>> good morning. we are counting down to asia's major market open. shery: the top stories this hour, a turbulent fraud ahead risk assets after a one point $3 trillion u.s. stock selloff.

bonds under pressure, treasury yields fitting multiyear highs ahead of friday's u.s. job support. the dollar surges as investors rush to havens amid a spike in volatility. u.s. futures not doing much in the early asian trading session. this after that turbulence in the last two days, we are talking about 95% of companies on the s&p 500 lower. this is after the s&p 500 saw the best day gains since 2011. -- best fed day gains since 2011. we have not really seen those sharp u-turns in quite a while. we have that haven flow into the dollar, wti a volatile throughout the session. it did manage to extend gains in the asian session given that the u.s. is rebuilding its oil -- refilling its oil inventories, not to mention we continue to see the threats of sanctions on russian oil.

it was what was happening on the treasury space after the fed action and that 50 basis point rate hike. we saw it go in the opposite direction with that selloff continuing, the tender yield topping 3% -- 10-year yield topping 3%. we had that curve continuing to steepen. haidi: we are setting up for a turbulent friday, negative indicators and sentiment. this is what we are seeing when it comes to sydney futures, a big drop potentially 2% lower. we already see that hammering australian bonds as well. look at the aussie dollar, that volatility at play. the biggest decline since march 2020 off the back of its best day in 11 years. currency traders feeling a bit of that whiplash.

we are seeing new zealand off by 1.3%. the dollar yen above 130. what a day for japanese markets to return, asterisk coming back after three days off we have tokyo cpi's and monetary data released. adding to the concerns of the fed trajectory was the bleak message of recession potentially , stagnation, the loss of jobs across the labor market and double-digit nation hitting a nerve for investors. look at bonds. this global bond selloff is continuing after the wrist fight for treasuries, seeing escalating selloff in the long end, 10 year as well as the 30 year bond rising. we are seeing that play out in australia. that three year yield back beyond 3%. it hit that early this week for the first time in eight years before falling. the 10-year yield back above 3.5%.

is similar selloff when it comes to kiwi sovereigns as well. shery: let's break down those big market moves with our correspondent for asia and global economics and policy editor. i need you to help me understand what is happening and the markets right now. >> a couple things going on. one is, there were people saying this at the time yesterday -- yesterday our day in the u.s. -- a big part of what happened after the fed was due to positioning. a lot of investors have gone into the federal reserve, positioned for a more aggressive stance than they got, and the immediate impact of that was for bonds to rise rapidly. choice got squeezed -- shorts got squeezed.

that gave them a signal to go, ok, this may be the bottom for now, so let's pile in. that then cause positioning shifts. even then, on wednesday in the u.s., there was concern that there might be an insufficient level of aggression projected by the federal reserve when it comes to fighting inflation. the 30 year yield did close up at its highest in several years, which is a warning signal, and breakeven rates went higher. there's concerns about the potential for too soft and inflation and then those came back overnight. the fact we had a gain being made selloff more potent. haidi: the dollar value was short-lived. garfield: yeah, it always seemed

likely it was going to be short-lived. you were either going to get a world in which the fed was seen as being raising rates faster than everybody else and also removing accommodation by qt and that was going to put a bid under the dollar or you are going to get this world where the fear factor came back and at the moment, if there is fear in the markets come the dollar is rising. up those the dollar. shery: we are not done. we still have the friday here in the u.s. and the u.s. job support. what are we expecting? kathleen: the markets are watching it closely in the context of how much the fed is going to have to tighten interest rates. let's start here. the former vice chair who stepped down in november is speaking at the hoover institute monetary policy conference. his prepared remarks show him saying he things rates are going to go higher than jay powell does.

he says, getting back to neutral -- remember how may times jay powell used that word. he says the funds rate will need to be in restrictive territory, at least a percentage point above the neutral rates, 2.5%. he is talking about 3.5% at least. jay powell said they will not hesitate to go higher than the neutral rate if needed, but one of the things to determine this is the labor market. he is suggesting that somehow they are going to do enough for unemployment to stay where it is, maybe rise at little bit, job creation to slow down, which we have seen a little bit recently. in terms of the forecast for the april jobs report on friday morning, payroll gain of 800,000. that is still pretty hot and the unemployment rate is expected to fall. not exactly moving in jay

powell's direction, but that is the context of the jobs report. what does it mean for inflation, wages? that is what investors may be reacting to. haidi: it makes you want to hide under a rock. any country, you can say we've got problems but sometimes you say, the u.k. is being hit hard by a lot of things. they warned today when they came out of their meeting with a 25 basis point rate hike to 1%, that is the highest since 2009. they are looking for a rise of inflation, the cpi year-over-year to 10%. you can see wages rising at a record. also because of the impact of rising energy prices more than anything else, a big demand shock is expected to the economy. andrew bailey, the governor of the bank of england, said he does not expect ever session, he does expect a sharp slowdown to

1%. they also said they expect to see 600,000 u.k. job losses because of this, because of higher rates. although, important here as well, this decision to raise by 25 basis points happened with a 6-3 vote. there were three members who actually wanted to do the 50 basis point hike. but it's interesting to me, we have had moves this week -- the rda surprised people. the reserve bank of india came out a month early doing a change and raising two key interest rates. people are looking at inflation, responding. the bank of england not responding as aggressively as they might have that is what the fed is watching. that is one of the big things we see. when we are talking about volatility, this is another thing, with these things hanging over investors that will continue.

haidi: kathleen hays garfield reynolds there. let's get over to vonnie quinn. vonnie: thank you. opec and its allies are sticking with their standard small monthly production increase in the face of tightening global markets. consumers are calling on saudi arabia and its partners to fill the gap left by an eu ban on russian oil. liz meeting brought it down to four to 22,000 barrels a day in greece for june. china's leaders have warned against questioning the country covid zero strategy. in a meeting, the standing committee reaffirmed its commitment to the approach. it also said authorities are making progress towards overcoming china's worst outbreaks since the first wave in wuhan two years ago. japan's prime minister said he loosened the virus-related border controls next month, aligning them with those of

other g-7 nations in a did to boost consumer spending. he said later the border will be opened in stages based on the advice of experts. there he allison is among well-known investors agreeing to back elon musk's acquisition of twitter. crypto exchange finance as well as brookfield, fidelity, and kaiser holding have also given new financing commitments. the saudi prince has also agreed to rollover his current investment in twitter. 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. this is bloomberg. shery: still ahead, we are looking to what could happen if roe v. wade is overturned with a law professor formerly served the u.s. supreme court. this is bloomberg. ♪

