>> you are watching "bloomberg daybreak asia". >> we are counting down to the market opens in tokyo and seoul. >> australia has just come online. asian equities to client with a rescue package, a wall street rebound. a rate hike despite the credit suisse. the u.s. government moving to boost confidence in the baking system as lenders rush to borrow funds. >> this week's actions demonstrate our resolute commitment to ensure that our financial system remains strong and the depositors savings remain safe. >> japan's wage negotiations in focus, they're looking for inflation pressures and the boj's path under new leadership. >> we have the open of the asx

200. we are focused again on that move from the ecb. a former treasury secretary, larry summers, told that christine lagarde deserves an a plus for doing so. the reason for that is urging the fed to do the same next week, focus on reining in inflation instead. we are still seeing these markets, a 25 basis point hike from the fed you. this is what we are seeing in terms of the short end of the curve in australia. that three year yield really leading the move there, climbing 18 basis points in the early part of trading. stocks wise, the focus is on the financial sector. australia is -- just fractionally higher for the index in the opening moments where the broader asx 200 sitting a little bit flat. while we are focusing on the baking sectors, shary will get

through the details in a moment. it does come back to that bank bailout for first republic. those money and deposits coming from depositors. in terms of the stocks, you can see japanese futures are modestly flat, but china looking to a brighter start as much of the other equities in asia are still seeing that retreat into the havens like the japanese yen. shery: a lot of volatility in the markets. we have seen a u.s. stocks throughout the session. we saw bancshares rebounding, pushing the s&p 500 almost up to percent. u.s. jurors are giving up some earlier losses that we saw when the stocks came under pressure in the asian session. we had seen that plunge in first republic bank after hours. that after it gained about 10% in the regular session, and given that it is going to be getting $30 billion of deposit

from the biggest u.s. banks. we are seeing that downside continue in the after hours session. the tech index at the moment, slightly supported after we saw the nasdaq 100 rising to one month high in the new york session. haidi, it is really to do with the banking system and how sound it is. secretary yellen kept advertising the fact that there was confidence in the banking system and how resilient it could still be during her testimony in congress today. heidi: so much remains to be developed over the next days and weeks. in the meantime, u.s. authorities saying that an agreement by big lenders to deposit $30 billion with first republic bank, demonstrates the resilience of the system. let's bring in su keenan. in terms of the rescue plan, how do we know about how it all got brought together? su: by all indications,

financial authorities in the u.s. engineered this unprecedented direction -- rescue plan. yellen and jp morgan ceo jamie dimon worked closely together, talking earlier in the week, and meeting hours before the plan was announced. as for the plan, the 11 banks have pledged a total of $30 billion upfront cash in the form of deposits. according to a person close to the matter, those are committed for at least 120 days. jp morgan, big of america, citibank, and wells fargo contribute in $5 billion each. and morgan stanley and goldman are kicking in. a group of additional banks are kicking in one billion each. u.s. financial authorities applauded the effort and again, bloomberg has learned that treasury secretary janet yellen have proposed the idea of a group effort on tuesday. this was during a call with

officials including fed chair jay powell and the head of the fbi see. -- fbi c. fdic they both agreed the stock would demonstrate confidence in the banging system and we are told that jamie dimon took the lead in getting together other banks. they finalize the deal. quickly to the after hours, new details came out that first republic would be suspending its dividend. we saw shares dropped as much as 18%. earlier in the session, they swung wildly on speculation over details as to the rescue. bloomberg has been reporting that first republic has been exploring strategic options including a possible sale. a sale still very much a possibility. shery: what about silicon valley bank? su: they have not found a buyer yet. when the fbi see takes over a bank, they very quickly moved to auction off the bank so that by the following monday, all is calm.

that really didn't happen here. bloomberg has learned that a combination of infighting between regulators and other issues really marred initial efforts to get the auction underway. what we do know is that there will be a new set of bids that will be due by the end of the week on friday, and then by early next week, we could have some more information. we also know that with the fact that the vast majority of the deposits in silicon valley bank are outside the $250,000 cap that is covered by the fbi see, finding a buyer, almost certainly another bank that would take on this liability, has been difficult. several things have been circling to look at assets of the bank, such as age loan book. the bids are due on friday, we should have some news by early next week. heidi: even as we hear about the

government that letters themselves, are still mulling these potential worst-case scenarios, which could lead to a credit suisse tie up, we are hearing that credit suisse is not entertaining it at the moment. is it likely to be the solution of last resort? adam: it's weise investors want is just a little bit more clarity on what the future holds. they have got a bit of that with the swiss national bank, liquidity injection, yesterday. you can kind of see it in market pricing, a lot around the future of the institution. the equity has bounced back significantly yesterday. but credit default bond pricing suggest that there is still a lot to be sorted out here. still trying to go through this second strategy revamp. there is quite a lot of uncertainty around stepping out

that was so significant of the back end of last year. even the idea of a tie up isn't that palatable for credit suisse investors. although, as we are hearing from a lot of people, it is seen one of the most likely options. shery: investors haven't really been that happy with the turnaround attempt to from credit suisse. so, i'm knowing there is this option not be on the table, what would make investors happy? adam: ultimately, it is about trying to call back a lot of this erosion of the franchise that has been happening. not just the past week or two, this is a multi-month if not multiyear kind of path that credit suisse has gone down. that is why the equities sold off so much in recent years. did

the buildup of the reputational damage is taking a lot longer than people thought. credit suisse are doing some things with bringing down massively, their headcount and overall global staffing levels. they are trying to tailor get advantage into areas that they are very good at. one of those being wealth management, particularly in the asia region. they are trying to do a few things around the edges there that will increase their competitiveness. they are doing a number of things across the business. the investment banking side of the business remains an area that people continue to point at that still need quite a lot of work done to it to improve it. shery: thank you both with the latest on the baking upheaval. for more analysis, tune in for special coverage at 4:30 this

afternoon in hong kong on bloomberg tv. the ecb managing to look past the banking and force the fed and s&p to shore up the confidence. the euro area's financial system can with strand -- withstand an aggressive rate hike. we have kathleen hays who joins us with the latest, how much of this is confidence in how much is it that they don't want to start a panic? kathleen: both. christine lagarde and her president, that is what they communicated. of course, they did push past all this credit market turmoil, the banking industry turmoil, particularly, it is basically in their part of the world, although it is not under their remit because it is a swiss bank, that is why they had to jump in with $50 billion worth of liquidity for them to access just 24 hours ago. christine lagarde said they are

ready to support banks as needed. they are monitoring them closely. she said also, european banks are in a much better position than other banks, including spm. >> in europe, we have strong supervision. we have strong capital, and we have solid liquidity positions. as the vice president said exposures are not concentrated. and based on the work that has been conducted by the ssm, we don't have similar occurrence as the one that for instance. kathleen: yes, indeed. the vice president she is referring to is the vice president of the ecb, lewis. he, speaking to a group earlier said that yes, some banks may be in trouble, but basically eurozone banks are resilient, 50 basis points, they did not pull back to 25.

