haidi: watching "daybreak: asia." annabelle: we are counting down to asia's market opens. shery: markets are betting the fed is sector of london gradualism -- set to abandon gradualism and move more forcefully toward a bigger rate hike. the selloff in stocks and bonds intensifies, the dollar rallying, and the yanda sinking to a 24 year low. class hong kong's chief executive admits that covid policies weakened the city's status and cost lives. >> had we adopted more aggressive measures at the very

beginning and protected the elderly better, especially the elderly homes, perhaps we would see a lower number of deaths. haidi: we are getting south korean jobs numbers. the unemployment rate seasonally adjusted for may coming in at 2.8% higher than expectations of 2.7% and higher from the previous april reading of 2.7%. we are looking at the 935,000 jobs added in may from a year earlier so, missing expectations a little bit, but overall, the jobless rate remaining low in what is seen as a sign of resilience in the economy. the government is seen to be holding up in the face of accelerating inflationary pressure and raising interest rates. really seeing inflation as being the biggest headwind for south korea. it has prompted the bok to remain open to the idea of a big rate hike, the likes of which we

have been seeing from increasingly more global central banks. annabelle: that's right, and all eyes are on the fed, with the chance of a 75 basis point hike at the upcoming meeting. we are tracking how that is also playing out in the bond space in asia. we saw treasuries extend the ir rout. keeping an eye on the shorter duration bond that's. australia's three year yield, particularly sensitive. we had hawkish comments from the rba governor in an interview with the abc, saying that higher rates will be necessary to "slay " the 7% inflation rate. goldman sachs has also changed its forecast for rate prices, now seeing 50 basis point moves. . to the board now for a check on how we are setting up for equity markets. treasury moves are setting up for a week start across the

board. new zealand extending losses already. sydney also pointing to a weaker start. the yen is a key focus as well, traders increasing their bets on a 0.75-point move from the fed. shery: take a look at what u.s. futures are doing. we were seeing anxiety in the new york session, the s&p 500 falling for a fifth session. we are headed towards the federal reserve rate decision on wednesday. in the u.s., future succession in asia, a bit of recovery, nasdaq 100 futures gaining ground. 100 stocks outperforming in the new york session, the likes of oracle and fedex really rallying today. we are watching the treasury space, the 2-year yield at the highest since 2007, when it comes to the three-day gain, the biggest since 1987. the 10-year yield at a 2011 high.

we continue to watch oil prices, because it is extending the declines from the new york session. fears about more energy legislation here in the u.s., the white house considering perhaps an oil profit tax. haidi: that fear gauge for u.s. coded markets is flashing red in anticipation of a rate rise shock from the fed. the high-grade credit is at its highest since april of 2020, as a 75 basis point hike garners even more support. we talked about 100 as well. let's cross over to kathleen hays and our mliv strategist, mark rant--filled, joins us as well. kathleen, more high-profile wall street names are jumping on board. i do they gauge the chances that we will see an outside hike? su: i want to quickly comment on the credit spread, something that the fed has to watch closely. stockmarkets can sell off, but

liquidity conditions could be a red flag for the fed. in terms of the size of a hike, it has a lot to do with the fact that people are concerned that being behind the curve, losing credibility, they have to do something. in the last 36 hours, the markets see it just three minutes, 275 basis point hikes, another 50 basis point hike. a month ago they saw only 190 basis points. a huge change. that is because inflation numbers are getting harder, inflation exports are rising, not going down as the fed has said that they must. this is a dangerous sign. former new york fed president bill dudley, now an opinion writer, talking to wall street journal today and saying five basis, wins, keep betting on it. bill ackman, noted investor, he thinks a 100 basis point hike would raise people's confidence, investors' confidence.

opposite side of the coin? one thing people are talking about, if they think there is any chance they will do 50 as advertised, is that the fed had to work really hard to get where it is now. it has allowed inflation to get out of control. they could restore it with 75 basis points. and they had a lot of hawks on one hand and doves on the other to agree on 50 basis point hikes. can they not still do the 50 basis point hike? a former economist on the federal reserve board of governors will be on the show. . he thinks there's a chance the fed might stick to it and the chance is bigger than the markets are betting on right now. shery: what is the expectation right now about the market reaction? if they are pricing in 75 basis points and the fed does 100 will that calm the markets and reassure them about what they

are trying to do about inflation or will they spook them and make them think inflation is out of control? mark: traders would see it as a sign of panic if the fed ghost to 100 basis points. if they go from 50 to 100 so abruptly, people will be thinking, what is next? 150, 200 basis points? where does it end? traders are more used to the fed going in incremental moves. already changing from 50 to 75 would be seen as quite significant, and probably the fed messaging needs to be something like, we are moving to 75, and receive room to -- and we see room to do something similar at the next meeting. showing that the fed is open to being more aggressive if it needs to be, that would be taken better than the market than subtly going from 50 to 100

basis points which would smell like we are losing control and we don't know what to do. there has never worked well in markets, and the rise in bond yields would get worse as people completely dump long end bonds. something in between would be seen as better the financial markets. haidi: that gulf between the u.s. and japan rates is continuing to drive dollar-yen trading. how much weakness do we see, given that it has fallen to the 24 year low? mark: it is hard to see where the high would be. just yesterday the bank of japan was increasing bond purchases, going as far as the 30-year sector, adjusting specifically 25-year plus bonds, plus the 10

year bonds which they have been buying for some time. the bank of japan is trying to stabilize the yield curve, even the superlong section ahead of the bank of japan meeting on friday. so as long as the bank of japan is continuing with its super easy policy and the fed is going to raise by how much they do so, the haven is dollar-yen. dollar-yen doesn't have a limit, until japan's ministry of finance gets more aggressive either with intervention, or shows that it is willing to support the yen with specific purchases. the market can just see the interest rates getting wider and wider now, and the net effect is that the dollar-yen good setup. shery: mark rant--filled and kathleen hays -- mark cranfield and kathleen hays, thank you. vonnie: sources say that organ so that her ron wyden may propose a surtax of 42% -- sources say that organ senator

ron wyden may propose an oil profit tax. president biden will seek to amend ties with saudi arabia during a trip there next month, a reversal of his pledge to make the kingdom a pariah over its civil rights record. the visit will cap four days of travel in the region which also includes israel and the west bank. he will meet there easily prime minister, and palestinian president mahmoud abbas. truckers in south korea have reached agreement with the government, ending a weeklong strike. they will resume their duties after agreeing to extend a freight rate system that guarantees minimum wage. the transport ministry will also provide subsidies to alleviate surging fuel costs. hong kong has marginally tightened its virus restrictions amid a rise in cases. residents will have to show a negative covid test result

within 24 hours of entering bars and nightclubs. more than 300 cases have been linked to bars since bernie's reopened recently. 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: hong kong's outgoing chief executive carrie lam says hotel and teens have heard the city's status as a financial habit, and she says the government could have prevented elderly covid deaths with a stronger vaccination drive. however, she refused to apologize. >> if you look at the past two years, before the fifth wave hit us, for a period, hong kong was ranked the world's number one in terms of normalcy. that is when other countries and places were imposing the stay-at-home permits and lockdowns and closed their airports and so on. we were, by and large normally.

