♪ >> good morning. we are counting down to asia's major market open. sheri: welcome to daybreak asia. haidi: top stories this hour, apple sees supply chain constraints costing up to $8 billion this quarter after posting record results. >> amazon predicts sluggish sales growth as consumers cut online spending. earnings reports sets to weigh

on sentiments in asia. the yen in focus with a fall past 130 per dollar. breaking news out of south korea, we are getting industrial production numbers for the month of march. rising 1.3% month on month. beating expectations. analysts expected contraction. the year-to-year number a little softer, but still growth of 3.7%. this as we continue to see the strength in exports for south korea. it makes -- we had -- beating profit and net income. right now, we are seeing the year on year number a little softer than expected. month on month, industrial production rising 1.3%. haidi: we had pretty good numbers out of dbs. now we are seeing ocd reporting first quarter net income better than expected. 1.2 billion was the expectation.

the actual number at 1.3 6 billion. -- saying asian growth is expected to remain resilient. net income more or less in line with the $1.52 billion expected. closer to expectations of what we saw from dbs. we also see the ratio lower than expected at 1.4%. -- saying they will remain vigilant to risks of geopolitical tensions. loans at other assets down 73%. we have expected more of a profit drop when it comes to ocbc. there were concerns about weaker wealth management fees and trading income, losses as well. a lot of the southeast asian banks facing rate or pressures and disruptions from some of its operations when it comes to the

hong kong unit, given the covid restrictions in hong kong. watching out for comments when it comes to asset quality risk across greater china after credit costs jumped fourth quarter. some of those birds coming out from ocbc, net income certainly better than expectations. let's look at the markets set up for this friday. a little bit of calm before we get into the week. the big fed decision and to rba decision. -- to be extended. sydney futures looking pretty outpaced. .7 percent higher as indicators -- we are watching the 10 year yield in australia because -- are saying above 3% treasuries of the same 10 year at .75%, but it's trillion bonds are looking attractive. perhaps the market is starting a steeper move than what we will actually get from the rba, which are expected to move with the interest rate hike next week.

watching new zealand as well. a pretty flat start this morning. tourism stocks in particular with tourism reopening for the country set to have borders reopened the visitors. dollar-yen and focus. further volatility expected as we see a falling to the 20 year low. the volatility for the dollar yen at the highest since the peak in 2020. sheri: we want the -- also because of dollar strength. we had the dollar index at a 20 year high. the bloomberg dollar index at a two year high. perhaps that is why we are seeing pressure on commodities. the asian session under pressure despite the fact we may be seeing an eu ban on russian crude. we are continuing to see treasury markets a little mixed at the moment. 10 year yield headed towards the 280 level. the focus has been on

after-hours sessions with u.s. futures under a lot of pressure, which kind of doesn't happen at this hour, pretty early in the asian morning session. movers in the after hours. apple, supply chain constraints, talk of that has impacted the stock and the stock is now trading down despite great numbers from the previous quarter. we continue to see a downside on amazon inflations, eating low market businesses. intel, fears that perhaps demand for semiconductors has peaked. twitter continues down as we hear more of elon musk's plans including job cuts. haidi: let's get more on those big tech results. this is what tim cook had to say about supply constraints. >> i want to acknowledge the challenges we are seeing from supply chain disruptions driven by both covid and silica and shortages, to the devastation from the war in ukraine. we are not immune to those

challenges, but we have great confidence in our teams, products and services and our strategy. haidi: let's bring in mark. we will start off with you. we were talking to don o'donnell. the question has to be asked, is apple exempt from all of these concerns about consumer slowdown and demand slowdown? >> not at all. i think you see that factor into the $8 billion number. those headwinds they are expecting in the current quarter. they said that would be related to some of the closures you saw in assembly centers in the shanghai corridor. also related to civic and shortages that have been going on for a year, if not longer. i think inflation, consumer ability to spend big bucks on tech products, that plays a role in it as well. one factor i would like to point out for the june quarter, that

is typically the quarter before their big products release cycle. consumers no new products are coming out between q4 and q1. in many cases, people are going to hold off. we have pictures of the iphone 14. details about the next ipad and apple watch already reported by bloomberg news and elsewhere. consumers are aware of that and they might be holding off. that is why you see massive quarters, particularly in q4 and q1 for apple, even q2's. sheri: we continue to see the downside on amazon stock after hours. what's going on? su: amazon shares fall as much as double digits, tells you the report was not good. they surprised investors by reporting a first-quarter loss of $3.8 billion, and projecting a loss in the current quarter. analysts expected profit in both. shares off their lows come of the extended session, certainly

not a ringing endorsement. they are blaming part of it on rising fuel costs, especially in europe due to the war. on a conference call, they said they doubled their warehouse capacity and nearly doubled the workforce. a year ago they were talking about they didn't have enough staff. that is not the problem. they now have excess capacity and are spending money to put new people into the system. the bright spot was the amazon web services, their cloud service unit. a revenue of $18.4 billion, a 37% increase. add sales up 23%. again, the outlook is weighing on shares. they are projecting sluggish second-quarter sales growth. this as consumers cut back on online spending. blame it on inflation, blame it on the fact that the worst of the pandemic is over and people are going out. doing other things than clicking on buy.

haidi: su keenan and mark -- with the latest. we have a big interview coming up after intel reported last -- results. do not miss that conversation. for more on market volatility, let's bring in our correspondent for asia. we are talking about these huge swings on the s&p 500. i think the move is about 4.2% in either direction since earnings started. which we have not seen in over a decade. can we expect volatility to continue given the macro environment? where are we headed? >> volatility is picking up across asset classes. that is an acknowledgment that investors are in extremely uncertain times. they're looking at economies at

a very pivotal moments. the u.s. economy, the strongest inflation and 40 years, the fed expected to raise rates at a pace it hasn't done since at least the 1990's, and possibly going faster than that. you also have china, which continues to look like the days of chinese growth are behind it. i haven't mentioned the word new crane yet and what it is going to do to europe. we saw all of those factors affecting things like what tim cook said in the conference call , which turned a smile into a frown. there's a lot of smiles and frowns that are being switched back and forth across asset complexes, including the nasdaq and the s&p. haidi: u.s. stock futures falling, which potentially portends a challenging session for asia. how much messiness to be expect