the hawks kept pushing. christine lagarde said it is virtually a majority, most people were in favor of this. the question is, how much further will they go? they dropped any language on future hikes, signaling that more hikes would come, but bloomberg economics guesses or forecast that with inflation so high, over 9% in germany, the biggest economy in the euro area, they will do another 50 basis points before they stop. former treasury secretary, larry summers said that it is an a plus to the ecb for focusing on the inflation fight and not giving into the financial turmoil fears. he hopes the fed will also move down a similar path. heidi: we will be watching asian financials again as we get that

reaction after theheidi: rescuee first republic. if this is any indication, you are seeing some of the lenders seeing some bounced back in the early part of the session. just about 15 minutes into the start of cash trading. take a look at that. a big jump when it comes to anz. nab seeing some of the strongest gains. this, a week of pretty flat is trading. analysts at bloomberg seeing that any contagion fears for australia's bank as a result of the woes in the u.s. and europe are largely overblown, they have a pretty comfortable capital position. let's get you to vonnie quinn. vonnie: regulators in china have informed so brokers they can resume contributing bond pricing feeds to data aggregators. according to bloomberg sources. it follows an abrupt suspension of such services for its 21 trillion dollar market. that sent jitters through some corners of the market.

has been no official!has been nr the sudden halt in data feeds. the u.s. has released a sort video that shows russian jed's dumping fuel on a u.s. surveillance drone in international airspace, and apparently clipping the aircraft. the chairman of the joint chiefs of staff says he doesn't know if it was intentional, but he says the video suggests that russia's actions were aggressive. tiktok is awarded awarded talksf potential buyers as the u.s. precious it to divest. -- presses it. former president donald trump threaten to ban the app in 2020. rival social media stocks rallied as the u.k. dealt a new blow to the popular video sharing app. it is banning tiktok from government funds, citing security risks. global news 24 hours a day, on-air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. shery: later in the show, the details between the rare summit of south korea and japan, and

its potential impact on regional security and trade. next, we look at the market fallout from the banking fallout in the u.s. and europe. morningstar's lorraine tannen tells us where the buying opportunities are. this is bloomberg. ♪ go. go green. go wind turbines. go gorgeous reliable grid.

go emerson software. go science people. go breakthrough meds and safe science. go space age welds for super silent cars. go big. or go home. from software that delivers new cures at warp speed, to technology that makes clean energy reliable, emerson innovation helps make the world healthier, safer, smarter and more sustainable. go boldly. emerson. it's easy to get lost in investment research. introducing j.p. morgan personal advisors. hey david! connect with an advisor to create your personalized plan. let's find the right investments for your goals. okay, great. j.p. morgan wealth management.

when you automate sales tax with avalara, iling returns. avalarahhh ahhh >> more likely than not, we will see a recession with the rise in unemployment and some negative

prints in gdp. have a rate hike cycle of this magnitude and how quickly that is going to be the outcome. of the odds of a hard landing gone up? they certainly have. shery: former fed vice chair on the likelihood of a recession. our next guest says the baking a people has not changed her market views and there are still buying opportunities. joining us now is lorraine tan directory -- director of research for morningstar. investors seem to have been spooked even away from asian lenders, despite the fact that the backdrop seems to be very different in the region. so, where are the opportunities? lorraine: hike. we haven't really changed our views, we are still looking at where there is value and, it tends to be still within the cheapest sectors, that includes both the tech and consumers

areas. as you mentioned, there are pockets of opportunities in other places, as well, including the banks have pulled back amidst the insurgency this week. in thing we advise is that we stick to quality. that means the companies that we think have economic [indiscernible]. shery: what do you think will be the biggest obstacles in the coming months? lorraine: for us, i think it is still this question of whether the rate hikes go. obviously, in asia, we are positive -- switched over to brokers. that remains the key driver for us in our equity. we are optimistic, more so on the china mains. that will obviously filter through to some of the asian economies as well. well basically, when we look at some of the names we like, a

mixture of the and growth. young china, recovery from post-covid. and coley is in one of the better positions, chinese real estate developers. we are starting to see some improvements in the real states to -- real estate space in china. heidi: i do feel about tech and some of the ongoing problems that we see both geopolitically, but also some of the opportunities that continue to exist? lorraine: the geopolitics is going to remain unfortunately. it will be a several year issue that will probably continue. we've focused more so on the thomistic picture when it comes to china and companies that are largely focused within the domestic.

our tech names, there are a number of tech names that are still trading below our fair value that we selected. we look across the streets to tsmc, we still like tsmc, but that is a global story in terms of where the end echo goes. -- inventory cycle goes. recovery in those terms. we are talking about the -- what we are seeing with tiktok in the states, unfortunately [indiscernible], just more focused on the most of names. heidi: when it comes to inflation, taking a look at cost pressures and exposure for stocks at the moment, is that still a key theme for the next few months? i know you talk about labor costs in particular, but you're also expecting that to ease.

lorraine: we look at the cost pressures, primarily within the universe that we look at. we have actually have been expecting an easing of those cost pressures. a lot of that will come from energy prices, but staying time but plateauing. they are not -- we are expecting prices to start to come off gradually over the next 2023 and into 22 for. that will help with inflation, definitely. the peak issues that impact it, auto prices, for example. inflation much higher. that is also going to be off. we think at the end of the day, those inflationary pressures have been [indiscernible]. probably a little bit more optimistic and we do expect the fed to reverse course may be towards the end of 2023.

so that is kind of the scenario that we are looking at with timing. 's that are willing to hold some of the growth stories into the next nine to 12 months. shery: lorraine tan, director of industry research for morningstar. you can get a roundup of all the stories you need in today's addition to daybreak. you can go to the dayb . you can customize your settings so you only get the news on the industries and assets that you care about. this is bloomberg. ♪

introducing the new sleep number climate360 smart bed. the 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. what do you see on the horizon? uncertainty? or opportunity. whatever you see, at pgim we can help you rise to the challenges of today, when active investing and disciplined risk management are needed most. drawing on deep expertise across the world's public and private markets in pursuit of long-term returns...

