shery: welcome to daybreak asia. >> australia has just come online. disney announces a dramatic restructuring cutting $7,000 -- 7000 jobs. asia is set to follow wall street lower. bets rising on the peak rate for the fed hitting 6%. adani set to prepay on a $500 million loan. shery: we saw the nasdaq 100 falling more than 1.5%. fed speakers hawkish. hinting at the fact that we

might see higher for longer. investors are taking that into account after hours. disney we are watching. in terms of treasuries, we saw yields fall across the board. the 10 year yield around 3.6 level. the two year yield 4.4%. wti prices holding steady. we saw a little bit of a rebound when it came to demand from u.s. refineries. hopefully that offsetting some of the negative sentiment coming from the fact that oil supplies are still rising. haidi: when it comes to equity sentiment in the start of trading in the asian session, it is firmly negative. look at what we are saying when it comes to the first couple of minutes of trading in australia. a little bit of downside for

that asx 2000. fresh insights from fed officials encouraging investors to rethink what they want to believe, this broadly bullish response to commentary over the past week perhaps changing the narrative. chicago nikkei futures off by about 1%. also watching the aussie dollar sitting marginally higher, but under 70 since u.s. as we saw the broad rise in the greenback. reinforcing the narrative that rates will need to keep climbing and perhaps stay there for longer to quash inflation.

also watching batch of earnings. at top of that list is disney jumping in late trade although advising -- revising some of the session highs. it was an earnings beat. plans for massive cost cutting. what do you make of these announcements? the tension to get cost savings, but perhaps less focus on subscriber growth and that part of the story for streaming? asked yes thank you. this was a fantastic beat on all measures and coming into this quarter, we knew it was going to be a litmus test for bob iger and his first earnings release after his return. what we were looking for was an articulation of that strategic vision and strategy that would help them save costs. i think he blew it out of the

park because he announced the reorganization of the company into the three divisions which is going to help them streamline their cost structures, maximize their revenue growth opportunities. then looking at the cost savings target of about 5.5 billion which is no joke. they seem to have already made fairly good progress because when you look at the streaming profit number, there are still reporting losses but they have made considerable improvement from the prior quarter and we are already seeing the streaming significantly. he looks at their firing on all cylinders especially when it comes to the parts and even the streaming business, it looks like they're making really good progress. shery: the job cuts, will that be good enough for the next few months? guest: they have a base of about 220,000 employees across the

world so these are 7000 now cuts. it's more like a drop in the ocean. it's not just jobs, they are going to reduce marketing spend, about 50% of the cost cuts. on every possible measure where they can trim a cost, they are absolutely looking at it. they are doing every little thing they can. of course have abandoned those subscriber guidance numbers telling us that the focus is no longer going after subscribers for the sake of scale. it's about making sure the end unit economics works and delivers sustainable profits. shery: the latest on disney as we continue to see the surge after hours on that beat on earnings. let's turn to the fed because we continue to see this chorus of

sources. saying interest rates will have to move higher and stay there for longer to bring down stubbornly high inflation. kathleen hays is here. the markets finally get the message? >> it seems like they are starting to and certainly the hot jobs report has helped the fact that over and over, it's like you are training an animal or something. no offense, investors, but difficult to train if you are jay powell. let's look at what chris waller said. he spoke at an event today and what he said is the rates are going to move higher, they'll have to stay there longer, the fed has more to do. >> we are seeing the effort begin to pay off but we have more to go. it might be a long fight with interest rates higher for longer than some are currently

expecting. we will not hesitate to do what is needed to get the job done. >> more has to be done to rein in the hot labor market. he is still looking for a 5.4% terminal rate. he is the president of the minneapolis fed. the president of the new york fed says the fed still has to get to a sufficiently restrictive rate although he will be happy with 25 basis point hikes for a while. >> i think these 25 basis point steps allow us to both adjust policy based on the new information and get us to our goal. obviously if the situation changed significantly, we would have the ability to move quicker than that or adjust course. right now, i think the 25 basis point increase that we just put in place seems like the right

size to adjust policy at least given what i am seeing today. >> lisa cook a governor in washington says she sees the need for more hikes, but the 25 basis point moves gives them time to assess and see where the economy is. bill dudley the former new york fed president and bloomberg opinion columnist says finally the fed and markets are getting in alignment. look at this chart. it looks like they are getting closer to 5.3% is quite move in the last week or so. 6%, that's really something. that is not refunded in this chart because a smaller part of the market. you have people putting on big traits that the fed rate could get up to 6%. we member the middle of 2022,

jamie dimon said he threw that out at one time maybe the fed funds rate would have to go that high. he wasn't expecting it, but interesting the longer inflation stays high, the longer the labor market stays hot, people are thinking maybe it has to go higher than we expected. haidi: when it comes to the central banks surprising to the hawkish side, full -- fully twice. >> you know the reserve bank of australia move surprised everybody. how could they do what they did with the higher rate hikes, the signaling? same with our b.i.. -- with that rbi. they raised their key rate. this is what would not -- people thought they would do. they maintained accommodation withdrawal.

in other words, we are gradually taking the stimulus out. they did not shift to neutral. in -- let's look at inflation. it is expected to come down but it is going just below on the top of their 2-6% range. the headline is gone from 5.9 5.7, but the forecast for the second half of the year is still something like 5.4% may be down to 5%. and the head of the rbi says the expects inflation to stay above 4%. a lot of central banks are saying it's high and hard to get down. i have to add that bloomberg

economics team says they think they are overestimating what they will have to do and that could be a problem down the road. haidi: kathleen hays there with the latest when it comes to the central banks surprising pending the narrative. the latest now when it comes to job cuts and the headcount reductions globally across the financial sector. alliancebernstein cutting more than 100 jobs. these cuts announced this week include roles in north america and the u.k.. one person estimating it amounts to about 4% of total staff. the investment management firm had about 4400 employees at the year end. the statement also suggested the company was reducing headcount to cut costs. we have had no comment from

alliancebernstein but we have heard the in them and aided 100 from their global headcount. -- we heard that they eliminated 100 from their global headcount. we have seen similar cuts at morgan stanley and blackrock as well. let's get back to the rbi, it is also moved to alleviate fears over contagion fallout from adani group. is their fear of a spill of are becoming less likely? >> that seems to be the case and we have heard from a number of different regulators, market officials and government officials saying essentially that this is something that is

company specific. it doesn't affect the broader industry. this topic of adani did come up in the press conference yesterday. the rbi evan are shared his views on -- evan are shared his views. what it means for the global health of the banking sector. >> in individual cases and their numbers, we do not discuss in the public domain. the strength size and resilience of the indian banking system is now much larger and stronger to be affected by an individual incident or a case like this. >> it does echo what we heard from moody's as well a few days ago. they said the exposure of indian banks to adani assets is looking at 1% of their total assets. that could made worse if its ability to access financing and other markets is curtailed.

