haidi: you are watching daybreak

asia. shery: we are counting down to asia's major market open. haidi: asian stocks set for a cautious start, an central bank -- a central bank expected to deliver back-to-back hikes. saudi arabia raises oil prices more than expected as we expect to see more rating oil in the market. -- iranian oil in the market. achieving gender parity in management. shery: u.s. futures are trading, giving up earlier gains we saw in the asian open.

we see futures are muted after at the index fell for another weekly fall. and a client, although volumes on friday -- low volumes. tesla stock fell more than 9%. we are watching energy shares because they continue to rally after rent gained ground for six consecutive weeks. not to mention that saudi arabia raise oil prices for its biggest market asia by more than expected. let us discuss all of this given how important it is in the inflationary context of things. oil prices continue to go up? >> it continues to be what of the tightest of markets that many who follow oil for decades have ever seen. let us drop into the bloomberg. we were ending with a

disappointment for opec-plus, we were starting to see oil prices break higher to above 180. let us go to what we see in asian trading. oil prices close at 1.18. up above the 120 level. that comes as a world's biggest oil exporter which is saudi arabia is saying it is raising prices for its asian customers. that is the biggest market. it is also more than expected. $2.10 for light crude versus $1.50. coming as we are seeing a big rebound throughout asia and regions throughout singapore to china, a lot of the covid restrictions and many on ground such as groups and top analysts are saying that the activity

they are seeing in terms of returning to the growth in terms of airfare, is much greater than expected. no price change do you. we see the price change in oil. back to you. haidi: inflationary concerns and pressures, let us get you to annabelle who has a check on the asian markets at the start of the week. >> we are looking to a cautious open at the start of trade. that does set the stage for more fed tightening ahead. we see australian futures a the downside, japan is unchanged. amp capital say that we could see more short-term volatility ahead. also central bank tightening and on central banks, the rba, one of the key decisions, we are expecting back-to-back rate

rises for the first time in 12 years. the aussie dollar looking fairly flat this morning. haidi: treasury yields are volatile as the markets and debate whether the fed sticks with an aggressive series of hikes or starts easing up. providing some clarity on whether inflation has peaked. let us get to mark for more. what is driving direction at the moment? >> is all about the ecb this week. -- it is all about the ecb this week. they are farthest away from the central bank in closing the gap between interest rates should be and where they are. if you have a colleague, they put out a quick study on where the central bank sits.

ecb could be as much as 5% away from where the model would suggest their interest rates are. it does show you that the ecb has and probably will start tightening in july. they should get on with it this week, that is unlikely to be getting consensus in the ecb is difficult. you see the pressure in the market. a bit of stress in the european market, the bonds to take the pain and they got battered. markets are on the back foot. treasuries for now, and the rest of the world taking the direction, what happens in europe. this meeting is the most significant financial markets event that will take place this week. >> what about covid restrictions easing across china?

zero covid policy has been a big one for global markets. >> any easing of restrictions in china is going to be well received. we see with shanghai, already starting to ease up. there are concerns for investors that beijing retains a lot control over these things that they have not completely given up on the covid zero policy. it is a long step forward and another step back. it is not going to be easy. yuan currency is more stable, we see more fluctuation between that and the dollar right. -- rate. the central bank can do more easing. it is not a clear picture for china, any easing of covid is a good news for investors. shery: some of the catalysts of

what we are watching. let us get you the first word headlines. haidi: at least three people were killed in downtown philadelphia on saturday according to authorities, multiple shooters opened fire in a popular entertainment district. the attackers remain unclear. beyond devastating and stressed the need for stronger gun laws. it may make sense to live tariffs on some groups to contain inflation. she said that president biden is open to any good idea that will help american families. officials have offered differing views on what to do with donald trump's tariffs on goods from china. >> steel and aluminum, we have decided to keep some of those tariffs because we need to protect american workers and our steel industry. there are other products,

household goods, it may make sense. haidi: a short range ballistic missile pushing a record of 31 it launches this year. it is the biggest since kim jong-un took power. south korea and u.s. test flight eight missiles in response. australia says one of the surveillance of flames was cut off by a chinese fighter jet in international airspace in the south china seat. as a maneuver threatened the australian aircraft. the incident happened on may 26 and is the latest encounter between the their military after following an incident in february. global news 24 hours a day, on-air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries. this is bloomberg. haidi: we speak to a japanese

recruitment company that is looking to achieve gender parity in all management and positions by 2030. 20 us later this hour. -- joining us later this hour. shery: central banks containing inflation by hiking rates. we look ahead with analytics, next. this is bloomberg. ♪

haidi: a massive week ahead on the income front, inflation dominating. price pressures have peaked. we are looking at chinese data as well. the rba said to have policy decisions. the ecb expected to announce the end of the set up bond buying. the president already looking at comments when it comes to a 15 basis point hike. in india and thailand, let us get to analysis from the chief economist at the moody

analytics. what is a balance of risk here? in australia that wage price spiral is not quite the same that we see across other major economies. what is the dynamic you are watching? >> the wage price spiral may not be as great as it is in other developed countries. it is beginning to go up a little bit in australia. we are looking at core inflation and food inflation. keeping a close eye on that. thank you for a moment -- think for much of the region it is strong inflation, stronger than topline inflation. this will keep central banks on high alert going further. haidi: in terms of the data dump, what is keeping you watching china? is there a better prospect of a

meaningful recovery in the transmission of monetary and fiscal stimulus that we are seeing the lifting of the covid zero restrictions? >> i think that there is a chance. the policy stimulus should become effective pretty quickly. the impact on the faulty stimulus is the opening of the shanghai economy. data starts coming out over the june month, that is getting it made a out right now for the trade. it may show a bit of weakness because of the shutdowns in shanghai. the may data on china is not going to be so conclusive. we are watching some of the other countries data coming out for industrial production and trade. places like malaysia, philippines, taiwan, getting

leads on industrial production or trade. those give us a good idea of whether that aspect of the economy continues to bolster the asia-pacific region. trade is important as you know. the one positive factor all along and continues to bolster the region. >> it has led to more soaring inflation in asia where prices are catching up and continuing to accelerate. when you look at the price pressures and what you are seeing, the economies across asia, implementing production measures, limiting exports of chicken, cooking oil, and grain. how does this factor into the inflationary picture in the region? >> this is very important in terms of driving inflation for over the next few months.