across the next seven days, given we are looking down now at this highly anticipated big fed meeting? >> i think there's going to be a lot of mention of the fed. with the fed, they pretty much have to raise 50 basis points. that is very likely. that is what is priced in. the quantitative tightening question, what is the fed going to do with its balance sheet? trillion massive. they want to move quite rapidly to start reducing that and all sorts of estimates as to what that would do. the main thing is it is expected to push up treasury yields and possibly steepen the curve. there is all of that playing into it, and the new got the bank of england and the yen has been the center of difficulties. what do you know? japan is off. three out of the five days next

week or that makes for an extremely volatile picture in currencies and elsewhere. sheri: garfield reynolds there. let's get the vonnie quinn with headlines. vonnie: the u.s. economy unexpectedly shrank in the first quarter. g to be declined at 1.4% following a 6.9% basis growth at the end of last year. economists had called for a 1% increase. contraction was due to a ballooning trade deficit and less robust consumer spending than anticipated. gina said the figure is not a trend for the economy. >> you look at small business starts, they are higher than ever. talk with ceos, the economy is resilient and growing. obviously, you don't want to see this. it is disappointing. but, we were not surprised. i do not think it is a trend. vonnie: president biden asked

congress for $33 billion in aid for ukraine. white house officials say the funding would cover ukraine's costs through september 30, the end of the current fiscal year. the proposal would also get the u.s. new authority to seize and sell the assets of wealthy russians, allowing the government to use the proceeds to help ukraine. -- agreement with the imf within two months. in a speech to business leaders, he said external debt restructure remains top priority. domestic that will not be restructured. he gave assurances that political develop into a lot impact the imf action. 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. this is bloomberg. sheri: still ahead, we analyze the significance of amazon's union election and what it implies for labor rights and corporate culture. plus, the dollar is king.

the cries raging across currencies as the yen tumbles. this is bloomberg. ♪

>> this is the currency market vigilantes. >> the driving force. >> because of yield differentials. >> it is up by 10% to 15% over two months. i think that will be a cause for concern. >> the dollar yen could push higher. >> the longer term chart continues to point to 150. ultimately that's where this is going to >> it is impossible to control the yen. >> this is a new macro regime.

the risk premium has to go up everywhere when you are seeing these types of moves. sheri: the yen tumbles. an interesting call from goldman sachs strategists, seeing high risk of intervention as the yen keeps falling. also saying it won't really change the fortunes of the battered currency. other analysts thinking it is all but inevitable the yen falls to the 135 label. lehman capital saying it could weaken to 200 or beyond. take a look at where the crisis stands. we are seeing a change of about 100 -- 130. this is the weakest level in about 20 years. especially defying expectations of perhaps a move higher, given we heard from the finance minister, perhaps a more decisive way to tell the markets to stop selling the yen. they were coming out and saying they would respond appropriately. this after the boj doubled down

on their alter easing monetary policy. they will continue with on purchases to tap yields. that is really not doing the yen any favors. take a look at the chinese yuan and the aussie dollar. we saw a lot of u.s. dollar buying after the boj policy. that actually sent the other currencies much lower and the aussie rebounding from a month-to-month low, as the dollar index is now at a 20 year high. let's get analysis with sean callow, westpac. we talk about the dollar index high, how much of this has to do with the weaknesses of other currencies like the yuan, the yen and the euro? sean: it's a combination of factors. certainly there has been localized weakness, as you say. the yuan come a very sudden move

over the past several weeks after extended periods of stability. volatility picking up but it seems china is reaching the point where trade between gains wouldn't go much further. the euro has specific weaknesses on the energy side. the hint is that is going to be to growth. wars on its doorstep, so that might be weak for a while. for the euro, the only surprises really what took so long to get going on the downside? why haven't we seen any real rally since were broke out? the -- of the move is very dramatic. the bank of japan -- it is clear they want some -- they have lingering hope that maybe all that commentary from the ministry of finance in the preceding couple of weeks might be reflected in the stance from the boj. but they are sticking with their

yield curve control policy and that has ignited a fresh wave of dollar buying. i certainly agree with the 135 area as the obvious target. >> goldman sachs said even if the government came out to intervene, that wouldn't actually help. what do you think? sean: it would be a very lively day. we talked about volatility earlier, it is a pretty wild day. it seems ridiculous they would. [indiscernible] it doesn't align with monetary policy. we just had to boj telling us they need to keep monetary policy loose. the side effect of that is a weaker yen. how much weaker? yes -- is volatile, but really -- there currency will be set by

markets and we haven't seen anything for a long time. it just doesn't align with policy. a week before the fed kicks off what is probably a series of 60 basis point rises is not the time to do it. i do think fed positioning is getting one-sided and there will be a pullback at some point. at some point, maybe later in the year, markets will start to think about, has the fed done enough? how close are they to the end of their cycle, given they are frontloading? haidi: what are the interesting moves we have seen is the plunge in the yuan. take a look at this chart, the big moves we have seen. in fact, big moves in volatility as well it offshore yuan on track for the steepest monthly decline since its inception. last time we saw this was 2015. when you look at the relative moves to the euro, the yen, the

aussie, what is going on? sean: -- is striking really. i things really kicked off on the 18th of april. that is where we had gdp on the face of it but notable weakness in the march data. particularly retail sales. it's one thing we get an announcement from the pboc, so we have to read the tea leaves and look at what is happening in china's economy. growth is being hit hard by the zero covid policy, trying to get omicron under control. that is really hurting the economy at this point. given that inflation in general has not been a particular problem in china for the past little while, then adding a superstrong currency in strength-weighted terms, which it had to be, then letting a bit

of steam out makes sense having a softer currency it's just the timing that is hard to predict. haidi: we also see emerging markets currencies down for a ninety-day along with -- the longest streak in 21 years. is that a yuan anchor currency? do you see more of that once we get past, or get to the fed next week? sean: it certainly a big factor there. as you said with the fed, you can't ignore the fact that the fed is being aggressive on rates , a difficult environment for a lot of currencies it obviously we've got a world economy struggling with high energy prices. these past two days has seen a resurgence in natural gas with russia cutting off supply. that is adding to the terrible terms of trade shock for lots of big energy importers.

