation. these moves are so fast in terms of the weakness. will this add to the uncertainty? belita: there is so much uncertainty with every corner right now. this new spate of lockdowns and china has a huge impact on global supply chains. i do not know where it stops at

this point. it seems to me 1.30 is cheap. we don't try to invest based on making macro calls, but at these prices, many of the exporters -- even though there is in demand products, there is a timely fashion and there is problematic logistics. these companies will do better only when we can see some sort of rotation of the supply chain and global trade again. shery: you would think with a selloff in china that perhaps the stocks there were a good opportunity. but you are actually underweight. why? belita: we have been underway china for a long time because of our investment philosophy. these companies are run by entrepreneurs, typically, that have an interest in minority

shareholders. and their interests are much more political. more employment. we don't invest in that part of the market. there are enormous headwinds against china at this point in time. we came to the year with problems in the real estate sector. we came into the year with population growth already a problem. and that is still a problem. and we might even have the potential of capital outflows because u.s. interest rates are higher. and because of western investors, many of them are looking away from china. now it is china risk. in this lockdown.

it certainly makes a mess of global trade. haidi: always great having your insights. learning what to expect from the markets. get a roundup of the stories you need to know in today's edition of daybreak. terminal subscribers go to dayb . we have plenty more ahead. this is bloomberg. ♪

haidi: we are counting down to the start of trading in tokyo. here are the stories we are watching today. in japan, we are watching the japanese yen extending the longest losing streak in at least half a century. 14 sessions of losses against the u.s. dollar at a 20 year low.

we are watching toyota investing $383 million in four factories across the u.s. to boost production of hybrid vehicles. we are seeing demand for fuel-efficient cars rising. the sandbox is considering raising fresh funds at evaluation of more than $4 billion. it is a platform that allows traders to monetize and trade virtual assets and the ethereum block change -- blockchain. we are also watching the bank of korea expected to auction off a slate of three year bonds and 63 day financing bills. the nominee saying he will support further increases in the benchmark interest rate unless there is a threat to the outlook for economic growth. haidi: let's get a check of the business headlines this hour. rio tinto's iron ore shipments slumped 15% in the first quarter. the drop is due to challenging

operating conditions. total shipments of 72 million tons of about 73 million tons. -- short of estimates of about 73 million tons. asset management has said that they are against backing musk's unsolicited offer. it would be one of the largest leveraged buyout on record if it goes ahead. 8000 employees have backed the tesla factory in shanghai after it close for three weeks as part of the covid lockdown. it is expected to take all day to ramp up production. they have started along with a few assembly lines. coming up next, china provinces support the economy but the promises are failing to impress.

why they are not buying the governments bullish rhetoric. this is bloomberg. ♪

vonnie: this is daybreak: asia. the imf is slashing its global growth forecast while projecting faster inflation it sees economic expansion slowing in 2022, 4.4% in january. >> inflation has become a clear and present danger for many countries.

even prior to the war, it surged on the back of soaring prices and supply the men. many federal banks had moved toward tightening monetary policy. war-related disruptions amplify those pressures. vonnie: boris johnson has apologized for breaking lockdown rules. he has paid a fine for attending the downing street event and say there will be further fines. >> let me also say, purely because it explains my previous words, that it did not occur to me then that gathering in the cabinet room on covid strategy

could amount to a breach of the rules. i repeat. that was my mistake and i apologize for it vonnie: unreservedly. [indiscernible] up from 29% in august. the results show continued improvements from historically low rates with the institute blaming covid. global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie quinn. this is bloomberg. haidi: [indiscernible] failing to impress investors. this as a surge [indiscernible]

what are we hearing in terms of these overtures from the government and from authorities, and why are they falling on deaf ears? guest: we have had a flurry of announcements in recent days. it ranges everything from mortgage relief through two ways to get loans there making clear the authorities can beat the growth target for this year. the market is not buying it. not seeing any broad-based rallies we are seeing the pboc being quite reserved, and at the same time, we see investment

houses downgrading their forecast to below 5%, the bank of america talking about a bearish scenario. even it all stacks up to how much work the government has to do to keep the economy on track, that's what it's keeping a lot of investors unnerved. shery: what are we expecting? they did not move on the medium-term lending facility. is that also why there isn't that conviction that china will come to the rescue? guest: the message seems to be the authorities will put support into the economy, might have anticipated a downturn because they are being targeted. those measures they are talking about, they are really targeting pockets of the economy to