>> the group paying -- prepaying another loan? >> this is about alleviating concerns around debt leverage. we reported a few days ago that adani's family prepaid along. -- prepaid a loan. we understand adani group has confirmed they are prepaying, they have not explained why but we understand from sources that the banks who lended out on this were reluctant again. we're still around the $100 billion mark even though the efforts to repay debts have

started to prop up market sentiment, but still a long way to go. >> thank you to keeping that's -- keeping us up-to-date. vonnie: president biden has told pbs that u.s. china relations have not taken a big hit after suspected spy balloon was shot down. china wants washington to return the debris from the balloon. beijing says it was a civilian climate research vehicle. hope this fading in syria and turkey of finding more survivors from the earthquake. amid criticism, president erdogan says it's impossible to be prepared for an event of this scale.

turkey's stock exchange has suspended trading for five days. the ukrainian president has made an unannounced visit to the u.k.. he praised britain for supporting its fight against russia. rishi sunak announced more training for ukrainian troops. sources say the ukrainian leader is expected in brussels on thursday to attend a summit of eu leaders. >> we are also accelerating the delivery of our equipment, the equipment of our allies to ensure that it reaches your frontline incoming in coming days and weeks, not months or years. the ukrainian crews who arrived last week be using challenger to tanks to defend ukraine's sovereign territory next month. vonnie: global news 24 hours a day powered by more than 2700 journalists and analysts in over 120 countries. i'm vonnie quinn.

this is bloomberg. haidi: still ahead a preview of earnings reports from automakers. this is bloomberg. ♪

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>> our next guest says australia is likely ccm of the -- likely to see -- the numbers are likely to be good. the outlook murkier? parks absolutely. we are still going through a phase where our economy is reopening. consumers balance sheet is strong, consumers are still spending. the past christmas spending is pretty good relative to expectations. we think the result will be pretty good, however the companies will become a bit more cautious. trading so far in the last few weeks for consumer related stocks is getting harder particularly the household goods related sector. we heard from a smaller company that already had downgrades on that basis.

outlook we do expect some downgrade. over the next 12 months, amid single-digit downgrade. haidi: when it comes to building china into your portfolio, a lot of the commodities have been picked. what other exposure would you want as the reopening goes through different stages? >> this is going to be big the medic driver of return this year. commodities have already rallied aggressively on sentiment if anything. you want to take some profit because the reopening is going to take time. we think the areas, travel is big. they will drive down ticket prices. not a great idea for qantas, but i think it will be very positive for travel agents and the like.

we also like education. the chinese government just told the students they need to go offshore to study. clearly we are seeing very strong recovery in students. this was before the chinese students rushing back so we expect these companies like education is going to have a great 12-24 months. other areas, they offer great leverage to the china reopening. shery: is that the narrative that is behind your call on a bull market by the second half of this year? guest: it is partly. i think china reopening is definitely underpinning the positive outlook for the equity markets. the challenge is for the share market for the first part of the year is that the corporate earnings need to be downgraded

as we talked to probably a single-digit downgrade even for the u.s. market. the downgrade will probably be in that similar vicinity. it once the corporate earnings are downgraded and the outlook is much more reasonable and with an interest rate with a benign inflation, with interest rate expectation price into the valuation, we think it offers pretty good base level for the share market to rally from a lower level. the second half is looking incredibly strong for share market. shery: how much could the fed help the market? are you expecting a rate cut the end of the year or next? guest: this is the part where the market is probably ahead of itself. we don't think the fed will cut this year. there was still have a little bit of rate rise to put through. the market, it has been too

optimistic. the fed was behind the curve in terms of putting out the interest-rate. there certainly is going to be very slow and cutting the interest-rate. the data so far came through with a little softening in inflation outlook but mixed signals we saw other data as reasonably strong. together, we think early next year is where we are looking at the cut. and the inflation will remain high for other bit longer. haidi: that is one of the reasons we had the hawkish surprise from the rba. this move his put sentiment over the edge. how much of a leg affect do you expect to explode when it comes to the impact on consumer and households? guest: i love that word explode. it has quite a meaningful impact. we haven't seen any of that yet. every month, we have a little bit of refinancing of that cheap fixed-rate into the more expensive ones. consumer has still proven they are willing to spend.

we are still looking at a good savings rates of the balance sheet is strong. selectively a certain sector of the consumer sector is under pressure like housing. you expect everything else in the next six months to slowdown. haidi: thank you for joining us. we have much more here on bloomberg. ♪

shery: president biden is speaking saying the u.s. has recovered major pieces of the u.s. so-called china spy balloon. plenty more

vonnie: this is daybreak asia.

the adani group plans to prepay a bridge loan due in march after some banks refused to refinance the debt. sources say that lenders were in talks on the loan up to one week before the hindenburg report triggered a massive selloff. the imf is asking pakistan for a solid relief plan to revive stalled loan program. the energy minister told local media discussions have been detailed and vigorous and should conclude successfully within days. imf wants pakistan's government to strengthen its fiscal position. north korea appears to have staged its first military parade in almost a year. local media reported jets flying over pyongyang and music coming from a city square. it may be a platform for kim jong-un to show off his latest

weapons. state media usually broadcast images of such parades after they happen. the first australian coal shipment to china in more than two years is close to docking as trade relations thought. the bulk carrier was anchored off of a southern port city on thursday morning carrying coal mined in australia. china placed informal restrictions on australian coal in 2020. global news 24 hours a day powered by more than 2700 journalists and analysts in over 120 countries. i'm vonnie quinn. this is bloomberg. shery: president biden has said the u.s. has recovered major pieces of the chinese balloon. china's ambassador to france now asking the u.s. to return the debris saying if you pick up

something on the street, you should return it to the owner if you know who the owner is. this is clearly not debris on the street. it was shot down from the air. is this going to be the next point of contention in this relationship? guest: i think we have to wait and see. obviously the chinese investor to france was the person making those comments. it is not clear with the official position in beijing is. i think it does reflect the desire by both sides both the chinese and american governments to show that they are being tough on this issue. i think that's why the chinese government has moved away from being contrite to more aggressive in defending its position. in this case wanting pieces of the balloon bank but also why president biden has mentioned that the shooting down of this balloon has not been a big hit to u.s. china relations.