pgim. our investments shape tomorrow today. shery: a quick check of the latest business flash. fedex boosted its profit outlook, adjusted outlook --

earnings will be as much as $15 and $.20 per share. efforts to cut cost are helping its business. the stock is up 18% this year, well ahead of the s&p 500's gains. credit suisse is losing several senior executives in its asia-pacific equities business amid worries of the bank's financial health. the head of the japan equities team is leaving for bnp paribas. the head of equities for the region also headed for the exit. tartar consultants has resigned. tcs has named the head of its banking and financial services business, as ceo designate. he will take over in the next financial year, subject to shareholders approval. shery: a look at how u.s. futures are trading. a little more positive sentiment sweeping to the markets after we

had pressure when it futures opened in the asian session. it is still early in the asian session. we are talking about coming off that jump in the new york session one pictures also rebounded. we have the s&p 500 seeing its best day since january, and the nasdaq 100 rising to a one month high. the expectations are perhaps less fed tightening being fell across markets. we even have the dollar falling for the first time in three sessions. you can take a look at the fx space. the aussie also gaining a little bit of ground against the u.s. dollar, 66 u.s. cents level. we have the aussie doing pretty well as the jobless rate also beat expectations. beat e- [announcer] imagine the jhaving fuller, thicker,

more voluminous hair instantly. all it takes is just one session at hairclub. introducing xtrands. xtrands adds hundreds or even thousands of hair strands to your existing hair at the root. they're personalized to match your own natural hair color and texture, so they'll blend right in for a natural, effortless look. call in the next five minutes and when you buy 500 strands, you get 500 strands free. call right now. (upbeat music)

vonnie: the u.s.'s biggest banks have agreed to deposit $30 billion with first republic bank in an effort to stem the turmoil that sent depositors fleeing. they will each contribute $5 billion of uninsured deposits. while goldman sachs and morgan stanley will chip in $2.5 billion per piece. the ecb has gone ahead with a plan for a half-point rate hike. few click -- few plans on the next move. no language about where borrowing costs are headed. it come days after the market turmoil that rattled credit suisse which raise questions about the health of the wider banking industry. the elevated level of uncertainty reinforces the importance of a data-dependent approach to our policy rate decision. that would be determined by our assessment of the inflation outlook in light of the incoming

economic and financial data. the dynamics of underlying inflation, and the strength of monetary policy transmission. vonnie: ubs and credit suisse are said to be resisting the idea of a merger that i'm in the industry say would boost investor confidence. bloomberg sources say they are reluctant to take on sources. at credit suisse, executives are focused on turning the bank around. jp morgan analysts are saying that they will most likely end at its takeover. china's communist party has unveiled details and restructuring plans facing the finance and technology sectors at the heart of its control. the new committee will absorb an existing state council body and a central technology committee will be established. global news 24 hours a day, on-air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. annabelle: we are just taking a

look at how markets are trading here. 30 minutes into the session for australia, and looking ahead to the open in japan and korea. the focus is very much on that 50 basis point hike from the ecb. larry summers, former treasury head, said that deserves an a plus. he is very clear that the fed should be hiking by 25 basis points next week. we are still seeing those yields moving higher, that aussie three year yield, the more policy sensitive one, climbing 18 basis leads. that retreat a haven currencies. the yen is around 4% off its year to date high. terms of equities, we are very much focused on what you were just discussing around this bailout that came from first republic. he billion dollars in deposits coming from some of the biggest lenders in the u.s.. bdc japanese looking to gain 1% at the open. that is the nikkei futures in singapore just coming online. aussie stocks are climbing 0.3%.

the worst of the turmoil is now behind us. we still did see one of the most talked about stories this morning is the fed discount window soaring to an all-time high. our markets live team reporting a very interesting terminal on the block. he is saying there is an, which is a short-term term liquidity gap solution. it is now actually undoing a huge chunk of the quantity of tightening program. the fed's balance sheet, you can take a look here at this line in white. climbing from a low of 8.3 near the beginning of this month to $8.64 trillion. the banks climbing intern, not sure if that will really help with more marginal banks on the sidelines. shery: market, let's bring in mark. everything that she was telling

us, really not conducive to a risk-free fomc meeting next week. what can we expect, given the tension in the market? mark: i am sure the fed will be very aware of that rise in the requirements that annabelle was talking about. that is a pretty serious matter. it shows there is uncertainty even within the banking community itself, not just from the investors looking at banks, at the banks are taking very defensive measures, themselves. even they are not sure about the structure of the whole system hanging together right now. the fed will be very aware of that. they will probably be reading a bloomberg story about the big hedge fund who have put some traders on hold for the rest of the month because they lost too much money. if one of major hedge fund is doing that, you can bet several other funds and bank traders as well. this is an added reason where we

will have volatile markets going through to march, because a lot of traders don't have risk limits to participate in the usual ebb and flow of currencies and bonds. that will mean the reactions to each headline to each change in data will probably be more jumpy than usual, just because liquidity will be forced into just a few hands. the fed will be looking at all these things. also looking at what the ecb did, the guidance or lack of guidance from the ecb, particularly interesting is they have downplayed the cpi and inflation targets. the fed may well use the opportunity to do something similar, to set the conditions. without saying they're going to go for the pause, they may use inflation guidance as a way to set the groundwork in case they think a pause is warranted after next week's meeting. heidi: so does that mean that we are setting up for more volatility? that it will be meeting by

meeting, there will not be much guidance in terms of the months to come, depending on how we seek is playing out? mark: it certainly means around specific data points. you will have a very interesting days, jobs report, cpi numbers, anything that tells us a big picture story about the u.s.. certainly on those particular days, traders will have to make their own interpretations if they are not getting a narrative from the central banks themselves. in between, people will be watching the stock market and banking sector to try to give them more information. also looking at the credit markets very closely. one things that has occupied a lot of people's time in the last few days is the credit suisse credit derivative curve, which is showing signs of stress, even though the swiss national bank is giving great support to credit suisse, traders in the market are very active in the

credit suisse derivative curve, that might start to apply to other institutions, as well. a lot of moving parts here, and a lot of influence on wet traders are making their decisions. shery: how long will it take until we are past this latest bout of volatility? it is a tough question for you, since the ecb couldn't even give guidance, but i wonder how long until these worries about the system and about contagion can subside, and what factors will you be watching? mark: how banking stocks perform is certainly a very big factor for everybody at the moment. if you look at what happened yesterday, first republic bank, a lot of people got together and supported it, the big banks are giving them the pause, but the stock price still fell in after-hours trading. people will be watching the performance to see some

stability coming back into bank pricing. and backing the global financial crisis in 2008, one of the big factors which changed everything for the positive was when we saw the big bank stocks, if you remember when warren buffett put money into goldman sachs, suddenly there was a turnaround in the major bank lanes, a big rally which led to a wider rally in the market. people will be looking very closely to see when the banking index starts to turn for the positive and stays there for an extended period. that will give people more confidence that things are stabilizing. heidi: we have mark cranfield there. depends large companies are set to announce the annual wage decisions after talks of labor unions. an lawmaker joins us to focus on what it means to close the gender pay gap in japan. this is bloomberg. this is bloomberg. ♪

when you automate sales tax with avalara, you don't have to worry about things like changing tax rates, exemption certificates or filing returns. avalarahhh ahhh ahhh ahhh

heidi: the leaders of south korea and japan have pledged to end a long simmering dispute about damage to trade ties. the president and prime minister met for the first form meant

between the two countries since 2011. let's bring in our japan politics reporter, isabel. what have they achieved so far, and what are the next steps? isabel: i think south korea has certainly taken a huge step already. and president yun announced that he was proposing a plan to resolve a dispute by having south korean companies compensate victims of this forced labor programs, not the labor companies who have been sued. japan welcomed this plan, that is why this summit is taking place, that is why he has been invited. i think the prime minister has gone out of his way to portray a very warm relationship that he is trying to rebuild trust with south korea. he was taking president yun out to eat on the race last night to show how intimate their relationship had become. but they have done so far on the

