haidi: good morning. i am haidi stroud-watts in sydney and we are counting ages market opens. shery: and i am shery ahn in new york. our top stories this hour, asian stocks may rebound, with redmond not showing a planter can hawkish. china's premier says the economy is worse of it in some ways since the start of the pandemic, calling for more help to shore up growth. plus new zealand pledges to reign in inflation in a least cost fashion. we will speak to the governor adrian orr. u.s. futures not doing much in the early asian session, this after the s&p 500 fluctuated

throughout the session here in new york, just to finish higher in the afternoon. consumer discretionary and energy leading gains. deputy i crude above the $110 a barrel level. u.s. crude stockpiles data is out, and a little more optimism from the fed not turning more hawkish than anticipated. we continue to watch the treasury space. it was a little bit mixed. two-year yields rising, very much sensitive to policy changes. they were headed towards the 2.50 level. the 10-year yield drugs today. we continue to watch -- the 10-year yield dropped today. we continue to watch the space since the fed minutes pointed to potential risk of unexpected side effects -- we are talking the unwinding of the $8.5 trillion bond portfolio. haidi: not much when it comes to the opening action here for australia. although we do see the broader

markets in asia inheriting the light risk-on sentiment, shall we put it that way. take a look at the currency picture. we are seeing potentially more risk to the downside for the aussie. the kiwi dollar jumping to recovery after the rbnz came through with the 50 basis point hike. the bank of new zealand saying that these rallies are really opportunities to sell, given the poor growth outlook for the rest of the world. sydney futures looking pretty flat at the moment. also watching dollar-yen, just over 127 to the dollar. the latest fed, minutes making it crystal clear that there is consensus for 50-basis point rate hikes in the next couple of minutes. meantime, china's economic prospects for 2022 keep dimming. joining us now is kathleen hayes, enda curran, and andreea

papuc. will start with the fed minutes. the fed pause in play here. what do you think might happen for future policy moves? clean: it depends on inflation, that is the message here. the idea is to frontload rate hikes. they have confirmed from the minutes and may 4, and meanwhile, jay powell said likely more 50-basis point rate hikes in the next two meetings. other fed officials have echoed it. so now it is crystal clear that this is what they are planning to do. all of them said they need to move expeditiously, and they are judging that this is what will be appropriate to make that expeditious move. and here is where the facts's ability comes in. there will be well-positioned later in the air to assess the effects of rate hikes and how much economic development since then is warranting policy

adjustments. some fed officials, they want to frontload hikes and be aggressive. raphael bostic from the atlanta fed saying a pause may be appropriate, if inflation starts cooling off. but that is a big if. james bullard said they could start cutting rates as early as next year if they are successful in pulling out of inflation. so again, they don't know exactly what they will do. they don't have a plan for a year. they have where they think they are going to go, but they don't know if they will get they're not in terms of when they start hiking rates. for now, they plan to keep going. balance sheet reduction was widely advertised. but everyone agreed it is time to do it. they will start shrinking the $9 trillion balance sheet in june. there were some comments interestingly in the minutes about several officials noting that tighter policy -- raising interest rates, could affect treasury market liquidity.

and they will start balance sheet reduction. they consider balance-she'd reduction a parallel mode of -- balance-sheet reduction a parallel mood of tightening policy. it is a signal here that they will watch closely how this plays out because if you remember in march of 2020 when the treasury market liquidity dried up, now is nothing like that. but the fed is watching that too. shery: we are also watching the back of korea's rate decision, expected to go higher. another exciting day. are we expecting 25 points or basis points. kathleen: 25 basis points. inflation has doubled compared to what the bok would be a couple of months ago. however, growth is expected to take a hit. they had lockdowns, they are facing higher prices around the world. it also hurts demands and

businesses. so we are expecting the hike. what we are looking at is this jump in inflation, up to its fastest pace in eight years now. that is where we are expecting to see yet another -- they have already done four rate hikes, this is going to top it off. another interesting element here is that they have a new head who was the imf's asia division chief, the director for all of asian research. when he was just going through his hearing spent being confirmed, he was asked a question about 50 basis point rate hikes and he acknowledged that was something they could do . he had to walk that back and said that was just a broad prospect of what might happen. 25 basis points is what everybody expects. haidi: andreaa, how are

markets going to take this question mark we are seeing an optimistic mood given the idea of a fed pause? andreea: i think the market has largely become accustomed to a hawkish fed. what they were fearing was that being taken up a notch, being dialed up, and they did not get that from the minutes. that is why there was a sigh of relief, why you saw those gains on wall street. that could spill into asia today . late gains. we can look forward to that. but this is a market that we have seen is looking to buy the dips after the selloff. valuations have come down. notwithstanding the challenges that remain from the war in ukraine and the china lockdowns. all of these headwinds we have been talking about. the fed perhaps leaving the door open that there could be a pause , today they are taking heart

from that. but there are still a few challenges there. it is an unsettled and volatile market, and that is what we can look forward to. shery: lots of challenges for the chinese economy as well. enda, the fact that we had a policy meeting, with people including premier li keqiang that was actually reported by the state media, what are the signals that we are getting from this very much choreographed economy? enda: it adds to a sense of pressure. policymakers are very conscious of the fact that the economy is not performing as well as it could. the meeting was well-publicized. two messages, the government is worried about growth in particular. we have seen youth unemployment grew. also, that it once the local and provincial authorities to go ahead and get on with measures, everything from tax rebates, to more spending on infrastructure.

so it is being interpreted as another sign that the government realizes that growth in the economy is slipping away, that the economy has not been what they have expected. it makes the growth target of 5.5% seem even further away than ever. haidi: bloomberg's global economics and policy editor kathleen hays, chief asia correspondent enda curran, and our asia cross, andreea papuc. let's get to vonnie quinn with our headlines. vonnie: good morning. china has polished chinese officials over there handling of covid lockdowns. one official was one overnight supervising prevention work. eight others were punished for lying about their movements. separately, one port city has locked down a district in its center to retain a recent flareup. sri lanka is looking to fast-track talks with the imf and agree on a loan by june.