making the argument that the u.s. was within its rights to shoot down the balloon because it was flying over american territory. haidi: what do we know about what part this balloon played in what was potentially a bigger program, not just affecting the u.s. but perhaps more globally? guest: since we have had the balloon appear over montana last week, that have been reports of other balloons obviously in latin america, there have been reports of balloons cited previously. in parts of asia. secretary blinken coming out saying this is part of a global spy campaign by china. it would not be surprising if that was the case. china being a major global power , spying, espionage is part and parcel of state practice but every country around the world.

>> what's next? the thawing of relations was supposed to happen during secretary blinken's visit to china. a visa, that did not go through. >> we are going to be looking for the next opportunity for secretary blinken to travel to china. it's clear that the chinese side is not ready for him to visit either. when will the right time be? obviously, we are about to get to the national people's congress in march in beijing. that looks like it will not be a good time, so it's probably going to be off a few months from now before antony blinken can make that trip. haidi: let's get a look at how the markets are faring. >> this kicking off with the offshore yuan. it has been under quite a bit of

pressure in the session now looking a little bit unchanged but part of the calculus comes down to the fed as well because we heard from four fed officials reinforcing the message that the central bank is not done just yet with hiking rates. there is still more work to be done. that leads us to look ahead to a risk off session. u.s. futures now turning flat, but we have the nikkei also pointing to a drop at the open. when you bring up this terminal chart, we are seeing nikkei volatility back at levels we haven't seen since july 2021. this is a sort of fear gauge and it tells us according to j.p. morgan that investors are quite optimistic on the outlook. we have seen the recovery extending after the boj shocked investors in december with change to its settings.

when you put that against what we are seeing in earnings, we are in the midst of earnings season in japan. so far, the results have been disappointing basically we have seen nearly 60% of companies missing so far. we have toyota, nissan among the highlights. yesterday a lot of that news around the is pointing numbers that came from nintendo than softbank as well. haidi: let's get more on softbank. the technology editor joins us now for more. what are the implications for this for softbank? guest: the $5.1 billion represents a billion dollars widening of his deficit to softbank from six month ago. it indicates how badly the

recent investments at softbank have soured. he has stakes in vision fund two and northstar. this has contributed to the downturn in valuations. it's important to remember will me talk about this the japanese executives in general have lower compensation than what you might see in the u.s.. when softbank made the jump from being a domestic telecom provider to a global tech investor, there was a lot of trouble recruiting and keeping top local talent to its investment fund without some sort of compensation boost, some way to give an incentive for

people to stay on board. son took the initiative to create the schemes. that said, he didn't have to put up a lot of money upfront for the stakes. he has 17% stake in one. investors were extremely angry at him for doing this. it exposed them to the upside, but also to the downside now. shery: how risky is the position for him? is there a deadline for repayment and are there any bright spots in the future for softbank the could help him recoup some of these losses? guest: there is no immediate deadline. he has to pay interest on the loan that he has to softbank.

his debt is not payable for the lifetime of these funds which is about 12 years. and he can extend his payment further for another two years. then possibly another two-year extension. when we say his debt has grown, it's only on paper. they are unrealized debts. within the lifetime of the funds if stock comes back, if the valuations of the startups comes back, he could come back very rich. shery: coming up next, looking at toyota and nissan. they are set to announce earnings later thursday. we will discuss the profit outlook of the two carmakers.

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>> we are counting down to the start of trading in tokyo. japanese investors offloading a record amount of overseas debt last year as hedging costs rose and speculation that the boj --

we are also seeing local reports that prosecutors have arrested three more suspects on suspicion of bid-rigging on olympic contracts. kfc japan, toyota, and nissan are all on tap for reporting earnings. shery: let's get deeper into the carmakers earnings. good to have you with us. you have a by on nissan motor. should we start with nissan because we are seeing more details of that revamped alliance with were no -- renault ? >> i think, i see nissan on a recovery track on earnings. they have some nice ad hoc projects they are working on.

the big plum would be if nissan can start to rebuy those shares that renaul is putting in. earlier the ceo said he would like to get access to the funds that those shares represent because they have a lot of projects they want to do. that makes us optimistic that that catalyst can play out. shery: what do you make of the revamped alliance? >> it makes the alliance practical. the hope that to get these companies with two different attitudes to work closely and taking orders one from the other was never going to work. now they have an alliance where -- you're not going to have the big benefits of a fully integrated company but there will be ad hoc projects they could work on. there smaller areas where they can work together and that's

probably the best we can hope from these two companies working together. haidi: what are the biggest buyer -- drivers of your buy rating? >> if nissan starts to buyback a lot of it shares, that would be great. this stock is trading on only 1.3 times. this is a situation where if you start to get positive news from the company and earnings recovery which we do expect, that the shares could move. certainly the share buyback potential would be the biggest prize of all. haidi: taking a look at toyota, what are your expectations and what would be the top elements were looking for their customer? guest: we are looking for them to beat their guidance just

barely for this fiscal year. the strengthening and the yen did give them a setback. we are looking for next fiscal year and toyota talking about a recovery in production. we didn't they have a good chance of meeting that. we are hearing from multiple sources that the chip shortage which helped them back so much last year is rapidly becoming less of a factor. that should set the stage for normalized production and an improvement in earnings over the current fiscal year. shery: how does the current level of the japanese yen bode for these automakers and the speculation that the boj might have a policy shift play into the carmakers calculations? >> if we see something like we saw in december where policy causes the yen to get stronger, then going to be wrong. the earnings headwind will get

stronger for these companies. most likely we would have to lower our forecast and r-value expectations for them. it is always a wildcard for these companies. shery: regionally speaking, we see china reopen, the u.s. economy a bit stronger than many had expected. what are the bright spots for these companies? guest: four toyota, i would say china reopening would be a great thing. even though the sales have been down, it is outperforming the chinese market. another big win for toyota has been the strength of aussie on markets. we had a very strong -- in the u.s. in december 15 point 7 million units. we have 14 million baked into our numbers for the automaker.

