shery: you're watching daybreak: asia coming to live from new york, sydney and hong kong. haidi: we are coming down to the market opens in tokyo and seoul. our bloomberg scoop. wall street and u.s. officials discussing a attentional intervention of first republic bank that could include government backing. asian stocks set for gains after a risk on u.s. session led by a bank rally. wall street sphere gauge is seeing its biggest two day plunge since may. the fed's debt limit is still in focus. annabelle: we have the open of the asx 200 peered at the start of the session we are pointing to the upside. what is driving that? we did see the fear gauge, the volatility index coming off its biggest two day slump since may. that is helping to restore a sense of calm.

more support coming through for the u.s. banking sector. the big headline is a first republic rescue deal may require on u.s. hacking. sally bakewell is here. she will get through all the details in moment but it is helping to restore some normality into the financial sector. anz bank moving to the upside. stocks in new zealand in the green. the big question is what does this mean for the fed decision later today? the expectation in markets is we are going to see a 25 paces point hike. quite an about turn. a few days ago we were at odds are 50-50 shared yields rising led by the front end of the curve. the 10 year yield still a little bit higher in new zealand. watching what is happening with the japanese yen. we have seen that currency coming back into focus.

bank of america says buy any dips in the dollar-yen. bitcoin stabilizing. holding on to the $28,000 level. it does seem crypto investors also taking pause with their tried fight counterparts -- there traditional finance counterparts. shery: the fomc decision coming up. fomc -- u.s. futures muted. this after the s&p 500 topped the 4000 level extending the game above the 200 day moving average. we saw a return to calm. fixed futures dropping to the 21 level. the biggest two day plunge since may. you mentioned help -- mentioned how the expectations of the 25 basis point hike. the two year yield jumped around the 4.2%.

we have seen extreme volatility in the treasury space especially in short-term bonds. you can see the downside in crude prices. this only after jumping the most since early february. we had a risk on session in new york. after hours a little bit different. first republic is sinking down more than 14%. we mentioned the possibility of government backing has been discussed. some of the ideas being floated to make the company more attractive. you can see first republic has lost more than 90% or so in the past month. until monday we saw a little bit -- i mean 30% pair that was the best day ever. after hours we are back again down. sally bakewell has the details of this bloomberg scoop of first republic. what is being discussed? >> we understand the u.s. government and wall street leaders are looking at some kind

of intervention for first republic. that intervention may involve government backing. that government backing could involve lifting some of the assets, debt securities that have seen their value plummet off the first republic balance sheet should that is something that is being deemed potentially necessary to encourage a buyout for the bank. government once a buyer for the bank because they don't want to have a fourth bank collapse would of course spread the fear that this regional banking crisis is not at all contained and it could spread to other banks. haidi: the continued fears of a systemic crisis is obviously encouraging. these reports treasury officials are looking at complete insurance for u.s. deposits. what are we hearing in terms of the response to that and how it works into tighter regulation we might see? >> u.s. officials are

considering this but i think of what we are hearing as this would be a dramatic measure. they are not expecting to have to unleash just yet. they probably want to wait to see how some things resolve. we have the sale of silicon valley bank ongoing this week with hopefully some bidders emerging tomorrow, wednesday or friday. we also solve the signature bank found a buyer for some of its assets. first republic although falling now did see a rebound today. we are also picking up some of these banks that had seen a lot of outflows are starting to see some of these deposit withdrawals stabilize and perhaps even reverse. i think u.s. officials and regulators before unveiling dramatic measures, they do want to see if things stabilize. the fact they are considering this shows they are prepared to do whatever it takes to contain

the crisis. shery: we heard from secretary yellen talking about how they want to preserve regional and community banks. what is the likelihood of seeing more contagion? >> the issue with these regional banks is like a disease they have been inflicted with. they all plowed money into debt investments that when interest rates were low but the react -- the value has eroded now interest rates have gone higher and that has been compounded by the fact deposits have been withdrawn. how widespread that is among regional lenders and how problematic it is on the balance sheets is upside down balance sheet issue will be the defining factor in how contained or extensive this crisis is. the government mulling measures like temporarily ensuring or guaranteeing all deposits is a way to tell people, not all of whom will be reading the news and grasping what these measures are but they're deposits are

safe and that is what we need to happen in order for the regional banking situation to resolve. haidi: sally bakewell with the latest on u.s. banks. let's turn to credit suisse and ubs. bloomberg has learned ubs wants to cherry pick the top dealmakers from credit suisse instead of supporting the plant's been off the first boston brand as an independent firm should let's get more from adam haigh in sydney. new that this deal was probably dead in the water. what is the plan going forward to spin some of that value? >> this is one of the key pillars of credit suisse's rebound strategy. it does come -- although it has been muted even before a week ago we thought this may be under pressure. this might not be happening but now we are clear it will not be happening. it will come as a surprise to some people. what it does do is it allows ubs to essentially pick the bankers in the global franchise from credit suisse they really want to add to their teams.

in areas like advisory in the u.s., those prominent industries like tech where they are looking to bolster some of the ranks it allows them to bring in those bankers selectively and not have to bring in wholesale staff they would need to trim or cut further down the line. it does give them a huge amount of flexibility. that looks like what is going to happen. the ubs management are still part of planning this thing, how it is going to happen. they have not had long to work out how this is going to work. that is what we know is they are going to go in, pick a select top-tier bankers and bring them on board with their ubs teams. haidi: we are hearing credit suisse -- shery: we are hearing credit suisse bonuses could get deferred. who benefits from this? >> there will be many people at credit suisse that will be very disappointed to know they will not get access to those

longer-term deferred payments which is a typical strategy a lot of banks have to lock in people over a longer period. you don't get access to your compensation performance until further down the line. to your question of who benefits, it allows the people buying this bank to understand a bit more about the kinds of people they want to keep. what they want to do when they shuffle people around and make redundancies in some areas of the bank. for a lot of staff at credit suisse that are already sitting on an equity price that is down significantly from when these were awarded to them last year, it is clearly a sign of a tough future for them in terms of understanding what their compensation is going to be. shery: adam haigh joining us from sydney. the fed has a lot of work to do now. it has become its two day meeting with the outcome still

unclear. will it be financial stability? will it be inflation or price stability? our policymakers trying to balance the fight. kathleen hays is here. . there are risks in both a fed pause and a rate hike so what are we expecting? >> it does seem -- it is worse than anxiety. the banking fears, the crisis seems to have eased a bit does seem to have shifted what people are expecting. in terms of markets and what they are pricing in, it is not the usual over the last year rate hike. maybe they will do 75. they are pretty sure now the fed is going to hike or the door is open to them. they are not sure how aggressive it is going to be. the latest read from our bloomberg terminal is they are pricing in a 20 basis point hike. not everybody is convinced they are going to do the 25.

