haidi: daybreak australia. annabelle: counting down to asia's major market open. sheri: s&p 500 closes above 4000 after risk on session led by a rally in banks. the vix sees its biggest to the plunge since may. haidi: wall street leaders and u.s. officials are discussing an intervention at public bank that could include government backing. sheri: investors have doubts on the hike path creep into the market. we were higher with the s&p 500 climbing and extending its gains above the key 200 day moving average. u.s. futures not doing much at the moment but this after returns to the markets with that coordinated action to resume the

banking turmoil. the vix was plunging falling towards the 20 level. we continue to watch the banking sector. every stock on the index climbing and first in the new york session climbing. we are talking about the best day ever for first republic really rebounding from that record low. j.p. morgan mapping out a new plan to a the lender that would convert the profits to capital. shares have fallen 90% this month until monday. we have bloomberg scoop where wall street leaders on u.s. officials are discussing an intervention that first republic, exploring the possibility of government backing to encourage a deal that would shore up the lender. this is according to people close to the matter and speaking to bloomberg, the group has floated a variety of measures to make the company more attractive.

let's bring in bloomberg sally bakewell who has the details on what we could see in terms of trying to help this bank. we have seen the biggest lenders coming to the rescue, that doesn't seem to happen enough, so what else could be done? >> that didn't seem to relay concerns that this bank might be the fourth for them of this regional banking crisis. the real aim of this game today would be to bring courage and smooth the path towards a sale because then they avoid another bank failure, which would inflate this fear that this contagion would be spreading around the regional banks. haidi: is there a sense that the depths of this crisis is not fully well-known yet, particularly as we had the report they are exploring the potential to explore over target -- over targets that was such a market moving story? sally: the sticking point for the banks is the potential that

they have these unrealized losses on their balance sheets. a lot of the regional lenders plowed money into debt securities like treasuries and mortgage backed securities when interest rates were low. now because of the aggressive interest rate hikes, they have seen the value of those assets eroded, and that has been compounded by a withdrawal of deposits. how extensive that is on regional banks more broadly is the question. and also will dictate the level to which this continues. but the u.s. government and regulators, this is what they are trying to stem and that's what they did with silicon valley bank and signature bank. the guaranteed uninsured deposits for the lenders. that up backstops and might dissuade people from withdrawing their money. they hinted they could extend that to other smaller lenders, which would be an effort to

contain the crisis from spreading further. sheri: bloomberg has learned we could see all deposits insured. what sort of factors need to be aligned for officials to come out with a drastic plan? sally: all options are on the table and they probably want to see what happens with first republic because, while the shares plummet yesterday, they have rebound. today on comments by yellen, they are willing to intervene to help smaller lenders, so things aren't looking as dire as last week. it was disappointing that the 11 banks who came together to inject 30 billion to replenish the deposits that had been withdrawn from first republic did not have the desired effect, but now they are coming up with a slightly more creative plan, including government intervention. that is on the table and it's

not necessarily guaranteed to happen. this is the kind of thing of thinking to keep things contains. haidi: sally with the latest. all of this anxiety and volatility is creating a lot of problems when it comes to the upset for global banks when it comes to risky debt. we are starting to see the likes of barclays, jp morgan link on these deals as the bank's freezes the debt market. we are seeing this market starting to find its footing, but the market for news -- new finance deals is looking shaky. we see banks across europe pausing on future deals and demand is looking very tepid. barclays shelving a pair of loans for indio's enterprises and russell investment. j.p. morgan chase yanking that deal. so it does feel like, according to alliancebernstein, the primary loan market feels like a scooby-doo ghost town, recently

deserted and a bit haunted. sheri: look at the risk spreading. it's not surprising as we have been speaking to saudi, we do continue to hear from officials. they might intervene and protect bank depositors as smaller lenders are threatened. take a listen to what secretary yellen had to say. janet: our intervention is necessary to protect the broader u.s. banking system. and similar actions could be warranted if smaller institutions suffered deposit runs that posed the risk of contagion. shery: she wants to preserve regional and community banks. she did not address the issue of protecting all depositors, but that something the markets are watching closely because that would shore up confidence. the s&p 500 above the 4000 level as the surge in bank stocks fuel

the wider rebound. this sends wall street's volatility rage tumbling. let's get more from emily. really the vix taking a tumble. emily: surprising to see this vix solo because anecdotally, this seems like one of the most highly anticipated and highly uncertain fed meetings. to see the stock market and higher and bank stocks finish higher in the fix plunging over 10% is a little surprising. we do know the zero date expiration option has made the telltale signs of what the vix can tell you about market fear, market uncertainty a little unshaded and the growth of money market funds. we have investors piling into cash so they are hedging. you don't see that through the movement of the vic's, but we have the fed meeting tomorrow. some strategists are expecting a