if the market can stay at this level, there could be the beginnings of positive earnings surprise for them. haidi: you can tune into bloomberg radio to hear more from the big newsmakers and get in-depth analysis from the daybreak team. we are broadcasting live from our studio in hong kong. lots more ahead, this is bloomberg. ♪ introducing the new sleep number climate360 smart bed. only smart bed in the world that actively cools, warms, and effortlessly responds to both of you. our smart sleepers get 28 minutes more restful sleep per night. proven quality sleep. only from sleep number. you don't have to worry about things like changing tax rates or filing returns. avalarahhh ahhh

shery: walt disney jumped after the bell as bob iger announced dramatic restructuring of the world's largest entertainment company. the plans include cutting 7000 jobs and finding by $.5 billion and cost savings. the revamped follows big gain -- big gains at the theme parks. >> we are going to take a really hard look at the cost for everything we make both across television and film. things in a very competitive world have gotten more expensive. that is something that is already underway. shery: credit suisse is said to

be paying out $380 million to top executives if it's restructuring succeeds. the boards incentive for managers is the second straight year the swiss lender has looked to ed -- incentivize top staff to lessen the pain of bonus cuts. sources say reductions at j.p. morgan included some managers. the mortgage origination volume slumped last year as fed rate hikes cooled the pandemic era boom. alliancebernstein is said to be eliminating over 100 jobs. sources say the cuts include america and the u.k. amounting to about 4% of total staff. we are told several analyst roles are among those being axed. >> japanese companies are under

pressure to raise wages. the practice is typically seen as undermining corporate profit but could end up supporting the market. how are markets reacting with some companies already announcing pay hikes? this is already a sensitive and fascinating part of corporate japan. >> good morning. we have seen quite a lot of companies announcing aggressive wage hikes at least by the japanese standard over the past two decades or so. the market reaction has been quite interesting. according to analysts, on average companies have announced wage hikes have seen their shares rise over the following period. that suggests that investors

take it positively even though the wage increases are actually negative in terms of a hit to profit in the short-term. shery: that's really interesting. you wouldn't associate wage hikes with ceos being happy about that. is that because this could be a way out of the deflationary mindset spiral that japan has been in for the last couple of decades? guest: yes, definitely. there is a hope that this could lead to a virtual cycle where rising wages would boost domestic consumption. of course it is still too early to come to any conclusion on that. according to analysts at j.p. morgan, if japanese companies can manage to pass on up to 80%

of rising costs to customers including wage hikes, then the damage to profits would be mitigated. that would mean there could be another cycle of rising wages and inflation. some think that is a quite narrow path. japanese companies have passed on rising costs that much in the past. we just have to see. shery: when we talk about japan, i hear analysts being positive about the governance picture that things are getting much bigger -- better in terms of corporate governance, transparency, esg. that what you are seeing? guest: yes i think there is growing awareness about the importance of governance among japanese companies. several years ago, there is a

perception that it's driven by the governance efforts and companies are doing that because they were told to do so. after a few years, many fund managers do see some examples of improvement. that does not say every companies moving in the right direction, but generally speaking fund managers seem to be quite positive about what is happening in terms of the corporate governance. shery: that was a preview of japan. let's take a look at how futures are trading. we have come back from a down session on wall street. it lost ground with tech leading the selloff.

more hawkish speak coming from fed officials. nikkei futures unchanged at the moment. kiwi stocks falling for a second session. the asx 200 is also down. wti prices are holding onto gains at around $78 per barrel. we will be watching the energy space as well. look at disney after hours because that has moved into surged after the prophet revenue beat -- profit revenue beat. coming up in the next hour, we will be speaking to frankel templeton investments. this is bloomberg. ♪

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>> this is "bloomberg daybreak: asia," we are counting down to asia's major market opens. we react to more hawkish fed speak. hire for longer seems to be the answer. disney is beating expectations. >> huge earnings season, hire for longer, and it is not just the messaging by the fed, but the rbis doubling down on its hawkishness. let's look at the side of trading across tokyo and seoul. >> that is the big question that investors are asking themselves. where do we see the fed funds rate topping out at 6%? that is building out in some option strategies, traders will make millions that happens. we have trent -- japan and korea coming online, we have the 10-year yield looking like this

at the start of the day. focusing in on japan we see a lot of focus in the session about what fed officials say, more than just a moment. we are also seeing volatility. the gauge slipping to his lowest level in 19 months. there is a lot of optimism in the markets unit we see the nikkei up happy percent in the open. a lot of that is driven by --. a half of a percent in the open a lot of that is driven night -- i earnings. we are halfway through the earnings. 60% have been reporting misses. toyota among them. we are watching a change, on the -- in the wall street session we sawtek selling off -- saw tech selling off. we see the contact slipping, -- kosdaq slipping, that is -- become as we have the past when

he for hours pushing back on the idea that we were near the end of the tightening cycle. more work needs to be done to curb inflation. we see that inflected in the dollar strength coming through into the session. the korean yuan a little weaker on the open. in australia we are one hour into the session, that is a clear laggard on the session. reporting the first half results lowering the guidance for the year, a lot of issues around the cost of decarbonization. call planned outages. energy market -- coa -- coal plant outages, and in the oil market, a lot of focus amongst the traders on what the manned outlook is from asia -- the demand outlook is from asia. >> they ca decoupling -- see a

decoupling of u.s. markets from the asian markets, seeing a performance. joining me is the senior portfolio manager and investment analyst at templeton investments. thank you for being here. let's talk about asian outperformance. we hear that narrative come through. is that about the china momentum? guest: a couple of aspects. first of all you have china momentum, the have the consumer with a lot of pent-up demand. the second aspect could be a level of softening of u.s. markets. we have a situation where eps estimates are looking to come down. you combine that with the fact that the u.s. consumer is starting to tailor back on spending. the outlook on u.s. versus china is just different. >> is asia just cheaper at the moment?

