♪ haidi: a very good morning. haidi stroud-watts in sydney and we are counting down the ages market opened. shery: i am shery ahn in new york, welcome to "daybreak: asia ." internet stocks deliver earnings disappointments, alphabet reporting images for the first time since 2018. the results will pressure asian markets on concerns that growth will slow.

haven market jump. russia is set to counsel gas supplies to russia and bulgaria -- cancel gas supplies to poland and bulgaria. haidi: equity futures are firmly in the red after that very week lead from wall street overnight. australia, expecting the cpi rate to come in above 4%. does that accelerate calls for a super site hike from the rba. sydney futures are down 1%. we will get to the start of cash trading in about one hour. . that is bringing the total losses for futures so far this week more than 5% over the past four days. 10-year yield holding steady at this point. new zealand see a downside, pretty bearish forecast when it comes to the property market there. we are watching some of the developers that might be exposed. and we are watching dollar

china, as we continue to see the dollar strength within the g10 space. the euro is falling to that five-year low, looking for potentially more capitulation to come. the role of the declining yuan that plays into that as well. we are watching dollar-again as the boj kicks off its policy meeting. no change expected it its policy settings overall, but we have seen remarkable an fast weakness in the yen in the past few weeks, but holding pretty steady right now, 127 to the dollar. shery: the flight to safety continues. we have u.s. treasuries rallying, the 10-year yield falling towards the two .70 level. we continue to see the bearish sentiment spreading across futures. futures are peering back the losses. they had fallen as much as 0.5%,

this after the s&p 500 already filed to a six-week low in the session. the nasdaq 100 falling to its lowest level in almost one year. we are seeing the gains evaporating for the wti in the asian session, we had a bit of a boost in the new york session, on expectations that policy demand will be there, china saying they will support the economy. but we continue to see softness. texas instruments, we had seen the disappointing forecast really been found across markets as there are fears that we are seeing a peak in a semiconductor demand. microsoft rebounding from losses earlier. first-quarter earnings did pretty well, cloud services demand looking strong. twitter, we continue to watch. we are hearing that elon musk's plans to buy out the company will come with a $1 billion termination fee. we continue to watch alphabet,

perhaps peering back some of those earlier losses, but that makes in earnings really hit the stock after hours. haidi: and of course, the focus on tech, alphabet reporting first-quarter sales fell just short of analysts' estimates, a rare mix for the tech giant. . let's get to our west coast reporter ed ludlow. ed: overall revenue growth was 20%, $56 billion in the first quarter. the street was looking for $56.1 billion, so it was a modest mix of estimates. in europe, they saw the headwinds from the conflict. there businesses where they place ads in other areas beyond google search. and youtube was really interesting, revenue came in softer than expected. there are two issues here. the first the executives talked about was the changes that apple made to the ios 4 third-party

app tracking. that has been for issues -- that has been an issue for others like meta. then when you think about it snap and twitter, there is a competition for eyeballs, regardless of the medium, and tick is certainly weighing on youtube a little. shery: and we continue to watch microsoft. we saw a rebound in after-hours trading. this is what the cfo had to say about risks in china. >> supply chain constraints, which are specifically related to the production shutdowns in china. i generally follow the same principle, which is i good with my best knowledge is off today and i try to do that with a lot of clarity. we are expecting production shutdowns to extend in may. shery: how significant would this be for the broader

business? ed: significant, when you consider that microsoft just reported a -- -- pretty strong first-quarter earnings. they had stranded in the cloud. but they also got an unexpected boost from gaming. xbox did better than expected because they were able to get the hardware in stores. what she is talking about is the physical fourth quarter -- fiscal quarter. they sent fourth quarter gaming sales could drop to the mid to high single digits, and the health of the supply, getting the hardware in stores is directly related to whether or not the shutdowns in china continue, and if they do, it will hurt not just xbox, but pc sales. and it will hurt the software sales that microsoft is providing. shery: bloomberg's west coast reporter ed ludlow with the latest on pressure coming from china, not surprising given that officials are ramping

up policy support for the nation's lagging economy. let's bring in our chief asia correspondent in hong kong, stephen engle, and our asian market reporter greifeld reynolds in sydney. we have seen fears of lockdowns, mass testing in beijing. what do we know about potentially more lockdowns? stephen: what is happening is that local officials in various city, whether it is beijing or upper mongolia,, officials asked trying to ramp up their measures earlier than what happened in shanghai, to avoid a repeat of what is happening in shanghai with 20,000 cases. it dipped below 17,000 the day before yesterday, but still, a bit of a humanitarian and economic crisis in shanghai. they are trying to get ahead of that in beijing. the most populous district in