i do think that food inflation will be very high on the watchlist of central banks because alleys in the developing economies of east asia, food accounts for a higher share of the consumer's purchasing basket. a strong impact on house and budget going forward. central banks are watching very carefully and factoring that in to their policy. that is why most central banks are already on their way to normalizing monetary policy that will continue to be the case going forward through the coming months. haidi: what are we expecting from the our b.i. -- rdi this week? >> is due to -- it is due to

internal constraints and external constraints as well. we expect there will be a 40 basis point rate hike from the central bank in india this week. there is no way that they can avoid that. going for it, a few more rate hikes -- after that, a few more rate hikes in the year. haidi: we see extremely tight labor markets here in australia. the skill shortage, the distortions coming out of the pandemic are becoming problematic for businesses. do you see this being eliminated -- alleviated? we see borders reopen for a while now. >> the reopening of orders is going to help. so many countries rely on migrant labor. it has been a little bit easier for business travel and poorest travel in much of the region.

a little less easy for market labor but they'll be picking up in the second half of the year. it will be important for the construction industry, travel and tourism, a number of services around the region. it will help normalize labor markets in the coming months. haidi: let me ask about your hand, it seems that we are starting to feel across asia, the surging inflation is not temporary. why does the doj is to the easing -- stick to the easing? >> the japanese economy is on his own in terms of its monetary policy rate i do not expect much change going forward. it will pick up in japan but it will be the lowest across the region.

i think the central bank is worried about consumer spending. it is very weak, consumer confidence is not strong at all in japan. the government has not eased up on all of the restrictions related to covid-19. there are easing up in terms of entry into japan of business arrivals but it is not complete by any means. there is nothing to suggest in japan that inflation actually is going to get a hold of worse in -- a whole lot worse in the near term or is going to accelerate in the near term. shery: in singapore, setting the week for us as we move ahead. tons of economic data i monetary policy decisions. -- and monetary policy

decisions. go to dayb in the bric app. customize your settings so that you get the news on as industries, and assets that you care about. this is bloomberg. ♪

>> we have decided to keep some of those tariffs because we need to protect american workers. we need to open it our steel -- we need to protect our steel industry. household goods, etc., it may make sense. shery: the possibility of lifting tariffs on some items to contain inflation. steel and aluminum will see the end of tariffs soon, it is a

matter of national security and are there to protect all american steel industries and their workers. the biggest port has recovered from the low-level activity in april. 2.4 million in may, and percent less than a year earlier. saudi arabia raised oil prices more than expected. hoping to boost demand. the july shipments resuming a streak of hikes that started in february. shery: we are saying it reflected across prices in wti. above 120 dollars a barrel. we see gains above eight. this is as we have already opec-plus disappointing, the modest output price. shery: 4% of global demand over july and august.

we continue to extend that advance. bloomberg terminal users can read more about that in our newsletter, supply lines. chevron ceo mike wirth says he has seen strength in oil demand. in boxes of interview he talks about the company -- in an expose of he talks about the company's client constraints. mike: demand collapsed. activity contracted because it had to and there was no demand for incremental production. we had to store production that the world did not need. we are seeing the reverse of that and the dramatic increase in demand. economies have reopened, but not completely yet. we are still seeing real strength in demand. we are seeing international air travel, the strongest before the

pandemic. china has a ways to go. demand continues to be strong. demand moves faster than the supply in both directions. we are saying that today. >> you are working hard in the permian, your production is 17% increase. if i said put more, could you -- pump more, could you? mike: pump as much as you can. in the decisions that lead to two today's activity was made two years ago it is land work, permitting, roads, completion cruz, a goes into planning and executing -- a lot goes into planning and executing. we were up 10% versus a year

ago. we are doing our parts to meet this growing demand. it is not instantaneous. it requires a longer lead time, even in the short cycle. it does not happen quickly. >> if we pretend it couldn't, where is the biggest bottleneck? is it transportation? where is the problem? mike: in the permian basin, it is all of the above. during the pandemic, operators should activity down -- shut activity down. are's left and went to other parts of the country. -- workers left and went to other parts of the country. rates were not in the yard. there are real concerns and constraints. we plan our work and work our plan. our plan is to continue to grow

were late in -- laid in place. a lot of work has to happen and a lot of constraints have to be solved for. >> it or not matter how often it hit a high or with the oil price was? mike: it does not influence our capital position and activity. we have a long-term deal on markets, technology, policy, that since our capital spending. -- sets our capital spending. haidi: north korea has fired eight short range ballistic missiles. after president biden's recent trip. this is bloomberg. ♪ as a business owner, your bottom line is always top of mind. so start saving by switching to the mobile service designed for small business: comcast business mobile.

