shery: welcome to daybreak asia, counting down to asia's major market opens. haidi: top stories this hour. imf cuts global growth projections, it is too soon to sound the all clear on financial sector from a prudent janet yellen placed on the baking risks in the u.s.. we hear from the imf korea mission chief as inflation eases. the fed is divided over its next policy move. one official says a rate hike may be regional, another calls for prudence and patience. take a look at breaking news when it comes to the jobless rate in south korea at the moment. we are seeing tick up to 2.7% when it comes to the seasonally adjusted on a plummet rate, lower than expectations of 2.8% heard just higher to the 2.6% that was on for bear. we have seen the job market in south korea seeing unexpected

resilience when it comes to the face of broaden her -- weakening demand. we saw that slump in exports and overall trade conditions in the first 10 days, trade numbers out yesterday, all of this has been threats to the job market beard we have seen resilience there. the on implement rate -- unemployment rate better than expectations. lower than the 3% that we were at back in january. this is the key parameter when it comes to korea's economic performance, a year and a half of tightening measures by the be ok. let's take a look at how we are an hour away from a cash trading across major records in asia. we are looking at modest gains ahead of the cpi report that

will inform the direction of where the fed goes and market expectations as to further interest rate hikes or, are we closer to a pause. cindy futures up by my 3%, we are coming up the biggest rally in three months, driven by strengths across minors, a flat trading session when it comes to trading in new zealand, fluctuating session for the yen after four days of losses against the dollar. shery: we are sinful equations when it comes to the u.s. markets, it was a session here in new york that lacked clear conviction beard we are seeing u.s. futures not doing much, the doubt any ground, the s&p 500 reversing earlier gains, finishing unchanged, but the pressure of the nasdaq 100 another tech stocks. we are trying to get more clarity on where the fed goes from here and we have the cpi numbers coming out on wednesday.

we are seeing bearish wagers against u.s. stocks rising from hedge fund speculators. we continue to watch what is happening in the treasury space, yields slightly higher, the two-year still above 4%. crude prices are under pressure, some gains in the new york concession with the first of a series of supply demand predictions coming out. only seeing a modest rise in production in the u.s.. haidi: the imf has whittled down its will growth forecast for the second time is your. kathleen hays is in washington covering the's spring meeting. what are the numbers telling us? kathleen: the imf has lost confidence in how strong the global economy is going to be this year. they cut the global forecast by

a tenths of a percent. that's down from 3.4% for the actual growth rate last year. it suggests that the imf has a up hope that this would be the turning point, the early january, the next april report, continuing to do better, re-openings around the world. instead, they said, the not so fast, it has a lot to do with the financial turmoil that started in the u.s., which led to europe, and has now left a shadow. are there more shoes to drop my and what would that mean for lending conditions? imf chief economist saying it is a big concern for him. i want to contrast that to the world banks forecast from last week. the world bank rose their forecast by 1/10. they get to the same point.

that's going to help the economy move forward, they like the fact that a warm winter in europe has kept energy prices down. market resilience in the u.s.. probably globally, no matter with who you talk to, the banking turmoil is a big question. growth is still expected, but there is not the same confidence there was a months ago. shery: plenty of commentary from fed officials today, and is there any insight that stood out? kathleen: there seems to be, will they do another rate hike? it was all but certain, until svb had its mountain. until credit suisse had it smelled him. we heard from john williams, president of the new york fed, he said one more hike is reasonable because there is still more work to do on inflation.

austan goolsbee, the new president of the federal reserve bank of chicago, speaking at to the economic club at new york your he said, we have to have prudence, patients because we have to be wondering about tighter financial conditions and financial headwinds. we should gather further data, be careful about raising rates aggressively until we see how much work the headwinds are doing for us in getting down inflation. this idea that if financial conditions tighten, maybe the fed doesn't have to raise rates as much. the philly fed bank president saying he is watching the same factors, he is also not white as suggesting that you have to watch as it goes into the meeting, nothing is guaranteeing. the cpi report coming out of the u.s. in the next few hours. the headline is supposed to improve, energy prices have fallen, that's a big reason to go to a 6% in february 2 5.1

percent in march. we will see how the fed factors that into its coming analyses. kathleen hayes joining us from washington, we also got treasury secretary janet yellen weighing on the state of the u.s. economy, saying it is in better shape now than it was six months ago. that is despite recent stress and the banking sector and tighter monetary policy settings. >> i have not seen evidence at this stage suggesting a contraction in credit, although that is a possibility. the u.s. economy is obviously performing exceptionally well with continued, solid job creation, inflation gradually moving down, robust consumer

spending. i'm not anticipating a downturn in the economy, although that remains a risk. shery: a spring in our u.s. treasury and economic policy reporter, joining us from washington your we are talking to kathleen, about, it's from fed speakers. and patrick harker talking about the resilience of the banking sector. what did secretary yellen have to say? chris: she viewed this recent inking turmoil as some that the economy could simply shrug off. up to a point, her points are reasonable. she pointed to the labor market, which has remained remarkably resilient. then she made quite a surprising statement. she said she saw no evidence of

credit contraction. just last week, federal reserve issued a report that showed in the last two weeks of march, u.s. bank lending declined by the largest amount on record. those records are go back to 1973. credit measures are not the most reliable. i don't know what metrics she is looking at. janet yellen is not one to go out and say something entirely unfounded. it is questionable that treasury secretary is claiming there is no credit contraction in the u.s. economy. or who feels that we can breeze past this incan -- banking turmoil. haidi: debt relief is a major topic when it comes to the spring meeting spared is there any hope for progress being made? chris: mostly no.