beijing will have its second of free tests today. 12 other districts had their first test yesterday. one official said they found five cases. five cases out of 3.8 million people. but still, there is that a threat and people are lining up to buy groceries because they fear that what happened in shanghai will potentially happen in beijing. beijing and shanghai get the headlines, but places like inner mongolia, this city is one of the largest source of rare earth, used in everything from evs to military hardware. it had 2 cases and is now in lockdown. another city also in lockdown. haidi: and steve, turning to infrastructure to boost growth. this is an old playbook. stephen: tried and true. build roads and airports, build bridges, that is what xi

jinping, after a financial committee meeting, essentially ruled that they will do more of. but when he started looking at the satellite imagery, it doesn't necessarily jive with the officials' data of investment being strong in the first quarter. there is a san francisco-based imagery company and they track 13 different factories in china. they are showing port activity has fallen below levels the during the first months of the pandemic in 2020. they see factory production, inventories piling up. goods stuck at ports. goods are being made, they are just not being sold. and another companies satellite images shows new construction in the three main urban areas of shenzhen, shanghai and beijing are down 57% year on year, based

on satellite imagery. shery: to be fair, when it comes to billing staff in order to help the economy, that is a playbook for many different governments. but garfield, it seems that it doesn't matter what currency makers in china say these dates, markets don't seem to be reacting that positively anymore. garfield: well, you are talking about the law of diminishing returns when it comes to infrastructure projects. it is ironic, because part of what china has been trying to do over the last three years is repair some of the long-term damage that you tend to store up when you just focus on the infrastructure projects figures eventually you build them and people do not come. that is where china found. it is why it was trying to deleverage. instead now it is returning to those because along with the covid lockdowns, the lack of oomph that fact, plus attempts to deleverage that has

undermined some of the pillars of the china economy have left them with a very difficult outlook, and they keep on resorting to the same old efforts and also trying to fine-tune. fine-tuning your economy at the time that you are also pursuing a covid zero policy, it doesn't seem to be working very well. and markets are starting to catch up to that. haidi: we also saw the euro taking on the five-year low on the russia-e.u. gas tensions, the ongoing war in the ukraine, and the weakness in the yuan and the added strength in the dollar, all parts of this dynamic. garfield: yes. the euro had seemed vulnerable for some time, along with european assets in general. keep in mind there is still more unfortunately on their doorstep, and also the idea that russia would sort of quietly, gradually

subside, it always seemed a little bit too optimistic. now these concerns about what might happen in the energy complex, and at the same time we have talked before about the concerns that the fed is going to be so aggressive in fighting inflation, that that will damage u.s. growth, and indeed, global growth given the impact the fed has on the wider world. one of those impacts is what is going on in the currency markets. we saw the yuan breaking out to new highs. the same for the yen. now we are seeing domino after domino in the currency , and some folding harder than others, such as the euro. haidi: garfield reynolds and stephen engle with the latest on the markets. breaking news, this company has held talks with buyout firms, mattel. private equity firms speaking to

the company about a potential sale, according to people familiar with the matter. this comes after the company declared that its corporate turnaround was complete. mattel has been talking with the leg -- with the likes of apollo global management. if there is a deal, it would be sizable, with their $8 billion market cap. shery: and we do have breaking news out of sk hynix, operating profit coming in below analyst estimates, 2.8 6 trillion. interesting, because the sales number is higher than expectations of 2.1 6 trillion won. the expectation was solid results from peers like micron and samsung. but not so much from texas instruments, which led to more fears that perhaps we have seen the peak of the semiconductor demand. but at least when it came to prices, it seems to be recovering.

but we are hearing from sk hynix that consolidated debt also came in below expectations. we will continue to watch sk korean open.head towar let's go to vonnie quinn with the first word headlines. vonnie: russia will cut off gas to poland and bulgaria on wednesday, making good on its threat to. from countries that refuse vladimir putin's demand to pay in robles. it is seen as a major escalation in the standoff between moscow and europe over energy supplies, and the word ukraine. gas prices surged 17% after the news in europe. the carmen is considering a plan to suspend regional elections in september, amid concerns about growing social tensions due to the war, and sanctions imposed by the u.s. and its allies. the talks are an indication about moscow's worry on rising costs, as fighting continues, and living standards decline. the sec chair gary gensler floated an idea that increasing transparency. in fixed income markets. he wants to slash the amount of

time traders report disclosures from 15 minutes, 21 minute. new research shows that half of the u.s. population has been infected with the coronavirus at some point. a nationwide study of blood samples indicates that 57.7% of americans had antibodies of the virus as of february, up from 33% of americans in december. with increased at-home testing and many people experiencing mild and even asymptomatic cases, official case counts have become unreliable. 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. shery: with over $2 trillion in assets under management, and what -- bny mellon tells us why they are focusing on japan. but also, the sydney

australia tells us that equities are undervalued. that is next. this is bloomberg. ♪

l it is probably above 50%. -- it is probably above 50%. but an important point to me, david, is how deep a recession. i think the odds of a really deep recession, you know, some people are raising the shades of paul volcker and the deep recession we had then. i think that is very, very unlikely. extremely unlikely. shery: the former fed vice chair alan blinder, on the possibility of the u.s. recession.

