>> you are watching daybreak

asia coming to you live from new york city and hong kong. >> counting down to the major market opens. the top stories this hour, stocks opposed amid the debate on interest rates, the imf sees the return to ultra low levels while the fed president in new york thinks that the rates are still very low. business as usual under uva the -- u 88, the co said it's a peer -- appeared to keep things as they are for now. and china simulating strikes on the island of taiwan. >> we are early in the asian session and we had a mixed picture in the new york session, lacking clear direction. the s&p and the doubt higher, but tech stocks under pressure. we have seen three weeks of gains for tech stocks and also a potential of more rate hikes coming from the fed after a

strong u.s. jobs report. on top of that we had a report that apple saw pc shipments fall by the most since 2000. that really weighed on the sector. did have semiconductors gaining ground because of samsung cutting production and announcing that last week. we are all -- watching treasury yields with the two year yield at an all-time high, there has been more free pressing that the fed may have to continue hiking rates. the dollar is higher and the oil and -- and oil is under pressure. there holding $280 a barrel -- they are holding to $80 a barrel. >> this week it is about u.s. inflation, and today in asia we are focused on the inflation data coming from china in a few hours. it is interesting when you stack up what you see in the united states and other major economies versus what you see in china because the survey median reading is 7.1%.

-- just under 1%. the second lowest inflation rate in the world. we have a few surprises from 2.5% on the year, that would be the lowest point in three years, but you have to take into effectfacts. what we saw last year, temperature -- if you inflation rising, the inflate -- invasion of ukraine, it's certainly to -- something to watch in a couple of hours. if you take it a look at the outlook for equity markets, we are looking new did in the session today. we have new zealand online, after the opening at the top of the next hour alongside japan and korea. what else we are watching will come down to central banks in north asia, we will be watching the bank of korea. we do have a decision do under two hours from now, and expectation from 15 economists that it will -- the key bank will keep its rate at the correct percent. we are also keeping an eye on

the yen, and that is largely unchanged this morning. we did see a lot of weakness in the yen against the u.s. dollar yesterday, and and underperformance that is expected to stay for some time. >> so much focus on the boj, let's listen to what the governor had to say during his inaugural press conference. >> given the current situation, i don't think it is necessary to reconsider the joint accord. of course, i think there is still space to have discussions with the government again if the economy and price situation changes can -- sick of kelly. -- significantly. >> let's get to garfield reynolds, who joins us out of tokyo. how do you read this? clearly he is treading very very carefully. >> i mean, you think of the way

he was employed -- appointed, and the way his counterpart was appointed, shinzo abe appointed the former -- his predecessor, to end the inflationary mindset. a decade later we have him appointed by a government that wants a steady hand. it does not want any sudden moves, it does not want disruption. new eta has come in and given them exactly that. -- they have an agreement with the government that there is no need to alter the current accord under which the bank of japan operates, and so, everything is fine. everything can stay where it is because it is -- appropriate. the deflationary mindset has been almost inundated japan has inflation but they don't see it getting out of control, so those bets on a rapid move to and

curve control or remove the negative benchmark rate, those are all pushed to one side. we will see to what extent developments both domestically and globally in particulate, allow them to chart the course. as you were mentioning, began is something to watch, and it has -- is kind of a long way back from the 150 levels that lead the government to intervene. but because it has been there so recently it can get there again very rapidly if you get the right sort of circumstances. if you do get the yen dropping, that will restore pressure on the boj and the japanese government to make them leave policies where they are. >> they were thinking that maybe it was fine to leave everything where it is for now, but with so

many distortions in the market, with not even the public being happy about their spending power decreasing? >> i mean that was a very key issue, there is also a great deal of concern, bubbling under the surface with japan's banks, who do have to still hold a lot of jgb's, they have to trade them, which can be difficult when the bank of japan owes more than 100% of some of the 10 year bonds. so, given all of that backdrop, there is a strong constituency therefore -- which could turn towards we need a change soon. the trigger could action come from outside of japan. you were talking earlier about williams's comments on the idea that he does not blame rapid interest rate hikes for what has gone on with the banking sector, and that is just a reminder that the fed is still very determined to use interest rates as a tool

to fight inflation, we have markets price again, 125 basis point hike, and what if they end up pricing in another 35 basis point hike after that? if you have a more hawkish fed, then that will put pressure on the boj. through the currency channel. >> our chief rates correspondent for asia joining us today from tokyo. taiwan's foreign minister tells us that china has not completed three days of military exercises around the island, which were similar in scale to one conducted last year in response to nancy pelosi's visit. we will talk to our chief is a correspondent, what do you make of china's response so far iesco -- ? >> i think it was fairly muted compared to the policy response. after nancy pelosi made that controversial visit there were

big pla wargames that encircled the island, they disrupted shipping lanes, and there were lots of rhetoric -- was lots of rhetoric being bandied about. it was a different political time then. xi jinping had not secured at the party congress is third consecutive term. he was playing to a domestic audience might showing signs of forced. it seems as though even before the taiwanese president met kevin mccarthy, so -- both sides were tamping down the rhetoric to not inflame tensions even further, especially in the united states. i believe from china's perspective that they had to do these drills that the pla announced were completed as of yesterday, three days of military drills, and the foreign minister said as of 6:00 p.m. last night there were 91 pla aircraft, 12 warships surrounding the island last night.

the four of those were planes, crossing the median line of the taiwan strait in the southwest. air identification defense -- and it air defense identification zone of taiwan. and the pla saying all the things it usually says when these kinds of tensions happen. the pla stands ready to fight at any time and crushed separatism activities and for interference. but again, those wargames are now over, we have to go see how the relationship goes forward from here. >> it is been so eventful. speaking of the relationship, the relationship between france and beijing as well, after those comments from emmanuel macron about the strategic autonomy of europe we are now hearing that french lawmakers will be visiting taiwan. >> i think a french lawmakers delegation or two of them were heading to taiwan with much political overtones then a u.s. delegation going to taiwan.