>> this is not a good day, this is not a good year. >> we are pretty firmly in a big bear market. >> is about inflation. >> the market is trying to determine what is the most important factor going forward. for the fed, it is clear.

they are only focusing on inflation and telling us that. >> i believe the market is going to go 50% below its peak. >> we think things are overdone. you have gotten rid of some excesses on the underlying fundamentals are still relatively good for now. shery: some of our earlier casts on the market selloff. the bank of england's clue me outlook has contributive to the negative mood sweeping across assets. and you barely told us he is seeing a dichotomy between market voices and pricing. >> it is interesting market reaction. we have discussed this. we discussed how we think markets might react. you can make a case, we collected a lot of intelligence and information from markets, and our team collects a lot of information on what the markets think we are going to do.

it is like looking at herself in a mirror. there were arguments both ways. some people are saying, we are looking at what the vote will be for instance. but we did not spend that much time on that. i'm not saying they should. read the statement, the minutes, take the whole thing and. >> what do you say to the market? it has 118 basis points pricing between now and year end, that is just shy of 25 per meeting. is that a mixed price? what do you say to the market when it has that expectation? >> i'm not making predictions on what we will do. what we will say is this. we do a market survey, we publish it. republished one at the last -- we published one at the last meeting. there was a gap between the

market prices and what the market was telling us in the survey. the survey curve was considered lower than the market price. you can have arguments about market price and have a distribution of risks and views of the risks and the survey is more of a centricus view. we could observe that the gap between these two things was larger than it often is. we spent a bit of time pondering that. haidi: andrew barely there after the pessimistic expect -- pessimistic nearby the boe. terminal subscribers can get that at daybreak go. this is bloomberg. ♪

>> with a sharp reversal in u.s. markets today with the best bet rally since 2011 being wiped out, the nasdaq 100 plunging 5% after gaining more than 3%, one of the most violent u-turns we have seen for that index. the nasdaq composite has been pretty volatile in recent days. for more analysis, let's bring in michael every. always great having you with us. but it these market moves mean? are investors finally understanding where the fed is coming from? yesterday, they were relieved that 75 basis point hike was taken off the table. michael: yesterday, the market

[indiscernible] then on thursday, they found their brains and we got the results we saw. whether we will lose our brains or find them today remains to be seen. a lot of news coming through. we have big data release coming through as well. it would not surprise me if you did not get an enormous surge in volatility again, everyone running and the other direction. they will be wrong again if they do but it would not surprise me. shery: is this the end of the by the dip mentality, given that right now the fed does not want to lose and financial conditions anymore? they are going in the opposite direction. when is the market going to understand this? michael: there's an old saying, which is about science that i think applies to what you just talked about, which is progress comes one funeral at a time. it takes a long time for

institutional memory to shift. you hang onto an idea and hang on and hang on and people have to literally exit the stage before new ideas can come through. i agree the market should be recognizing that as things stand now, the fed does not want to do what everyone normally things it will do and bail everyone out as soon as things look rocky. it will take a long time for maybe two generations of traders who have made a lot of money by never having to do anything other than wait for the fed to save them to realize that is not going to happen this time and when they do throw in the towel on that, it will be worse than what we saw yesterday. haidi: his relief and the markets in the face of what is perceived to be dovishness or relative dovishness a false economy? is that not set up for the pain of inflation continues to rise, growth continues to slow, central banks continue to be behind the curve? michael: exactly.

the key point i was arguing yesterday in my not sarcastic at all style was everyone said that the fed had a perfectly threaded the needle why was it that you had bonds rallying and stocks rallying and the dollar selling off? for enough. and you had commodities rally in? how can you square that? i understand the new normal of bonds rallying and stocks rallying. you cannot have that and commodities rallying. that means you still have growing pipeline inflation pressure. it is commodities that are holding out and everything else that is crumbling and the dollar is picking up, which is another pinpoint outside the u.s., stronger dollar and higher commodities making the importation of commodities twice as expensive for other people. haidi: what does one do about china now? michael: in what regard?

haidi: as an investor, the narrative you are seeing this martone? -- seeing a smart one? what are we seeing when it comes to expectations from beijing? michael: i have been allowed a consistent voice, not giving investment advice, but saying that i was skeptical of everyone who is bullish on china. i could not understand why. we have had other market voices controversially saying is on investable for political reasons. since the invasion of ukraine, you have seen more investor money starting to think similarly. that you have hard lockdowns which we heard yesterday are likely to last for the rest of the year. you have to think, which of the two arguments carries more weight? particular the against a backdrop where everything else is selling off. i do not see the relative value trade. haidi: i also wonder about, as

the market is struggling to deal with the economic regime change, it feels like there is a relative sense of acceptance that we are going to continue to see the war in ukraine after the russian invasion continue in the medium-term. what are we not seeing there in terms of the further disruptions on top of what we are seeing with inflationary pressures, supply chain energy markets? michael: if that is true, and i fear that it is, but things can change -- if that is true, what we saw yesterday, even if that was particularly extreme, 5% down on the nasdaq, we can expect more of that, two steps forward one step back going forward. we are not going to get normally functioning supply chain spac. we will seeing on shoring again,

two steps forward one step back. we are not going to see the normal low-priced, functioning commodity markets that provide the input for everything that we need to build things into to eat and transport things. they are not going to come back. it continues to escalate on the ground and in the economic sphere. on the basis of that, we are all poorer than we were and we have to recognize that. one quick point at the end. central banks cannot pump up demand, which is what they have been trying to do on the supply side. but there is no resolution to it. shery: you have all of these issues sending prices higher and it seems none of them are saying that the federal reserve or any other central bank can control. what do you make of the federal reserve's actions yesterday, whether it was taking off the sunday five basis point hike

were trying to choreograph this selfish landing -- softish landing. michael: taking the 75 basis points for syphilis move. you are in a war of sorts and you are taking weaponry off the table. that is what -- that is what generated the ridiculous rally on wednesday which created a larger selloff. they should have alluded that it could remain there. because they are not going to do 75, they will have to do more 50's. that is what the market recognized. at the end of the day, they don't have a great deal they can do about it. one of the things they may have to do is try to have a strong dollar in high fed funds rate to crush commodities because that may be one of the only remaining tracks they have left to go down to get energy prices down in commodity prices down to bring inflation under control. can you imagine what that is

going to do to the markets if that is their unspoken goal? shery: always good having you on. up xfinity mobile runs on america's most reliable 5g network, but for up to half the price of verizon, so you have more money for more stuff. this phone? fewer groceries. this phone? more groceries! this phone? fewer concert tickets. this phone? more concert tickets. and not just for my shows. get $400 off an eligible samsung device with xfinity mobile. take the savings challenge at xfinitymobile.com/mysavings or visit your xfinity store and talk to our switch squad today.