the new prime minister is vowing that the bankrupt country will slash budget expenditures to meat conditions. he says he is hoping for $4 billion of support this year for food and fuel, including from creditors like china and japan. >> i feel the anger. some of them are missing one meal. a lot of people from the middle class feel like they are being pulled down, people have got unemployment, farmers have no fertilizer for two seasons. so i can understand. we have to somehow get out of this rut. vonnie: russia's defense ministry says it is opening see corridors for several ukraine airports after criticism for triggering rising food prices with its blockade. humanitarian corridors from the ports of the black sea and the sea of as of will up a writ during an 11 hour window each day. however, shipments may take time to resume as lines are cleared. the 18-year-old gunman who

opened fire in a texas school reportedly warned about his plans on social media. officials alleged the assailant, salvador romas, posted on facebook his plans to shoot his grandmother, and also to target an elementary school. facebook parent meta says that messages were private and only discovered after the attacks. global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie quinn. this is bloomberg. shery: still ahead, we speak to the rbnz governor adrian orr after the country's central bank signaled further rate hikes. up next, our exclusive interview with the saudi aramco ceo on oil markets the davos world economic forum. that conversation is ahead. this is bloomberg. ♪

shery: take a look at commodities right now. we have seen gold trading above the 1800 dollars level. we star losses being here back the fed not necessarily more aggressive in the fed minutes. they showed support for half point rate hikes in june and july, already priced in by the markets. natural gas also topping $9

billion in the u.s.. stockpiles are below normal for this time of year. of course, russia's invasion of the ukraine has worsened supplies. wti prices also extending gains in new york. they rallied in the afternoon session. we had some data on stockpiles. and refineries have boosted the highest in many years. shery: sticking with crude, saudi aramco's ceo says oil markets have balanced, but the company needs to invest -- but companies need to invest in more production to meet demand. he spoke inclusively to a francine lacqua at the world economic forum in davos. >> basically the market is balanced. supply is balanced today. but i think there is a lot of talk about availability or how much is spare capacity and all of that, and i think that is an

issue. >> how much more can demand grew as we start to open up? >> we were really caught, after the pandemic, as the economy started to recover, we have seen a strong pickup in demand. a lot of supply will rebound as economy start open up. we are seeing now different countries, different enclaves, for example in the u.s., more pickup on transport fuels. some areas where there is some lockdowns, there is still impact in terms of demand, but in general, the market is well supplied. >> could you foresee a situation where there is so much demand where there is not so much supply and the price of oil tops

$150 a barrel? >> i don't want to talk about prices, but today we don't have a lot of spare capacity. capacity is 2% or lower. in a market of 100 million barrels, that is very low. capacity. usually spare capacity gives comfort to the market that in the case of any disruptions or interruptions anywhere in the world, the spare capacity will kick in and supply the market. right now it is going down quickly, releasing for hundred thousand every month. very soon you have a world that 100 billion barrels or more with basically spare capacity. >> does that make you nervous, that prices shoot up uncontrollably and that hurts demand? >> it is always going to ensure that there is enough spare capacity in the market to supply or to mitigate any interruption that might happen.

we have seen a lot of interruptions in many different parts of the world. and spare capacity will always help. right now i have been talking about a long time, lack of investment is not bringing additional supplies to the market and there is much investment going on. >> so what is the solution for that? if we start investing now, because of the crisis in ukraine, the market will not -match win we need more supply. >> correct. since 2014 we are spending $700 billion. we went down to almost $300 billion and picked up a bit close to $400 billion in terms of investment. but that's not enough especially with the increase in commodity prices. we more in order to even maintain your current supply in the market. it will take years to build that project. we announced an increase in capacity by a billion barrels by

2020. and will come to the market in 2027. it takes time to bring engineering and to bring that capacity to the market. >> does it mean we could see a lot of volatility in prices until then? >> there is need for more investment, there is short-term investment, or it can come to the market much quicker. but it is a short cycle. you need also an investment in long-term projects, sustainable for 20 or 30 years. that is not happening that much. we are doing our part in terms of investment, but you need that to happen from all players, all energy companies globally. >> has our relationship with fossil fuels changed because of the war in ukraine? >> i think we need also and hydrocarbons in general as part of the energy mix in the

long-term. that is our position. we're building a lot of renewable projects and hydrogen and other projects and nuclear maybe in the future, you need to ensure you are investing in hydrocarbons, because you need both. hydrocarbons will always be up for the energy mix in the long-term and we need that investment. shery: sideye aramco ceo only lesser there. you can catch up on all the news get your day going from today's edition of daybreak. subscribers can go to dayb . you can customize your settings so you only get news on the industries and assets that you care about. this is bloomberg. ♪

haidi: sri lanka is looking to fast-track talks with the imf and agree on a loan by mid june, so they can approach other lenders for urgently needed funds. the prime minister spoke to bloomberg. >> the proposals they made were accepted. one issue was that the imf wanted us to have the primary budget with a surplus of 2% by 2025. i felt that looking at the present situation, that 2023, globally it would not be a good year for the economic development. i suggested we should be somewhere from breakeven to about a surplus of 1%, within that range. >> similar to that, the world bank said today that reform

needs to be placed for fresh funding. do you think the chinese rescheduling repayments will also balance on what you present to the imf? >> they all have to sit together and work it out. whether it is japan or china or anyone else. >> what sort of repayment do we have to china? early in a debt trap to china? >> we are not an debt trap in china. the percentage of loans to japan and china are the same except that chinese interest rates are higher. shery: the sri lankan prime minister ranil wickremesinghe there. we are counting down to the start of trade in seoul. we are very much focused on the bok rate decision, expecting them to raise their benchmark rate 25 basis points. a couple of hours after that, the central bank will release their revised forecast