especially after macron just came back from beijing where he did meet with xi jinping as were saying, in the footage there. and you know, he's taking a more neutral approach not wanting to get involved, necessarily with the larger u.s.-china difficulties. macron told people this week that the worst thing would be to think that we europeans must become followers on this topic and take our cue from the u.s. agenda and a chinese overreaction. basically he is saying paris should avoid getting dragged into pit -- any potential competition between the u.s. and china over taiwan. but we are hearing from joseph deluca will and others from taiwan is that this one delegation, which would be led by ellen rishaad, a lawmaker and for other french lawmakers that could be there as soon as the week of april 24, they are going to talk business ties, including semiconductors, and we are hearing from sources that

another french delegation could be going to taiwan as early as this can. >> chief north asia correspondent, stephen engle there. let's get you to su keenan with the headlines. >> we start with the u.s. treasuries top international official, who says the country is not seeking to decouple from china. under -- the under secretary says the two biggest economies need to be able to collaborate on global issues. the imf earlier warned that the tensions will drive geopolitical fragmentation and risk damaging the global economy. >> we need to be able to work together and i think that is something you heard from the leaders when they had the summit in bali, that they charged their teams to communicate and work together and in particular work together on global challenges. they said the world expects us to be able to work together on some of these big challenges, whether climate or debt or things like that. >> the philippines and the

united states are holding their largest military exercises in more than 30 years. the drills will involve more than 17,600 personnel, doubling last year's number, a high-profile display, of the two nations alliance when both are seeking to push back against beijing's aggression in the south china sea. this also comes after china concluded its own drills around taiwan. australia is preparing to host its first senior chinese official in six years, a sign of warming relations between them. ties deteriorated in 2017 after australians introduced anti-for interference opposition. the vice foreign minister is being described as china in a new round of consultations, despite measures from australia just weeks ago. south korea says as north korea has failed to respond to regular

lay held calls for a fourth straight day. this is the first time since october 2021 that military lines or liaison calls have been stopped for more than a day. other this month, u.s. japan and south korea joined in antisubmarine drills, to which pyongyang has placed an unprecedented response. global news 24 hours a day on air and on bloomberg quicktake powered by more than 2700 journalists and analysts in over 120 countries. i am su keenan and this is bloomberg. >> still ahead, china set to announce its march inflation data. tuesday, the chief economist joins us later -- ing greater chief china economist joins us later. but also a look at why chinese -- apple's mac shipments declined so much. this is wennberg. -- bloomberg. ♪

>> despite the remarkable resilience of consumer spending in the united states, in europe, despite the uplift from china's reopening, global growth would remain below 3% as we projected it earlier. this year, and what is more

concerning is that it would remain around 3% for the next five years. >> imf managing director there speaking alongside the world bank president as the spring meetings kick off this week. our next guest continues to show that inflation concerns are rising and this has sparked debates about u.s. rates going back down again. joining us to discuss, the senior global macro strategist at safe straits. of course with what we heard about what the imf thinks could happen to rates after this year, the next few months will be critical to that, and is there a sense of market expectations shortening this rate cycle? >> for sure. one of the biggest topics so far this year is help aggressive, really, the rates market has gotten behind pricing fed cuts. despite the fact that certainly

data has weakened, but some of the more important data we saw last week remains somewhat robust. we will get cpi and see what that says. it has kept the central banks for the most part quite aggressive at least in their rhetoric. i do think that a rate hike is still forthcoming in may. and data would need to ultimately cooperate to really get the market to where it thinks rates are going to get to by the end of the year. >> how are you positioning at this point, given the magnitude of uncertainty when it comes to the rate environment? >> sometimes the most boring investments are those that you can suit the best with. cash remains an incredible alternative right here, keeping that powder dry, it certainly makes sense. i think that there is an argument to be made that what we see in the banking crisis is the beginning of the fed over tightening already. positioning around kind of that recession from a cash perspective or thinking about

how you would want to play there is parts of the curve or the relative parts of the equity market is how i would look at things. five 30's from a steeping perspective makes sense to me, and a barbell, when it comes to quality growth as well as the defensive parts of the equity market, can give you a little bit of both parts of the procession discussion and maybe some aspects if it's not as bad as some of the estimates are thinking it is going to be. >> it is really interesting that you said earlier, these central banks could be saying the harshest -- hawkish and rhetoric. we also know about other variations with other central banks. how do you play with this policy divergence that you could see more of this year? >> for sure, looking at the devil in the details around inflation is key. when we look around the world, there is not that much left in

rate hike expectations at this point. most of it is contained in europe, where they were slower to start, even with that being more exposed -- aggressive than they specter, it got to a point where the market thinks that they are done. you need to continue to look at those relationships and really see where the flexibility exists. part of the strength in the u.s. risk start right now is that the fed has been one of the most aggressive central banks. we will see in the next day or two with inflation, but it is showing signs that it is starting to cooperate. that is something a lot of the european economies and central banks don't have the advantage of. so, you do run these -- this divergence which race into the ownership of where we are with each one of these cycles. >> we were talking earlier with another guest and how they have performed market peers. i wonder where you see the

biggest opportunities among economies that pose a yield advantage? >> i think real yield in an environment where you get a little rate stability and we have had great stability for at least the last week or so, but we also saw how volatile those markets can be. as we get closer to the end of the cycle for the fed and the other central banks i think you will get comfortable being able to say ok well the volatility around how quickly those expectations can move around gives us a chance to take a step back and look. a lot of the biggest carry opportunities right now are in life town where they had been aggressive and some of those inflation numbers are peaking or coming back in the opposite direction. but it really does depend on your outlook on the fed and whether you think that overall rate volatility starts to come down from what we have seen really over the last few months. >> senior global macro strategist at safe straits, and we will get more insight on the

that yield advantage could be going in some of those ems. stay tuned for these conversations. we have central bank governors from countries like south africa, and she late, which have tightened at a much faster pace than developed economies. these conversations coming up on the imf spring meeting coverage this week. this is bloomberg. ♪