shery: we have news out of japan, we are getting the tokyo headline inflation numbers. rising 2.5%, coming in at a faster acceleration than expected for the month of april. also accelerating above that 2% pace, around 1% the previous month. core cpi numbers exclude fresh food which is a volatile item. you have acceleration of 1.9%. much faster than the previous month and also at a faster rate

than was expected. exclude energy, you get core cpi and the acceleration of inflation in tokyo was 0.8%. the reason we follow tokyo's consumer prices is it gives us an indication of where the national numbers will go. we are trying to see whether the bank of japan will hit the 2% inflation goal. the boj consists that that is because of transitory factors. tokyo core cpi coming and at 1.9%. haidi: onshore japanese markets return today after three days off. let's see what we should be watching for. it has been quite -- it has been quite the eventful week that japanese traders have been missing out on. >> i think they are pleased that they missed out on it. much better to be on holiday than have to put up with the volatility we have seen this week.

it is going to be about relative plays for japan. they cannot avoid the negativity coming across from other markets. there is not much they can do about that. with again being relatively weak, there will be some support for japanese equities, maybe in the travel sector, japan is going to be reopening some of its borders. more people coming into the country. at least tourism related stocks could do better in japan. it is going to be hard for the market overall to rally when the rest of the world looks bleak. you do get some export sectors which may benefit a bit in that respect. the bank of japan has made it clear that it is committed to it super low interest rate policy. that means differentials compared to the rest of the world are going to get wider in that means the currency will stay soft for some time. that will affect sentiment particularly for foreigners. if you are a foreign investor

wanting to invest in the japanese market when there is a chance of some currency upside, not when the currency is falling quickly, so these things are working going into japan but they do have to messick investors bringing back money. -- they do have domestic investors bringing back money. at the end of the day, the global situation looks bleak and it is going to be a question about whether japanese stocks can outperform on the downside against the rest of the world which they may be able to do. shery: we are seeing global bond yields rally. are we expecting to see jgb yields pop? what will the boj do? mark: the bank of japan has stated that they are going to defend the 10-year yield at a 0.25 level. they bailout a long end of the curve, the 30 year and 40 year, they may allow those yields to go higher. you may see a steeper yield curve in that respect.

their messaging was resolute. they are in no mood to change their yield curve control for the 10 year and they have stuck to it. they are willing to spend a lot to keep the 10-year yield there. few people bill go up against the bank of japan in the 10 year sector. they may take them on in the superlong sector. the bank of japan usually wins, so you would expect them to control the part of the yield curve they are focused on. haidi: the other central bank fighting against the broader global elements of a tightening world outside of its borders, what to expect from the pboc in terms of the potential for yuan weakness given that the pullback in the dollar was short-lived? mark: i think it is inevitable that the yuan will have to we can further, not just because of interest rate policy. no longer that china closes off

its country to the rest of the world, the longer they restrict movement in the country, it is going to have a serious effect on economic growth. the quarter we are in now, many are predicting there will be virtually zero growth for china. that is extraordinary for a huge economy and painful. this is going to weigh on the currency upright from the stock market as well. the chances of the yuan strengthening is slim. they seem to be comfortable with gradual yuan decline. they are not going to stand in the way aggressively as long as the move is not too fast, as long as it is going down relative to other currencies and the rest of the world, they will probably allow it to continue to go. there's very little chance of the yuan appreciating when the pboc has more easing to do. shery: always good to have your insights.

let's get to vonnie quinn with the first word headlines. vonnie: germany says it is ready to house eastern european nations -- ready to help eastern european nations weaned themselves off of russian oil. the chancellor made the pledge after discussing with the checkpoint minister. the covid-19 death toll climbs to almost 50 million people in two years -- 15 million people in two years, that is about one in 500 people globally. the figure is higher than the official number at includes deaths indirectly caused by pandemic disruptions. data from governments put the number at just over 6.2 million. hong kong retail sales fell 13.8% in march from a year ago, the first bank to back contraction in more than a year as virus restrictions crush consumer spending.

the tumble was worst than economists fear, though not as bad as the drop in february. the city imposed strict social curbs during those months to contain a covid outbreak. 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. this is bloomberg. shery: take a look at cryptocurrencies. we are seeing a little bit of upside for bitcoin after it saw its worst day since january. we had ether falling as much as 8.7% at one point. this as we continue to see signs of the end of easy money with the fed continuing to hike, not to mention brazil and chile central-bank policy around the world getting tighter. the boe also hiking rates and signaling a potential recession session in 2023. let's discuss where this critical currencies are heading.

-- where these cryptocurrencies are heading. >> it is at the lower end of the range at this point. it is getting at a bit of a bid today, but that is after this big drop yesterday. it cannot escape that correlation with the other risk assets like the nasdaq. people are worried about the end of easy money. cryptocurrencies overall are taking it bad as people get concerned about where they are going to get the money to get any further. haidi: with markets grappling with the seismic shift in the economic regime in expectations, what does that mean for the role of cryptocurrency in so far that that has changed over the past couple years? joanna: it is definitely something that people will be

examining more now because in the past couple years, there's been this trend towards adoption , or that is the narrative. at this point, any institution looking to get in that feels like they might have missed out might be reconsidering at this point and saying, if i want to take a bath every time the stuff happens, i might as well be in the nasdaq. it is probably causing people concern and there is less action under the surface with people buying right now. into crypto. there are concerning signs. there's still greater adoption, there are a lot of things happening under the surface with the technology. might this be a temporary setback? sure. but it is definitely not a great moment for people invested in crypto. haidi: coming up next, a legal

battle over abortion rights with the supreme court poised to overturn federal protection. we take a look at what is ahead with a law professor and former supreme court clerk. this is bloomberg. ♪

>> this is off the wall.

i am shocked that alito would have written it, assuming he did. >> this is the result of a decades long campaign by extremists to overturn roe v. wade. >> i would be more shocked if the other justices in the majority were to sign on. >> this is the issue that can decide elections. women are concerned. >> will this we the midterms? i doubt that. >> we don't know if this is a reflection of what will happen yet. >> we want to take care of employees, cover employees, to choose whatever they want to choose. we want to protect a driver that happens to take summit to an abortion clinic just provided a ride. >> this will be a galvanizing issue in the election. haidi: tv guests reacting that the speed court may overturn roe v. wade. let's get more.