japanese side to show willingness to reconcile, they have already announced they will lift export restrictions on three high-tech materials, which are used in the manufacture of chipped. that will be an important gesture in terms of improving relations. they have also said they are going to reinstate the agreement on the sharing of military information, which was in danger during the height of the dispute. also, one thing announced last night was that they are going to start an economic security dialogue. that implies they will work together to secure supply chains in the region. shery: the agreement reached in 2015 between the two fell apart after a change in south korea's administration. is there a risk of that this time? isabel: i think that risk never entirely goes away. south korean opinion polls shows this is not very popular with

south koreans, although it is widely supported in japan, so we have to wait and see. what has changed since then is the drip drip of north korea's increasing prowess with missiles and nuclear weapons. i think both governments perhaps have more realizations that they need to work together if there is in fact, a crisis on the korean peninsula. shery: that was isabel reynolds. japan's largest companies are expected to report soon on the results of their spring pay negotiations with unions, as well. prime minister has been calling for higher wages to help inflation. he says, this is the key plank of his new capitalism plan to strengthen the economy. a major japanese labor organization has a ready announced a wage rise averaging around 3% more than 160,000 workers in manufacturing services and logistics. we spoke to a member of the new capitalism panel earlier. >> coding is the smaller

companies have the fear of raising their prices, because they thought they would lose sales. now, this, pass on the prices. once that goes, and obviously the wage prices will follow with that, as well. up until now, they felt they had a cap. obviously, the smaller companies are under more pressure compared to the large corporations to keep wages low. i feel like we are in a different era in japan. heidi: the wage negotiations are also putting gender inequality back into focus. the gender pay gap pains -- remains the highest among richer nations. here to discuss this is rui matsukawa. great to have you with us. first, give us an overview on what the situation is, how far away we are from potentially getting closer to those in the wage gap, and how you hope these negotiations might prioritize this?

rui: thank you. first of all, i am really happy to see the first step of the south korean normalization taking place last night. after the 12 years of deadlock. responding to your question, now that japan and japanese women and men's pay gap is 22%, whereas the u.k. it is 14. we still have a lot of rates to go. the reason why there is a gender pay gap is because of the seniority system which is actually your wages is responding to how many years you are working for the company. we have to take off the time for the babies, so, the women are not really fitted for this seniority system, not fitted for the women to be promoted. that is one thing.

the other is, we still have a number of women in the decision-making physician -- positions. the government is now introducing the asking to make the companies obliged to information on sick and annual reports, or their homepages, the pay gap of the men and women in most of their places. the other thing is, the doj is actively promoting to oblige the parental leave for men. i was very much active on the mayors parental leave promotion. it has been increased. still a long way to go, but i think that japan is at a turning point for making these fundamental programs to tackle.

heidi: what is the easiest or most effective way, policy-wise, to make sure this model of new capitalism actually encompasses dozing that pay gap and getting broader wages to raise higher? there has been lots of criticism that even as more women have returned to the workforce, and played out in that way, this is really a big missing piece of the puzzle. rui: no one solution to change the situation. i and is, even though it takes time or maybe a more politically difficult, we have to change the seniority system. means you work with one company for a long time and as you get old, you get more pay. after change this to a more merit-based system, so even though women take maternity leave or a few years for their kids, she can return to the

position with the same amount or even higher payment. otherwise, it is just so difficult. not only for women, it is much better for younger people and revitalizing the economy. i think the prime minister is very much keen about this program and they're trying to change it. heidi: how much support is there from society and japanese culture itself to kind of get away from the seniority system? there is so much that the government can do without the public having its back. rui: i think people do realize the program, and i really feel the tide of the change among the people, too. for 30 years, we have been 30

years in japanese economy. japanese people are very diligent, working hard. why we haven't been able to develop or achieve the economy growth, i think the system is something is wrong. i think people do realize that. shery: we are hearing from the finance minister as we are speaking to you, he is saying that prices are weighing on household, that they need to respond to inflation with additional measures. how much have women, in particular, been hurt by rising prices? you mentioned earlier how their left and when it comes to closing the wage gap, and given that women have these part-time jobs more than men do, as opposed to full-time jobs to get the benefits, how much have they been hurt? rui: i think the overall wage raises will affect positively

for women who a large number of the women actually work in the part-time jobs, i think they will have a positive effect. also, if the other sectors have the wage increase, that will also affect the households wages. then we have a another positive effect. i really hope that wage rates will push it start the reincarnation of the economy. we need to circulate more, which has a positive, rather than a down way. heidi: how important his broader

representation and? we still see that as quite a rarity. most recently, toyota unveiling the new management structure, women, conspicuously absent. how much of that is also not helping when it comes to lifting more senior wages for women? rui: i am sorry, i couldn't hear the first part could you repeat it again? heidi: talking about better representation in leadership roles for women in corporate positions and how much that would potentially help lift the wage gap. rui: i think it is huge. if the women have more positions in the senior, company, they will be paid more, the average of the women's payment will be higher. still, the number of the percentage of the position of

the women in the companies is still 7.7%. it is just too low. we should have at least 30 or 40% of women in the positions. if that will be achieved, there will be closure of the pay gap. and to do so, i think the company needs to realize the importance of the women being in a position of decision-making. heidi: lots of criticism over the new leadership and not having any women represented in the top positions there. we have to leave it there, but rui matsukawa joining us there, we really appreciate your time. be sure to tune in to bloomberg radio to hear more from the days big newsmakers. get in-depth analysis. much more ahead.

this is bloomberg. ♪ online personal styling? what's that? that's stitch fix. ...and how can you help me? we do the shopping for you. you tell us your size, budget and style. wait, is it a subscription? no. style for me? for me? for me? always. we'll pick the clothes. you enjoy the great fit. stitch fix.

annabelle: these are the stocks to watch. japan is set to lift export curbs on key semiconductor materials to south korea. still watching some of these bank shares as well as the overall banking turmoil

continuing to unfold. we are already seeing some positive reaction when it comes to a bit of relief from first republic getting $30 billion of fresh deposits in the latest bank rescue. we are also watching the gaming giant that is cutting its operating profit by 13% to $838 million. shery: and coming up, why a credit suisse executive believes the worst still lies a head developed economies. plus, views on the recent banking turmoil and credit markets. the market opens in seoul and tokyo are next. this is bloomberg. ♪

get help reaching your goals with j.p. morgan wealth plan, a new tool in the chase mobile® app. use it to set and track your goals, big and small... and see how changes you make today... could help put them within reach. from your first big move to retiring poolside and the other goals along the way wealth plan can help get you there. j.p. morgan wealth management.