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>> they do not have a choice because there is so much liquidity. >> liquidity is coming down. >> we are going to see this withdrawal of liquidity. >> we have to remove some liquidity. >> i don't think the slow beginning of runoff is going to cause volatility in and of itself. >> it is expected. >> we have begun to see it priced in. >> the way we are thinking about this is the end of easy money. >> i don't understand how q2 is going to work and i showed, i am a fixed income guy. >> it is going to get the market on its toes. >> ceos and market watchers on the fed's quantitative tightening. >> continued tightening is the

focus this week around the world. we are expecting such -- expecting six central bank to tighten their rates. we could see the ecb start a similar program to defend with an end to bond purchases and set the stage for tightening to begin in july. in asia, we've got australia central bank, they are expected to deliver back-to-back rate hikes for the first time in 12 years. a bit of debate over the size of the hike. our economics team expecting a move of 25 basis points. that is below the median forecast. in india, the are b.i. will probably deliver another hike around 50 basis points. the reason is they are trying to head off demand pressures we are seeing in the economy before they reinforce push pressures driving inflation higher. thailand, an outlier, it is expected to stay on hold with risks in the domestic economy to

the downside. shery: the latest on what to expect from monetary policy and a lot depending on inflation, oil prices. let's turn to vonnie quinn. we are hearing about what is happening with crude. >> the u.s. may allow more iranian oil even without a revival of the nuclear deal. the biden administration could ease up on the flow of sanction oil ahead of the midterm elections. pump prices in the u.s. have shot up to record levels. saudi arabia has raised oil prices more than expected. the increase for july shipments to asia resume the streak of heights that started in february imposed last month. aramco also increased oil grade for the northwest, europe, and

mediterranean regions. the british prime minister expects his own party to trigger a leadership vote in the coming days. the tour remembers may be on the cusp of getting the letters needed to force the confidence vote. calls for johnson to step down have intensified after bit -- after a report on illegal parties during the pandemic. rafael the doll has acknowledged his tennis future is in doubt because of a nerve condition in his foot. he said he relied on many numbing injections to clinch the victory. nadal says he is looking into new treatments but is not sure if he will play wimbledon next month. swiatek won the women's final against coco gauff. global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. haidi: tensions have increased

at the korean peninsula after north korea testfired eight ballistic missiles as u.s. and south korean forces conducted a joint naval drill. the u.s. and south korea countered with missile tests of their own. let's bring in our chief north asian correspondent with the latest. it does seem like the saber battling has been amplified -- rattling has been amplified. >> you had joe biden in the region a couple weeks ago and you had the meeting of the quad and there are always potential standoffs with the chinese in the south china sea. what i do know about the tests over the weekend, with to react conducted eight missile tests, bringing their total up to 31, a record for any year. the previous record in a single year was 24. they surpassed that with eight ballistic missile tests within

35 minutes of each other sunday morning, firing from four locations in north korea into the sea off the east coast. japan says it did not land in their territorial waters, they landed in international waters. we are also hearing that the south korean and americans tested their own eight missile tests this morning, tactical missiles this morning, monday morning, for 10 minutes, i assume in retaliation. they were testfired firing, but in retaliation for those tests by the north koreans. we are hearing from you and and u.s. security experts that it is believed that the north is preparing a potential nuclear test at some point. definitely tensions being ratcheted up at a time when north korea perhaps is emboldened by the fact that china and russia at this moment

in time would not stand in support of any new un security council sanctions. shery: you mentioned that a standoff over the south china sea. what was that about? stephen: the australian royal air force is saying and american surveillance aircraft on may 26 was reportedly intercepted over the south china sea by a chinese fighter jet and the australian air force essentially says that the chinese fighter jet conducted a fairly dangerous maneuver, pulling up alongside the surveillance plane and doing another maneuver to cut in front, to essentially intercept over international waters over the south china sea. it is another incident of perhaps provocation, the

australians say the chinese did. this comes a couple weeks after we heard the canadian air force also had a few of its surveillance aircraft over the east see -- sea intercepted by china fighter jets when canadian aircraft where there to protect the u.n. sanctions against north korea. there is more tensions right now. shery: stephen engle there. let's talk about one key player in the region, prime minister in japan -- prime ministers in japan have briefer legacies but there is now increasing recognition for a former leader 's accomplishment secured a bloomberg, mustache accomplishments. a bloomberg columnist joins us now. you write he has a surprising legacy. what does he leave behind? >> i spoke with him a couple

weeks ago. it is tempting to think of him as another flash in the pan, one of the many japanese by ministers who leave nothing behind, but he got a lot done, forcing mobile phone companies to lower prices. most recently, he spearheaded public health insurance and that has put him into the public spotlight a little bit. if you think back a year ago, we were talking about the olympics and whether that would go ahead and suga was able to overcome opposition and carry that out and they were safe and successful in the end. haidi: his handling of the pandemic letter to his downfall. it was perhaps his legacy, what he did not to as much as what he did do. now that we see covid normal pretty much everywhere other than china, doesn't seem to make

more sense? >> i think so. suga is committed to keeping as much canonic activity open as possible throughout the pandemic even during the delta wave we had last year, even in the face of calls from the media, from the opposition to do something closer to lockdowns. if you look now at the statistics or the covid deaths per capita in japan, it is one of the lowest countries in the world, including countries that pursued covid zero for a while such as australia and singapore. even though it was public dissatisfaction that forced him out of office, i think his legacy in terms of dealing with covid looks better now. haidi: a lot of people talking about border policies as well,

when are we going to see taurus allowed back in -- tourists allowed back in. what was his approach to opening of borders? gearoid: the a lot of people don't realize that he was one of the driving forces when he was the chief cabinet secretary. he was one of the driving forces to the loosening of visa requirements that led to japan's tourist boom in the 2010s. it was not surprising when i spoke to him that he said he was in favor of bolder measures to open the borders. he said japan needs policies that will take advantage of the weakness and turn it into an advantage for japan. he says that means inbound tourists. haidi: our bloomberg opinion columnist there. next, the world's top jump finder looking to set up hiring amid shifts in the tighter global labor market. we will speaking the ceo next.