but since the fifth wave hit us, and it hit us very hard, particularly in terms of the number of deaths -- >> we went from 300 to 9300 deaths. >> we had to be extremely cautious. at the same time, because of the trust visibility of omicron and the mildness of this virus while other places were opening up. by comparison -- i am a person who believes in relativity. everything is relative. when people are opening up in hong kong is still imposing a seven-day hotel quarantine, that, to a certain extent, weakens our position as an international city. stephen: is there something you wish you could've done better? we talked that the deaths went from 300-2300? >> vaccination. vaccination. if you ask me, had we adopted

more aggressive measures at the beginning, and projector the elderly better, especially in the elderly homes, and perhaps we would have seen a lower number of deaths. shery: hong kong's outgoing leader carrie lam with our chief north asia correspondent stephen engle. stephen joins us later this hour for more on his discussion with the outgoing chief executive. also ahead, cryptos winter gets even colder with more job cuts, the bear market taking the digital coin to december 2020 lows. but first, you can hear why manpreet gill from standard chartered remains with the base case that the u.s. dodges a recession. that is next. this is bloomberg. ♪

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>> everybody knows we are either getting into a recession or it is going to be close to recession. so i don't think there is a lot more negative news that's going to come out. the question really is going to be, how long is the recession? three months, six months, a year? i think ultimately it is going to be pretty short. haidi: avenue capital management ceo marc lasry there talking about inflation risks. the hottest inflation in the u.s. in four years will push the fed to raise rates more aggressively, these are the signals coming from the markets. but our next guest remains optimistic, his base case is that the u.s. avoids recession. manpreet gill joins us. i think with all of the panic selling that you are seeing i read your notes this morning and

i felt a calm the sand. what is making you think that everything is going to be ok -- i felt a calm descend. what is making you think that everything is going to be ok? manpreet: we think inflation will come off moderately from where we are today. if we see that happening the coming months that feeds into many other factors, obviously the fed reaction and obviously the asset market reaction beyond that. so i think for us, it is about whether the fed delivers on what it has already priced in because of what inflation does, or whether they feel the need to tighten expectations further. that really is at the heart of what we see as a base case, inflation peeking, or the pessimistic scenario, where the fed keeps repeating what we have seen the last couple of days. energy prices have at least

stopped rising. haidi: for the longest time, we have seen safety being found in the preference to developed markets, particularly u.s. equities. are you starting to move away from that? this chart shows the soul being extended in asia. financial conditions tightening as well, which is also adding to the volatility. the use the growth and inflation scenarios more optimistic in this part of the world? manpreet: yes, we do. there are two different factors. one is the global environment, which as you mentioned -- i don't think asian equities can escape that completely, but asian equities, particularly chinese equities have been under a downdraft for a much longer period of time. if you look at the chinese policy cycle, is almost a mirror image of what the fed and other central banks are doing. inflation is not the problem, growth is.

we are seeing a lot of policy effort and increasingly so, to support growth. from the equity market perspective, that is what drives up preference for asian equities. china is a big part of that. but i think it is a great thing to diversified equity exposure away from just focusing on all views on what the fed does. we think it is a more positive valuation backdrop. shery: let's talk about what. . currency markets are doing. the japanese yen continues to weaken. where do you stand on where the yen goes from here? manpreet: the yen, it depends which factor will be predominate. the yen is getting weaker. as does where the oil prices going. what makes the yen trade

difficult is that is one strong driver on one hand. but we have policymakers that could step in at some point, against the backdrop of what has been one sided positioning, in this move from the 115 level. and a base case, you could see the yen keep getting weaker. that is what it is not a favored trade, it has low visibility. any policy intervention introduces a huge amount of volatility with positioning on one extreme. that's why in the fx markets, we are mixed on currencies. perhaps less exciting but i think you get more support, whether that is on interest rate hikes, or eventual growth bottoming out in china. i think that is a more visible and more critical outlook, compared to what we have got around the yen at this point. shery: when it comes to the volatility in the currency market or the equity markets how

do you take advantage of the long-term opportunities, and ready you go -- and where do you go? manpreet: in our view, the opportunities will be created in any type of income asset. it is another debate whether treasury yields have further to go, but when you look at income assets, fixed income or even in non-core assets like reits or convertibles, the level is reaching a level where it is starting to look interesting. our preference is to it a diversified multiethnic income strategy. they are at a level that we have not seen at least since 2020 and not for many years before that. one factor that provides a good buffer even if treasury yields have not talked out, the basket takes a lot of preference for fixed income, emerging market bonds or other asset classes where credit spreads are already

wide, and a mix of floaters. . we think a diversified basket is where it starts look interesting. it is not as high-octane a be t, but at least we are getting a yield level which provides an interesting buffer. shery: always good to have you with us, standard chartered head of fixed income strategy manpreet gill. you can find all the things he talked about on today's edition of "daybreak." terminal subscribers go to dayb . you can customize your settings so you only get the news on the industries and assets that you care about. this is bloomberg. ♪

haidi: are quick check of the headlines. softbank is set to be preparing to list some of its london arm

in the london stock exchange, shifting from an earlier plan to only use. the u.s. market. sources say it will still list the majority on u.s. exchanges and that, plans for any london person hasn't been finalized. goldman sachs is preparing to offer foreign-exchange prices that last for days. it plans to extend this into the coming weeks. but clients will pay a premium in the form of added spread to reflect the risk that rates will move against goldman-s position. credit suisse shares hit a record low, after analysts say the bank will suffer from funding pressures. barclays analysts say that raising more equity could help credit suisse soft and the impact of upcoming funding headwinds. the lender has been hurt by that archegos and greensill scandals, and a string of profit warnings. shery: and the bear market for bitcoin is now in its docket phase, according to industry watcher glassnote.