20 us now is reddick a row -- joining us now is radhika rao. i want to get your opinion on whether the originalists are misinterpreting the constitution and if the battle was against the right to privacy, what does that mean across the other issues and protections that are covered by that? >> great question. number one, if the originalists, we take them at their word, then the people who drafted the constitution did not actually intend for it to be interpreted literally, according to their intentions. if you are a true originalists, you should not be interpreting the constitution according to the original intent of the framers because the framers to liberally wrote the constitution in broad language that was meant to evolve over time. that is the answer to the first

question. in terms of your second question, what does this mean for the constitutional right to privacy, justice alito in his opinion, which we think -- which purports to be the opinion for the majority of the supreme court, he says that the constitutional right to abortion is not protected because abortion is nowhere explicitly mentioned in the text of the constitution. but that same constitutional text does not specifically mention privacy either. if the right to abortion is not protected because it is not in the constitution, there's no right to privacy. that would encompass not just abortion, but also contraception or the right to marry or the right to engage in intimate relationships, sexual relationships, with another person. haidi: this draft opinion has caused so much backlash and

upheaval in popular sentiment. when you reconcile a constitutional interpretation against political morality, contemporary views, is that a reconciliation that could happen in the form of a rollback when they see how many parts of the american public and political class have reacted? prof. rao: i do think that there may be some feeling, perhaps, of surprise, or the extent of the impact that this decision is having, and perhaps that will cause the justices to rethink their opinion, it might even cause the defection by one justice, and if a justice changes their mind, even at any late stage, then what looks currently to be a majority opinion could turn out to be a dissent. you could hope for that but i think the hope is slim. it seems as if all of these

justices are quite firm in their traditional philosophy -- judicial philosophy. shery: how often have we seen historically judges changing their minds, and who could be, in this case, if that happens, who could be the one who does that? prof. rao: historically, i know of one case involving roe v. wade. this i know because i came onto the supreme court to collect as it was happening. 30 years ago in planned parenthood against casey, the supreme court was asked to overrule roe v. wade and the original draft majority opinion was set to overrule roe v. wade, but one justice, justice kennedy, at the last minute, switched his vote and roe v. wade was reaffirmed. today, we find ourselves in the same position. a majority of five justices set to overrule roe v. wade.

there is a possibility that one justice might change his mind and the justice i would predict is most likely to change is anthony kennedy's replacement, kavanaugh. >> you mentioned the issue of president and overturning at and how that could branch out to other issues. could you extrapolate more about the significance of this decision if we overturn this precedent, what else could be affected? prof. rao: directly, if they overturn roe v. wade, the whole unenumerated rights to privacy, which encompasses not just abortion, but also contraception, the right to marriage and the right to sex, family relationships, all of that. in terms of indirect impact, a court like this one that shows

so much disrespect for president and a fury justice alito's opinion, he is mocking roe v. wade and the entire jurisprudence of president on which it was based. according that disrespects pre cedent might be willing to overturn others as well. shery: how does chief justice roberts feel about this? prof. rao: he must be furious. chief justice roberts really wants to move in moderate steps, incrementally. he does not like radical, big moves. the idea that one year after amy coney barrett was appointed, the court should overturn roe, he must be very upset that that would be happening on his watch. haidi: i am wondering how ketanji brown jackson is feeling even though she has identified as an originalists.

does that change the makeup of the bench in any meaningful way? prof. rao: justice ketanji brown jackson would be replacing stephen breyer, and breyer is already a liberal. it would not change the vote because if you replace one with another, they would vote the same way in this case. both of them, i have no doubt that justice jackson would also vote to open old roe v. wade -- vote to uphold roe v. wade. >> with susan collins suggesting that gorsuch and cavanagh misled the senate on whether they would -- on their views on roe v. wade, i'm wondering about your views on that. does that go into a credibility issue for the supreme court? prof. rao: i think there are massive credibility issues for the supreme court. so much of the country is questioning the legitimacy of this court at many levels.

one level is the one you mentioned. that these justices, when they were nominated, promised before the country that they believed in precedent. i think that they would say that what they meant was they honor precedent at general and at the time, bro was settled law, but that can always change in the point is that the supreme court has the power to change it and those justices think they are doing a great thing, getting rid of a precedent which they think is wrong. shery: thank you. next, japanese markets are set to reopen after three days off. we will discuss what to expect. this is bloomberg. ♪

>> we are counting down to the start of trade in tokyo. the stock market set to open after a three day break. futures indicating a drop after the selloff on wall street. we will be watching for more

reaction to the latest inflation data which showed the cost of living in tokyo rose at the fastest pace in three decades in april. the prime minister says he will loosen border controls in line with other democracies next month. sony in focus after the u.s. opened an investigation into the company's proposed purchase of bungee -- bungie. haidi: let's get more from japan. what a time to be away. we had the fed move. how do you see japanese investors reacting? >> we have been shut for four days in the last time we traded was last friday. a lot has happened since then. the last word you used, bungie, it looks like that is what is going to happen, straight down at the open, this flesh we are

expecting to see. i would mention korea which is reopening today. don't let -- i'm borrowing a phrase -- don't let the stability you are seeing in u.s. futures, the pullback in vix futures right now take away from the flesh we are about to see across asian equity markets. uic that in new zealand. this is where you are as far as nikkei futures. this time yesterday, it would have been ok. 24 hours, big difference. the magnitude of the job, when people talk about the drop in point in our percentage. you couple things to mention, it is a big earnings day today, japan airlines is coming out with earnings. it is going to be a big week next week. some of these re-opening plays might catch a bid, might is the operative word, on the back of the pledge from the prime

minister, relaxing border controls next month. and other things. in the opening minutes, pay attention to price action, have a look at volumes, and the extent which the nikkei -- which, by the way, closed right above the 50 day moving average on friday, let's see if the level holds. it is not look like it will. >> david in glass with a preview of the japan and korea open as we are getting breaking news out of china, shanghai reporting 12 cobra deaths for may 5, also 4269 local covid cases. we are getting an update on beijing covid cases. 72 local infections for may 5. this as we continue to hear from china's top leaders warning against questioning the covid zero policies. the strategies they say can stand the test of history.