china is there, but it is a little different category. certainly india and korea and just not a very upbeat environment for investors to be looking for opportunities in emerging markets. clearly an underperformance. haidi: great to have you with us. sean callow, senior currency strategist at westpac. to get your day going, this editions of daybreak. terminal subscribers can get it. this is bloomberg. ♪

♪ haidi: a quick check of headlines. elon musk is set to have offered ways to monetize twitter in talks with banks to take over the social media giant.

he floated the idea of cutting both cost and jobs as well as adding potential subscription services. twitter's latest earnings reports missed estimates by 1.2 billion dollars. a16 percent gain in sales was the worst growth in six years. robinhood, which drew novice investors turning -- during the early days of the pandemic is struggling. transaction revenue totaled 218 million dollars, a 40% decline from the year earlier. that sent stock plummeting after hours. china's biggest offshore driller has given shareholders a session dividend with profits surging. income more than doubled to $5.2 billion in the first quarter. sheri: up next, cities across china continuing mass testing at lockdowns for just a handful of covid cases. we get the latest. this is bloomberg. ♪

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haidi: take a look at offshore and onshore yuan, extreme volatility. we kissed since november, 20 20. dropping out a similar pace than what we saw after kind of sharp devaluation. if you recall, that spirit an estimated $1 trillion in capital flat. lots of reasons including diverging policy and the impact of the covid situation. we know pboc probably does not want to have that massive

outflow situation, particularly in such a key political year. shanghai posco it outbreak may be showing signs of abating. the economic toll of the covid zero approach. it comes as the nation and's into a five day holiday period that will likely see people's movements limited. let's bring in our chief north asia correspondent stephen engle. this is part of those key consumption periods of the year. it is going to be different this time around. >> you have those two golden weeks, then october holidays come labor day. the five day period that begins tomorrow. those are the main holidays in china. restrictions across the country are extremely limited, especially out of beijing and shanghai, the city of 25 million in lockdown. these ghost town drone shots are telling the story.

this is how it works in china, you get the mandate from beijing , then nobody in their provinces or minister polities wants to be blamed for a big covid outbreak, so they take steps to get ahead of the curve and not have a repeat of fortis happening in shanghai. at the same time as we got all those policy moves and statements from xi jinping and the pboc this week, essentially saying, you need to provide job growth. you need to provide infrastructure growth. you need to provide growth. how are you going to do that if everybody is locked down, not participating in the economy? that is the dilemma and that is why we are seeing many economists of a many banks including bloomberg intelligence, they are out with their revision lower for growth this year. the government has about 5.5% growth target, it is going to be very difficult to meet that target without abandoning covid zero. they say 3.6% growth.

sheri: we are in the mist of earnings season. we have heard from big multinationals talking about china as a risk. what are they hearing? stephen: apple is probably at the top of that list. just within the last hour essentially saying supply chain constraints could knock off $4 billion to $8 billion in revenue. obviously china is very connected to the supply chain for apple but you are looking at other companies too. i am skimming the surface, caterpillar warning that demand in china will be weaker than expected because demand is slumping. obviously, they make construction equipment. boeing, microsoft, texas instruments, airbus among the many big list companies saying supply chain constraints are going to likely have an impact on the revenues. haidi: stephen engle with the latest on global earnings and the risk coming from china.

here's how china's earnings season is shaping up during a busy week for results. so far, sales are just ahead of misses with more than 150 companies reporting. this is a picture for bottom lines. negative surprises well ahead of positives. there's more earnings on the way later today. we will be watching results from the big china banks including icbc, bank of china and others. haidi: qualcomm results smashed estimates, thanks in large part to christiana -- plan to diversify the company beyond making chips. he told emily chang there has been growth across the entire business. >> this strategy is working for the company. it is really working. we are now growing across all business and a number of different markets. yes, it is a great story, it will continue to be a great

story. we are doing well. no good deed goes unpunished, i guess, by doing well. we get all these questions, but the reality is the iot growth has been incredible. we grew 61%. an auto, we have a 3 billion-dollar design pipeline within the quarter. the company is truly changing from what is perceived to be a communication company, it is really a connective processor company for intelligent edge. hopefully that message came across. emily: you have gotten so many questions about your relationship with apple, including from yours truly. the call focused a lot on samsung. is it better for qualcomm to have samsung as a successful customer as opposed to apple? if so, why? >> that is a good question. i think it goes to the heart of

our mobile strategies. here's the reason we are doing so well, one of the fastest growing revenues for us, silica and content and earnings is on the processor side. we put the following strategy in place. we want to be synonymous with premium and high tier android. when you think about a flagship android, use think -- you think snapdragon. snapdragon is becoming the platform of choice from samsung to vevo. they -- to build their phones in the flagship category. to go back to your question, when we sell a snapdragon eight series into a galaxy s 22, from

an revenue and earnings standpoint, it is probably the equivalent of selling modems to five iphones. it is a great trade. especially when you look at the decision made by samsung as a result of a strategy being very focused and snapdragon winning in all categories, the best smartphone cameron the world of the best ai, the lowest power with graphics and cpu performance, that is driving a shift from 40% to 75%. galaxy s5 and 21 now worth 75% plus. >> the qualcomm ceo speaking with emily chang good a big interview coming up. after intel reported lackluster results, pat gelsinger joins bloomberg ahead of his trip to japan and taiwan. for now, let's get the vonnie quinn with headlines.

vonnie: u.s. treasury secretary janet yellen defending the biden administration's $1.9 trillion spending baggage. it has been criticized for fueling the highest inflation and 40 years. bidens 2021 rescue plan came on the heels of two major packages in 2020 totaling almost $3 trillion under former president trump. the biden program played a key role in driving growth. >> the recovery packages sought to protect against risk. they were not just tailored to address the median outcome. let me be clear, the risk in 2020 and 2021 was a downturn that could match the great depression. vonnie: authorities in ukraine's capital still can't guarantee safety residence hoping to return. this even after russian forces pullback from the city's outskirts. -- told bloomberg it could take