, next guest sees a brighter future for fixed income. joining us is mahjabeen zaban from citi australia. good to have you with us. how big a role will fixed income late your portfolio this year? mahjabeen: received fixed income to be a next important element. the fundamentals behind that are really that market losses in fixed income we saw earlier this year. we see that has already been realized. . in a slowing growth environment protection from any downside equity risk is there. on an average return number, u.s. treasuries return were weakest in q1 and strongest in q3. we are looking to position for that going forward. shery: where does that leave the equity space? we continue to see the downside pressure there. mahjabeen: at this stage, markets will remain choppy, given what is happening in china.

but the scenario we are looking at is that markets are going to remain resilient. overall we are looking for that to point towards a single-did you annual return this year. shery: is there any specific sector of equities that you like at this point, or even regions? mahjabeen: we think u.s. exceptionalism as we are seeing with the dollar strength in the market u.s. exceptionalism will lead the way with markets in the equity space. within the u.s. market, we are looking at sectors driven by the consumer, not on the discretionary side, but more on the staples side of things. with inflation trading as high as it is currently, you will be spending more on must haves, rather than need to haves. so we will be seeing a location

towards the defensive side of things going forward. haidi: there are expectations for outside inflation print from austria today. does that lead to more calls for a supersized hike from the rba? mahjabeen: that is a good question. while the inflation number does point to the rba -- will be on the rba's target of 2% to 3%, i think the answer to your question depends on the evolution of labor costs. today, we feel like august is the likelihood of the first rate hike. having said that,, we have elections in may, so the june and july meetings are very live, based on the fact that in june and in may, if we see the unemployment numbers remain at or below -- and this is coupled with the commission review in july where we expect minimum wage is be lifted up slightly. if that goes hand-in-hand, we may see a slightly higher rate hike -- slightly earlier rate

hike, compared to our likelihood of august for the rba. haidi: we are seeing that china is turning more to infrastructure spending, construction spending, the old playbook when it comes to stoking growth. is that enough to inject a bit more confidence into investors? mahjabeen: policy response to date has been a bit underwhelming for investors. but we need to know that china has signaled strongly that we have additional fiscal stimulus coming. maintaining household income and boosting consumption. this means smaller companies and sectors that had been particularly hit with the covid disruptions -- that is the physical side of things. it goes hand-in-hand with monetary policy. we are seeing that there naturally is a lag between rate cuts and equity markets moving higher. we think that lag is currently in play right now.

in the long term, we think chinese equity performance has a strong correlation with monetary policy everything that is coming up ahead. valuation of chinese markets today is 52 percent of debt compared to the s&p 500. so i think gradually, it looks quite attractive. haidi: mahjabeen zaban, great to have you with us. you can get a roundup of the stories you need to know, on daybreak. terminal subscribers can go to dayb . plenty more ahead. this is bloomberg. ♪

shery: we are counting down to the start of trade in tokyo and seoul. in korea, sk hynix reported that

its profit more than doubled in the last quarter after data center sales of such slowing consumer demand. two the= number missed analyst expectation not to mention the prolonged shortage of supplies. that will actually impact the company. they also pointed to risk from rate hikes, inflation, not to mention geopolitics. that south korea will be selling 63 financial bills. the bank of japan is beginning its two day meeting, expected to keep its monetary settings unchanged. of course, big focus on what is happening in the central bank as the yen continues to weaken. our we going to see with the 130 level against the dollar, that is the question. nomura is planning to diversify operations in europe, where it

lost money in the first quarter. also watching softbank invested $63 million into a japanese startup which specializes in and us copies, the third vision fund investment -- specializes in endoscopies. haidi: teslas shares are down 12% over concerns that elon musk sell stock to compete his takeover of twitter. the e.v. maker's market cap is down $275 billion since april 4, when he first disclosed that he increased his stake in twitter. british investment banks are in line for a big payday from that sale. goldman sachs and others may earn as much as $130 million from advising twitter on the sale, according to data. it is not clear how much musk will pay his own advisors, led by morgan stanley. coming up, russia is cutting off gas to poland and bulgaria, as

the energy standoff with europe takes a turn for the worse. . we look at what we can expect from other countries in the e.u. as his payment deadline in rubles, looms. this is bloomberg. ♪ so many people are overweight now and asking themselves, "why can't i lose weight?" for most, the reason is insulin resistance, and they don't even know they have it. conventional starvation diets don't address insulin resistance. that's why they don't work. now, there's golo. golo helps with insulin resistance, getting rid of sugar cravings, helps control stress and emotional eating, and losing weight. go to golo.com and see how golo can change your life. that's g-o-l-o.com.