we have been hearing a bit of this from the secretary today, we've been hearing from treasury officials, that we ought to expect incremental, technical progress in these stocks. there haseen a push since the pandemic to bring together a new structure for debt leave for -- debt relief for middle income countries. the wildcard is china. china is the biggest creditor, to developing nations, it is not playing ball so far in this new structured, common framework set up by the g20. china is not sending its senior officials to these meetings in washington this week. there is not a lot of expectation for any big progress. haidi: bloomberg's u.s. treasury and economic policy reporter

chris condon. let's get to su keenan with first word headlines. >> the swiss parliament has voted against granting $120 billion in government guarantees for the ubs credit suisse deal, lawmakers can do little to derail the takeover, there is still likely to overhaul too big to fail rules and pursue legal action against management at credit suisse. this embolic by the lower house stands in contrast to the upper house, which gave its green light earlier in the day. taiwanese a vice president is expecting to be named as the ruling democratic progressive parties candidate. compared to current leader tsai ing-wen, he is seen as a robust advocate of taiwan's in venice. the winner of the 22 for election will be released up into a role that could determine the trajectory of geopolitics and the global economy for years to come.

to france, french finance minister bruno le maire says europe must not to be pushed around due to the rivalry between the u.s. and china. lemaire told europe one radio that being a u.s. ally does not mean that france should be against bashan. his cummins come after president macron's visit to china last week, during which he pushed against decoupling compared with washington's tougher stance. beijing is planning reviews for local artificial intelligence services before they are allowed to operate. china's interest -- internet regulatory says it wants to ensure that platforms provide accurate content and do not compromise national security. tech firms like alibaba plan to launch ai services that would compete with the microsoft backed chatgpt. global news 24 hours a day on air and on bloomberg quicktake powered by more than 2700 journalists and analysts in over 120 countries. this is bloomberg.

shery: still ahead, we speak to the imf korea mission chief about why they affect korea's gdp to slow to 155% growth this year. more on the outlook later this hour. first, twitter has ceased to be an independent company after merging with the newly formed shell firm x corp. this is bloomberg. ♪

>> we have to be vigilant because some of these pockets of vulnerabilities could spread to the whole financial system. this is not where we are, the authorities have been dealing with that. what we are seeing right now is the risk that banks are going to look at the outlook, look at their bottom line, they have to pay more for deposits, using deposits, a law sets on the asset side, they are going to be more prudent in extending loads going forward. that could way down further on economy growth, in the u.s. and the rest of the world. haidi: speaking to bloomberg about the risks to the global both outlook.

let's get to our next guest, in terms of what the fed might do next. joining us now is the chairman at dalton investors. we are hearing divergence from new york a fed president john williams about the need for more work to be done and hearing from chicago feds, saying 33 patients and prudence on assessing the impact of what is being done on credit conditions. what do you expect the path to be? >> the next cbi number is important. absent a major surprise on the upside or downside, i would expect that the fed would increase fed funds by another 25 basis points, because that is what they have said consistently . that's what i expect they will do. they probably have had an idea

to bring the fed funds rate to five. because it takes a year for the impact to start to be seen. we have started to see some impact. but not a huge impact event the strong jobs numbers. haidi: when it comes to what that means for the rate sensitive rallies that we have seen, even bitcoin joining the does that mean there is a further volatility or is it a straightforward bet for the months to come? belita: the good news is that we are not macro investors, we invest in one company at a time. given the widespread uncertainty in the world, on the geopolitical front, on the economic front, the inflation front, all of which are important factors, that we will have volatility. for us, volatility gives us a

chance to get in when the price is low, and get out when the price is raised higher. haidi: when we talk about a investing, many analysts and traders have come up with a proposition that india is a desirable than china. in your notes, you are optimistic about the indian outlook, why? belita: india represents an excellent long-term place to invest. it is a democracy with a huge population who are very young. the met -- the dimock -- they can effective see a growing middle class. the changes that have been made by modi have been constructive. the worry longer-term is the hindu extremism. additionally, out of a billion

people, you are going to find talented entrepreneurs, we already see them. you are seeing the slope maturation of the market and that they are more and more investors coming into the indian stock market. that is important. it makes the market less reliant on foreign investment. haidi: when it comes to china, everyone knows the challenges of investing in that country. but there seems to be a fear of missing out when it comes to the second largest economy in the world. there pockets of value at this point? belita: we had trouble investing in china because of the lack of alignment in interest between management and shareholders. that's a problem for us.

there are times, for instance last october, when the market plummeted. there were great values in sectors that were not sensitive, such as fashion, or people that make basic goods that the average consumer would use. these are areas we can invest in when the price is attractive. shery: always great to have your insights. plenty more to come on daybreak: asia. this is bloomberg. ♪

at morgan stanley, old school hard work meets bold, new thinking, ♪ to help you see untapped possibilities and relentlessly work with you to make them real. ♪

shery: twitter as an independent company no longer exists after merging with elon musk's newly formed firm x corp, driving special agent about what he has in store for the social media

500 let's bring in social media reporter joining us now from san francisco. what are we expecting for twitter. >> it's an interesting situation. they merged with this company called x corp.. they may still do business with twitter, or using the twitter name, but they are technically called x. that has been part of his vision for a while. haidi: what is the broader game plan when it comes to what elon musk is trying to create with this desire to make x similar to wechat in terms of the business units of that form the whole. >> he has talked in the past about creating a super app,

taking the current capabilities and adding things like payments or booking event tickets. he has been vocal about the payment part of it. and having that as part of his vision, he comes from a paypal back in the day. he has had the vision for a long time of having an app where you can do anything that you might want to do in one place. shery: any insight on what happens to elon musk's schedule? we know that he has been busy managing different companies at the same time. >> we will see how he manages this, it would be another -- he has a lot on his plate. payment is a whole other business, it is outside of twitter's core business. it is interesting to see how he will manage that. haidi: let's get a quick check of latest business flash

headline spirit glencore is stepping up its pursuit of tech resources, that as a cash component. teck rejected glencore's proposal to buy the company and $23 billion in shares. the new deal would give teck shareholders the option to get billion dollars of cash is that of shares. blackstone closed its largest level property drawdown fund, it secured 30.4 billion dollars for the fund that targets deals across sectors, such as rental, hospitality and data centers. it started in 1991, it now has $326 billion of investor capital under management. for the first time since 2018, boeing has taken the jet livery crown from its arch rival airbus. the u.s. company says it delivered 130 aircraft in the

first quarter, a 30% -- 37% increase. it is a sign that boeing is getting back on track after years of production issue. airbus delivered 127 planes, a 9% drop. coming up next, we will be discussing korea's economic outlook and the potential of another be ok --bok rate hike. this is bloomberg. ♪