the leading digital coin appears to have stabilized a little bit. su keenan joins us with the latest. we are hearing more warnings that this may be another crypto winter? su: there is a wide range of views on where we go from here, but the one point of agreement is that we are clearly in bitcoin winter, kicked off by number of events, the fed rate hikes and inflation has been negative for crypto. we have increasingly seen the currency trade in sync, lower with tech stocks. then you had the terra luna meltdown, and now the latest problems with celsius. where does it go? bitcoin has fallen 30% this month, 21% in just the past three days. . look at the five day chart and you can see that steep drop. it could move 20 percent in two

days, and another 20% in the next two days. and the bitcoin bull in billionaire mike novogratz, he believes 20,000 is probably the bottom. we have come pretty close to that in the last couple of days. haidi: at the same time you have a big crypto firms like coinbase laying off workers. at least one bitcoin bull is saying that he can handle the volatility. su: yes, that would be microstrategy's ceo, who says that is stocks lost some 25%, but he can handle the volatility going forward. to look at the companies that are cutting, coinbase is cutting 18%, joining companies that are adjusting to this bitcoin winter. back to you. haidi: su keenan with the latest on crypto. lots more to come on "daybreak: asia." this is bloomberg. ♪

>> you're watching daybreak asia. we are half an hour away from the open in japan, south korea and australia. we are looking at how the yen is trading at the 24 year low against the greenback this morning. we are seeing signs of risk aversion that's creeping into yen crossing this morning. the aussie yen, a typical barometer of wrist sentiment. we are seeing it down for percent off this year's peak. the euro-yen just claiming that 140 level as the session in new york winds down. changing to the terminal, let's have a look at how the weakness in the yen has been a boost for japanese stocks that he did some more than 3% in the previous session. we are seeing that blue-chip nikkei to 25 outperforming s&p 500. while it has risen around 7% from its march low, the s&p 500 has lost around 12% in that same

time. >> they are betting that the bank of japan will force japan a policy looking out of sync with global peers. the senior portfolio manager is talking about the pressure growing on governor kuroda in the central bank to capitulate at some point. >> we still have duration markets in the short time. and i think it's important to fix this. i think the physical work price into the u.s. is approaching fair value, not asymmetric anymore, and we think the same thing in europe. we think yields move higher in the u.k. and in japan. we do think that they would be forced to capitulate at some point. we think that the second quarter would be a key determinant of that, and we would see

inflationary expectations rising by the beginning of july. we are really more focused on the points at which the boj does that. depending on how hard it goes on wednesday, depending on what happens with the bank of england, the pressure is growing on corroded. i think he is facing political pressure. we sought over the weekend and last week that it's becoming a more concerned and more rhetoric around what has to be done to contain the session and what's happening with the yen. we think that point made will be coming forward a little bit here. >> portfolio manager russell matthews. we are counting down to economic research from china including industrial outputs and retail sales. but it's expected to show an economy between -- teetering on

the brink of an extraction. let's bring in our chief asia economic correspondent enda curran. we haven't seen two months of contraption it in with the collapse of these numbers it has been quite a while. what are we expecting today? >> probably expecting improvement over the month of may because that's when the lockdowns begin today ease. more production by the factories and we know that transportation and logistics are starting to improve as well. so starting to be a better tone. year on year, industrial production in fisk -- fixed asset production will still be down, but heading into the right direction, the real one to keep an eye on his retail sales. not a drop of over 8%. that really speaks to how covid zero is hollowing out consumer sentiment and consumer confidence across china. i think that's the key indicator for the depth and the scale of how far this recovery will go.

i think the main activity indicators are too soon for the rebound. you have a look at what's coming up with this. haidi: what further action you expect from the pboc in light of the widening policy divergence we continue to see here? annabelle: first of all -- enda: first of all, we have to get a handle on how things are going in june. is the reopening allowing the economy to get back on its feet? we thought exports would be down pretty quickly. we will see investments in production and retail come back pretty quickly. it would speak at this, china's got control of the virus again, and authorities don't have to do as much as they would have to do back in april. at the same time, they are facing that divergence with the fed, which is quite unusual if the fed does go by as much a say use to, obviously down a pressure on china's capital slow

stories and lower investors away from china. that's probably not what china wants at a time when the economy is under pressure. they will continue to support the economy, but it's a questioning of how much easing can be do when there's so much downward pressure on both the exchange rates and investor flows out of the country. it has to be a tricky one for them to balance. haidi: our chief asia economic correspondent enda curran with a preview. in hong kong has intervened to buy his local currency to defend the greenback pay as a hong kong dollar fell further towards the end of its trading band. more on that in the interview with the city's chief executive. let's bring out our chief north asia correspondent stephen engle. let's look at the dollar peg, what did carrie lam say about that? stephen: in the short-term, there has been capital outflows from the hong kong dollar pushing against the weaker and narrow band of 7.75 to 7.85. the increase is obviously that

the fed will be increasingly hiking rates. so, there's that capital slow on the short-term. on the longer term, where i really talk to carrie lam's some of the most interesting bits of my interview yesterday with the chief executive, was about the dollar peg and whether or not she saw any scenario that could potentially deepak the hong kong dollar from the u.s. dollar. now, there has been increased chatter, at least discussions, this is usually an untouchable subject were hong kong says filling linked exchange mechanism with the u.s. dollar is unflappable. but there is at least discussions going on now, other it's at the hk m&a, and the chief executive essentially saying they need to prepare for all scenarios going down the road. but also, the financial secretary recently talked about what he saw's the u.s. weaponization of the u.s. dollar, especially in light of the actions taken when russia invaded ukraine.

so, i posed these kind of questions to carrie lam in this interview, and as i say, it some of the more interesting bits of our discussion. >> i'm still in the position, as a chief executive, in my personal view is there is no basis, and no need to change the exchange rate system. it has served hong kong well and will continue to serve hong kong well. the reason we have to make a robust responses there's always rumors that try to exploit any uncertainty in order to make profit or undermine hong kong's profitability. but i think one thing is very important. when all over the world things are a bit chaotic, the certainty of hong kong's monetary system is another mean to hong kong in our country. stephen: do see signs that united states is weaponizing the

dollar or that there could be threats if there are further sanctions against hong kong, threats to hong kong's assets to the swiss system like we have seen in russia and alike? >> some overseas governments are totally unpredictable, so i cannot comment on that, sometimes they are totally irrational. up to this moment i don't understand why being a hong kong government official defending national security of the people's republic of china should be sanctioned by the u.s. government. i just don't understand. except trying to bully and intimidate us in defending our own country. stephen: are you still paying in cash, or do you have your banking situation? >> the one thing is i have not been spending money in the last two years without a credit card. but i can survive, i can survive.

