he haidi: you are watching

daybreak: asia. the top stories this hour. asian risk assets may benefit from last week's almost 5% jump in global shares. worries remain about inflation, monetary tightening, and the risk of inflation. g7 leaders pledge indefinite support for your crane as the group looks to cap the price of russian oil. fallout from the u.s. supreme court moved to return abortion rights as a new bull signals the majority of americans do not support the decision. a strong finish for u.s. stocks on friday. good performers on the s&p 500 for the one-day gain. at setting up australia as well as japan. grain futures optimistic. we saw a dragon in the index rallying for percent from friday the best week in more than three months. look at futures trading in sydney. 1.6% the start of cash trading. when it comes to energy and oil

related stocks, we have had back-to-back weekly losses for oil prices, the first since april. the 10 year yield unmoved at the moment. kiwi stocks extending gains to 1%. watching the dollar-yen. any side of a pivot from the boj will start to show the yen's true value with the 135 handle. the aussie dollar is trying to push through the 70 level. we see concern over recession. inflation bringing down the risk currency. the aussie looks to benefit from improved demand. out of china as well, ongoing demand for commodities shery. shery: we saw strong performance in u.s. markets friday not supported now in the early trading session in asia with u.s. futures under pressure. the s&p 500 seeing its best day since may 2020. a gain of more than 3% taking the weekly gains to more than

6%. that will be the second-best reading of the year. we continue to see concerns about a potential recession in the u.s.. that has pushed oil prices down. you mentioned the first back-to-back oil prices in losses since early april. we see pressure in the asian sessions. trading around the $106 level. we saw all of these concerns. the treasury markets signaling warnings about recession with the two year yield dropping the most on a weekly basis since may or so. fears eased a little friday with the 10 year yield rising. university of michigan is showing inflation expectations were not as bad as many feared. haidi: markets are still rattled by worries of rising interest rates. the volatility index, the fear

gauge of stock investor sentiment is well below levels we have seen in the past. bloomberg chief rate correspondent fraser, garfield reynolds. you have seen a lot of gains for the s&p 500 last week driven by defense and bond proxies. how much volatility and fear is in the market even as we see recovery? garfield: i think there is still plenty of fear out there. last week, part of what helped explain the move was bond yields did finally come back down, so, whether or not inflation peaked, there would be some potential bond yields would peak. that has a direct influence on share pricing. investors use benchmark government bond yields to judge where prices should be, the

shares, how they should factor in potential earnings relative to the borrowing cost. that had a mechanical influence. i think that there was also some people looking for, you know, where they can deploy money thinking shares are gone. the previous week, there was capitulation. if you are looking for a bottom to pick, this might be a bottom. as we get closer to the quarter in, happened, potential positioning closes, playing the role. oil also help. the problem does linger. inflation keeps coming hotter than expected, hotter than 40 years. even as oil prices come down now, they are still a long way up from where they were a year ago, 44% higher today than one

year ago. that will seep through into inflation for at least the coming few months and make it harder to see central banks easing. this will keep putting pressure on consumer demand. shery: that is the problem, right? goldman sachs is seeing consumer starting to tighten their belts. what will that mean for corporate earnings from here on out when it comes to the stock market? garfield: there was some thought at various stages that shares were a better place for money then bonds during inflation because companies could at least pass on those cost pressures to consumers. however, if you've got consumers crying uncle, saying we tried as much as it would take to maintain, what it was like to be

buying because inflation is too high, that is a direct impact on corporate earnings. inflation rate and interest rates are higher and going higher still. if you have the concern that companies will get squeezed by higher borrowing costs on one hand and weaker revenue flows on the other hand, that is part of why the fear factor will remain. also, it's not as elevated because this is a slow burn, slow torture that companies are facing rather than the sudden shock we had with covid or the global financial crisis. shery: it is a slow burn for these companies, but we know that energy prices, food prices soaring are really hurting

households and companies. with the war in ukraine ongoing now a group of seven leaders is committing to provide indefinite support to ukraine for defense against russia's invasion according to the text of the draft joint session from the summit in germany. annmarie: g7 leaders spent the day in the bavarian alps. how do they support ukraine and at the same time address higher energy costs? according to communication, they will commit indefinite support for kyiv coming in the form of humanitarian aid, financial aid, political aide "for as long as it takes." that wording is important because many of the leaders are expecting the war to draw god. some like germany and france are

open to negotiated cease-fire. while they are talking about more sanctions on russia and how to support ukraine, they are also discussing issues at home, higher consumer prices especially when it comes to grocery and gasoline prices. boris johnson said we have to have honest discussions about the implications of what is going on. the pressures individual friends and partner that populations are feeling, whether on the cost of energy, food, or whatever. on monday president zelenskyy will be virtually joining the group. we heard from his prime minister calling for more sanctions against putin. that came after early sunday morning there were a number of vessels hitting the center of kyiv, especially these apartment now -- apartment buildings. in bavaria, i'm annmarie hordern. vonnie: in germany president biden is looking for the support