that is the start. the terminal rate is another question. from the last survey it was at 5.1 on the consensus. the funds rate is that cointreau and three quarters. you have about -- is at four and three quarters. either they will do 25 and stop or 225's and stop. this is very important. what does the fed do next? do they may be think we should not do the hike right now? look how much financial conditions have tightened. when financial conditions tightening is about -- it is like getting a certain interest rate hike. at least signal that they are doing 25, they don't know how much they're going to do because of those conditions. a big argument a lot of people are expressing in different ways including our bloomberg opinion columnist bill dudley saying in another op-ed today the fed that

can fight inflation and promote price stability and get the banking system back on a solid track. this is the signal the european central bank said as well. that is the kind of thing people are looking for. we spoke to carmen reinhart. she says her baseline is they will do the 25. and they will signal they are not being more aggressive or pausing because they want the markets to be clear about what they are doing. they need to fight inflation and that is where they are heading. the communication, the policy statement and jay powell's pressure are going to be some of the biggest forces, some of the biggest potential market movers we get in the next 24 hours. haidi: i care of nevertheless time a fed decision was this uncertain and also this exciting. let's get you to vonnie quinn with the first word headlines. vonnie: the ecb is asking

lenders about indirect exposure to credit suisse after finding their balance sheets show few or no holdings of the swiss firm's jr. debt pair the watchdog is said to be widening as approach to ask banks if they face risks from their clients a losing money. the takeover of credit suisse rendered $17 billion worth of at1 that worthless. the biden administration is set to unveil restrictions on the chinese operations of chipmakers that get federal funding paired sources told bloomberg the commerce department while line new curbs as it disburses funds under the chips and sciences act. they include a 100,000 dollars spending cap on investments and advance capacity in china and restricts on the -- restrictions on expanding output. the japanese trimesters made his first visit to kyiv. he invited president zelenskyy to join the group of seven summit 10. he made the trip after stopping in new delhi to pressure indian prime minister modi to join

other leaders in shunning russia . japan is set to host the g7 summit in hiroshima. this is bloomberg. shery: still ahead on daybreak asia, the biden administration is set to further tighten restrictions on the chinese operations of chipmakers. we will assess the impact later. up next defines etf's tells us how tech names could benefit from a less aggressive fed as we look ahead to tomorrow's rate decision. this is bloomberg. ♪ ate sales tax with avalara, you don't have to worry about things like changing tax rates or filing returns. avalarahhh ahhh was also the first time you heard of a town named dinosaur, colorado. we just got an order from dinosaur, colorado. start an easy to build, powerful website for free

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shery: we have now seen tech extending those gains in today's new york session after the best weekly gain already since november. this is not what you might think we expect given banking turmoil but you can see the line on a blue going up as opposed to the other sect or's we have been following. big technology holding support but it is breaking out of its near term downtrend paired our next guest says the fed is likely to be less aggressive in the near term and that could bode well for tech names. we discuss with the ceo and cio of defiance etf's.

we continue to see the stream of negative news coming from the sector especially when it comes to layoffs but what do you like about this sector? >> great to see you. we have seen 109,000 people laid off in the tech space. that spells doom and gloom on the surface. what is interesting about tech is there is this tailwind for tech during covid. we know that ended and last year was the pullback of tech. so much of that was a fed that became more restrictive. tech companies are growth companies. and do what they set out to do. with all that has happened in the last couple weeks whether it is layoffs amtech companies becoming more efficient, the banking crisis and how that impact deflation, a fed that is likely to consider what is going

on and pause a little bit faster than we thought, that sets tech up well. most of the big tech names and small-cap, mid-caps are well off of their highs. shery: a lot of the capital coming from the banking sector, the chart showed you how big of a hit banks got. we sold the rebound in the new york session. that is not holding up in the after hours session. first republic plunging should would you get into the banking sector again at this point? >> i would selectively do it. i think the bigger banks are likely to benefit from what is going on with the regional banks. or is this inevitable psychological impact when you see a couple of regional banks struggling. investors panic and pull their funds out and either put them elsewhere or the put them in the bigger banks that they think are the stalwarts and don't have any

balance issues and feel more protected. i think when we come back to all of this and this resolved to see the government, european and u.s. with the backstop, regional banks still covers the 250,000. regional banks don't have the mess of accounts. consumers are safe. they need to see the confidence we instilled. yes i would buy it because i think the confidence will be reinstalled. a lot of these regional banks and even like a schwab, something that got hit, they are well diversified. there will likely do well in coming years when they get past this. haidi:haidi: what are your expectations in terms of whether this forces the fed to reconsider its trajectory? that will obviously have huge implications for the broader market direction. >> i think it is a great question and there has been so much debate about this. a few weeks ago we talked about will it be 50 or 25 and now it

is 25 or nothing and perhaps even cuts sooner than we expected. there is what i think the fed could do and what the fed should do. i think the fed should consider all of this information and kind of look to pause after the next rate hike. what the fed will do is likely 25 basis points and give us some guidance. in the near term there is uncertainty however we are not finished with the inflation fight if we get too much strength in the latter rhetoric that is poised to set the market. if the fed is 25 and let's wait and see, then i think the market continues to hang on here and we don't worry so much about a hard crash landing. haidi: in the most recent selloff have you found a good value proposition fit in with i guess your investing themes prior to everything going on with the banking system?

like energy, you have talked about tech and ai already. >> yeah, absolutely. these are the days when you have to pray on the market and find the stocks you would like to hold for the long term. it is always the most uncomfortable time to invest in the market. every time we see these massive pullbacks it is so uncomfortable to come on and talk publicly and say get into the market and buy equities especially when fixed income is trading at 4% and has almost no risk. the truth is this is where wealth generation occurs. every time we have these two to 3% pullbacks i look to pick up names like quantum related names , ai, machine learning names that are going to change the way we live, work, play. we heard the nvidia conference. there is so much excitement in that space and such a potential growth rate. and also travel and leisure, i think just about everything got

beat up. if you thing about where money was going before this it was going into services. we probably will start seeing continued inflation and price appreciation. the ability to pass on prices to consumers. i still like picking up those crews, airline, hotels, the ai related names, technology when they are on sale. but i hold them for long periods of time. in the short term i am uncertain about whether they will perform the on 2024. shery: when you are talking about travel, we continue to watch the country closely because it seems relatively insulated from the global banking turmoil whether it is in the u.s. or europe. are there any regions you would think are safer bets in international markets? >> yes and i think china would be one of them. there is a good amount of exposure to u.s. banks from what we now.