when you look at the valuations where you find the bargains? do you look at them in terms of countries, regions, or sectors? guest: on global pms i had the benefit of going anywhere and buying what makes the most sense. in terms of valuations for chinese equities in particular you have to remember number of these companies, also just china was the country that was locked down, love the companies were subject to the same trends. they have nothing consumer spending. they are under earning. you have to be wary of looking at the headline pe number, you are comparing that to the european market that has been opened this entire time. they have different issues in the u.s. market that is on fire. >> how are you competing when it comes to the direction of the u.s. dollar and the impact it has across asian markets in emerging markets? guest: the u.s. dollar is one of those currencies that is a real flight to safety. a lot of people have been

focusing on the movement of the u.s. dollar versus the euro. you see that currency underperform. the u.s. dollar underperform see swiss franc. a lot of people are surprised to the euro has held up well as well as a basket of other currencies such as the japanese yen. as we look at these currencies people just tend to focus on strength of the u.s. market and certainty of the u.s. currency. that is not the only trade we are talking about here. haidi: we have seen volatility when it comes to trading japanese stocks. do you expect that rally to continue in light of what we've seen from the tweaks from the boj in terms of policy? guest: we are waiting for the next announcement with any certain -- what that means in terms of long-term policy. some of the things that are very interesting about the japanese market, the fact that we are seeing wage increases

implemented across such a broad range of companies. they are announcing these and implementing that. one of the things we have been looking at, whether or not japan can sustain 2% inflation. that is not a question outside. with japan, with high commodity prices, it is still much lower on its inflation outlook. we have seen some of those pressures abate. the question is if they can maintain 2%. things such as wage increases are permanent. they are the second derivative effect and have a much longer and lasting impact. haidi: that is interesting to hear. you always think wage increase is not great for corporate margin so it may be a negative. for a country like japan people are optimistic this will lead to a better cycle after 70 years. -- so many years. >> we have been talking about the deflation cycle in japan. that is important. there is a great relationship

and the longevity of the relationship between japan and their workers. they are sending japanese workers a clear message of how much they value them and their contribution. japan is at a pivotal point in its develop it. i note -- development. i know it's been around for a long time and it has a longevity in the stock market. some of the western rules in terms of share buyback, shareholder friendliness, taking care of your friendly's -- employees is starting to translate to that market. >> i have to ask about broader ems. what is going on? yes, is the next decade for ems. yours have cracks forming thinking perhaps it is not so much a look riskier than thought. guest: that is a risk for emerging markets. the returns are hiring people are attracted to them. one of the ways would like to play the emerging markets is through buying developed market

equities with emerging-market exposure. i use coca-cola as a great example with that type of franchise. what you do is you get the benefits of having developed market governments with access to the rates. for me it is a win-win. >> that is interesting, great to have you in studio with us. senior vice president for folio manager -- portfolio manager at frankland templeton. vonnie: president biden has told pbs the u.s. china relations have not taken a big hit. after a suspected spy balloon was shut down of the carolina coast. they told local media that china wants washington to return the debris from the balloon. beijing says it is a civilian climate research vehicle although the u.s. believes it is for surveillance. hope is fading in syria and turkey of finding more survivors of the earthquakes, the confirmed dead approaching 12,000.

president erdogan says it is impossible to be per haired -- be prepared for a disaster of this scale. they have suspended trading after assault that wiped out billions of dollars in value -- sell off that wiped out billions of dollars of value. he prays the u.n. for supporting the fight against russia, new help for fighter jet pilots. ukrainian leader is expected in brussels on thursday to attend a summit of eu leaders. >> we are accelerating the delivery of our women, the increment of our -- equipment, the equipment of our allies to make sure he reaches you in days and weeks. not month-end years. they will be using challenger 2 tanks to defend -- sovereign ukrainian territory next week.

we have also expanded our trading program. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. haidi: still ahead, hotel and gaming -- discussing trends across the entertainment agency -- industry. adani's flagship firm has rebound, looking to get ahead of the curve with another loan repayment. that and the rba view on the crisis. this is bloomberg. ♪ sale online was also the first time you heard of a town named... dinosaur? we just got an order from a dinosaur, colorado. start an easy to build, powerful website for free with a partner that always puts you first. godaddy. tools and support for every small business first. three nights, esg... the broker will take your bonds. -diversification, futures, options. fiduciary. leverage. [whispering] -frothy markets. psst. virtual real estate is a lock. ♪ cold hard cash ♪

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haidi: a chorus of federal reserve sources singing the same song. interest rates will have to move higher and stay there longer to bring down severally -- stubbornly high inflation. kathleen hays is here with the latest. can we say there is strong consensus within the red on this -- fed on this? guest: we have to say there is. jay powell said, after the meeting of a 25 basis point hike , a downshift says to more rates point hikes anyway. we hear 4 more today, that they agree. let's start with chris waller. he is a governor at the federal reserve. he has been on the hawkish side.

he was speaking at an event today. he also said, that they have made some progress, but they are not there yet. they have more to do. let's listen to what he said. >> we are seeing that ever begin to pay off, but we have farther to go. it might be a long fight. with interest rates higher for younger than some -- longer than some are currently expecting. we will not hesitate to do what is needed to get the job done. >> we have heard that from jay powell and more and more fed officials. they will not hesitate. they will do what it takes to get the job done. i year and a half ago he was quite the dove and now he is quite the hawk. he says the fed needs to do more to adjust this hot labor market. more tightening, he is looking at something as high as 5.4% of the terminal rate.

the fed hierarchy goes the fed chair, the bed vice chair, the -- fed vice chair, the president of new york. policy has to get sufficiently restrictive, at the same time he is not there yet. he is fine with 25 basis point rate hikes. >> i think they allow us to both adjust policy based on the new information and what is going on, and get us to our goal. if we need to, obviously this situation changed significantly we would have the ability to move quicker than that or adjust course. right now i think 25 basis point increase we just put in place seems like the right size to adjust policy given what i'm seeing today. >> like john williams, lisa cook was also a governor at the fed board. saying more hikes are needed. if you average it all out you have a consensus more needs to be done. rates are moving higher.

