haidi: good morninghaidi: good morning and welcome to daybreak australia -- haidi: good morning and welcome to daybreak australia. we are counting down to major market opens. shery: from panama city, i'm shery ahn. haidi: u.s. stocks closing your session highs as investors way jay powell's promise to tame inflation even if it brings some pain. chinese companies listed in the u.s. get a boost after beijing's public show of support for internet platforms. lust the australian election into the home stretch. prime minister scott morrison's government is closing the gap. shery: this was the picture across wall street. take a look at u.s. futures at the moment because we had the s&p 500 finishing at a one-week

high. we had that solid number when it came to consumer spending, but also factory production rising at a solid pace for a third month. see u.s. futures extending those gains up .2%. we had stocks falling briefly to session lows in morning trading. we heard new york city raised the covid-19 alert. that took markets for a ride but we got treasury yields climbing. the curve flattening after the federal reserve chair powell said he won't hesitate to tighten above neutral. oil also gaining ground after it fell in the regular session. we had seen the u.s. government taking action to ease some sanctions. but take a look at u.s. retail sales because it grew at a solid pace. the caveat in these numbers is that you take away the inflation numbers recently and the gains haven't been that strong. haidi: yeah, haven't been that strong is where we are at in

terms of sentiment. have seen some fragile green shoots going into the start of trading this midweek. take a look at australia futures. it we are just a couple days from australia heading to the polls this weekend. signs are we are seeing a closer race than previous polls had been showing. we see asx futures up by 1%. this market has been -- the aussie dollar sitting above $.70 u.s. as we saw the dollar falling on the risk on day. some of the haven demand evaporating as investors shrug off the hawkish remarks from jay powell. that will give some support to some of the asian currencies including dollar-yen still under the 1.3 level. -- 1.30 level. we are getting into the start of trading with the asian leg of the rebound. shery: and we continue to watch

what is happening to price pressures around the world, especially as we have been waiting to see what happened in the u.s. when it came to retail sales. headline numbers were pretty strong. but there is the cabbie ought that if you adjust for inflation. -- the caveat that you adjust for inflation. consumers are relying on leverage to fund their spending. so that chart is showing you how we are seeing higher credit card debt. that is the line in white. goldman sachs says consumer spending will be relatively slow, so no wonder we are seeing that market volatility with investors trying to digest what that actually means. haidi: there are concerns about a bear market liquidity trap. it calls into question should we be doing more stress tests given liquidity conditions? we are getting to a point that it seems like market makers are struggling to buy and trade, sell and trade without making big moves.

this harkens back to the 2020 pandemic disruption. in recent months, we have seen trading conditions like equities and bonds getting worse as money managers kind of struggled to move without seeing these big moves. so that ease of trading issue when it comes to the s&p 500 futures market is worrisome even by standards of the covid pandemic era meltdown more than two years ago according to j.p. morgan chase and co. market depth and treasuries also approaching the historically pretty worrisome levels according to data from goldman sachs. we did see those worries back in 2020 ease in a matter of weeks, but a lot of people concerned this time around that we have an environment of tightening cycles in large parts of developed markets around the world. including a fed that could be a little problematic. shery: we have seen emerging markets really take a hit this year. we are talking about 16% losses for msei year today.

but it has remained resilient, gains of 13% this year alone. what a time to be here in panama city. we are holding the inaugural bloomberg news economy gateway latin america. we will be joined by guests including bianchi sasun, sharon o'neill -- shannon o'neill, and the inter-american bank president. two shocks of the covid 19 pandemic and the war in ukraine. it is really sending commodities prices through the roof. latin america is such a huge exporter of commodities whether it is grains or critical minerals. at the same time, they are reeling from all of these inflationary pressures. haidi: and consumers could be the saving grace, right? that is what markets are hoping for. laying the resilient april sales data from the u.s. and comments