i do think if you think about taking that aside and assuming this issue is going to get resolved, if you look at china and the chinese economy and the amount of spending that is starting to have been between china and europe, i think you get a tailwind on the chinese consumer. i think particularly airlines when you get the full reopen and you see the full use of hotels and airlines picking up your going to go from the 80% of pre-covert level to closer to blodgett percent of pre-covid level. that amounts to trillions of dollars. i do like that global travel trade as well. haidi: always great to have you with us. ceo and cio at defiance etf's. much more to come onto to break asia. this is bloomberg. ♪

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shery: here's a quick check of the latest headlines. hsbc, the new owner of silicon valley bank's u.k. arm is set to hold its first meetings with the regional clients this week. the bank will meet with technology startups and venture capital firms in the u.k. and europe. hs bc took over svb u.k. for a dollar and two cents. nike says sales rose more than expected as they trimmed the glut of the inventory. the sportswear brand says global revenues were up 14% in the third quarter. this is bloomberg. hi, i'm katie, i've lost 110 pounds on golo in just over a year. i was a diet soda addict, and i needed to have a diet soda every morning as my eye-opener. with the release, the cravings are gone. golo worked for me when i thought nothing would work for me. the first few weeks were really astonishing

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haidi: you're watching daybreak:

asia. we are seeing the extreme volatility in the bond market continue taking a look at the short end of the curve. the trigger yield and of the u.s. rising ahead of expectations. no shifting in favor of the fed hiking by 25 basis points in its meeting. the german true your guild spiking the most since 2008 with expectations we are going to see further tightening from the ecb. those moves spilling over into the and to benny's. the aussie three year yield, the aussie trigger yield moving in tandem. we do have a little bit of a little bit of the sense of calm being restored. investors liking the sense those financial risks are being a little bit contained. more backstopping for first republic bank. that is putting a focus on the fed's fight against inflation. it is being interpreted as a positive. we have the aussie session 30

minutes underway. we are seeing at gaining 1%. u.s. futures are fairly steady. we see japan pointing to gains at the open. 30 minutes out from the start of training -- start of trading for tokyo and seoul. shery: what are you seeing in currencies? i know you are watching the kiwi dollar in particular. annabelle: it is interesting when you take a look at the moves we have seen in the fx space you can see the kiwi dollar is the second week performer against the greenback. only being beaten by the norwegian krone. those are the more commodity linked growth sensitive currencies. it is against the backdrop of the u.s. dollar starting to deteriorate. a lot of investors focusing on this as being a prime choice to hedge against any potential u.s. strength that could come back in. it performs better in times of economic strength and weakness. some investors including j.p.

morgan saying there could be further downside ahead. morgan stanley has a dire prediction out for the kiwi dollar. there sing it could jump by a further 7% against the greenback. it does come down to the haven appeal we see for the greenback. haidi: treasury secretary janet yellen has moved to reassure depositors about the strength of the u.s. financial system. she says the government could repeat the drastic actions it took to protect bank customers if smaller lenders are threatened. >> our intervention was necessary to protect the broader u.s. making system. and similar actions could be warranted if smaller institutions suffered deposit runs that posed the risk of contagion. haidi: with us now is a senior fellow in economic studies at the brookings institution. he previously served as a deputy

secretary for economic policy at the u.s. treasury. we did here yesterday treasury officials are looking at a more extreme scenario where you could see the fdic's ensuring all deposits at u.s. banks. we heard from senator warren saying she would want to see something like this tied to tighter regulations. keen to get your reaction to that and how that sits uncomfortably attentively with moral hazard. >> thank you very much for having me. we are in a bit of a tough situation because the decision to bailout the uninsured depositors of silicon valley bank was not necessarily the best move to make but it does set up market expectations and a set of political realities where how can you bailout one uninsured depositor like the tv streaming service roku which had $450 million of uninsured

deposits at silicon valley bank and turned to another small bank in main street usa and if it were to have a problem and most years several small banks in america fail. america has almost 5000 banks. some of them should fail in any ordinary year let alone the year we are having so far. how do you turn to those uninsured depositors and say you did not get bailed out we build out the other person? that creates a set of its own problems. as it relates to regulation, stronger regulation is needed as is better supervision. some of the problems in silicon valley bank were not a problem of regulation as much as supervision. you can have the best set of rules. if they are poorly enforced, what good does that? stronger regulation and better higher regulation is important. you can put all your eggs in one basket. either the market or the

government to ensure the banking system is stable. haidi: it is not a perfect science. we know that. we have been asking this question as to what are the lessons learned and what could have been done to have avoided this point. what is interesting is also that in many of these instances and i guess svb is unusual in credit suisse as well, these were well-capitalized banks. these don't feel like idiosyncratic stories as opposed to the building of a systemic risk. >> i agree with you in part. they are idiosyncratic. silicon valley bank was not a mainstream bank. both banks midsize had about a thousand branches. it had 16 this is a bank that had 95% of its deposits uninsured. it was a bank for tech funds and venture capitalist and rich people associated with those industries.

what could have been done different is simple. silicon valley bank raised every classic red flag you could imagine in bank regulation. huge growth what drooping assets. huge reliance on uninsured depositors. a giant $100 million unhedged risk to interest rates from assets they bought. mostly fannie and freddie securities. what should have been done by any competent bank regulator as they were amassing the risk during this huge rapid growth, make them hedge. make them hedge. edging is expensive. silicon valley bank stuck tripled in value in a couple years. they were making huge profits in part because they were not paying the cost of hedging. no america is paying the cost of their failure to hedge. that requirement was clearly within the fed's authority and the fed failed on the job. shery: so how do we move

forward? you mentioned the fed and they have launched their own investigation but we know they have taken on more roles as time goes on whether it is sitting monetary policy, becoming the lender of last resort? who else needs to be held accountable? >> the fed needs to be held accountable because in america we have seminary make regular leaders that when there is a problem the regulars do this to each other. it is hard to figure out who messed up. silicon valley bank was one of the few banks regulated head to toe by the fed. the fed is a central bank should any organization whether it is a government organization, private company, nonprofit, you can only have one true north star. only one thing can be your stop -- your top priority. if everything is your top priority you have no priorities. what is the central banks top priority? monetary policy. what world is that leifer bank

regulation? in the last financial crisis which are live through as chief economist in the senate banking committee and at the treasury department, we realize the fed had fallen on its job as a consumer protector. in 1994 congress required the fed to promulgate mortgage. that created systemic risk. very different from what took down silicon valley bank which was much more idiosyncratic bad risk management. we moved consumer regulation out of the federal reserve and created a new consumer financial protection bureau. it is incumbent upon policymakers to ask the question of why should bank regulation be at the fed? you made this comment about the fed's own internal investigation. forgive me for not taking that seriously when the fed's own internal investigation of their senior bank president in dallas and boston failed to uncover the dates of their financial trades. that is the most notable fact on gods green earth.

