>> good morning and welcome.

shery: cap shery ahn. treasuries rise as activity tempers inflation. paul: higher crude prices causing a fresh headache. shery: decision day for the rba. take a look at how oil prices are coming online. it was that leading the s&p 500 higher. energy shares led gains. i was a mixed picture.

broader gauges given tesla saying deliveries missed, price cuts did not do much. we are seeing not a lot of movement area we had treasuries rising after the manufacturing date. we have seen expectations of where the fed goes fall given the manufacturing gauge ease concerns that we would see more inflationary pressures coming in. paul: that is true. a little bit of weakness adding some relief.

it is bankable play decision. not a lot of action and currency markets at the moment. again strengthening a little bit. shery: let's delve into the factory gauge. i only mentioned components when it comes to the employment numbers. it seems the labor market is starting to give. the employment measure is dropping to the lowest level since july of 2020. we're going to get a fuller picture of the environment when

we get the payrolls report friday. we are expected to see slower hiring, this is one part of the puzzle for the fed as it tries to rein in inflation and the labor market remains tight. paul: the move from opec-plus through a wrench into what it means for inflation. the fed thinks the oil surge might make the feds job more difficult. >> this was a surprise. >> prices fluctuate, it is going to make our job more difficult. >> let's bring in su keenan.

global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. >> it's a conflicting view. opec tells us inflationary pressures will wrap up but data tells us it might cool because to your point, it makes the fed job easier. below 50 means it's a contraction. on friday we will get a cooler picture. paul: morgan stanley said maybe the tech rally is looking overdone. why does he think that? >> overdone is what he said. he said the rally we have seen entered bull market territory which means they rose 20%. he says this is not sustainable because everything is not looking well. he said usually when something its bottom it will rally.

where did they recommend? the fed is still tightening. inflation has to reach its feet. money managers are pulling their decisions to become underweight in equities. shery: we are seeing more money managers and analysts jumping on the bandwagon. >> opec-plus catching the market wrongfooted. the bank was, oil sliding back. we saw an immediate search on the decision and the gains have builds from there. goldman put $100 back on the table from the end of 2024. citigroup looking at the various

arguments that are out there that certainly put oil close to if not at $100. >> it was designed to boost oil prices. we are floating with a market that could see more demand in the spring and summer. they want higher oil prices, they needed to reinvest in economies. >> recapping, if the goal was to get higher prices, most analysts seek oil prices higher from here. we saw nymex with the biggest boost of the year. >> it was a surprise, previously opec-plus said it wasn't going

to do it. the unanswered question is why do they do this? >> many believe it's a return to the tactics of the saudi oil minister who famously wanted to make traders rather jumpy, fearing they had become too confident and bowing that whoever gambles will be out in like hell. the view was that opec wants to support higher oil. brent crude slid to a 50 month low. people close to the matter tell

bloomberg short-sellers redo a reminder of the pain opec-plus can inflict. we are told this was made in the final days before the announced in a very tight circle. some delegates will start assuring reporters that they were going to hold at. they just did not know. we are told two officials were completely blindsided by this. that is why the white house will prices. paul: is going to hit pause?

we don't see expectations. is a between hope and reality? >> you're right, we don't often see the division. the expectation they will pause because they expressed a desire to be cautious. we are seeing signs of a slowdown in the economy. we're seeing disinflation. we have two months of inflation data. on the other hand, inflation remains high. is it a good decision?

that's a question some economists are asking. shery: how sharp has the slowdown been? >> is a natural part. he has said as interest rates keep going higher, a chance of a recession increases. that's a reason why some economists think the rba will pause because philip lowe said he wants to.

shery: the latest on what to expect from the rba. we are seeing the aussie dollar jump after oil assets rally. we're getting the first reaction from president biden. they are saying the opec-plus production cut won't be as bad as you think. we are seeing this decision called ill advised and they would work very hard to work with consumers when it comes to gas prices. president biden say it won't be as bad as you think. donald trump has arrived in new york to face the first-ever criminal indictment filed against a former u.s. president. is affected to plead not guilty.

trump has bolstered his legal team by hiring a third high-profile attorney. the u.s. military says the suspected chinese spy balloon had gathered intelligence from military sites, however the u.s. was able to limit what it collected. nbc news reported china was able to transmit information in real-time. the chinese government is said to have warned actors that crackdown is over -- far from over. sources say it was delivered in a private meeting on friday. authorities say a chairman is suspected of serious violations of law.