♪

shery: this is daybreak asia. we are counting down to him asia's major market opens after wall street's rebound with the s&p 500 seen it best day since january the nasdaq 100 at a one month high. this after we saw regional lender first republic receive $30 billion of deposits from other lenders. the private and public sector working together to avert a contagion. haidi: central banks trying to work their way out of this also. we saw very decisive action from the ecb with 50 basis points. what does that mean going into next week for the fed? belle, i wonder whether equities will get much more of a boost given that these are guardrails. doesn't lend itself to more of a rally? annabelle: big question there. we have the open of japan, south korea, and the start of trading for treasuries. we are watching that two year yield closely.

we have seen six straight daily changes of at least 20 basis points. it does tell you the amount of volatility we are seeing in the market. coming online fairly flat. the question, will we see that 25 basis point hike from the fed next week after we saw the ecb raising by 50 basis points overnight? former treasury secretary larry summers says stan lagarde deserves na+ for separating -- says christine lagarde deserves an a+ for separating what we see in the system. the japanese yen continuing its strengthening against the greenback this morning. that fed discount window borrowing hitting an all-time high. a lot of banks turning to that short-term funding position. -- funding provision. comments from the japanese finance minister. he sees risk averse moves to the markets due to credit suisse.

also stability, that is what he says is the state of play for the japanese financial system. you can see the topicx index -- topix index climbing 2%. let's see how the financial sector is performing in korea. the focus this morning very much on that bailout that came with u.s. banks agreeing to give $30 billion of deposits to first republic. that was some thing that helped the move in the intraday session. on wall street the kospi gaining 1%. still first republic, you can see how it performed in after-hours trading. that was with the bank saying its cast position was roughly -- cash position was roughly $40 billion as of march 15. us trillion won -- australia won out, financials gaining the asx 200.

brent crude fairly flat this morning. we have seen it trading around the 15 month low after holding a three-day slide. question marks over the path for central banks and the outlook for recession given ecb could be hiking europe into a contraction. shery: let's bring in our next guest because he says the worst is still ahead for those developed economies. with us is the cohead of asia-pacific strategy at credit suisse. it's great to have you with us. you do not expect this soft-ish landing that central banks are trying to maneuver? >> no. i think it will be very hard, to avoid a recession particularly in the u.s.. the economy is running too hot in the u.s.. the labor market is still running above where it should be. wage pressures are still high. the fed will have to cool down the economy one way or the other. if this banking issue does not goal the economy, the fed will

have to. -- cool the economy, the fed will have to. shery: how do you invest in this environment when there is so much uncertainty? do you go hunting for valuations and bargains given the uncertainty? dan: one approach you can take is regional. the u.s. appears to us the most problematic part of the investment in equities. you can go to emerging markets, to asia, where you don't have these banking sector problems, where the inflation problem is not nearly as serious as in the u.s. haidi: when you take a look at emerging markets, and if you are still looking at china, compelling stories there, even though we have seen the recovery rally at least in its first leg kind of stall for china? dan: china is still cheap, even after the big move we had since

it reopened. it is trading at an unusually large discount to big market global peers. there is still a better macroeconomic story of china than anywhere else as far as major markets is concerned. there is i think still quite a significant amount of room for china to outperform big global peers. haidi: when you look at banking stocks, and a lot of people made that trade over the past week with variable results, but asia, particularly places like australia where the fundamental situation is quite different for lenders, do you see value in buying any of the dips we have seen so far? dan: i think in general, asian banks look interesting right now. they are very cheap. they don't have in general the problems that u.s. and european

banks have with interest rate risk in their bond books. they don't have the same liquidity risks. australia wouldn't be a place we would be favoring within the asia-pacific region. i think chinese banks, indonesian banks, philippine banks, indian banks would be more interesting places. in general i think asian banks are a place that people should be looking at right now. shery: how do you factor in the currency impact when we have seen dollar strength given haven moves, but at the same time we were bracing for a weaker dollar given where the fed was supposed to be going? dan: we have seen some unusual price action in the dollar since this whole banking issue arose. typically when you have a risk off situation, the dollar tends

to do well. there tends to be a flight to safety to u.s. treasuries. at this point the u.s. rates argument has trumped the concerns over risk off. the dollar has weakened, which is a bit unusual. we think the market is probably right now pricing in a too optimistic outlook for fed rates, and therefore this trade may end fairly soon. haidi: i have to ask about the fed. the ecb surprised a lot of market participants with how aggressive it continues to be, doing 50. what is the path ahead when it comes to the fed? on the one hand there is the suggestion that with the backstop they can continue with the fight against inflation as aggressively as they had, or do you think there will be more reason for a pause for a catch-up now?

dan: next week's meeting is a tough call, but i think that the impact of the svb situation isn't going to have a great impact on terminal rates, or how long the fed keeps rates high. we think inflation will dictate that the fed has to keep hiking and that it will keep rates high until next year that we don't have cuts into next year. the fed doesn't have a choice. haidi: dan, great to have you with us. cohead of asia-pacific strategy at credit suisse. a look at some of the movers. we continue to watch the asian financials, catching some of that relief rally. annabelle: they are. it is one of the better performing sectors. under 10 minutes into the session for japan and korea. looking at the bigger names in japan, this index has been

affected by the bank of japan decided to keep its yield curve control settings in place, which extended the selloff, as well as japanese banks being big holders of u.s. treasuries, more sensitive to what is going on, but lacking this bailout which is come for first republic bank, $30 billion of deposits from some of the biggest names on wall street. let's look at korea with lenders and focus. -- in focus. first republic declining in the after-hours session, given it said its cash position was roughly $34 billion as of march 15. it is not pursuing any dividend and it wants to bring down its borrowings. we are seeing names gaining at the start of trade in korea. for a look at what sectors are performing better than others, broadly green so far into the session. i.t. stocks gaining this morning, up around .5% on the broader index.

some strategists saying when economic growth becomes scarce you need to look at which industries can outperform. it still says tech is the one to be watching. shery: let's get to vonnie quinn with first word headlines. vonnie: ricky leaders in china informed some brokers -- regulators in china informed some brokers they can continue fees to data aggregators. the move blend cited investors and sent jitters through some corners of the markets. there has been no official explanation for the sudden hold in data fees. the leaders of south korea and japan have pledged readiness to end a dispute that had hurt security and trade ties. their leaders shook hands at a formal summit since 2011. the leaders agreed to counter threats from the likes of north korea. tiktok is reportedly in talks with potential buyers as the u.s. presses its chinese parent

to divest. the new york post says it is explore impossible deals it had considered when former president trump threatened to ban the app in 2020. the u.k. dealt the new blow to the popular video sharing app, banning tiktok from government funds, citing security risks. china's coming is party unveiled a restructuring plan -- communist party unveiled a restructuring plan. a central technology committee will be established to strengthen the party's oversight of that industry's development. global news powered by more than 2700 journalists and analysts. shery: the ecb goes with a 50 point hike. u.s. banks pledge a $30 billion rescue for first republic, but

escalated borrowing from a fed back stock may show continuing funding strains. we take a deep dive into the banking breakdown next. this is bloomberg. ♪ it's easy to get lost in investment research. introducing j.p. morgan personal advisors. hey david! connect with an advisor to create your personalized plan. let's find the right investments for your goals. okay, great. j.p. morgan wealth management.

when you automate sales tax with avalara, you don't have to worry about things like changing tax rates or filing returns. avalarahhh ahhh every day, millions of things need to get to where they're going. and at chevron, we're working to help reduce the carbon intensity of the fuels that keep things moving. today, we're producing renewable diesel that can be used in existing diesel tanks. and we're committed to increasing our renewable fuels production. because as we work toward a lower carbon future, it's only human to keep moving forward.