if you don't know when your own executives are making trades that led to their resignation how in the world are you going to have the credibility to conduct an investigation that is far more complicated into what went wrong when you won't tell the american people on your own people made trades which you know? shery: we are running out of time but quickly what will it take to stop the contagion? even in the after hours trading session we are seeing this regional bank -- these regional banks continue to lose confidence. >> economists tend to believe in rational actors. we tend to believe in models that have people behave according to their incentives. what you see during these type of contagions are panics, irrational behaviors because there is a lack of trust. the financial system is predicated on trust. without trust no financial system will survive. the question of how to restore trust is a complicated one. it is one that does not follow the models but follow sentiment,

follows feeling and follows things that can, market. part of that has to be a steady hand. in that way past actions whether good or bad and the time for armchair quarterbacking is later. now that you've gone past -- on down this path what is next to instill confidence? shery: let's hope all of the coordinate action pays off. aaron klein, good to have you with us. senior fellow at brookings institution. we have another interview coming up thursday. first conversation with a major u.s. bank leader was since the financial sector turmoil. that starts at 11:00 a.m. thursday sydney time. the by the administration's sets are further tighten restrictions on the chinese operations of chipmakers. we assess the impact. this is bloomberg. ♪

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vonnie: this is daybreak: asia. the imf has reached a staff level agreement for a $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 executive board. the swiss government is temporarily suspending certain forms of bonus pay for credit suisse employees. authorities said they are invoking the swiss banking act which allows it to impose pay related measures if a systemically important bank is granted state aid credit suisse had already decided not to award bonuses to executive board members for 2022. the u.s. is reviewing whether the impact of silicon valley bank's collapse on chinese startups may have been greater than publicly disclosed. the bite in the is pulling data on chinese companies that may have had accounts with the u.s. banks. the u.s. wants to know if there is a risk of butter contagion in china. washer has decided to keep its oil production at a reduced level through june according to the deputy prime minister. last month moscow pledged to reduce its crude output by 500,000 barrels per day in

response to western energy sanctions. russia's oil output data has been classified since last year but he says the targeted output level will be achieved within days. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. this is bloomberg. shery: the biden administration is set to unveil tighter restrictions on the chinese operations of chipmakers that get u.s. federal funding. let's bring in our chief north asian correspondent stephen engle. what do we know? >> this is significant for the chipmakers. particularly the ones out here who received the one your exemption from the export curves when they were announced by the chips and science act in october. i'm talking about tsmc and samsung. what this means is if you are a chip company whether it is intel or tsmc or samsung or anyone who gets federal funding to build --

this is originally designed to build plants in the united states and the likes of tsmc are building plants in the united states. sources are saying this tightening of the chips and science act will bar these companies if they are taking u.s. funds from investing more than five or 10% depending on the category into their facilities in china. it is going to bar these companies from expanding output in china by 5% for advanced chips and 10% for older technology. it will also include a 100,000 u.s. dollars spending cap or that is nothing on investments and advance capacity in china. this is important for companies like intel. generates 27 percent of overall sales from china. not surprisingly intel shares fell as much as 4% overnight. they closed 2.4 percent lower. you are seeing until china exposure over the last three years. more than a quarter of their

sales coming from china. switch the page. you can see tsmc. it is diversifying more a little bit away from its investment in china and more into the united states but keep in buying they have a massive facility in nanjing where it makes 28 nanometer and more advanced 60 nanometer chips so this has direct impact on a company like tsmc despite getting the one-year exemption. that one-year exemption runs out in october up your they have tough choices to be made. let's see a quote from gina raimondo church she is the commerce secretary of the united states saying the chips act is a national security initiative. the guardrails will help ensure malign actors -- i'm sure she is referring to the likes of russia and china -- her words of course, do not have access to the cutting edge technology that can be used against america and our allies.

haidi: and of course the new ambassador to china from japan is arriving in the country this week. it is quite a backdrop in terms of a lot of these tech curves japan is involved in. >> absolutely. there are so many issues between china and japan. the new chinese ambassador comes to tokyo at a time when mr. keisha is in ukraine. at the same time mr. xi jinping is in moscow. lots of geopolitics and optics going on at a time when japan is joining the united states in those export curves. tokyo electron likely to join the call to limit export to china of advanced chipmaking equipment. the lines are being drawn right now. he met with solesky of ukraine

-- with zelenskyy in ukraine inviting him to hiroshima in may. geopolitics and the business of the export controls playing out this week. haidi: our chief north asia correspondent with the latest. japanese prime minister has offered strong support to ukraine during a visit to kyiv inviting resident volodymyr zelenskyy to the g7 summit in may. it's get the details from our east asian editor. ahead of the g7 meeting, what can japan, what can he do in terms of aiding ukraine? he was also in india. >> i think what he is trying to do or has tried to do is show japan is solidly behind the g7 sanctions on russia. japan has also been providing aid to ukraine, loan guarantees. it will do a $5.5 billion a

package. a lot of this was loan guarantees. in terms of the armaments for ukraine, because of japan's constitution drafted after world war ii, it is barred from providing arms to ukraine. pan pen has been providing nonlethal assistance to zelenskyy's government. but it has shown solidarity by keeping on board with the g7 in its united front against russia's invasion. shery: how significant is it that he actually made this trip in person and does he risk anything politically at home? >> yeah, from a domestic standpoint it is quite a big deal because japanese prime minister's typically don't go to places where there are high security risks. this is probably the first visit by a prime minister post war to an active war area. it is a bit risky for him to

make such a bold move but it seems so far opposition politicians and his own liberal democratic party are behind his visit. it seems to be paying off even though it is a risky procedure for him. the japanese public has been on board with the measures that he has put into place to punish russia for its invasion of ukraine. shery: the latest on prime minister keisha does trip. get in-depth analysis from the daybreak team now broadcasting live from our studio in hong kong. some through the app, radio plus or bloombergradio.com. stay with us. ♪

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haidi: a quick check of the latest business flash headlines. the toe group says lng prices could rebound due to an increase in demand. the comey says china is likely to recover half of its demand this year after a drop in 2022. the recent slump has made them feel more attractive globally. google suspended ptd holdings after finding malware in unsanctioned versions of the software.