>> we took some provisions in the quarter. we think it's a complete provision. >> we think there is a further need for central banks to curb

inflation. shery: take a look at the commodity space. we had european gas futures surging past 70%. we are seeing an extension of gains from chinese policymakers that they would support the economy, that sent base metals higher. gold holding onto gains, but unchanged at the 1905 level. it has seen gains with bond yields falling and china's pledge to help the economy. the european gas markets. russia planning to halt deliveries to poland and bulgaria, that is spooking markets. we saw the surge in gas prices,

what does this mean for energy markets? guest: it's a new demand to pay for the fuel in rules. that was always a threat. there will not be gas shortages, they seemed to have enough. this brings up the field -- the fear about countries who need to gas, germany. what does this mean for other importers?

the line had not been crossed. markets are digesting, and they could expect against today as well haidi: time gives them a little bit of space, the summer seasons. what do some of these countries need to do in order to be able to secure future energy security? guest: they have to find alternative sources. they have doing that for weeks and months. they wanted to curb imports from russia. immediately speaking, it believe means more lng could be going to europe. they are basically at max capacity. that means they could be pulling more supplied. it could have a large global

impact. the most likely will out of fear . haidi: increasing fear of lockout out of china. we are hearing the government is returning to infrastructure development. how are the different dynamics playing out when it comes to commodities? guest: you are right. there is this boost. when you talk about natural gas, these lockdowns have curved the demand for the product.

you are seeing them cut a lot of that. you're going to see flows that would have gone to china go to european countries trying to secure supply. haidi: let's get you to vonnie quinn. vonnie: antony blinken has met with vladimir putin in moscow. this is in a bid to revive efforts to end the war as officials say talks are at a dead-end kit --. putin says he is not refusing to negotiate.

>> i'm concerned about violations of human rights laws and war crimes which requires independent investigation. vonnie: china is said to step up infrastructure investment. state media reports have decided to advance construction projects. satellite images show lockdowns have crippled lockdowns. a federal reserve vice chair is confirmed. president biden has a fifth nominee for vice chair awaiting a hearing by the banking committee. the world bank has pledged

millions of dollars in aid to sri lanka. the eight will be delivered in two phases. world bank representatives have promised more support if the crisis continues. 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: next, we are speaking about outlooks for japanese markets. the investment company is a big issue of russian depositories. this is bloomberg. ♪

>> we are optimistic. >> we said we want to get back to double-digit returns. we are optimistic about the outlook. >> there will be pressure on commodity prices. there is a need for central banks to curb inflation. haidi: bank executives giving

their outlooks on the macro backdrop. i have 2 trillion -- they have $2 trillion of assets in management. let's bring in the senior executive. great to have you with us. you have increasingly levels of friendliness toward shareholders. guest: thanks for having me, it's great to be back. a lot of optimism comes from a commitment in japanese markets for big structural programs around energy and agriculture, and increasingly in financial services.

that is alongside the policy for digitization and technology investments can be put in place. haidi: when it comes to the weakness in the yen, does that change your strategy? guest: absolutely. according to our analytics, the yen is the most undervalued and we recognize the weakness on the japanese economy. i want to prelude anything that happens out of the bank of japan tomorrow, we remain confident about the ability to execute

that here. shery: does it make companies more vulnerable to acquisitions becoming targets as well, given you have a cheaper currency? guest: i think so. that's acquisitions that i would say the rise of the master revit equity fund. about one third is still in cash. there is love the of dry powder. over the last few weeks, there is talk of new deals in the pipeline. the combination of that and strategic investments could mean more companies are in play and more capital will be deployed locally. shery: you have been one of the bigger issuers of russian depository receipts. when it comes to global markets,

a lot has to do with ukraine. how does that affect your company at this point is to mark -- at this point? guest: we start with a humanitarian crisis in ukraine and a geopolitical crisis that has formed. we are focused on helping our clients. this geopolitical and humanitarian crisis should not term -- not term to a challenge for major markets. haidi: do you expect adrs to be delisted? what is the plan going forward? guest: i would say right now the environment is still uncertain.

but we decided to do in light of the current environment and coordination is these are banking business in russia. how this plays out over the next few months, we are watching this closely. haidi: can you give us an idea of how that part of the business is going? quite cumbersome and potentially complicated. guest: we are well prepared for the potential sanctions models. we have been working in coordination with regulators.

nothing unusual to report. shery: good to have you back. the chief growth officer at bny mellon. ubs leaned on traders to post better-than-expected profit after its key wealth management business was hit by slowing client activity. the ceo spoke to bloomberg. >> you see transaction income down from a year ago. generating assets are still positive. more money going into manage. then, you see a real pickup and demand. indeed, from an income

perspective, there is money flowing in that region. manus: the biggest threat -- in your view, what is the biggest threat? >> if you look at this quarter, the current circumstances apple challenges and opportunities, the challenges -- the threat is, transaction revenues going down on the wealth management side. more and more money is coming through. the brand is out there is a beacon of stability. capital strength shows clients

have trusted us. you see opportunities and threats, and with things being unpredictable, you can only rely on what you are strong at, your own advice instability. manus: when i look at china, there is a sense of panic in the currency market, growth levels are being stripped back. he >> we are seeing deleveraging in asia-pacific. yes. that is normal, on the back of a lower market, you see deleveraging because generally the leverage we provide is financing the position in the stock market. we do see that. on the other psych, we also see

investors and asia are looking at recycling risk. there are there with that strong investment banking order in asia. haidi: the ubs ceo. japan's largest brokerage earned about $242 million after selling its think tank. the results capped one of their most challenging years dealing with a fallout and legal bills. one analyst called those results lackluster. disappointing earnings are adding to concerns the demand for semiconductors has peaked. the company says sales will be between two point billion dollars -- below estimates.

