haidi: a very warm welcome to daybreak australia. you're counting down to asia's major market open. shery: good evening from new york. the top stories this hour, the fed warns high inflation and geopolitics are clouding the outlook for growth. the san francisco fed president says the central bank should raise rates expeditiously to neutral by the end of the year. haidi: u.s. stocks swing as treasuries rally with the goring

-- rate hike better overdone. shery: tesla tops estimates thanks to strong demand for electric vehicles but warns supply chain issues will persist for the rest of the year. we are seeing u.s. futures rebounding, up .3% after we had the s&p 500 swinging between gains and losses. we are talking about really finishing that'll change -- little change. but it was a mixed picture. we had a very bad day for big tech, being pulled lower by netflix which lost 35%, the worst day in a few years, since 2004, given they saw their first subscriber decline in over a decade. we have a treasury rally though in the 10 year yield falling towards the 280 level. really interesting giving that money managers are factoring in the potential of peak inflation after u.s. real rates turned briefly positive. we are seeing crude prices in

the asian session continuing to extend gains, up .3%. we had seen edge slightly higher. we have seen of course the russian oil ban coming from europe, not to mention we also had u.s. inventories dropping very sharply. but right now after hours we are following those big moves, especially after we got those results from tesla topping on the side of sales and profits. we are seeing those gains. united airlines also rising, given they are now seeing a return to profitability in the second quarter. travel demand is increasing. although alcoa sinking because we have heard aluminum shipments fell. there are concerns about the potential demand in the future, not to mention that we are seeing these concerns about global growth being slashed consistently from the imf and world bank as well. it was really interesting to see that rally. you have the u.s. real yields briefly positive after that,

treasuries rallying because many money managers now from bank of america thinking that perhaps that round and treasuries has gone too far. bank of america now saying the bonsall up has gone too far, the 10 year offers an attractive level to buy. they are calling this a compelling long, although i have to say we saw the 30 year yield the below 30%. short a majority yields not so much, given that of course they are pricing in a more aggressive fed path. haidi: but really, this barometer of rising real yields, despite it being just temporary in yesterday's session, but this really signaling to a lot of analysts that this is a turning point when it comes to the global markets rally we have seen and now potentially heading into a more difficult part of this market dynamic. it is crucial when it comes to funding for corporate, but certainly if it upends the playbook there are always

winners and losers print some of the losers we talk about the impact to high-priced tech for example. tech heavy markets are going to be seeing that outsize impact. on the other hand if you take a look at asean stockmarket, there is more exposure to value, to commodities and energy. some analysts say that could be a way to try and hedge that risk. we do have breaking news. to and fro when it comes to domestic mandate for travel in the u.s.. the cdc now says the travel mask rule is still needed. they are setting up for an appeal by the biden administration. they say they will ask the department of justice to appeal the federal court ruling that struck down the ask mandate for travelers. that now sets up that legal battle. they say the rule is still needed. so we continue to watch the legal tussle now that the mask

mandate debate finds itself when it comes to planes, subways, trains and the like after a federal judge in florida struck down the mandate monday. let's look how asian markets are shaping up, particularly as we spoke about the real yield rising risk for some of these tech heavy markets. of course we have already seen that impact when it comes to the netflix effect. a lot of media and tech-related stocks in this region. it is looking pretty positive as we head into the start of trading in sydney. still trading at the highest since early january. very close to raising -- erasing its losses for the year. seeing an upset of about .3% when we get to the start of cash trading. mostly gained despite the s&p 500 ending little change. bhp out with quarter production numbers.

chicago nikkei futures looking pretty positive, and we continue to watch the yen after it has come down a little from the potential it had yesterday to cross 130. shery: still weakening. that is really a phenomenal string of losses we are seeing for the japanese yen. but i digress. let's turn to the fed's latest survey showing inflation and geopolitics ramping up uncertainty over future growth, emphasizing the debate among officials over how fast to raise rates back to a neutral level. let's bring in our global economics and policy editor kathleen hays and editor andrea popovic. give us some kid taken -- give us some key takeaways. kathleen: the beige book is put out before enteral -- every federal reserve meeting pit may 5 is the next one. signaling on future hikes. this covers the six weeks through april 11. it is an auto evidence from the