google says it is investigate the matter and suspended downloads of the play story version as a security precaution. in a statement the company rejected accusations it's app was malicious and google statement is inconclusive. gamestop shares soared after the company reported its first quarterly profit in two years. income was 48 million dollars. a turnaround from last year's 140 $7 million loss. that sales fell over 1% to 2.2 3 billion dollars but still beat analyst estimates. the ceo says he now sees a path to four year profitability -- to full year profitability. shery: take a look at how we are setting up in the asian session. kiwi stocks moving higher by 4/10 of 1%. we have been watching the kiwi dollar closely should we continue to see that decline given the new zealand treasury has said the recent cyclone has damaged primary production in the country. we are watching nikkei futures

at the moment gaining 1.5%. coming back from holidays so perhaps a little bit of catch-up with a risk on session. we are already hearing from the finance ministers speaking in tokyo saying the financial system in japan is stable. they are seeing risk-averse moves in the financial markets and they welcome authorities moves to stop fear spreading. that has been the case when it comes to financials. we are seeing on asx 200 financials being one of the big gainers alongside energy given that oil has rebounded from lowes that we have not seen in months. it is all to do with treasury yields rallying and government bond yields rallying ahead of the fomc meeting. we continue to watch financials very closely not only in australia but broadly in asia. these are some of the stocks we are watching at the open. we have heard the latest from sources speaking to bloomberg that wall street and u.s.

officials are discussing an intervention of first republic that includes exploring the possibility of government backing. first republic has been hammered in the after a recession so watch those lenders across asia. semiconductor stocks also in focus with the biden administration moving to further stunt the growth in china for chipmakers getting u.s. funds. we have the market opens in seoul and tokyo. tokyo coming back from holidays as the japanese yen continues to strengthen at the 132 level against the u.s. dollar. this is bloomberg. ♪

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haidi: we are counting down to asia's major market opens after risk obsession in new york. banks rebounding. perhaps nothing sustained in the after hours station -- session ahead of the fomc rate decision. haidi: the question is whether it will be 25 basis points, a pause. so much uncertainty going into this meeting as the fed really has to choose in that dilemma about bank stability and the fight against inflation. let's take a look at the set up here in asia. annabelle: money market suggesting we will see that hike later today. the open of japan and korea upon us. in some -- the start of trading for cash treasuries. watching the two year yield very closely, given it has continued to be whipsawed over the past

few sessions. coming online fairly steady, around that 4.15% mark. around its highest now in a couple of sessions. still a full percentage point lower where it has been. the moves in treasury yields weighing on the japanese debt space. we can see that 10 year bond future there taking lower. we did have markets shot yesterday for a public holiday. this is the state of play. we are keeping a nine the japanese yen. still in a fairly tight range of ahead of the fomc decision. it does come down to those banking stressors as well. we do have -- hear from the japanese finance minister. he is saying that the japanese financial system is stable, is welcoming the moves from authorities to stop those fears spreading. taking a look at the outlook for korea today in trading. details coming through from

first republic bank earlier. we understand that any sort of rescue may rely on u.s. bank -- backing. that stock still lower in after hours by pairing its earlier declines. market sentiment focusing on the tech space. moves in yields helping those progrowth stocks. further strength coming back into the korean won. a signal of that relief that's coming into the equities markets. we are around that key 1300 level. we are one hour into the session for australia here. the rally we are seeing here being supported by the financials index. up 1.8%. continuing to reclaim some of their recent losses with stability coming back in. what is under pressure is gold. coming off of the six week high. we see some gold stocks amongst the worst performance in the session today. we are still seeing brent crude

coming online and it is likewise in the red. haidi: let's bring our next guest. he sees opportunities in u.s. mega camp financials. here with us is daniel lam it's a brave investor at the moment who is keen to take these opportunities across banking. we know that asian financials are looking a lot more robust. daniel: well, we like both. the u.s. banks particularly, those are the segments we are looking at. because of the fact that they have less of a concern about the assets versus liability management issues that we've seen in the bank failures that happened 10 days ago in the u.s.. also the fact that, as the regional banks have more issues at hand, the bigger banks are likely to grab market shares.

haidi: so when you take a look at banks you think are not at risk from any sort of contagion risk and showing good value at the moment, how do you make that decision? daniel: well, the mega cap banks, because they have less of these asset liability issues, the fact that they are much more diversified, they have asset management, wealth management. also the fact that some of them have investment banking capabilities. so if you think about it, we are at the state of the cycle where the economy is going to slow. you will probably see more m&a pickups and dcm happenings, right? so they are going to benefit from those. if you are looking at a six to

12 month horizon, those megabanks can benefit from this. not to say that there won't be short-term volatility. there probably will be. but for the longer-term investors, this could be a very interesting opportunity to pick those up. shery: we know that a key source of funding for banks after the financial crisis has been the market of 81 bonds. what happened after credit suisse, how are you watching this fear? daniel: good question. the 81 right now, because of what happened at credit suisse, the confidence in that asset class has taken a hit. so in the short term, they are unlikely to recover at all. they will be stabilizing around these levels which is lower than what we saw back before this weekend, before the last weekend. probably going to stay there for a while. that would mean that, in terms

of funding for the banks, it will be more challenging. this channel doesn't work as well as it did before. right? shery: of course, we can't ignore the fact that we are headed toward the fb -- fomc deficient -- decision. quite a time. what are your expectations for the magnitude of rate hikes or whether or not they will pause? would you be able to trade around that? whether it's on strength or weakness of the u.s. dollar. daniel: actually, we believe that it's going to be very likely a 25 basis point rate hike. but what they say in the press conference is going to be of paramount importance. whether they are going to be continuing to be hiking or they are going to be watching out for financial stability.

most likely, they are likely to have a dovish tone in the press conference, right? because this issue that they are seeing in the regional banks is pretty much equivalent to a 50 basis point rate hike. they were going to do another 50 to 75 pips like before what happened in the u.s. regional banks. so if you do the math, 25 pips more tonight. that will probably be it. they will stay put for little bit and observe. what that means is that the dollar is likely to be weakening. on the back of this. so the trades to look at would be, in terms of the currency front, you are going to go to the commodities currencies like australia, new zealand dollar. also on equities, refocusing on chinese equities. the weaker dollar is good for em. you have seen that in the hang seng index, even at the peak of

the fear in this banking crisis. it just stays around the 19,000 level. it didn't come off. people were coming into by. that's looking pretty good. shery: how played out has the reopening trade in china been already? what sectors are you watching now? daniel: the hang seng index is a bit overshot. it's looking quite reasonable. we are looking at the consumer drift -- discretionary sector. if i were the internet consumption sectors, -- shery: good to have you with us for all of your calls on the market as we head toward the fomc decision. let's turn to vonnie quinn with the first word headlines. bonnie: thank you. the imf has reached a stat level

agreement for a $15.6 million loan for ukraine. it is aimed at helping promote ukraine's long-term economic recovery and pay the -- pave the way for entry into the european union. the loan is still subject to rip -- approval. japanese prime minister has made his first message to keep. he offered support to ukraine and invited the president to join the group. he made the trip after stopping in new delhi to pressure the indian prime minister to join other leaders. it is set to hope the -- host the g7 summit. the u.s. is reviewing whether the bank collapse may have been greater than public interest loans. the biden administration is pulling together data on chinese companies that may have had accounts with regional u.s. banks. the u.s. wants to know if there's a risk of broader contagion in china.