of g7 leaders to reboot effort to counter china's flagship trade and infrastructure initiative. this team has been rebranded the partnership for global infrastructure and investment. the u.s. one 600 billion dollars for projects in low and middle income countries over five years, mainly private-sector sector investments. dutch prime minister says he is against reconsidering trade relations with china over policies towards hong kong. he says cutting ties with china will not help people in hong kong or the uighurs and the eu should not isolate countries that don't live up to european standards. hong kong's daily covid cases continue to rise ahead of a planned visit by president xi jinping to mark the cities 25th anniversary of chinese rule. the city reported as more than 1900 cases on sunday. 118 of those. xi jinping will attend the july 1 ceremonies including the

swearing in of the new chief executive john lee. a poll by cbs suggest the majority of americans disapprove of the supreme court decision to overturn the constitutional right one abortion. the survey found 59% of respondents disapproved of the ruling. along party lines, 78% of republicans backed the decision at 83% of democrats disapproved. global news 24 hours a day on air and bloombergquint take powered by more than 2700 journalists and analysts in over 120 countries. shery: for more on the fallout with the supreme court decision we will be joined by bloomberg political news director jody stiger. what are -- jody schneider. what are the states doing now? president biden has called grow on the ballot for the u.s. midterm elections. what can we expect? jodi: it is somewhat confusing.

even though it was widely anticipated and is a draft opinion was lead to more than one month ago, there has been confusion in the last few days as soon as roe was overturned by the supreme court at least nine states with more than 40 million people band abortion right away. clinics were closed even though there were people there to get abortions. appointments were canceled and they were sent home in at least nine states. in a number of others including popular states like texas they are waiting for their so called trigger laws to make it through the court. those are basically triggered by the supreme court ruling to take up to 30 days before the bands go into effect. 26 states will have at least that either abortion band or it will be severely core tailed -- severely curtailed given the supreme court announcement friday. the other 16 states will have

some form of abortion on the books. some states like california, oregon, and washington that came out with a joint memo over the weekend saying they want to be sanctuary states where they help women in other states you cannot get abortions from there because these are states who do have abortion laws on the books. we will see a patchwork. we will see almost two americas when it comes to abortion rights. the other question is given some commonsense justice clarence thomas gave whether other rights like contraception or gay marriage could be curtailed or overturned given the president of overturning grow -- roe v. wade. haidi: two americas when it comes to the socioeconomic gap. a number of corporations are already alleging employee travel

costs to be covered if they need them. jodi: right. a number of corporations say they support abortion rights. they tended to be in states that already have those protective laws on the books, new york, california, illinois. they have come out and said that they will pay for the abortions and travel costs of employees who need abortions who will travel across two states -- you will travel across state lines to get them. there is no real estimates of how many people will take advantage of this. but, a number of companies including disney, meta, uber, and amazon have come out with statements reiterating this. a number have made the case, have said this. a number have come out over the past few days and reiterated that they would pay for these travel costs as well as any

medical cost, that they support abortion rights. haidi: bloomberg's political news directorjodi schneider with the latest. the number of female candidates for japan selected words -- elections is at a record. this is bloomberg.

the frontloading of interest rate increases is a good idea in this situation. what you would like to do is nip inflation in the bud before it gets entrenched in the economy. get inflation back down towards 2%. >> early term inflation

expectations have drifted up. they do drift up when we have high inflation. the longer runs are remaining fairly anchored and anchored around our average 2% inflation target. they have inched up, but not in the way you would expect them to do if you were using the anger. we have really gotten behind. shery: fed presidents mary daly and james ford speaking over the weekend. we will hear from central bankers including jay powell and christine lagarde at the ecb form starting tuesday in portugal. g7 meeting continues in germany followed by a nato summit in madrid where the group will lay out their joint position on china for the first time. this is ahead of the hong kong 25th anniversary of its return to chinese rule on friday. president xi jinping is expected to make his first trip to the city in five years. haidi: let's bring on our next

guest who says the concerns around the speed and magnitude of the slowdown are really key. great to have you with us. talk to us about your best guest about -- best guess about the recession and how deep it is likely to be? >> thank you for having me on the program. there is a difference between individual country recession and global recession. there is a fear that the developed world will go into a recession or is in one at the moment because of what is happening with high inflation and stocks we getting in economic indicators. we think there is a bigger chance of arrest session in the u.s. in the next 12 to 18 months has rate rises really had consumers. consumer spending is already starting to show some signs of that. i put the chance for u.s. recession in the next year at

about 50%. we could see a negative june quarter. after a negative u.s. -- quarter in march may be the u.s. is not negative at the moment but it depends. in australia i think the risk for recession is lower. we seem to have other things like strong spending from the government keeping our economy positive. we are not necessarily likely to see global recession right now or in the next 12 months. but i think that some countries may experience recession-like activity into 2023. haidi: we are getting industrial profits from china and pmi data later this week expected to show the continued recovery. how strong is the return of chinese demand story when it comes to australia? we still have the commodities boom. but there is a lot of risk aversion when it comes to the aussie dollar. diana: australia has been quite

fortunate in the last six months. all sorts of commodities, agricultural, but oh, iron ore, call, that has benefited all kinds of trade. despite china being in a lockdown earlier this year and only starting to resume normal economic activity now that has not really hit our national income balances. so as china comes out of lockdown, it should be positive for our trade power even more. but the biggest story now is the big rise in commodity prices. shery: let's talk more about that and how perhaps it is increasing costs for other countries including china. ppi really remains elevated. metals prices are key when it comes to this surge. how much will it affect the broader chinese economy? inflation, especially on the consumer space has been muted.