from fed officials when it comes to the rate hike path. let's bring in our asia editor and global policy editor. what are the big drivers when it comes to the u.s. session today? andreea: the markets were looking to perhaps buy the dip after the brutal selloff we have seen. and they brought it with those u.s. retail numbers, certainly with headline numbers. and factory production being a lot more solid. for a short time, it pushed back those concerns about recession that have really been dominating investors'thinking in recent weeks. -- investors' thinking in recent weeks. there has been an adjustment from jerome powell. how he is going to fight

inflation. and monetary conditions have already tightened and are going to continue to tighten. we have seen that sharp jump in bond yields. inflation remains elevated. there is still a lot of uncertainty out there. but it seems that investors are waiting to sort of come in and trade on any sort of positive headline news urges what we saw last night in the u.s. shery: and investors were trying to figure out what chair powell really meant when it came to raising interest rates above neutral if needed. what are the implications of that? kathleen: i think jay powell is being so clear. this is the third time in a row he has pretty much said the same thing. they know they need to fight inflation and they know they should have started sooner hiking rates last year. now they are ready to go full speed ahead. he said they are going to keep pushing on rates until it is clear that inflation is coming down. here is what he said at a wall street journal event earlier today.

chair powell: inflation is coming down and that's what we need to see. if that involves moving past broadly understood levels of neutral, we won't hesitate at all to do that. we won't. and honestly, we will go until we feel like we are at a place where we can say yes, financial conditions are in an appropriate place and we see inflation coming down. kathleen: he was asked about the neutral rate. some people saying it might be 3.5%, 4%, or higher. he agreed we will push as high as we have to. he said the economy is strong and can withstand tighter policy. if the basis point rate hikes are fine for now -- 50 basis point rate hikes are fine for now, but inflation has to be reined in. it's not just the present numbers solid, it's the revisions. april retail sales up 0.9%. but the may increase was revised from 0.5% to 1.4%, nearly three

times higher. autos up to .2%. that was a big part of it. acellena sales because prices for seasonal adjustment reasons were down over the month. that is one of the things that prevented it being higher. the core was advised from minus 0.1 to 1.1. the guy that talked about the 75 basis point rate hikes, he's a hawk. 50 basis points is what he's looking for. another says it was easy for him to be a dove and it's easy for others to be hawkish. he is questioning if they have to cause a recession to get this economy to slow down enough to bring down inflation. jay powell is hoping they can achieve that feet. haidi: take a look at chinese tech stocks getting a lift. is this the signal that investors were waiting for? andreea: we certainly had some good news from china, the chinese vice mayor coming out in

support of internet companies. they and they are supporting the development of digital companies , suggesting perhaps the government is pulling back from that year-long clampdown on the tech sector. that is something that has been a real worry for investors. it has caused a lot of uncertainty. that is the golden dragon index up overnight with the likes of alibaba and baidu. we had better than expected revenue from jd.com. and it really came together to support chinese equities in the u.s. and we have signs that there is perhaps some easing in the shanghai lockdown. all of that is likely to provide some sort of a tailwind in asia today for chinese stocks that -- and perhaps the broader asian markets. shery: andreea and kathleen

joining us. the tech theme will be a big focus on day number two for the china summit in hong kong. stephen engle will be speaking to a number of big guests in the coming hour. steve is joining us from the city. what do you have for us? stephen: we will pick up on those big themes that andreea and kathleen just talked about whether it is inflationary pressure or a potential recession in the u.s. and higher rates. what does that mean for deal flows? we will be speaking with j.p. morgan's asia-pacific head of investment baking -- banking paul uren. mark leung will be joining us, j.p. morgan china ceo. he will pick up in the conversation we had yesterday with asia pac ceo philip on gory -- mongorri. they said they will not be seduced by addressing the short-term shocks that are seen

in the china market right now. they will be looking long-term. philip: the longtime perspective of the region in general and the china in particular, i think nobody has any doubts about that. therefore, we try to stay away from short-term -- and focus on we are doing this for the next 25 years. stephen: j.p. morgan with other wall street banks have big ambitions for the china market. last summer, j.p. morgan won 1% approval from their joint venture. we will also be joined later on in the morning by another guest. we will see how the pandemic has affected the priorities of the ultra high net worth individuals in the asia-pacific. and not to be outdone, we have - - will talk all things crypto. the unwinding, if you will. the impact in the future of