12 district banks. it did say that high inflation and geopolitics are clouding out but importantly they said it shows the economy expanding at a moderate pace since mid february and bloomberg economics points out when you look at the details that shows more than just moderate optimism about the economy. labor demand is strong. hiring is only held back by the lack of workers. inflation pressures remain strong could manufacturing seeing spikes in commodity prices pit consumer spending accelerated, aided by dropping covid cases. all of that is good. so there is this uncertainty about ukraine of course, inflation come a how high it will go. is this going to slow down the fed at the next meeting? not if you look at mary daly, one of the former devs -- doves at the fed. she was speaking and she said she sees a really solid case for 50 basis point rate hike in may. she says it is putin to get the key rate to the neutral rate about 2.5% by years' end.

charlie evans, also considered a dove. he said the rate hike could be frontloaded. 50 asus point hikes at the next two meetings and 25 basis points thereafter. when the doves are calling for potentially 50 basis point rate hikes, two in a row and continuing to hike at every meeting, the doves are getting pretty hawkish. no matter what the beige book says, the fed is certain and has to go ahead with rate hikes. haidi: powermic is per -- markets pricing all this in? andreea: look, the move in real yields because of the expectations of aggressive fed interest rate hikes are really making investors reassess what we have seen for the last couple of years coming out of the pandemic. he mentioned before the winners and losers. the clear losers here are the tech stocks. we saw how they declined last

night. these are companies with very high valuations. but higher real yields are really going to impact that. at the same time you had those earnings from netflix weighing on the technology sectors. amongst winners, southeast asian stocks skewed more towards value and commodities. also treasuries, we saw investors last night bank of america mentioned that maybe this is time to start looking at coming back into bonds and that helped that rally we saw in treasury. another beneficiary, the u.s. dollar, higher u.s. rates. this is still the reserve currency. this is still where investors are going to park their money. and negative for emerging-market currencies. we saw the yuan fall, we saw the yen -- not emerging-market

currency, but that divergence for central banks that are not going to be as aggressive on lifting rates as the fed is. so this move in real yields is something investors are definitely keeping an eye on right now. haidi: thank you. tesla has reported better-than-expected first-order results, really supported by strong demand for ev's. but it is warning of supply chain challenges that could stay for the rest of the year. let's find out more from ed ludlow. pretty good commentary overall but the supply side could be sticky. ed: and the supply chain issues are broad based. they are talking materials prices in particular rising quarter on quarter. they saw high prices in the first quarter. that is passing through to the second quarter. there is still disruption with semi conductors and of course in shanghai which is so crucial to the global production footprint the government induced shutdowns impacted production. even so, such a significant beat

on the top and bottom line. they do have the lever of raising prices to protect margin. margins were incredible in the quarter when you consider inflation and you consider the cost input headwinds. they seem to have managed it really well. shery: and of course analysts were really keen to find out what is happening in china, especially with the shanghai lockdown. what have we learned? ed: it was disruptive. there were periods when they cannot produce. they restarted fully in the last few days, musk confirmed. but he is super bullish. overall they still see growing annual production by even 50%, and shanghai is at the heart of that. if they pull the rabbit out of the hat, musk's words, shanghai could set another record this quarter despite the shutdown. he seems super confidently third and fourth quarter, shanghai will drive the volume growth of production. haidi: most analysts we speak to are really bullish because of the robo taxi potential. ed: this is the big surprise.

the tidbit in the call. no steering wheel, no pedals, a genuine robo taxi is in the works that tesla. it will go into volume production in 2024. that is all we know. musk was asked about it in a follow-up question and he said i do not want to jump the gun because he has come under criticism of course about overpromising and under lid delivering in the past. all we know is the robo taxi is coming and in the meantime they're working hard on the underlying software and artificial intelligence needed to power its. shery: very exciting. let's get over to vonnie quinn with the first word headlines. vonnie: the biden administration is expected to announce another $800 million in weapons and support for ukraine. sources say the money will come from the president's authority to arm allies in an emergency. this is the imf calls on nations to provide grants and donations to fill a $5 billion among financing aid to ukraine after

russia's invasion. >> priority is to make sure that there is support to fill this financing gap in ukraine over the next three months. let me stress the $5 billion is to keep the economy functioning. it is not to meet the construction needs of ukraine that are going to be huge. vonnie: the u.s. rick perry -- the u.s. treasury secretary have walked out of a g20 meeting after russian officials began speaking. the fed chairman jerome powell, ecb president christine lagarde, boe governor, and the ukrainian finance minister were among those who left or turned off their cameras when russian officials joined virtually. russia is on course for its first expert -- external default in more than a century. the bridge to the terms of two bonds after it paid them in rubles instead of dollars.