for gdp. this will be the new bank of korea's governor first press conference since taking office and we will be watching that. haidi: a quick check of the latest business flash headlines. jack dorsey has officially left the board of twitter, ending his relationship with the company he cofounded in 2006. he did not stand for reinstatement at the twitter shareholder meeting. also, twitter's director and co-ceo of silverlake failed to get enough votes for reelection as director. shareholder did not report on the inland musk takeover. amazon shareholders have rejected a slate of resolutions seeking more disclosure about the company's treatment of workers. its reputation as a grueling workplace has been under pressure from unions, politicians, and its own employees. proposals for improving working conditions were rejected, but shareholders voted to approve amazon's executive pay packages. terra is shifting to a new

version of luna after the collapse of its token, a victory of sorts for the founder two, and his supporters. terra unraveled in may, with the collapse of its underlying stablecoin technology, in one of the industry's biggest busts. nvidia tumbled in lake street after seeing sales. were likely to miss projections. revenue is now expected to be $8.1 billion. supply chain issues in china and the war in ukraine are both waiting on the bottom line. -- are both weighing on the bottom line. meta ceo says the company could lose money internet five years as it invests heavily in the metaverse. he says the project will eventually make money with businesses selling virtual goods and services. however, until then, the company

is betting on revenue growth to come from the reels short form video services. shery: take a look at how futures are trading. they have been muted after the flp 500 gained ground in the new york session. no change right there. though we didn't see any signals that officials could turn hawkish soon, the treasuries market is a little mixed. we are now seeing nikkei futures with not a lot of movement. kiwi stocks are up 0.4%. we are talking to the rbnz governor very soon, so we will see if we get any market reaction on that as well. they kiwi as well as the new zealand yields jumped after the 50-basis point rate hike. governor edward or joins the show -- adrian orr, joins us to discuss hiking here. this is bloomberg. ♪

haidi: the bank of new zealand raised its benchmark rate by 60 basis points for a second consecutive meeting on wednesday in forecast a higher peak for interest rates as it will banks globally try to stifle inflation. kathleen hays is here with a very special guest. kathleen: joining us now is adrian orr, governor of the bank reserve -- the reserve bank of england. you had embarked on a pretty aggressive path, you have done 250 basis point -- to 50 basis point hikes, you have raised the rate you think you need to get to. this is in order to bring supply

and demand back into balance. demand will be low enough that supply will be enough to meet it. how aggressive are you willing to be? are you willing to tolerate higher unemployment if it gets to this, slower growth bordering on something that raises the risk of recession? >> great question, and really the important part to remind the viewers, we are talking about a slower growth rate. we are not talking about bringing the level of activity down, so growth versus level is always important. we do forecast that unemployment will rise, but we see that employment growth slows before the pace of labor force growth. it is about employment growth becoming more attuned to the labor force growth.

i cannot overemphasize the constraint on productive capacities in new zealand because of the lack of labor supply. kathleen: as we talk to economist and get a reaction to this, we are finding out that there are a number who do not think you will have to get up to 4% on the official cash rate, they think the peak is lower, 3.5% because they think the economy will start cooling down and you will be able to back off these rate hikes. how do you respond to that view? >> that is a possible outcome. that would mean we have to do the same work, which is to have inflation turned back to the 1% to 3% target range. possible stories were inflation expectations become unanchored and more persistent, which means there is more work for us to do

in the future. we need to balance those two stories. our central prediction is one where we achieve our information with interest rates modestly above what we would consider a neutral level and holding that there for a relatively brief period the next 12 months, and then over time as we get that balance we can take interest rates back to neutral. the biggest thing that has changed in recent times is risk appetite. we believe that the worst outcome we want to avoid is one where inflation expectations become persistent, and that means we have two slow demand considerably and add a necessarily a high unemployment for inflation to get back to that level. we far prefer what we are doing now to avoid the process of having done too little, too late. kathleen: since we are talking about least regrets, i love that

phrase avoid the worst possible outcome to get a better outcome. you have done 2 50 basis point rate hikes. would you be willing to do more? has that been discussed. ? >> we have painted a clear picture that we want to move at base into a level of around 4%. that does give us time to stop and breathe and observe the data as we go. i cannot commit to exactly what we will do by then, we will have to see the data like everyone else does. there are some more 50's and 25's movement. we will start from scratch each time, every six weeks.

we look at the data, how is it performing relative to what we were anticipating and recalibrating? we have got time. it is a repeat game. haidi: with all of the frontloading you have done, 175 basis points since october, does that mean any point you could take a pause and be talking about the fed pause? is that what you were talking about when it comes to recalibration? >> we need to be careful with the phrase frontloading, because we started from somewhere that was exceptionally low, exceptionally stimulatory, and what we are trying to do is get it back to where it is neutral at the wholesale level, and we know we will have to know with confidence that we will have to be leaning against demand growth. i would not get too excited about how frontloaded we have been. we are leaning into the

inflation pressures we see, and of course we would take pause, we will always take on new information. we always need to stop and be considerate and deliberate with our actions. shery: especially given that your latest statement is laced with indications of global uncertainty. for new zealand how specific is that to what is happening in china, your largest trading partner? >> yes, that is right. we have a standard consensus type forecast outlook for the international economy. we note the balance of risks. they are asymmetrical, really challenged. you could have quick resolutions to challenges in the globe

around food and energy prices or you could have a persistent, drawn out period of inflation. for china it is a slower than planned economic growth that impacts new zealand's international trading position. one of the benefits that we have is our exports to china are made up of final consumer goods, particularly food. it is not a good to be sent on, it is to be consumed in china. we are concentrated to china, and i believe china's economic outlook is one of the riskier that you have if you recall growth rates. kathleen: governor, at the press conference you noted the ocr is at neutral now around 2%, and what you have done, you have moved the cash rate up to the point consistent with market rates. if you keep raising it would be

ocr. do you expect the market rates to go stepping up with that? or do you think as you become more restrictive with rate hikes, do you think market rates are going to slow down, and that gap is going to narrow? >> in an ideal world if i were allowed to choose it would be the latter option because it would mean the markets are starting to be challenged around whether we need to lift the rates as far as we predict. what i want to leave no doubt about is what we are trying to target and achieve, and that is low and stable inflation over the horizon. if that credibility can be anchored, of course you would expect an inversion in the yield curve, you will expect lower, longer-term interest rates then -- than near-term rates.