stephen: how about after you step down question mark you obvious lee paid attention, would that be paid in cash? >> probably, a very modest pension. i left the government too early. politically appointed officials 16 years ago, i was no longer a paid pension based on a civil servant labor service as i had been saying, i have no property in hong kong, very little assets, but i enjoy serving the people of hong kong, and i'm sure i will enjoy my retirement. stephen: would you apply or find a way to apply to the united states to get off the sanctions list. >> definitely know. stephen: why not? >> i am not keen to go to the united states, i have no assets in the united states. if my family members have been hurt, they have already been

hurt and they stand by mean, so why should we go to apply for any sanctions. i hope one day the u.s. authorities will realize that they have done something wrong, that they should rectify their own mistakes. shery: hong kong chief executive carrie lam speaking to stephen engle. you can catch more from that conversation, a conversation with carrie lam. 5:00 p.m. in hong kong, 7:00 p.m. in sydney. let's now get to vonnie quinn with the first word headlines. >> a member of the bloomberg news in beijing was released on bail in january. they were detained more than one year ago on suspicion of national security violations. the embassy says the case remains under investigation pending or trial. bloomberg users have been unable to contact them, but the editor-in-chief says she is out on bail.

china security regulator has issued paid to the nations brokers and funds to avoid or cause excessive short-term incentives and prevent financial risks. they deny setting limits on banking compensation. on monday bloomberg reported that the regulator asked global banks were to inquire credit suisse details on how they pay their top-down. european gas prices surged as much as 21% from russia in the u.s. russian sanctions have left a crucial -- for the nord stream 2 plane stuck in canada. reduced flows through nordstream 2 i-40 percent, along with an expected outage at a u.s. lng terminal added for pressure. this applies trying to guarantee. they will retire allstate own coal power power plants by 2030. government officials say $2.7 billion will be invested in new

green power infrastructure, including wind generation and storage. it's a latest effort by the nation to curb emissions and roll its aging energy infrastructure. global news, 24 hours a day, on air and on bloomberg quicktake, powered by 2700 journalists and analysts in more than 120 countries. i'm vonnie quinn. shery: coming up next we hear from the ceo about launching the high-end resident and already competitive asian market. that exclusive interview is just ahead. this is bloomberg. ♪

haidi: you're watching "daybreak asia". ksk's group flagship do well for in kuala lumpur will be inflated by the end of the year. the high-end residence has been in the works since 2013 with completion delayed by the pandemic. ceo grew ksk from an insurance company that her father started in malaysia more than three decades ago. today, the group has a fleet of businesses to its name, including tech ventures and their plan to expand even further. i spoke exclusively to joann about concerns of oversupply of stimulation in malaysia. >> we are actually a niche

investment class. what that means is and this is strike above your normal luxury. it is provided by the hotel, so, people do think of it as a completely different asset class. when you look at that, there's only three developments in malaysia that's actually in the area and they only do this. it's not that is just in the markets. that's where we are looking at. i think that we talk about all the supply, we are actually talking about the luxury. >> obviously this is your first project for ksk, and it came at a time when there was covert as well. what lessons would you take from covid going into your next development project? >> i think one thing that we can learn moving forward is how do we actually look at the

construction supply and labor in the market and how both are increasing. so what are we going to do moving forward? things like prefabrication of homes. i think moving forward and looking at the future developments, we would be considering things like construction where the cost is not going to be that high anymore, and we thank all the time, everybody knows in the property development industry, time is money. so i think that would be very important. >> ksk group is quite diversified, where you see the biggest growth drivers now? >> for ksk group, and the industries for us, one is achieved property and the other is actually insurance. we see opportunity.

where we have the assessment is actually customers. we don't want to just be a real estate developer, we want to continue that relationship with our customer, and what that means is to look at how we can inject into the system so that we can have value. >> what exactly led you to identify the customer as the starting point? as you say, property and insurance are two industries that are very legacy businesses, and they see customers as the end-users, but not a starting point. what made you identify that? >> as insurers we always say we saw the taper. if something happens to you, we cover you. so we understand that we are always thinking about the services that are provided to the customers. so this is what got us thinking, we should actually be taking on

more. understanding customer journey. that's where the prophet is and got us thinking about being more customer obsessed. haidi: talking about the diversification of the business, you joined and then you sold the malaysian insurance unit your father founded. he made it into a household name. a very old step at a very early stage in your career. >> it was not a decision that i made a loan. it was a consensus decision that we made as a family business. for us, that decision was because we had a vision as a group at that time to not just going to continue on the growth and insurance, but also to diversify into real estate. and at that point in time, it was already a household brand.

we had a lot of opportunities, and we have a lot of -- and we decided, we should start the profits of venturing into this sale, with the intention of actually continuing into the insurance industry, and also taking it as -- taking it as an opportunity. >> its focus more on the family dynamics, this is a business founded by your father, and outside of work that relationship his father, daughter, but when your artwork its it's chairman and ceo. so how did you negotiate that transition? >> is the financial institution, we are regulated by so many authorities. we had that moving in, it helped us to create lines of what is a family conversation in a professional conversation in the

workspace. so that actually helped. i think over time, building a habit. it's when do we actually have these conversations that are family conversations and that happen at home, and the moment we walk into the door in the office, we always say to ourselves we should be professional. haidi: being a young ceo, did you ever feel imposter syndrome and was that something you had to overcome, going into a business where your peers had 20 years of experience are more and you had this bold vision? >> it's not that often in the banking industry, when you actually go in, for me it's the same. i never walk into a room and think about how people think of me, i like to focus on the work that i do. i always want to say that i

don't take any of what i do for granted, and i always like to think of myself as the underdog. so it's about doing genuine work and being passionate about what i do, and giving it my best. and if my best -- the outcomes of my best are just mediocre, then i learn from it. that's why it's the culture that we like to innovate, and we like to innovate and learn very, very quickly, even if we experiment and feel, whether we fail in succeeded or we have something to learn and i prefer to focus on that. >> ksk groups. because generation x every wednesday only on bloomberg tv. we do have breaking out of japan, we are getting the core machines orders out of japan for the month of april. this is a huge jump. we are talking about the month-to-month numbers. growth of 10.8% in the expectation was for contraction.

we know that these court machine orders tend to be volatile. year on year, gains of 19%, that's a huge jump when it was around 5% gain. it's also a huge increase from the previous month. former orders are very important in giving you an outlook about the cute -- future capital expenditures. we are seeing a very strong number come out of japan for the month of april. a jump of 10.8% year on year. a surge of 19%. this is bloomberg. ♪