bill dudley, former fed head and now bloomberg columnist says the fed and markets are getting in alignment. i want to show you this chart. we have been covering the june contract that expires in december -- september. people are putting more bets on that the fed might hike the cure up to 6% --key rate up to 6%. this is not the first time we have heard 6%. some say it will have to go to seven percent or higher. this is the picture being painted. it is pretty amazing. some people, instead of fighting the fed are getting ahead of the fed. saying, we get it, if inflation stays high and labor market stays hot we have to do more. haidi: there is a theme,

something in the air, the rba, the fed, now the rvi. >> just when everyone has convinced themselves it is time to ease off and it makes sense. perhaps it does come a woman knowing to we get to the end of this saga --, we will not know until we get to the end of the saga. the peak inflation has started to cool off, they are just getting into the 6-2% band, i'm going from top to bottom. it is just -- is not just the interest rate hike. it was a 4-2 vote, but also a vote to maintain accommodation of draw. a technical term for withdrawing stimulus, that is what they are doing. we are not actually using.

they did not -- easing. they did not go to neutral. that is what surprised me people. they say inflation will stay above 4% even though it has come down from 5.9 year-over-year to 5.7, expected to get as low as -- is not low enough for the rbi to declare an end of hiking get. again a central bank chief saying we have more to do. we do not know how much more, they are not saying that. haidi: they really kept us on our toes this week, the central banks. the indian conglomerate adani is planning to prepay a loan. brian joins us now for more. this is a clear strategy we have

seen. is it infusing confidence or at least paring back the risk of a contagion fallout? guest: you are right it is a very clear strategy to be throwing cash at this to improve sentiment. we are seeing, definitely, a recovery in the market when it comes to adani group stocks. huge gains particularly in the holding company, and some of the other units. it has been coming at a time where they have been reporting pretty good earnings, pretty good topline numbers there. as you say, throwing money at this issue. prepaying this $500 million bridge loan they were in talks to refinance for that hindenburg report exploded onto the world stage. haidi: also because we are seeing more scrutiny from global banks, right? when could we see clear turnaround for this empire? guest: i think that is unclear.

there is a fair bit to play out here. it will depend on the strategy, when it comes to the leverage, if they can keep up this prepayment strategy they have going. that dusting -- does seem to be shoring up sentiment. showing investors a do have money. that they do have the air with all to make this -- wherewithal to meet this challenge head on. they have a low-wage to go -- a little ways to go as of yet in terms of that story. >> you get a roundup of all the stories you need to know to get your day going in today's addition of daybreak. bloomberg's of scribes go to dayb go. is available on mobile and the bloomberg app. this is bloomberg. ♪ only smart bed in the world that actively cools, warms, and effortlessly responds to both of you.

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>> bp will say -- it will stick to its disciplined investment strategy regardless of a happens to crude prices. they spoke exclusively with bloomberg television after news -- shares jumped on news of shares buybacks. >> we have the strongest operations in history. lowest production costs since 2006. the strategy is working. we are leaning into the strategy, $8 billion more into the energy transition, $1 billion more into oil and gas. -- $8 billion more into oil and gas. we announced a 10% dividend increase and we announced a buyback. i think the company is running well. we are leaning and. investors -- we are leaning in. investors see the track record that is good and that is why you saw the response from that arc

it yesterday -- on the market yesterday. >> going forward it seems like you need a high oil price to get there. i know you say 70, when inflation adjusts for 2021, you're looking at 90. do you need that make it work? guest: absolutely not. it is a requirement as part of our accounting to publish what we think the best estimate for the ford pricing is. 70 -- forward pricing is. $70 a barrel is we think it is. we run our company on breakeven $40. we do not know what the future price of oil is. nobody is -- does. we run it conservatively, we run with a ballast quite -- balance point of $40, if prices drop can maintain our dividend and invest. if the price is higher clearly we are going to do the things we are doing. >> if it is higher does that

mean you have to invest more in oil and gas? this question came up three years ago when we did a panel. you said no. if oil prices go up i will not spend more on oil and gas. they did and you are. guest: this is driven by a desire to grow our company. >> this is free cash flow. >> this is about growth, we are investing. >> you are not growing volumes. >> we are going to invest in oil and gas, we will grow volumes over the coming years. we invest more into that because people knew that today. we need energy security today. we need energy affordability. we must invest in today's energy system. at the same time we are investing more on changing the system. in between 22 we are --2022, the numbers over 30% fueled by a huge acquisition. the world needs us to do both,

we believe we can create value for our shareholders to do it. it is a growth driven strategy. that is what we are trying to achieve. >> i appreciate that. then you look at how you are valued versus exxon, for example. the market once you got, i say you and european measures, to be an oil company. that is why chevron and xm will have the multiple -- exxon to have the multiple of you have. guest: they like the fact that we are delivering. we have a track record, three years now on delivery. 30% average return on capital deployed. >> that is an oil thing. guest: they like that we are delivering and they like that we are growing. >> speaking exclusively with

bloomberg. here is the latest look at the headlines. general motors is competing for a stake for -- in the brazilian mining's -- we are told it could raise $2 billion from the deal but has not made a final decision. britain's antitrust watchdog is warning that the microsoft acquisition of activision blizzard would harm competition in the u.k.. it could force a selloff of the blockbuster call of duty franchise, the statement draws into question the viability of a deal already under attack from u.s. regulars. manchester united's shares surged on the reports that qatari is building -- bidding on the club in coming days. other possible suitors include british billion air jean

radcliffe and private saudi investors. coming up next disney announced thousands of job cuts in billions in savings, details on restructuring the world's largest entertainment company shortly. this is bloomberg. ♪

>> this is "bloomberg daybreak: asia."