you saw the yield curve flattening yesterday, that is important that story that i'm telling you there is plenty of water to go under the bridge. kathleen: you have also stressed a lot in the monetary policy report at the press conference how big a factor global forces, global inflation, upward price pressures, particularly looking at the fed. if the fed is more aggressive, does that allow rbnz to do more with rate hikes, and conversely if the fed as to keep doing more and be as aggressive or more aggressive as it is been does that mean the rmb -- rbnz will have to do more too. >> the period that matters to us

, the easier the job is for us. we are seeing the u.s. fed, ecb, all of the major economies moving in the same direction other than china around tightening monetary conditions, and we are seeing financial conditions tightening. that helps our case over the medium-term. in the near term and what we are seeing is as u.s. interest rates go up, we see differentials narrow and you see downward pressure coming on the exchange rate. that has been the case across all countries. everyone has eased currencies relative to the u.s. through that period. there are short-term dynamics we just have to be aware of. the medium-term, the more work by the u.s. fed, the bigger the

problem is shared in the easier it is for all of us. haidi: governor, how worried are you about the impact, for the short-term we are seeing higher borrowing costs. i know you downplayed the risk of a recession but is the risk of stagflationary factors when you watching? >> an enormous proportion of new zealand mortgage holders are repricing their mortgages for the next 12 or 14 months. they will be shipping onto a different interest state level, but the vast bulk of households, a lot of mortgages will be moving across from rates relatively similar to what they are onto these rates, and these rates are the ones the banks have been testing their consumers at. i am confident around the

robustness on average of the new zealand health sector to manage higher interest rates, but there will be pockets where recent borrowers will need to be readjusting their spending desires and priorities without a doubt on that side. that is what gives us the confidence. we are also the regulator in new zealand, so we have very good insights into the bank's behaviors and household balance sheets in that story. that is on average through time. on the recession side, there is not a central prediction for us. we have small growth rates on a persistent basis quarterly, but it .3 growth rate is within standard deviations on either side of a negative or positive. two negative quarters in a row are typically a recession. that is not our prediction. kathleen: as you walk this rate

hike bath, is there one main thing, are there a couple of main things you can tell us you were watching to say whether the key rate peaks out at 3.5% and goes all the way to 4%, what is the main signpost to say it looks like we have done enough, we can pause and at some point think about lowering rates? >> great question. as we know for everything we do today the end does not come out for another 12 to 18 months. we will be looking at spending variables to see if they are selling growth rates. an important sector contributed to growth is been the construction sector, so we will be watching carefully is that evolves, for us it can be summed up easily around inflation expectations. a lot of people thinking about where inflation will be two

years ahead, five years ahead. we want that anchored. haidi: governor, always good to have you with us. we appreciate your time, governor of the reserve bank of new england. let's get you to su keenan. su: we start with china's premier li saying the country is facing economic difficulties much worse than at the start of the pandemic at 2020. he urged officials to take efforts to create more jobs and stabilize the economy. his emphasis on growth is seen as an acknowledgment that china could find it tough to meet its target will remaining committed to president xi's zero covid policy. ceo's scott minerd announced it going will plunge to a thousand dollars -- $8,000. he said crypto's have not

established themselves as credible investments and has become a market that is for a bunch of "yahoos." -- the ousted premier in hong kong has led a convoy of supporters to the capital to push for elections. the government employed the army. the prime minister's administration is on pressure around imf topics -- talks and resuming a program get to create a deal. australia's new foreign minister is heading to the pacific for a visit. simultaneous visits to the region are the latest example of

growing competition between china and australia across the pacific islands. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i am su keenan. this is bloomberg. shery: coming up, alibaba is expected to post a second straight quarter of single digit revenue growth as we continue to see regulations and the covid lockdowns apply pressure on the company. an earnings preview next. this is bloomberg. ♪

haidi: we are tracking the flood of the global supply chain courage and these are your top stories. nvidia, the largest chipmaker by market value slipped in trade and the war in ukraine wait on its forecast. the company says revenue will be $80 billion below analysts' estimates. real-time tracking data shows the heavy toll of covered restrictions is no longer available. public access to the data is making it difficult to assess the damage to freight traffic and will make it harder for businesses to know whether the slow reopening of shanghai is

improving supply chains. rush's defense ministry says it will open sea corridors as the threat of a global food crisis grows. russian forces of block 22 million tons of grain. shery: a little bit of a mixed picture. go to our trade analysis, for bloomberg terminal users who can read more about those stories. we are getting the shanghai covid numbers reporting no new covid cases outside of quarantine. i believe this is the second day or so we continue to see restrictions being eased across shanghai. they are reporting a new covid-19 death adding 338 local cases as well. let's turn to a chinese e-commerce company expected to

post it second-quarter of single digit revenue growth as lockdowns continue to pressure the companies. let's bring in stephen engle in hong kong. very important to watch this company, because it gives us a sense of consumer demand during all of these outbreaks of covid, what is the consensus here? >> on the regulatory front this is a company that has been beaten down, battered, and fried. we had it whittled down because of monopoly investigations and dismantling the ant ipo and its fintech arm, but then along came covid and it hammered their court indicator revenue generator. core revenue is expected to be

200 billion yuan. 167 of that is in core commerce revenue. when you have retail sales in april contracting 11.1%, may is probably not going to be much better. people are not even allowed to have deliveries to their homes. one analyst was telling bloomberg news that court revenue number it heavily on things like apparel and cosmetics. when people are locked down they are not buying close and cosmetics for sure. that from truest, there are seeing that being hit particularly hard by the pandemic, and there is been a lack of clarity on the relaxation of regulations, so you combined those two things, the pandemic and lockdowns combined with the regulatory overhang, and it is not going to look ready.