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haidi: it is time for japan ahead. let's look at how they have been shaping up. a lot of headwinds for sentiment as we get a number of central bank decisions.

also data heavy when it comes to gauges on whether we have hit inflation in the u.s. whether we have hit the bottom when it comes to the chinese numbers. look at dollar-yen, pretty steady but still above that 130 level. nikkei futures looking soft as well. take a look at some of the stories we are watching ahead of the markets beginning trading. astrazeneca raising hopes for expenditure mid options for breast cancer pictures. japan's largest steelmaker is delaying the restart amid a shutdown in slowdown in demand due to supply chain snarls. we are seeing the dk reporting japan is considering restarting domestic travel subsidy program as soon as this month to both of tourism industry. this was launched in 2020 but halted due to a surge in covid cases. shery: we are watching the labor markets. the world's top job finder

looking to adjust to historic shifts in the labor market. recruit holdings is the company behind indy.com and glassdoor with a strong presence at home and in key markets like the u.s. it is the ninth largest company in japan and says it aims to shakeup how employers across the world hire workers. joining us is the coo. great to have you with us. we know in the u.s., we are seeing a tight labor market. what are employers in your key markets seeing when it comes to hiring workers? ayano: thank you for having me today. as you mentioned, the labor market is very tight and employers are doing many different things so that they can hire talent in time. for example, people are still

using resumes. now they are moving more towards assessments, skill assessments, which i think is a wonderful thing. those are the changes we are seeing. shery: we are hearing from local media in japan that the country may be raising their minimum wage to 1000 yen by 2025. what are you hearing from employers and workers looking for jobs through your company? ayano: thank you. that is an interesting and important question. in the u.s., we have been seeing the rise on the wage throughout the pandemic. it is now across the globe. in general, yes, inflation and all of those things happening at the same time, but looking at

that holistically, just in the labor force from one industry to the other, which is more productive and growing faster? overall, it is a good thing for the economy. haidi: you are one of the senior executives in japan that is also a woman at a large company. what is the emphasis on esg and how has that contributed to recruit's growth? ayano: thank you. in 2021, we introduced the third pillar of our strategy, which is profit together. that has five esg targets that are measurable and with a defined timeframe, 10 years, by 2030. we have esg, but we want to make impacts, so shortening the

duration of job searches by 2030. people talk about esg as a separate thing from business growth. what we believe is those are tightly connected. for example, the 10 year timeframe, these people can get hired half the time that it is currently taking. it means that our service, our matching algorithms is twice as better as what we are currently having. the business growth and those sustainability targets, those need to be tightly connected. i believe hours are. that is what excites me. haidi: there is also a gender parity goal. what are your ambitions for this? how has it been received? how is it reflective of the

bigger issues when it comes to women in the workforce that we have seen more broadly? ayano: thank you. first of all, it is not just about japan-specific issues, gender disparity. an economic forum announced it is going to take 136 years to achieve gender parity across the world. it used to be 100. too long, i agree. it is getting worse because of covid, because it hits people disproportionately. there is a long way to go. i also understand that, a special connotation when it comes to gender parity here in japan. again, the same report, japan is ranked 121st among all the countries, and there are reasons for that.

so we need to approach this differently. we have been talking about gender parity for decades and we are still not having it. so we need to change so the next generation don't have to talk about this. shery: how do you do that? how does recruit try to achieve those esg targets? do you have initiatives that are happening? and do the companies that you work with share that idea that esg is linked to business growth? ayano: thank you. for example, on gender parity, we implemented new initiatives from 2021, we call it irr. when you have roles that are a certain level and above, hiring managers need to wait until the

candidate pipelines are both male identifying candidates and non-male identifying candidates, for example, and unless the candidate pool is fairly do stupid, you cannot even start an interview process. so with that, we see some progress already. on the executive layer, which is the hardest layer to move the needle on, we had women representation 10%. it was 10% the year before. now we have 21%. there is quite a jump already. for example, those no initiatives -- those new initiatives moving things forward together, i think we are moving into the right direction. haidi: what is the one change japan needs right now?

ayano: i would love to see improvements in economic and social disparities. i do believe recruit is uniquely positioned to improve that. that is why we are focused on esg targets and we will keep doing what we do through our business. haidi: so great to have you with us. you can get more from this interview on tv on your bloomberg terminal. you can also tune in to japan ahead every week to hear from the leading names in japanese business monday at 8:40 a.m. tokyo time on bloomberg television. this is bloomberg. ♪

haidi: here's a check of the latest business flash headlines. elon musk says the automaker is increasing total headcount days after telling employees he plans to reduce salaried staff by 10%. elon musk said the number of salaried workers will be fairly flat, but overall, job numbers rise. elon musk was planning to cut staff because he had a bad feeling about the economy. drugs from astrazeneca have

shown promising results in late stage trials. the drug was found to extend the lives of patients with an advanced form of cancer by six months. for the first time, women with low levels of a cancer linked protein were seen to benefit from such a treatment. a philippines property developer is planning to boost capital expenditures by 30% as it sees opportunities from re-opening. the company says most funds will be for construction of residences and development of townships. the philippine economy grew at one of the fastest rates in asia in the first quarter, expanding a .3%. haidi: we are on the cusp of the markets open in japan and australia, watching japanese military contractors including mitsubishi and iha after north korea fired eight missiles. in australia, we are seeing geopolitical tensions.

one of his surveillance planes was cut off by a chinese fighter jet in international airspace over the south china sea. we will be watching those defense contractors in australia. also coming up, china pmi data, we talked through the risks of china's ambitious growth target. china rolling out stingless plans in an effort to boost the nation's economy. we speak to bnp paribas equity management. the market opens are almost upon us. this is bloomberg. ♪