a check on the biggest sentiment drivers for the day. the hawkish chorus from the fed that is growing ever louder. overnight we heard from 4 fed officials saying the central bank is not done just yet in his rate hikes. more work needs to be done to tame inflation. how that plays out in the option markets we are seeing more traders are cognizant of this risk that is building. we see options bets popping up over the past few days that rate hikes could reach 6%. the open options contract mitsui one point -- reaching the $1.4 million level. the fed can turn more hawkish. the consensusbuilding that we were near an end of the timing cycle could be misplaced. that is weighing heavily on tech stocks in particular. it was tech stocks that led the selloff in wall street overnight. it will be interesting to see

how that plays out for korea. the kosdaq, very correlated, slipping at the start of trading for japan and korea. that could stop the rally, within a whisker of reaching a market in its tracks. -- bull market in its tracks. we are red across the screen. losses are coming down, from the hawkish fed rhetoric coming through and also what you hear from investors. morgan stanley wealth management is one of them saying the rally is misplaced and the cyclical moves is really -- not really reflecting the underlying issues in the market. that is coming out of the weaker economic data coming through and also sharing the some of the earnings announcements are the past few days as well. haidi: disney, let's take a deeper dive, we saw the

entertainment giant jumping layton trade, after the ceo bob iger -- late trade after the ceo bob iger made an announcement. give us a highlight with bob iger at the helm again. >> by all measures it was a fantastic eat and and -- beat and investors said it needed to be. shares were up 8 percent after hours, a big applaud from investors analyst alike. while streaming is reporting losses, there has been improvement, they beat expectations. first quarter revenue -- ubs adjusted is $.99. the $1.1 billion loss on streaming in the quarter was better than analysts had feared.

the big announcement was a dramatic restructuring. bob iger streamlining the company into three core businesses. disney entertainment, espn, that some thought would be spun off, and disney parks experience and products. listen to the ceo he says he is making the moves the need to be done. >> we will aggressively jury eight -- curate our general entertainment content. we will reassess the markets we have lost in and determine the right balance. we will adjust our pricing strategy including a full examination of our promotional strategies. guest: the parks were the standout performer in this leaders -- latest quarter. he says he will no longer -- they're sticking to the prior profit target, telling analyst investors they plan to deliver. >> what kind of pressure is he

under now? guest: it could not be any greater. he was brought back in november in a surprise move when the board pushed out his handpicked successor. due to the outsized losses in streaming. activist investor pushing for a board seat arguing that they need to do a better job cost control. operating income plunging for the 5% back in --45% back in 2022. the question was what would bob iger do in terms of strategy and address the concerns that pelts has. the big job cuts, 7000, on a percentagewise that is a small amount, two or 3% of disney's huge staff. it is a big way towards the cost cutting. the reorganization is intending

to improve profit margins. he is looking at other ways to raise revenue, possibly licensing -- content to rivals, the third major transformation by disney in an effort to beef up the film franchise. on the conference call he says there is no plans to spin off espn. that was a concern, he indirectly addressed some concerns, sing the board would consider -- saying the board would consider restoring the company's dividend this year. that is something that activists have flagged. heidi. haidi: su keenan the latest, now to vonnie quinn with the first word headlines. vonnie: international monetary fund is asking negative for a solid relief plan to revive a stalled loan program. discussion with the fun this weekend been detailed and

vigorous and should conclude successfully within days. imf uzbekistan's government -- want a pakistan's government to strengthen -- north korea has staged its first military parade in almost a year. illuminated jets of flying low over pyongyang, and may be a platform for him to show off his latest weapons after threatening to exponentially expand the nuclear arms weapons. state media will broadcast pictures of the parade after they happen. australian plays -- defense apartment is removing chinese made cameras. the cameras were, quote an issue that would be dealt with. this is after details of an audit that found the chinese manufactured cameras used at 250 government studies -- sites. it is close to talking, as trade

relations stall. the carrier magic eclipse was anchored off the port city thursday morning carrying metallurgical coal mined in australia. they placed restrictions on coal after 2020 and they called into question the origins of covid-19. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. sherry. >> president biden says the u.s. has recovered major pieces of the chinese balloon as he plays down any serious blow to relations with beijing. >> the idea, shooting down a balloon that is gathering information over america, that that makes relations worse? i made real clear to xi jinping. we are going to compete fully with china. we are not looking for conflict.

that has been the case so far. >> meanwhile china's ambassador to france says the u.s. should return to the debris. let's get the latest from our correspondent rebecca, the investor says if you pick up something on the street you should return it to the owner. as president biden outlined, it is not something picked up from the street. it was shut down from the air. it is from china. is this the next point of contention between the two? guest: certainly one of them. it is the first comment we've had a -- from a chinese official to and u.s. returned the debris. the u.s., for a while, i second point of -- on a second point of contention has been public about finding the balloon. the stages at which they were shooting it down. going and sending u.s. naval divers to retrieve it.

antony blinken overnight saying they will continue to update publicly and brief precisely what they do find. they expect to do that over the next couple of days. the other thing to watch, stepping back a little bit is the extent to which we see the u.s. you this this -- use this moment to press its advantage. while biden says that the billing has not weakened ties at all, -- balloon has not weakened ties at all, this is part of a broader global. surveillance program china has ruled out antony blinken saying he has briefed several other countries the u.s. please has been -- believes has been targeted by china. >> at the same time president biden is denying this is a serious blow to the relationship. what steps could we see, after an adequate period of time to cool down?

that could see the restart and potentially rescheduling of the secretary of state's visit. guest: that depends on two things. one, what they find in the balloon. whether or not that allows beijing or china to move on from this. whatever they find in terms of hard evidence in surveillance technology will be difficult a brushoff given that beijing maintains this is a vehicle for civilian whether monitoring. that is a challenger. the -- challenge here. the other is if the u.s. finds evidence that u.s. technology or u.s. allies supplied technology for this a commit that put biden into a position where he has to make some further extension to some of the curbs and exports controls he is already introduced. if we do not see a further escalation following the balloon, it could be that antony

blinken does resume that visit. he said it was not canceled. . simply postponed. we could see him go back and take a much stronger message than originally intended for this meeting. haidi: asia government correspondent, becca. he remains optimistic about the casino industry, the executive to determine joins us. this is bloomberg. ♪

three nights, esg... the broker will take your bonds. -diversification, futures, options. fiduciary. leverage. [whispering] -frothy markets. psst. virtual real estate is a lock. ♪ cold hard cash ♪ j.p. morgan wealth management knows the world is full of financial noise. i'm looking at your asset mix and plan. you are right on track. great, thanks. our easy-to-use app and local advisors are here to help you figure out what's right for your investments. j.p. morgan wealth management.