the biden ministration is set to unveil tight restrictions on the chinese operations of chipmakers that get federal funding. sources tell bloomberg the commerce department will outline the new curbs as it disburses funds under the chips and science act. they include a $100,000 spending cap on investments in advanced capacity in china and restrictions on extending output. global news, powered by 2700 journalists and analysts in 120 countries. this is bloomberg. haidi: you are looking at some of these things we are watching today. new china chip curbs. >> that's right. we are seeing most of the stocks moving to the upside here. tokyo electron stands out because it does get about 15% of sales from intel. others in china are in focus. intel among the company is expected to secure funding from

the u.s. chips and science act. that stock was down 2.4% in the session. there's another sector that we are focusing on today. it is still that we are focusing on that stability that started to come back in to market sentiment. we are seeing financial stocks moving to the upside. we got that bit -- big headline earlier. any sort of rescue deal for first republic could be backed by u.s. officials as that's giving that sense of calm into the biggest banking names. 10 minutes into the session for japan and korea. changing on because we are continuing to watch what is moving in the other direction. this comes down to the gold space. in the last session, we saw gold sliding the most in six weeks. we have seen a run-up in the commodity passed the 2000 rounds mark, given that move into it as a safe haven. some saying it was performing better as a haven.

we are seeing big mining names and australia that are linked to gold the climbing today. haidi: still ahead, we talk earnings expectations for tencent with credit sites. they will be sharing their outlook on china's wider tech and gaming sectors as well. up next, details of a bloomberg scoop. wall street and u.s. officials discussing a potential intervention at first republic bank that could include government backing. more just ahead. this is bloomberg. ♪ the new chase ink business premier card is made for people like sam who make...? ...everyday products... ...designed smarter. like a smart coffee grinder - that orders fresh beans for you. oh, genius! for more breakthroughs like that...

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shery: bankers are trying to balance the inflation fight with the turmoil we are seeing in the banking sector. kathleen hays joins us with the latest. there are risks in the fed pause and in a rate hike. which one is a bigger risk? kathleen: that's a better question. you tell me what it is. the fed has a sense but they are not convinced.

they have to do something and they have to do something after a couple week of banking turmoil. we haven't seen this since the great financial crisis. on the other hand, you still have an inflation fight. where markets are coming down now, things have calmed down enough that now the fed can take a little sigh of relief and go ahead and do the 25 basis point hike. it's going to be communication, the message in the policy statement in jay powell's presser that are going to make markets understand what they are doing. is inflation simply that we know that things are cooled down enough? the other thing is, the markets are expecting that it's there. that's the easy thing to do. maybe now instead of going up to 5.5, as high as 5.75 or 6%, they are going to stop just to 25 basis points act -- after this.

when you see financial conditions tightening like this, it's like a rate hike or two. you can see how dramatically they've tightened. that's another thing they will include in their policy statement when jay powell is explaining what they did. of course, reporters are going to ask him about this. they -- bill dudley, bloomberg opinion columnist, says that the fed like the european central bank can do two things. fight inflation and maintain financial stability. the former world bank president, he joined us in the last and she says her baseline case is that they are going to do 25. >> i think it is too soon to expect that the fed will throw in the towel so to speak on

their inflation finding. i think also, not a complete pause. it may not only be counterproductive from the vantage point of the medium-term inflation objectives but also could send the signal that they know something worse that the markets are yet to learn. kathleen: in the end, that's where the balance of arguments are right now. that if the fed stopped, then people worry. when christine lagarde led the ecb in the 50 basis point rate hike even before the credit suisse ups arrangement was in place to help cool off that crisis, she said one of the reasons they were doing it is exactly that. you don't want people to think that you are slowing down because you think something worse is going to happen. haidi: the dot plot is something that investors rely heavily upon. how do we expect guidance to look given the unmount of

uncertainty? kathleen: i think looking at the market is interesting. one of the most interesting things we had was the fact that there's been a big issuance of investment-grade corporate bonds this week. some nine companies, most of them utilities, are going into the market with the idea that the fed is going to do that rate hike. they want to get into the market while conditions still look good to them. the dots, if you are so uncertain, back in 2020 during the pandemic, there was a point where the fed had a month at the beginning where they didn't issue dots. it seemed like, how do we issue dots when we don't know where things are going? this time, that would be another sign perhaps to investors and people watching the fed, they can't tell us what their outlook is for over the course of the year. so it's going to be a question of communication.

they are going to be changing their forecast of inflation, of growth. on inflation, some people are saying, they will have to revise their forecast for this year up. when it comes to growth, they are going to have to revise it down. what we get to that point, 2:00 eastern wall street time, there will be an lot of different information hitting the markets at once. it's a lot of potential for some market movements. haidi: kathleen hays there ahead of that key fed decision. wall street leaders are set to be discussing an intervention of first republic bank. our finance reporter joins us for more on this bloomberg scoop. hearing that government intervention and backing might be involved here. >> this is about avoiding the collapse of another u.s. regional bank. we've seen a number have fallen in the past week or so. now we are talking about government backing.

jamie dimon has been leading talks about how to stop this from happening and to bolster first republic. we've been talking about banks, the deposit that they put in. now we are talking about government backing. that includes the government potentially lifting our assets that have eroded the banks balance sheet. other options include liability protection, lifting limits on ownership stakes. there's a lot being discussed behind the now. everyone is really desperate to avoid another bank collapse. haidi: given what happened with europe and credit suisse, what do we know about how ubs is trying to come together with this other lender when it comes to perhaps cherry picking some of their business? kathleen: that's right. what -- >> that's right. ubs likes the wealth business and part of the investment banking business.

that's focused on the advisory business. they are now trying to unwind a previous agreement that credit suisse had made to spin that business out under the first boston brand and to be run by michael klein. credit suisse did that deal in october of last year. they were to pay $175 million to make this deal happen. now ubs is examining ways to get out of that. they've sought legal advice to see how they can get out of that deal with the least amount of money possible. shery: we have another big conversation coming up on thursday. city ceo jane fraser joins us at the economic club of washington. this will be the first conversation with a major u.s. bank petersons the turmoil began. that starts at 8:00 thursday hong kong time. this is bloomberg. ♪