with prices continuing to surge, what will be the cost to households, businesses, and the overall economy? diana: the question is whether businesses can pass on rises in income prices. profit growth is ok. the economy has taken a hit over the last few months because of lockdown. but i would not characterize it as weak. the physical stimulus done this year -- fiscal stimulus done this year is probably equal to the start of the pandemic in 2020 and it should drive strong economic growth in china this year between 4.5% to 5% this year. that is ok but a little below what the authorities would probably like to see come close to 5.5%. there is room to raise prices

for consumers because, as you said, consumer prices have still been quite low. shery: what about the fact that unemployment also seems to be going up in a country that is really careful about maintaining social order? and, how important jobs are on that front. diana: that is probably a reflection of the lockdown. given that we are only starting to see the resumption of normal activity, probably, we would expect the unemployment rate to trend a little lower now. i am optimistic that huge levels of stimulus will work to increase economic growth there this year. shery: amp investor and senior economist, thank you for joining us. we are looking for a lot of economic data this week out of asia. we have plenty more to come. this is bloomberg.

shery: tracking the fallout of the global supply chain crunch. g7 members are discussing a cap on the prize of russian oil that would impose restrictions on insurance and shipping. the potential mechanism would only allow the transportation of russian crude and petroleum products sold below a threshold. the u.s., u.k., japan, and canada plan to announce a ban on new gold imports from russia at the g7. it will apply to gold leaving russia for the first time and the treasury department will issue a u.s. ban on tuesday. egypt's supply minister says the country plans to cut wheat imports by 500,000 tons by eking

out more subsidized on the screen as one of the world's largest wheat importers struggles with soaring commodity prices. as a result of the russian invasion of ukraine. we see the downside in brent and wti prices at the moment. bloomberg terminal users can read more about the story. let's get a check on the latest business flash headlines. toshiba is expected to appoint representatives to its board at its annual meeting tuesday. the move is seen as a step forward in governments -- governance but may deepen divides in the boardroom. toshiba is weighing beds to possibly privatize or form business alliances. indonesia says foxconn is considering investing in the country's new capital, a move that would bolster the 34 billion other construction project.

indonesian investors say the taiwanese company is looking to set up an electric bus system. and and iot network. the chairman of foxconn met with the indonesian president saturday. evs has reportedly begun causing large u.s. investors to become top shareholders. in a push to improve its market value and become more closely aligned with wall street banks. with the aim of getting them to increase their stakes. more to come on daybreak: asia. this is bloomberg. millions have made the switch from the big three to xfinity mobile. that means millions are saving hundreds a year on their wireless bill. and all of those millions are on the nation's most reliable 5g network, with the carrier rated #1 in customer satisfaction. that's a whole lot of happy campers out there. and it's never too late to join them. get $250 off an eligible 5g phone with xfinity mobile.

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>> the risks are increasing, probably looking towards the end of this year, the silver lining

is we do not see the scope for a deep downturn. >> you're going to have a slowdown. we are already seeing financial conditions tightening across the world, particularly the u.s.. >> we have raised it probability of the recession to be about a 50% chance. i think those factors mean a downturn in growth. >> russia and ukraine could get worse. we don't know what will happen with israel and iran. asia and taiwan. i think geopolitical risks are the most to worry about. >> russia and ukraine is going to put further pressure on prices and make the fed job

difficult. >> the concern in europe is the periphery which complicate it further. shery: for the second half of the year. the latest polls show expectations expect bonds to end 2022 slightly lower. haidi: we are seeing the sphere that wall street is seeing a sustained global rebound be disappointing as we see fears of inflation, recession. nikkei futures looking tepid given we are seeing strong gains in the sydney market. dollar-yen trading at 135. kiwi stocks that -- pretty much session highs. goldman sachs cut its growth

forecast, warning the risk of recession is rising. the chief of -- economists is the magnitude of a recession would be shallow. >> we do not have a recession in our baseline forecast. we have below trend growth, only half the long-term trend pace. our best guest -- guess is we are below trend, rebounds in the labor market that helps bring inflation back down. there is a significant risk of recession. it's difficult to reduce labor demand without the deterioration feeding on itself and ultimately culminating in a recession. we are getting a one in three chance of a recession and it's close to 50-50. >> 2% of unemployment baked in

to a 2001-ish recession. >> that was the bottom end of the historical range. the top end is 5.5 percentage points. if we do have a recession, it's likely it would be on the shallower end for two reasons. one, private sector balance sheets are in better shape, and while inflation is high, i don't think it is as entrenched in expectations as it was in previous high inflation episodes. >> we just got off a couple of weeks where people were ratcheting up expectations, about 4%. here we are looking at a huge rally. can you translate the rally we have seen through an economics lens, whether it seems plausible