>> apple's personal computer shipments declined by over 40% in the fourth -- first quarter marking the worst drop since the year 2000. this is according to the latest idc report. let's bring in our intelligence senior analyst. what is this telling us about demand? >> from us it looks like consumer spending has slowed down a lot more than what we

previously anticipated. granted, apple had tough comparisons this quarter, but we had already known about it and there was consensus looking at a 22% drop in revenue. but after this news came out, i think we need consensus to go back and revise their estimates downward even more. and i think it is not going to be just max, it will probably be other categories also in the upcoming quarter. as you said, it's not just about apple, we are seeing broad declines. is this an indication of waning consumer spending, or is this a come down after the pandemic driven work from home demand that we saw? >> it is a bit of both. everybody knew about the pandemic drop off. that is not a surprise. but i think a little bit of that can be seen on the consumer spending side as well. and i think it will be very important when apple reports in a few weeks whether that has of

affected the accessories decision or effect of the iphone segment. i think that is the big question, because from our side, this quarter should not have been that bad frankly because we had some pull forward because of the iphone not being so strong in the previous quarter because of supply chain issues. this quarter was supposed to make up for some of that loss. it will be interesting to see how much of that cat is up, because frankly speaking, once we cross summer that everyone will wait for the next generation of the iphone because this is third year of the previous cycle of the phones in terms of hardware design. >> how is apple performing against competitors like samsung and others, especially on this appeal to different demographics? >> it's always been different compared to the other brands. it is a premium rand, and aspirational brand. friendly -- frankly, people who choose it don't go into apple, people who choose apple don't go

to samsung. is just customer loyalty on the high-end. from that point, there it is -- we have heard from a lot of the numbers we have seen that it has been growing will digits in emerging markets for some time, and that is really the big group death -- growth opportunity for iphone. >> thanks for being with us. coming up, the bank of korea is expected to be its -- leave its benchmark rate unchanged. we will have the decision up next. this is bloomberg. ♪

do i worry? [indiscernible]

interest rates? i think my answer is i don't really worry about it. and market about inflation is much faster -- [. [indiscernible] to me that's not to worry with it. >> that is john williams and speaking at an event hosted by new york university. and we will go into detail he was and the market expectations and a cut. there is a lot of speculation whether the rapid pace of tightening and issues and others. but john williams, he was asked about this and he said no, it came down to specific issues of both of those two lenders. but there is a debate whether

when you you have bank stressors and access to bank credit that slows down the awe pace of u.s. economic growth and new york fed put out a new survey on monday and see here this chart of looking how many households are their credit to u.s. and looking on the course of this month versus the rest of the year earlier, 60% of u.s. households saying it is obtain to get credit and shows that shift in markets and could weigh on the economy in the months ahead. but fed officials are leading to a hike at the next meeting and going to get 5-1% by the end of the crear despite expectations

and u.s. inflation data and we have another c.p. e! due. >> china faces a different picture of what is happening in the u.s. inflation data out and numbers to allow them to stay. our next guest will have estimates. >> later and e! n.g. what are your estimates for not only securing inflation given that we are seeing the tick up on that side of the equation? >> when we talk about consumer price inflation in china, we focus a lot on foot prices. this time we have pushed prices lower but at the same time, we

have season that prices have gone very, very high on a year-end basis due to swine flu in asia area. it is something that we have to be really watching and it could move the c.p. e! needle. but apart from that, we haven't seen c.p. e! inflation inflation for long in china, one thing is due to covid. and even during recovery in the first quarter we haven't seen general prices going up because of the competition during the referry period. >> what does that mean what policy makers do about measures across china. the china is the babyingon of

life due to economic challenges this year? yes, you are right. the challenges does not come from within china. actually, business travel within china's big cities in the past few weeks and the recovery is quite solid. but what we have seen is that external demand has fallen and many businesses affected by ex term demand in various industries in china and put challenges on the economic. and the low inflation rate, they don't need to do anything. but to fill the gap of the weak external demand there will be stimulus from the government.

for example, and electric vehicles. >> you talk about the foundation of that recovery being the need to get real estate and there isn't much progress in working out, given the structure, is that going go to be a long-term drag? >> i think the issue that nowa days for today, i think the chinese ease government is allowing property developers to grow a little bit by selling more inventories. and after the selling the inventories, not all of them will go to repayments of debt. and partly will go to land and therefore newer home

construction. this is important for g. d. p. growth in china. >> they are not seeking a decounseling but undeanable we will see that relationship. how much are you watching the geo political risk as to how much the chinese economy can actually accelerate? >> umh, i think what the treasury said is what overall -- let me put it this way, what government officials have said is really reflecting that behavior for several months already. and so i don't see any fake escalation of tension. i don't see any fake escalation of tension as well. i believe the relationship is now intense. it's not good.

they will continue to impose ex export bans on each other. we have to be careful on this. because it means that it means that international trade by strengthen and you need to from top to toe, you have to decide the supply chain and redesign your markets as well. this will be not only difficult on the macro basis on companies. >> great to have you with this. watching it. and inflation has been slowing. and let's get a preview of japan korea. and consensus is for a you

nanous hold. expected the bank of korea to hold rates at 3.5%. it would be the first time they would have held rates for two consecutive times which began in august of 2021. the odds of rate hike could have been higher had it not be for the financial concerns we are seeing in the u.s. that as well as growing the concerns over global slowdown is i think changing the expectations in the market. as you know, south korea's economy is dependent on exports. and anything that happens outside of korea will impact monetary policy there. >> we saw the r.b.a. rates

holding steady last week. but it seems more central bank governors are egg sticking to it. what are the indications when it comes to pause or continue their tightening cycle? >> it depends on the east central bank. for south korea, the headline inflation, the pressure coming off a bit on that. however, core inflation is high. so all eyes will be on what the governor will say at the press conference. he said he will re reveal what the terminal rate to beat and the expectation there will be at least one more hike in the pipeline, if not more.

>> and headlines. and we are talking about the bank of japan and governors and what they will do next. >> the bank of japan's new cover said his predecessors' policies are sticking around. and negative interest rates are what the economy needs at the moment. and he is saying it will be a long-term standpoint which will need the approval profl of board members. >> i don't think so it's necessary. of course, there is discussions to with the economy. >> taiwan's foreign minister that the grills meeting with the

u.s. house speaker kevin mccarty after his predecessor visited the island. the intestity of the air and naval threat are similar what they you saw after nancy pelosi and detected 59 aircraft. and recent documents leak poses a serious risk. the military is trying to figure out the scope and scale of the heek and there is a criminal investigation. another league enclouds spying on other countries and weaknesses in ukraine's military. four people were killed after an employee opened fire in a bank in louisville, kentucky.

two officers were wounded. the shooting, the 15th mass killing in the u.s., coming two weeks after six people were killed in a school in nashville tennessee. this is bloomberg. >> bloomberg, the global economy is at riching of losing 3 trillion due to biodiversity and the risks of this next. this is bloomberg.