>> today, what i want us to think about is why i think that

in moments of financial stress like this, the right monetary policy is really caution and watchfulness and prudence. haidi: chicago fed president austan goolsbee they're talking about the need for patience and prudence in terms of monitoring the impact of rate on credit markets specifically. we're just about a half-hour away from the start of trading in sydney. sidney futures looking pretty bright after the biggest rally we saw in australian equities in about three months. largely driven by the mining sector and those gains on the back of opening up their books to due diligence with that potential deal on the rise and. singapore nikkei futures up by just about .3%. trading in seoul potentially

getting a boost after the unemployment numbers came in a little bit stronger than expect. u.s. futures seeing a modest upside after a range bound trading session overnight amidst broad-based weakness for the u.s. dollar. this as global economic uncertainty continues to abound. the imf trimming its global growth projections to 2.8% this year, warning of high uncertainty and risks. their chief economist spoke exclusively to bloomberg. >> the baseline is the baseline, so that is still where we believe things might unfold. a slight downward revision for this year and next year. this is reflecting basically the flat -- the fact that we have advanced economies reopening, head of china reopening and at the same time we have a tightening of monetary policy that is weighing in.

plus a little bit of financial instability that could lay down on bank lending. you put all this in the mix and that's where we have our baseline. the concern we have is that there could be a lot of things going off the rails, in particular in the financial stability space. in addition to the baseline we offer two other scenarios and we look at what the consequences might be. >> when it comes to stb and credit suisse, how do you think about that? >> clearly what we are seeing is with the sharp increase in interest rates by central banks around the world in the last year, that is creating pockets of vulnerability, both in the banks and the nonbanks, we had the u.k. episode last fall, we have to be vigilant because some of these pockets of

vulnerabilities could spread and they could spread to the whole financial system. what we are seeing right now is good -- the risk that banks are going to look at the bottom line, they are losing deposits, booking losses on the asset side and holdings of long weighted asked income assets and they're going to be more prudent in extending loans going forward. shery: the imf expects developing economies particularly in asia to be a bright spot this year. inflation already easing in south korea but tight monetary conditions still leading to growth concerns. harold, great to have you with us. we have seen for the longest time inflation pressures being a

concern for south korea, but now with global demand and the property sector weakening, is it more evident issue of growth going forward for south korea? what are the key risks? thanks for having me on. we're still following growth of 2.6% in 2022 in korea. we're expecting a rise from our forecast from january. there's a variety of factors including consumption, the ongoing housing market correction and tighter monetary policy but also importantly for korea it's the worst unexpected semiconductor down cycle.

let me .22 things that help with this -- let me point to two things. korea is slightly up. secondly over the course of the year we expect to pick up in demand from china, reopening their, and it gradual normalization of the semiconductor sector. shery: how much of a drag could this be? >> we do think china will be a boost to korea pot economy, just maybe not immediately. -- two korea's economy.

those industries in china that are more dependent on airports -- on imports could take a little longer but we do see a marked recovery in china because of the year and high-frequency indicators, so we see a likely increase of 2% in china that will sooner or later benefit china's trading partners. haidi: given the worries about external demand and what happens to an export-dependent economy like korea if the u.s. and e.u. go into a recession, is that the biggest risk at this point, and are you surprised that the labor market is still remaining resilient? >> that is a good question. in terms of the u.s. and europe, we do see that by large those economies are more resilient

than it seemed earlier, based on our projections. we're slightly more resilient in seeing u.s. growth this year and in the euro area, some european economies will likely see a slight contraction over the course of the year. if -- you ask about the labor market in korea, it has been tighter than expected and that's the case and other economies including the united states. so we do think that the labor market in korea will have some support for domestic demand with

households earning significant demand through the labor market. haidi: how much vulnerability is there and the banking sector, particularly after the scare that we had a november. >> i would say it was a critical stress in the local currency debt markets following the fall of a project developer for which the guarantee by local government was not immediately honored. thanks to the swift korean monetarist -- monetary response that's -- the stress has lifted now. it -- the effect on institutions abroad was quite small.

i can add that property prices have fallen in korea so we still looking closely at real estate related vulnerabilities there but there are still risk associated with project financing, and while conditions overall have improved, the risk does remain for some small to medium-size developers and construction firms in pockets of vulnerability may exist in institutions that are heavily exposed to project financing but we do not see this at any scale that will be systemic. shery: are you concerned about the court -- market moves around korea? the korean won being one of the worst performers around asia. could that have an impact on macro economic policies in the country? >> i don't think so. think korea is preventing --

there are no macro relevant economic movements but some movement should be tolerated and we don't see many issues around that. there is the issue of the rising interest rate differential between korea and the united states but even there some movements resulting out of that should be fine. haidi: great to have you with us, we appreciate your time. stay with us throughout the course of the week for more great conversations with key global management leaders during the imf spring meeting coverage. this is bloomberg.

meantime let's get you to su keenan with our first word headlines. su: janet yellen says the economy is in better shape than six months ago. despite recent turmoil in the banking system. she played down data that showed lending contracted since march. speaking in washington, she said even with the recent stress, banks are still lending. chicago fed president austan goolsbee is urging prudence and patience in setting monetary policy. he says the u.s. central bank should take a measure of just how much last month banking turmoil will contribute to tighter lending conditions. he is the first to signal that he may support holding rates during next month policy meeting but stop short of's specifically

endorsing the move. lua's trip to china will include visiting the huawei site in shanghai. lula is heading to china on a state visit as he seeks to improve trade ties between the two countries. we will have a bilateral meeting with president xi jinping on friday. u.s. defense secretary lloyd austin says washington will not stop until it tracks down a trove of classified -- how trove of documents -- classified documents appeared online. in his first public remarks since the league he did not say why took officials a month to discover the documents online. the justice department has an ongoing investigation and the u.s. has sought to reassure allies about its ability to keep secrets safe. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries.