blockchain as the market is seeing another crypto winter right now like we saw in 2018. lots on the plate. haidi: lots on the agenda. stephen engle in hong kong ahead of those conversations. vonnie quinn has the first word headlines. vonnie: china's main bond trading platform for foreigners has quietly stopped providing data on the transactions. sources say the china foreign exchange trade system last published overseas investors daily trades on may 11 with data showing sizable net foreign outflows. it is unclear why the platform stopped releasing figures and whether the move is temporary or related to shanghai's lockdown. the biden administration is poised to fully block russia's ability to pay u.s. bondholders, a move that could push moscow closer to the brink of default. bloomberg has learned the treasury department will let a temporary exception lapse once it expires next week. that waiver gave russia room to

pay coupons to help default on -- avoid default on government debt. japan has approved an extra $21 billion help cope with higher prices. spending is brought -- part of a broader package of measures to ease inflation. it is part of the boj's easing plans despite the week yen. numbers are expected to show that japan's recovery is stalling. dow jones reports flight data show that someone in the cockpit intentionally crashed the china eastern jet earlier this year. the boeing 737 was cruising at high altitude when it suddenly nosedived at high speed into a mountain. citing sources close to u.s. investigation, no mechanical issues were found with the plane. all 132 people on board were killed. global news 24 hours a day on air and on bloomberg quicktake powered by 2700 journalists in more than 120 countries. haidi: we discussed market

strategy with washington-based wealth manager cope corrales who tells us how we are advising clients. shery: for bloomberg's new economy gateway latin america, we will be joined by bianchi and shannon as we dive into the region's growth outlook and more. this is bloomberg. ♪

>> if the economy performs as we expect, then that is something that will be on the table. and honestly, things are so uncertain in the economy right now, it is very difficult to

think about trying to give guidance out into the future. >> i think we will have a second big night at this apple. a recession that is more traditional where the fed can't bailout the recession because there is tightening to control inflation. haidi: fed chair jerome powell there and bruce richards. our next guest says the fed will have a hard time avoiding a soft landing and is sticking with defensive stocks. let's bring in shannon from the washington-based wealth image meant c -- management cope corralles. you say the next 18 months will have similar market volatility and there has already been a policy mistake? >> i expect volatility will continue in the markets for quite some time. a lot of it has to do with you can clearly see the overheating happen in the economy. and there are signals that there are other issues.

keep in mind, inflation has been elevated at a rate of over 5% in the u.s. for the last 12 months. it has been over 7% for the last five months. but as recently as the middle of march, the fed was still undergoing asset purchases and doing quantitative easing. which was not going to help get inflation under control. and now they realize the mistake and they are accelerating their policy for tightening which i think is going to make it very difficult for them to be able to navigate into a soft landing. haidi: when you take a look at the trading action overnight, there are concerns about the depth of market, and the fragility of sentiment. yet we saw the rally in spite of rising yields. does that tell you that this is going to be a fragile rebound when we get it? shana: i think so. keep in mind, we are technically

for the s&p not in a bear market. we are down a little over 15% as of the end of last week. i think we rebounded a little bit, but we have not hit the 20% threshold. so we are technically not even in a bear market right now. i expect there will be volatility. i think we are headed that way. inflation is elevated as it is. the rule of 20 is pretty basic. what it is is, the pe of the market and rate of inflation, add them together. if it's over 20, the market is overvalued. if it is under 20, the market is undervalued. the multiple is around 20. when you add inflationary to that, we are well over 20. we need to get closer to a market multiple of 15 to really feel like the worst is behind us and to have the market get the excess and speculation out of it. and we have some economic headwinds coming up with the rising rate environment.