haidi: our next guest is increasingly positive on china's tourism after the country we have three years of isolation. great to have you with us. one start off with the biggest thing that will be affecting tourism and travel this year, the return of the chinese outbound consumer. how big of an impact will this have on your business? >> thank you and good morning. it is actually very, very exciting. if you look at the numbers, in recent reports, the chinese domestic savings for 2022 is about $2.6 trillion.

this is about 3% -- 30% compared to 20% pre-covid. there is a lot of pent-up demand for consumer goods and travel and entertainment. there will be a lot of revenge spending. and of course outbound travel out of china will be one of the beneficiaries. cambodia, where it is located in proximity to china, given the geopolitical relationship with -- between cambodian china it will benefit significantly. haidi: i was just going to say, part of it is obviously, yes, that was what i was going to ask you about. this pilot program for approved tours. do expect that to be a big source of benefit? guest: yes it is.

as you pointed out cambodia's one of 20 countries under the approved destination status. what this allows or is for tour groups to be sold within china packaged groups. if you look at pre-covid in 2019 there were 125 countries in this program. has been whittled down to 20. cambodia is one of them. cambodia is very confident about this latest element. -- develop and. so much so that they expect chinese tourism will recovered to 2019 levels in 2024. that is an amazing case of recovery. haidi: what about international rivals from other -- arrivals from other countries especially within southeast asia? >> that is also very exciting. when you look at country station

near cambodia, the holiday of 2022, it was 17% of the 2019 levels. in december of 2022 it was 80% compared to december of 2019. research in travel to cambodia in the past few months. that has been good. you can see physically on the ground in our property, a lot more from other countries. >> you also have a very affluent ex-pat community within cambodia. how big of a support have they been especially during the pandemic era when the borders were still not opened? do you expect the support to continue in a much more difficult macro environment where we see perhaps even growth slowing around the world? >> i think yes. it is been very positive for us.

if you look at naga. if you look at all of the properties in asia, naga is only one of two that remained operating during the entire covid about. the other -- other covid period. the other one being singapore. the reason for this is because of our captive domestic market. they have pointed out -- [indiscernible] ex-pat market within cambodia. to be a constant source of -- allowing us to achieve profit. whether operating in a bubble within the covid period. this will only increase. the ex-pat community income --

in cambodia has business interests in cambodia. as china and the rest of asia open up we will expand a even greater amount of investment into cambodia. that will directly benefit us. >> the numbers of recovery have been lagging and singapore, there is the talk of earning downgrades is your. does that need -- this year. does that need to be flagged? will there be a china catch up? guest: is a matter of timing. singapore is a very different market. very transient market that benefits sick leave from prolonged kosher -- cyclically from belong -- prolonged closure of hong kong. it takes time for -- [indiscernible] the first quarter of 2023 is only about 21% of 2019.

will be a bit of a period needed for the outbound flow from china. we think it is a matter of time. we are well prepared to welcome them. we have renovated a lot of areas to cater to this, especially chinese visitation. we have designated certain areas , that we think the chinese will really like and they come and visit cambodia and especially to naga. >> good to have you with us, executive deputy chairman at naga corp with the latest results in outlook for chinese tourists. watch us live and see past interviews on interactive tv function. you can dive into the securities rtv functions we talk about. you can become part of the conversation. send us messages during the shows. this is for bloomberg subscribers only. check it out at tv .

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conventional thinking delivers conventional results. at allspring, we break away with purpose. harnessing data-driven insights and boundless curiosity. we dissect the market from every angle. helping to build portfolios that redefine what's possible. because investing isn't one size fits all. allspring. purposefully divergent. vonnie: a quick check of the latest business headlines. they are paying $380 million to top executives if restructuring succeeds. the incentive is for 500 managers, the second straight

years they are incentivizing top staff to lessen the pain of annual bones cuts. jp morgan cuts mortgage workers this week. it is tied to lower industry volume that included managers. the mortgage origination volumes slumped 60% last year as rate hikes called -- culled a pandemic era boom. >> the pandemic reopening is having an unfortunate -- more from bloomberg's chief china markets correspondent. is this a temporary squeeze? what is happening to liquidity? guest: good morning. this is incredibly interesting right now. the rapid reopening of the economy is doing something that has not happened in china in a long time. stirring up credit demand. we are set to get loan data as soon today.

what is really happening is banks want to borrow more from each other. there is not enough supply to match that. you are seeing a surge in interbank borrowing costs since the high of 2021. that was when the pboc bank was engineering a credit squeeze. they are unlikely to do that now. if you see a pickup today can we get the bids around 9:30 a.m. hong kong time they will be likely to offer more cheap funding into the interbank are get. it is an interesting dynamic. for the first time there is a lot of credit demand among chinese banks. haidi: we are watching hong kong dollar reaching the weaken of the -- guest: every time i watch the hong kong dollar it is like watching paint dry. it is a currency that moves incredibly slowly.

the dynamics have shifted very rapidly for the hong kong dollar. this is the carry trade. what traders are doing as they are benefiting from higher rates in the u.s. versus lower rates in the hong kong dollar. this is a pegged currency, it a very easy trade to put on. what has happened, because of higher interest rates in the u.s., the gap between the two currencies is the widest sense 2007. it is likely to continue. that gap will not what -- narrow anytime soon. shortening the hong kong dollar, is a -- >> investors chasing returns with anything related to chat gpt. >> this is playing out in the onshore market. state backed media has warned investors on to not speculate can -- not speculate, not to

chase these rallies. it is the fat of any company that announces efforts to go -- fad of any companies and announcing efforts to go into ai. they see stocks surging. some companies announce it although they have nothing to do with this business. alibaba and at ease got a little bit of a -- netease.com a bit of a left after the slump to start the week. haidi: bloomberg chief china market correspondent. that is it for "bloomberg daybreak: asia," markets cover -- coverage continues. bloomberg markets, the china open his next. this is bloomberg. ♪

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>> good