india has slashed the size of his biggest ipo by 60%. according to sources, the government will sell to 21 million shares. as far lower than the earlier target of 6.5 billion. mattel surged. the wall street journal says discussions including -- these may not result in a deal. shery: stephen: thousand -- shanghai reporting 48 deaths for tuesday. the number declining slightly

this is as we -- 20 were to come. this is bloomberg. ♪

haidi: china says it will enhance infrastructure projects, the latest pledge to bolster the economy. according to bloomberg intelligence, oil demand could fall 19% in may as the country continues lockdowns. it chipmaker says it's expecting a slight year on year decline and maintains the forecast. shery: seeing supply chain turmoil.

the ceo says the current macro backdrop is the most challenging he's ever seen. terminal users can read more about the stories. some of the stocks we are watching right now talking about the supply chain disruptions. missing on the operating profits, but the prophet did come in double the previous rate. interest rate hikes, inflation, geopolitical risks are some of the factors they are watching. we're also watching manufacturers like samsung. samsung is interesting because the market value dropped below 20% of the benchmark for the first time since 2019.

samsung is one of the biggest in the market cap. haidi: take a look at the after hours trade. we are seeing microsoft and quite a lot of resilience, investors feeling better about after hours.

a lot of this is on concerns about covid lockdowns. take a look at treasuries. he when it comes to the bond market, we continue to watch the volatility, the australian 10 year yield above 2%, treasury yields, the cpi is expected to come in hotter than expected.

shery: next, a director joins us to discuss energy prices. this is bloomberg. ♪

shery: welcome to daybreak asia. haidi: mixed earnings on wall street, concerns growth will slow. china turns to a thin layer playbook. metals rally, we discussed the

wider impact with the world bank. shery: take a look at losses in japanese equities markets. we have seen gains in the previous session. we are seeing it hold that the 127 level, we have seen short cover, all of the moves coming with losses in the u.s. session, to mention u.s. for -- futures are under pressure. watching was happening with the 10 year yield. futures were supported with the boj extending those bond buying operations, gene we're going to see what happens if they want to do anything about the collapse of the japanese yen. a lot of risk off sentiment. the korean won, take a look at

that. two year low. operating profit, missed expectations. samsung nsk as well. he haidi: that pain when it comes to the open extending to australia, this is the asx, extending yesterday's declines for a third straight day. one quarter of 1%. everything trading in the red. third day of losses.

the underlying measures are exceeding the target adding to calls for a supersized hike from the rba. watching some properties given we had residential properties falling to the lowest in a decade, corelogic saying they are likely to fall further. seeing a recovery for the kiwi dollar after the qe lost overnight. the strength of the u.s. dollar continuing to push through. take a look at u.s. treasury. two year yields are seeing a move as well. futures extending the rally. we saw at the open extreme bearishness.

s&p futures are up 1/10 of 1%. $102, lots of concerns about demand with signs the covid restrictions on lockdowns could be further extended across china given we are seeing the cases start to building beijing. let's bring our guest. the tensions, conflict. what is the best way to balance the portfolio given the breath of uncertainty out there? guest: it's a topical and great question, investors talking with the concern.

started at the beginning of this year, when growth rate is closing and growth slowing, rates rising, that is typically not a good environment for equities. on top of that, we have have the supply-side shock with oil with the invasion of ukraine, that his intensified stagflationary shock which has led to further hawkish expectations in terms of monetary policy. it's a challenging cocktail of factors. we think valuations are attractive, more specifically we think parts of the markets look attractive, those includes banks

those would look to be two ideas fundamental backing. haidi: none other than china when you talk about valuations. is that attractive? infrastructure, gdp targets. guest: a challenge is sequencing. the zero covid situation needs to be dealt with to a greater

degree before a full-fledged infrastructure investment can take all. to be specific, if an entire city is locked down, if we look further in the year, we think there will be moderation of covid intensity. it's difficult to forecast the timing. there is certainly plenty of policy tools, the china index with trading 12 times earnings. you're still talking about a market that is about half of what it is trading one year and

a half ago. we think the conditions are there for upside recovery, but we need to get through the near term challenge in terms of immediate shock before investors can feel some confidence about re-engaging. this is the prime week for earnings. the next three weeks will also be the bulk of the reporting season, pretty much a full view in terms of what is taking place. so far, we ran the numbers, about 9% of stocks and of course