we have slowing activity in some sense. yes we had retail sales and good industrial production. but if you look underneath that, they were being driven by things that aren't necessarily sustainable like autos. we had a pent-up demand for autos as a result of the supply chain. we are seeing that work its way out. there are things to be concerned about and there is still downside in the market. what we will have this kind of volatility as people jump in and look at opportunities to buy as markets decline. which i think is pretty healthy and pretty normal. shery: we have seen more investors hoarding cash at the moment. bank of america's latest survey seeing cash levels we haven't seen since 2001 or so. what are you doing with your money? shana: we are not hoarding cash because with inflation where it is, cash is not an asset that will be able to keep up. so we are focusing on keeping

our portfolios defensive. we are pretty neutral on stocks and bonds. i think we will have headwinds right now. so we are overweight value, underweight growth. the environment, the macros environment favors those value names. and we have a big slug in liquid alternatives as a hedge to both stocks and bonds. we are buying equities opportunistically but on a case-by-case basis and individual names, not broad assets like value growth, small-cap, large-cap, or anything to that extent. that is where we are focusing. we are not increasing our cash position. you are losing money being in cash with inflation where it is. haidi: shana, always good talking to you. and of course, you can get around up of all of the stories you need to know to get your day going in today's edition of daybreak. terminal some scribes go to dayb on your settings -- terminal subscribers go to dayb

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haidi: taking a look at the day ahead for australia now, and the leading economic index for april is scheduled to be released in two hours. this is a leading indicator when it comes to broad economic activity here. also do is the first quarter wage price index going into sunday's general election where cost of wage inflation are going to be key issues. and mike cannon-brookes was behind --the billionaire now controls and 11% stake in the company and has been using that to oppose plans for a demerger to try to accelerate the transition to green energy here in australia. it's get a quick check of the

latest business headlines. jd.com did better than expected, 18% revenue growth. but that figure was still the slowest quarterly rise since the company went public. as covid lockdowns in china weighed on consumer spending. sales climbed to $35.6 billion in the first quarter, beating the 35 billion dollars average analyst estimate. jd's stock rose on the news. the core gaming revenue grew faster than expected, offsetting a slowdown across the rest of the business as online activity retreats from pent-up highs. they posted sales of just over 1.1 billion dollars against a forecast of $930 million. it's e-commerce business underperformed. saudi aramco is considering an ipo of its trading arm amid oil prices and what could be one of the biggest listings this year. the patrol company is working with banks like jp morgan and

morgan stanley to study a potential listing. it could fetch tens of billions of dollars. shery: coming up next, we get insight on the startup and investment lance cape in latin america with a pioneer in the region's vc space. bianca sassoon joins us live in panama next. and we have seen a huge rebound in investments in 2021. they are a different case as we continue to see liquidity drying up. we will discuss all of this coming up. this is bloomberg. ♪

shery: last yearshery:, there was no better place for startups. a record $16 billion raised. but with investors pulling out of risky bets everywhere, there is a painful adjustment underway right now. our next guest runs a venture capital fund. managing partner be anke -- bianca sassoon. really good to see you in person. tell us a little bit about 17 sigma and what you're doing. i understand that pre-seed money and investments are hard to find in latin america. bianca: thank you for having me here, first of all. of course. 17sigma is a pre-seed fund. we invest in latin america and as you had said, 2021 was a

great year. currently, markets have been tough, but actually we have seen a tremendous amount of opportunities. i think tough times are where resilient founders and creating ideas do come out. history has taught us that most of the very interesting companies come out of tough times. so i'm looking forward to see how entrepreneurs -- shery: what are some of your first investments in this uncertain time? is there a type of company you are looking at? a type of founder? bianca: we look for resilient founders disrupting very core latin american building blocks. we invested in health insurance in mexico, an argentine based financing company starting with later education. for example, on top of colombian

based cross-border talent company. it is interesting times. shery: when you're looking at these founders and these ideas, what is your timeline for returns? and what sort of returns are you expecting? bianca: we are looking for traditional vc firms. we are expecting a 10-year projection. we are looking for 17sigma events. what does that mean? a sigma event is a financial event which characterizes a very rare statistical event. we are looking for the magic and we are betting for the magic to occur. which we think is ripe for disruption. only 4% of the 16 billion that you mentioned last year only went for early stage investments. so we want more of that to come to early stage which we think is ripe for disruption. shery: given the changes in the