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shery: cathie wood has revealed that her exchange rate fund's offered losses more than $2 billion during last year's market route. we asked her why those funds didn't rearrange their portfolios more given clear signals from the fed that aggressive rate rises were coming. >> the premise of the question is that we are an asset allocator. we are not. we invest exclusively in disruptive innovation. nothing else. what we did do was concentrate our flagship strategy and are other strategies and we moved

from 58 names in february of 21 when we peaked down to 2728 -- 27, 28 names. we have a scoring system. it's based on variables we believe are important to innovation. so we concentrated the portfolio. many people in the traditional asset management world, when they go through a risk off time, they will diversify their portfolios by moving closer to their benchmarks. what they are doing is typically selling are kinds of names. -- our kinds of names. that will create losses by selling stocks. that gives us a tax loss asset. it's over $2 billion right now against which we can take future gains. and then concentrate to arts -- towards our names. we have the benefits of this

strategy during risk off and diversification strategy during risk on. >> when it's risk off, you've underperformed. even on a five-year basis. i know people will say, you were looking in a long outlook kind of perspective. look back from here over the last five years and it's been a turbulent time. you've underperformed the s&p 500. what do you say to those who have a shorter time frame terms of investing? those that are looking to retire in the next five to 10 years? should they be with you or do we have to be long-term equity investors that have a longer runway to have exposure to art investments? >> we are the closest thing to a venture strategy, venture capital fund and the public equity markets. a venture fund has a long-term investment horizon. if an investor can't have that long and investment horizon,

then they should allocate perhaps a small amount to our strategy. say one or 2% which, by the way, from what we can tell, most advisors have us at that one to 3% range. shery: cathie wood they're speaking to bloomberg. coming up next, the biden administration unveils restrictions targeting china's high-tech chip industry. we take a look on asians chipmakers -- asia's chipmakers, next. this is bloomberg. ♪

>> this is daybreak: asia.

the ecb is asking lenders about indirect exposure to credit suisse after finding that their balance sheets show no holdings of the junior debt. the takeover of credit suisse went around $70 billion. janet yellen says the government could repeat the drastic actions it took recently to protect bank depositors. she says they are committed to mitigating financial stability risks where necessary. authorities took extra ordinary steps to boelter -- bolster confidence including 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.

vonnie: the swiss government is suspending credit suisse employees. authorities said they are invoking this wish banking act which allows pay related measures if a systemically important bank is granted state aid. credit suisse had decided not to award bonuses to its executive board members for 2022. global news, powered by 2700 journalists and analysts in 120 countries. this is bloomberg. i'm vonnie quinn. haidi: let's get you a look at the markets. annabelle: half an hour into the session now for japan, korea, also cash treasuries. we are watching the two year yield very closely. you can see that actual volatility has now eclipsed the era of the financial crisis. we are back at the times of paul volcker. now what that tells us is the big differences is that this is an area where we are coming out of low interest rates and the extreme amount of uncertainty that's coming through in the

market even though we saw the two year yield looking flat today. yesterday, rising more than 20 basis points. it's that question of, what will the fed do as their meeting wraps later wednesday? in the broader markets, yields climbing, led by that front end of the curve there in asia. in terms of the fx base, we've seen the dollar fluctuating somewhat. some currencies and focus. the kiwi dollar is declining. some analysts including j.p. morgan saying this currency could drop as much as 7% on the haven demand which we could say for the greenback if conditions in the economy continue to deteriorate. we are continuing to watch the korean won. that currency is leading asians ones to the upside. it does come down to that sense of relief that's coming back into equity markets. we did see more support coming through for the financial sector.

first republic bank, any sort of rescue deal could have backing from u.s. authorities. stabilization coming out in more of the risk on trading. the nikkei playing catch-up. sticking in north asia. one sector of stocks we are focusing in on particular is the chipmakers in japan and korea. the big headline does come down to those new rules for chinese chipmakers. shery: the administration here in the u.s. now set to unveil restrictions. let's bring in our chores nation -- north asia correspondent in hong kong. what is the significance of these latest curbs? >> it is quite significant. sources telling us that if you are a chipmaker and you receive

grants from the u.s. government under this $50 billion chips and science act that the united states unveiled last autumn, if you take that money, we will bar you from doing a lot of expansion in china. this is essentially what we are hearing. this newest it -- initiative will bar firms that release u.s. funds that are designated for investment in -- implants in the united states. it will include a 100,000 u.s. dollars spending cap on investments in advance capacity. that's nothing. $100,000 cap. this will impact and make a lot of these chipmakers make tough choices. intel makes 27% of the overall revenue from the china market. the other companies that were in

focus are not american companies. tsmc and samsung. korean and taiwanese companies like them did get a one-year exemption from these export controls under the chips act from october. they will have to start making difficult decisions. tsmc has their big, high advanced chip plan, doing 28 nanometer as well as the more advanced 16 nanometer chips. their revenue from china as a proportion of overall revenue has started to decline a bit through the pandemic. still out 11%. tsmc will have to be making some tough choices as they build up their chip plants and blueprint in the united states in places like arizona. i want to bring up a quote from the commerce secretary. essentially saying the chips act as a national security initiative. these guardrails will help ensure malign actors do not have access to the countries leading edge technology that can be used

against america and our allies. national security issues obviously take to the -- come to the fore here. shery: national security issues that encompass japan's policy as well. what a mission of china's new ambassador to japan and his visit to the company this week. there are a lot of issues on the agenda. >> there are tons of issues. chips is one of them. japan is the host of the g7 summit in may. john will be joining us to talk more about that. the chinese ambassador to tokyo takes up residence there at a time when the prime minister is in ukraine. geopolitical troubles as well as these economics troubles. the legacy issues are deep between china and japan. japan obviously hosts the g7

summit and would like to seek ordination among g7 nations to counter what it calls economic coercion. there's a lot to overcome in the relationship between china and japan at this stage. haidi: the japanese prime minister has offered strong support to ukraine during a visit to kyiv. let's get over to our east asia government editor. as a host of the g7, what can japan do in terms of aiding ukraine and keeping these issues at the four? you saw that diplomatic pressure in india. >> japan is trying to solidify support against russia's invasion. getting all the g7 members involved. he invited zelinski to

participate. it will probably be through video link. it shows that russia is feeling pressure on all sides. the world's biggest economies a year into the full-scale invasion. just as united as they were at the start of this. that's the message they are trying to send with the visit to ukraine in the meeting with the linsky and the invitation for the g7. shery: how significant is it that the prime minister is making this trip in person? >> it's rare for the japanese prime minister to go to a place that has a security threat. this is probably the first time that the japanese prime minister has visited a place where there's an active war going on. but it's a high risk visit. he was also the last leader of a g7 country to visit ukraine. he had been trying to arrange this trip ahead of the g7 hosting in hiroshima in may to

make sure that all of the g7 countries have visited ukraine to see firsthand what's going on. haidi: is it political risk domestically with this visit? >> it's a difficult thing. it's a rather difficult thing for japan to do. the opposition, they have sown support for the visit. the public has been on board with japan's pressure towards ukraine -- towards russia. even though japan has relied on russia for energy, the public has been adamant in its opposition to what has gone on in putin's invasion of its neighbor. it has shown strong support for japan's sanctions and application of pressure on russia over the invasion. shery: the latest on that trip. coming up next, we break down

tencent earnings with credit sites so expect revenue turnaround in 2023. better gaming license approvals. this is bloomberg. ♪ the new chase ink business premier card is made for people like sam who make...? ...everyday products... ...designed smarter. like a smart coffee grinder - that orders fresh beans for you. oh, genius! for more breakthroughs like that... ...i need a breakthrough card... like ours! with 2.5% cash back on purchases of $5,000 or more... plus unlimited 2% cash back on all other purchases! and with greater spending potential, sam can keep making smart ideas... ...a brilliant reality! the new ink business premier card from chase for business. make more of what's yours.