$100 million to rebuild the city. the exit of businesses and people has already cost at least $1 billion to the city's budget. russia's war against ukraine does not follow any clear rules. >> this role -- this word is genocide of ukrainian population. our city is destroyed. i am talking about mario pull, kharkiv, destroyed. [indiscernible] vonnie: -- with a guaranteed 4% return to foreign investors willing to park their money for two years. sources say discussions are ongoing and details of the plan could still change. the average to investors would represent a major u-turn by the turkish central bank as pressure mount some authorities to reverse capital outflows. 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: up next, amazon workers are voting in new york on whether to join a union. we discuss the significance of this for u.s. labor and culture. this is bloomberg. ♪

♪ >> apple coming out with very

strong earnings results. but, concerns over supply chain constraints is really hitting the stock, down 2.3 percent after hours. amazon down 9%. inflation is eating into those low-margin businesses. amazon web services still the bright spot. a mixed bag what i comes to those earnings. intel also paring back some earlier declines. but, revenue was disappointing. sales and profit forecasts were disappointing as well. there are concerns that perhaps demand for its chips are not out there is much as they were before. we have seen twitter accelerating in after hours sessions. this is of course after we had revenue missing estimates and a little more detail of elon musk's plans to take twitter private. haidi: let's get more on amazon. today we are looking at the

companies labor union election underway at a second warehouse in new york. that will decide whether to join an upstart union that has already won an historic election. let's bring in kate bronfenbrenner, cornell university. we to have you with us. the first victory does not necessarily lead to a second. we know that. broadly, is the political environment becoming easier? amazon had pretty successfully kept that out for a quarter century. kate: we are in a very special moment right now. we have a tighter labor market. we also have a moment where workers are turning towards unions for many reasons. workers are angry. they feel the country didn't pay attention to them during the pandemic. corporations make huge profits and workers took great risk.

they risked their lives and families. they didn't gain. they want respect. they want their rights taken care of. employers have treated them very badly when they have tried to exercise the right to organize. amazon in particular has broken the law, has acted in an inhumane way when workers have tried to organize. haidi: you talk about some of the points coming together, this confluence of a perfect storm. so many of these workers were vulnerable throughout the course of the pandemic, they worked through the course of the pandemic and the resurgence, now we are seeing the rising living cost and the pressure being put on people just trying to make a wage and get by.

does that add to the anger come over the impetus to see change? kate: these are workers who are making a little bit above minimum wage. cost-of-living of living has gone way out. people talk about come of these are great times, jobs are everywhere. these workers are not doing well. everything costs more. they're having to work very long hours in very unsafe conditions. when they try to ask for safer conditions, when they try to ask for better hours, they don't get anything. there has been a great deal of racism in the campaign from the employer. that has fueled the fire. shery: if we continue to see more success in workers organizing, are we going to see perhaps this spreading to other companies? kate: organizing is contagious.

we have seen that in the starbucks campaign. each time workers organize, other workers say, if they can take on this global corporation and win, maybe i can too. haidi: what are the mechanics of that? how do workers start with this movement? kate: for workers to organize, they have to talk to other workers. they have to go on the job and talk to each other, convince each other to file a petition with the government. and then keep talking to each other. and when the employer threatens and intimidates them, they have to keep up their courage and keep going. workers are very brave. the workers at amazon have had the courage to keep going, even when faced with threats of discharges, intimidation and coercion, they have kept going.

that's what it takes organize. shery: historically when you look at labor unions organizing, what is the difference between before they organize and after in terms of labor conditions for these workers? also, how do you push back against the idea from employers that there is a reason they don't allow this, that they want flexibility in order to be profitable? that this is actually very costly? kate: after workers organize, the next step is to get a contract. negotiate a contract. what workers get -- try to get, they want the right to grievance and arbitration. it is under our constitution, workers have a right to freedom of association in the right to collective bargaining. collective bargaining is the right to meet and talk with --

talk about terms and conditions of employment, to speak to workers -- speak to employers when workers feel unjust things are happening, and having a voice when change happens. when there is a change in terms of conditions of employment, workers can talk about the effect on them. health and safety problems, technological change, when workers feel like there is discrimination. workers want to have a voice. they want to be able to make sure they are treated with respect and dignity. they want to make sure they can talk about things. if they are denied leave because of sickness in the workplace, if they can talk to the employer about it. workers are concerned about broader social issues they want to be able to talk to the employer if they feel the employer is not taking those serious concerns. it is about respect, dignity, voice. these are the issues that matter to workers.

these are rights that workers -- go on. haidi: kate bronfenbrenner, we will have to leave it there. senior lecturer at cornell university, thank you for your time. we have breaking news. she how is not -- shanghai is now reporting 15,000 local covid cases thursday. this is as we continue to watch for any more cases or deaths, and perhaps more restrictions coming from shanghai. we are trying to get those death numbers as well here they have not dropped as of yet, but we will get them to you as soon as we can for now, shanghai reporting 15,032 local cases thursday. planning more to come. this is bloomberg. ♪

♪ >> -- described as disappointing by the u.s. commerce secretary. in an exclusive interview with bloomberg, gina raimondo says it won't be a friend. >> if you look at small business starts, they are higher than ever. wages are up. you talk to ceos about their businesses, the economy is resilient and growing. at this point, obviously, you don't want to see this. it is disappointing for you

never want to see it, but we were not surprised. i do not think it is a trend. >> what our business is telling you about the consumer right now? this had a lot to do with our trade imbalance. not a lack of spending by consumers who seem to want to spend in the face of rising inflation. what are you hearing her from companies across the country? >> exactly what we say. people are employed. unemployment is at an historic low. people have money to spend. they want to spend. obviously, inflation is a drag. people feel it, we know that. if you look at the fundamentals of this economy, productivity, production, investment, wages, hiring, it is all strong and resilient. >> last time i spoke with you we talked about the innovation and competition. this has been in the works, in the air, on ice for the better

part of the year. it includes the chip act. 52 billion dollars to incentivize domestic chip making. it is remarkable to see progress over the last 24 hours. mitch mcconnell and chuck schumer say they have a timeline they have agreed on. but so far, they haven't been able to name conferees to create a committee to hammer out differences between the house in the senate version. if this is a national emergency, as you have suggested, the need to make chips in the u.s., why is this taking so long the >> -- why is this taking so long? >> it is a national emergency. talk to any defense contractor. they tell you, they need chips to make sophisticate or weapons. talk to the auto industry. they are still furloughing workers because they don't have chips to make cars. you don't have to believe me, this is a national emergency. i wish i knew what it would take to get congress to move more quickly and do its job, but it