it will likely be the second consecutive quarter of sub 10% revenue growth, is story close -- historic lows. tencent last week a minute 0.1%, and they did not see any clarity on the regulatory front on any easing. haidi: is the regulatory front actually improving given officials to talk up these internet platform companies? the markets do not seem to be buying it. >> the markets are not necessarily buying it because there are not many specifics. these stocks, alibaba and tencent have lost $1 trillion in market value over the last couple of years of this regulatory pressure, and when government officials are talking about we are going to wrap up

these so-called platform companies, but there has not been any specifics, essentially all of analysts are saying because of those lack of details we cannot recommend wholeheartedly going into it. consensus analyst's calls price targets double what they are trading now. haidi: stephen engle there with a preview. we have lots more to come on "bloomberg daybreak: asia." this is bloomberg. ♪

haidi: let's take a look at u.s. futures at the moment after traders are rushing to reprice at this idea of a fed pause, the fed open to being nimble with the takeaways from the state of minutes from the federal reserve and slightly less hawkish. s&p futures trending lower at the moment, not much luck when it comes to tech futures, the nasdaq down and the dow tempered. the nasdaq 100 outperforming, we are giving back some of that positive sentiment. jp morgan joining us to talk about china's lockdowns.

this is bloomberg. ♪

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shery: welcome to "bloomberg daybreak: asia." i am shery ahn. haidi: i am haidi stroud-watts, is your pledge because major markets have just open for trade. a rebound as announcement show no signs of officials turning rockers. policymakers in hong kong are said to -- the economy is worse off in some ways than at the start of pandemic -- the pandemic. shery: let's take a look at japanese equities, not a lot of movement on the nikkei, the

first session of gains in three days, the japanese yen recovering strength we saw earlier, recouping losses one the previous session. we have seen less weakness after falling to that 20 year low against the u.s. dollar enjoyed positioning on the yen starting to ease in recent weeks. we continue to watch jgb futures, the 10 year fell to an april low, but today the big focus is south korea look at how the kospi is coming online. we saw two sessions of losses, right now unchanged. the korean won weakening against the u.s. dollar, 12.56 is the level. the korean won at around that three week i given we are added to that be ok rate decision -- bok rate decision. perhaps weakness in the korean won will stall it the 1300 level.

today it is about the bok rate decision, the expectations for a hike to 1.75%. haidi: central banks right and center after processing the second 50 basis point hike from rbnz. we heard from the governor and the last hour telling us out they are ready to recalibrate, they are watching the data but they need to anchor inflation expectations early. look at the open in sydney bringing gains of .2 of 1%, potential further upside when it comes to the aussie dollar if there is more stimulus coming for chinese markets. when it comes to new zealand, equity markets up .4 of 1% with more expectations of further rate hikes. take a look at how things are faring when it comes to the treasury market, that was muted going into fed meeting minutes

and volatility potentially to come from the withdrawal of qt, that will be the next bracing for the market. watching oil prices, we have seen gains in brent and wti, this going into the heavy summer driving season. shery: our next guest says pessimism is taking over as markets by been -- pricing -- price in the possibly of a recession. the gtv chart on the bloomberg is showing the mention of the word stagflation skyrocketing in a few weeks. how important is it to have this quality buy in in your portfolio, and how would you achieve that? >> it is important on this point

especially with volatility on the rise. we are emerging from the midcycle to a cycle for the rest of this year, and where the concerns are going to be on the top of investors' minds. how will you achieve that? will they manage because were effectively or pass on the costs to their customers? this is an environment where asset management becomes important to pick out those companies, and we have seen companies with little or no profit being penalized as well. it is clear for me you guys are looking for companies who can deliver reliable, consistent earnings for shareholders. shery: can you find companies in china even when you are hearing from the premier that the economy may be doing worse than at the height of the pandemic? >> we take a slightly longer

term view. i think the chinese economy it shifts back to slowly improve during the second half of the year. infection numbers are coming down, and we are expecting more robust policy stimulus coming through. this comes back to what sector we are looking at, where we have seen some sectors, staples, financials being more consistent in terms of delivering earnings. that will be the focus of investors, whereas i growth sectors where we are seeing more volatility, i think those will be more scrutinized by investors. haidi: internationally you prefer the u.s. over europe and you are willing to take that duration risk. when it comes to the fed pause and perceived repricing, it does that give space for meaningful rebound? >> for the u.s. i do think so.

it is a weaker growth environment. [indiscernible] but if you look at leading indicators or manufacturing indices the u.s. economy is still in expansion mode. earnings obviously slower compared to 2021, it consistently growing. i think the market is too pessimistic. to fixed-income, after eight tough six to 12 months -- a to ugh 6 to 12 months, i think we are seeing more value, so investors could revisit the space. it does provide a better balance between being resilient in a slower growth environment, and at the same time delivering

income and yields to investors. haidi: are there opportunities in chinese credit in that space that you were willing to look at now? >> i will be careful with high-yield especially in the united states space. there will be pain coming through, but if you look at sector quality names including chinese government bonds, a policy easing environment in china, and at the same time well covid growth is challenging, many of the better quality names are in good shape. also appearing in mind if we are in a -- mode, china's fixed income does play a role in that. haidi: let's get to su keenan with our word headlines. su: we start with china who has

punished several beijing officials over their handling of covid clusters. a top agency says one was born for not properly supervising virus intervention work and eight others were punished for lying about their movements. the port city of tianjin has lockdown to contain a recent flare. the defense ministry says it is opening sea corridors after drawing criticism for creating a global food crisis. there will operate during an 11 hour window each day. shipments may take time to resume. do sri lanka, a country that is looking to fast test -- fasttrack talks with the imf. a leader is avowing that is bankrupt country will/budget