deliberately inject cash, especially in the small and medium-size sector. there is support for farmers, logistics, clearly having to pull up their sleeves, and we know it's coming on the fiscal side, there will be more spending, borrowing. nonetheless, despite the pressure on the economy, it's something of a relatively disciplined policy response so far, that's why expectations remain similar. shery: our chief asia economics correspondent. the imf has cut china's gdp growth estimates for this year to 4.4% lower. we spoke to the mission chief

who said it's time for beijing to step up support. guest: the forecast has come down quite considerably. we're down to 4.4%. because of the factors you just listed, the real estate, ramifications of the ukraine war, the domestic covid situation could get worse. these are all drivers of the forecast and there are risks going forward. >> asymmetric then. you are not looking for a big rebound. it stands out when you talk about china's slowdown. white this point in time is it so important?

guest: we have a lot of headwinds. we hope that policymakers accept the challenge. su: does the pboc need to do more? we got the rrr cut, did not get the lending lowered, what does it do to provide liquidity or credit if they can't go shop? if workers can operate because they can get to the factory? guest: good question. the pbc has acted. we have heard communications for

structured policy support going forward. it's up to fiscal policy to step up. shery: we have seen a big step up already as this chart shows, i wonder how much they can do given at the same time it involves a lot of leverage, especially from the local government side of things. guest: it is correct that the economic circumstances are helpful to provide additional fiscal support. if you do it right, there will be less spending to achieve the same growth support. household support is critical, households are affected most by the covid situation, we know

that the recovery of consumption has been fairly weak throughout the last 12 months or so. i think that's where fiscal policy comes in. haidi: that was the imf china mission chief. coming up next, a big interview with the imf japan mission chief, discussing whether the boj needs to change its policy direction. this is bloomberg.

shery: take a look at the currencies base. not a lot of movement on the dollar. this is after it rose to the 2020 high, it's felt against the chinese yuan and japanese yen, especially the yuan which is fallen to the weakest level in six months against the u.s. dollar, and this might not sound significant, but given the yuan, it's a pretty big deal. especially we are seeing these concerns about growth forecast. we are seeing the aussie rally for a second session, we heard from the rba wage growth could be accelerating the timing for its first rate hike. the one we are focusing on that's not moving, the boj, the

weakness of the japanese yen. we have not seen such a long losing streak. given the boj is not budging when it comes to monetary policy , we might see even more weakness. haidi: looks like we are getting close to 1:30. the last time authorities strengthen the yen was at the height of the asian currency crisis in 1998. we will bring up that chart to show you the brief journey back into history to see what happened. let's get over to ruth who will give us more analysis on this. it seems inevitable we will continue to see the weakening, what sort of intervention could we see? are these measures sustainable given we know the fundamentals are working against them? guest: absolutely.

great question in the sense we are already seeing daily interventions by the bank of japan officials and finance minister and they have been trying to slow down the dissent of the yen. is that taking effect? no. markets and investors are so sure and the one-way bet that the yen should go down because of the policy divergence with the federal reserve compared to the dovish stance. can there be more intervention ahead, the answer is quite possibly yes, but until then there is no line in the sand. shery: especially when you look at the adx, the measure of trend

strength showing you with at the highest since the 1970's, i believe, what are investors saying we could see the weakest level? guest: goodness, anyone answering that question would be making lots of money. to put into perspective, 130 was the level spoken about last week as a level that could be reached within weeks, within 72 hours we're seeing it fall, now it just shows you have ferocious the decline has been. we have analysts from the bank of australia and other companies saying there is no line in the sand we can draw, at the moment you have mega bears saying 150 could be next. shery: the senior ethics recorder.