the market opens in sydney and tokyo next. this is bloomberg. ♪

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♪ shery: welcome to daybreak asia. from bloomberg world headquarters in new york, i'm shery ahn. haidi: i'm haiti stroud-watts in sydney. our top story, stocks set to open under pressure after a $1 trillion u.s. rout. aussie bonds, selling off. central bank action, u.s. jobs

support the key data point to watch. china leaders worn zero tolerance over covid zero as pressure builds. shery: japan and south korea coming online. japanese equities were off for three days, but the nikkei is down .2%, perhaps a little catch-up given asian stocks fell throughout the week. the topics, off point 1% and holding onto gains in the broader index, right now gaining ground. we have seen japanese equities finishing just above the 50-day moving average in the last session, before holidays. we continue to watch the japanese yen because weakness continues, levels we have not seen in 20 years or so. already, nine weeks of losses against the u.s. dollar and we continue to watch jgb yields because a global bonds selloff could trigger a big move. look at this chart on the bloomberg, it shows you where we are adding yields.

you can see the pop fire, we finished at 0.23%, higher at the open. this as we saw the 10-year yield in the u.s. surpassing 3%, the 20-year yield above 3.2% at one point. we have seen tokyo cpi numbers this morning coming in at the fastest pace in three decades for the month of april, but the boj is continuing to insist these pressures are transitory, so they are holding to that ultra easy policy and capping the 10-year yield at the upper level of a quarter percent. we will live for this is added. the korean yuan has seen incredible weakness in days, coming off a five-month low in the previous month. right now, continuing to see weakness at that 1270 level. the korean stockmarket losing ground, more than 1% for the kospi.

we have seen increased selling by overseas funds across south korea. haidi: we are seeing unraveling when it comes to sentiment. when it comes to trading in australia, the first the minutes down .8% here in australia. energy stocks, given resilience in oil prices, look at the action when it comes to unraveling of the bond market. three-year yield crashing through 3% again. it briefly fell under 3%. we had declines in yields, 17 basis points lower for the 10-year, up another 10-year above 3.5% and the three-year above 3%, crossing free percent for the first time in eight years earlier this week. also seeing price action in the aussie dollar as well, creeping back higher, about .1% higher after it lost 2% overnight in the biggest decline since march 2020. that came on the back of the

best daily gain in 11 years. we are seeing so much to and fro when it comes to pricing action as investigators are really trying to navigate a lot of uncertainty from global central banks and the growth and inflation outlook. snp futures are holding steady but that is not in -- not what is lending sentiment to the downside as we start trading in asia, down .1%. but we could continue to see the downside when it comes to asia tech as well follow the u.s. broader tech selloff. the golden dragon index putting downside pressure on, when china and hong kong come online later. rent crude holding steady, shy of $111 a barrel. let's rake down the big market moves with our bloomberg cross asset reporter. what is most interesting to you right now in terms of

volatility? emily: one of the most interesting moves to me is the amount stocks and bonds were both selling off on thursday. cross asset reporters on bloomberg work comparing an etf that tracks a broad basket of eat -- of u.s. equities and another basket that track -- the tracks 20 year treasury bonds and both fell 2% in trading in new york. that has only happened three other times in the last 20 years. so, really historic losses in those equities and in bonds as those treasury yields rise across the curve. we saw big moves on the backend of the curve on thursday as well. shery: is this a situation where the market misread the fed is we had that policy meeting and now, they are saying, that was actually a very hawkish meeting?

what are strategists saying? emily: i saw a lot of strategists on twitter joking about how it is futile to make sense of this year drop in equities that we saw. analysts are saying, anyone tried to figure out what is really going on is probably going to be wrong. but it was quite a u-turn in equities. another thing i am hearing is buy the dip. that strategy that has been working isn't working as much anymore. if you go back to january, the s&p 500 days of decline have been 2.3 days. that is the longest cap we had in any year since 1984. you buy the dip, you see stocks lower, you go and buy them and you expect them to rally the next day and that hasn't been happening it in 2022. haidi: emily graffeo with the

latest moves on the market. our next guest says a peak in the dollar is needed for a sustainable revival of emerging-market. daniel lum is head of strategy at standard chartered bank. what you make of market moves in the past two days? daniel: everyone is over reading it, in my humble opinion. if you look at the price action in the s&p 500, that has leveled off, 4063, the gain a few sessions ago. that is critical. it was tested again. and i believe the market is going to test the level once again, very likely breaking to the downside. but there are a number of levers out there, starting with 4000. down to about 7700.

i think what needs to be revived in this market is the, is some kind of real likelihood of controllable inflation in the u.s. what kind of factors would be leading to that? a few of them. the oil has to come off in order for that to happen, and that depends a lot on russia and ukraine. the other point to note is the supply chain issues from china's, i guess, lockdown. haidi: those are -- shery: those are all things that the fed cannot necessarily control. taking you back to your point about the dollar, as the rally took a breather in the past session, it is backup right now.

so, when are we expecting that peak, because as you say, it is going to affect inflows? daniel: correct. we all know that is a big job. opening is quite a lot in the u.s. you actually have two jobs for people to look at for every job loss and wage inflation is a key part of the inflation. so, it needs to be a case where the u.s. economy begins to have expectations of a slowdown, in order for that to stop. where arbuckle to get to that point -- where are we going to get to that point? it seems as if we are not there. if we do get a couple more rate hikes, it will be signs that the fed is backing off a little bit. if you look at the u.s. 10-year,

earlier, there was a jgb chart that you showed. the u.s. 10-year level is 3.25. we are not so far from there, .25 away from their, and that is a key tentacle resistance level. if we manage to go south from that level in terms of 3.25, perhaps it is a sign of the market beginning to show inflation expectations may have peaked by then. but we are not there yet. i think the market is going to have more likelihood of downside rather than the upside. haidi: where do you prefer to be right now when it comes to asia and japan? because you are quite measured when it comes to getting over the covid hurdle and lockdown hurdle in china. daniel: at this moment in time, we really need to look at what happens when it opens today. but i think a starting point was