i'm su keenan. this is bloomberg. shery: coming up, china is planning to require a security review, the details next. this is bloomberg. ♪ you can't buy great conversations, 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.

haidi: baidu and alibaba have

unveiled their own versions of chatgtp. now the chinese government is saying it will require security reviews of such services before they are allowed to operate. let's bring in stephen engle from hong kong. this is china, so i guess the question is, was it very much expected, and at the same time, how much of a blow will it be for their ai ambitions? stephen: let's get to the first part of that question, was it expected? you could expect that given the regulatory environment toward tech over the last three years against alibaba and others in the priority of national and data security, that there would be an effort by chinese regulators to get ahead of this new trend which is predicted to be explosive and transformational for society and for the technology world. we've got these draft rules that

were published on the website of the cac, the big regulator, a powerful body overseeing the technology space. it is essentially saying these ai providers must ensure content is accurate and respects intellectual property and neither discriminates nor endangers security must also clearly label the content one sees as ai generated content. generative ai has exploded since november with open ai's chatgtp powering up the industry. in china you have a lot of ambitious players, all aimed to build the definitive next-generation ai platform in china for the world's biggest internet market. people we have spoken to do not expect necessarily that foreign

players will be welcoming to china, just like google and facebook and all those others are not allowed to operate in china. but one have to question given the pretext to your question, would they want to operate in a fairly restrictive internet controlled environment in china. before we move on to those services coming from alibaba and the like, there's three big questions that i highlight for the service operators in china and given the new guidelines that have been published. how to galvanize growth and ai in china and also police its content, that is a big question that alibaba has been trying to solve over the last three years since the regulatory crackdown. how can you do this without the advanced chips especially for training, because of those export controls by the united states. and how do you allow these companies to build without

building monopolies? obviously that is something alibaba has to contend with. shery: tell us about the services they unveiled, how groundbreaking has it been so far? stephen: i don't think they are groundbreaking yet. they are still building up deplatforms and building the training, the learning, the algorithms and data that goes into that. it's not necessarily transformational like chatgtp has been, but these are steps toward what will likely be a generative ai industry in the world, in the west and china. echo smart speakers, home -- more home providers, and since time unveiled new ai services. theo unpack and to uncove t rapidly changing industry, not only in china but

around the world, obviously. shery: plenty more to come. this is bloomberg. ♪

haidi: we are getting breaking news, some of the banks we saw

shored up first republic to boost their reserves. we're hearing from people familiar or would knowledge of the matter that the biggest players, the likes of wells fargo, citigroup, bank of america, really contributed the biggest portion of that $30 billion in deposits and they're planning to set aside about $100 million each. it's meant to ensure covering potential losses for a lot of these assets dictating the move, according to people familiar with the matter. the amount set aside by each bank will likely vary according to the size of their contribution. the provisions will have a minimal impact when it comes to these lenders earnings and of course they cost billions in profit every quarter. we have not heard comment are

they did not immediately comment when it comes to u.s. lenders. shery: we have breaking news from japan a form of ppi numbers. a faster acceleration any comments had expected but it is so easing from the previous month. inflation numbers for factory gauges right now, 7.2 for the month of march. core machine orders month on month, interesting, a contraction of 4.5% for the month of february, not his biggest economies had expected but still want the fall from the boost of more than 9% that we saw in the previous month. with seymour signals from large manufacturers that perhaps the optimism tore the rest of the year is not as great. we are seeing perhaps some indication of where investments are headed. of course we headed toward the

market opn. we had heard that warren buffett is eyeing more investments in japan. could foreign investment in japan rise further from this? >> yes, that is possible, and it is worth noting that the foreign interest in japanese stocks have been rising according to morgan stanley, their underway position in japanese stocks has shrunk to 1% -- one percentage point. they had been two percentage points underway for many years. one percentage point may sound a little different, but actually in the global portfolio japanese stocks were about 6%, so were

talking about a difference of almost 16 of their portfolio. there is some reason to be optimistic about japanese stocks. japan, thanks to japan's delayed reopening, the japanese economy looks quite solid, at least for this year, no one is really expecting a recession. also the guinness very cheap, which means bubble investors can benefit with more price -- more fair price levels. so there's a reason some investors are now avoiding investment in china for geopolitical reasons, and if you

want to bring some money out of china you have to put it somewhere. japan can still benefit from that. so there seems to be a good reason to be optimistic. haidi: minutes away from the start of trading on this wednesday session in australia, tokyo and seoul. austrian futures now extending gains about .6%, looking like we will continue that rally. the biggest gains we saw in yesterday session in about three months. a modest upside when it comes to the start of trading in japan and korea. this is bloomberg. ♪

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shery: we are counting down to

asia's major market opens. this was after mixed close on wall street. not a lot of conviction in market moves. we had fed speakers showing divergence about where the fed should go from here, but globally speaking, the imf really cutting those growth forecasts. haidi: so much hinges on the u.s. cpi, where does the fed go from here and where to market expectations go from here? will we see changes when it comes to these recent rallies across bitcoin, for example. shery: not a lot of question on where the boj goes, waiting to see what happens on the japanese open but we've seen the japanese yen holding steady against the u.s. dollar. a muted session early in asia. we had seen gains across the

board in japanese stock markets and we continue to watch jgb's. we had seen them gain in the previous session after we saw that five year bond sale stronger than expected demand. look at what the kospi is doing at the moment. korean stocks gaining for a third session. we continue to see them lose ground and under pressure at the open as you can see. this is after the be ok cap the rate steady for the second consecutive time, the second time there holding steady in this tightening cycle. we've seen the korean unemployment rate come down to 2.7. the tight labor market continues to be in play in south korea and growth concerns of their given that the global demand remains weak. haidi: that global demand when it comes to the lack of strength

to the china recovery playing out in a big way for australia. the asx 200, a good start to trading, watching for more strength potentially but we will wait a little while to see the market come online. the aussie dollar managed to lead gains but most of the sessions trading this week but down given the softer central-bank outlook we are now dealing with. for now are seeing a little bit of support coming in from those positive china headlines and when it comes to resolving the dispute over bali and now potentially over wine tariffs as well. take a look at the picture when it comes to energy as well, another thing that will play out significantly movement it comes to the equities trading session.