let's talk more about japan, because the imf downgraded its forecast for the economy to 2.4%. let's cross over to washington where kathleen hays is standing by with our next guest. kathleen: thank you. with us now is the imf mission chief or japan, the man responsible for making that's romantic cut, great to have you, great to see you in person. it's a big reduction. presumably has to do with commodity prices, energy prices. the headline inflation rate, people are complaining about it. how big of a threat is this? is this a one-time response to something it will go away, or is

this a genuine weakening trend? guest: thank you. just to explain, it's a fairly large downgrade, but it's actually not fully related to the developments in ukraine. regards for omicron and the estimates about the global supply chain disruptions will take longer to resolve. that accounts for about .4 of the reduction, and the development in ukraine, the war in ukraine accounts for .5 percentage points of the reduction, that's a mix of commodity prices, mix of weaker global demand out of europe, and finally financial market volatility. kathleen: when you see this extreme weakening, the currency

stuck in this range forever looking like they could pass 129, could get even weaker. what sort of signal is that sending? what does it mean for the economy, what does it tell us about the economy? ranil: we view the weakening so far in line with what we see as some fundamental developments. one is rising commodity prices. downward pressure on currency, import commodities. this is how monetary policy could occur in key central banks, particularly the united states. you have this perception that the bank of japan maintains its accommodative stance when we see the fed and other central banks

tightening. that is probably what we have. in terms of impact, it's kind of a mixed impact. goods and services, exports, or earn revenues abroad. on the others there are companies that import, and household that will feel higher prices, and they will be more harmed by the depreciation. kathleen: what did you make by these signals, words being spoken, the finance ministry is considering intervening currency markets to put a floor under the yen, maybe even get it stronger? ranil: i am not aware of any specific floor, i think the previous discussion with that, we do see, we will have to see

how this evolves over time. shery: do we need to get back to talking about structural reforms? ranil: yeah, once the near-term issues are resolved and related to covid as well as the impact for what is happening in ukraine, the longer-term issues are related to the structural changes, two things the japanese

government is focused on our digital investments, digitization of the economy. in addition, green investments. that's positive noxious for japan but globally. then there are longer-term issues as well with things like labor participation, women, the elderly and other issues related to longer standing reforms. shery: i'm getting breaking news japan. exports rising 14.7% year on year, exports rising 17%. when it comes to shipments, missing expectations. when it comes to imports rising more than expected, not surprising.

31.2% year on year. this is leaving the adjusted trade balance down 15.6% from february, trade deficit coming in coming and that -- bigger than anticipated, little bit of easing from the previous month. we are seeing exports missing expectations, imports rising more. imports remaining elevated given the rising commodities prices. ranil: in the short run, you

could have a weakening trade balance. on balance, the yen depreciation should help exports over the longer-term, and marginally reduce imports. we think the yen depreciation does help. of course, japan also has an income surplus. that can benefit from yen depreciation as well. overall, it remains in surplus. kathleen: going back to the bank of japan, it ties closely in my mind with the weakening yen, the fed is tightening. the curve control, does this make sense, should this continue? ranil: that makes sense from a

domestic perspective. basically underlying the need to maintain stimulus is to avoid to early exit from using policy, and that is based on -- when you look at underlying inflation, we think of core inflation in the united states, excluding fuel, food, mobile phone chargers, underlying inflation in japan is running only at .5%. it's pretty far from the 2% target that the boj would like to achieve.

kathleen: at one point the imf did a report about targeting five year yields, some people think this will change once the governor term is up and someone replaces him, is yield curve control something important to maintain? ranil: it is, as part of the unconventional monetary policy strategy. globally, we have seen quantitative easing and has been there for a long time. the reason they use yield curve control was actually to have relatively low yields across the yield curve. that is why we think it's

necessary for japan to maintain some form of control. kathleen: no plans of changing it. certainly not now. i'm going to send it back to the new york studio, so we can let this all sink in. we just heard some interesting thoughts on japan and what we can and cannot expect in the future. haidi: the intervention, watching for anymore verbal remarks or market intervention from japan. let's take a look at fx, and of course we have been talking at length about the yen, 130 interview, it feels like the fundamentals of the carry trade, yield differentials will

continue, going into a bit of oversold territory. the u.s. dollar, little bit of weakness. this is bloomberg. ♪

shery: welcome to daybreak asia. haidi: asia's major markets have just open for trade. our top stories this hour. bond selloffs, china covid fears. the imf its cutting its mobile growth outlook.

plus, netflix plans major changes to its service model after losing subscribers for the first time in a decade. shery: the nikkei and topics gaining ground, focus on the japanese yen which is weakening against the u.s. dollar. we have not seen such a long losing streak since bloomberg has kept data since 1971. talking about a 20 year low, the lowest since, trade deficit number, winding more than expected. as we have missing expectations while the import got inflated given rising commodity prices could weigh on the even more. we're looking at the 10 year yield which has now opened above that 25 basis point level, we know that is the upper limit of

tolerance for the boj, and about level we have seen this thank come in with purchasing operations and that has led to more weakness, we are watching with happening in the yield space. we are watching the korean won, lost ground for three consecutive sessions, we are now seeing it at the 1240 level, weakness for the south korean won given we have strength for the u.s. dollar at 20 year highs, little bit of pressure for the kospi, reversing gains we saw in the previous sessions. haidi: we are watching to see, given the market is close to wiping out as losses, trading at the highest level since early january when it comes to stocks.