environment right now, are you expecting more m&a and consolidation in this space? andreea: at a later stage -- bianca: at the later stage, we do. it will be interesting to see what companies later stage do develop. i think it will be interesting times to look at -- we can look kind site and see how things have developed. i do think it will be interesting. shery: some of those disruptive technologies happen a lot on the fintech side of things, also in crypto. stable coins. latin america has been at the forefront when it comes to adopting central-bank digital currencies as well. when you look at this space, do you see opportunities? bianca: yes, of course. there are huge amounts of opportunities in crypto in latin america. that can be a conversation on its own. i'm not a crypto expert but there has been a huge amount of

talent going to this space. particularly, argentina where i am based out of, due to particularities, is a huge crypto and web 3 port. there are a lot of projects there. shery: they may offer some of those actions against the valuation and that affects so many of these economies across latin america. i do wonder when you look at the volatility we are seeing in the crypto asset space, does that give you pause for concern? bianca: it does indeed. it does indeed. but not all asset class in cryptos are the same. we have to look at the different asset class in themselves. i think there are a lot of things going around. when constructing a portfolio, you have to balance what you are looking at. shery: you mentioned you are based in argentina. why? what is the advantage and disadvantage of that given argentina has so many of its own macroeconomic issues? bianca: i believe argentina is a

great country. so we invest across latam as i said. i was born in this space but i was raised in argentina. my mother and grandmother raised me near argentina. i think there is a tremendous amount of opportunities and a great pool of talent. so i'm very happy. the founder of 17 sigma is also based out of there. we're happy to be headquartered there. shery: i love buenos aires, it's a bit of a city. bianca, thank you for being with us, managing partner of 17sigma. haidi: great conversation. we continue to monitor one of the big stories going on with elon musk's a puzzle to buy twitter. twitter making these comments saying that the board -- elon musk's proposal to buy twitter. twitter making these comments, the board saying that we intend to enforce the muska merger. -- musk merger.

we heard elon musk talk about wanting a cheaper valuation given his concerns over the proportion of spam accounts or bought accounts on the site. he had said 20% fake/spam accounts, four times what twitter claims could be much higher. they publicly refused to show proof of that number around 5%. he said this deal cannot move forward until he does. so now we are hearing that twitter is really intending to close that transaction at the levels we heard earlier, the numbers that had been agreed upon. we have seen quite a lot of turnover when it comes to the upper echelons of leadership there. twitter losing three more senior employees including two more vp's, reflecting a great deal of uncertainty as we await this $44 billion acquisition from elon musk.

u.s. retail sales grew at a solid pace in april, suggesting demand remains resilient despite rampant inflation. asset management ceo bruce richards tells bloomberg that the figures are not telling the full story. bruce: the consumer is not buying more. if you go to home depot and walmart, the consumers are walking out with less. but they spend a lot more because the prices were up a lot. take this, for example. retail sales are not inflation-adjusted. it is just an absolute nominal number. cpi that we recently had showed month over month, airline ticket prices were up 18%. ticket prices are part of retail sales. imagine if there is one item that you have in your entire retail sales and you are flying from new york to l.a. and it cost you 18% more, you have the same exact ticket you bought but retail sales just went up 18%. it is nonsensical to think

retail sales are doing better because it's not. inflation-adjusted, it is down. so what we see from home depot and amazon, it is down 20% to 30% and that is a scary concept. yet they are reporting more. the stocks will probably get hit from the retail consumer sector. consumer debt has exploded upwards to the record of $16 trillion. below are borrowing more against their home and against credit cards. personal savings has plunged below 6%. and consumer sentiment plunged from 100 to 59 where it is now. it's not a good place. >> the consumer is not in a good place. yet we see materials jumping up nine to 10 basics points. -- basis points. the fed will have to act aggressively because inflation is high. if what you say is true, what kind of policy stake are we