that looks good. that is a small sample set, so i don't that we should be too much into that. additionally, investors will not be looking so much at the numbers in the first quarter. he -- haidi: the chief apex equities strategist will be along with more insights. let's get an update. more fiscal spending, spending

on construction and infrastructure when industries are in lockdown. what are we seeing when it comes to the economic impact of these restrictions? reporter: beijing is not in lockdown yet. there is going to be an economic impact, and we are seeing it from satellite imagery, forswear technology, maybe countering more real-time some of those monthly indicators that show investors are holding steady,

down in the official data was consumer spending. the satellite imagery is giving us a better way to assess the impact in real-time on production and supply chains. productivity has fallen below early 2020. satellite imagery is showing that, they have satellite imagery and the supply chain, inventories are showing to be piling up. cars being made but not sold. talking about fixed assets, they are showing areas of new construction, around beijing, shenzhen, it's down around 57%

year-over-year. shery: we are getting the latest beijing numbers, covid cases at 40 tuesday. we expecting more some policies were? -- policy support? >> we have the pboc providing ample look at it, late yesterday from the central finance committee, they are saying they will spend more on construction, roads, railways, bridges and the like. this is a common avenue to stimulate growth, so far, no

leeway on zero covid. shery: we have more earnings coming out of south korea. lg is reporting operating profit that beat analyst expectations, coming in at 258 9 billion one. it's a big beat. slightly higher than expected coming in at 226.6 billion juan. -- won. haidi: we have updates with the merger we have been watching, a deal to combine, we are seeing details, expected to face a shareholder vote in the fourth

quarter. talking about an extraction of $500 million. they will learn 56% of the combined entity. we have been watching for this transformative deal, shares have been surging on expectations for this combination into a separate entity, and further gains are expected with the potential re-raising of shares. let's get you to vonnie quinn. vonnie: russia will cut off gas to poland, bulgaria wednesday making good on a threat. the move is seen as a major escalation over energy supplies. gas prices surged as much percent.

the prime minister has urged the bank of japan to work towards 2% inflation goals after announcing in a package to ease the pain. the new measures are expected to help the boj stick to interest rates that have contributed to the fall of the currency. kamala harris has tested positive for covid-19, making her the highest ranking official to report being infected. a spokesperson says she tested positive on rapidan pcr tests. she is not showing symptoms but will isolate and work from home. she is not considered a close contact of president biden. the world bank rented sri lanka financial aid to help address the economic crisis. the presidential office says the eight will be delivered in two raises targeting health, food and gas. world bank representatives have

promised more support if the crisis continues. 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. shery: we are hearing from local media that a district has halted schools. the last time we saw beijing suspending classes was june 2020, deja vu as we see beijing reporting covid. still ahead, we speak to a world bank guest. alphabet misses revenue estimates.

we will go through the earnings later. this is bloomberg. ♪

shery: seeing a selloff across markets, talking about the nikkei losing 2%, haven't seen such a bad day since the start of march, this coming at a time when industrials and materials are leading to decline, utilities gaining lounge -- grounds, seeing a bounceback in oil prices. the kospi is seeing its worst day in about a week as we continue to see the korean won

very weak against the u.s. dollar, talking about a two-year low versus the greenback, we are also following the japanese yen which continues to weaken against the u.s. dollar, we have seen a little bit of a rebound, let's talk about all of this because we are headed towards policy decisions, and with us still is the chief apex equities strategist. let me start with happening in japan. guest: we think it will be status quo. the chief economist recently published a note on this. the logic is clear.

not too much the boj can do given its objective of supporting growth in trying to make sure inflation comes back. differential seven widening given the hawkish statements coming out of the fed. the near-term differentials are between the u.s. and japanese rates, and they have widened. that is propagating broader based dollar strength with yen weakness. there's not too much that can be done. our expectation is the boj needs to wait for yields to stabilize, and that in turn would stabilize the yen. it's hard to argue until we see stabilization and the rate differential.

haidi: talk to me about the capital. guest: for the first time in 10 years, taking a more constructive you on asean. all attention is on china and the new economy, you have the

recovery more cyclically from covid lows. with the rate cycle changing, heavy index is to asean's benefit, especially singapore which we upgraded. thirdly, you are seeing the emergence of the digital economy and singapore, so that's pretty attractive. we are quite pleased. shery: great to have you with us. the chief apex equities strategist at goldman sachs. that as we continue to watch stockmarket futures opening like this.

plenty more ahead. this is bloomberg. ♪

haidi: quick check of the latest business flash headlines. profits doubled at a company, memory prices fell. operating profit increased to $2.3 billion. just shy of analyst estimates.