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>> we are counting down to asia's major market open. oil prices continue to gain in the asian session. this after saudi arabia raised prices for the region. we are seeing the rebound in asian economies. haidi, this will have implications for central bank decisions this week. >> particularly as we see china starting to open up its economy again with the roebuck of some of these covid measures in beijing, and of course the continued opening and shanghai, and the revival of the economy there. let's take a look at the market open with bill. >> we have the u.s. jobs report on friday setting some fairly risk of trading at the start of the week here in asia. looking ahead to the opens in japan and australia, korea is closed for the republic holiday as is new zealand.

we will wait for the nikkei. treasury yields are moving higher. the 3% handle is in focus at the moment. the big question for investors is whether we have seen the peak and inflation. we could get an answer to that in the inflation report due later this week. japan, up and running to the downside, .8% there. the yen, holding onto the 130 handle. we have seen the bloomberg dollar index trade pretty much in a tight range. some strategists, saying we won't see that 135 level we had been watching out for. checking australia, we will wait a few minutes, with the staggered start. we are expecting back to back rate hikes for the first time in 12 years. domestic inflation pressures, also reinforcing the need for a high fare as well. price spikes in electricity, oil, another big four this morning, and i what a three month high this morning with

saudi arabia raising prices more than expected. shery. >> a really disappointing last week. let's bring chi lo. assistant manager at bnp paribas equity management. we have the rba decision this week. we have central banks expected to height rakes -- hike rates this week alone. what will move markets? >> district policy is going to move markets in the short term. the market is still trying to find its footing in the conflicting views between rising inflation, which i believe won't bottom out until another two months, which means there will be more rate hikes. and the expectation on aggressive central bank hikes will remain a drag on the market. on the other hand, there is this more recent concern about recession coming in. certainly by countries including in the u.s. you combine the two inflation, the possibility of recession,

there is concern about stagflation. some very confusing trends, four issues are being borne out by confusing data as well, which in turn will drive a lot of volatility in the market in the short term. then we believe there will be more expectation on hawkish hikes by the central bank. >> there is concern with china's policy that is easing some of the restrictions, the question of the day is, how far can china assets rally? this is we are seeing restrictions lifted. what do you think? >> we do need to see china have a clear exit strategy for its zero covid policy. before we see that, before china shows it's going to do something about exiting the strategy, there will be more drag on the market, then more momentum. we think for the rest of the year, china will not change much

this year with the covid policy, but maybe next year, the second quarter of next year, there will be more possibility and a clear vision on how china is going to exit the strategy. by that time, there will be an upward trend pair would we believe the chinese equities will stage strong and sustained recovery. the point here is a timing. that we don't know. we are expecting late this year and to early next year that we may see that come. >> where do you see the bus opportunities, if we are seeing a bottoming out -- best opportunities, if we a bottoming out? >> in chinese equity. >> that's right. >> we are pumping a lot in here. when you look at the drag on the chinese equities, the tightening on the tech sector, the worst is over and we are seeing some tailwind. the big drag is over.

than there is a easing cycle that china is incrementing, which is not finished. despite what the u.s. said. when you put this together, liquidity is going to rise and china. the economy hopefully is going to stabilize within the next quarter or two. then you have the big retract over now. a start for a recovery and chinese equities, the timing is immediate. >> elsewhere around the region, you've got interesting dynamics, when it comes to what central banks are doing. does the divergence play into the appeal and these markets --in these markets? >> like asia overall. overall we are neutral on equities. but we are light on em markets because of the tightening cycle. over in asia here, em overall, we like em, we like asia more,

because a tightening cycle is not going to be as serious as in the u.s. or even in europe. because we do have strong fundamentals here. we have the big player here, china, easing -- stabilization and recovery in the chinese economy is going to pull up the whole regional growth. we like em, asia, we are actually prepared to long em asia, china, we are already along japanese equities, we don't like much european equities or the u.s. equities at this point, which are technical decisions here, because of the valuation and the tightening cycle. >> when it comes to the fx assumptions, is some of that bullishness being driven by the assumption that we've seen the fade in the u.s. dollar and

potentially a rebound in the u.n. leading to some more buoyancy for other emerging asia currencies? >> i think short-term we are still bullish in strength and the u.s. than the original currencies, including the chinese yen. there is still going to be the expectation of hawkish central bank tightening in the developed markets by the fed. as long as that expectation exists, expectation on the original currencies and the china's policy, expectation that is going to continue to ease, that divergence in policy direction will continue to maintain a tight buyer for the u.s. dollar and requires for regional currencies, including the chinese yuan. into the fourth quarter for example, when inflation starts to come down in the developed markets, while things here and china and and asia start to stabilize and look up, than there will be more portfolio flow look backs to asia and

china again. by that time we will likely see the you want and other regional currencies -- yuan and other regional currencies are and better fiscal balance and so on. -- in better fiscal balance and so on. we are seeing short-term. they strong dollar. week buyers for regional currencies and china's yuan, meantime going until later this year. >> chi lo. but to have you here with us -- good to have you here with us. asset manager for bnp paribas equity management. in japan, we are starting to see some reopening. >> that's right. this is what the local media report over the weekend. that japan may restart its travel subsidy program for domestic tourism. this is called the go to campaign. it was launched back in 2020.