25 basis point hike. goldman sachs a pause and nomura says a cut. i was reading another note from a nomura derivative strategist who says he does not think the fed knows what they will do. they will watch the market until the last second before making the meeting. to see stocks finish higher is a little surprising. haidi: we are still watching it when it comes to 81. major losses. the effect when it comes to funding conditions was like several rate hikes in one day. emily: we have seen so much great volatility. of course bond volatility in that a tv one space after the plunge on monday. we saw a lot of a t-1 bonds from european banks rallying after u.k. and european regulators assured these investors that typically the 81 bond investors

would get their money before equity shareholders. this coming after. that did not happen in the credit suisse deal, so there was uncertainty. but for right now the market calming from the big plunge we saw on monday. still a ton of volatility in the bond market and the rates market ahead of that fed meeting. haidi: cross asset reporter emily. speaking of the fed beginning the meeting with the outcome and usually unclear. trying to balance their inflation with the sudden onset of the banking crisis. kathleen hays is here. russ are in a pause and rate hike, so what are we expecting? catherine: we are expecting the fed to wrap up the second day of a two day meeting in jay powell to explain what they have done, communication will be important in the decision, no matter if they decide to hold off, watch the landscape, see the steps that have taken that will calm

the market allow those things that happen in equity in bonds that emily just outlined. or if they decide to do the hike. that's the other side. markets, it looks like credit suisse, ubs deal seemed to do a lot to make people think maybe they can do this. 20 basis point rate hike means they are almost leaning for sure for the 25, but not quite, but that's where people are leaning now. the dot plot, how will they do the dot plot? we are uncertain about if this financial thinking turmoil is over or not, but they have to put dots up. there was one pandemic where they did not put out dots. that's the step that makes people think the fed is worried. it won't tell us where it things it's rate hikes are going. terminal rate is seeing 25 to 50 basis points higher. four and three quarters is the funds rate that would take it up to just over five and a quarter.

consensus. has been 5.1, but just think what we talked about, maybe it will be five put four or five point five. maybe they will go to six. look at this chart. financial conditions are tightening. do you have to raise rates if financial conditions are going to do the work for you? if this does settle down, if depositors keep money in their bank, maybe this will ease. for now, it signals caution is warranted. bill dudley, former new york fed president said yesterday in an op-ed that he thought the fed should pause. he is saying what the ecb said when they did a 50 basis point rate hike with inflation high, you can do both at once. you can try to maintain stability in the financial markets. you can use whatever tools you need and use your monetary, you're inflation fighting tools to bring down inflation.

as the market seem calmer, investors and economists are on board with the idea that it will be a dovish hike with a lot of explaining from jay powell, but it seems to be the sense of what is most likely right now. but we will talk tomorrow about whether it was or it wasn't. shery: kathleen hays, we sure will as we continue to see the latest developments in the banking sector. we are getting the response from first republic, it has been pressured, down 90% in the after hours trading session extending declines after we saw the best day ever in the regular new york session. coming out with a reply through twitter saying the events of the past two weeks have been unprecedented and they want to provide an update. our commitment to client service is unchanged and we remain well-positioned to continue to manage deposit activity. in a follow-up tweet they say every day is a process

transactions, open accounts and fund loans. you can find the comments on twitter, but you can see after hours trading is under pressure. how are we setting up for the asian session in this environment? annabelle: the real sentiment driver for where we go in markets comes down to the health of regional banks. kathleen talked about communication from jay powell. what he says about financial sector stability will be the most closely tracked comments. in markets, the expectation is we will get the 25 basis point hike. we see yields whip sword but move higher for the short end of the curve. the aussie three and kiwi two-year. japanese yen and focus because we did see the greenback strengthening the most against the yen. bank of america saying yield differentials will come and focus. also, the yen is losing its safe haven status go, which we did see above that 2000 level.