in your mind? >> our forecast is a terminal rate. we think we will get there by the end of 2022. we do not have any additional rate hikes in 2023 because the economy is decelerating, inflation is coming down. at that level, the fed would probably hold. you are right. we have priced something around 4% immediately after the fomc meeting but i think people have looked at the fact that the economy is decelerating and that has led to a reversal of that. i think fundamentally that's appropriate. >> given the fact we are seeing a deceleration but not when it comes to inputs into inflation, we are seeing rent climate of record pace, disruption to oil

supplies and food supplies causing increases. when do you start to talk stagflation, a fed forced to act despite an unemployment rate rising and weakening data? >> it is more mixed as i look at the inflation indicator. no question, the last cpi and red number was bad. there was an increase in inflation expectations. but, the supply chain is getting better. you look at the supply chain deliveries, business surveys are coming down. wage numbers in 2022 has been lower than the second half of last year, and broadly speaking, inflation expectations, look at the breakevens and the bond market, very well he cared. -- anchored. in an environment where growth comes to a below trend pace, i don't think the fed would keep

hiking aggressively when the economy is slowing and and patient is coming down. haidi: jan hassey us -- let's get to vonnie quinn. vonnie: thank you. leaders will commit to providing indefinite support for the -- according to the text of the draft statement from the summit in germany. according to the document, leaders are weighing the possibility of using tariffs on imports to support ukraine. wimbledon organizers say a ban on russian and belarus layers may only last for this year. the ceo told bloomberg this decision was difficult but right. they blamed unjustified military aggression. some highly ranked players are exempt. china is rolling out new

subsidies to spur purchases of electric nichols. the city of beijing will provide as much as 1005 hundred dollars in financial aid for qualified buyers. the move follows similar measures by shanghai last month. passenger vehicles in may slid 17%. nasa launched a rocket from australia, the first time they have used a commercial launchpad outside the u.s.. the rocket lifted off late sunday. nasa will use rockets to investigate phenomena that are viewable only from the southern hemisphere. global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie quinn. this is bloomberg. shery: russia has defaulted on or in that for the first time since 1918.

su keenan has the latest. i know this is largely symbolic, but it is still the first time since the repudiation, more than a century ago. su : it's a big deal historically and legally. russia is saying it has enough money but because of the increasingly harsh sanctions imposed, it's unable to actually do so. that's why we have the russian finance minister saying whatever label you want to put on it you can put on it, but he said anyone who understands the situation knows this is in no way a default. that is a quote from the finance minister. however you view the situation, it is a grim milestone in the country's transformation into an

economic, financial and political outcast. bonds have traded at distressed levels since the start of march, the bank foreign reserves remain frozen, it's been cut off from the global financial system. it's in an odd situation, literally unable to pay. at issue is $100 million on best interest payments. the grace. has expired. shery: usually you would have ratings agencies saying if a country has the ford -- defaulted. su: it is extremely unique. russia claims it has funds, can't make the payment. a senior catalyst says you have to understand it is very rare when a government that has the

means is forced into default by an external government. he says it will be a watershed default. it is a historic moment. a formal declaration would usually come from ratings firms but sanctions led them from withdrawing ratings. they will wait and see, they have got time to sit back and watch this more unfold. as mentioned, the default is largely symbolic but certainly a major historic moment. haidi: su keenan with that piece of history. coming up, we speak to a candidate in japan's up numbing elections about the future for

the country. this is bloomberg. ♪ as a main street bank, pnc has helped over 7 million kids develop their passion for learning through our grow up great initiative. and now, we're providing billions of dollars for affordable home lending programs... as part of 88 billion to support underserved communities... including loans for small businesses in low and moderate income areas. so everyone has a chance to move forward financially.

pnc bank: see how we can make a difference for you. haidi: japanese markets will open at the top of the next hour. holding steady, we heard that

any signs from a pivot will show the true value start to emerge. we are seeing broad upside when it comes to the optimistic tone asian equities will get. this is what we are watching. toshiba is top of mind. the company has proposed new board of directors including representatives from hedge funds. japan's government gave its first ever warning about a power lunch urging residents to reduce altra city consumption. the bank of japan decision is due out in less than an hour. shery: let's stay in japan. surveys show the japanese prime minister ruling coalition is

expected to keep its majority. our next guest is campaigning on better worklife balance, gender equality. she is also the first person of weaker origin to run as a major already candidate in japan. thank you very much for joining us. you have an interesting, diverse background. tell us about how a person like you is running for election, how symbolic it can be, and if we're going to see more representation in japanese politics from now on. guest: thank you so much for having me. it's quite significant the ruling party that has been seen as the more conservative or's has given me this nomination. i am of uighur heritage.