take a look at new zealand, seeing gains of 3/10 of 1%, watching the aussie and kiwi dollars, both are seeing support. the aussie yield is climbing. we are also seeing bond moves as well, treasury taking it, real yields turning positive for the first time since 2020. this as we see global bonds continuing to real from investor expectations that inflation will continue to take hold and banks will have to happen faster and more aggressively. we are seeing the headline 10 year real yields turning positive for the first time since 2020. also taking a look at the other

piece of the puzzle when it comes to the global economic outlook, the lockdown in china, 18,000 local cases for tuesday, in terms of the headline case number, that is down from the peak of 27,000, lower than yesterday. we also saw seven deaths reported. we are seeing some signs of a return to normality, factories being pushed to reopen, 8000 workers at the tesla factory in production is starting to ramp up. shery: let's bring in our next guest. head of equity research. it's always good having you with us. as we were just starting this program, we saw the real yield ends 10 year treasury turning positive, we have seen the yields premiums in asia fading,

what does this actually mean for the equity space? guest: it means continued economic policy by the fed, sometime in may and june, that's never a good news. we have to brace for impact. it also means continued outperformance, there are note telecommunications and utilities. i would add to that basket the yield like hong kong and korea.

it's a narrow universe that investors have to choose from. shery: where does china placing your calls between being defensive and proactive in positioning? we are seeing the chinese yuan weaken against the u.s. dollar which we have not seen given the resilience during the pandemic. guest: china is a tricky call. we have been constructive on china over the past quarter, and we have retained overweight for now, but in the near term, we have to watch out for several key variables like consumption, services, several areas of services have dampened quite significantly as a consequence of covid related restrictions. finally, unemployment.

in the case of china, one has to focus on high dividend yield stocks. there were quite a few of them in the energy and financial space. one has to focus on tech hardware, and one could also focus on being discretionary, but only those that have the ability to pass on cost increases. have to be very selective, and careful sector selection. not would win the day for investors. haidi: if you look at netflix,

is this a broad reversal? guest: as we gradually move out if the pandemic, this was in a sense supposed to happen. individuals would gradually move out of the so-called service specter consumption. that was enabled by staying at home or remote working. the flipside is there are some other areas of consumption which could benefit as a consequence of with happening. the classic reopening plays. haidi: you talk about the narrow universe of options for investors which i find quite intriguing. does that mean you are keeping

some powder dry? guest: under the current circumstance it will. we just allocate it across equity. if someone is a broader asset allocator, i think that may be a big idea. we see continued volatility in equities as an asset class over the next one or two quarters while the monetary policy normalization or rate increases have possibly been digested to a large extent by the markets. we must take into account the upcoming episode is likely to be significantly more severe than the one we have seen in 2017 to 2019, both in terms of the base

and length that's likely to occur. that would also put pressure on the funds that are allocated globally into equity, and therefore, particularly relatively highly valued equities, which are the so-called long-duration equities, the growth we talked about. there would possibly be more at risk than they have ever been. haidi: always great to speak with you. k2 vonnie quinn. vonnie: thank you. ukraine's army says russian forces are attacking along the line of contact in the donbass region. lome zelenskyy says moscow has launched a new campaign. president biden has vowed to provide more artillery and

allies have agreed to continue wrapping up sanctions against russia. the imf's flashing global growth forecast while projecting faster inflation on russia's invasion of ukraine and renewed virus lockdowns. it sees economic expansion slowing in 2022 down from a forecast of 4.4% in january. >> inflation has become a clear and present danger. even prior to the war, it surged on the back of commodity prices and supply demand imbalances. thanks have moved towards tightening, more disruptions amplify pressures. vonnie: police have killed one person and injured several others when they opened fire on protesters. officials say they fired live

rounds in sri lanka after tear gas failed. pakistan has appointed a new finance minister. if confirmed, the economic aid will be among officials responsible to steering inflation and ongoing street protests. global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie quinn. this is bloomberg. haidi: let's take a look at this breathtaking turnaround when it comes to real yields. take a look at what happens when it comes to the 10 year treasury turning positive for the first time since 2020. this is designed to protect investors against inflation, price increases. it rose above zero for the first time in over two years, 0.008.