is past time and they need to do their job. the american people deserve to be safe. this is the single most important bill to bring down inflation long term, to fix our supply chains long-term and create hundreds of thousands of high-paying american manufacturing jobs. i will say i am optimistic. i am hearing more from senators on both sides of the aisle concerning the urgency of this. we have to kick it into gear and get it over the finish line. >> gina raimondo speaking with bloomberg. we do have the death for shanghai cases. 52 covid deaths reported thursday. we did get -- just over 15,000 local covid-19 cases reported. this coming as we see some

easing, some signs of easing when it comes to the covid restrictions in shanghai. of course we have seen in other parts of shanghai, as well as other parts of the country including increasing concerns over beijing and surrounding areas. some of these other major economic and tech's, in various -- tech hubs. cases starting to go up. some stocks we will be watching when korea and australia open in a few minutes. asian suppliers of apple are keenly and focus in korea. we are watching lg. samsung among the chipmakers evaluating locations in india to build out new manufacturing plants there. that expansion coming as nations around the globe are increasingly putting resources and chip production. we are watching for the impacts as we have seen tech stocks down

after hours after a mixed bag. shery: plenty to watch as the market opens in sydney. tokyo was away on holiday. this is bloomberg. ♪

shery: welcome to "bloomberg daybreak: asia." in shery ahn. haidi: i am haidi stroud-watts, our top stories, asian markets and for mixed trading, the yen living past 130 following big tech earnings. apple says restrictions will hit demand and make it harder to produce products and are raising billions of dollars in profits. amazon produces sluggish sales

growth as consumers return to pre-pandemic activities. shery: take a look at korean stocks, coming online, a little bit unchanged after the kospi gained ground in a previous session, industrial production numbers out of south korea earlier today with the month on month number beating expectations of growth of 1.3%. we are watching government bonds in south korea, 10 year yield helping 3% with the broader global bond rout, budget is all about the currency strength we the dollar strength at a 20 year high, and that is pressuring everyone else with the korean won seeing its worst day since june of last year and at a 2020 low, and we are seeing 12.72 level, i was just thinking of that 12.50 level. not surprising, it do have the finance minister coming out in south korea saying they are watching the markets very

closely, they will stabilize the fx markets if needed. this morning under their finance minister saying exactly the same thing. it is really about the verbal intervention at this point, because japan's finance minister also coming out and saying in a more decisive way that it would continue to see these moves, that there could be a response coming from them. still, the japanese yen low against the u.s. dollar, at a 20 year low as we continue to see the boj carrying out unlimited bond buying operations. the boj doubling down on its yield cap policy, further pressuring the japanese yen, also leading to this broad dollar basket buying, which took the aussie dollar to a month to month low. haidi: we are seeing volatility just hurtling higher, not just when it comes to fx, but that is

where we are seeing so much of that tumult and anxiety. take a look at the equity set up, first three minutes of trading seeing stable gains when it comes to australia, as we get into not just the fed but the rba next week, markets pricing in a move as all but certain. we are watching other moves when it comes to the bond market, jp saying above 3% when it comes to treasury 10 years is looking at an attractive level, new zealand flat. we are looking forward to that reopening to tourists. airlines could see more of a move, and the kiwi dollar is heading steady as we get this dollar is king mantra. take a look at what you see when it comes to major commodities training -- trading, asian currencies struggle, that will

impact demand for oil. the likes of the yuan and other asian fx place -- plays as well as letdowns impacting demand. crude off by 1%, gold is holding steady at the moment and watching that correlation between the strengthening in the dollar as well as broader inflation fears. this is what we are seeing when it comes to the new covid numbers, the latest covid numbers out of beijing. record deaths reported out of shanghai on thursday, beijing city reporting 49 local covid cases for april 28. this comes as we see various states of lockdowns across a number of chinese cities. stricter measures from massive testing drives to lockdowns for just a handful of covid-19 cases, but places like the e

commerce hub, schools getting off to the labor day weekend holiday early. this comes at a time when we are about to have what is usually a very busy tourism and consumption season ahead of may holidays. let's bring in our next guest who was expecting asian markets to find a flaw, but the rebound will require growth stabilization. with us is julie away -- wang, always great to have you with us. how much of that stabilization is to come from china? >> thanks for having me on the show. i think a lot of the growth stabilization's signal will need to come from china, which you mentioned earlier is in the middle of a renewed covid outbreak. we have seen four weeks of lucked out in shanghai. it could be for another one or

two weeks. we are seeing sporadic cases being reported elsewhere, particularly in beijing where we are seeing mass testing. it looks like the prelude to economic restrictions, which could hurt growth. we are still thinking -- looking at the next couple of weeks in continued downward position in terms of growth expectations. we started to get with a 4.5% gdp assumption, leaving some allowance for situations like this, just in case covid three -- re-erupts. but this introduces additional downside risk to our forecast. hopefully we see another two or three weeks of lockdowns, situations start to stabilize by the end of may. second quarter could be the worst quarter in terms of growth, and the second half of

the year we could see more fiscal policy coming through slowly, which will help us to move growth expectation back up a little bit, but generally this year covid is a big driver of growth apart from other factors slowing, such as the housing market and global export demand. haidi: the security times are think we could see two more rrr cuts this year and that the pboc as were to cut interest rates by another 20 basis points or so. if we see more swift action, is that enough to put a floor under the volatility and give more confidence to investors? >> well, i think at this point probably any policy is better than no support, so having more from the policymakers side is definitely better for markets.