oil has been holding onto gains with the u.s. projecting modest production growth there. brent crude trading at about $85 a barrel. generally energy sentiment has been pretty risk on with projections for this week with only a modest rise in output. shery: with the sector having a useful pillar of support in china, with us now is our guest, always great to have you with us. we haven't necessarily seen that huge consumption happening in in china despite the reopening. how much longer can we expect this to really boost optimism in the markets? >> we need to see the data.

the first few months of the year i guess were probably too optimistic for the -- to expect the numbers to show a rebound. we had the chinese new year as well and that always jumbles up the numbers a little bit. we are in the time now, march, april, may, where we should be seeing the numbers and frankly we are not seeing the evidence. the fact that inflation continues to underperform expectations is itself a signal that the actual demand still remains quite week. we will be talking about consumption i suspect for another few months but we need to start to see the hard data and is yet it is quite conspicuous by its absence which is a big concern for chinese authorities. shery: on the other hand we are seeing a really robust economy

here in the u.s. which is leading to more concerns at the fed will continue on its tightening path. how does that challenge your calculations this year? >> to follow on from that point, obviously we haven't seen the numbers out of the u.s. this week. the inflation picture for us in the u.s. is still very mixed. it is certainly not consistent with the rapid adjustment to the downside in interest rates. so there -- what we're focused on as well, the u.s. for us is not as attractive as it once was insofar as treasuries and u.s. equities are concerned. so we are looking beyond the developed markets right now into opportunities in the emerging markets. from a fixed income and equity perspective we think emerging markets are going to ride out

the slowdown wave quite well. in terms of portfolio allocations we are still very defensive more broadly on equities and opportunities in the fixed income space. inflation is topping out in certain parts of the world. on that bond versus equity balance we are still favoring a higher allocation toward fixed income. haidi: receiving a slow upward revision process, are you expecting that picture to pick up, and when you look at not all emerging markets are created equal, where are you liking those opportunities? >> it follows on the conversation from korea. if there's not pick up on the consumption side of china, the labor markets elsewhere a very tight.

we would not be all together that negative on the overall global demand picture. of course labor markets are bit lacking and there are signals that labor markets are starting to roll over. that would be negative signal as far as markets that are dependent on exports. korea being a case in point. it's quite clear and quite clean the way we are doing this. we do foresee commodities remaining well supported. it's an old relative value trade. for those markets that are quality exporters, that's a real relative play between emerging markets right now. haidi: i'm interested to know your view on the china versus india debate.

is india too expensive? as the china reopening the low hanging fruit? i found it interesting that you point to the lack of evidence about the domestic consumption momentum in china. >> that shouldn't mask the fact that the situation china is becoming little bit clearer as far as international investors are concerned. clearly what we've seen recently in terms of the bellman's across the tech sector and political developments have been extremely important in terms of those who are sitting at the high table right now on policymaking in china. the new team as it were, they are going to be very pro-reform and pro-profit sector. -- pro-private sector. given some of the travails we've had in the chinese market the last 18 months, the issues around real estate, for example.

the tech side is looking at opportunities and were starting to see interest again and international investors who have stepped back from china over the last 12 months or so but the interest is starting to build up again, giving signals of potential reform in china. india still looks very attractive insofar as we think of india as the next leg on industrialization. china is beginning to look very interesting again because a new political regime there seems to be supportive of reform and some of what they push back on previously. haidi: always great to chat with you. su keenan has the first word headlines. su: janet yellen says the u.s. economy is in better shape than six months ago. this despite recent turmoil in

the banking system. amid the collapse of svb and signature bank, speaking in washington, she said even with the recent stress, banks are still lending. >> i'm not really seen evidence suggesting a contraction in credit, although that is a possibility. the u.s. economy is obviously performing exceptionally well with continued solid job creation, inflation gradually moving down, robust consumer spending. so i'm not anticipating a downturn in the economy, although of course that remains a risk. su: to taiwan, the vice president expected to be named as the ruling democratic

progressive party's candidate in the next presidential election. compared to current leaders, he is seen as a more robust advocate of timelines independence. the winner of the january 2024 election will immediately set a role that will determine the direction of geopolitics in the global economy for years to come. beijing is planning reviews for ai services before they are allowed to operate. china's internet regulator says it wants to ensure the platforms provide accurate content and do not compromise national security. tech firms like alibaba and baidu plan to launch ai services that would compete with the microsoft back chatgtp. the brazilian president's trip to china will include a tour of huawei's innovation center in shanghai. the visit may potentially harm the u.s. which accuses the tech company of -- may potentially

include the u.s. as it seeks to improve trade ties between the two countries. we will have a bilateral meeting with president xi jinping upon arriving. i'm su keenan, this is bloomberg. shery: still ahead, we discuss why beijing's heightened scrutiny may not stop the ai boom in china. plus, showcasing submission to an international blog chain -- blockchain hub, just ahead. this is bloomberg. ♪ go. go brain. go this one. no, not . go. go optimizing data. go efficiency. go results. emerson's plantweb digital ecosystem is the brain for smarter, safer and more sustainable performance. go plant go. go boldly. emerson.