goldman sachs and jp morgan are among the groups saying the failure happened earlier in april. russia could still avert default if it pays in dollars before the grace periods ends may 4. chinese authorities say they need more time to figure out what caused a chinese jet to plunge into a hillside last month killing all 132 passengers and crew. officials confirmed black box analyses are ongoing. the scanned details to criticism on social media in china and suggests investigators are being particularly cautious about the probe and public disclosures. 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: still ahead, we discussed the imf's outlook as lockdowns disrupt supply chains. first, optimal capital says buying the dip in gold will continue to benefit investors as the fed tightens.

we will discuss that next. this is bloomberg. ♪ bloomberg. ♪

>> inflation is much higher than what they were dealing with in

2019, now it's clearly through it. but they will bring it back down. it will come up and down if they have to. it is not like they will just wait it out. they will have to move higher than what people may feel short-term rate is what the economists believe, and i think the data shows it. shery: the bank of america ceo there. let's bring in our next guest who says there is a very low probability of a soft landing for the fed. with us now is frances stacy. good to have you with us. right now we are seeing spot contracts pricing in a 50 basis point rate hike in each of the next two fed meetings. how much of your concern has to do with the pace of the tightening right now? frances: what i find very interesting is when i look back to the previous iteration of tightening, they stopped doing the asset purchases in october of 2014 and they did not start lift off until december of 2015. and so all of these things have lag effects and they gave almost a year for the system to absorb

the reduction in asset purchases. that is actually a move in tightening because money is being drained out of the system with debt service pot -- service constantly. to take the buffer of the constant asset purchases away is like taking away an income. so there is a recalibration that occurs, and we are really not seeing that recalibration until we have left off, and now we are already talking about balance sheet reduction. in addition to that, the last iteration they were only able to take $650 billion off the balance sheet before we had a liquidity issue in september of 2019. when you compress all of those things would lagging effects, you have more room for error. shery: we had this huge drop in netflix just because they missed earnings estimates. is that is something we are going to continue to see, the tightening and financial conditions becoming more challenging? frances: right. as real rates tick above

positive as they did briefly today, the cost of crazy as far as valuations go is over. it is not free anymore. and when you start looking at that, then investors are not going to tolerate these high valuations. and so what happens, you pick winners and losers and then you return to those balance sheets. of course we saw interesting skewing today with netflix so far to the downside and then the big surprise with tesla after the bell. so, yes, you are going to pick winners and losers and people are going to get more picky, and it is not just going to be, oh, it is a tech company and it is stay-at-home and everyone loves netflix. you can see investors punished their miss pretty drastically. haidi: precious metals is one way you quite like to add some diversity. take a look at this chart, which shows quite an interesting correlation which we do not usually see between what we are seeing in the u.s. dollar and what we are seeing in gold. does the direction of the dollar and a of fed tightening really inform your positioning when it

comes to silver and gold at the moment? frances: it is interesting because gold and the u.s. dollar were haven during the covid selloff. i think when everything is breaking down and the system is being reduced in size when you think about the tightening that is occurring, those are both haven assets. i think in the short-term the dollar is overbought and i think gold is obviously pulled back a little. i would be buying the dip in gold. i would not buy the dollar right here. i think you will see less short-term. there is a divergence. but you will -- the lagging tightening effects come into the system and the financial conditions get tighter. right now the financial conditions are not meaningfully tighter and when you look at the causality behind that, consumers are taking on more debt. credit card debt is coming on the line. but then you are starting to see a reduction in housing. that is being affected by interest rates going up and things are starting to slow in the background.