we have been a camp that says monetary policy is very depended upon the housing market in terms of the transitioning mechanism because it accounts for almost half of credits in the system. it is also a very key factor that transmits the effect of lower policy rate into the rest of the economy. that traditional transition mechanism is not working out so well, so that is partly the reason the pboc has been quite cautious in doing monetary policy easing. some further incremental policy signals are likely given that clearly there is expectation for it, but we would not expect that to shift the growth trajectory up a gear. you need to see covid subsiding first and some fiscal support. shery: how will the chinese yuan

react to that? how does that set you up for what you do and do not like in the equity space? >> sure, we are of the view that the yuan will continue to weaken in the next few months based on fundamental factors that are shifting coming into 2022. one being clearly global export demand is not quite as good as they were last year. we are looking at a sizable trade surplus down 20% or 30% from the very strong level we saw in 2021, and the big policy divergence in the u.s., and thirdly the fact that in this current environment the stronger dollar is pushing every other currency to depreciate. these fundamental factors warrant a weaker rnb, and that

will provide pushing for the economy. we think authorities will manage the pace of depreciation. shery: i see in your notes that you like treasuries especially 3 to 5 years or longer, which sets us up for the survey about the bond markets and volatility. do you have any expectations of when the uncertainty in the bond space will end? >> sure, i think that for long-term investors we are looking at a picture where seven to 10 year treasuries are approaching 1%. in the backdrop of a strong dollar and deterioration of global growth expectations, that is looking like a fairly attractive package for long-term investors. if you ever head into a bad global scenario, the treasury

offers more upside in that scenario. a risk-reward or treasuries are looking quite attractive, particularly with investors going into alliteration from 7 to 10 years are looking increasingly better. we do think inflation is key to watch, preferably seeing a peak in inflation probably around midyear. it will be an even clearer signal for investors. shery: julia, always good talking to you. of course, in south korea we are watching some apple suppliers, including one that recently mr. and operating profit, but we are seeing the upside of almost 2%, samsung electronics gaining ground after their earnings came in better than expected, but they did point to the dollar strength and korean won weakness and flagged concerns over covid

and parts shortages that should persist into the second half. you see a mixed picture with lng. vonnie: the u.s. economy unexpectedly trying to the first quarter, gdp declining at 1.4% annualized rate following a 6.9% pace of growth at the end of last year. economist have called for a 1% increase. the director was mainly due to a ballooning trait deficit and less robust consumer spending than anticipated. gina raimondo said the figure is not a trend for the economy. >> you look at small business starts, they are higher than ever, wages are up. the economy is resilient. at this point obviously we cannot want to do this, you never want to see it, but we were not surprised. vonnie: president biden is asked

congress to provide $33 billion for military economic and humanitarian aid to ukraine. white house officials said the funding would cover ukraine's cost through september 30, at the end of the current fiscal year. biden's proposal would also give the u.s. with a ready to seize and sell the assets of wealthy russians, allowing the government to use the proceeds to up ukraine. sri lanka possibly central bank on expect to sign an agreement with the imf within two months. in his speech a local business leaders, he said external debt restructuring remains the top priority, but domestic debt will not be restructured. he also gave assurances that political developments will not impact the imf's actions. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i am vonnie quinn. this is bloomberg. haidi: still ahead, we speak exclusively to the charter education group on what the crackdown means were profits. the again slides after the boj

it would buy and unlimited amount of bonds at a fixed rate. this is bloomberg. ♪

>> i want to acknowledge the challenges we are seeing from supply chain disruptions driven by both covid and silicon shortages to the devastation from the war in ukraine. we are not immune to these challenges, but we have great confidence in our team and our products and services and in our strategy. shery: apple ceo tim cook on supply constraints there. let's take a deeper dive into

the latest tech earnings with su keenan. we have been watching apple perform very well but at the same time talking about the $80 billion hit because of china lockdowns. >> that reversed everything morning of a $4 billion loss in the quarter. you have to recall your adventist after hours feel good rally where stores -- shares of apple were soaring. it was the best nonholiday quarter ever, but they report records across the board, they beat out iphone sales, ipad and services. look at what they talked about on the conference call. they warned of negative headwinds, they said the covid restrictions that have swept china will take a toll. they also expect chip shortages to continue, and the outlook

renewed concerns that we have always waited to hear from other tech companies, microsoft, texas instruments have said covid-19 lockdowns are going to make it hard to produce products like the xbox. apple said the latest supply did not begin until the end of the march quarter, and that is why they had such a strong quarter. first fiscal segment sales and profits, revenue up 9% all fueled by strong demand for the iphone and digital services, and the company announced $90 billion in new stock buybacks read that presented a strong quarter, but the outlook has really put the fears and concerns about shortages and supply chain back in focus. haidi: amazon taking a big dive in extended trading, a couple of major disappointments for investors. >> they missed on earnings and

in terms of the outlook, so that is a big concern for investors, the stock was down as much as 10% in after hours before coming off the low in the session. they reported a first quarter loss of $3.8 billion and reporting a loss for the current quarter when analysts were expecting profits on both. there blaming it on the loss due to rising fuel costs and especially in europe affected by the war in ukraine. it has doubled its warehouse and delivery capacity and nearly doubled its workforce. just one year ago they were talking about staff shortages, but that is what is eating into profit, and it is causing them to work all of these new people into the system. they are projecting sluggish growth as sales are cut back. haidi: elon musk is said to have offered ways to monetize twitter

and is in talks with the bank to take over the social media giant. bloomberg understands you for that the argue of cutting both cause and jobs as well as adding subscription services. twitter's latest earning report saw estimates missed the third quarter, a 16% gain in sales. china's biggest offshore drilling has given shareholders a special dividend with profit surging on rising production and soaring oil and gas prices. the net income more than doubled to $5.2 billion in the first quarter. the company says it will give shareholders a special payout after delaying the announcement of its 2021 dividend allocation month to month. huawei's profit dropped as the chinese telco continues to battling crippling trade and investment sections. revenue declined remarks. sources say the company's profit was it by winning sales and

growing research and development costs. plenty more ahead. this is bloomberg. ♪

shery: it is been a huge we can asia's currency markets, offshore yuan on track for its deepest monthly decline since its inception. the last time markets are something of similar magnitude was after china shock evaluations back in 2015, losing ground for more than 4%. we are watching a historic time for the yen as well, the plunged to a 20 year low, the threat to leaving it significantly weaker for years have come at the cost of you in becoming more expensive was a japanese holders of treasuries to be the most in more than two years. not surprising to have japanese investors dumping treasuries in the latest.