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you get grit, vision, and the creativity to guide you through a changing world. ♪ taking a look and bloomberg the global economy could plunge by $2. # trillion. that would impact securities and disrupt supply changes. and we have more. we talked about the biodiversity at being the forefront and huge when you look at the agriculture and supply chains and komed yits. what is being done and how much

appetite? >> it is early days. and knew front for e! s.g. and reporting. we are seeing right now, a push to create markets to trade and by diversity credits and that funding needs to increase to $166 billion to trillion by 2030 to preserve a supply chain. >> where will all of this funding will come from? how much will be needed to make an impact in this sector? >> and funding comes from governments and domestic policies and smaller portion from overseas' aid. and what is needed is private sector investment the biggest

pace of funding could come from funding. and half a trillion of that goes to the agriculture sector and that is the largest sector and valuing through the trading of credits. andrew: potentially through the food and textiles supply chains through the end. >> how challenging is it? >> it is extremely challenging. the companies, what we see in 2023 and underdevelopment is the task force and that is being developed. the language isn't well understood.

>> there with the ratest. coming up next. cutting a communications link with gold. we have more details. this is bloomberg. ♪

south crean officials say north korea appears to be purposely cutting communication links with the south as upon has failed to respond for days on the communications channel. we will bring in our communication editor. intercrean tensions are high with drills. just how dangerous is this move by pyongyang? >> when the communication links are it is done by north korea, where it is deals and leaflets. so, at this point, we are looking at over detroit military

drills and intercrean factory complex but the worry this could be signaling something bigger to come, realignment vis-a-vis of north korea and five days and a weekend for the commune kaigs. so it is too early to say it is something big or just some show of anger. >> what is the purpose of having these? >> mostly to keep communication -- the two koreas are still at war and not an official peace treaty and some things that don't occur. there is no regular phone service between the two contraries. it is difficult and truth

village. and one one go up to the border and turn on their faction machine. and getting messages across and when you don't have normal communication. >> and north korea sending ballistic missiles and ratcheting tensions and how have they tested the field already? >> they are stepping up the weapons which are designed to deliver strikes, mostly japan and looking at new systems, new means. andrew: simulate attacks before they are one off testing missiles and mobbing warheads, so they are showing this year,

these new systems, new deliveries. and underwater tsunami. andrew: experts, but this is something they have as well. >> quick comek of the headlines. and 40% in the first quarter%. the worst drop. shipments. and 56 million. the demands driven by pandemic era work has vab rated. and weakness. and the first quarter revenue

was 16.7 billion and was short of the estimate of $17 poib 2. and it contributed to a miss in sales and down 15%. and latest chinese challenger. the company displayed its model. and c.e.o. showed a large demonstration telling a story prompted by questions as well as email and computer codes. and the organization is looking at japan offers and expanding japanese language services. and he discussed the technological and how to mitigate the downside. and some of the things we will

be watching. japanese financial firms in focus after the new governor that the central banks has control and appropriate given the current economicky situation and down 1.6% dpens a 4 1/2%. we are keeping an eye on suppliers to build a new about thery factory and new press mining after the company received an offer. >> take a look at it could get a little bit of a move. you see the commodities markets and asset managers really going --

[no audio. and slightly higher after a mixed finish here in the u.s. and this is bloomberg. ♪

>> this is daybreak asia, we are counting down to the major market opens after a mixed

finish here in the u.s.. critics is upgrading the odds of a quarter-point hike i the fed and this of course all ahead of the big rate decision made in south korea as well, haidi. christ big decision days in south korea, we are also watching the bank of japan with the new governor. it may be interpreted as starvation and we want to see how much more drag we see when it comes to trading in the end. let's take a look at the market open. >> we are watching the japanese yen this morning, holding fairly steady, it was the biggest underperformer against the greenback in the g10 space. but the open now of japan and south korea and australia is upon us. we started training here for cash treasuries. so i did mention the yen is holding steady as you can see there. watching how it will go against the 10 year yield in the session, we did continue to see yields rising in the prior days.

that was as investors continue to build their bets that the fed will hike by another quarter percentage point at its meeting in may. so that yen weakness is something that can help japanese exporters. we are seeing the nikkei coming online, likely to be the big driver of the specific index in the day's trading. we will also be keeping an eye on the bank index, a little bit higher, japanese banks have been a sector that was bearing and where we thought we would see policy habits. let's change to what we are seeing in korea, that decision from the be ok could come as soon as this hour, economists say that the key rate is likely to stay on hold at 3.5%. that would be as we start to see more signals of economic deterioration coming through into the economy. we have already seen stresses in the property sector, slump in exports, and we need to get those through the first 10 days of april numbers, exports

dropping 6% on year, and certainly sectary as we know is a global trade bellwether. let's change now to what we see in australia because we have the asx two online, it is so far muted trading, you can expect that with a staggering start, but also with those key events coming up this week, inflation readings do, wall street banks showing earnings, and chinese inflation data do later today. we also have eyes on geopolitical tensions, perhaps fine between australia and china, with australia hosting a chinese official for the first time in six years. we want to see how the new crest comes on in a couple of minutes given that we have seen their increased officer to 19 -- off her to $19.5 billion. >> to sees opportunities in

small caps and korean stocks, we have the equities asian profile manager. we saw the support -- export numbers already for the 10 days of this month follow more than 8%. the export outlook for south korea has not been that great and we are not expecting the be ok to hold again when it comes to rate. what do you like and south korea at this point? >> high-end good morning. we like a lot in south korea. i acknowledged that the data points from the u.s. have been underwhelming, some of the data points in china and south korea as well. our views on longer term. 3-5-7 years. when you look at the horizon, such as the auto manufacturing in south korea, not just semiconductors. we see opportunities in clean and new energy across south korea, across market caps.

we also see opportunities and domestic names. where we have shifted away from, and this is consistent with what we have done in china, is the large-mecca cap tech names. we are less exposed there. >> you are also liking the smaller names in japan, why? >> in japan we have been noticing that the current shift in corporate government, that current shift in being more intelligent with capital allocation and hiring broadly from around the world just after place within japan is changing. the environment today is different from what we have seen and any point in the last 20-30 years. when we look at the most underresearched part of the market, the most diverse part of the market is in the japanese small caps and we see opportunities there across sectors, not just semiconductors and energy, but in financial services, beverage chains, there is lots of opportunities.