the 19,900 level. we need to look at that level, if it is going to hold up today. 19,900 was basically the level where this many valley started before we had the holidays earlier this week. now, that level needs to be held. because raking that level could be a test of 19,000 again for the index. having said that, believe you are going to have a good volume at critical support levels, so i think investors should be looking at gradually going in the hong kong/china market because the governments need to support the economy. because of the lockdown, they need to double their efforts in supporting the economy. at we believe that you could see signs of infrastructure support,

easy monetary policy and potentially lightening up on the regulation crackdown. haidi: the climate theme has been a popular one, as that changed evan volatility we continue to see, specifically in energy and commodities prices? daniel: energy stocks and oil are likely to stay strong. oil is around .1 o five, the up trend is certainly there, we are looking at $120 a barrel for oil and an upside for energy stocks. what that means for the claimant see -- the climate theme, basically they are high variation stocks. the yield at this kind of level is quite unfavorable for those stocks. having said that, if you look at

the long-term prospects come i think the long-term prospect are still there. so we are poised to look at those and in a three to five-year theme, there will be volatility ahead, what those are longer-term investments at one has to be able to stomach the volatility. because they are high variation stocks. haidi: great to have you with us, daniel lam, head of equity at standard chartered bank. vonnie quinn has our first word headlines. vonnie: opec and their allies are sticking with their production levels. international producers are calling on saudi arabia and its partners to fill the gap left i a potential eu and on russian oil. the group rubberstamped another 432 barrels a day increase for june. chinese leaders warned against questioning the covid zero

strategy. in a meeting led by president xi jinping, the covid policy committee reaffirmed its commitment to the covid zero approach and set authorities are making progress in overcoming china's first outbreak since the wave in wuhan two years ago. hong kong retail sales fell 13.8% in march from a year earlier, the first back-to-back contraction in more than a year as stringent virus restrictions crushed consumer spending. the tumble was feared, but not as bad as the 14.6% drop in february. the city have restrictions in those months to contain a widespread outbreak. a billionaire says well-known investors are backing elon musk's purchase of twitter. other companies have given new financing commitments totaling $7.1 billion. i saudi prince has agreed to

rollover his current investment in twitter. global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm vonnie quinn. this is bloomberg. ♪ shery: still ahead, one of the philippines largest telecom providers joins us to discuss their earnings outlook. don't miss our exclusive interview with ceo ernest cu. plus, the fed inflation fight, a preview of friday's all-important jobs report, this is bloomberg. ♪

shery: -- as japan and south korea are back online for holidays, i head of the u.s. jobs report, a very important number. this as we hear from a former federal reserve chair who says it will take more to curb inflation. kathleen hays is here with us. how much more aggressive with the fed need to be? kathleen: the vice chair left

after his term expired in november. jay powell opened the door to get above neutral if he has to. in preparation for the quarterly monetary policy tomorrow, he is speaking in the morning and said getting to neutral isn't going to be enough to get inflation down. he says the funds rate is going to need to be raised into restrictive territory, at least 1% above the fed to current view of the neutral rate of 2.5%. now, we asked the farmer president of the atlanta fed what he makes of the fed, are they behind the curve? are they going to have to tighten faster? he didn't exactly say, but he is willing to give the fed more space. >> they are now catching up. having said that, we have to watch how this economy evolves

and we are what he seeing some signs of a labor market that is slowing a bit. that could take some of the edge off wage increases, which would have a beneficial effect on the inflation numbers. it is a wait-and-see situation as far as i am concerned. kathleen: quite a contrast from a couple years ago, when we were saying we would like to see maybe the labor market go down a little bit, course that was in the middle of the pandemic when everything cratered. but now, the fed is basically saying they will welcome something that is less hot. haidi: the april u.s. jobs report, energy focus now, does that change things depending about we see with policy trajectory? kathleen: i asked about an hour ago what is the meaning of the jobs report? it is about the strength of the

economy and inflation? that is an important issue. yesterday, jay powell said the fed won't go higher to go above the neutral rights. but right now, he is expecting the labor market -- he says it is extremely tight end he thinks job creation is going to slow. to that extent, the april jobs report is expected to show payrolls up 380,000. they were 480 1000 -- they were 431,000 the month before. the labor report is expected to complicate things because it falls from 3.6 percent to an even lower 3.5%. the idea is that unemployment is so low in the labor market so tight, you will see earnings rising. earnings were up 5.6% in march and 5.2% the month before. it is ironic that, if anything, the fed is hoping they look healthy, but not too strong. haidi: goldilocks, right?

kathleen, our bloomberg global policy and economics editor. let's look at futures after what was a volatile session to the downside. we saw a slide in european stocks, the fed optimism giving way to growth fears particularly with pessimism out of the bank of england. european stock futures looking soft at the moment, dax futures off .25%, investors there are turning their attention to slowing growth and rising inflation. we have had a warning about the risk of inflection, double-digit inflation, the risk of labor market conditions deteriorating at all of that weighing on the pound, falling the most 2020. it was the gloomiest outlook of any central bank this year. governor andrew bailey, warning

of double-digit inflation and prolonged stagnation or even recession. >> i wouldn't agree with the statement that the cure for higher inflation is higher inflation. we think that a lot of the work in terms of a cure is going to be done by the fact we are experiencing a historically long shock to real incomes in this country, coming from outside the country. a trade shop, import prices, predominantly energy, food and some core goods. high inflation fuels high inflation? it doesn't. it is standard demand shock where activity and inflation are going up. what we have is inflation because of this big push out on real incomes. it is a real income push that we think will need a lot of work to lower inflation.

but here's the company i should. there -- but here is the complication. there are a lot of risks the other way and what is the labor market. we have very tight -- we have a very tight labor market in this country. there are a lot of predictions that we are going to have a big rise in unemployment. in the end, it did not happen. >> why are you convinced wages are not going to rise me the inflation we are seeing? i hear what you are saying about cost-of-living prices, but nevertheless, there is a risk of rates going higher. this seems to be a gap between the banking business. ceo's tell me they are really struggling to hire, as a result of which they are having to raise wages to compensate for that and as a result of which, while at the moment wages are below where inflation is, inflation is going to come down

but the labor market may stay tied, and we end up in and -- and up in a situation where that starts to bite. >> the core story here is a big real income shock to the countrn household income -- [no audio]