nomura eked out a profit thanks to one-time gains, the largest brokerage turn to $42 million -- earned $242 million. it capped one of the most challenging years. one analyst called the results lackluster. shery: take a look at how stocks are trading, sk hynix losing more than 2% after earnings, we had operating profit, missing expectations. we continue to watch lg energysolutions which came out with earnings, they are seeing the worst day in two weeks. watching samsung electronics broadly, it is just downside. the kospi is losing a lot of ground. the market value has dropped below 20% of the benchmark for the first time since 2019. we're watching fanuc.

the world bank says food and energy prices could loss for years. we will hear from development policy. this is bloomberg. ♪ this is xfinity rewards. our way of saying thanks, with rewards for the whole family! from epic trips... to the original jurassic park... on us. join over 3 million members and start enjoying rewards like these, and so much more in the xfinity app! and check out jurassic world: dominion, in theaters june 10th.

vonnie: this is daybreak asia. the u.n. secretary general has met with vladimir putin in moscow in a bid to revive diplomatic efforts to end the war. officials say talks are at a dead end. putin said he is not refusing to negotiate. he had to ukraine on wednesday to meet load them are zelenskyy. >> i'm concerned there are violations of human rights laws

and war crimes. it requires independent investigations. vonnie: bloomberg learned the kremlin is considering a plan to suspend regional elections amid concerns of social tensions. the talks are an indication of worrying about rising political and economic costs. fighting continues and living standards decline. authorities have decided to advance construction projects. the light images show china's lockdowns. a vice chair has been confirmed in a vote. she is the first of four nominees including jerome powell.

president biden has a fifth nominate. he is awaiting a hearing by the banking committee. 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. shery: russia will cut off the gas to poland and bulgaria on wednesday in a major escalation. what does this mean? reporter: what happened is a lot of the market was hoping they would not cross this line. they are cutting supply to the buyers. poland and bulgaria said they will not be rationing gas and have enough supply, they have been busy and poland said they

would cut russian gas by the end of the year. the surge is really a reflection that of russia is doing this to poland and bulgaria, what is stopping them from doing it to germany? germany said they would not pay for gas in rubles, a request putin has made, and if germany does not follow that request, that will trigger rationing. that is why you are seeing a strong price reaction. haidi: that's not as though they have not been trying to secure alternatives. what measures are they taking? reporter: they have spent the last few weeks preparing and saying, what can we do to curb dependence on russian gas? those goals were two thirds, not

today. a sudden drop in imports from russia will have a large impact, but what they could do is potentially secure more lng, liquefied natural gas over the ocean. there is fair supply in the market from the united states, nigeria, they could reroute to europe to help meet any supply deficit, but that's going to come at the expense of countries in asia and south asia grappling with their own energy shortage. there is not enough gas to go around. if europe grabs more, that could cause higher prices for europe, asia and other countries. haidi: our energy reporter there with the latest. rising food and energy prices could last through to the end of 2024 due to disruption in trade,

production, according to a new report from the world bank. let's bring in kathleen hays who is our next guest. >> thank you so much. with me now is the managing director of development policy and partnerships at the world bank. the commodity markets outlook on the war in ukraine to talk about some concerns, great to have you with us. when you look at the extent of this shock. you have been in key policymaking positions, what is your biggest concern the price of rent is averaging $100, food prices, we up 30%. immediately, what your biggest concern? guest: obviously, the food

prices and high energy prices. it's going to cause higher inflation. it's not so much about availability, it is affordability. it's about distribution, making sure where the products are can be delivered to where the needs are. this is why one of the important lessons compared to 2008 is we must -- countries must not impose expert restrictions in the name of trying -- [indiscernible] that causes fluctuation. that is exactly what happened in 2008.

as well as panic import buying and hoarding. we should not panic. we should not make the high-priced go higher because of policies that accentuate the rise. >> we have seen those kinds of reactions and places as consumers protest high prices, students and indonesia protesting prices, there was a ban announced, hit the market really hard. >> they should do doing it in a transparent way, and temporary.

it should not be at the expense of oil prices and volatility. if your concern is for households, it's much better than trying to hoard supplies or even control prices. well targeted subsidy programs we could also accelerate against stimulus programs, cash for work programs to help the income side. as well as school food programs, another way to provide subsidies with a double advantage. kids go back to school.

these are better programs than trying to control prices and subsidizing all food prices. >> it seems difficult for emerging markets, if you are going to provide subsidies, that's going to cost you money, what has to change or to be done right now to make that happen? >> yeah, especially in a fiscally constrained space, you should be using subsidies in the most effective way. subsidizing overall food will actually delay supply response as well as the demand response. you would be more efficient on

the consumption side. rather than having that used for food or agriculture, it's much better to focus on poor households, targeted subsidy programs, and this time around, this is the difference, fertilizer prices have also gone up. it's better for us to focus on the production side, making sure farmers can get input, fertilizers. at the same time, introduce efficient use of fertilizers less dependent on natural gas like bio fertilizer, because the high prices related to the high energy price. shery: how much will depend on how governments try to increase domestic production? we have seen mexico trying to do that to achieve food security at