that lines up with the horizon that we are talking about, which we measure in years. >> when it comes to emerging markets, india is one that you are more positive on. if you take a look at india at this point, is the indian growth story look more compelling than china? >> it's a fair question get the data points that we are seeing in both economies. what i can share is that over the last 12 months we have increased our capital allocation to both markets. for us it is not a view that one of the -- of one of the other. we see opportunities about. in india this is a market that has been sent -- seen as being expensive. there are certain pockets that are more expensive than others, but auto manufacturing, the consumer names, not so much staples but financial services, health care, hospitals is an area where we have increased our allocation in india over the

past 6-12 months, where we think there will be a lot of growth for years to come. >> when it comes to your exposure to china, what is your preferred way of doing that? is it still the open, what are you waiting for, because it feels like the low hanging fruit of the reopening story has already been picked? >> i think that is fair. our invest -- investment theses have not been contingent on one top-down catalyst. when you look at the collection of bets we have in china, they are esoteric, one-off, we harvest vip that we have across sectors. with the most concentrated bets that we have placed our in names that will play out and we believe which will compound for years to come. that is in the auto manufacturing sector, the health care sector, consumer brand, factory automation, we see plenty of opportunities in china. echoing what i said about south

korea, earlier, same thing with china. the maker cap, the large-cap tech names, i acknowledge there has been restructuring's there with spinoffs. i think there are reasons why the returns will be likely higher elsewhere. >> you talk about watching the broader realignment of countries and loyalties and some of the strategic alliances as well. are you investing around those things? >> i think we have to. some of these things are difficult to quantify. they are impossible to predict. but when we speak to companies and we ask what is your biggest concern, very rarely do we hear anything about inflationary pressures are recessionary pressures. a lot of the conversation centers around supply chains. and diversification of supply chains. and where people will get this image could -- semiconductors from, where they will get their apis from the from a single sector.

in green energy this is why we think south korea will play a larger role over the next two years, because they have the technology, bottom-up, and more leading companies. top-down when you look at it, we will people get their equipment from for the supply chains? it is getting more difficult for companies to align themselves with one large country. they need to diversify away from that. this is something that we spent a lot of time thinking about. >> good to have you with us, let's get you to su keenan with the headlines. >> we start with the u.s. treasury's top international officer who says the company -- country is not seeking to get -- decoupled from china. they said the world's two biggest economies need to be able to collaborate on global issues. the imf earlier warned that tensions would drive geopolitical fragmentation and destroy the economy. >> we need to be able to work

together and i think that is something we heard from the leaders when we had the summit in bali, that they charged their teams to communicate and work together and in particular work together on global challenges. they set the world expects us to be able to work together on some of these big challenges, whether climate or debt or things like that. >> taiwan's foreign minister says china's military drills in response to president -- the taiwanese president's meeting with kevin mccarthy were on par with the reaction last year after nancy pelosi visited the island. they told bloomberg that the intensity of the air or naval threat was similar to what they saw after nancy pelosi visit -- nancy pelosi's visit. taiwan detected 59 aircraft and 11 warships. the philippines and the united states are holding their largest military exercises in more than 30 years. the drills will involve more than 17,000 personnel, doubling last year's number. it is a high-profile display of

the two nations and their alliance at a time when both are seeking to push back against beijing's aggression in the south china sea. two australian out, preparing to host their first senior chinese official in six years. a sign of warming relations between beijing and canberra. tyson started to. he -- tyson started deteriorating in 2018 after australia introduced anti-foreign interference in assertion. the visit this week has been described as a new round of consultations by china. it comes despite canberra signing up to the august submarine deal just weeks ago. global news 24 hours a day on air and on bloomberg quicktake powered by more than 2700 journalists and analysts in over 120 countries. i am and this is bloomberg. >> it's early in the asian session, let's turn to the bell with what is moving. >> taking a look at new chris here, this is an australian

miner, who just got an offer from a takeover china, which spun off from them i can 1999, credit arena for geisha. but this deal is worth $90.5 billion, and new chris shareholders would own 30% of the combined company. it would imply an aggregate value of 32 $87 -- 32.87 dollars per share. we are seeing those stocks they are moving to that mark. certainly many companies have really seen a wave of acquisitions to try to gain scale and address some of those more industry-specific growth challenges. let's change over now, because staying in the energy material space, we are keeping an eye on big oil companies this one given the moves that we have seen in crude, it has been weaker over the prior few sessions, really not being helped by that dollar strengthening that we are seeing. we are seeing a mixed picture here, higher than we see in korea and australia, changing

not to what we see with shares of japanese banks as well this morning, those are mostly under pressure, and we have about 80% of the topics or more rising at this point in the day's trading. unsurprising given that japanese bank stocks have been rising over the past few months, preparing for some sort of policy pivot from the doj. -- boj. it has not come so far. we are watching glen de vries -- lenders throughout the morning. >> we have the latest pronouncements from the bank of demand -- japan's new governor and how it is playing across markets. this is bloomberg. ♪

>> given the current situation, i don't think it is necessary to reconsider the joint record. of course, i think there is still space to have discussions with the government again if the economy and prices situation

changes significant. -- significantly. >> the new governor of the boj saying rates will stay standing for now. for more on what he signaled in his first press conference, let's bring in the government editor, yukio talk 80, and -- yukio takei oh, and garfield reynolds. now that this era has begun, what did we learn from his inaugural pressure? >> we had the officials start off a new era and the messaging seems to me that there will be no change. at his first conference, he essentially said even the current state of the economy, prices and financial markets, there is no need to change by sisi or the rates or to change the boj's stance. the message seemed to be more towards easing then he had

during his confirmation hearings in the japanese parliament. at the same time, he did keep some options open by saying that if they do change policy he will explain why thoroughly. afterwards. and the overall message did seem to be they are going to keep things unchanged for now. >> garfield, did the u.n. overreact, and does this bring that back in as a swing factor for the governor and the boj? >> i don't think there was an overreaction, and it did, the backdrop of the yen already being under pressure. there was some anticipation that ueda would list to the side on that, but with those jobs numbers on friday for the u.s., setting yields back and traders forcefully pricing with a chance of a fed hike next month.