i was born and raised where i was -- then i looked abroad, them returned to japan and was in new york until quite recently. it's rare to see a candidate like myself and japan. as orton we have this kind of representation. japan is i digress country but we are not seeing that representative followed accented is something i would like to bring our. shery: what has to be done? what are some of the metrics the government can take in order for a nomination like yours not to be so rare? guest: that is a very good question. i am not convinced on the quota system. japan's diversity is different from what you see in other economies. when we talk about japanese

diversity, it's not only about candidates like myself who have obvious diverse backgrounds, but it's japanese people with different kinds of lifestyles. in politics we are overrepresented by men from a certain generation who come from a specific economic and emily background. it's important all parties recognize this is outdated and what is needed is the people to speak with their votes, especially during the selection and elections going forward that they are looking forward to more diverse candidates. denominations we are seeing is a testament to that. people that have pushed for more representation. haidi: if you are successful, but would be your policy priorities? guest: i have placed a

comprehensive lot form based on japan becoming a global leader. one, being a global leader in national security, human rights diplomacy. as we are seeing this upcoming threat to international rule-based, international order, it's important is the second largest economy in the world and largest democratic economy that japan take stronger stances on principles, human rights. second, climate change, urgent response to climate change. as well as preparing for disaster.

number three, democracy and diversity. it is bringing japan forward, a quantum leap in making sure we become a country that is suited for the 21st century. it includes bringing young people into politics, but also having a comprehensive approach to protect women's rights in japan as well as children's rights. haidi: how much progress do you expect to be made on the issues of equality? guest: i think we are making great progress. ldp has a target of 30% of candidates to be women, having

just come from the united nations, i find that to be quite low. this is a great start. the fact that they set a target and have met this target is a symbolic show of support for more diversity and progress. haidi: does that diversity come from outside of japan's orders? the culture of openness when it comes to talent abroad is not something japan has dealt with very well in the past. is that a necessity? guest: the asian demographic are , i think we need to look at that more comprehensively. if many different areas. making sure we have a society

where all kinds of people can go to work. one of the reasons why we have a bloomberg rate is it is difficult for japan to be part of a dual income family and be raising children. it's about the worklife balance, infrastructure that supports all people. that is one aspect of it. when we come to immigration, asylum and refugee policies, we need much more consistency and human rights-based approaches. haidi: we really appreciate your time with those. tune in every week for the leading names in japanese

business. this is bloomberg. ♪

shery: getting the latest lines from the boj. the summary of opinions coming out. one member saying they need to watch the currency impact on the

economy, but at the same time saying they do need to support the economy with easing, up or pressure on yields are likely to stay. that easing has weakened the japanese yen. another member saying they should add easing if needed without hesitation. we will continue to watch the impact. shery: also continuing to watch was going on when it comes to cryptocurrency. helping a broader crypto regained the $1 trillion market cap. we are seeing a recovery of what has been a spectacular selloff. guest: exactly. that something a little bit, it looks like the has steadied out.

bitcoin and either above the $20,000 and $1000 level. it looks like the moment, that must be somewhat encouraging for people invested in the space. it is still way down the start of the year. so there is worry in the industry right now. shery: what are the next technical levels we should watch? reporter: the 200 week moving averages are pretty significant and bitcoin is about $22,000 or so, either probably $1100. those are big deals. the round numbers are still a big deal. bitcoin is around $21,000. either is around -- if they can

get any momentum upwards than we can start talking about that. right now it's holding onto round number levels. shery: coming up, aberdeen says they expect a recession next year. nasa successfully launches the first of three rockets. we will have the head of the australian space agency. we continue to get the latest boj lines, saying the ownership of jgb has risen to 48.2 but they should keep easing. this is bloomberg. ♪

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shery: we are counting down to

the major market opens. inflation, the threat of recession, key issues of the g7. it's all about threats for the markets, the economy, at a time where we are seeing doubling down against russia. we are seeing the russian economy defaulting on foreign debt for the first time since 1918 at a time where we will have plenty of eco-data to gauge the health of the economy. haidi: this is a week that holds pmi numbers out of china. we will get to see the resilience of the rebound as the country emerges. the durability of this rebound is really a big question for traders. shery: as we count down to the open, we have all of that data coming out including industrial profits. pmi numbers later in the week. take a look at the open.

we are seeing a pop to the upside for the nikkei, topics under a little bit of pressure. coming off the back of the biggest rally in u.s. markets in two years. little bit of positive sentiment given we are seeing stabilization in u.s. yield below the high levels we saw earlier. we heard from the impact on the economy. one boj member continuing to double down. we are seeing all of those concerns about the weakness of the japanese yen. take a look at the korean kospi. we have come off from that

november, 2020 low. we are seeing an upside. watching the korean won, it is strengthening a little bit, it topped the 1300 level against the u.s. dollar and it is that topic of policy divergence, capital outflows from asia that is having a huge impact on the market. haidi: take a look at the staggered open. here getting the staggered open in the green, 4/10 of 1% as these stocks continue to come online. it of weakness in energy, that loss in crude resulted in the pullback from some of these inflation worries. bonds rising in the morning, the aussie dollar inching higher.

finishing to tenths of a percent snapping two weeks of declines. of course this push and pull of factors, the commodities demand, with is not farewell when it comes to downside of risk and there is plenty of that. shery: no wonder our next guest is underway on equities. good to have you with us. you are specifically underweight on korea and taiwan. talking about that policy divergence and capital outflows we see across asia. why specifically do you not like these equity markets? guest: i would lump the equity markets with currencies. base case, we see a recession

coming into next year. we see a slumping demand driven by a slowdown in markets. korea and taiwan, we expect them to be very vulnerable. we have seen a lot of this come under pressure. there is a lot of supply that is going to come, and therefore we expect continued outflows. shery: i am surprised you are long china. is that the whole pboc doing easing narratives at play? guest: that is right. we see some divergence. for china, we believe the rally will have a lot more legs.