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>> today, what i want us to think about is why i think that in moments of financial stress like this, the right monetary policy is really caution and watchfulness and prudence. haidi: chicago fed president austan goolsbee there. that officials singing what sounds like different tunes about the next policy move. we just heard from austan goolsbee talking about the need for patients and prudence in

terms of monitoring the flow on effects on credit markets. then we have john williams saying that there is more work to be done in this inflation fight. >> you wouldn't even have this divide between the various fed speakers if we hadn't had some recent collapses of banks in the united states. if that hadn't happened and we were just purely looking at the data i think you would hear there was confidence for at least one more 25 basis point hike. 3.5% unemployed is not the situation the fed is entirely comfortable with. the underlying picture is strong enough, when the cpi data comes out today, the core numbers will still have a 5% hang which is way too high compared to the fact that the fed keeps insisting the ultimate target is to percent for inflation. you put all those thing together, the data clearly would

justify more on interest rates when they meet in may. in the meantime we've had a few banks fail in the united states and there is some concern there could be more in the woodwork. as the central bank is responsible for monitoring the health of the banking system and making policy, they have a dual role so they are more aware than anybody that there could be some risk ahead. the cpi number today, we always say cpi's important but today really is a swing factor. they need to come in at least an line or maybe a fraction above for them to justify another rate hike. the downside it will be quite hard for the fed to hike rates anyway. shery: fed speakers talking about the banking sector and perhaps showing a little more optimism about the calm we are seeing their, that the banking system is sounding resilient, but the imf not only downgrading

the global forecast but resisting to sound the all clear when it comes to this sector. mark: from a traders point of view, i can tell you, unfortunately the imf track record speaks for itself. it's not very good. either they are too far behind, they wait too long to update their forecast or they just missed by such a wide degree. so there isn't much from a traders point of view, not much credibility in the imf forecasting ability. of course there's a lot of data when they put out the report, a lot of interesting background and useful data. their ability to forecast markets is not that great in the eyes of most traders. shery: mark cranfield they're giving us some perspective on the imf forecast. when it comes to those economic numbers, the fund has just trimmed its global growth

projections to 2.8 this year warning of risks. the imf chief economist spoke exclusively to bloomberg. >> the baseline is the baseline, so that still where we believe that things might unfold. as you pointed out, it's a slight downward revision for this year and next year, 2.8% and 3%. this is reflecting basically the fact that we have advanced economies reopening are moving ahead, china reopening and at the same time we have the tightening of monetary policy that is weighing in. plus a little bit of financial instability that could weigh down on bank lending. put all of this in the mix and that's what we have our baseline. the concern we have is that there could be a lot of things going off the rails, in particular in the financial stability space. that's why we are offering two other scenarios where we amp up

financial instability and look at what the consequences might be. >> when it comes to svb and credit suisse, how do you think about that? >> clearly what we are seeing is with the sharp increase in interest rates by central banks around the world in the last year, that's creating pockets of vulnerability in the financial system, both in banks and nonbanks. we had the episode last fall, and we have to be vigilant because some of these pockets of vulnerabilities could spread to the whole financial system. authorities have been dealing with that, but what we are seeing right now is the risk that banks are going to look at the bottom line, they have to pay more for deposits, they are booking lawsuits on the asset side and holdings of long dated fixed income assets. they are going to be a little

more prudent in extending loans going forward and that could weigh down further on economic growth. haidi: the imf chief economist there speaking exclusively to bloomberg. stay with us for more interviews with key financial leaders. this is bloomberg. ♪

shery: the biggest u.s. banks are playing to bolster banks, explain to us what's happening here. these banks are some of those that contributed the largest stock in deposits, so why are they doing this now?

>> in some ways it can simply be explained away as a to require banks to set aside sufficient allowance for a wide range of assets. what is interesting here is that rarely do you see the largest banks in the country gang up together and try to shore up -- while at least four months is telling them want to keep their deposits here, it was entirely risk-free. just because of the measures these banks are taking, the fact that they do have to bolster their reserves, the biggest contributors have putting up to $5 billion.

it tells you this move had some other additional side effects and $100 billion is not nothing when it comes to additional provisions. haidi: does it make a meaningful impact when it comes to future earnings? >> it will be a point of discussion. it will be something that will likely come up with the call. i'm sure it will come up in discussions because this friday with j.p. morgan in citigroup in the united states followed by some of the other bigger banks through the next few days. we member, these banks -- it will appear like a little lip there. but they're going to look at every single line item and something like this will jump out. they will have to factor that in to see what to expect from these things when they report their numbers. shery: the imf today really

declining to call the all clear when it comes to the financial sector. what are we seeing in u.s. banks at the moment, the broader sector, especially in regional banks like first republic? >> that's -- it's been a few weeks since all these banks came together to try to help first republic shore up their bank and give it some time to play out the strategic options that it seems to be seeking. we don't really seem to have made a whole lot of progress. we know that first republic will come out with their earnings report on april 24. will the government have to come in and offer a few more concessions to attract or induce any other buyers to come forward and help this bank? we are not talking about it as the great banking crisis of 2023 anymore.

at the least, more of an industrywide crisis, is a crisis for certain banks. it's very hard to call the all clear because we are still in a place where we are stuck in limbo with a number of these banks that saw their stocks drop massively, first example is a great example. they sort of floated at that level for the last few weeks. that is not good enough. what we want to

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>> we are seeing broad episodes across risk assets in asia with the nikkei gaining for a fourth

consecutive section. communication and industrials. despite the fact we saw machine orders under a bit of pressure with the contraction. the kospi gaining 0.2%. this after the bank of korea kept this in schmuck interest rate steady at 3.5%. we got the unemployment numbers for south korea at 2.7%. also seeing upside on the asx 200. the aussie among the best performing g10 currencies given we saw strong consumer confidence numbers this week. kiwi sticks are also on the up -- kiwi stocks are also on the up. yvonne: bloomberg intelligence says chatgpt is likely to deter alibaba and netease.