>> first republic down about 30%. negative for western alliance. >> this is the tip of the iceberg. >> for the latest on the banking industry turmoil keep it tuned to bloomberg tv and radio.

shery: we are watching china as broker fees have resumed on some china bond information platforms. we saw bond codes going dark earlier in the week, disrupting markets. that abrupt suspension earlier in the week disrupted trading in the $21 trillion market, with no official explanation for the sudden halt in data fees, there have been -- feeds, there have been concerns about regulatory shifts. sources telling us regulators in china informed some brokers they can contribute to data feeds as of friday morning. those feeds have resumed we are getting confirmation. haidi: u.s. financial authorities say an agreement to deposit $30 billion with first republic bank demonstrates the resilience of the nation's financial system. let's bring in bloomberg's su keenan and adam haigh from

sydney. in terms of this rescue plan, what do we know about how it came together? su: bloomberg sources tell us treasury secretary janet yellen and j.p. morgan's jamie dimon played key roles talking earlier in the week and meeting hours before the plan was announced. the 11 banks have pledged a total of $30 billion of fresh cash in the form of deposits that sources say are committed for at least 120 days. j.p. morgan chase, bank of america, citi, wells fargo each contributing $5 billion. goldman and morgan stanley kicking in $2.5 billion each and additional banks kicking in $1 billion each. u.s. financial 30's applauded this group effort. -- financial authorities applauded this group effort. yellen proposed the idea of a group effort on tuesday in a call with officials, including jay powell and the fdic.

yellen later pitched the idea to dimon and both agreed this would be a great way to demonstrate competence in the banking system. yellen and dimon reached out to other banks. shares down in extended trading. at one point they were down 29%, which indicate that perhaps all concerns have not been resolved. first republic announced it is suspending its dividend and said it will focus on reducing its lending. shery: what about silicon valley bank? su: they are still looking for a buyer a week after the fdic first took over. what we know according to various sources is that a combination of infighting between regulators and other issues marrred initial efforts -- marred initial efforts to auction off the bank. when the fdic takes over a bank, as it did last friday, it really

usually tries to buy in that -- tries to find a buyer in that weekend. it did not happen. talks over the weekend were frenzied. big banks were cut out of the process and there was not enough time for many to do due diligence. there is another bidding process taking place. the bids are due late friday. while there is a possibility somebody buys the bank outright, we do know various names in the mix are interested in various aspects of the bank. it has a $74 billion loan book. with bids due at the end of day friday, possible we could have some news next week. haidi: when it comes to the latest with credit suisse and ubs, j.p. morgan saying they thought the most likely scenario is for credit suisse to be bought by a rival, most likely

ubs. what are we hearing about this as a potential option of last resort? i do wonder how investors would feel given they have not been impressed by the last two turnarounds for credit suisse. adam: it is clearly an option out there. it is not new. it has been out for a long time during the struggles credit suisse has been under in recent months and years. your point to what investors really want, part of what they want they have at least got over the last 24 hours. they know the liquidity is there from the swiss national bank. we are waiting to see if they actually tap that liquidity avenue. they have not done yet. more broadly what investors and credit suisse really want is the bank to get more competitive in the areas that it is good at. one of those is wealth management. it has historically been very strong. it is a key part of the

franchise, especially in asia, and the way it goes about delivering portfolios for high net worth ultrarich people across the region. it still needs to build up some of the momentum it must in areas like that. -- it lost in areas like that. whether any kind of tie up would have to happen with arrival like ubs, clearly the bank wants to exist on its own and is pushing back strongly against any forced tie up with its main rival in switzerland. now at least with that liquidity backstop, investors are feeling there is more there if they need it. shery: adam and su with the latest on the banking sector. those lenders rushing to the fed's discount window lending facility in a sign of escalating funding strains following svb's failure. kathleen hays is here with the latest. this is a sign of pressure in

the sector. kathleen: absolutely. this is the traditional thing that banks to when they are short on liquidity and need more money fast. this is the emergency lending window that has been around forever at the fed, the discount window. you let the fed know that you are short of money and it's a short-term lending facility to help them stay afloat, assuming this is some temporary stress they are under. you can see $153 billion in the week to march 15, the most that has ever been borrowed at the discount window. yes, there is inflation since other banking crises, but it is a large amount, suggesting there are banks that are in trouble or worried about getting in trouble. they want 20 of cash on hand. $12 billion from the new loan

facility that the fed set up in the wake of what happened to sv b. that occurred in four days, sunday to wednesday. we hear of big banks like j.p. morgan putting this money out for republic bank. we had a story a couple days ago that b of a picked up $15 billion in deposits as svb has gone down. maybe that is another reason why janet yellen was able to broker this kind of deal. our reporting is that other big banks had this outflow as well. blackrock investment institute saying they still expect rate hikes on wednesday next week, maybe 25 basis points. we will see. the ecb has set a roadmap for them, haven't they? haidi: that definitely is

something that has created more conversation. is there a sense that the ecb went for 50 because they were worried about a message that would have been sent if they did less? kathleen: indeed. christine lagarde certainly implied that in her remarks after they did the 50 basis point hike to 3.0%. no one would have been surprised had they sat back and say we will do 25 because there is financial turmoil. instead christine lagarde and her team are pushing back past that. they are watching what is going on with the banks. they are ready to step in if they have to. christine lagarde says european banks, in her remit, don't have the same kind of problems like svb. >> in europe we have strong supervision. we have strong capital and we have solid liquidity positions. and as the vice president said, exposures are not concentrated

and based on the work that has been conducted by the ssm, we don't have a similar occurrence as the one that occurred in california, for instance. kathleen: important for christine lagarde to make that clear. she is referring to the vice president of the ecb, saying there are some banks that are vulnerable, however under their region he thinks they are resilient. in terms of the rate hike and what may happen next, it is interesting that the ecb in its policy statement took out language about future rate hikes. past several meetings they have been indicating the path was forward towards more rate hikes. bloomberg economics thinks even if the markets are pricing out, there is 50 basis points more of rate hikes to come because inflation is still so high.