nato allies are being urged to pitch in $500 million a year to help provide ukraine with nonlethal war effort. bloomberg sources say it would include funding for fuel, protective equipment, electronic equipment. leonardo dicaprio has testified at trial. he underwrote the film the wolf of wall street and is accused of embezzling billions of dollars. those are your first word headlines. paul: the latest on donald

trump's booking and arraignment in new york. we're live later in the show. ubs telling investors to look outside the u.s. for attractive valuations as it anticipates dollar weakness. more on that, next. this is bloomberg. ♪

what do you get from the morgan stanley client experience? listening more than talking, and a personalized plan ♪ to guide you through a changing world. ♪ shery: take a look at how

futures are trading.

, expectations perhaps cooling inflation fears a little bit. our next guest says valuations look better and investors should invest. good to have you with us. what was your continuation of that trend? >> with think evaluations look more favorable for countries abroad, specifically the favor europe. the demand for gas, we believe

that will be a boost. we think the reopening for china is favorable, as that continues china is a good focus. the strong jobs market, the pric oil and the surprised by opec, we expect to have a cap on future market appreciation in the short-term so we think evaluations for european and chinese markets be more favorable. shery: let's focus on emerging markets. we have seen expectations flowing about india. can they compete better?

>> it's the reopening story. as those markets continue to improve. they will favor even over an economy like india's. we will encourage investors to look there. these are risky markets and we want to make sure clients that have the appetite to invest, they will do so with eyes wide open. paul: in the u.s., you note the s&p is range bound. what is the catalyst for equities to break higher? is it up to the fed? >> it is. inflation is a beast and it is proving difficult to bring it to

levels that feel normalized. the idea of a soft landing versus a hard landing is everything when you look at range bound numbers. we could see the equity ets being higher, but if we end up with a hard landing, it's a very different story. it's all eyes on the fed and i think jobs number on friday is going to help, the work they have to do continues to be very difficult. paul: what do you make of the surprise move from opec-plus? we heard from present fight and say it will not be as bad as you think. without have an impact on inflation? >> has to. the fed is trying to news interest rates as a tool, we believe the fed will have to

raise rates again in may. it was uncertain whether we would get a pause in june. the production will be a real issue for the fed. if you get a strong jobs report on friday, it makes it more difficult for the fed to wrangle inflation and bring it down to the levels they are looking for. shery: trading sideways in the u.s. has seen a rally is narrowly focused with a lot of investors being forced, where are we headed? >> the opportunity still exists. one should look at staples. you look at companies with high dividends.

free cash flow and some control over operating margins. staples is one i would take a look at. auto automation the fact we will see some increased spending from defense is another reason one should look as into -- at industrials. it's the underdog for the last six months. utilities are a place that investors have not invested in or under invested in. they are resilient, defensive. if the economy does slow down this year or next year as we start to see inflationary pressures on earnings, utilities should do well. there is still about $1 trillion of excess savings that consumers

since the pandemic and that is a buffer, utilities, industrials and staples are areas we will look to invest. paul: the ubs senior vice president, thank you for joining us. you can get a roundup of the stories you need to know to get today going. terminal subscribers can go to jb go. -- dayb . this is bloomberg. ♪

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the headlines. evergrande has entered into restructuring support agreements with a group of creditors. the agreement allows them to swap holdings for notes. hsbc senior executives pledged to keep up dividend payments. the global lender says they regret putting out dividend payments and have moved to restore quarterly payouts. leaders fended off calls to split off the asian operations. shery: the aussie dollar trading study -- steady. this coming after the third best day against the u.s. dollar, we had seen the rally and spike in

oil prices. we had the aussie dollar holding shy of the moving average. all of this ahead of the rba decision, why the 11th straight hike with inflation easing. this is bloomberg. ♪ as a business owner, your bottom line is always top of mind. so start saving by switching to the mobile service designed for small business: comcast business mobile. flexible data plans mean you can get unlimited data or pay by the gig. all on the most reliable 5g network, with no line activation fees or term contracts...