expenditures to bare-bones. -- >> i understand. i can see the anger. [indiscernible] we have to somehow get out of this. su: global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i am su keenan. this is bloomberg. ♪ shery: take a look at movers we are watching in japan and south korea, chipmakers given that nvidia do so is slumped after hours for second revenue forecasts that missed estimates and they talked about china's

covid-19 lockdowns, dimension the war in ukraine weighing on their forecast. in china and over in europe as well, this is not boding well for semiconductor makers, and we are seeing downward pressure in japanese chip stocks. we get the latest on sri lanka's imf talks and debt restructuring efforts in interview with the prime minister. economists cannot stop slashing their forecast for china's economic growth with the nation looking set to miss its target for the first time in three decades. this is bloomberg. ♪ this is how it feels to have a dedicated fidelity advisor looking at your full financial picture. this is what it's like to have a comprehensive wealth plan with tax-smart investing strategies designed to help you keep more of what you earn.

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>> i think as long as we stay the course on tightening, the dollar is going to do fine, but if the fed blinks because of financial panic, which i think there is a high probability of for the second half of the year, i think the dollar will come under pressure. shery: scott minerd there on the fed, the latest minutes making it crystal clear there is a consensus for 50 basis point hikes at the june and july meetings. this as the federal reserve most

expeditiously to bring down inflation. kathleen hays is here with the latest. what was the message from those minutes? kathleen: we have heard fed officials including jay powell and others say i am sure we will get to 50 basis point rate hikes . this was something agreed on at that meeting. this is not a random speaker. the word expeditiously, i continue to love, so let's move expeditiously to what the fed said when they were telling us how they're going to move. they judged 50 basis point rate hikes where appropriate. move on. they said to moving rates quickly, getting rid of accommodation leave the better position to look at the effects of the policy later in the year and take a look if they need more policy adjustments. this has been said here and there by various fed officials,

someone saying a pause between these rate hikes might make sense as inflation calls. another official saying maybe they can start cutting rates as early as 2023 if they succeed in: off inflation. it is a big if. there was also mention these minutes, i think it is important, talking about tighter policy, out it could affect treasury market liquidity. treasury market liquidity as you reduce the balance sheet is going to reduce, and it will reduce at a higher rate because they will start at 30 billion a month and then moved to 60 trillion in three months that is an issue the fed is watching closely, and that is another reason people like scott minerd and people watching markets closely or saint you could see financial gyrations that so the fed down.

they will do the balance production, it is a concern -- reduction, but it is a concern. haidi: bringing on inflation also important for the bank of korea today. kathleen: the bank of korea i would put in the camp of one of the leaders of global rate hikes. they were one of the first two begin moving out of the pandemic, and there have been a total of four. the latest expectation is another 25 basis point rate hike that will get be ok to 1.75%. the reason for aggressive hikes, that is what inflation is doing. the bank of korea. the forecast would stay around double 2% the u.s. target. it is already a percent. you can make this inflation

point standout, the fastest pace in eight years, under the country that figures this is job number one. they are expected to cut their gdp forecast. bottom line, the amf asia director is now the head of the bank of korea, and he has indicated as well, the concern is there a 25 basis point rate hike will happen. haidi: we will be watching for even more central-bank action from russia and turkey in the coming hours. bank of russia as push up its next rate decision by two weeks and is expected to make another big rate hike at this emergency meeting bloomberg economics expecting turkey's bank to stay

flat, raising rates not seen as being politically viable. both central banks are under growing pressure to take action. the lira, the worst-performing currency. we are turning to an anchor for the rest of that space in china we are the as admitted china's economy is in some respects faring worse than when the pandemic first emergent 2020. let's get more from our chief correspondent. the labor market is so politically, socially key. it is tied to gdp growth, which is falling every time i look at the terminal. >> that is how people are responding to the premier's meeting. it underscores an urgency for

policymakers to act and stabilize the economy, but it also shows things have not bought about -- bottomed out. this shows the pickup is not with anticipated. the mandate that the common authority as, officials are concerned about that now. the jobless rate up 6.1%. the youth unemployment rate is at a record. there is no doubt they are trying to get on with things. he was urging local officials to push through certain measures. everything from tax rebates to infrastructure. you had the pboc meeting with banks telling them to get out and lend, but the overall sensible people is that the economy as not get to bottom, and it feels like it is a long way away from the growth target

of 5.5% this year. shery: whether the expectations? a few days ago i saw an article that bloomberg economics is expecting for the first time since the 1970's grow more slowly than the united states. >> there has been a feeling that maybe april woodmark the bottom for china part of its economy, but that has been changing. perhaps may will look bad given the ongoing covid zero impact. the meeting is around 4.5% now, well below the growth target. the question becomes what are authorities going to do with the growth target? it seems to be getting downplayed, it will be difficult to meet that given the obvious adherence to covid zero. it is the view of some that it

is not that significant if they do miss it. the question becomes in the coming weeks, months ahead of can they navigate away from that? it is not about the growth target, it is about maintaining dividends and covid zero and making sure the economy keeps taking over. it seems that they are focused less on the growth target now. shery: growth under pressure in europe, and a very challenging task for the ecb. we are seeing futures gaining ground at the moment and extending gains we saw in the previous session, cheaper valuations around european markets have really attracted investors. sharp losses this year already, making stock valuations attractive. plenty more to come.

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haidi: adrian orr says he wants to move rates at base telling bloomberg he does not want higher inflation expectations to persist. he spoke to us earlier about the decision to hike. >> we do have a forecast that unemployment will rise, but we see that employment growth slows follow the pace of labor force growth over the forecast. it is about the employment growth becoming more attuned to the labor force growth. i cannot overemphasize the constraint unproductive capacities because of the lack of labor supply.