we do have that sense of calm coming into the equities market, we have new zealand online, aussie futures pointing to gains. keeping an eye on the bitcoin space, above the 28,000 level, but the question is, is this a sense of calming or is it the calm before the storm? haidi: annabelle with that set up as we get into the day before the fed decision trading in asia. let's get you the first word headlines. japanese prime minister has made his first visit to kyiv since russia's invasion. he offered strong support to ukraine and invited volodymyr zelenskyy to join the summit in may. he made the trip after stopping in new delhi to pressure indian prime minister modi to join other leaders in shunning russia over its invasion. it is set to host the g7 summit in hiroshima. the biden administration is set to unveil tight restrictions on

chinese operations of chipmakers with federal funding. the commerce department will outline the new curves as it disburses funds under the $50 billion chips & zach. they include a 100,000 dollars spending cap on investments and advance capacity in china and restrictions on expanding output. the u.s. is reviewing whether the impact of silicon valley's banks collapse may have been greater then publicly disclosed. sources say the biden administration is pulling together data on chinese companies that may have held accounts with u.s. banks. the u.s. wants to know if there is a risk of broader contagion in china and russia decided to keep its oil production at a reduced level through june. last month that moscow pledged to reduce its crude output by 500,000 barrels per day in response to western energy sections. russia's oil output data has been classified since last year but novak said that output level

will be achieved within days. those were your first word headlines. shery: more on the banking sector troubles with harvard committee school professor carmen reinhart. here why she believes lenders may be in worse shape now than during the 2008 global financial crisis. we will talk trading opportunities with wealth manager as investors debate the fed's policy decision. 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.

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shery: we are saying pressure in the after our session but this is after gains in the regular session, the s&p 500 topping the 4000 level, extending its advance above the key 200 moving day average. this as lead, for the past two weeks. remember, things really went badly for the banking sector around march 7. so if you look back, you have seen the s&p 500 has recovered all of its losses and has added a little more. the banking sector still hammered, as you can see. a lot of that flow has gone into the short end of the curve. as u.s. markets move higher, our next guest says she's looking for opportunities to sell in the stock markets and dear risk.

she joins us now from san francisco. what concerns you about where markets are right now? >> the original financial crisis among the banks is important to us. we are pleased that the treasury secretary is getting in front of it and other banks in the whole system is focused, but we have concerns that could spread. even if it doesn't, it could lead to recession. we are keeping our portfolios broadly diversified, and if we see stocks continue to tick up, we might shave a little off of stocks and move them into other parts of the portfolio, particularly into bonds and into alternatives to get diversification. shery: we've heard expectations from analysts that the fed goes ahead and pauses tomorrow or even just lessons the tightening pace, that perhaps we could see a short-term rally, how are you

positioned? sandi: right now we are broadly diversified. we have half of our portfolio in stocks. the stocks are underweight towards u.s. equities. those in u.s. equities are tilted towards quality stocks. so companies with a lot of resilience that should experience last -- less volatility if we see more market volatility going forward. a lot of health-care names in consumer discretionary in the portfolio. also allocated towards bonds about a quarter of the portfolios and liquid alternatives. the bright spots we see in the portfolio are really and oversee equities -- overseas equities investments. we have tailwinds that should help out a lot. vibration multiples, high dividend yields in the softening of the u.s. dollar hopes those

investments quite a bit. that's where we are excited when we look over the long term and encouraging our clients who are corporate executives, family business owners and entrepreneurs stayed focused. haidi: take a look at this chart which suggests the divergence we see when it comes to volatility. we could see a move ahead for the s&p led by tech. that divergence does suggest we could see -- if you take a look at fixed versus realized versatility, that is the guidance we are getting. when it comes to tech we saw the big move up in the nasdaq 100 1.5% higher. are you pacing these assumptions on a slower rate environment from the fed? do you think there's opportunities or value in big tech at the moment? sandi: in terms of tech, it's part of the portfolio and a lot of our quality names are in the

tech space, figure companies like apple and microsoft, but we are looking in the totality of the markets and relying on our managers to make moves within particular sectors and within particular names. but as we look out ahead, as i mentioned, because we see valuations as being high in the u.s., any significant tick forward would cause us to want to scale back on our equity portfolios. if we saw volatility in another direction and saw unexpected declines in the portfolio, we would go in the opposite direction and pour more into equities. we are looking to be nimble and continuing to be very well diversified with our eyes on the long term in the next year or two. there's just a lot of risks and we want to make sure we are managing those for our clients. haidi: always great to chat with