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paul: james bullard says the

strategy in dealing with the ranking this baking breakdown is working, but higher oil prices might make the job harder. >> i think the reaction to the banking problems was swift and appropriate and both here in the u.s. and overseas, so i think the idea there are macro tools you can use in that kind of situation to calm things down seems to have worked, if there are, and other monetary policies to fight inflation. he -- this idea that you can

walk and chew gum at the same time, we can do both. knock on wood, we are never sure what is around the corner. of course, oil prices are always important. i would have expected higher oil prices anyway with china coming back sooner than expected. whether there will be a lasting impact is an open question. >> you had moved of your

estimate of where the rate needed to be to bring down inflation. does this change the calculation at all? can you explain why we need to go that high to hit the terminal rate? >> we will need to get over 5%. the committee says it's a little over 5%. i am higher than that. i think inflation will be stickier. 4.6% or something like that. we're talking about a lot of inflation on that basis, and oil

places -- prices fluctuate around, it's hard, makes our job more difficult. shery: jim bullard speaking exclusively with michael mckee. here is the first word news. u.s. factory activity in march contracted with a gauge dropping to its lowest double since may 2020. the pmi decreased to 46.3, below the median estimate. the data suggests that rising interest rates may be weighing on business investment. the philippines is giving u.s. access as it seeks to improve defense of eastern coast.

china has territorial disputes with the philippines and has described the plans as an attempt to contain beijing. taiwan has defended the president's men to meet with u.s. lawmakers. the house speaker is set to buy post a bipartisan meeting on wednesday, china has vowed to take resolute measures. sources tell bloomberg they believe the reaction may be more muted than it was when nancy pelosi visited taiwan. an indian court has suspended a prison sentence for an opposition leader as he appeals his conviction in a criminal defamation case. he was disqualified from parliament in march for making derogatory remarks. bob iger has called ron desantis

antibusiness for his policies regarding the theme parks giant. he said companies have the right to freedom of speech. he recently replaced the board of a municipal district that provides services to theme parks after legislation limiting discussion of gender identity in schools. paul: let's take a look at the day ahead in australia. some stories are watching. new data shows policy firms are posting more job listings.

on that note, let's bring in a chief economics at ey. we have had 10 rate rises. we have seen inflation come down a little bit. the rba signaled they are considering a pause. [no audio] paul: as i mentioned, we have inflation in australia extremely high.

after 10 consecutive rate increases, not a great deal of movement. now we have the wildcard of rising oil prices. shery: we're trying to fight price pressures. the fed will not like what they see. here, we saw the manufacturing gauge coming in lower, that sent treasuries rising on the expectation things will not be quite as bad when it comes to inflationary pressures. how it is being felt in the housing market. what does that mean in terms of the overheated housing market and how it's being translated

into the different states and territories, perhaps a different reaction depending on what jurisdiction you're watching. paul: in terms of the housing price, we have seen houses, from extreme levels. health greatly -- house prices were high in australia. the mortgage cliff is approaching. that is when they will roll up into floating rates. just to reiterate, my first question, 350 basis points of tightening so far, perhaps not as much as many would have hoped. is a pause on the table?

it's a hardball today. they rba will see its job is not finished yet. as you say, the inflation rate is particularly high, it's come off its peak. that does not mean it's even close to the target range. of course, the target range including the tightness of the labor market. perhaps wage close -- gross is back on the table. after the election and the likelihood we see -- paul: we might have one more

things to opec-plus. is this something that's likely to factor in to decision-making today? they often come down as quickly as they come up. that is going potentially to add to demands consumers eyes. it may have some lingering effects. shery: we were discussing this while we return to get you back. what uniform has the transition been on the housing market in australia?

>> builders, we saw some approvals yesterday back to where they were free covid average. suddenly, a decline, and you would not say disaster by any means. we saw house prices declining over the last year picking back up again in march. perhaps the one with the most influence is not a soft number, perhaps indicates the weakness in the housing market is maybe just starting to stabilize.

the result is not any ongoing strength in the housing market for which monetary policy works. the economy can't afford a strength in the moment with inflation this high. the bit of a mixed card, but the rba would be watching that closely. shery: what about private construction -- consumption? >> private consumption has slowed, there is no doubt about it. we have seen households affected by higher prices and interest rates, again, we're seeing discretionary services. people are still wanting to go on holidays, beauty services, cafes. the economy is slowing down, but

it's not a disaster. paul:. quickly. if we get a positive, what is your gut telling you? >> if we get a pause today, it will be likely the rba did not warn about the possibility of more rate hikes. it's going to want to see the march quarter inflation data. i would be surprised to see it. shery: put to have you with us. coming up, a former u.s. president has more legal firepower to his defense team. i for scheduled arraignment. our live report is coming up

next. this is bloomberg. ♪ or excuses to unplug. you can't buy possibilities, and you can't buy moments that matter. but you can invest in them. at t. rowe price we believe your investments should work harder for the future you imagine. and that's where our strategic investing approach can help. t. rowe price, invest with confidence. shery: donald trump is now in

new york ahead of his arraignment on criminal charges. the alleged hush money payments to a point star in 2016. simone foxman is at trump tower.