headed toward? higher rates, a more aggressive fed, and a consumer that you see already struggling. bruce: exactly. the policy mistake was already made. the fact that trillions were dumped into the system through the various stimulus packages and the fed running up its balance sheet. bernanke said it well last week. i think it was sunday when he spoke. the fed waited way too long. and as powell says, the pain is going to have to come. the fed has two tightening's under their belt and they have six to eight to go. the treasury moved 50 basis points. in the high-yield market a couple hundred basis points. high-yield has gone from low yield 4% to a more reasonable high-yield of around 70%. the markets have adjusted. there is heavy volume these last couple of weeks. so there is a lot of

capitulation. the markets can now move into a bear market rally which we are entering right now. it is a bear market rally. but the best is yet to come in terms of the downside. we have already lost 25 trillion in terms of the system in net asset value. and liquidity over the course of the year will get worse. so the fed has no choice to get inflation under control and start a quantitative tightening program which will start next month. haidi: bruce richards, marathon asset management ceo speaking with alix steel. hocker central banks announced the top risk for investors. take a look at this chart. thank of america finding 31% -- bank of america 1% citing monetary policy is their top concern ahead of other worries. japanese stocks are starting to

look more attractive according to baron berg -- berenberg. they are more appealing than elsewhere. still some risks, so they are suggesting hedges against stagflation. shery: coming up next, we speak to the council of foreign relations about latin america's key political challenges. the war in ukraine, and the u.s.-china rivalry. don't miss that conversation coming up from panama city next. this is bloomberg. ♪

shery: you are watching daybreak australia. i'm vonnie quinn with first word headlines. jay powell says the fed will keep raising interest rates until it sees clear evidence that inflation is cooling. howell made his most hawkish remarks yet at a wall street journal event saying he won't hesitate to push rates past neutral if needed. he repeatedly stressed price stability is the top priority. chair powell: inflation is

coming down and that is what we need to see. we are watching for that. if that involves moving past broadly understood levels of neutral, we won't hesitate at all to do that. we won't. and honestly, we will go until we feel like we are at a place where we can say, yes. financial conditions are in an appropriate place. bonnie: -- vonnie: vice premier told a symposium of some of china's biggest technology firms that beijing will support the development of tech companies and plans for public listings. his remarks reported by state media were short on detail but do signal a further easing of regulatory risks. the u.s. is preparing a military aid package for india as it looks to deep insecurity ties and reduce new delhi's dependence on russian arms. bloomberg sources say the package could include weapons and financing of as much as 500

million dollars. it would make india one of the largest the biden administration is poised to pay u.s. bondholders, a push that could push moscow to the brink of default. that waiver has given russia room to pay coupons and help divert default -- that help divert default on government debt. global news 24 hours on air and on bloombergquint take powered by 2700 journalists and analysts in more than 120 countries. shery: russia's invasion of ukraine has shaken the global economy and commodity markets with rising prices. it latin american countries are big exporters of commodities. that's discuss the outlook for the region by bringing in shannon o'neill from the council of foreign relations. she's also a columnist at bloomberg opinion.

it's good to have you with us in panama city. let's talk a bit about what the u.s. can do with its relationship with the western hemisphere. we are talking about latin america up on star shining -- latin america's star shining brighter. shannon: this is a moment and opportunity for latin america. as the united states look for other sources of commodities, grains, and other trading partners, they are looking away from asia, china, and russia. latin america is there. there are also real benefits because it is closer. we have had logistics hookups. the proximity of the nations, too, is a help. in one of the big benefits of latin america is the united states has very few free-trade agreements. less than 10% of the global economy does the u.s. have referential access to. but where does it have free-trade agreements? mostly latin america.