>> as we talk to economists and get a reaction to this we are finding out there are a number who do not think you will have to get up to 4% on the official cash trade they think the peak is much lower. they think the economy is going to start cooling down and you will be able to back off these rate hikes. how do you respond to that view? >> that is a plausible outcome. that would mean we would have to do less work to get the same outcome, which is to have inflation to that 1% to 3% target range. stories were inflation expectations become unanchored and more persistent, and that means there is even more work for us to do in the future, so we need to balance those two stories. the reaction is one where we achieve our target with

inflation rates above a neutral level and holding it there for a brief period over the next 12 months, and over time as we get a better balance we can take neutral breaks -- rates back to neutral. the other thing that has changed is our risk appetite. we believe the worst outcome is one where inflation expectations become persistent, and that means that we have to slow demand considerably and add unnecessarily high unemployment to get inflation back to that level. we far prefer what we are doing right now to avoid the process of having done too little, too late. kathleen: since we are talking about lois regrets, avoid the best -- worst possible outcome

to get a better outcome. also quebecers are getting asked if they had done 50, would you be willing to do more? after the first 50 basis point rate hike and got ready to do the second one. >> we have painted a clear picture that we want to move at base and to a level of around 4%. it does give us time to stop and breathe and observe the data as we go. i cannot commit to what we will do. we need to see the data like everyone else, but our best intentions, there are some more 50's and 25's movements. we will start from scratch each time every six weeks. we look at the data, how is it related to what we were anticipating and recalibrating what we need to do

shery: we have breaking news of the philippines, we are seeing the new president of the philippines has tapped the central bank governor diokno as the new finance chief. we are seeing marcos junior for his new government. we are now seeing him tapping the current governor of the central bank as finance chief. we have seen the philippine central bank increasing their benchmark interest rate again. in the previous few meetings -- we will get you more details as we get them. haidi: let's get the latest on beijing.

the government has punished several officials over two covid-19 clusters as china's capital continues to report new infections. tianjin is looked on its city center after a flare up there. our guest joins us for the latest. we are seeing increasing pressure on officials to ramp up their response, to not be seen to be doing the wrong thing. >> the beijing outbreak is starting to feel a little bit like groundhog's day with this consistent number of cases, around 45, just biking up to almost 100 the other day. they do not seem to be able to squash the break and eliminated, which is the intention of china's covid zero strategy, which remains in place. you are seeing ratcheting up of

the heat on officials. you had a fight over the postal service in their role, along cases come to fruition as well. you have a minister in town watching over things, which is a sign the central government's attention is on the situation in the capital. a real potential for a shift ratcheting up of restrictions in beijing. shery: what about the outbreak in tianjin? how concerned should we be? >> cases each day are under 20 do cases each day. in a covid zero environment that does not mean much, because the intention is to try to eliminate the outbreak. we have seen the central city

area, it is not a huge industrial part of the city. it is quite poorest -- tourist focused. we are watching to see if that lockdown spreads particularly to where you have an airbus plant, various carmakers with a presence there. that would be a step up in that situation if you were seeing disruptions. carmakers back in january had to shut down production because of another outbreak. shery: let's get to su keenan with the first world headlines. su: china's premier says the country is facing economic difficulties much worse than at the start of the pandemic in 2020. li urged officials take all efforts to create more jobs and stabilize the economy. his emphasis on growth is seen

as an acknowledgment that china can remain committed to president xi's covid zero policy. a foreign minister says peace negotiations with russia are going nowhere. she compared the offensive in that dunbar's -- dobas -- donbas region to a world war ii battle. the teenage gunman who opened fire at a texas school reportedly warned about his attack on social media. officials alleged the assailant posted on facebook's plans to shoot his grandmother and also to target an elementary school. packers fans ousted premier in hong kong has led a convoy of

supporters to push for early elections read in response government deployed the army with soldiers firing tear gas. the prime minister's administration is under further pressure with ongoing imf talks on resuming a loan program yet to deliver a deal. that raises the prospect of a default for just the second time in pakistan's history. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i am su keenan. this is bloomberg. shery: sri lanka is looking to fast-track talks with the international monetary fund and agree on a loan by mid-june so that it can then approach other lenders for urgently needed funds. the prime minister spoke to bloomberg in the capital. >> one issue was the imf wanted

us to have a primary budget surplus by 2025. 2023 globally will not be a good year for economic development. breakeven, go above a surplus of 1%. economic restructuring is a concern. i want growth in announcing reforms. [indiscernible] one day we are to start repaying all of the foreign debt with, and if we do not start earning

we will need to get further. we have to change our system. >> you talked about a budget coming up. would that be oriented toward a program needing to bring in tax hikes to praise this deficit? >> the way is to cut expenditures. health services and education. make sure we can give more welfare assistance to a large number of people who are been affected by this economic crisis. it is difficult for people. i can feel her anger. [indiscernible]

i can understand. >> we know about the sovereign bonds that are due, but the chinese funds, how will that repayment and restructure work? >> we will talk with china once we finish the imf discussion. >> what is that you are looking for? are you looking for a debt restructuring? >> we would like to ask them about a debt restructuring. [indiscernible] >> the world bank said today a reformed is to be in place for fresh funding. do believe chinese rescheduling

will also balance on what you present to imf? >> they all have to sit together . >> and what sort of repayment do we have to china, being in a debt trip to china? -- trap in china? >> the rates are the same. haidi: let's look at the commodities complex, because we aren't seeing fears of a crisis, fears of shortages as we get continued moves when it comes to food protectionism. beijing has started buying brazilian corn, a very rare move suggesting we are seen impactful fears of food security and supply. corn sitting lower, week also up by about 2%.