>> you're watching "daybreak asia", we are watching the fallout of the global supply chain crunch. the shutdown for key natural gas exports, some -- they have announced that it was hit by a fire last week and won't be operational until the end of the year. they have reach an agreement with the government and it has added to the strain of global supply chains. the trucker solidarity divisions at truck drivers will immediately resume their duties after their freight rate systems that guarantee minimum wages. indonesia has cut the maximum

food levy by more than half to another just to speed up shipments after an export ban on the commodity. exporters must pay indonesia's fund agency a maximum levy of $200 for oil, down from $375 currently. bloomberg terminal users can read more about those stories on and i trade nl. haidi: we are getting shanghai's new coping numbers. this as we see just that gradual reopening, mass testing going on, and looking back at some of these litany of's -- litany of restrictions as beijing reported the highest number of uber numbers. the covid czar is really urging for more action, continuing the covid zero strategy despite the disruption. we do have the markets open through sydney, solon tokyo just

upon us now. this is bloomberg. ♪

>> this is "daybreak asia", we are counting down to asia's major market open ahead of the fed rate decision. plenty of data out of china. haidi, including whether or not the pboc would further try to support the economy with its one-year lending rate. haidi: lots of caution, in particular as we see the reopening. the pullback of restrictions. we've seen covid rising in beijing, in case is still being transmitted in the community in shanghai. covid zero is still being considered. let's get into the market. shery: -- annabelle: china's market -- focus is -- i we are focusing on the treasury space because the direction we are

seeing in the shorter duration is setting the tone for trading in asia. we are checking in on the treasury two-year on the cash open. we are seeing yields move just a little bit lower this morning, so we have been spiking to the highest level since 2007. how that sets us up for trading in the rest of asia where we do have the nikkei coming online, fairly flat at the start of trade. we are seeing it boosted by the weakness trading at that 24 year low against the greenback. moving now for a check on what's happening in korea. we did see the kospi declined to the lowest level we had seen since 2020. we are still seeing it extend those losses. also a major focus because of the losses we saw on the tech base yesterday. eight of the 10 largest cap stocks sinking yesterday, and that korean won we are considering monitoring weakness, it has been leading asian effects currency to the downside. changing now to the focus in australia, the asx 200 was slumping yesterday to the lowest

level since november 2020. we can start, it is a stagnant open. still focusing on these yields as well. that three year yield in particular, watchmen it had commentary out from the rba government still low, it turned hawkish saying we would need the central bank to take an aggressive stance to really have that 7% inflation rate with goldman sachs changing -- changing its forecast for that. now seeing half-point hikes in august and september. just some of the factors we are watching this morning. of course the focus on the fed here. shery: our next guest says asian markets are likely the best position among major economist, including europe and the u.s., in this environment. with us now is the asia-pacific strategist at invesco. is this asia outperformance call based on the covid recovery, how is that start and stop the reopening haidi mentioned

earlier on does threaten the economy? >> we have seen the worst of the omicron spreading in asia and china, we are not out of the omicron woods yet, and i think the worst is behind us but there should be a reopening boom for consumption in consumer spending around the region. shery: the worst is over also for chinese equities, we are seeing the chart on the bloomberg showing major indices trading above their 50 day moving average, but what happens with that regulatory crackdown, not to mention of course the renewed restrictions from covid? >> i think that we have certainly touch the bottom of chinese equity, but i don't think that will get back there, it doesn't mean we won't see any kind of near-term volatility, but i think we will give insight to the tightening coming up, and

still some covid revenant set of potential lockdowns and other cities, but i think the recent outperformance for chinese equities, i have a bit of legs left to run still, i think there is still a few impediments and had woods that investors have to take into consideration. haidi: you are looking overweight low volatility and within equities, where you find that in this environment? >> i think it's a very challenging environment right now given the uncertainty of fed tightening, and how quickly and at what velocity they are going to cite in. i think there is a time of consolidation of investors trying to assess a lot of these different factors. we certainly see it in a risk off mode as investors tried to assess these variables. but i think that from now into the end of the year we will get back to risk on mode, and that situational. i think places like asia and other emerging markets could

benefit. shery: you talk about transparency when it comes see -- comes to earnings. given that we are in this kind of liquidation tight -- liquidation tight move, does that mean the bar when it comes to the next few earnings seasons are going to be that much higher? >> i think so, i think we are in an environment where investors are looking at companies that have strong balance sheets, and good cash flow and earnings flow. and i think that that is going to pivot. we will certainly remain for the rest of the year. the era of accommodative policy for all that that has happened, and investors are going to become a lot more. >> when you say about that kind of dispersion between bonds, credit, equities, are you looking for at the moment, other than the overweight equities in this environment? >> we have equities over fixed

income, and getting some of the massive bond movements that we have seen so far over the past couple of days, i think the u.s. two-year has basically priced and aggressive tightening, perhaps the 10 year could slow up a little more. but i think that investors should take a very close eye on where they want to be positioned in fixed income, and i would still prefer a bit of duration over credit given the current dynamics. >> good to have you with us, invesco asia pacific strategist with his calls on the markets. in this as investors are -- and officials are getting ready to become more aggressive in the fight against inflation, but even they expected just weeks ago. our global hong kong economic editor is here with us with the latest. kathleen, we have a strong conviction on the markets that we will see that 75 basis point hike. kathleen: this is amazing, a

longer we talking about jay powell telling us 50 basis point rate hike likely in june, 50 basis point rate hike to be followed up in the july meeting, aggressive moves. that's how we were looking at it, but now the markets he aggressive as something that's a lot more aggressive than i think, as i said, the fed or the markets would have guessed that just a while ago. because now you see the market is pricing in in june, july and september that we will have 200 basis points of hikes. just a while ago there were looking for a total of about 200, perhaps by the end of the year, maybe a little bit higher, but dishes goes to show you how quickly if you has changed. so from the former fed economists and some high-profile investors like the founder of virgin square, they said today, who is tweeting, he is a very active tweeter if you like to follow him there, he was saying

that the fed has basically sloan. that they let inflation get out of control, they need aggressive rate hikes to restore more confidence, and he goes on to say that if they could do 75, that's fine, but 100 basis points, they said, would be even better. and that's something bill dudley said as well. he said maybe for the fed it will turn out that getting there is equally as important. he thinks there's a sense at the ready to do 75 basis points tomorrow. >> it's a very goldilocks debate because you have this that won't be enough and people are saying 75 and another one saying 100 would be overdoing the markets and it would freak out. is there any uncertainty in terms of what the market feels like the fed will do? kathleen: you know i love metaphors and that is the perfect metaphor, goldilocks

deciding which one is right. goldilocks is jay powell and his colleagues. when jay powell was promising the 50 basis point rate hike, economic numbers started showing something different. a .6% year-over-year. now pulling back, starting to rise more. this is the consumer confidence survey in the new york fed survey, inflation expectations are rising. next year is now record. it 6.6% year-over-year. what is the pushback? he's a chief economist and said it so jay powell long time to do 50 basis point rate hikes. so don't be so sure that the fed won't decide to stick to that path the fed right now is under