just as recently as march, we saw that below -1%, that was before the war in ukraine fanned inflation expectations, and that reversal being driven by the hawkish fed signaling they will raise rates swiftly to dampen inflationary pressures. we have seen inflation-adjusted yields sitting in negative territory for two years, they have been such a key pillar of support. all of that book be changing. shery: the concern are these funds will flock to the bond space, but there is no alternative. still ahead, a firm has set up a facility with goldman sachs. don't miss it. netflix takes a tumble. there are plans for lower-priced

service with ads. details ahead. this is bloomberg. ♪

>> allowing consumers who would like to have a lower price and advertising tolerance can get what they want, and it makes a lot of sense. that is something we are looking at now. shery: talking about a plan for an and-supported tear. we have seen netflix plunge more than 25% given they announced they lost 200,000 customers in the quarter, first decline in the decade, expected to lose another 2 million in the second quarter. su: one of the surprises was the use of ads for lower-priced

membership, this is something they said they would never do. a complete about-face. they're also going to crack down on the use of sharing of passwords, something taken place . analysts had to submit questions within advance, the results stunned investors. investors think they have reached mature penetration, in other words, everyone who is going to subscribe in most countries has done so. as one fund manager told bloomberg, they are hitting a ceiling. investors are going to panic which is why we saw shares drop. you looking at the bloomberg which shows the explosive decade of growth.

it comes as a surprise, add on the projection of losing another , the cfo had to point out, this is not a full year event, the promise we will grow revenue. netflix has zeroed in on the path, making it a priority, looking to monetize it. pay more to share more. they are going to slow content protect. haidi: asia was the only region for netflix to be a bright spot. su: it means the key growth story is for netflix, they added a million subscribers, downloads up 8%.

then you have india where the downloads are up 50%, a reflection of a lot of incentives to bring india subscribers in. we should point out a pack is a good growth story, still the least penetrated market in terms of growth, the rest of the world, netflix has reached saturation when you layer on all of the other streamers that are out there from disney to hbo plus to paramount etc.. it's incumbent on netflix to come out with the rear -- real viral hit. that's what analysts were concerned about spending. they're spending an awful lot of money. the crown -- projections cayman

at a disappointment. haidi: take a look at some korean production studios after that earnings disappointment from netflix. these are some content producers seeing downside to the tune of over 5%. a lot of these names, ones that are in postproduction and agencies represent, actors and performers. some other moves when it comes to the deals space in australia,

there is a bid for ramsey health. we're also watching rio tinto, missed when it comes to iron ore shipments falling and other operational delays, still fairly buoyant. lots more to come. this is bloomberg. ♪

>> [indiscernible]

>> zero-tolerance lockdowns are overwhelming. >> there must be sweaty palms behind the facade. >> construction is a little bit disconcerting. >> we could stay cautiously optimistic. haidi: some guests talking about the challenges for china's growth targets. we are tracking the fallout of the global supply chain crunch. a thousand employees are back at the tesla factory in shanghai. it could take four days to ramp up production. manufacturing has started along with assembly lines.

[indiscernible] raising concerns over already tight supply. shery: take a look at the soft commodities space, seeing capitulation after we saw the huge rally especially when it comes to sugar. we're seeing the downside when it comes to arm shoes. that was the most since 2010. we have seen the recent rally in these commodities given tight supply, but the market was focused on the weather issues, droughts, the imf really back

growth forecast, not surprising we are seeing downside. bloomberg terminal users can read more about those stories. haidi: take a look at the yen. the huge pace of yen weakness continues as we see the japanese currency barreling towards 130, dollar-yen trading stronger for a 14 straight day. this historic front of losses showing no signs of letting up, the rise treasury yields, 14 consecutive sessions as traders bet on further divergence. the yield differential, carry trade playing a part. this is the minneapolis fed talking about inflation, he says

inflation is much too high, we are continuing to wait on what other comments he has. we have heard that inflation is so hot right now, 75 basis points could be on the table. lots more to come.