the latest report out of germany, the biggest economy in the euro area, was 9.3% year-over-year, up from 9.2%. that is why christine lagarde signaled we are still fighting inflation. shery: our global economics and policy editor kathleen hays. get a roundup of all the stories you need to know in today's edition of daybreak. bloomberg subscribers, go to dayb . this is bloomberg. ♪

shery: ck hutchinson profit rises in 2022. major deals helped the conglomerate weather headwinds, including china's covid lockdowns. the committee reported net income of $4.67 billion for the 12 months through december. the technology behind chat gpt

will be integrated into more microsoft products. ai powered assistants will be added to its business apps, including outlook and excel. microsoft's ceo told us more about the company's vision for ai. >> today's generation of ai is all autopilot. in fact it is a black box that we just sort of use, that is dictating in fact how our attention is focused. going forward, the thing that is most exciting about this generation of ai is we move from autopilot to copilot. haidi: take a look at futures in europe after that late rally that we saw in the previous session. this is a picture across the stoc -- the stoxx 1941 there wa0

billion worth of treasury outstanding. in 1945 there is about double t he pre-war gdp. if you scale that to 2019, covid expenditures on the skill of world war ii, that is $40 trillion. who is going to buy it? >> so what we are dealing with is kind of nothing. >> in that context. but it is difficult problem, who is going to buy the equivalent of $40 trillion today in debt? haidi: let's take a look at some

eco data trade numbers from singapore for heavy memory. non-oil domestic exports coming through at a contraction of 15.6%, marginally better than expectations of a fall of 15.8%. it does signify significant improvement to january, where we saw a decline of 25%. seasonally adjusted, that number for nonoil thomistic exports month on month coming at a contraction of 8%, much worth than expectations of a fall of 0.5%. extrinsic exports year on year for february we are seeing of all of 26.5%. that essentially matches the decline we saw in january. january's number was the biggest klein since february 2013. -- decline since february 2013. we are seeing decade low drops in trading numbers from what we saw was a very high base in the previous year's numbers.

electronics continuing to remain week. we saw strength when it comes to pharmaceuticals. that tends to be a sensitive sector and quite volatile. petrochemicals and oil continuing to be the weakness when it comes to trade in this area. we continue to watch singapore as very much that leading indicator of how we perceive trade strength across broader asia. shery: we are getting comments from the banxico central bank governor talking about her comments when it comes to the inflation picture still remaining pretty elevated. you can find those comments on tv . she is saying the financial system in mexico is well capitalized and mexican banks remain solvent with enough liquidity. the bank is ruling out the u.s. of people impacting mexico.

-- upheaval impacting mexico. interesting to see central bank governors, the philippine central bank governors saying the credit suisse effect on philippines are not likely to be significant. this as well coming on top of comments from the japanese finance minister about the financial stability in japan. those contagion fears very high at the moment. let's get to vonnie quinn with first word headlines. vonnie: the u.s.'s biggest banks agreed to deposit $30 billion in an effort to stem the turmoil that sent depositors fleeing. jp morgan, bank of america, citigroup and wells fargo each contributing $5 billion of uninsured deposits. goldman sachs and morgan stanley will chip in $2.5 billion apiece. of the will also deposit smaller amounts. -- other banks will also deposit smaller amounts.

bloomberg sources say ubs is reluctant to take on the risks related to its smaller rival and that credit suisse executives are focusing on turning the bank around. jp morgan analysts say the crisis at credit suisse will most likely end in a takeover. the ecb has gone ahead with a plan for a half-point rate hike. officials lifted the rate to 3% is expected, though there was no language in the statement about where borrowing costs are headed. it comes days after the market turmoil that rattled credit suisse, which raised questions about the health of the wider banking industry. >> the elevated level of uncertainty reinforces the importance of a data-dependent approach to our policy rate decision. which will be determined by our assessment of the inflation outlook in light of the incoming economic and financial data, the dynamics of underlying inflation, and the strength of monetary policy transmission.

vonnie: global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i'm vonnie quinn. this is bloomberg. shery: bloomberg intelligence believes the uncertainty surrounding credit suisse is putting the ecb in a challenging position with financial stability taking priority over inflation. joining us is a european senior strategist. with svb's collapse rekindling fears about credit suisse, where does the overall european market now stand versus the u.s. and asia? tim: it's interesting. with all of this having started in the u.s. with svb, europe is actually down more than the states. we are now down about 5% since the seventh or eighth of the month. the ftse interesting is worst of

all, down 7%. in the bounceback we had the last couple days, it has been less notable in europe relative to the last two days in the u.s. this leaves us at this point at still a pretty low multiple of 12 times forward earnings. you think about several multiple points below the u.s.. a lot of this has to do with the importance of the banking sector within europe, say in comparison to the u.s. haidi: banks the epicenter of all the current volatility. do we see the efforts made by regulators stemming the crisis in confidence, or do you look at it as guardrails, a band-aid at this point? tim: i guess in my mind it may not simply be a crisis of confidence.

yes, that is what precipitated all this, but i think it is more basic banking cycle issues when it comes to profitability, not liquidity. if this crisis is going to call central banks to take the foot off the brake in terms of raising rates, and it might moderate from the standpoint of the rising rate expectations, that all of a sudden has an impact on the future of net interest income that has been benefiting and expected to benefit more from higher rates. if there is concern about where the economy goes from here, more so than in the past, that creates some concern about loan loss provisions. you bring all of this together, i think the issues with angst selling off at this point -- banks selling off at this point is the view that the underlying earnings cycle is less robust

than expected, as opposed to the concern about liquidity. you look at a risk measure, credit suisse is crazy, acting as a hedge across europe. cds's across other european banks are in calm territory. i think it is different than a crisis in confidence. haidi: how does this compare to 2008 or other points of stress in the past? tim: clearly there is reasonable and understandable comparisons to the global financial crisis and how banks started to topple. it seems to us as a group to be more limited. not to dismiss at all what happened with a long-term credit, or the u.s. crisis, or even in 2019, the takeover in

china. those were limited issues without significant repercussions through the economy in the same way the global financial crisis did. that is because regulators jumped in quickly. they calmed the markets. you were talking about what's going on with central banks around the globe making statements. that is important in getting ahead of the curve and not leaving the public wondering about our banking systems. haidi: tim, really great to have you with us, particularly at a time like this. let's get to belle, who is taking a look at this relief rally play out across asia. annabelle: when you talk about those historical comparisons, treasuries volatilities at the most extreme levels we have seen since the financial crisis of 2008. focusing much on the moves on the shorter end of the curve,

the more rate sensitive to year yield. coming off five straight sessions of moves of more than 25 basis points. you can only expect on any given day a percentage of 0.03. to see that four times in a row, we are talking about a once in a 50 million euro event here. that does put it into perspective how rare it is to see these changes coming through into the market. the uncertainty around the banking system has really been playing out in borrowings for the fed discount window. that is essentially seen here. you can see that spike in loans, $153 billion in the week ending march 15. this is a facility that lenders only turn to as a measure of last resort. there is a stigma attached. it tells you that banks are looking to that as a backstop

solution. we are still seeing moves coming into the front end of the curve. the aussie to year yield up. -- two year yield up. the three year yield. dollar wise very flat today. you will see how we are trading in the asian session. broadly markets are looking higher across the region. that is coming down to a few different sectors. the tech stocks rising. health care in turn, financials likewise in the green. another event could lead to more volatility, the quarterly triple -- [indiscernible] shery: as if we needed that. we have triple witching to contend with. as for today's session we are seeing that upside. sanrio is surging in double digits. this is a consumer goods stock. they are doing pretty well.