it was halted soon after because there were concerns it was spreading covid cases. now local media, saying it could be restarted by the prime minister as soon as this week. japan has been quite slow to restart its tourism overall. this week, international tourists will be allowed to visit on packaged tours. >> we are also watching defensive stocks and japan and potentially in australia as well, given all the geopolitical tensions that seem to be rising up in the headlines and. -- now. >> you can see across the board, the defense stocks moving higher today and japan. korea closed for the republic holiday. we did get them missile launches by north korea on the weekend. eight short range ballistic missiles. which would take it to a record number of launches in a single year. this latest test came after

other drills. we are seeing the reaction in stocks today. haidi. >> let's get you to vonnie quinn with the first word headlines. >> australia's surveillance plane was cut off by a chinese fighter jet over the south china sea. officials say the maneuvers threaten the safety of the aircraft and the crew. the incident happened may 26 and is the latest encounter between the two country's military. we were -- beijing is rolling back more covid-19 restrictions, resuming public transport monday, allowing workers to return to restaurants to return dining services. entertainment facilities will also reopen with capacity capped at 75%. the left incomes after most beijing regions reached zero cases for seven consecutive days. at least three people were killed and 11 injured in a

shooting in downtown philadelphia on saturday. authorities say it occurred at a popular entertainment district. let called the shooting "beyond devastating" and urged the need for stronger gun laws. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i'm vonnie quinn. this is bloomberg. ♪ >> still ahead -- as china markets reopen, key that i give us a look at the economy's recovery. we will discuss when -- we will discuss more with our china economist later this hour. and more on inflation worries and what that means for the fed. this is bloomberg. ♪

>> inflation is, if not transitory, is probably with us for a number of years, and if the type of inflation -- i don't believe the federal reserve has the policy or the tools to do much with it right now -- it is a hurricane.

right now, it is sunny, things are fine, everyone thinks the fed can handle this -- that hurricane is right out there down the road, coming our way. . we just don't know if it is a minor one or a superstorm sandy. >> i think the story is much more about rates. we think, is there going to be a recession? we hope not, in the best case. >> there is optimism, and risk tolerance. that is a very difficult climate for an investor to find a bargain. >> the fed needs to loosen it up. which pressures will accumulate. >> increasing taxes, depending upon on whom they fall, is of course a very durable way to reduce spending and bring down inflation. ♪ >> major market closes on

rising inflationary pressures. those pressures, clearly driving policymakers around the world. from central banks, expected to hurt rick's this week so the white house looking at potentially lifting tariffs. our policy editor, kathleen hays, is here with the latest. the bloomberg economic theme now , not expecting u.s. inflation to have peaked, but how much lifting some of those tariffs on chinese goods help? >> more than i would've expected. let's start with we are expecting for the cpi, the biggest report for u.s. traders, investors, for the fed, and others around the world, what's happening in the u.s. and what we are looking for, actually in the bloomberg consensus, is that it made say at a .3% year-over-year on the headlines. food prices are up, energy prices are up. so the long-awaited peak may not be here. on the core though, it cuts

often, it could be down a bit from 6.2%, still, very high, 30 or 40 year highs, in fact. the problem here is, we are starting to see core goods, those prices softening. but we can expect services prices to keep rising in the u.s. and keeping inflation "uncomfortably high." the fed is on track for 50 basis point hikes. on your terminal come on bloomberg.com, team transitory is back, and they see inventory, housing market -- the housing market taking the pressure off prices. now the white is getting into the act. the commerce secretary, saying we could start looking at removing some of the tariffs on china imports, as well as other tools to fight inflation. let's listen to what she set. >> steel and aluminum, we have decided to keep some of those tariffs, because we need to protect american workers and we need to protect our steel industry. that is a matter of national

security. there are other products, you know, household goods, bicycles, etc., and it may make sense. >> the peterson institute in washington dennis study back in march. -- did a study back in march. they suggest that removing tariffs broadly could actually cut u.s. inflation by about 1.3 percentage points. it wouldn't solve the problem entirely, now that the target is to percent, they are hoping to be at 4% or so or less by the end of the year, but it could do something apparently. >> we are all expecting the announcement for the plans for rate hikes the summer as with the other central banks accelerating their tightening campaigns. they are pretty late to the party, aren't they? >> they have certainly taken their time. by the end of this year, they were turning to look at rate hikes sometime this year. probably sometime in the second half, probably even in the fourth quarter. then the war in ukraine happened. that made them very worried about gdp. but look at this chart. their cpi is at a record 8.1% year-over-year.

it's not just the question of 25 basis point hikes being announced, being indicated in the june meeting this week, for a july move. people are talking over 50 basis point hikes -- of a 50 basis point hike. that is the drama there. of course we've been talking about the reserve bank of australia, expected to thedo another rate hike -- expected to do another rate hike. traders are saying they could do 50 even though they said 25 basis points. it's more like getting back to business as usual. the reserve bank of india could do another big one as well, 50 basis points, on top of 40 basis points from their last meeting. what an energy prices, still rising. they are in the we are getting aggressive camp now. >> kathleen hays, you just mentioned the rba, the forced back to back rate hike in 12

years. we are seeing tech leading both declines. energy is up. that is the singular picture we are seeing in thenikkei. with tech leading the declines. kiwi stocks up .6%. haidi. >> this is where energy is up. take a look at the pressure across crude oil trading. we had saudi arabia raising prices, more than expected, for asia. signaling demand confidence. we have oil rising to a three month high. just about a three month high. the wti. there, raising about 1.3%. brent up by about the same amount. the dynamic is also improving, with covid restrictions being gradually cautiously lifted out of china, production and manufacturing, transport and the like, all starting to resume for that economy. let's get more about the outlook for the equity market. we are seeing oil prices

around the three month highs. >> a lot of analysts are saying that we are structurally in a situation where we could go higher from here, as we close down last week, we were close to 120. now we've got saudi arabia, the world's biggest oil exporter, raising prices, signaling confidence in asia's rebound. we've got the biggest independent oil trader predicting the u.s. will allow iran to bring in more oil on the market, even before a nuclear agreement is struck, because more oil in the market is important. take a look at the latest trading in asia, on the heels of six straight weeks of gains. we are already seeing brent crude above 121. we are seeing new york traded crude above 120. saudi aramco is saudi arabia's state owned oil company, they raised prices for asia, which is the biggest market, by more than expected, by about $2.10 a

barrel, only a $1.50 increase was expected. we see a lot of covid-19 related restrictions being lifted across asia. from singapore to china. this is going to help boost demand. one prominent asia analyst is saying there's been a significant rebound already in cars back on the road and in air travel, as a result of the asian restriction being lifted. in terms of where prices go from here, one top analysts says crude prices remain supported as a happen opec-plus hangover -- you will recall last week opec-plus said they would have an output hike, it was not as much as others expected or hoped for. again, we've seen the west texas crude amped, brent crude up