the risk has become more attractive area the government has said it could meet the upside, we see inflation being very low. equity markets are performing better. shery: given that expectations are so low.

how much room is there for upside surprise given earnings expectations are so low? guest: perhaps you can get another five to 10% in the near term. we expect bond markets -- a lot more within china, so we have the earnings capitalists, the additional upside could provide an additional tailwind. haidi: we see pullback when it comes to crude. how do you like getting that exposure within asia? guest: yes, energy in general is

a hedge against inflation, geopolitics,. in asia, our exposure will come from the asean region. heavy exposure. its opening much later, and there are high exposures to banks. much lower explosion to the probability of recession. haidi: always great to have you with us. let's get you to vonnie quinn.

vonnie: russia has defaulted on sovereign debt for the first time in more than a century after missing a deadline. the grace period expired on sunday, with russia unable to repay the debt due to sanctions. the finance has called it a farce. she seven leaders -- according to the text of the draft statement. according to the document, it might support tariffs on russia. president biden is seeking the support of g7 leaders to counter china's initiative. the scheme has been rebounded the partnership for global infrastructure investments.

the u.s. wants $600 billion for projects. nasa has launched rockets from australia. the rocket lifted off from the space center in australia late sunday. global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm vonnie quinn. this is bloomberg. haidi: let's take a look at some movers we are watching. toshiba is expected to appoint representatives. we're watching a boost of 1.3%.

shery: more on the australia space race later in the show. coming up next, more on the controversial move by the u.s. supreme court to overturn roe v. wade, the case which had protected and abortion-rights slicing 73. details ahead. this is bloomberg. ♪

>> the health and life of women in this nation are at risk. >> the voiceless finally have a voice. >> the termination of a presidency is the opening act. >> i don't know what the limit is going to be. >> civil rights are under threat. >> it will save the lives of millions of children. >> will have huge implications, economic implications for families. >> this decision is not about abortion. >> see more voter intensity in

swing states and senate rates. -- races. >> a woman's right to choose reproductive freedom is on the ballot in november. shery: officials reacting to the supreme court decision. for mall the fallout, we're joined by jodi schneider. what are we expecting, given what we have heard? reporter: we're going to see the states react pretty quickly. we have seen nine states. there were some cases with people in waiting rooms that they no longer will perform

abortion. another set of states have trigger laws. depending on the state, it could have 30 days to go through the courts. as many as 22 overall could be banning abortion or severely restricting abortion. on the others, we're seeing states with democratic governors who were saying they want to be a sanctuary for women from other states to come to their state. we saw governors of california, oregon and washington state say

they want to provide services to other women. there is a number of things that are going to happen in the court . haidi: we saw a swift corporate reaction. reporter: there has been. we've seen a number of companies come out with statement saying not only will they support, they will help pay for the medical costs. the travel costs. a number of companies have come out in pretty rapid fashion.

we have seen that the next few days. gay marriage or even contraception, the cork a look at those cases in the coming term. clarence thomas said he thinks the court should come out and look at some of those cases. other justices said they don't think so. haidi: there is a lot of anger towards the supreme or. anger directed at the justices. how much anger and frustration is there towards the president,

the administration, the democratic party, how much power do they have to circumvent roe v. wade? reporter: one of the things everyone is looking to do the midterm election, and whether this is something abortion-rights are critical of this decision. whether they can do that, whether this is going to vote on this issue remains a big question. people see gas prices, that is expected to crimp the democrats in november. one of the things that may be in play is the senate where democrats have a slim majority.

something they may be able to hold onto by going ahead and looking at suburban women voters, independent voters who may vote on this issue more than other issue. republican said we delivered. we have to have justices more within our way of thinking. on a fundraising level, probably will be a push. haidi: according to a joint communique. >> g7 leaders spent today in the

bavarian alps but looming large is how they support ukraine, domestic problems like inflation. they will commit regarding indefinite support. financial, political aid. according to the communique, as long as it takes. leaders are expecting it to drag on and some are hinting and discussing issues at home. all are dealing with consumer prices when it comes to groceries and gasoline prices. boris johnson said we have to have honest discussions about what going on.

the pressures partners are feeling. there were a number of missiles hitting the center of kyiv. shery: take a look at european futures. all seeing big gains and a jump after we already had equities rallying in the final session of the week. best day since mid-march. we saw the buyers returning. european equities jumping after we saw data from the u.s.,

initially we thought we would see a 14 year high but that easing led tech stocks that are very sensitive. haidi: we will watch the european session. western sanctions preventing moscow from making those payments. we will get the details, next. this is bloomberg. as a main street bank, pnc has helped over 7 million kids develop their passion for learning through our grow up great initiative. and now, we're providing billions of dollars for affordable home lending programs... as part of 88 billion to support underserved communities... including loans for small businesses in low and moderate income areas.