you have both the push on the pull levers recalibrating and it is giving us not a certain direction, and you are going to have the dollar pricing that in slide differently than gold. as we align into the fact that the fed is tightening into decelerating growth, we're going to see those interests align and we are probably going to become haven assets. that is what they have been historically. haidi: we talked a little about netflix and this idea as earnings deterioration and tighter financial conditions, investors start to get pickier and punish these companies, more than we have seen in the past. how do you sidestep that? what sort of company profiles are you looking for? frances: we are basically looking at defensive thanks. we look at things mostly when things start to get tighter, we go very global macro. during the reflationary trade we had lots of individual oil companies and things like that. the reason we do that is we get very defensive. you have seen the reaction in staples, in utilities to the

upside, despite the fact we have seen rates up. you've seen a decline in financials despite steepening of the curve and rates going higher. i think that is foretelling the fact that the fed is not going to get the amount of hikes in the level of tightening that they are talking about into the system. and i think why that is important is the reason they had to pivot in 2018 is you have the 20% correction in the s&p 500, but in september you had that liquidity shortage. now we have a record amount of debt in the system, so there'll be more liquidity required to service that debt. the whole debate between the soft and the hard landing, which i think that we are going to have a harder landing just because it is so hard to measure these things in real time, is a credit event. when you think of a credit event as a risk on the table, i am staying very defensive in the portfolio. shery: francis state -- frances stacy, great to have you with us.

we were talking earlier about the big mess from netflix and how they got punishedi that markets -- problem -- punished in the market. pershing square saying it sold netflix investments today. the loss returns about four percentage points. pershing square funds down about 2% year to date as of today's close. we had heard from bill ackman earlier in the year that pershing square capital was among netflix's top 20 shareholders with a purchase of more than 3.1 million shares in the streaming giant. we are now hearing they have sold their netflix investments today. haidi: we do have bhp production and output numbers out at the moment for the third quarter. western australian iron ore output at 66.7 million tons. broadly we are seeing shipments for iron ore coming out of wa meeting expectations. when it comes to four year output they are still seeing 249 millionto 259 million tons.

four year total iron ore output to come between 278 and 288 million tons. we saw steelmakers in asia miners falling after we had the world's top oil producer, as well as valle both reporting a drop in shipments and output missing excitations. perhaps we will see more support coming through from those bhp production output numbers more or less in line with excitations. lots more to come. this is bloomberg. ♪ s is bloomberg. ♪

>> i know it is disappointing for investors. it is just a softer seasonal quarter for us. >> we have this adjustable market that is expanding over time. >> internally we are really our moment to shine.

shery: the net flux chairman and ceo -- netflix's earnings report triggering a wave of downgrades. we also heard just now at xfinity, we live and work in the same neighborhood as you. we're always working to keep you connected to what you love. and now, we're working to bring you the next generation of wifi. it's ultra-fast. faster than a gig. supersonic wifi. only from xfinity. it can power hundreds of devices with three times the bandwidth. so your growing wifi needs will be met. supersonic wifi only from us... xfinity.

vonnie: you are watching daybreak australia. the fed's beige book survey shows the u.s. economy growing steadily through early april but high inflation is clouding the outlook. it found price pressures remain strong with firms passing rising input costs onto consumers. the san francisco fed president mary daly sees interest rates in raised to neutral by years and. >> i see an expeditious march to neutral by the end of the year. vonnie: sri lanka's foreign minister says the country is seeking urgent loans from several nations as a full imf

aid package may need six months. india is providing assistance and he will be meeting the chinese ambassador thursday. sri lanka is also talking to japan and several gulf countries as it looks to raise as much as $4 billion in emergency aid this year. the u.k. government opposed to delay a decision on whether boris johnson should face a parliamentary investigation. members of parliament were due to vote on the matter later thursday, but the government proposed an amendment would delay the vote until the conclusion of police probes and a full report by the cabinet office. 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: russia is of -- is on course for its first foreign debt default in a century after its payment on rubles on do dollar bonds was ruled as potential failure to pay. jodi schneider joins us now with the latest.

what are the implications of this potential default? jodi: this would be, as you just noted, the first foreign default, debt default in a century, since 1918 for russia. basically this failure to pay event occurred, allegedly, this derivatives panel found on april 4. if russia is able to pay bondholders in dollars before may 4, it could avoid this default. but it also points to some of these really serious issues that russia has before it, since the invasion of ukraine, in terms of things like this. one would have been very surprised to think that russia would be defaulting on foreign debt, but this has really all occurred since the invasion of ukraine. and there is some concern that they may not be able to pay the bondholders before the may 4 deadline. haidi: in the meantime, the u.s.