there are huge opportunities to draw on. shery: no wonder we are hearing about near shoring and friend shoring as well. what does it mean in practical terms? is there a broader framework where washington is approaching proactively these economies? shannon: this is where you start to see washington doing things, but it's early days. you start to see the import-export agencies, looking at the development bank, looking at other agencies to begin thinking about incentives, financing, and other ways to bring more companies. may be parts of their operations come back from asia to the western hemisphere. to reshore, to bring things back and have them done in the united states. but what they will find is you can't do everything in the united states. even in critical areas. critical minerals,

pharmaceuticals, electric vehicle batteries, semiconductors. not all of that can be done in the united states. they will have to find partners. i think you start seeing them look towards latin america and other allies. shery: what can we expect from the summit of the americas? a lot of the focus has been the reactive and a little bit more negative when it comes to the approach of the western hemisphere countries. a lot of it depends on migration flows, drug trafficking, other very negative issues as well. shannon: you are going to see a focus on migration. i think that focus will be regional. what you see is the movement of millions of latin americans all around the hemisphere. to the u.s., the southern border of the u.s., we talk about that. but you see venezuelans in columbia -- colombia, chile, all kinds of movement. thinking of that as regional flow will be a big focus. this other near shoring idea,

maybe we get more meat on the bones of what that means. and how would you go about setting up more manufacturing supply chains? mineral supply chains, here in the western hemisphere. shery: i wonder how much of the u.s. focus depends on its relationship to china and this rivalry. shannon: there is something there, of course. we have seen this relationship deteriorate over the last several number of years. we saw trump put tariffs on that have been kept by the biden administration. with the russian invasion of ukraine, it has gotten much worse. there is definitely an effort by the biden administration and the united states more generally. it is one of the few bipartisan issues in washington, these ties. how do you look beyond china and create a values-based or democracy-based set of countries that come together for commercial region -- reasons. shery: your column said it is

beyond a pawn in the china fight. they were really quick when it came to those medical supplies towards these countries. shannon: you have seen ties grow there. the challenges some of the medical supplies sent or vaccines don't work as well as the others. i think china has been a great benefit to some latin american countries. we have seen a lot of trade from china with many south american nations. china is also a double-edged sword. but in america suffers from what economists call premature deindustrialization. their manufacturing sectors are disappearing because they are competing with chinese exports. it is a tough relationship for latin america. it's not just a benefit. there is a cost. shery: senior fellow for latin american studies on the council of foreign relations joining us here in panama city. and we have plenty more coming up. the inter-american development bank gives us its outlook for the region's economy with this commodity surge and inflation

shock. mauricio claver-carone joins us in the next hour. haidi: speaking of inflation shock, we are hearing in terms of the speech that charles evans is set to deliver in new york, they are talking about favoring frontloading rate hikes. we heard otherwise hawkish remarks from the fed chair jay powell, saying they will keep doing what they are doing in terms of raising rates until there is clear and convincing evidence that inflation is in retreat. charlie evans saying he favors the frontloaded adjustment towards a mutual -- neutral range. that it's important to speed up the tightening of financial conditions and demonstrate the commitment to restrain inflation to keep those expectations in check. after that, he's hopeful that can transition to a more measured pace of rate increases after that frontloading. have lots more ahead on daybreak. this is -- we have lots more

ahead on daybreak. this is bloomberg. ♪

haidi: opinion polls are starting to tighten in australia ahead of saturday's election raising prime ministers scott morrison's hopes of another miracle when for his coalition.

the election is coming down to the wire. what are we seeing in these recent polls? i was the government trying to make up ground? paul: perhaps we are seeing evidence of people gravitating back towards the known quantity. this is the met -- message he's been hammering. things like you may not necessarily like me, but you at least know me. he described himself as a bulldozer over the weekend when it comes to some policies and promised he can change. to get to those polls, look at the most recent poll, the reserve pole out this morning. a 44% primary vote for the liberal party, labour party only 31%. a small increase for the liberals than last time and a small decrease for labor. we had to australia and pulls over the weekend --australian polls, and another from the guardian flipping yet again with

labor ahead on the two-party preferred vote, behind in the primary vote. one consistent thing is that they are getting closer all within the margin of error. and they are also diverging as well. it is very difficult to predict the outcome of this election with just three days ago -- to go. and we've seen a lot of early voting. there are 17 million eligible voters in australia and 2 million have already cast their vote. many have made up their minds. haidi: paul allen in sydney. you can download bloomberg's australia decides podcast. it features paul along with georgina mckay. it's available wherever you get your favorite podcasts. that is it for daybreak australia. daybreak: asia is next. this is bloomberg. ♪

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