50%, 60% so far this year, and the direction seems higher from here. >> definitely higher coming from citi as well. we are now sitting that they have raised their second quarter brent crude price forecast by $14, to $113 per barrel. let's take a look at what european futures are doing at the moment. we saw those losses in the previous session. this, on expectations a faster rate hikes by the fed, given that we have a pretty strong u.s. jobs numbers. of course, this week we will be watching the ecb, expected to announce an end to bond purchases. to formally begin a count down an increasing borrowing costs in july. really finally about to join the global move on monetary policy tightening, you are seeing a little bit of a mixed picture on the board. >> have a big guest coming up later, we will discussed the travel recovery in asia. this is bloomberg. ♪

>> bitcoin minors are beginning to see a slowdown in the industry's growth prospects. we will have more insight. we see this struggle, when it comes to bitcoin prices, seeming to get above the resistance level. lots of analyst saying we would need to see a bump about $40,000. what are we seeing, by the bitcoin minors? >> -- miners? >> this is really the miners trying to keep their operations as there is a crypto winter for prices. we have seen something

representing showing they are at least looking to sell, if not selling, in order to maintain operations and paper machines they might've met months ago. >> surprising, look at bitcoin right now, it says it is rising, but it's less than half of its peak back in november. >> right. it is really stuck around the $30,000 mark. it hasn't been able to get momentum. there is concern about the impact of the federal reserve rate hikes. we have the implosion of the terra luna ecosystem a few weeks ago. ethereum is having difficulty with its upcoming merge. you have a lot of stuff in the crypto ecosystem that's made it difficult. bitcoin is really stuck at that $30,000 mark bring. >> what about bitcoin miners in the broader market? how are we seeing that performance? >> they are not doing that well. there are companies like

marathon digital that are down more than 70% year-to-date. that's way underperforming actual bitcoin. which is down maybe 30%, 40%. the nasdaq is down 23%. so the miners are really not doing well in the market right now. >> our process at team editor, with the latest on cryptocurrencies. we are seeing a little bit of a mixed picture. still bitcoin, among the $30,000 level. still ahead -- we discussed the chinese economy with natwest, ahead of the pmi print. we have the details. this is bloomberg. ♪

shery: hong kong pmi numbers coming out, 54.9. this is a big boost from the previous month at 51.7. we are talking about a second month of staying unix action area. we have seen cooling when it comes to pmi numbers and economies like korea and indonesia, perhaps hong kong reacting a little bit differently perhaps we are seeing some easing of covid restrictions. 54.9 is the number. let's turn to them about with the markets. >> we are seeing stocks in asia edging lower, a couple of factors to that. the first is the u.s. jobs report. it does set the stage for the fed to continue with aggressive

timing, we are seeing equities lower in japan. brent crude at a three month high after we saw saudi arabia raise prices more than expected for asia. something that could be a supportive factor for inflation is food prices. we have the central banks in asia grappling with the problem. it had its biggest weekly month into loss, something that could change investor sentiment in asia, bringing up the terminal now. china is sticking with its reopening plan. you can see we have developed the reopening market, you see that, air china, singtel.

haidi: beijing continuing to roll back. eyeing a return to normality after declaring the latest outbreak under control. 73 million passenger trips during the dragon boat festival, our managing editor for label -- global business joins us for more. not surprising. reporter: you have people just emerging from beijing and other parts of the country. there is feel -- fear they will get caught up in the dragnet. that is something that will remain as long as china keeps the policy.

under 10 new cases in beijing and shanghai. it appears as though cases are taking a little bit higher again. you have to remember, that's probably the tip of what we are actually seeing, a lot of people probably not reporting infections, particularly given the atmosphere has soured in hong kong with concerns about rolling back quarantine for people diagnosed with new variants.

concern that the path hong kong is on my frozen at least until the handover of power at the beginning of july. haidi: emma o'brien there with the latest. let's bring in our next guest. with us now is shery: peiqian liu. great to have you with us. now that we are getting some alleviation of the covid restrictions in the cities, is there a better chance we will see easing measures? peiqian: it's helpful the easing measures will be put into implementation faster. still, i think lingering uncertainty of covid policies remains to be risk to growth in the short term.

haidi: do you expect further measures to be taken, trying to support the property market? cannot take flight? peiqian: you are seeing railway infrastructure funded by bond issuance is. these policies on aggregate will probably be able to stabilize growth at a lower level, but we are not hopeful to see the fiscal easing.

shery: you mentioned how we really don't have certainty on covid restrictions. what are you seeing in terms of spending when households don't know when they will go back into lockdown? peiqian: i think the uncertainty is the reason for us to remain cautious over the short term. now, china lacks a clear roadmap to the long-term covid policy or management plans. it's critical for china in order to lift business confidence, as long as the lingering uncertainty continues, there is limited room for business to reinvest or continue with an expansion plan. that's why there is a list to

where growth might rebound. shery: data expected this week, this chart showing you that trend. what are some numbers you will be watching this week? peiqian: overall, pmi, trade, inflation and reddit data. the broader picture shows we are going to see a month on month improvement from the month of april, but we are not going to see a v-shaped recovery. we will see a more moderate rebound from the lockdowns. exports might rebound, but pboc might have to step up with easing.