they actually upgraded their operating income forecast. they also beat estimates and it came to the results for the for your -- for the full year. an upside in that stock right now. ahead we will discuss how central banks may need to consider a joint effort in the easing of the banking sector crisis. the muzinich cohead of public markets joins us next. this is bloomberg. ♪ isors. hey david! connect with an advisor to create your personalized plan. let's find the right investments for your goals. okay, great. j.p. morgan wealth management. sales tax automatically. avalarahhhhhh what if tax rates change? ahhhhhh filing sales tax returns? ahhhhhh business license guidance? ahhhhhh -cross-border sales? -ahhhhhh -item classification? -ahhhhhh does it connect with acc...? ahhhhhh ahhhhhh ahhhhhh

haidi: we do have some new a rate calls when it comes to the rba. westpac is lowering the peak rate to 3.85% versus the prior 4.1%. we continue to watch for how we see the rba reacting that we have seen a rebound in hiring. unemployment down to 3.5%. we still see mounting cost-of-living pressures, the mortgage pressures as well as the broader concerns of, if not a recession, a rocky landing. we have been watching for the potential when it comes to contagion for these banks. certainly australian lenders are well capitalized. seems to be a different story

here. bill evans coming through with a revision as to where he sees the rba peak rate. the cooling inflation numbers we are starting to see puts that policy pause front and center. shery: you mentioned the banking turmoil in europe as well. ubs and credit suisse set to be resisting a merger that would boost investor confidence. bloomberg sources say ubs is reluctant to take on the risks related to its small arrival and credit suisse execs are focused on turning the bank around. jp morgan says the crisis at credit suisse will most likely end in a takeover. haidi: our next guest says the central banks still need to take measures to back the likes of credit suisse. with us is tatjana greil-castro, cohead of public markets at investment firm muzinich and co.

you say central banks have exercised a lot of these tools that are available to them. does this mean it frees them up to continue their fight against inflation? does doing the latter intentionally not really fix that we will see more financial system volatility and instability? tatjana: yeah, i mean i'm going back to what the ecb said yesterday. i agree with the analysis that they have put in place where they say there is two things we need to consider. yes, there is this volatility in the market and lack of confidence around the banking system. that needs to be addressed. we have the tools to do so. that is what they highlighted. at the same time it we also still have inflation at hand.

and their analysis is suggesting inflation will be quite sticky. it is important to keep inflation expectation anchored. there are two things. one is what everyone is currently focused on. clearly that is the burning issue at the moment, but at the same time they cannot complete give up on the others also. so the other thing is there is somewhat of an location that if central banks -- of an implication that if central banks have the tools, that this lack of confidence is going to subside relatively quickly. i think you would have to see that as relatively quickly. when you look at the quality of the banks and of the balance sheet and the capital ratio and

liquidity they have broadly, especially european banks, then all this turmoil we currently see is not warranted. shery: how high are you looking at credit quality at the moment if you are focusing on those more safe sectors? tatjana: on the credit quality across the corporate world, or the banking world? oh, on the corporate world. of course we need a strong banking system and a strong financial system. the turmoil in the market at the moment is not just affecting the banks, it is also affecting the capital markets. there is much less activity. there is no new issuance. if the underlying interest rates are as volatile as they are at the moment, you can't bring any

data to market because it is difficult to price. this is not just affecting the funding source of banks, this is also affecting the capital markets. there has to be a solution found quickly. when it comes to the need of funding immediately, companies usually have at least a few months, usually a few years actually to deal with the funding requirements. there is nothing imminent that needs doing. but over time, we need to functioning capital markets. -- we need functioning capital markets. haidi: how are you funding around the dislocations you are seeing right now? tatjana: with this level of volatility, to make decisions on a fundamental basis becomes even harder because there is so much technical volatility and there is some sort of -- you know,

very difficult to anticipate what the response will be. we continue to be constructive where we say central banks have the tools and can respond very quickly. and yes, the market is sort of asking for more. we see pretty much every half day another measure being put in place. so we do think over the coming days that things will come down. what that means is we generally hold onto our positions, not to panic and have fire sales, to hold on and if there is any fundamental change, and at the moment we see little that makes us think we need to have fundamental changes. shery: tatjana greil-castro, good to have you with us. plenty more to come. this is bloomberg.

♪ go. go scientist. go software. go cure. go production. go faster and safer. emerson automation software helps breakthrough medicines get to market at warp speed. go human go. go boldly. emerson. what does it mean to be ever better? its your customers getting what they ordered when they expect it. discover how ryder ecommerce makes your customer's experience ever better.

haidi: as credit suisse looks to shore up its finances it may need to move quickly to assure its customers in asia that their deposits are safe. our bloomberg columnist who joins us from hong kong is following this story.

we have the philippines central bank governor talking about how the philippine banks have no reported exposure to credit suisse. everyone trying to bring some stability and calm into their markets. we have a sense of credit suisse's asian operations at this point. shuli: not directly, but asia is quite a big component of credit suisse's business around the world. in the five years between 2016 and 2020, the asian region contributed close to half its invested asset growth. it is a lot of money we are talking about. it is understandable that the wealthy asians and asian governments are quite nervous, trying to clarify that they don't have much exposure to credit suisse. haidi: even before this there were lots of issues when it came to its private banking business.

there was certainly quite a lot of concern from ultrahigh net worth chinese clients. shuli: yes, absolutely. for swiss banks it was very prestigious and asians loved to bank with them. in the last year, after russia invaded ukraine, people found out that switzerland is not as neutral as they thought. switzerland was going in lockstep with the european union in sanctioning vladimir putin's friends. that is a concern for the chinese clients in addition to the possibility -- to whether their deposits are safe or not. shery: when you look at this banking turmoil unfolding, first in the u.s., now credit suisse in europe, what do you think will be the long-term repercussions for asia? shuli: at least looking from the chinese government's viewpoint, at this point they would rather

not bank than risk a banking crisis. china is one of the world's most indebted nations. way worse than the u.s. they feel they would rather just do a market economy than have a developed banking system. we see that in recent regulations. they are trying to basically reduce transactions even in the bond market. asian governments will have to become more cautious because of that. haidi: a reminder of our exclusive coverage coming up of the credit suisse asian investment conference. we will be speaking with the bank's top executives as well as the bank's key speakers. wework is nearing a deal for a major financial restructuring in which key investor softbank group will convert $1 billion of debt into equity. sources tell bloomberg that the co-working company is close to

securing capital commitments of more than $1 billion. the ceo has been working to cut costs and push the firm toward profitability. sources say meta platforms started carrying out job cuts, beginning with 1500 employees in recruiting and human resources. we are told ceo mark zuckerberg warned employees that the climate of layoffs and restructuring could last many years. shery: some of the stocks to watch when markets open in hong kong and china, asian financial stocks in focus given what is happening with first republic bank's rescue package. we are watching long for hong kong and china guess. we are seeing those earnings for those companies today. the china market open is next. this is bloomberg. ♪