haidi: let's get some more with our rate strategist. we have got a lot of messiness potentially in the next seven days. what are you watching out in terms of dollar-yen specifically? >> japan has entered its golden week, which means markets are closed, so you have thinned the quiddity, which is not good for volatility because it could add to it. today in the u.s., you have pc data and cost data. the big driver of the dollar-yen is differentials. it all rotates to the u.s., and what happens with u.s. yields? next week we have ism data and that little central bank called

the federal reserve in its policy meeting, and markets will look to see how hawkish it sounds and whether they continue to signal 50 basis point hikes. shery: we also have another small bank called the boj, they are doubling down on capping those yields. what are we expecting from them? will they be forced to move given what is happening with again? -- the yen? >> i think that is the real question. it is no big surprise, but they came out very blatantly and said we are going to defended -- defend it, so the question becomes how many bonds do you have to buy? at some point it gets unfeasible, the market becomes very on functional, and at that point it will force you to tweak your policies slightly. the big thing looking forward is

purchases of daily bonds. they may tweak their policies slightly. haidi: what are the risks for the weakening yuan for china? are we worried about outflows and broader implications the currency market? >> jenny's bonds are one of the best performers this year, so that is a good one, positive for the yuan. from the equity perspective that is not as positive, and at the moment it seems the pboc is comfortable letting it depreciate. u.s. yields were rising, the yuan was stumbling and that 640 range. the sentiment is the pboc is comfortable with it weakening.

last time it was down in this range of 630, 640 was 2018. it is one thing to rally or weaken against the yen or dollar. everything is weakening against the dollar, but in the basket the yuan is not done that much. shery: take a look at the currencies in play, the dollar under a bit of pressure at the moment this as the japanese yen old at that 130 level and we have the korean won, that weakness continues and offshore yuan holding. a lot to do with weakness in asian currencies and the incredible strength that we continue to see in the dollar. the dollar index at a 20 year high, bloomberg dollar index at a two year high. --

our interview with the bank's cfo is ahead. this is bloomberg. ♪

vonnie: this is "bloomberg daybreak: asia." u.s. treasury secretary janet yellen is dividing by numbers to be his administration one point $5 billion spending package, which has been criticized groping feel the highest inflation 40 years. biden's 2021 rescue plan came on the heels of two major packages in 2020 totaling most $3 trillion under former president donald trump. yellen says the biden program played a key role in driving growth. >> the recovery packages sought to protect against risk.

they were just not tailored to address the median outcome. the risk in 2020 and 2021 was a downturn that could match the great depression. vonnie: the mayor of kyiv said authorities in ukraine's capital cannot guarantee safety to residents hoping to return. the mayor told bloomberg it could take around $1 million to rebuild the city the exodus as caused a $1 million hit to the budget. he says russia's war in ukraine does not follow any clear roles. -- rules. >> is genocide of the ukrainian population, because our city is destroyed. [indiscernible]

vonnie: turkey could offer interest rate lira the guaranteed 4% return in dollars with investors went back to many for at least two years. i was discussions are ongoing a details of the plan could change. the original investors will represent a major your by the turkish central bank as pressure mounts on authorities to reverse capital outflows. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i am vonnie quinn. this is bloomberg. shery: standard chartered or positive on the outlook for china even after flanking charges related to its real estate sector. the cfo andy halford spoke to bloomberg about earnings that beat estimates in the first quarter. >> we are around -- countries and that gives us broad reach.

we had increases in our exposure in the last few months. [indiscernible] even if there is softening of demand the rates will be considerable. >> so what outflows? are we expecting that to come from china? >> i think in china, whilst gdp expectations have been low, our focus is on across border trade, so that important activity affects us. we continue to be very positive about china as a region, and we will continue to do everything we can to help our clients to navigate changes going on.

the underlying sector is still strong. manus: there was one closing line understatement on real estate, hsbc says it is too close to call an end. is that being done? are we at the end of that cycle, are you concerned there could be material or -- materially lower risk? >> it is not fully through it cycle. hopefully it will fully settle down, but overall it is one sector that we have got. we have taken one reserve but not huge reserves. haidi: andy halford there. coming up next, we speak exclusively to the china education group under earnings.

what policies could mean for the future of the education sector. this is bloomberg. ♪

haidi: it is a huge day for china by serious banks as some of the biggest reporting earnings. rishaad salamat during this for a preview. what are we expecting?

rishaad: it is apparently, there earnings today, they did. the full gamut, icbc, agricultural on top of china on top of the bank of china itself, and medications as well. they have always been looked at as having good fundamentals, but at the same time we do not get much of return. mainline running banks disrupt stable earnings prospects that they had at the start of the year against the backdrop of many headwinds, not least in shanghai, the lockdowns we have seen there and jitters across the banking industry as well. the prospects of locked in beijing given the current situation as well. if you take a look at what bloomberg intelligence has been doing, crunching the numbers.

they give estimates of stable profit growth of 7.7% on average this year. you look at that and you look at these banks themselves. the wealth management likely to be affected by the closures because they cannot sell products. they are sold on a face-to-face basis. also look at long performing loan ratios, when something as of late is not been such a problem as it was before. shery: rishaad salamat there with what to expect out of those earnings from big banks in china. return to the education sector as well, the china education group reporting earnings were six months, revenue rising 29% from a year ago while student

enrollment increased by 23%. let's discuss how covert restrictions -- covid restrictions are impacting the sector. joining us is bill mok. we continue to see more restrictions, more lockdowns coming down as well. when in is that having on your business? >> i think it will be very minimal. our online program was very successful. 15% of our program can be given online. shery: are you already starting to transition and prepare given that we continue to see more covid cases and deaths across the largest city in china? >> yeah, i think we are very

well prepared, and we will see how a ghost. most of our students of on campus, so we have a typed approach to safeguard our campus and our students. haidi: are you seeing more educational tech companies pursuing overseas growth ambitions considering the domestic crackdown? >> i do not see that. we are still very much focused on onshore. [indiscernible] china is still the major market for our growth and we will continue to expand ourselves. we do see the pandemic, it will be gone sooner or later. for long-term growth we still

believe in the china market. haidi: what are the greatest challenges for the sector and for your business model? >> i would say quality is one, but all of the positive supporting iron education and what has been lately on the focus of education it will give a further boost on our business. we are very positive. we got a report to expand our policies and focus on education. for china education group, we have 12 schools in china, including universities from traditional schools. even university is very vocational.

shery: tell us a little more about your overseas business and your ambitions as well. >> ok, we do have a school in sydney. it is not a big school. it will help us to formulate [indiscernible] our school in china. when they graduate they will get a chinese degree as well as an australian degree. we have a school in london, that program will be even more attractive given that after finishing a four year program, the student can get a chinese degree and u.k. degree and even

a u.s. degree, so it is a very attractive program. also, onshore in china, our schools do not offer much programs. both schools in sydney and london provide the programs. when students get special degrees from our school, they can further advance before the market program that they want to pursue. haidi: how would you gauge investor sentiment for the sector right now after the brutal selloff and regulatory changes? >> it will take some time for us to educate the market.