with policy divergence, the fed is still on the hiking path. they you want to still going to be under some pressure in the short-term, but it's probably going to recover later this year when china's growth stabilizes. shery: the chinese economy could get a boost if the u.s. decides to lift tariffs. let's get to vonnie quinn. vonnie: looks like it might happen. the commerce secretary says it may make sense to lift tariffs on some goods. speaking on cnn, she said president biden's opening to any good idea that will help american families.

officials have offered differing views on what to do with the tariffs. >> steel and aluminum, we decided to keep some of those tariffs because we need to protect workers and steel industry. it's a matter of national security. there are other products, household goods, etc.. it may make sense. vonnie: boris johnson expects rebel mps to trigger a leadership vote. a source as tory members may be on the cost of getting the letters needed to force the vote. calls to step down have intensified since a report was released on illegal parties at downing street. a top official at the world's biggest crude trader thinks the u.s. may allow more iranian oil onto markets. mike told gulf intelligence the

biden administration could ease up on the flow of sanctioned oil. prices in the u.s. have shot up to record levels and food prices have soared more than 50% this year. meanwhile, saudi arabia has raised oil prices for its biggest market in asia well keeping u.s. prices unchanged. the increase for shipments resume district of hikes that started in february. aramco also increased for the europe and mediterranean regions. global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie quinn. this is bloomberg. haidi: coming up next, the conflict over forced labor is redefining the future of the u.s.-china relations. more on that story, next. this is bloomberg. ♪

haidi: tensions have increased over the korean principal -- peninsula as u.s. and south korean forces conducted naval drills.

the u.s. and south korea countered with missile tests of their own. let's bring in stephen engle hong kong. certainly an intensification across the region. stephen: absolutely. this comes after joe biden visited. those joint exercises that were held, and that is why speculation is -- north korea has conducted 31 missile test this year alone. the previous record was 24. all of those missiles were fired within 35 minutes of each other on sunday morning. we're hearing from the news

agency that the united states and south korea, which had been doing joint naval drills fired eight missiles of their own into the ec. -- east sea. those were ground to ground tactical missiles. the biggest single day faraj since kim took power a decade ago. this is an unsettling situation given the situation with north korea, perhaps emboldened by the fact it was believed china and russia would not block any future or current attempts that the un security council said because they have veto power. shery: another encounter over the south china sea.

what was this about? stephen: this comes against reports as well of air incursions into taiwan. the royal australian air force is saying a surveillance plane was intercepted by a chinese j 16 fighter jet and reportedly conducted a dangerous move in front of the airplane. reportedly routine surveillance. i should say as well, the canadian military has announced last week it was intercepted, had several planes intercepted by chinese aircraft over the east china sea that were taking part in you and surveillance of those sanctions on north korea.

there has been heightened interception by aircraft. shery: stephen engle joining us from hong kong. let's turn to another sensitive issue, forced labor is becoming the key divisive point in u.s.-china relations. we take a look at how beijing is looking to -- let's bring in this >> we are examining how the forced labor program is not only still in existence but has been expanded in terms of numbers of

people, also the scope of training. the government is saying it's doing nothing wrong. the research and evidence shows that is not the case. the point of view in terms of the u.s. versus the chinese point of view seems to be growing broader and broader, the gap is growing more and more, the question is can this cap be breached? haidi: >> interesting are these accusations that target pogroms that have been charitable or philanthropic room within china. how does this fit differently from the way other labor accusations have been made against other markets and countries?

guest: one thing we can say for sure is the environment in which job schemes are being offered. basically, it boils down to the question can they say no? if they say no, you are labeled a troublemaker. it's a huge distinction. or other similar places where forced labor has been alleged. the context is key. typically when we talk about forced labor insuring jen. our months go to detention camps, while that is a significant and important part of the forced labor story, it is

not the whole story. today, we are focusing more on the transferred labor program which basically is an initiative that sees agriculture, underemployed people strongly encouraged to take jobs in factories in cities in china. haidi: extremely important. this is bloomberg. ♪

haidi: a quick check of the latest headlines. make a is planning to boost capital expenditure by 30% as it sees opportunities. the company says most funds will be for construction. the philippine economy grew at one of the fastest rates in asia in the first quarter, expanding by 8.3%. alibaba has replaced the ceo. he was replaced by a guy who

joined in 2018. he is also an advisor and will remain on the board of directors. a breast cancer drug has shown promising results in late stage trials. the drug will extend the lives of patients by about six months. for the first time, women with low levels of a protein are seen to benefit from such a treatment. shery: we are watching the china fx markets, in focus ahead of the opens. we have seen big fluctuations for the yuan this year. reporter: what is key to watch is how this is an indication or

how strong or weak the central bank wants the you want, the pboc does not have regular press briefings, we don't know what the policy is. in terms of the yuan want, this is an important week. that could move the currency. any indication that china's reopening could bring inflows into the onshore market. haidi: data is showing funds are becoming more optimistic about

chinese equities, they keep asking this question of whether we are seeing a bottom. reporter: >> moving the market now is any sign things will turn around. we are seeing earnings for these companies are not as bad as our -- expected. " back. the discussion in the u.s. friday was not a good one, so we could get some weakness today. also in focus, stocks that move on turnover, watch the stock because they were named a codefendant in a lawsuit against the london metal exchange regarding the nickel market earlier this year. it's a key kind of bellwether.

haidi: beijing is continuing to be cautious in rolling back, some semblance of normality. when it comes to transports, casino operators, as always the gauge for consumer sentiment and optimism. we're watching chinese energy stocks. oil is rallying above $120 a barrel. saudi arabia signaling confidence, hiking prices of crude for asia. china petroleum is one of the ones to watch. ♪