-- firms are saying one problem is, i can't higher enough people. shery: bank of england governor andrew bailey speaking to bloomberg. this is bloomberg. ♪

♪ ♪

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♪ shery: breaking news at of singapore -- the snp global -- s and p global numbers at 66 point seven, higher number than the month of march. bmi numbers continued to expand for the past 16 months, so this number as estate any positive. we continue to see positive numbers out of asia. hong kong and asia yesterday, the pmi back in retraction

territory. we will continue to watch singapore. their monetary authority is also starting to tighten. haidi: let's look at the selloff across asia, following what we saw in the u.s. session. bonds are being sold off, yields are spiking higher again after the brief respite of the previous session. the biggest loser here in australia, the biggest decline since february when it comes to trading on the as si -- 86 200 -- asix 200. the biggest fall with tech, asian technology off four point said -- 4%, health care off 3%. nice value when it comes to energy stocks, not quite

dragging the broader index higher, but gains over 3% for energy and 1.5% for utilities trading in tokyo after traders come back to work after several days away. let's get more on the japanese markets from the jeep asian rates correspondent. there is concern about the direction going into this fed decision, and it would be a very different story if we had gotten 75 basis points. what is the trajectory we are looking for now? >> there is still plenty of concern the yen could move lower at the dollar-yen rate could move higher. i suspect part of what is going on today is that japanese traders need to digest all three, or all four days, what went on. and in the jobs report tonight our time, or tomorrow morning in the u.s. their time, friday,

that is key. and we have cpi week. so, for the yen, there is maybe a sense that 130 or so could be the chance to be stable, especially if the data doesn't upset the apple cart when it comes to jerome powell's comments yesterday about how 75 basis points isn't really on the table. if we get some further inflationary concerns coming from jobs and from cpi itself next week, that would really drive the yield rate higher, towards 135, which is where it got too in the early 2000. and that then would revive talk of potential intervention. shery: you talk about cpi numbers coming up next week, but we already have the tokyo numbers, an indicator of where national numbers are going. they are now accelerating at the

fastest in nearly three decades for the month of april. the boj will not be phase, though -- be phase, though. garfield: no. the latest we have from the governor was, he was talking about the spike in oil prices and what is going on with the currency, he is hoping to fuel what he expects to be not sustainable inflation. he would need to see more evidence, is what he is indicating, before he would say it is time to ease off on yield curve control. for the moment, it is going to be very interesting to see what happens on that yield curve control, because there is a scheduled, unlimited bond buying operation today to keep japanese yields under .25%, and given that 10-year u.s. yields are now above re-present, there is

potential the boj might have to hoover up quite a few bonds. shery: bloomberg's garfield reynolds with the latest on japan, of course inflationary pressures around the world coming from higher oil prices treat opec and its allies are sticking to a small supply hike even as markets tighten anti-e.u. prepares to band russian supplies. let's cross to our asian oil trading reporter. elizabeth, walk us through the opec decision. elizabeth: the meeting was extremely brief. opec ministers stuck to their standard 432,000 barrels increase for june. most of their members are struggling with capacity. they have struggled to increase output at all in april with some members like nigeria having production drops because of operational destruction and less

investments. oil markets should see a slowdown in demand is china is recovering from covid coverage, but the big issue would be russian oil in the near term. current politics and russia definitely complicate things for the world and it makes any shock production increases without russian help. before the russian in praise of ukraine, we had seen opec with increasingly short meetings. it does look like we are not going to get much help from the group from these high oil rises, unfortunately. shery: our asia -- haidi: our asia oil trading reporter vonnie: vonnie: elizabeth low. germany says it is ready to help european nation weaned themselves off russian energy sources. it is pushing ahead with plans to substitute russian oil and build up infrastructure with

lng. they discussed resource sharing with the czech prime minister. the japanese prime minister he will loosen japanese virus border controls next month to boost consumer spending spirit -- consumer spending. the prime minister credit the restrictions with helping the country whether the covid pandemic. he says the border will be opened based on the advice of pandemic. the covid death toll was up to nearly 50 million in the past two years, according to a report from the world health organization which says that is about one and 300 people globally. it includes deaths caused by covid disruptions. the chelsea football club is fighting an agreement led by -- agreement with a group, and

could reach agreement as soon as friday with chelsea and its owner, a russian oligarch. a deal would end a weeks long bidding process front the most successful english soccer clubs in decades. global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm vonnie quinn. this is bloomberg. ♪ shery: china's top leadership is warning against criticizing president z jinping's covid zero policy, saying it will withstand the test of history. chief north asia correspondent stephen engle is in hong kong. zero tolerance questioning zero covid? stephen: and it is very interesting this statement came from the standing committee of the public euro on the same day we got criticism of the lockdown from the most unlikely source -- the former editor in chief of "the global times," and usually a very strident nationalist.

he has a huge following on twitter and is usually critical of the west, not necessarily the government. he put out a post on we chat thursday warning of dire consequences of repeated lockdowns across china on china's economy. the article said beijing is facing a make or break battle against omicron and that covid zero is only worth pursuing when the cost is manageable. guess what? within hours of that post being posted on we chat, it was deleted. then we get a statement from the politburo standing committee, the all-powerful body chaired by xi jinping, calling on the nation to fight any speech that distorts or rejects our covid control policy. so, they are not linking those

comments to the politburo action, i'm just saying they happened simultaneously. we also got criticism of the same day from anthony fauci, the white house chief medical advisor who said lockdowns do not work long-term because he said china has not used this time to boost the vaccination rate of the elderly. he also says the chinese variant of the vaccinations, the traditional kind, are not that effective. haidi: unsurprising there are more calls for stimulus to prop up the economy, with this set of circumstances set to continue. stephen: the big concerns about the economy and we are getting similar pledges that we got last week, this time from the head of the state council, essentially the cabinet. they are pledging more support. these are not concrete pledges,

just more vague terminology, more support for internet platform companies, small to medium-sized enterprises and also companies in foreign trade. beijing in the statement from the state council, essentially on the trade front said the government will and short stable production and logistics with foreign trade at ports and encourages banks to lend to firms in the trading section -- sector and vowing to keep the yuan stable. again, these are more vague pledges, we will have to see specific policies that come out after a slew of pledges from, whether it is the pboc, state council, central committee of finance or the public euro -- politburo. the market is still waiting to get a shot in the arm with specifics. shery: the markets don't seem to be believing it much.