you. the chief client officer. more to come on daybreak australia. this is bloomberg. ♪

shery: here's a quick check of the latest business flash headlines. nvidia claims to have developed a new tool for chip design and has enlisted tsmc to use it. the u.s. company said its new software library will dramatically accelerate the development process for chips. it claims that the job of creating the stencils used add chip design materials can be accomplished overnight rather than over two weeks. hsbc, the new owner of silicon valley bank's is set to hold its first meetings with the collapsed lenders regional clients this week. according to bloomberg sources the bank will meet with technology startups and venture

capital firms in the u.k. in europe. hsbc took over for a dollar two cents earlier this month. and has agreed to inject close to around $2.4 billion into the unit. nike says sales rose more than expected as a trimmed the gut in its inventory that forced the company to sell products at a discount. the sportswear brent said global revenue was up 13% in the fourth quarter, beating analysts expectations. the weakness and china persisted with revenues from the region falling almost 8%. up next, the harvard kennedy school's carmen reinhart joins us to weigh in on t these days, our households depend on the internet more and more. families grow, houses get smarter, and our demands on the internet increase. that's why we just boosted speeds for over 20 million xfinity customers, on us. so you get more of the speed you need

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shery: you're watching daybreak australia.

the imf has reached a staff level agreement for $15.6 billion loan for ukraine. it is aimed at helping promote ukraine's long-term economic recovery and pave the way for its entry into the european union. the loan is still subject to approval by the imf executive board which is expected to tackle the matter in the coming weeks. the ecb is asking lenders about indirect exposure to credit suisse after finding their balance sheets show few or no holdings of the jr. debt. the watchdog is said to be widening its approach to ask banks if they face risks from their clients losing money. the takeover rendered about $17 billion of a t one debt with us. treasury secretary janet yellen says the government could repeat the drastic actions it took recently to protect bank depositors. yellen says they are committed to -- authorities took extraordinary

steps to bolster confidence including a new backstop for lenders and new rules at its emergency lending facility. >> our intervention was necessary to protect the broader u.s. banking system. and similar actions could be warranted if smaller institutions suffer deposit runs that pose the risk of contagion. shery: the swiss government is temporarily suspending forms of bonus pay for credit suisse employees. authorities say they are invoking the swiss banking act which allows it to impose pay related measures if a systemically bank is granted state aid. those are your first word headlines. haidi: bloomberg has learned ubs wants to cherry pick the top dealmakers from credit suisse instead of supporting a plan to spin off the first boston brand

as an independent firm. we get more from our finance editor. we knew that there were a lot of question marks. do we have more details now? >> what we know is this is not going to happen and even before three or four days ago this deal was under pressure. we have learned the approach being taken by people at ubs that are now building the new bank with credit suisse on board is they will be able to take those senior bankers and some jr. ones across the firm. ones that are particularly in areas where they need to add to their own resources. some of the areas they are looking at, advisory for example. some of these areas that need to bolt on. you're not going to get --

michael klein is not going to get his moment in the sun to set up this venture. it looks like that is not happening. it will allow ubs to bring on important members of the senior team from the ubs ranks from around the world that will enhance what they are already doing across the board. shery: we saw the news that credit suisse bonuses are getting deferred. who does that benefit? >> it is one of the many things that has come out of this tie up is who gets hit and where the surprise is. we have seen it with people, some of the bondholders who have been decimated and some of the staff for credit suisse who have got the locked in credit bonuses. looks like they will not be getting those for a significant amount of time. it benefits part of the management team trying to make

this partnership happen. a lot of these details were ironed out over a short space of time. the last couple of days since the announcement late sunday they have been trying to iron out things like this. it looks like for many of credit suisse staffers that had these long-term bonus payments they might be waiting longer. haidi: bloomberg finance editor adam haigh with the latest. all the developments over the past week have left the fed in a difficult position. continue to fight against inflation or stem systemic risks in u.s. banks. jay powell and the team weighing the very dilemma. joining us from massachusetts is harvard entity school professor of international business and kathleen hays. always wonderful to have you. i know you have spoken so much