let's bring in number intelligence senior analyst catherine lim. should the tech board probably be concerned about beijing's goals and applications when it comes to the growth outlook follow these companies? katherina: when we look at the pipelines, there were not so many surprises. i think with the new guidelines that come in at this early stage of generating it i applications in china, that is room for firms to fine-tune their development. and maybe integrate some of these applications on their existing platforms. shery: what are we seeing from

those platforms in terms of chatgpt-like capabilities. how will alibaba's compare to baidu's for example? catherine: looked at alibaba yesterday, and it seemed very interesting to see how they are looking to actually integrate their chatgpt-like tool into some of their platforms. and i must stress, it's very early stages. they are likely going to do more refinements. it is very exciting to see how alibaba spreads and uses this tool across multiple platforms that cover a broad spectrum of industries and categories. i am excited to learn about how alibaba will be able to change the experience, particularly the

consumer experience. nick potential for more monetization -- and i see potential for more monetization. shery: senia aipac consumer analyst for bloomberg intelligence, su keenan. let's get to the first word headlines. su: he says the u.s. central bank should take a look at just how much last month thinking turmoil will contribute to tighter lending conditions. the fed's newest policymaker is first to say that he may support holding rates during next month's policy meeting. but he stopped short of exclusively putting a number on it. >> what i want us to think about is why i think that at moments of financial stress like this, the right return policy is really caution can watchfulness and prudence. su: switzerland's parliament's

lower house has voted against granting 120 billion dollars in government guarantees for the u.s.-ubs credit suisse deal. lawmakers can do little to derail that takeover but they are still likely to push the government to overhaul too big to fail rules and pursue legal action against management at credit suisse. this symbolic move by the lower house stands in contrast to the upper house which gave its green light early in the day. in the u.s., defense secretary lloyd austin says washington will not stop until it tracks down how classified documents on ukraine, israel and other nations appeared online. in his first public remarks since the leak, he did not say why it took officials months to discover the documents online. the justice department has an ongoing investigation. the u.s. is a reassuring allies about its ability to keep secrets safe. india's monsoon is forecast to

be normal this year, bolstering the outlook for agricultural production and the economy. the meteorological department says showers in june and september are likely to be 96% of the long-term average. there were concerns after predicting a below average monsoon season which would reduce crop yields and drive inflation. global news, powered by more than 2700 journalists and analysts in more than 120 countries. i am su keenan. this is bloomberg. shery: taiwan's ruling democratic progressive party is set to name this vice president as a presidential candidate for next year's elections. he will be running at a time of heightened tensions between china and taiwan. our guest joins us from type a. tell us about the vice president. guest: this afternoon we will see the first presidential candidate for the january

elections next year, taiwanese vice president lai ching-te who will be officially nominated as a candidate. this is not the first attempt for vice president lai to join the presidential race. in 2019 in the last election, days before president tsai ing-wen's trip, he declared he wanted to join dpp's primary which led to tension between tsai and lai. president tsai ing-wen defeated him in the primary and decided to appoint him as his running mate. last year, both of them won the 2020 position election. so right now, this is the first time that vice president lai will be finally able to realize his dream to run as presidential candidate.

lai is a harvard educated doctor who decided to ditch his medical career in the 1990's and turn to politics. he would later become a lawmaker in taiwan and then was elected as mayor of a southern city in taiwan, twice. so he was actually very famous in taiwan. his most famous quote was in 2017 when he was a taiwanese premiere and told lawmakers in the legislature that he is a practical worker for taiwanese independence. but he recently walked back his stance on taiwanese independence and said he would be in line with the international relations as there is no need for tier 1 to declare independence because taiwan is already an independent country. it will be interesting to see

what his speech will be about his policies and the direction for the future of taiwan. shery: who should we be watching out for in this election? this election is very important, giving the reason tensions between china and the u.s. right now. it will not only decide the future of taiwan, it will shape the direction of geopolitical politics and the global economy for years to come. this is an election that will be closely-watched by washington and beijing. and right now now in addition to vice president lai, we have not seen the credits yet from the opposition party. but there are two hopefuls. one is the foxconn founder.

he was trying to use his visit to the u.s. to gain a nomination for the pardon, kmt. another hopeful is a taipei city mayor. these are the two creditors will be keeping a close eye on -- candidates we will be keeping a close eye on. haidi: cindy wang, our bloomberg breaking news editor. coming up next,, we will be discussing web3 developments and the outlook for crypto here in asia. this is bloomberg. ♪

haidi: the imf says china is leading the global economic rebound, and even compensating. for slowing growth in the u.s. and europe. we spoke to the asia and pacific department director at the imf, earlier on daybreak, about the outlook for the region. >> we have 4.6% this year. that is largely driven by what is happening to emerging markets in asia led by china, where we have a great forecast from 4.4% in october to 5.2 percent in 2023. that is the big change in the numbers. kathleen: what is the change in the monumental's? krishna fish in the

fundamentals, we had a slowdown earlier. now we have china rebounding faster than anticipated. both mobility and consumption are expected to go faster than expected in october of last year, fundamentally different to what we had before. but what is also true is that the external headwinds from slowing growth in the u.s. and europe continued to weigh on prospects for the u.s. and asia. both the u.s. and europe account for 20% of asia exports. that is an offset, but china is compensating for that with high-growth. haidi: we saw in the first 10 days of south korea's trade numbers, extremely weak when it comes to external demand, what does that tell you about the risks to the region, particularly if you overlay the risks from increased geopolitical tensions between the u.s. and china? krishna: again, one has to put things in perspective. external demand is weak from

u.s. and asia. but going beyond that, there are rising geo-fragmentation risks which for hr, they mean a lot because asia is highly integrated, benefits a lot from globalization. if these fragmentation risks arise, that could be a problem for asia town the road. haidi: what about that? in the right environment we have been looking at for emerging markets, one of the biggest issues has been that resurfacing. and china as well. do you see any risks in that sphere? krishna: if you look at the debt in asia, its share of debt has risen from 25% pre-pandemic two 38%. it reflects an increase in public debt and also a debt of households and multinational corporate. to the extent interest rates remain high, that could have significant bearing on the prospects for countries in asia.