haidi: we are counting down to

the open of markets trading in china. let's bring in david ingles. what are you looking at? >> you are about to say jump so i will take that and i hope i'm correct and point to the fact that this is really one of the things we are watching closely today. this jump in funding costs. this one is particularly interesting. it underscores the quarter. in some ways, it indicates demand for loans from the banks and the funding. i will spend this in a good way and say, this is want to watch moving forward. the other thing i want to point out, fairly consistent. when you look at swaps markets, nondeliverable.

we are back to the highest level since before the pandemic. that indicates right i expectations. growth actually will come in. the recovery will continue. i will end on this. it's a big earnings day. so far, the earnings forecast have come after that initial adjustment after the abrupt pivot on covid, have stalled. this is lest high frequency than the previous ones they've shown. rates tend to move quicker. i would imagine this is really contingent on what these companies say as far as guidance is concerned. shery: the latest on china earnings and what to watch out for. heading for that tencent result.

successful foray into short videos. not to mention a little bit of softening of the regulatory back drop in china. sustaining that could hinge on a crucial earnings release later today. joining us now is senior editor at credit sites, zerlina zeng. creditsights singapore llc, -- when can we expect a turnaround? zerlina: there will be pressure because of the lingering covid impact. we are looking at the 2023 earnings. revenue is going to turn around because of the normalization of license approval as we just saw two days ago. we think this is going to turn around. in the short form video space,

we are going to expect 10 set to see continued monetization. with covid's reopening, we are expecting to see the online and off-line commercial payment activity to pick up which is positive for tencent earnings in 2023. haidi: let's discuss the latest batch approval in china of those gaming developers. our companies like tencent the big players who will benefit more than the strong ones? what does that mean for competition in the market? zerlina: i think the latest batch will benefit the bigger players. we are still seeing that getting pretty big approvals. that's compared to the very beginning of last year. most of the approval was prioritizing the smaller player. this is beneficial for 10 set. we expect the company to steadily launch new games and

this will translate into a quite steady stream of additional gaming revenue income for the company. haidi: how much benefit do we see from the reopening in terms of advertising? zerlina: i think the reopening is definitely supportive of ad spending. there's additional layer for tencent. now the gaming approval has resumed. we expect publishers and manufacturers to have higher willingness to expand their budget a little bit. this will be beneficial for large advertising platforms. haidi: beyond the third quarter though, do we see a little bit more volatility potentially, certainly less a guaranteed return to growth given a lot of the volatility and uncertainty associated with the macro outlook? zerlina: i think right now for

tencent, the pressure might be coming from the overseas markets. after covid's activity as normalizing, people might spend less on playing games. we might see this in the domestic market. other than that, in the past couple of years because of macro difficulties, a lot of the online platform companies in china are cutting the cost, not engaging in very intense competition. with the act -- macro economic improvement, we expect players to again engage in some of the competition. that might also put some pressure on the margins of the internet platform companies. shery: what will you be watching out for in $.10 statement today? whatever the -- what are the indications we might get for the broader tech sector? zerlina: i think a few things we are really watching closely.

the first is the management guidance on the ad revenue post-covid recovery as well as the guidance for 2023 and 2024. as we knew in the past few earnings from jd and alibaba, the management guidance was less bullish than we expected. this is one area to closely watch out for. the third area is about their overseas market, what they are going to do in terms of investment outlay. shery: when you take a look across brighter chinese tech, there's a lot of geopolitical test -- pressure coming from u.s. tech curbs. what is your broader outlook? where do you see strengths and weaknesses? zerlina: i think for credit investors, i would see the last few weeks selloff as actually quite attractive as an entry

point. from a credit investment point of view, if you are cutting down your overseas m&a and investments, it is preserving cash. it's good for bondholders. we are going to see some price volatility because of all the geopolitical risk, the headline risk. i think the china tax factor is this high-grade tech sector. the credit profile is very resilient and we are going to see an earnings rebound this year. overall, the outlook is quite positive. haidi: zerlina zeng. you can turn to your bloomberg for more when it comes to $.10 earnings. get commentary and analysis from bloomberg's expert editors. this is bloomberg. ♪

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annabelle: all this comes at a time when the job market is already tight. goldman sachs and namor are just some of the banks that have announced cutbacks. john mullally's managing director of robert walters in hong kong. >> we saw a time from early 2021 to the middle of 2022. a high degree of demand. a real lack of supply of talent. the last six months, that has flipped on its head. now with the most recent news when the banking market has put the lid, it's a tough market. annabelle: ubs has yet to announce layoff. credit suisse was in the process of cutting 9000 jobs. a number that could just be the beginning. >> what happens to job cuts?

>> it is too early to say. we will be considered employers but we need to get through this in a rational way, thoughtfully. when we sit down and analyze what we need to do. annabelle: a spokeswoman told us that staff should continue to work to the best of their abilities. annabelle droulers, bloomberg news. haidi: a quick check of the latest business flash headlines. hsbc said to hold its first meetings with regional clients this week. according to bloomberg sources, the bank will meet with the technology start up to measure capital firms in the u.k. in europe. hsbc took over for a dollar earlier this month and has agreed to inject $2.4 billion into the unit. nvidia claims to have developed a new tool to ease a major chokepoint in chip design and

has enlisted tmm c to use it. the new software will dramatically accelerate development for tips. it claims the job of creating the stencils used to etch designs onto materials can be accomplished overnight rather than over two weeks. nike says sales rose more than expected as it trimmed a glut in its inventory that had sold them to force -- sell products at a discount. revenues were up 13%, be billing analyst expectations. weakness in china persisted. revenues from the region following almost 8%. gamestop shares have soared in extended trading after the company reported its first quarterly profit in two years. net income was $48 million. a turnaround from last year's $147 million loss. sales fell over 1% to 2.30 you dollars but still beat analyst estimates. the ceo says he sees a path to

full -- full year profitability. lng prices could rebound to $107 per megawatt hour due to an increase in demand. the company says china is likely to recover about half of its demand this year after a drop in 2022. the recent stop in natural gas prices has made the feel more attractive globally. that's it for daybreak: asia. markets coverage continues. we look ahead to the start of trading in hong kong, shanghai, and shenzhen. bloomberg markets the china open is 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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