we have cpi coming in a couple of days out of the u.s. that could drive that further. in that overall contacts, a fair bit of yen weakness makes sense. you have drivers from both sides on the monetary -- in them monetary policy area. you have concerns about the fundamentals, the persistent trade deficit these days in japan, the weakness in the economy, there are lots of reasons to push back against what may have become an overly bullish consensus on the yen, that the worst was behind it and that they did not have to worry about it going significantly weaker from here. we had a course correction on that front, the yen is a two-sided play here, it could get stronger if we get haven demand, if we get global consent -- recession concerns.

if we get a more hawkish fed than many are expecting and the boj six to the dovish tack take -- tactic that they have been sinking to, you could see the yen go back towards the high one 30's and that would start to race some of the concerns that would really lead to not an intervention, but some acknowledgment that the boj might have to tweak policy. and they did tweak it, although in a fairly strange fashion with the doubling of the yield cap. so i think it is understandable where the yen went. it could go weaker and then it is going to be a balancing act. it does not go so far that the way that feels he needs to respond somehow, even if only rhetorically, in order to avoid getting pushed by markets in the direction he does not want to go just yet. >> we have seen that happen in the past, and with market

distortions the question is for how long could they hold out? >> that is a simmering issue for the japanese economy and japanese businesses. the in particular is an issue for japanese households. but basic -- the basic fabric of the financial system is very strained after these trillions and trillions of dollars have been spent. you have large sections of the bond market, which on paper is the world's second-largest developer market outside of the u.s., but that large portion of the market cannot trade properly. you have very difficult conditions because the boj holds so much and the other people who hold bonds are often banks have to hold them, life insurance, they have to hold them, pensions they have to hold them too much duration from and assets. so the available free flow of japanese government bonds can be

very very thin. that causes distortion for traders and causes distortion throughout the economy. >> yukio, before the press conference he met with the prime minister to keep the 2013 joint agreement unchanged, is that significant? >> it is essentially another sign that they will continue the 2013 joint agreement, that they will try to reach the 2% stable inflation target as soon as possible. before yesterday's reassurance that this will continue, there was speculation that there might be a review of the agreement. there were reports about that which heightened speculation for a while. but the overall message comes back to the conclusions that you could drop from the pressure itself, -- from the press

release itself that there will not be change, and with the joint statement staying, it reinforces that myth -- message. they will stick with the 2% market, and the way they phrase that implies that they will get to that as quickly as possible. >> thank you both. you can get a roundup of the sword to get yourself going in this days issue of daybreak. it's on your terminals and available on mobile or bloomberg anywhere. you can get news on industries and assets that matter to you. this is bloomberg. ♪

>> we are seeing a lift when it comes to new crest shares after their takeover bid was sweetened to $19.5 billion. we are seeing training at the highest level since november 2020 at the moment. we have more details now. the last deal under the takeover company, why does it want new crest so much? >> it has a lot of long life assets, so that is attractive to them. if they buy them, those might the last 20 years or so. the other reason is that they have a lot of copper, and copper is a key metal in the energy transition. there is a shortage limit. prices will probably lift and that will be very attractive as well. >> we see a reaction in the

stock, with newcrest being higher -- its highest since 2020. what has newcrest said about this so far? >> newcrest has been -- it has opened its books, so that is a sign that it likes the offer. but it has hedged its bets a bit and has not come out right and said we things shareholders should vote for the -- think shareholders should vote for this. we will have to see how shareholders respond. as for the market, i have spoken to a few analysts this morning, and the sense is that this will probably be enough to persuade investors to vote in favor. it's particularly that there is a cash component, shareholders could get one dollar and $.10 dividends -- $1.10 dividends to persuade anyone on the fence to say yes, let's do this.

>> joining us from melbourne on that newcrest had newmont potential deal. -- and newmont potential to you. apple personal computer shipment that followed by 40% in the first quarter, marking the worst drop since 2000. shipments of all pc makers combined also slept by nearly 30% to 56 million units. the idc says the demand search for pcs driven by pandemic air are among work has evaporated. alibaba backed sensetime is the latest chinese challenger to check tbd -- chapter pt. and swift -- unveiling a suite of new services. they displayed their model and the user facing chaz bought, and the ceo showed a live demonstration of the block, telling a story when prompted by questions as well as writing an email and scripting computer codes.

open ai cofounder and ceo sam altman says the organization is looking at expanding into japan and expanding japanese language services. his plans follow his meeting with the prime minister, where he discussed ai's technological potential and how to mitigate the downsides. coming up, live in taipei as tension with china escalates after taiwanese -- the taiwanese presidents visit to the u.s.. 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... saving you up to 75% a year. and it's only available

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>> the big bounce back when it comes to consumer confidence here in australia, the index for the month of april coming in at

85.8 as a big jump up from 78.5, which was one of those rare readings below 80 in a back-to-back rating that showed deterioration when it comes to consumer confidence close to a 30 year low. we are seeing improvement above that. that seasonally adjusted month on month number for april is a gain of 9.4%, with sarah movement that we saw in the month of march. this is an improvement, quite interesting, given that we have seen that rba pause and midst these ongoing concerns about cost of living and the pressure of this string of rate hikes on australian households and the mounting pressures when it comes to expectations of potential further policy tightening as well. we did see last month that just over 70% of respondents pulled after that decision actually still expect rates to move higher next year. it will be very interesting to see whether those expectations have now changed. as we know, households in

australia are very sensitive to rising rates, with a lot of them holding these variable-rate home loans. >> we are watching geopolitical could -- tested today. taiwan's foreign ministry says china's military drills are comparable to how beijing responded to a visit last year by then u.s. house speaker nancy pelosi. the naval exercises their the island following meeting between the taiwanese president and kevin mccarthy, the leader of the house of representatives. go to our breaking news editor in taipei. cindy, tell us about the new drills and how they compare to what we saw in august. >> china just ended its three military acts -- exercise around taiwan and monday in response to the visit to the u.s., and the presidents historical meeting with kevin mccarthy, on u.s. soil. if we compared the drills with

the one that took place last august, following then house speaker nancy pelosi's taiwan visit, we could see that there were some similarities, including that for both times, china sent large sorties of military aircraft and warships to the surrounding region of taiwan. take monday, for example. china sent almost 100 military aircraft to the surrounding region of taiwan with over half of them passing through the median line of the taiwan strait, and entering the southeastern and southwestern part of taiwan's air defense identification zone. that is a buffer zone between international air and taiwan's territorial airspace. so we see that there are large sorties again this time, and what is different is that on monday we also saw china sent its -- send it it's taiwan -- air carrier fleet for the first time.