some point. >> it's much better to repurpose the subsidy, fertilizer subsidies, it's much better for you to introduce better use for more efficient use. more sustainable food production , that will also lead you to higher yields. you want to address the longer-term food insecurity and nutrition security issues. in the short-term, you can already introduce developmental, longer-term steps. more efficient uses of fertilizer, produce more with less. haidi: we know challenges come from the threat of climate

change. what about the threat of higher prices and energy and food security to the transition to cleaner energy? >> there could be a slight delay in the phaseout of fossil fuels. it should actually accelerate the transition to diversify, because what this crisis has revealed is the dependence on a few sources of energy and a few types of energy, so moving ahead, what countries should be doing is to diversify the energy sources that they have, and this would -- the bulk of it would be accelerating renewable energy, which would be available in their own country for importing.

so, something like hydro and solar, it can't be transported across the border. this is really the challenge ahead, to accelerate the transition to renewable energy. i would say just like what happened after the opec price increase, that will be an important pathway ahead. haidi: of course talking to kathleen hays. let's take a look at how we are trading in the asian session.

it was always going to be challenging with the difficult passover. tightening monetary policy, we're seeing the downside for the nikkei. 1.8%. pretty steady yen as we head into the first day of the bank of japan meeting. no expectations for any change in monetary policy or purchasing program, some of these concerns that the heyday of demand for semiconductors and broader tech may be over given the big selloff we saw across the tech complex overnight. in sydney we are seeing downside, 2% plus declines as we look ahead to cpi inflation due

out, that is expected to surpass expectations. plenty more to come here. this is bloomberg. ♪

>> supply chain constraints related to production shutdowns, i generally follow the same

principles. i did note with clarity that there would be production shutdowns into may, and that would have further impacts lome -- from a supply constraint position. microsoft ceo on the. shery: su keenan is here with the latest. let's start with alphabet. >> $56 billion in revenue payouts is indeed a rare mess, blame it on youtube video services which took a hit, lower growth. volatility in the market, add

spending in europe and the stock dropped after hours. down 14% this month, rough day in the regular session as well. on the plus side, share buybacks , strong growth. we have heard from the ceo of alphabet, jumping to 5.8 billion. we are seeing the government digitally transform businesses. the company was facing year-over-year comparisons, one year ago it posted 32% ad sales growth thanks to the russian return to commercial activity after the u.s., this year as

sales grew. haidi: microsoft, interesting to see the stock higher in after hours. the cloud business is doing really well. >> strong point. you so microsoft waiver, down a bit, up a bit. at one point it was up as much as 7% on a narrow beat, what analysts say better than feared results, a big boost thanks to the cloud computing business, 18% increase in revenue for the march quarter. the growth was indeed a highlight, 46% growth in line with estimates. this unit is second only to amazon.com.

the ceo has built microsoft into two main cloud units. these units have transformed the company into having a steady growth engine insulated from supply chain weakness. xbox sales were better than expected. shery: su keenan with the rap of earnings. nation continuing to grapple with covid related lockdowns. watching developments out of beijing. previewing the market open in what turning out to be a risk off day. this is bloomberg. ♪ \

shery: just over half an hour away from the start of trading china and hong kong. the yuan is weaker against the dollar for seven straight days, the slide not seem like this in 2014 despite policymakers trying to push it up. concerns for china's economy are growing as we see rising cases, lockdowns. the aggregate index showing the economy should -- slowed rapidly in april, stringent restrictions, it was revised lower from three to four.

haidi: let's take a look with -- for what to watch. more spending by the government? spending on of. is it going to make a difference for market sentiment? reporter: this is the old playbook of stimulating the economy for china. people i have been talking to are looking at this, is this going to help? does china need more airports? what will this do for the debt to gdp ratio? construction workers, but the concern is the economy remains

shut. the expectation is it will spread throughout china. china will only pivot to live with the covert situation from spring 2023. that is one year of shutdowns. will it help the economy? a lot of skepticism there. shery: sophia. given what she has told us, we continue to watch stocks in mainland opening in half an hour, including shares of infrastructure firms. asian chip stocks are another watch with earnings misses. also, we are keeping an eye on singapore stocks after a marine

business struck a merger. haidi: let's take a look at the korean won. dropping the most in seven weeks. the dollar is strengthening against the wand. this is when it comes to levels when it comes to the biggest drop nearly a year, we continue to watch what other downside might be broken. we are watching weakness that will have an impact when it comes to any hope for the euro to stage any recovery. we saw the euro breaking through five year lows.

up next, disappointing set of stimulus measures. we are speaking to jp morgan about gdp growth targets. ♪

>> good morning from hong kong. it is not :00 a.m. here in the city. welcome to the china open. i am david and glass. there were mixed earnings. feeling economic growth concerns. president xi commits to boost infrastructure spending to help china's economy battered by covid related lockdowns and china is the on