haidi: we are getting the australia leading index, this is what we are seeing, the index rising, 0.35% month on much in march, and we do see the prior contraction but 0.1%, that rise of 4/10 of 1%. this is a six poem -- annualized growth rate, it indicates the likely pace of economic activity and growth relative to the trend

of three to nine months into the future, where's indicator, all of this as we head into that may election with campaigning underway. we are seeing robust gains today, 7/10 of 1% higher and a fourth straight day, the index a race its losses. shery: hawkish comments from the rba bringing forward the timing of the first rate hike, and hawkish comments from the fed is being felt across the u.s. bond market space, we are talking about 10 year real yields

turning positive for the first time in two years, really making a difference in showing the clearest sign that the fed's hawkish shift is really being felt across the interest rate space. we have seen real yields rising about 100 basis points or more since early march, bond market really moving away from stocks and that could have ripple effects towards the broader markets. let's bring in our chief economics reporter, because we are now seeing implications for rate divergence, ruth, let me start with you. the japanese yen continues to weaken, what are we expecting from policymakers? >> absolutely.

the yen can seem to catch a break. it's a one-way macro to peak selling the yen. we are talking about the peak, near that level today. 129, heading towards 130. the more intervention ahead through bond purchases. haidi: the other big news story is this breathtaking turnaround when it comes to real yields. what are the broader implications if we see the sustained rise? >> absolutely. rising yields have been the force.

this will have ripple effects without markets, equity could be threatened, bonds could look more attractive. renewed selling pressure. all of this has spelled impact across asset classes, as it stands out, it's the u.s. dollar, it's obviously risen so much. haidi: what do you think of that, put into context that the pboc is going in the opposite direction? >> absolutely. >> my apologies. we are seeing that in china, outflows in february and march, divergence in interest rates with china going in the other.

all of the signals are the pboc will continue to ease. it's pretty micro measures. pressure on the economy, investment banks unlikely to meet growth targets, more support and china, even if it's not broad, because there was easing, that's a different story. haidi: we are hearing from cash carriers talking about inflation, how inflation is much too high, but also saying -- it's an unprecedented balancing act for policymakers right now. >> into interesting hearing those comments. these adding a note of caution compared to the recent fed.

we had the overnight chicago fed not just getting to neutral but push beyond neutral, real tightening in the economy. we have the possibility of going to a 50 basis point high, possibly 75. wait a minute, some economists are making the point that the world economy is shifting from the inflation story to a slowing growth story. we have seen that, at some point, one will have to see the inflation story. haidi: great to have you both. let's get you to vonnie quinn. vonnie: thank you. boris johnson has apologized to the u.k. parliament for breaking

lockdown rules he devised. johnson has already paid a fine for attending the downing street event on his birthday and may face further finds into other gatherings. >> let me also say, not by way of mitigation or excuse, but purely because it explains my previous words, it did not occur to me then or subsequently that a gathering in the cabinet room just before a vital meeting on covid strategy could amount to a breach of the rules. vonnie: the pass rate remains higher than last year.

in february, 44% [indiscernible] the results show continued improvement in historically low pass rates with the institute blaming covid disruptions for the decline. millennials appear to be saving less than retirement them bloomberg's. the study found millennials are more likely to invest in -- many worry they won't be able to retire. 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: [indiscernible] pakistan has appointed a new

head of talks with the imf, our asia economy editor joins us now. reporter: good morning. officials from sri lanka and pakistan will be having talks with the imf this week. the main goal for these guys will be to try to unlock funds. for pakistan, they have funds waiting for approval and disbursement, but a political gem up in some policy decisions have pause that. sri lanka is in a much scarier position right now. they are in washington now to try and work on some sort of agreement to help them get more

imports and start servicing debt. shery: investors are warning pakistan is not that far off as compared to sri lanka. what are we seeing in terms of pakistan measures in order to get more funding from the imf? reporter: good point. there in the same neighborhood, they have the first and second worst inflation in asia, dealing with windowing foreign reserves, higher prices, pakistan is in a slightly higher situation. they require fiscal discipline priorities, and his successor

has common event has not come in and announced higher minimum wages. this will strained the budget and raise eyebrows. shery: two economies facing major challenges when it comes to financing. coming up next, a hong kong fintech announced the results of a series a funding round. we will discuss it with a negotiator. this is bloomberg. ♪

haidi: $250 million asset security facility with goldman sachs will allow the company to bring -- bridge capital and asia, engaging in cross-border e-commerce. we're joined exclusively by --