the defense minister confirmed that there were more takeoff and landing drills commencing. that was the first time we saw them joining the drills. at this time we did see -- did not see china setting out exclusion sounds like it did, and they did not fire any missiles over the island. despite that we have heard from the taiwanese government that china's drills not only targeted taiwan but focused on attacking foreign military targets in the region, especially on the first island chain. part of china's drills was meant to be a response to the joint drills of the u.s. and philippines and to show that military superiority to the closer coast of china. in the following days we will keep a close eye on any further reactions from china.

cracks we also want to keep a close eye on french lawmakers visiting taiwan, what do we know about this, especially in light of emmanuel macron's comments about strategic autonomy? >> we heard that there will be two delegations of french lawmakers visiting taiwan, one by the end of the week and another one later on this month. it looks like both delegations are going to meet with top taiwan government officials and we also heard that semiconductors will be on their agenda, with a discussion with local leaders and government officials. in fact, the last time we had eight french delegation visiting taiwan was in 2021. and therefore administer told us in an interview that the french senate and national assembly have shown their backing for taiwan there, a strong supporter for taiwan for the status quo. across the taiwan strait.

but the visit is happening at a very sensitive time, because there are rising tensions across the taiwan strait right now and we see the military jewels just ended. another is the french president just visited beijing, and said in an interview that europe should avoid being dragged into the potential confrontation between the u.s. and china over taiwan. i think that comment is something we should keep an eye on about the french government's attitude towards the situation going forward. >> verse breaking news editor, cindy wong and taipei. the u.s. treasury's top international official says that the u.s. is not attempted to decouple from china. they also told us that the world's two biggest economies need to be able to collaborate. >> we always see need to be able to work together and i think that is something that you heard

from the leaders when they had the summit in bali, that they charged their teams to communicate and work together, and in particular, work together on global challenges. they said the world expects us to be able to work together on some of these big challenges, be it climate or debt or things like that. we will have to be able to communicate with our chinese counterparts and try to help move these processes along, and i think you have seen assume that and right after that leaders summit, secretary yellen had an important bilateral with senior officials and we met face-to-face with the vice premier at the time. and we had continued contact with staff and at my level. we are trying to work with the chinese on these important issues. in terms of your specific question around decoupling i think it is important for us to be clear that the u.s. is not seeking to decouple from china, we are not seeking to limit their growth. those are not strategic objectives. we want -- we have clear

security interests and we will defend those interests, and that includes specific restrictions around specific technologies, but we are not trying to massively decouple. we occasionally or frequently have issues with different economic policies in china, and we will defend economic interests as well, but we are not in any way trying to separate these two economies entirely. that is neither practical nor in our interest. >> where watching equity markets across asia, probably higher despite the mixed finished here in the u.s.. let's turn to and about with what to watch. bell. >> given what we heard there, some people are saying that traders are discounting the writing geopolitical risk that we had in markets today. but we are into the session now for japan korea and australia and we are seeing a bit of an upside coming through. it's being led to the major markets from japan and you can see the nikkei up around 8/10 of a percent, 75% of its

constituents are in the green this morning, being helped by that yen that we see yes, freshly higher against the great that, but trading around its weakest level since march 15. we did see the japanese yen, the big underperformer in the prior session, after the new boj governor make a pledge to keep -- made a pledge to keep things in place for now. now we are discussing shares of newcrest, the jump there at the open after the takeover bid made for up to $90.5 billion. we are also watching muted moves overall in the session, looking for different data points, including inflation data and the united states later this week, but bond yields are continuing to rise fractionally, traders betting on one further hike for the fed. you could see the 10 year yield, little changed.

and we are also looking at the korean won this morning, we see weakness ahead for the week ahead, and we have the currency report due in the next 30 minutes, and the bank will likely keep its easy setting in place on hold at 3.5%. let's turn to some stocks are watching a particular, the stocks that are declining are being led by the financial sector today, unsurprising, given that we had seeing this moving high in anticipation of a policy pivot that has not been forthcoming and we are not seeing the index clipping to a loss for the are down 2.1% versus a broader gain of 5% for the topix. certainly a sector we are focusing on and you are watching another one. >> we are watching these asian suppliers, a mixed day of trading after apple reported that their shipments fell by over 40%, the worst drop in over two decades. let's bring in debbie blue.

debbie, this is a combination of things, the evaporation of the remote working push that we saw threat the pandemic and also, does this indicate a broader consumer demand and confidence falling as well? >> i think this is a con -- continuation of week customer sentiment. as well as surging inflation, elevated ranking -- banking prices, and falling economic outgrowth. and then the fact that this is a pretty significant slump in pc demand is also reflecting the fact that the first quarter sales missed estimates, as they reported the number yesterday. and so what we are sick right now is that we have not seen this demand in customer electronics rebound, although

tsmc has said they are confident that business could pick up in the second half, although like last week we have also seen samsung electronics cutting upwards for its memberships, which you see in a wide range of electronics, including pc supports and servers and smartphones. i think it will take a little bit longer before we will know when exactly we might see customer confidence pick up again. >> debbie, how much does it have to do with apple, specifically, given its rivalry with other brands? >> i mean, apple is a premium brand and they will always be -- they will always be consumers who want to buy premium apple products. but at the same time, the weakness in apple products is a signal that even the consumers

who are willing to spend more on electronics are unwilling to put out that money. so for other commercial brands, we have seen other brands report a 20% decline as well. i think this is signaling that this first-half could be week, and it tsmc as said they expect their sales to decline in the first half in the dollar terms. i think overall we have to expect quite a tepid first-half when it comes to consumer electronics. >> debbie with the latest on the tech sector. let's go to su keenan with the headlines. >> started with the bank of japan's new governor, who says his predecessor's policies are sticking around for now, in his

inaugural press conference he said that the yield curve control and negative interest rates are but the economy needs at the moment. he says he is open to a review from a long-term standpoint, which would need the approval of the board members. the pentagon says it recent documents leak poses a very serious risk to national security, the defense department spokesman says the military is trying to figure out the scope and scale of the information that was leak. the justice department has also opened a criminal investigation into the matter. it includes detail of the u.s. -- the u.s. spying on other countries and an assessment of weakness in ukraine's military. former jp morgan executive jes staley failed to resolve the lawsuit against him with two related cases related to jeffrey epstein. his argument for more time was