we have you talking about potential protests, speculation we might see violence. what has it been like on the ground around trump tower? >> there was some protesters here earlier in the day, but i speak in the past tense. there were hundreds journalists gathered here. clearly outnumbering the number of protests. as you alluded to, there are 35 members of the new york city police department, all of them have been told to stand ready, much of that focus will take place outside of the courthouse in lower manhattan. we are expected to see a protest led by marjorie taylor greene. it does not sound like exactly what was happening before january 6.

at least what authorities are telling us, things are relatively under control. paul: let's talk about the timeline. what happens when the arraignment gets underway? >> donald trump is in trump tower. that's where he is expected to be for the remainder of the evening. come tomorrow, he will go downtown to the criminal courthouse, he will enter there, front door or side door, we do not know yet. if police photo could be taken, fingerprints, then he will be arraigned. we don't know whether cameras will be allowed in the courtroom. it's not new york policy but some organizations have argued

they will be allowed, trump will leave, he will go back to florida where he intends to host a press conference tomorrow evening. shery: we won't know what exactly the charges are until the arraignment. what are we expecting, and what are we expecting the strategy to be in responding to them? >> it's interesting. there has been a lot of speculation, but we don't know what the accounts are. we do expect to see more than two dozen counts come against the former president. i've refer to the checks that were written to michael cohen, the longtime fixer, we understand the thinking that this has to do with hush money

payments to stormy daniels before the last election. it is believed the da will look at falsification of business records, that in another itself is just a misdemeanor, but if done in an attempt to conceal or further a crime, that is where you get it turning into a felony. the question for us now is how serious the charges are, because most experts do not believe donald trump would have been charged if this were just a misdemeanor, but this is all speculation. another speculation is this could be seen as a campaign-finance charge. at the moment, we know that donald trump is gathering lots of attorneys including the lawyer for paul manafort. all of this is playing out in the early afternoon, new york

time. shery: simone foxman is keeping us up-to-date when it comes to the legal challenges. she joins us from an happen in front of the trump tower -- from an happen in front of trump tower. we have plenty more. this is bloomberg. ♪

paul: signs of some breast --

stressed are emerging in new zealand. let's get the details from wellington. what is behind the rise in mortgage arrears? ainslie: in short, it's interest rates. the central bank has been one of the most aggressive in the world, that, coupled with inflation is putting pressure on people. the structure of the housing market is about three years for mortgages. it happens that about half have to be refinanced this year. people are rolling off rates of three interest rates or lower to rates of about 6% or higher, which is putting stress on household budgets. shery: we are expecting the rbnz

to continue to raise official rates. is there any end in sight when it comes to hardships for people? ainsley: that's right, tomorrow they are expected to hike to 5%. i think when i spoke to the other essentials, the bureau the put out the information, she said it's a real reversal in trend. for the last five years, rates have been dropping because of improved regulations. there is perhaps one silver lining, that is that the unemployment rate is still very low. that means people have some of the room, so in theory there is

money coming in and they can pay their mortgages. that is stopping a lot of for sales. shery: ainsley thompson joining us from wellington. quick check of the latest headlines. l'oreal has signed a deal to acquire a brand. the dealer gives them an enterprise value of $2.5 billion. the company currently operates sales of $537 million. another company also saw to acquire a state. sources tell bloomberg a group of banks has launched a $3.8 billion deal to offload the riskiest debt from last year's citrix bio. they are being marketed at a heavily discounted price,

bringing it to 14%. wall street banks are poised for $1.3 billion in losses on the bio. -- buyouts. paul: coming up, mizuho bank tells us why the surprise well cut is not just an economic inconvenience, but also a geopolitical abrasion. daybreak asia is coming up next. this is bloomberg. ♪

shery: welcome to "bloomberg daybreak asia."