and chinese officials have a call today, talking all things russia and ukraine. what do we know about any kind of progress or consensus reached on that call? jodi: that call was between the defense secretary austin and his chinese counterpart, their defense minister. and it was a phone call. the u.s. had been trying to set up this call. they did not appear to make much progress. the u.s. basically said the call occurred. and the chinese substantiated that, saying it was about ukraine and security issues involving the two countries. in that call the u.s. wanted to continue to pressure china not to be supporting russia, to take a tougher stance on russia and that invasion of ukraine and russia's continued efforts there, and it's lack of

discussions about withdrawing. china said that the u.s. and other western countries should not use this, and should not use ukraine as a way to, as the defense minister said, smear china by using the ukraine issue. so they appear to be talking, but there did not appear to be a whole lot of change in the tone that has occurred between the two countries since that invasion. shery: talk to us a little bit more about china's stance here in terms of russia. because when this whole thing started about three months ago, we thought that china still really valued territorial integrity for countries. so, has any of that changed at all now that we are headed into three months of conflict? jodi: it is interesting, because china has continued to say that they do value that territorial integrity. at the same time, they have said they have tacit support for russia.

they will not publicly criticize the invasion. and they have made statements -- they continue to make statements like we are today that this should not be used as a way to smear china on the world stage. so we really have not seen a lot, at lease publicly, china change its stance. china course has other problems they are dealing with right now, the covid cases, lockdowns, and some economic tensions, but we have not really seen them change their stance, certainly not with u.s. officials. haidi: bloomberg's political news director jodi schneider with the latest. the imf slashed its growth forecast after russia invaded ukraine, and china's renewed virus lockdowns. they also downgraded asia's growth forecast for the 2022 to 4.9%. let's get over to washington, where kathleen hays is standing by with our next guest.

kathleen: with us now is anne-marie golda, deputy at the imf asia-pacific department. so happy you could join us today. in the revised world economic outlook, the imf said one of its very top threats to global growth is the china slowdown. which asian nations do you see as most vulnerable to this slowdown, particularly if it gets worse? anne-marie: as you saw in our report, we have downgraded growth in asia. and that reflects in part also the downgrade of china. so there are several channels through which this could happen. the most important channel is the trade channel. injure asian growth has grown dramatically. half of growth in asia is now within asia. to the extent that demand for imports in china goes down, that

definitely has a negative effect on all of those countries that export to china. those with -- those would be the advanced asian countries like japan and korea. we should also add some of the lower income countries that have built solid supply chains with china. that would be some of the asean countries, vietnam and cambodia for example. so, overall, countries will be affected to different degrees, but all countries in asia essentially will suffer from lower growth in china. kathleen: not quite high on the list but something that rings clear from this report is aggressive central-bank bank rate hikes around the world are another threat to the global economy. again, each asian economy is in a different state of their business cycle, their rate cycle.

which asian cycles do you see as most vulnerable to that force? anne-marie: as you rightly say, there is a lot of heterogeneity in asia. so which countries would be affected most by a more appreciated dollar and higher interest rates. in the first place, those would be countries with high dollar denominated debt. those countries with high dollar denominated debt include countries that have built up significant leverage in their household sectors and in their corporate sectors. and here, i would definitely mention china. other groups that would be vulnerable are countries with high sovereign debt. i saw in your news before, that would include countries such as

sri lanka but also lao and other countries that have high sovereign debt. so i think those are the most important channels. i would then also add countries that have a high share of foreign participation in domestic debt markets. and in that group the asean countries would be the countries to watch. kathleen: so we just spoke earlier today with the treasury secretary of the philippines, carlos dominguez. and i asked him about the prospect for keeping their key rates steady or feeling the pressure to move it higher this year. there growth was actually upgraded a bit by the imf. listen to what he said about central banks. >> we will have to watch exactly what other countries do, particularly the u.s.