watching oil markets as we see continued gains strengthening as inventories in the u.s. falling to new lows, marking the beginning of key summer driving season. new york crude up by about .6 of 1%. brent has been gaining for the last five or six sessions. we have lots more to come on "bloomberg daybreak: asia." this is bloomberg. ♪

haidi: scott minerd says he expects bitcoin to fall to $8,000. he had previously said on bloomberg he thought cryptocurrency should be as much as $400,000. he spoke to tom keene and lisa abramovich about his renewed outlook. >> i was an early believer in crypto. i remember looking into bitcoin first when it was at $100. i did a presentation at the nantucket project on crypto, how to deal with it, out to invest in it, and i really thought this is a viable investment vehicle. one of my big concerns is that no one has cracked the paradigm in crypto. it is used as a currency. as you know the definition of a

currency is that it is a medium of exchange, a store of value -- we learned that stablecoin, everything is suspect. >> i want you to explain the divide between someone at the bank of international investments on the starting of bitcoin and the entire -- to derive scarcity of it with the community of bitcoin that seems miles apart and they will not read it. >> bitcoin and any cryptocurrency at this point is not established itself as a credible institutional investment. it has really become the market of a bunch of "yahoos" and i

know that i will be blasted on twitter. we have 19,000 digital currencies or whatever we want to call them. most of them are junk. >> do you have any crypto asset investments? >> we did, we bought it at $20,000 and we sold it at $40,000, and after we got to $60,000 i thought we would corrected $30 -- $30,000. and i began to say where we stopping here? my latest work is that we will probably hit $8,000 until we totally flush. shery: scott minerd there, take

a look at how crypto assets are trading at the moment, we are seeing the bitcoin seeing slight gains up for a third session. if there -- ether as well, not a lot of movement and galaxy crypto falling. he continued to watch what is happening around stablecoins as we have seen terra averting a total collapse with this proposal by the offender to salvage the project being approved. terra usd now turning to terra classic. we are getting bank of korea, as expected a rise of the key interest rate to 1.75% from 1.5% as expected by economists surveyed by bloomberg. this coming at a time when we are seeing the fastest pace of inflation since 2008.

let's discuss what we are getting from the bok with kathleen hays who joins me in the new york studio. it is a rise, and interesting it is the governor's first rate decision as well. kathleen: unexpected, 4.8% year-over-year on inflation rate is way above target. the bank of korea was looking at 4%. it was kind of a slim dunk call -- slam dunk call. what is going to be interesting particularly because it is the governor's first meeting as head of the bok, he was formerly an imf director heading up that research. he was in a financial regulation department in korea. he is definitely someone who knows the economy, who knows

policymaking put in a very important position. what we are going to learn a lot more about is what the bank of korea is thinking about not only what is happening with inflation, we will get to learn more about their concerns were growth in gdp. 2023 growth as changed a little, 2.4% from 2.5%. what i want to hear is, ok, you made five 25 basis point hikes, one question is do you need a 50 basis point hike? what do you think your neutral rate is? where do you think rates are going to talk about. we a lot from the governor just interviewed in the last hour, and they have mapped out a very aggressive path, and korea is

not there yet. this is the kind of things that all investors will be listening for very carefully at the press conference. haidi: he is treading a fine line, probably white we did not see the outlook. what are some of the risk factors for the korean economy as they try and trade this path to bringing down inflation? kathleen: one of the things we discussed all the time, we ask that question of adrian orr, what about the chinese economy? it is slowing down dramatically, and many asian nations are big exporters, but korea is the 11th largest economy in the world but the fourth largest exporter in the world. that has to be a risk. as policymakers wait to see how

this feeds through, so holding up very nicely, there was a question about chip shortages weighing on auto production and the output of many other kinds of goods for their dependence on semiconductor chips, that is something that they have to balance right, because you can start raising rates aggressively. suddenly you feel something gets worse, particularly this chinese so down. now you have hydrates a lot, what do you do now? do you start cutting? haidi: what is next, kathleen hays reacting to the bank of korea decision, a raise in the key interest rates from 1.5%, raising the 2022 inflation

forecasts, cpi expectations to 4.5%, and the growth forecast got to 2.7% from the 3% projection they held in the way. for more this we have live analysis. commentary and analysis from our team of experts. coming up next, we get an early review from alibaba, the company expected to release its second consecutive quarter of single digit revenue growth. this is bloomberg. ♪

haidi: alibaba is expected to posted second straight quarter of single digit revenue growth that comes as a regulatory action and covid lockdowns continue to apply pressure. let's get up preview with stephen engle in hong kong. what is the action consensus do? >> it cannot seem to get much momentum even though there is been dialogue and vocal support for the platform economy, but the stock price has not been able to get out of languishing territory we have seen for the last couple of years has regulatory overhang pressures this company and has whittled it down in scope and size as they focus on philanthropic goals like the cloud and some of that. covid lockdowns and -- the covid

outbreak it resulting lockdowns have absently hammered sales. revenue is expected to grow at 7% in the fiscal fourth-quarter, the calendar's first quarter. it could be lower than that, because tencent had results last week. the market and since it was 4.5% revenue growth, they came in flat at 0.01%. they said it takes time to unwind or implement policy that will have a tangible impact on the company. that bar chart shows the revenue as steadily gone down and down, and the covid outbreak and lockdowns will add added pressure on this company in april and the month of may. shery: officials seem to be talking about these companies, orchids do not necessarily care.

-- markets do not necessarily care. >> keep looking at that stock price, and it is looking attractive. it is trading at utility levels, we can bring up a chart and it can show pe well below 12 right now for adrs. it has been better down. this year alone the stock is down about 80%. this company as an on a ski slope downward since a couple of years ago with this precatory action actually began. analysts are not confused but cautious. i will read you one quote from an analyst, saying a lack of visibility of the detail, timing, and potential success of government measures make it hard to forecast alibaba's growth. look at the analysts recommendations.

the price target both for adrs and hong kong shares are all about double 12 months out from now. fortier buys and one cell on adrs. shery: stephen engle with the latest on alibaba. watch out for these stocks, especially baidu reporting earnings, zto express relating the results, the company reporting a jump in first quarter process -- profit. semiconductor stocks missing. coming up, a founder says a policy is the biggest risk to investors. we will have more on that shortly and we will have more

with global advisors. this is bloomberg. ♪

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