stephen engle with the latest on china. up next, our exclusive interview with philippine telecom provider globe's ceo ernest cu, about earnings and outlook. this is bloomberg. ♪

shery: take a look at how em

currencies are trading, emerging markets under pressure given the u.s. dollar foster fast strength. we have seen some of the biggest losses in recent memory. we are also focusing on the political uncertainty from countries like the philippines. they will be holding a presidential election on monday, the son and namesake of former tater ferdinand marcos is leading the candidates while the vice president is trading a distance second. among the polls, investors showing the markets are stable with marcos at the bottom. historically though, elections are followed by big gains in the stock market. we will watch for that. let's bring in market coanchor david ingles with our next guest. david: we are joined in the philippines by ernest cu, ceo of globe telecom, a major care that

reported earnings recently. good morning. it is a pleasure to have you come it has been a while since we last spoke. i want to get your thoughts on your plans for the company beyond old-school telco. but i want to clarify what you meant when you said. has peaked. -- when you said telco has peaked. in many cases, core business growth has peaked or speaking. ernest: x-ray having me on. the peak means we won't be able to start the slowdown are capex as we build the infrastructure that we need, particularly. . in the broadband space we have reached the speeds -- particularly in the broadband space. we have reached the speed we wanted to reach in our mobile network and will probably move more into maintenance mode as

opposed to capacity builds. but we will have to see. the opening of the economy will have an impact on people's consumption of data, and as we can see in our earnings, even with just one month of lowered alert levels in the philippines, our mobile business has expended very nicely in the month of march. david: short-term, what is your sense of the current fiscal year, what are the assumptions you are making on growth? ernest: i think the business will grow in a healthy manner. our mobile business remains very strong and we have momentum. we are hopeful that when school opens, it will give us another step up and revenue growth on the mobile side. our broadband business is in transition. we were the leaders in fixed wireless in the philippines. and as we move toward the fiber side, the business in the fixed wireless side declined as the

product became not what customers expect anymore given the fact that they are looking for higher speeds, and 4g lt in the home was not viable. declines in fixed wireless, we were not able to offset those with increases in our fiber revenues. david: let's look longer-term, do you have any plans in terms of where you want to take the business, arguably beyond what you are right now? help us understand where you see the revenue mix in 10 years, telco assets and everything you are getting into commit data, health care, fintech, what have you. ernest: david, great question. globally, the telco industry has been slowing down. we expect that at some point, even emerging markets like the philippines, where data growth has been sustained for over 10

years, will experience this slowdown in growth. we have been preparing for this time to come by building businesses on top of the telco business. the taco business over is 20 plus years of existence has been able to build a significant set of assets by way of data for customers, a wide and vast distribution network, our partnering capability, our capital and most importantly, our people. the first manifestation of this growth has been [indiscernible] fintech for us is now a major contributor to our growth and profits as well as revenues. while we don't consolidate that, we can see significant growth on the g-cash platform which asked 60 million users and growing steadily. last year, we clocked three

point 8 billion pesos in gross transactions value. we are optimistic when it comes to growth. shery: and you plan to diversify avenue on the fintech funds, right? give us updates on how you're doing in terms of cryptocurrency and where you see that going given volatility we are seeing? ernest: for us, it is way beyond crypto. crypto is just one angle we are exploring. the biggest and most optimistic for us is the lending. we have i think three lending products not within the g--cash fund. one is g-credit, which customers can use to pay bills with that limited purchases with on a limited basis up to 10,000 pesos. qualifying means having a very good g-credit score. we recently launched g-loans,

higher-denomination loans that are straight cash, and so far, repayment rates have been very good. the most recent launch was a product called g-dibs, our by now, pay later product -- buy now, pay later product. this one is also ingrained in the spending habits of consumers and will take off when it is launched in a big way. so lending and key investments will also be developed. we are looking at expanding the range of options that people have in terms of equity trading in regional funds and so on. and also savings accounts, we recently took on another partner, big-name in the philippines, and our sister

company, and we expect the public to take this up in a very big way as well. shery: globe telecom ceo ernest cu. let's more to come on daybreak. this is bloomberg. ♪

♪ haidi: we are counting down to the open in china, covid

lockdowns still waiting on growth. u.s. stocks had a rough day as well. we are watching the open. our guest joins us. is anyone looking for the rainbow after the lockdown? this note criticism of covid zero really doesn't give confidence that this is going to be over soon. sofia: officials are doubling down on the covid zero strategy. that is not going away soon. it is a trigger situation wherein financial markets here are trying to read the covid numbers to gauge how you're going to trade. market sentiment remains low china. you say a big unwind of leveraged bets. it is the longest streak of margin debt falling since 2016. we know what happened in chinese markets in 2016 come also related to growth concerns, so

we could see more pain on that front. the yuan is holding steady, the bank play around the fed. and now, the fed shocked every market and we had pain overnighting u.s. markets, but the yuan remains steady. we are also looking at bond outflow data for last month. there were already two straight months of record outflows for chinese bonds. end april is looking like another bad month. anytime soon, that could comment really show how quickly money is being pulled out of chinese mainland markets. shery: how sensitive are mainland markets to wall street moves? as you said, we saw a huge capitulation overnighting u.s. equity markets. sofia: relatively shielded, i would say. u.s. equity markets are coming from a very different place. chinese markets have already

done badly. concerns were already priced in. capital controls mean mainland markets trade more on sentiments onshore than offshore. look at hong kong. that is the market that is impacted by both china and the u.s., it is a very small economy that is vulnerable to capital inflows. it also has to follow fed policy. the economy is not great, but hong kong had to hike rates anyway. that is one to watch. we are seeing libor ticking up. that is one to watch. the one-month is still relatively low, but it is the one market and economy that would be impacted by this. shery: sofia horta e costa looking at the chinese open. we are seeing pressure for the dollar after we saw the jump overnight on that safe haven demand. the euro and pound, holding steady after that boe rate hike. the japanese yen continues to weaken. haidi: and we continue to see

that global bond selloff, yields starting to spike again across asia. this is daybreak asia, our coverage continues as we look ahead to the start of trading on this friday in hong kong, shanghai and shenzhen.

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david: good morning. welcome to the china open. yvonne: inflation, recession fears sending investors into a panic, wiping $1.3 trillion out. a report shows solid payroll growth and wage costs, adding to inflation fears.