its pre-meeting. ahead of the meeting, they can say a thing, they can't reveal anything about their thoughts or for the staff economists about what's going on with the policy debate and where it might be going. they can't quote anything, they cap drop a quote in a newspaper or talk to reporters. they certainly can give speeches, that's another reason why it looks like they could do this, what we are not going to know for sure and so at happens, we see a happens tomorrow. >> our global economics and policy editor kathleen hays. stay with bloomberg for that extensive coverage, or what we are expecting from the fed, of course we got it covered across all angles. we have that in-depth analysis in breaking news. this get a look at the movers. legs taking a look at the biggest japan machinery makers

after we had pretty solid numbers out for april. we saw sheen orders rising 19% on the year that was well beyond what analysts or economists were expecting of a gain of 5.3%. machine orders are the leading indicator of the future capital spending, though those numbers could be pointing to solid moves in the japanese economy. that our bloomberg intelligence team is not quite so positive on the outlook. they are saying this to your up psycho could be concluding by the end of this year. they are also highlighting you in particular because it is the companies benefiting from the yen weakness we are seeing as it shifts all of its products from japan. >> we are following the truckers strike in south korea. they are reacting to the news. calexico take a look at those gains there, this is quite an agreement that we have reached with the truckers, korean truckers at union and the

government. basically what they agreed to is a new wage. we have seen the strike extending over a time of a week, and the government predicting around $1.2 billion of trade could be disrupted, so we are seeing now, obviously a lot of positivity, costco, that is the largest steelmaker. had been forced to halt production because it had a supply backlog of deliveries not being made, and seeing a change in the dish -- and logistics companies. one that is going in the opposite direction, this is high, but which is the parent or the owner of bts, or the k-pop fans. don't know if you guys are listeners. if you're a fan of this, seven members are all going solo. haidi: i know a lot of heartbreak is going to come from that. some big news when it comes to

the minimum wage here in australia. this is really a pig indication of how much she's inflationary pressures are eating and tousled incomes, particularly on the lower end of the scale. australia's wages being 40 australian dollars a week. that takes you to 812 dollars, 60 weaker $2138 australian an hour. that minimum wage by percentages to be increased by 5.2%. that is just a whisker higher than the 5.1% that the government had asked for. this comes after the work commission conducted its regular review. they asked lower paid workers don't go back and they see the rising inflation rate in the back that minimum and inflation raise of 5.1%. that comes in 5.2% after the review. this comes from the rba governor saying that he could see inflation getting into 7% by the end of the year. that we have seen that

announcement from the fair work commission on its minimum-wage decision for 5.2% increase. vonnie: president biden will look to men ties with saudi arabia during a trip. it is four days of travel in the region that also includes the west bank. the israeli prime minister and palestinian president. oil had signals that democrat is considering new energy legislation. looks up to 42% on companies that have a profit margin better than 10%. biden has not ruled out of taxing excessive oil profits. >> we are not ruling it out of consideration. we have an announcement we will make that announcement. with the president made clears

that there's a real issue here with a level of production by the oil companies on the profits they are making after the russian invasion of ukraine. >> european gas prices search as much as 21% from russia and the u.s., they left a crucial turbine by the nord stream 2 pipeline in canada. a longer than expected outage at the lng terminal added to supply pressure. germany says supplies currently guaranteed. western australia will retire all cool power plants by 2030. government officials say $2.7 billion will be invested in new green power infrastructure including wind generation and storage. it's a latest effort to curb emissions of overhaul aging energy infrastructure. global news, 24 hours a day, on air and on bloomberg quicktake, powered by 2700 journalists and analysts in more than 120 countries.

quite still ahead, we'll asked barclays why they remain cautious about the china recovery while having a bounceback in retail sales and industrial production. hong kong chief executive admits that designating hotel quarantine has weakened the city's financial hub status. more from the interview next. this is bloomberg. ♪

shery: we are counting down to a slew of economic data from china including industrial output in retail sales. the numbers are expected to show how the countries continues be on the brink of contraction and weak demand. certain bars control and we will also be watching the pboc. it makes the decision on the mls array. it will give us an outlook around whether or not authorities will continue to try to support the economy. haidi: the outlook for hong kong remains murky. carrie lam said her government could've done more and prevent more covid. darst covid debts. she spoke with bloomberg's david engel about hot why she was

optimistic about the financial hub. >> despite some skepticism and cynicism about hong kong's future, i remain optimistic and confident of hong kong's future. one of the reasons for my confidence and optimism is hong kong's unique strengths. a conducts external affairs, particularly on the international arena. so we have the autonomy to set up our own overseas offices, we could enter into free trade, avoidance of investment. i do want to complete my term by reinstating the importance of hong kong's international connectivity, and the status as an international city. stephen: is the damage already done?

carrie: yes and no. if you look at the past two years, hong kong was ranked the world's number one. that is when other countries and places were imposing departments in lockdowns and close the airport and so on. we were operating normally. but since then, it hit us very hard. between the terms of the number of deaths. stephen: 300 deaths. 9300 deaths. quirks at the same time because of the transmissibility omicron, and the mildness of this virus, then other places are opening up . by comparison i'm the person who believes in relativity.

-- to a certain extent can weakened the position. mind you, during my term, we're still quite high on the 25th of march and i announced the gradual opening up. social distancing is a three stage relaxation. we've done the two phases. our reducer designated hotel from 14 days to 17 days. the failure rivals in our beautiful hong kong airport was in the few hundreds. i hope gradually we are able to

progress on the route of normalcy. stephen: in hindsight is there something you wish you had done better? the deaths went from 900 300 -- carrie: perhaps we should be more aggressive than forceful. stephen: why not a mandate? quirks for vaccination, -- carrie: for vaccination, we never do it in having people take a job, because that would be to interfering. looking back, if you ask me had we adopted the more aggressive measures at the very beginning, and protect the elderly better, especially in the elderly homes, perhaps we would see a lower number of deaths. stephen: this may be your last television interview as chief

executive. but given that your term coincides with probably the most term all hong kong has ever seen these last three of the five years, i want to give you the final word, is there anything you would like to apologize for to the hong kong people? carrie: no. i want to apologize to my husband and my son for the sacrifices they have made to support my mission to serve to people of hong kong and to build hong kong as a part of the people's republic of china. shery: bloomberg stephen engle speaking with hong kong's chief executive carrie lam. you can hear more from that conversation in our upcoming special and the chief executive reflects on the end of her five-year term, which included widespread protests and a condemning. this is bloomberg. ♪

>> is a quick check of the latest business flash headlines. coinbase has laid off 18% of the workforce in another sign of a worsening downturn that shaved off trillions and the total cryptocurrency market value. the largest u.s. digital asset training platform had both cuts of a crypto winter. goldman sachs is preparing to offer a foreign-exchange plan for the last four days to shield clients from market swings. the bank has already been having rates allows for minutes and plants extended incoming rates, but finds will adjust the rates to move against goldman-s conditions.