we do not want to be behind the eight ball here. if they raise interest rates, people in the philippines will of course want to follow those rates. so we have to make sure that we violence the need to grow, -- that we balance the need to grow, and the need to preserve capital. kathleen: specifically for the philippines, what do you think this means more broadly, what is the story for nations like his? anne-marie: the story here is clearly one of an appropriate policy mix and the policy mix that prevents excessive capital outflows. as we said before, each country may have to have a slightly adjusted policy mix but in a number of countries, it will

require more aggressive tightening than would otherwise be needed. and it certainly requires a very good communication by central banks on what their policy aims are. shery: we have seen the bank of korea raise rates last week. we saw the rbnz also see his biggest hike in almost two decades. do you expect those rate hikes to potentially go beyond pre-pandemic levels? anne-marie: i would not want to necessarily speculate on that. but central banks have to remain watchful and have to take policy actions as necessary. but it will be important to have good coordination between monetary and fiscal policy and not leave the entire policy adjustment to monetary policy, given the importance of interest rates for the economies and for growth.

haidi: what do you see as a balance between tightening monetary policy and faster to clamp on inflationary pressures, but also providing any necessary fiscal report to ride out what i s still the risks of the last of the pandemic-induced and supply-induced lockdown? anne-marie: it is a very serious dilemma policymakers face. it will require fine balancing of those policies. it will depend country by country of how much physical space there is. those countries of course that are lucky to have small fiscal pace -- space can deploy more physical armory. those that don't will have to be very careful in the way they calibrate their fiscal support for the economy, trying to be as targeted and as efficient as necessary.

but it is important for inflation to remain -- inflationary expectation to remain well anchored. and in cases where we see that inflation could become entrenched, there will be a need for appropriate monetary action. shery: i have to get in a question about sri lanka. kathleen: the sri lankan form -- finance minister said getting agreement could take six months. could it take that long, and what the sri lanka have to do to negotiate an extended fund facility? what is the main thing they need to accomplish? anne-marie: what the minister meant is the entire process, not necessarily only the agreement of the imf program. as you know, we have received a program request from sri lanka and we have started technical negotiations. in sri lanka, we issued our

report in february, a standard report that we do for every country, every year. in that report we come to the conclusion that sri lanka's debt is unsustainable. the imf cannot lend to countries that have unsustainable debt levels. so countries need to take steps to make their debt level sustainable. this has to happen in parallel with negotiations of a funded program. and in cases where that has happened, it has taken more time than it would if we were to just look at the standard fund negotiated program. this said, sri lanka is a complicated case and the program itself, the agreement with the country in the program is likely to also require detailed discussions. shery: it was really good having

you on. thank you very much for your time on a busy week. we will be speaking also to the imf's mission chief for korea later, after it downgraded the country's gdp growth to 2.5% fr om 3%. martin kaufman will also get insights into economic policies of the incoming president. that is at 8:30 a.m. hong kong. next, more from our exclusive conversation with the philippine finance secretary carlos dominguez, including why he says the country must grow over 6% to cut debt. this is bloomberg. ♪ his is bloomberg. ♪

haidi: breaking new zealand inflation numbers. the inflation rate jumping to 6.9%, the fastest and 32 years. we continue to see new zealand staying at the forefront when it comes to the central bank and its tightening actions. we saw the biggest rate hike in about 22 years from the rbnz. since then we have had more hawkish and aggressive language from governor adrian or about the pace of monetary tightening, and they expect to keep raising rates in the coming quarters to contain inflation expectations.

1.8% quarter on quarter, slightly lower than expectations of 2% but faster than the 1.4% that was the previous quarter. the year-on-year number, 6.5% is the inflation rating for cpi. missing expectations a little. we were looking at expectations of 7.1%, but picking up the pace from the 5.9%. as such, inflation rate at 6.9%, the fastest in 32 years for new zealand. shery: a little more on the fallout from bill akron's call on netflix. they have lost more than $343 million under three-month bet. we have learned pershing square holdings sold their netflix investment today. they purchased more than 3 million shares just in january, but we are now learning to have lost more than $430 million on that three-month netflix bet. their loss on investment cut was year-to-date returns by four

percentage points. their year-to-date returns by four percentage points, reduced because of this bet. as of today's close, pershing square funds are down about 2% year to date. they have announced a they are selling their investment today. that because netflix is modifying their's ascription only model to be more aggressive, that although they believe in this new business model changes, it is extremely difficult to predict the impact on the company's long-term subscriber growth, future revenues, and so forth. bill ackman has lost more than $430 million on that bet. it is time now for morning calls ahead of the asian trading day. the slump and treasuries marks in -- vanke of america saying and investors can go along on the bonds for three-month horizon. expect inflation to peak this quarter and fall steadily into next year allowing rates to fall according to bank of america.