great to have you with us. tell us how you intend to use the funding. guest: delighted to share with you this that we have just secured. we analyze data banks would not have rather than financial. it helps us provide liquidity to smes. we can conclude that since the inception, we have devised $600 million of liquidity toward 7000

merchants. we've saved $4 billion, and we are terribly excited to support them further with funding we have secured. haidi: how does the covid zero strategy, covid lockdown in china affect the demand for liquidity? at the same time,, they are also not seeing the level they would prior to covid? guest: rising prices, we are further away from covid in china, these changes in the

economic environment, opportunities, optimizing cash flow, the really place to our strengths. being able to provide the capital necessary for these businesses to survive. shery: access to data perhaps thanks don't have. guest: it's our proprietary credit model, obviously the product continues to support these smes, the finance cap is $1.7 trillion. this is a substantial market for us.

it means we are in a strong positionre looking forward to continuing our development, products in the market we serve and start to expand a collaboration with more partners , payment gateways, and we also have our eyes set on the process , further good news. shery: tell us about those partnerships. my understanding is you are working with alibaba and others. guest: that is correct.

we coexist with the platform providers, our strength is supporting the working capital needs of these smes. if you look at the market we are operating in for greater china, 42% of retail sales, mann compared to 21%, it's a material opportunity for us to capture more market share. haidi: great to have you with us. let's get you a quick check of e headlines. sources say private equity firms have ruled out financing elon musk's takeover bid for twitter. another company said it is against the offer of $43 billion. it would have been one of the

largest leveraged buyout on records if it goes ahead. the board of a start up is said to be considering replacing its ceo after an investigation into the firm's accounting practices. around 8000 employees are back at the tesla factory in shanghai after the plans closed for around three weeks. it's expected to take four days to ramp up production. the manufacturing of batteries and motors have already started along with a few assembly lines. shery: we are continuing to see the latest developments on the pandemic, some of the parks we have enjoyed during the pandemic in the office may be ending, especially for goldman sachs. they have just wrapped their

free lunch perk. they offered free lunches during the pandemic, they are no longer doing that. goldman has been pushing for a return to the office, they are transitioning back to pay for meal service for breakfast, lunch, later this month, they are saying they are boosting the stipend out of hours to $30 from $25. really interesting to see these latest moves to bring people back into the office, because it seems when it comes to the latest survey employees -- haidi: take a look. they're pretty damaging. it looks like 35% of nonexecutive employees are in

the office five days a week. 19% of executives can say the same according to future form. the share of employees making the commute say they would like to have some flexibility, nonexecutive employees say they have less of a work-life balance. that disparity is starting to grow. next, china promises to support its economy but promises are falling flat with investors. traders and investors are not buying the bullets rhetoric. this is rhetoric. -- this is bloomberg. ♪

shery: china promises to support its economy but are failing to impress investors as lockdowns -- let's cross to the chief market correspondent. we have long time rates being announced, the expectation is for no change. broad-based easing getting -- again. reporter: exactly. even if the lpr is lower, that would put the owners on chinese banks to increase lending and make lending cheaper, even if funding has not been made

cheaper by central banks. squeezing the margins in the financial industry. the key thing is that people don't want loans. there is nothing to buy, lockdowns and the biggest city, making funding cheaper, it's not sufficient which is why markets -- it's not that they are not impressed, they don't think it would work. the big issue is how far as china willing to go with covid zero, how far, how much damage are they willing to take before the key need meeting in november where he's expected to take a third term? that is the key risk. haidi: when it comes to a

potential recovery, is there any indication which sectors might be slow to recover? still ongoing when it comes to property, for example. guest: we saw some news and local media, more easing. the evening has been targeted, making it easier to fund themselves, but the key thing is the only measure we had out of china was a pledge, a promise to make things easier for the sector. still not much of a follow-through from that they promise that spurred those gains, the short squeeze in march. there needs to be a

follow-through there. any indication consumption is improving -- haidi: right. that is it for daybreak asia. market coverage continues, the opens in hong kong, shanghai, shenzhen. ♪

marc: our job is to produce return. out of misfortune comes opportunity. if you look at the history, 36% growth, 26% net return. we have done well. ♪ david: marc rowan became ceo of apollo global management in march 2021, 31 years after he cofounded it. marc: this is a job you learn. david: he never