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shery: russia has defaulted on foreign debt for the first time since 1918. su keenan the details.

we know this is a symbolic development but is also historic. su: it is technically real. highly unusual both legally and financially because russia claims it has the ability to pay but is prevented from doing so because of the increasingly tough western sanctions that invented making payments on that to overseas creditors. from a russian perspective, this is a farce. they say put whatever label you want on it, in the words of finance ministers, anyone who understands the situation knows this is in no way default. however you view the situation, it's a grim milestone for russia's rapid transformation into an economic financial,

political outcast. bonds have laid at the stress levels, on the verge of default since may. at issue is about $100 million from missed interest payments, there was then a grace period that expired. haidi: what happens next? su: it's a unique situation where a country has the ability to pay but is kept from doing so. to quote a sovereign analyst, they never have seen anything quite like it. in his words it's very rare. he thinks it will be a big

watershed default. a formal declaration usually comes from ratings firms, but the european union sanctions led to the ratings agencies withdrawing from rating any kind of russian entity. the bondholders will take a wait and see approach. the default largely symbolic, litigation over the loss of hammett's will likely take place for years. as to whether this matters to the russians, the view is no it doesn't. double-digit inflation, the worst economic contraction in years. again, they do not have much respect or regard for this labeling of default. haidi: su keenan the latest. let's get to the movers. evolution mining falling after cutting violence. -- guidance.

we are watching an australian biotech company, stomach cancer vaccine. sapporo rising after the acquisition of stone brewing, the u.s. unit acquiring the craft beer maker for $168 million. coming up next. shery: covid cases rising in hong kong. ahead of a planned visit by president xi jinping. we will discuss. this is bloomberg. ♪

shery: take a look at how asian stocks are trading. utilities, materials leading the gains. real estate is under a little

bit of pressure. third consecutive session of gains for japanese stocks. the kospi rebounding from the low we have not seen in about 20 months. we continue to see gains for kiwi stocks of 1.4%, same with australian stocks. we have been watching the pressure on commodity stocks given we continue to see pressure on energy and food, reversing some of those gains we saw in the previous few months. seeing a little bit of strength for japanese. we have heard from the june meeting. one member saying they will be looking into how fx impacts the

economy. haidi: hong kong is marking the 25th anniversary. there was speculation the president would skip the trip. rising covid cases in hong kong. guest: i am pretty surprised. we don't even know if he is been vaccinated. china has the most at stake with

this ceremony. he is judged. i suspect there will be details of the bubble and restrictions around him. i don't think it's going to be the ceremony of old where he shook carrie lam's hand. they will be much more mannish. shery: especially given we are seeing nearly 2000 new covid cases and rising in hong kong. how is it going to impact was being discussed? guest: it's interesting how officials are taking this

increase in cases, probably because you are seeing a corresponding pick up and hospitalizations and at its peak with the deadliest in the developed world. as covid ripped through nursing homes and elderly people. the vaccination rate has tech tire which is being reflected in the fact you are seeing as many critical cases this time around. it will impact how the anniversary plays out particularly when it comes to mainland officials. shery: the last british governor of the city said he is worried

about the future of a financial hub. 25 years after the return to chinese rule, he tells stephen engle how he believes things have changed. reporter: i think that is true, the chinese communist leadership is always one without hung congress. i'm pleased we have been able to hang them a home in the u.k.. why they have been leaving, they see the future being clouded by the fact their children will have a difference in education, the most important part rather than educating children.

reporter: you talk about the destruction of hong kong. i am gathering the last three years under carrie lam, it has sealed the fate of hong kong, or do you deal it could resurrect itself? >> it's a real challenge. i wrote at the end about what had happened since 1997, taking account for 10 or 12 years things went pretty well in hong kong, not perfectly, but the real problem is president xi jinping has been a dictator, and i think it's what hong kong always stood for.

i mess again and again whether they should come back, and it's not an easy answer to give. reporter: on reflection, >> people -- it was patronizing. due process, judicial system.

taiwan, south korea, elsewhere in asia. reporter: i went to end on giving you an opportunity to reflect on what you remember most of that night, that stormy night. was there a sense of foreboding? he talked about feeling relief but also happiness. >> i hope for the best. my overall feelings when i left hong kong were deep sadness, leaving friends and family where i have been happier than

anywhere i thin and my life. hong kong mattered huge amount to me. i was extremely lucky. the opportunity of serving the people of hong kong. i will never forget how kind they were to me. the whole community was like a rolls-royce, and -- haidi: how does this affect china's ev stocks? >> they are all the region china. rising to 64%.

as you said, a slew of incentives including subsidies, tax breaks. apart from that, the pboc diverging monetary policy is lifting the ev sector, almost all chinese stocks are getting a bit of a lift. that's outperforming the nasdaq index about 18 percentage points this year. whether it's going to hit 5.5%, not sure. early indicators showing a bit of a rebound, because for obvious reasons, the

manufacturing sector is getting a bit of a rebound. transportation is reporting signs of acceleration they would have to translate to corporate profits. for that matter, we have not seen the rising real estate activity translating to demand. shery: let's talk about the industrial profit numbers. >> going to be a bit of a recovery, no ev was slowed in april, everything else was hitting rock bottom. we are going to see a rebound. whether we see the services industry having more of a rebound or the manufacturing industry. so far we are seeing a more significant improvement in the manufacturing industry.