credit suisse shares hit a record low after analysts said this bank was suffering from funding pressures. barclays analyst said raising more equities could help credit suisse soften. they have been hurt by the scandals under string of profit warnings. haidi: this is the picture when it comes to stocks. the preoccupation really continues to be what the fed will do. do we get to 50, do we get 70 five, could be potentially get 100? stocks in europe have been covering their the 2021 low on inflation jitters and rising great expectations. we are seeing green shoots when it comes to the futures in particular after european stocks fell to that six-day, the longest losing streak since the early days of the pandemic back in as a business owner, your bottom line is always top of mind. so start saving by switching to the mobile service

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>> thanks up when it comes to consumer confidence for the month of june. index coming in at 86.4, falling from 90.4. with that consumer confidence adjusting on that month on month number. that is a contraction of 4.5 percent. slightly better than the previous month contraction at 5.6%. certainly really not showing a great picture when it comes to inflation expectations and the pressure that consumers are in australia coming in under these rising prices and of course expectations of higher volatility and costs. let's get to the markets. annabelle: focusing in on australian retail stocks because we have the australian commission and announcing it will increase the minimum wage by 5.2%. that takes us to $812 and 60

aussie cents. we get to minimum wage we are talking about 21 $38 per hour. we are seeing fairly mixed reaction here in the retailers clothing leading to declines. we do have the major department store in australia just fracturing higher. flipping the board to check on what else is happening this morning. in korea there is a particular stock we are watching. dts absolutely slumping to a level we haven't seen since 2020. the main region -- reason for this is that the boy band is going solo. the seven members will be focusing on solo projects. they did say it's not likely disbanding. we will see if we get more music from them as a group. we did have the end to that weeklong truckers strike over in korea. that's certainly a relief for these logistics companies like this one here. this company here, that is one of the largest oil refiners in japan. it is shedding a 53 year --

53-year-old plant on a weak demand, the biggest decliner for japan stocks today. haidi: china will try to move on from covid lockdowns that have any -- on economic growth, it's making consumers willing to make major purchases with a chance at they will be locked down anytime. let's bring in the chief china economist at barclays. it's great to have you with us. we take a look at the data points that we've had when it comes to domestic activity. and obviously it saying that given that we have seen that big upside to this euro covid policy. given so much uncertainty as to whether there will be more restrictions, there is more or less testing. how quickly do you expect a rebound and how sustainable could that be. >> thanks for having me, and so far, the may data has largely

gone to the upside, like pmi trade and credit growth. so, we do expect a continued improvement, and especially with production putting supply to the upside in may and even coming in at a flat rate of properties after a contraction of 12% after last month. we expect contraction to narrow, but as you mentioned, we expect this euro covid approach largely and there could be a new partial lockdown. and we will continue to weigh in on consumption and services. haidi: does it seem like the pboc is in way and see moment. take a look at the start when it comes to expectations. the decision that's due on wednesday, rates are expected to

stay unchanged. after that decision, i guess they bought themselves some time for short-term bond issuance, as well as local bonds and short-term corporate loans. are they just waiting to see whether a rebound is reflected in the data and the month succumb? >> in a way, yes. we actually took out our rate cut since mid-march. we know that the fed is accelerating rate hikes and its diminishing. that's one concern and existing in february, especially on the bond market, and equities are conflating as the sentiment and turning more positive after the opening of key cities and so, in a way, inflation is also a concern in the pboc is watching close.

in the markets, cpi, and also the services, the core services inflation is easing, suggesting week domestic demand. that's clearly the commodity price, lowboy inflationary price, these are all the things that we should be watching. >> given a great differential like you mentioned, we have seen the korean won at a two year low against the u.s. dollar. we have the japanese yen at a 24 year low against the u.s. dollar. when does the start to affect china's export competitiveness, given that export is in a huge spot for the country? >> i think first of all, for china, the export growth is to a large extent depending on the extent of the slow down or the pace of external demand. in its on the exchange rate. and with that, we would need to

know if it's at the exchange rate. we have to know if it's at the additive level. with the chinese currency and hiking expenses. the demand, the slowdown is consumer spending and the economy, and the reopening, and the ships to services consumption. and also the substitution in the chinese -- the added emerging markets. these are the main factors driving chinese factors. >> where you think the yuan is going from here? quakes we have seen the correction last month and transparency has been resilient with the decrease on the back of

a stronger dollar recently. i think the balance of payment have continued to provide the support to the u.n. and we do see that the economic recovery continues to face a lot of tightening and there is the expectation before the pboc leaving, that these may add some pressures. >> always good talking to you, barclays asia-pacific chief china economist. now, hong kong has again intervened to buy a global currencies to defend the greenback they as a hong kong dollar fell further towards their weaker end of the training band. let's go to our chief executive carrie lam who spoke to bloomberg tv about the dollar peg about concerns over weaponization about the greenback. she says there's no need to make any changes. carrie: i'm still in the position as the chief executor,

in my personal view is there is no basis and no need to change the exchange rate system. it has served hong kong well and will continue to serve hong kong well. the reason why we have to make such a robust responses there's always rumors of those who try to exploit any uncertainty in order to sort of make profit or undermine hong kong stability. but i think this one thing is very, very important. it's when all of the world things are very fluid, and even a bit chaotic, the certainty of hong kong's monetary system is another need to hong kong and to our country. stephen: do you see signs that the united states is weaponizing the dollar or that there could be threats if there are further sanctions against hong kong? threats to hong kong to access the system like we have seen in russia? carrie: some overseas

governments are totally unpredictable, so i cannot comment on that, and sometimes they are totally irrational. after this moment i don't understand why being a hong kong government official defending national security of the people's republic of china should be sanctioned by the u.s. government. i just don't understand. except trying to bully and intimidate us for defending our own country. stephen: are you still paying in cash, or do you have your banking situation? carrie: the one thing is i will not be spending money in the last two years without a credit card. but i can survive. i can survive. stephen: how about after you step down? you obviously paid attention. will that be paid in tax? carrie: probably, it's a very modest pension. it's a very modest pension.

i left the government too early. politically appointed official 15 years ago, i was no longer paid a pension based on the service. as i've been saying, i have no property in hong kong, very little assets, i enjoy serving the people of hong kong and i'm sure i will enjoy my retirement. stephen: would you apply or find a way to apply to the united states to get off the sanctions list? carrie: definitely no, definitely no. i'm not keen to go to the united states, i have no assets in the united states, if my family members have been hurt, they have already been hurt, and they stand by me, so why should we go said any relaxation of a sanction. i hope one day the u.s. authorities will realize that

they have done something wrong that they should rectify their own mistakes. >> hong kong's outgoing chief executive speaking to bloomberg stephen engle. >> crypto space walker -- roger said there crypto space has its darkest phase with long-term holders coming under pressure. we get the latest next, this is bloomberg. ♪