haidi: the imf asia and pacific department director, krishna srinivasan speaking to us earlier. staying with the imf, it has also renewed calls for greater regulation of crypto, it says the collapse of banks like svb adds to the viability of digital assets. still, we are seeing prices for the biggest token, bitcoin, holding above the $3000 mark. shery: let's discuss the outlook and head out to the web3 festival in hong kong where crypto business leaders and regulatory experts are gathering. the city is working to showcase itself as a future digital assets. annabelle droulers is at the conference now with our next guest. belle. >> annabelle: its great timing as hong kong works towards of those ambitions of not only becoming the world asset habit

for asia, but globally. let's hours first guest, okx president. thank you for joining me. the focus right now is on the price of where we are trading. what would you say is driving the rally in bitcoin? guest: the circular trend is there. every time we have cracks in the current financial system between the banking failures and inflation rates, people are naturally asking the question, what is the current problem and how can we solve it, and bitcoin is becoming a very clear safe haven for a lot of the issues that we're having right now. annabelle: in terms of issues, you talking about the banking specter specifically? guest: the overall financial system. with technology improving the remainder of our life, money has been left behind. there is a lot of central point

of failure. inflation is also eating into people's purchase power and people are asking, how can i actually save money over time? and unfortunately right now there's only one option, and that is bitcoin, internet native, that doesn't fall into the control of any party and the value actually holds over time. annabelle: but bitcoin itself, at least in the u.s.m has been cut off from the traditional banking system with the collapse of signature and silvergate, for instance. that has impacted okx directly, where are you with that? hong: okx has not actually been impacted by those particular banking failures, we are operating just fine. but the industry is going through some pains because of the failures in the existing on ramps in general. annabelle: okx did not suffer

from the collapse of signature bank? hong: no. annabelle: so in terms of banking partners generally, how would you say that you are dealing with the fallout from those banks? are you looking for other partners? hong: we continue to build our banking relationships and our product in terms of on-ramp red-p part of that is also relating to getting licenses in different jurisdictions to enable a stronger relationship and our efforts in hong kong are a part of that. annabelle: the imf is one of those calling for greater rules. it does seem in the u.s. that the focus has been more on enforcement actions instead. what sort of conversations are you having? hong: in the u.s. we are seeing moving pieces from the industry perspective, and we definitely look for more regulatory clarity

, more guidance, more on what can and can't be done so that innovation and technology can be done with more transparency. things are still very dynamic, and i am hopeful, still hopeful because in the u.s., you have different regulatory conversations and then you also have federal and state dynamics which is playing out. i am hoping we can have more clarity down the road in the u.s.in hong kong , we are seeing good science. letter here is open and listens to the industry. -- the regulator here is more open and listens to the industry, and will continue to have more commitment from the local regulator. m the regulatory landscape in hong kong, what lessons would you say they are taken from other jurisdictions? hong: the hong kong regulator has always been more careful and disciplined. it is good to do very simple tests and i assume that is what we will end up having, simple

products to be offered to the larger population and to see what happens and to have an open conversation with industry and we are happy to have that conversation. annabelle: douyu see mainland china adjusting their ban on crypto at all? hong: i think what we can do as an industry participant is to be respectful of the regulatory framework in different jurisdictions, and keep the conversation we just need to continue to focus on building technology, building tools for the future, and providing more trust worthy tools to enable more control and more transparency, be responsible ourselves. that is what we can do. annabelle: what else would you say needs to happen in hong kong around the broader ecosystem for it to truly become a virtual asset hub -- for instance,

stablecoin is one area that still needs to be addressed? hong: part of it is regulatory clarity, which we are seeing and very encouraged by. then the other part is officially, industry has to play its own role. for us, we have been committed to noting and focusing on technology, building for long term. being disciplined and responsible. instead of being focused on short-term trading profit, which we never have done. we want to build for the long-term and be transparent and be consistent, and i think that that will help move the industry forward and in the right direction. annabelle: hung fang, okx president. this really will be one of the biggest virtual asset exchanges when the new rules take effect on june 1. shery: annabelle droulers, joining us from hong kong. tune into bloomberg radio and get in-depth analysis from the

"daybreak" team broadcasting live from hong kong. you can listen on our app numeral radio+ as well. plenty more still ahead. ♪

shery: take a look at how asian assets are trading at the

moment. the endless ei asia pacific index is being led higher by materials and industrial stocks. the only things in red are information-technology, not surprising when we saw pressure on the tech sector in the u.s.. the nasdaq 100 falling. we continue to see traders inking about the likelihood of another rate increase in may and that is pressuring the speculative parts of the market, haidi. haidi: haidi: twitter has merged with elon musk's's firm with court filings showing that the social media giant has stopped being an independent company. unclear what it means for the platform, but elon musk had suggested that buying twitter could help you create and everything app similar to china's wechat. boeing has said it delivered 130 aircraft in the first quarter, a 37% increase from a year ago, a

sign that boeing is getting back on track after years of production issues. meanwhile airbus delivered 127 planes, in 9% drop. . a pair of michael jordan sneakers from his famous last season have sold for $2.2 million, topping the previous record of $1.8 million. the air jordan 13's have an estimated value of up to $4 million prior to the sale. he wore the shoes during game two of the 1990 eight nba finals. shery: and of course we are headed towards the market opens it hong kong and china and these are the stocks we are watching. developers are in focus. china's stronger-than-expected credit expansion showing a recovering demand for mortgages, perhaps a sign that the property market slump is about to ease. also we are watching it i related shares as china plans to

acquire this -- watching ai-related shares. some of the names that we have been talking about, the potential ai-related services, alibaba, baidu and others. that's it for our coverage. coverage continues as we look to the start of trade in hong kong, shanghai and shenzhen. standby for "bloomberg markets: china open." this is bloomberg. ♪

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♪ david: good morning from hong kong. it's 9:00 a.m.