it has a yield target of 2.25%. haidi: more yuan weakness also spells declines. shery: analysts say correlations between them are positive over the past five years. the offshore yuan will weaken to six dollars and $.48 by the end of june on covid and other growth concerns. they are cautious on the korean won and taiwan dollar as well. haidi: the philippine finance secretary carlos dominguez says 6%-plus growth is needed to pay down the debt spawned by the covid-19 crisis. he spoke exclusively to bloomberg about the challenges facing the next administration. elections are due on may 9. >> the biggest challenge for the next administration is really to grow out of the debt we incurred during the pandemic.

which was natural because our revenues went down due to the lockdowns. and we had increased expenditures. so we had to borrow more money. so the next administration will have to design policies and stick to very strict discipline to grow out of this problem. however, everything is in place in the philippines to achieve that. last year we achieved a growth of 5.7%. the last quarter was over 7.5% growth rate. so we were well on our way to recovery. except now we have this ukraine crisis. and that is going to weigh a bit heavily on us. we are affected by the increase in prices of fuel, of grain, and this is among the things we

discussed today at the world bank and the g20 meetings. kathleen: in terms of paying back the debt, you're on the right track. you are moving in the right direction. you have the right intention. do you have any sense of how long it will take to pay this pandemic-driven debt back? carlos: actually, some of our debt has a 40 year term. so we assumed debt in weber -- and very favorable terms, as well as interest rates. so we are not worried about the repayment. we have to really grow out of the debt. in other words, expand our economy by better than 6% per year over the next five or six years. kathleen: you need to grow? carlos: yes. kathleen: we all need to grow now, a lot of countries have built up debt, etc.

you are a member of the central bank's policy board. i don't want to ask you what you are going to do next, but is it reasonable to assume that any talk, any serious consideration of raising the key rate again for the rest of this year is off the table at this point? carlos: we will have to watch exactly what other countries do, particularly the u.s. we do not want to be behind the eight ball here because if the u.s. raises interest rates, people in the philippines of course want to file those rates. so we have to make sure that we rebalance our needs. the need to grow, the need to fight inflation, and the need to preserve our capital. kathleen: you recently called for other asean nations to join together. that suggests that you can see this may not end quickly, it may

last for some time. carlos: i am afraid that is what it is looking like. again, i am going to have discussions with my counterparts in the different asean countries and see really what we can do together. i have also started discussions with the add and the world bank. they came together very well in the financing of the vaccines for the pandemic. i said this is another time, another opportunity for you guys to work together and work together with the finance minister is involved. to see what kind of rescue packages that can be done, particularly for the -- shery: -- haidi: let's get you a quick check of the latest headlines. the ceo of amazon web services says his unit could look to expand its market share with acquisitions. there are no plans to spin off

the cloud addition from amazon's main business. he said the cloud market is still -- it still has room to grow, and aws is open to deals of all sizes as it looks to maintain his lead. >> we have no current plans to spin out aws. we think our customs are very well served by having aws be a part of amazon. in fact, an increasing number of the conversations i have with particularly big enterprises, they want to make use of the capabilities that amazon has across the company. haidi: bloomberg has learned blackstone is looking to raise as much as $7 billion for its latest green energy fund. the firm is discussing the new fund with potential investors and is targeting returns of at least 13%. blackstone has a commitment to invest $100 billion in green projects over the next decade. coming up in the next hour, aberdeen says peak inflation has likely reached and expects

moderation inflation to provide relief to market. morning star is also with us ahead of tesla's earnings report. we talked about the extended lockdowns in china and how that impacts the company supply chain. this is bloomberg. ♪ this is bloomberg. ♪

haidi: a very good morning. we are counting down to asia's major market opens. shery: welcome to daybreak asia. our top stories, the fed says inflation and geopolitics are clouding the outlook as traders price in half-point hikes at the next two meetings. asian stocks set for a steady start with treasury yields tumbling from this year's high. tiny equities set for more