[indiscernible] since the ipo back in 2017 we said we can do the -- on higher education. we have more and more readability in the market. over the last few months because of the rumors and concerns, it has not only happened in the education sector, but across the board for the chinese stock. for us, we have to work harder to educate the market and do our best on our own business so to gain the confidence of investors. shery: our exclusive conversation with bill mok, thank you so much for joining us. we look at global money managers

bucking the trend by sticking with chinese stocks despite some of the world's worst losses. that is coming up. this is bloomberg. ♪

haidi: ford has reaffirmed its outlook for the year as third-quarter results topped expectations. i am prices helping the automaker offset supply issues. we spoke with the cfo. >> our early reservations and orders are highly skewed toward california and the east coast. absolutely, one of the things to point out, we have high-end pickup trucks and the price range you talked about, but we also have the starting series had around $40,000, so we have made this vehicle affordable for our commercial customers, as well as those that would want to

enter into it at the entry level series. >> what is the torque issue that came out? people are saying this thing cannot pull like the other electric vehicles. you are in those meetings with your engineering degree. help us with that. >> this truck is fully capable, it is built ford tough. it has all of the capabilities you need in a pickup truck and it does have the towing. we feel very confident that this truck will meet our customers' needs and it will represent ford tough as we have for many years. >> that might be the look forward. the looking out is beset by supply chain issues weighing on some of the supplies you were getting in terms of your automobiles in the first quarter. do you maintain your guidance,

even though you have seen production falls short of where you were expecting? how can that be? >> if you look at the first quarter, we had incredible demand for our products, all about new products, the bronco, the bronco sport and out electric vehicles, the incredible f-150 lightning. we see very strong demand for our products. in the first quarter we were disrupted by modules that were constrained due to the chip crisis. we resolved many of those. we do see the rate and flow of chips improving through the second half, and we are seeing great traction on our ford plus plan, and increasing demand, very high demand. we see our volume is up this year versus last year 10%, 15% and that abscess confidence of

confirming our guidance. >> how much you expect to raise prices on your automobiles this year given the fact that demand is robust and supplies are constrained? >> we have taken pricing this year and we are in an inflationary environment. the pricing is stuck, and we will manage that. you will probably see inflationary pressures continue, commodity prices continue to increase their it together think that we are doing is we are also focused on cost. in an inflationary environment to have to manage both ends. driving efficiency through every line item of our income space. shery: john lawler speaking with bloomberg. here is a check of the latest business flash headlines. a company gets released a share buyback program for investors concerned by softening demand. the nickel giant will purchase

up to 500 million shares over an 18 month period. 10% of outstanding value and roughly $8.3 billion. suffered by the funds from norway, singapore and abu dhabi may have signed on investors. sources say gic and the abu dhabi investment authority will be among names announced on monday. the ipo hopes to raise as much as $2.7 billion, making it india's biggest listing. bloomberg as learned accompanied missed an interest payment on the latest sign of pressure of chinese developers. it is the third payment in april that went through a 30 day grace period before going to default. haidi: for more on what to

expect from the china's market open, let's bring in our china market reporter. just a high will it stop as the yuan plunges? >> it is still quite strong against trading partner currencies. it is very much about dollar strength, but people tend when the yuan weakens against the greenbank and it is what the central bank looks at when it is fixing the reference point on a daily basis. the speed of this depreciation is quite similar to what happened in 2015. this is a market-driven move, but people are starting to compare the two, starting to wonder whether the pboc and

china is comfortable with the speed of this depreciation, and it looks like it is. the yuan is coming from a high base. when you add depreciation to the correct narrative around china when investor confidence is extremely low, it is difficult to separate the two, and that is the risk we might see going forward. shery: i am curious to see how the volatility in the yuan is being felt in the equity space at a time when we have plenty of earnings coming in. the sales side of things are looking ok, but the bottom line not as good. >> and just looking ahead as well, because the moves in the yuan are in april. we have seen softness in earnings, outlooks are not good. a lot of these companies depend on domestic demand weakening now

under the covid zero strategy. the picture is not looking bright for china. we had a lot of analysts reduce their forecast for where they see the yuan in the coming months and also by the end of the year, and bloomberg economics says the conditions around youn -- yuan depreciation could take it to .7 of the dollar. not a good time for a company trying to sell domestically. shery: our chief china market correspondent there. we are watching stocks, especially given that it is a big earnings week in china. take a look at these coming up, commercial bank of china, china construction bank, bank and agricultural bank of china said to release the latest earnings reports when markets open in

hong kong and the mainland. despite delivering a strong second quarter, apple morning of trouble ahead due to china's zero covid policy stance. take a look at asian chip suppliers that could be moving. when talking about movement, a lot of movement when it comes to the fx space especially when it comes to the japanese yen. equity markets are closed but we are seeing a 2020 low against the u.s. dollar, very costly to hedge those yen spikes. haidi: at we just spoke about the volatility we see in the yuan, the extreme strength of the dollar, playing out when it comes to the yuan, take a look at offshore yuan implied volatility. the shocked evaluation, and

estimated $1 trillion in capital flight. we note this is a difficult political year for that to happen again so we are watching that fall very carefully. that is it for "bloomberg daybreak: asia." our coverage of markets continues ahead. this is bloomberg. ♪

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david: happy friday morning. it is 9:00 a.m. here. welcome to the china open. today, the yuan