on what happens with the fed depends on the extent of the banking crisis. with the information and developments we know now, we know things are changing our tower. how systemic is this problem and how does that impact what the decision is at this meeting and the next meeting? >> i don't think we know how systemic the problem is. this clearly clocks as a banking crisis by any definition. you have had the runs. you have had the takeover by another institution. you have had the support from the fed. we are having a banking crisis. whether this becomes a systemic crisis or not remains to be seen. we had a savings and loan crisis in the early 1980's. that did not ultimately become a systemic crisis. it was also a period in which

rates rose significantly and institutions were prepared for it. >> will the fed raise the key rate tomorrow by 25 basis points? should they raise it? >> my expectation is they will raise it 25 basis points. i think it is too soon to expect the fed will throw in the towel on their inflation fighting. i think also not a complete pause may not only be counterproductive from the vantage point of the medium-term inflation objectives but also can send a signal they know something worse that the markets are yet to learn. my baseline is looking for a 25 basis point increase but also language saying they will

continue to monitor the situation. but not a race -- but not you race future increase in the funds rate either. let's not forget the labor market is still going quite strong and it is hard to fight inflation with a strong labor market and with negative real interest rates. >> some are saying financial conditions are tightening a lot. there is going to be lots of confidence. less bank lending because of the imbalance portfolios are going to affect a lot of lenders. how worried are you about inflation? is it imperative the fed keep raising rates to bring down inflation? >> to the first part of your question, i think a hallmark of

almost any banking crisis whether they are systemic or more contained is you see risk aversion set in on lending and the prospects of a credit crunch are very real. in that environment which credit crunch tilting things toward weaker economic conditions, more likelihood of a recession, shed the fed already pause -- should the fed already pause. i think we have to go back to the 1970's. the decade of inflation was in part due to the fed getting cold feet too early on in the process of inflation fighting. you asked me what i expect and

hope for and my hope is that they will not pause let alone reverse the recent rate hikes. shery: even before all of the challenges in the banking sector, we had seen the aggressive tightening from central banks in advanced economies having an impact on highly indebted more vulnerable economies. you have spoken a lot about those risks. what happens to those emerging economies? >> this is unambiguously bad news. capital flows which -- capital flows to emerging markets had already slowed significantly. late last year they began to stabilize somewhat this year. . . this is just a new brand of bad news. higher volatility. more risk aversion is a recipe

for emerging-market capital outflows. it is also the case we are little by little seeing the share of countries in that distress climb particularly among the lower income countries. shery: and we have seen the outsized role china has played in some of these restructuring talks. does that make and the environment more complicated to a resolution? -- does that make the environment more complicated to get to a resolution? >> if you look at the initiatives taken by the g20 to deal with debt problems, we have not seen from the time the so-called common framework was introduced a signal that a

single debt restructure -- a single debt restructuring as yet. the process is very polarized. i think the tensions between the u.s. and china which spans so many fronts are also not helping. but i would not be looking for very rapid resolution to the debt problems that are mounting. i think this impasse will continue for some time. >> what is the lesson learned here? you pointed out from 1946 to 1980 there were no banking crises. the s&l crisis happened. it was not so bad. two big banking crises since the crisis in this recent period. what is the lesson learned? is it fed policy?

did they do something wrong? do we have to take away from this something that will prevent more crises in the future? >> one could always point the finger at failures in regulatory oversight. but let us not lose sight of the big picture. the big picture has been since the early 1980's u.s. interest rates have been declining steadily. since the global financial crisis that decline was even deeper. real interest rates, at post -- x post interest rates have been a negative territory for 15 years. negative real interest rates are an end but asian to -- are an invitation to take on more debt, more leverage and induce risk-taking. in this environment -- has done

a lot to contribute to the resurfacing of financial crises with the frequency we have seen in the last 15 years. haidi: we hear that government officials, treasury officials are looking at ways in which potentially all deposits could be insured if this crisis worsens. i'm curious to get your views on the ventilatory side. how that has been handled and do these extreme steps that have been studied, how does that fit in with the idea of moral hazard? >> in the 19th century and this is not a history lesson but in the 19th century it is important we have banking panics which is what we have had this past few days, past week. we had thinking panics pretty -- banking panics pretty frequently

and the way of interest -- dealing with that was the introduction of deposit insurance. the recipe for dealing with banking panics has been to guarantee. blanket guarantees of course raise the issue for moral hazard. they raise the issue for moral hazard for depositors who don't have the incentive to monitor what financial institutions they keep their deposits in are doing. it easier for banks -- it makes it easier for banks that given their deposit base is guaranteed to take on more risks. if we are moving in that direction, then we have to have a very stepped up supervisory and regulatory framework that weighs in against the inclination to take on more risk