for example, we are seeing a headline that shanghai is allowing dining services. the real estate sector will slowly come back to life. shery: the asian stocks managing editor. coming up next, nasa launches a rocket from australia. we will ask the space agency what it means for australia and the local space sector. this is bloomberg. ♪

shery: now we get to vonnie quinn. vonnie: a poll by cbs news suggests a majority of americans disapprove with the supreme court's decision to overturn the right to an abortion. the survey found 59% of respondents disapproved. 70% of republicans fact the decision, 83 of democrats disapproved. i prime minister says he is against reconsidering trade negotiations. cutting ties with china won't help people in hong kong. the eu should nonisolated countries that do not live up to

european standards. china is the third biggest trading partner. wimbledon says a ban on russian and belarus players may only last this year. the decision was difficult, but right for now. wimbledon announced the ban in april blaming what they say is unjustified military aggression. china's capital is rolling out subsidies for purchases of electric vehicles. the city of beijing will provide as many as $1500 for qualified buyers who scrap and resell cars. the move follows similar moves last month. global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie quinn. this is bloomberg. shery: nasa has launched a

rocket from australia, the first time the agency has used a commercial launchpad outside the u.s.. it lifted off and australia late sunday. it is carrying an instrument like into be a hubble telescope. this is the first of three plans launches. 74 personnel will be in australia which includes those are -- those that are only observable from the southern hemisphere. haidi: let's discuss what the launch means. we are have joined by the head of the australian space agency. when you take a look at a project like last night, two more lunches to come. what are the implications? guest: it was a meaningful next

step. the agency was formed in 2018 and the nation has catalyzed. we have had a long history of collaborating with the united states and nasa. we are at a point where we can leverage framework. it really attracts a significant sector that is growing. haidi: the cooperation is huge and symbolic. you come from a background at virgin galactic. how do you see the makeup of that investment between public and private? guest: we have seen commercial

entities drop the cost of getting technology to space. what that means his businesses around the world. what used to be the world's major superpowers, now it's in the hands of commercials. activities are being fully commercialized. we recognize these trends, a vibrant commercial industry in australia, commercial spaceport. we will have entities for a whole variety of issues. shery: do you have an idea of how many new jobs this could create? guest: 20,000 jobs over the next decade. we're seeing all of the leading indicators. we are tracking $2 billion in

committed investment. you need to look across a small to large enterprise. all of these entities are hiring space professionals. they are focused on workforce development to make sure we can sustain their growth. there are australians working all around the world, we are eager to bring them back to help grow the sector. shery: you talked about owning the value chain of space activity. what is next? guest: we see multiple spaceports developing around australia, international and domestically developed rockets. once you have access, you have the full custody from building spacecraft, getting them into space and servicing them. we really become a regional space leader. we can provide services not just

for australia but partners in the region. haidi: what is the level of competitiveness, and how well places australia? guest: we work really well with our counterparts. we share common geography, we are like-minded and so our position here is something that can strengthen partnerships between our nations. the whole sector is fiercely competitive. it's forecast to grow to well over $1 trillion. in australia we are focused not just on launch, but many other priority areas. satellites that understand whether, and also improve productivity, as our primary

industry. australians is a world leader in operating mind sites. those are directly transferable into space sectors, missions to the moon and beyond. shery: to your point about how competitive industry this is, how do you keep the competitive edge? guest: one of the major things the government has done is launch a national space mission. very significant satellites. what that does is uplift the whole industry, that early stimulus from the government is critical. we built a responsible regulatory framework, and we are focused on inspiring the nation.

space industry has an enormous responsibility. haidi: how do you see representation within the space industry? globally, how does it fair to comes to representation? guest: 50% male to female ratio. we think australia can lead the world in doing space in a different way. if you look at our logo, we are proud to have been inspired by astronomers, the australian indigenous people and their connection is something we want to build into what we do. we have that in our dna.

shery: it was really good to have your insight. be sure to tune into bloomberg radio to hear more and get in-depth analysis from the daybreak team broadcasting live in hong kong. listen via the out, bloomberg radio, or bloomberg.com. plenty more ahead. stay with us. ♪

shery: here is a quick check of the latest business flash headlines. some of the most record -- recognized companies in the u.s. have indicated they will cover out-of-state travel for abortion. banks say they will help employees who need to travel to access legal abortions. ubs has reportedly begun telling large houses to become shareholders in a post -- according to the financial times, they held talks with capita group with the aim of getting them to increase the state. toshiba is expected to appoint

representatives from its most local activist shareholders. the move is seen as a step forward in governance. it may deepen divides in the board room with some directors opposing the appointment. haidi: watching chinese electric vehicle stocks as the country is offering subsidies for purchasing new ev vehicles and another effort to jumpstart the slowing economy. we are seeing ranges from $1000 to 10,000 yuan. that is it for daybreak asia. this is bloomberg. ♪ another crazy day? of course—you're a cio in 2022. but you're ready. because you've got the next generation in global secure networking from comcast business.

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