ruled as not wanting a severance , but the judge did grant him seven more weeks before discovery, including witness depositions. global news 24 hours a day on air and on bloomberg quicktake powered by more than 2700 journalists and analysts in over 120 countries. i am su keenan and this is number. -- bloomberg. >> the philippine central bank may pause on its rate hikes if inflation trends down. we spoke with the head of the bank about the outlook earlier. >> the other thing to look at if -- is month on month. because when you do you and year you throw to -- but too much information. -- a way too much information. and when you look at the price index, it will be slightly lower than the general price index. the question now is whether the rest of the inflation that was brought about by the shocks, which we call second order

effects, will fade. and beginning to see signs of that as well in the month on month inflation, most products now if you look from one month to the next, are consistent between it a target of 3% plus or minus one, and it's been 12. up month on month it is now consistent everywhere except for certain products. just 3% inflation. >> see you are not watching these big year-over-year numbers so much, you're watching the numbers that are coming down, even one that was negative. are you aiming for the positive? >> the high interest rates reversed the depreciation of the peso. from 30% depreciation year on year last year through january and october. where's the peso actually

appreciate buy to a percent since january. that is the other factor that is working. the data points are consistent with some of the other points, because we are not as worried now about the currency depreciating because it is strengthening. >> governor, does that mean if you get another negative break in april that is not enough to make you comfortable with a pause? how negative does it have to be, and argue more worried about the strength of the demand-side still? >> that's right. you know, of course, that the gdp numbers are surprisingly high. more than last year. that -- means the demand is strong. we think the increase has done enough already to eliminate the existing demand. >> philippine central bank

governor there. we have more to come on daybreak. this is number. -- bloomberg. ♪ you got this. let's go. gobble gobble. i've seen bigger legs on a turkey! rude. who are you? i'm an investor in a fund that helps advance innovative sports tech like this smart fitness mirror. i'm also mr. leg day...1989! anyone can become an agent of innovation with invesco qqq, a fund that gives you access to nasdaq-100 innovations.

i go through a lot of pants. before investing carefully read and consider fund investment objectives, risks, charges, expenses and more in prospectus at invesco.com. >> take a look at how the salt markets are trading right now, we see every sector on the index integrate, being led higher by

materials and industrials, tech is also higher despite the fact that we saw pressure on the new york session. we had the weeks of gains for tech stocks, and that report from ibc of the applicant shipments, the worst drop since 2000, led pressure on the tech sector. we continue to watch those apple suppliers. >> let's take a look at the decision today, we want to bring in catholic, a crate economists, let's start with the latest data points showing that week not only have headwinds in the korean economy but also implications of broader weakness in global demand. the first 10 days have created summary. how worrying is this you? -- to you? >> you are right, external demand has been coming down fast. we saw double digit numbers in

march, that by the tech down cycle. we do think that january and february was the bottom, but we also see only a very gradual recovery from here. at the risk of course is to the downside. >> i want you to expand on that answer but i'm interrupting because we are getting the be ok decision right now as you're speaking. the key interest rate left unchanged, three and a half percent as expected. this would be the second consecutive time that the be ok has left the rate unchanged and this is the first time that this has happened in this current tightening cycle, which began in august of 2021. kathleen, going back to you, you are telling us about those challenges that the korean economy faces, give us a bit of expansion on what they are facing right now? >> this morning's decision as expected, we were looking for unanimous, no change decisions this morning, following actor

.5. i think going forward, the key would be went to signal easing from here. although inflation is coming down on the headline, core inflation is still stinky. we are looking at 3% core inflation to the second quarter this year. i think only the headline inflation comes down well below or around 3% by the fourth quarter this year and the be ok can consider easing before that. external demand slowed down and private consumption slow down and the second half will be a challenge for them to juggle between handling inflation and domestic growth. >> what are your assumptions that when it comes to whether one goes from here? >> we believe that the fed hiking cycle, of course, the lower terminal rate has brought down expectations about the strength of the dollar.

head of course, on the korean side, the expectation is that the trade will very gradually improve from here! current account balance will slightly be better than last year. so that supports the structural pressure for the korean won. but at a mild extent. we are looking at below 1200 for the rest of the year. but at the same time, the pace will be quite mild, and that should be removing the concern of effects passing through onto the inflation about the upside risk again. that brings us to the be ok, not worried about needing to make further rate hikes from here. >> kathleen, i believe this is the first rate decision after the banking turmoil we saw in march in the u.s. and europe. how vulnerable is. -- korea to financial difficulties in this sector, especially when deposit

insurance is much lower than the u.s.? is this is a concern in the broader sense of the economy there? >> one good news about korea is that we believe the financial stability fund is relatively sound. of course, the high household debt and corporate lending has been accelerated, more recently, but it is in the practice of the local commercial banks to have a very strict and conservative review of the borrower when they land to both households and businesses. we are not worried about the delinquency rate going up, it has been coming down to 1.4% past 12 -- in the past 12-13 months. but we do see the risk coming from the construction loan fund that has been lent out from the small minor savings banks and securities brokers firms. and that delicacy rate has been going up a lot higher than the local commercial banks, the big

major banks. so if they do have any fear of contagion coming onto the banking sector from those smaller banks, we do think that is the focus of the be ok and the local authorities, to tame and manage the expectation and sentiment there. but overall, we do think that now that the be ok hiking cycle has officially finished, concern on the market side and making is relatively contained. >> korean columnist at bok center news, always great to have you on these decisions. we have even more analysis on this rate decision, this second pause in the tightening cycle, tliv is your function for expert commentary and analysis from bloomberg's editors. i will be sitting down with the be ok governor later in the week at the imf spring meeting, so you don't want to miss that

either. take a look at how equities are trading across asia, it brought upside, everywhere on the index is higher, being led higher by the asx 200, this of course as we continue to watch the implications of what it means if we have reached that peak rate globally as perhaps we have seen with the be ok in its second month that has pause its rate hike at three to have percent. we also have the iba pausing leslie. stay tuned for all of these upcoming interviews during the imf spring meeting coverage. this is bloomberg. ♪

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