because a moral hazard problem is as we are seeing time and again is very real. let me conclude by saying given what has already happened, even without an explicit guarantee, we already are very fair along -- far along to having already a broad umbrella of implicit guarantee. making it formal perhaps is not the biggest step as one might think. shery: we love our history lessons if they are coming from you. you may have shown us really this time is not that different but thank you so much. carmen reinhart, harvard kennedy school professor of international financial system and our very own kathleen hays. we have a big conversation coming up thursday. the city ceo joins james rubenstein for the first comments -- joins david

rubenstein. that start at 11:00 a.m. thursday sydney time. still ahead, china and russia take aim at the security partnership as leaders meet in moscow. concerns original instability next. this is bloomberg. ♪ when you automate sales tax with avalara, you don't have to worry about things like changing tax rates or filing returns. avalarahhh ahhh

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>> the biden administration is set to unveil tight restrictions on the chinese operations of chipmakers that get u.s. federal funding. spring in jody should -- let's bring in political news director jodi schneider. trying to restrict any contact with china when it comes to providing advanced tech. what else is left? >> this all falls under the $50 billion chips and science act the biden administration is claiming as one of its big victories in terms of helping companies. the big victories at has had in the two years of the administration. what it does is provide grants and other assistance to chipmakers to expand in the u.s.

and they are looking at according to people familiar, some restrictions on what would happen to these firms if they try to develop technology in china. if they are getting federal funds of any kind under the chips act, they would be restricted to limited kinds of investments in china. this comes on the heels of other efforts the u.s. has made including banding together with japan and australia in blockading advanced some conductor manufacturers from sending equipment to china. what the u.s. is trying to do is limit the ability of china to compete in this area and have a steady supply of chips made in the u.s. haidi: it is against this backdrop china's new ambassador to japan arrives in the country.

>> there is a number of issues. china's ambassador to japan is going there for the first time taking all us there if you will and there is this issue but there is also other big national security and geopolitical issues at this very moment. we have a xi jinping in russia meeting with russian president putin and we have the japanese president, japanese prime minister meeting with the ukrainian leader. at the opposite ends of the spectrum on the ukraine russia conflict. the chinese ambassador to japan is hoping to calm the waters on these issues. haidi: political news director jodi schneider. staying with geopolitics, china and russia have expressed serious concern about the orchids agreement which will see

australia acquire nuclear powered submarines in deal with the u.s. and u.k. what are we hearing from moscow and beijing? >> it was a wide ranging arrangement. the two countries raising concerns about the risks and the consequences. it was last week we got those details austria will require -- will acquire three rigid new class nuclear submarines any the 20 30's before going on to develop a new class of submarines under the 20 40's. china and russia saying they urge orchids members to fulfill their obligations of nonproliferation of weapons of mass destruction and their means of delivery. that is where the nuclear summer in cashel comes in because the us trillions -- the australian subs will not be armed with nuclear weapons. during the announcement and you can see it taking place, china was only mentioned once but it is clear who the submarines are aimed at containing or which country.

a professor says it has put xi jinping on the defensive. shery: how is the australian public reacting to the plan to buy nuclear powered submarines? >> the reaction domestically can best be described as mixed. the has been a poll released list week -- released this week. 26% think the country needs nuclear submarines. a further 26% thanks the country needs them not at this price tag. very much split along various lines. there is bipartisan support for this. it needs to be because it is so expensive and happens over decades. there is a sense on the back bench even within the government. we heard from government mp josh wilson telling parliament there are considerable risks and

uncertainty and this deal always takes longer and costs more than you think it is going to. shery: paul allen joining us from sydney. we have more head on daybreak. 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.

shery: we're watching the banking sector after hours especially first republic. bloomberg has learned the bank is being discussed by wall street and u.s. officials for an intervention exploring the possibility of government banking -- government backing. the lender came out saying they will -- they remain well positioned to manage deposits. all of this given we are heading toward the fomc decision. we will have more insights on the fed's upcoming policy decision. defiance etf's tells us which stocks may benefit from a less aggressive action. we are talking to brookings institution about the banking turmoil. daybreak: asia is next. this is bloomberg. ♪

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