>> they had asked for details on who they pay their top staff. hong kong has marginally tightened its restrictions. residents will now have to show a negative covert test result within 24 hours of entering. around 350 cases have been linked to country since venues reopened. a leadership transition says great uncertainty about hong kong strategy.

truckers and south korea reach an agreement with the government ending a weeklong strike that added to the strain on global supply chain. drivers will immediately resume after agreeing to extend the system that guarantees minimum wages. under the agreement the transport ministry will have subsidies to alleviate surging fuel costs. china's embassy in washington says the number -- member of bloomberg news was released on bail in january. he was detained more than one year ago on suspicion of national security law violations. the embassy says the case remains under investigation pending the trial. bloomberg news has been able to contact him, but the bloomberg energy and chief says he's encouraged to learn she's out on bail. global news, 24 hours a day, on air and on bloomberg quicktake, powered by 2700 journalists and analysts in more than 120 countries. shery: we are seeing crypto asset stabilizing with bitcoin. 22,000 level is a love -- is

above the 22,000 level. bear markets for bitcoin has entered its deepest and dark phase with even long-term overs coming under extreme pressure. the ceo also says they expect more pain in the crypto space. >> a number of people now are very nervous and they are trying to figure out should they get out. i don't think we have natural buyers, isaac you have natural sellers today. and nobody knows what the bottom is for that, but i think you will still have a bit of pain in the crypto space. >> the cross asset team joins this. what changes are we seeing in the crypto market at these price levels? wakes will the main thing is, that now so many of these are underwater, but it was saying at about $23,400, most of it are

now below the price of what they were bought at, so you are really seeing something where it wasn't just people who got in at the very top who are underwater, it's really a lot of people who bought in on the way up. long-term holders, very long-term holders are still in a profit area, they might've bought it by $10 over $300, but you are seeing a lot of negative sentiment in the crypto space. >> microstrategy says investments are what you need to worry about, but is there concern there? >> it looks like they have a lot of bitcoin that they can keep putting into as collateral for that. so they can keep doing it for a while. but, it is not necessarily a great thing when you have to keep adding collateral to your loan because the price of bitcoin has gone down so much. so they can put a lot more into

it, but it's not a great situation. shery: and we see companies like coinbase laying off their workforce, what do we know? >> a number of these bigger companies have been laying people off and they were hiring people very quickly the past year or so, really trying to get a lot of people around the globe. so it's not totally a surprise that if you are really going in the same momentum upward, you also might be going in momentum downward. but there has been so many people looking at the crypto space saying it's really something to get into something if these prices are going up, but there's a chance that it will reverse. people say, i want to be someplace that's a little bit safer. some of these big firm said it still hiring. . some might be in a better of position or not tired out so quickly, but it does look like hiring in the crypto space is not what it was a year ago.

>> our cross asset team editor with the latest on crypto. coming up as we count down to the china and hong kong market opens. the resiliency, gains or underscoring the optimism as we see most in the rest of asia falling. this is bloomberg. ♪

shery: here's a quick check of the latest business flash headlines. bts shares plunged after members of the group said they will focus on the individual projects for a little while. bts made the announcement in an hour long video posted on youtube. one member that that the time apart would be healthy for the band and urged fans not to view the development as negative. the crypto lender has reportedly hired lawyers for the financial problems. they have unidentified sources saying they are looking for possible financing options but also exploring a restructuring. they hope crypto withdrawals on monday worsening worries about threats in the digital asset sector. softbank is said to be planning to list some of its stake on the

london stock exchange, switching from an earlier plan to only use the u.s. market. sources say the company will still likely list the majority of what it offers for trading on u.s. exchanges, and that plans for any london portions of not been finalized. haidi: let's take a look at the state of action when it comes to trading in asia. it does feel like there is a sense of an easy calm as traders are just awaiting the fed, do we get 50, do we get 75, could we get 100 basis points? we are seeing a broadly lower trading session, not to the magnitude we have seen across the last couple of sessions. nikkei 225 down 7/10 of a percent, seeing a dip in south korea and australia as well. the s&p 500 closing down for a fifth straight day. we are seeing a lot of action when it comes to the bond space. australian bonds really sinking on the higher minimum wage decision handed down. it's at 5.2%.

broadly down by half a percent for regional stocks. of course we are counting down to a big day for china that started trading in shanghai, shenzhen and in hong kong just about a half an hour's time. get that domestic activity data dump. the chance of economic relief will tell us if there's any signs of a marginal rebound that it will downturn. bloomberg's mark cranfield joins us to take a look at the china market open. we are in the situation where there is a lot of perception that chinese equities and assets is supposed to hide at the moment. what are your expectations? mark: people are getting used to the idea that china's government and the authorities are doing what they can to support the economy. there are lots of statements about ways to stimulate growth and to help the property sector and other parts of the market. also, the central bank, the pboc is still saying that they've got room to lower various rates more

than they have already. of course you have them today at the chance of it being lowered as well. so the backdrop of china, in addition to valuations, which is been like this for some time, that's all obviously relatively supportive, and people think it's probably the worst that has been seen in terms of the lockdowns, which damaged the economy so much in april and may especially. so those are probably behind us now. and if you look ahead, china could be something of a relatively safe spot within the global market, because at least you don't have the central bank fighting against the trend that we are seeing in other parts of the world. shery: mark, we could see china testing markets with their biggest offshore bond sale in years, what sort of appetite could we see here? >> it isn't particularly big within the context of bond

markets, so it shouldn't be any problem in getting the sales done, so they probably will have to do a concession on the yield. ec g10 yield driving so much as they have been in the past few days, it does make it tougher for china to have a bond yield well below the global average. having said that, with the pboc still in easing mode, it's a sentiment for people to hold chinese debt. it will probably succeed, but it probably won't be them -- be the most successful bond taylor. and with china assets being reasonably good within the global market, it shouldn't be too bad. shery: our cranfield, our bloomberg mliv strategist. as we head to the open to the mainland and about half an hour. take a look at the spots we are watching. they have repurchased about 5.5 million a shares or just under

.2 of her percent of the total capital for a total of 206 east million dollars. reporting traffic fell by 69% for may, of course those travel stocks are really under pressure, and lenovo will have a direct interest for some $613 million. we will be watching those stops, heidi. haidi: we are watching the yen. we are taking a look at cities outlook for currencies. remain high for market volatility. credit suisse shares for the latest investment strategy. they have soon been overweight on chinese equities and at the chinese domestic activity indicating, do we see that rebound? we will get the special coverage as the fed announces the next great decision. ♪

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