haidi: welcome today big

australian. we are counting down to asia's major market open. shery: the top stories this hour, prime minister fumio kishida calls this weekend's explosive attack on forgivable, vowing to step up security as g7 diplomats gather in japan. haidi: markets will be searching for clear signals on the strength of china's recovery with key eco-data due this week. shery: and more big bank earnings ahead. investors will be watching for insights on u.s. recession risks and fed policy. financials or some of the outperformance and last week's session. we had jp morgan and citi leading the charge after earnings. coming online in the asian session we are seeing the upside. we are reversing from losses on friday. so for the week we are slightly higher. the nasdaq 100 underperforming a little bit, given of course the rate sensitive tech giants were

under pressure. in the meantime we continue to watch treasury yields pushing higher. the 10 year yield around 351. the two-year yield out around 4.1%. traders pricing in at least one more rate hike coming from the federal reserve. guessing oil prices continuing to gain ground, about $82 a barrel level after four weeks of gains. we are continuing to see more signs perhaps we could see a tightening supply market for crude. haidi: yeah, that energy market of course course is a key one to watch. we have seen sentiment more or less holding up despite the worries about broader growth hurdles. take a look at sydney futures, looking like we will extend the gains we saw friday. we have seen a pretty good run of gains when it comes to australian stocks lately. futures indicating a bit of modest upside. watching some agri beef stocks, companies that have related transactions when it comes to

agricultural trade given that we hear from the trade minister that australia is optimistic some of these trade sanctions imposed by china will be lifted by the end of this year and winemakers will be another want to watch. kiwi stocks down by about .3%. aussie dollar pretty flat after the dollar opened mixed on range bound trading. watching dollar-yen of course given our top story. shery: let's turn to that story. prime minister fumio kishida continuing to campaign for his party after saturday's attack with an explosive device that he denounced as unforgiveable. g7 diplomats are gathering in japan ahead of a high-stakes leaders summit. >> we will have more vips from around the world during the g7 meetings. we must tighten our security to maximum level to ensure the safety of the foreign dignitaries during their visit to japan. shery: for more let's bring in

our tokyo bureau chief and stephen engle. there must be a lot of uncertainty on the ground right now. what is the latest that we know about this incident? kana: we are learning more about the suspect and the weapons used. what we still do not know is the motive behind the attack. he has said he plans to remain quiet until his lawyers arrive. obviously this comes as a shock for people, coming less than one year since the assassination of former prime minister shinzo abe. it also immediately raises concern about japan's security ahead of the g7 summit coming next month. haidi: what is the potential impact when it comes to domestic policy and even potential timing for the boj? kana: this could have broader implications for domestic

politics. there is speculation that kishi to may call a snap election in the coming months if they win bug in -- big in the by elections. his surprising visit to ukraine won him support as well. if he calls for an election that brings more uncertainty to the timing of the boj's exit of its ultra-loose monetary policy as it might be pressured to avoid any market disruptions. how this all ties to the attack, one analyst said the fact that he continued with his campaign even after the attack might come across positively for voters. on the other hand some analysts have said -- pointed to the risk and warned that we all know that after the assassination of abe, that exposed ties between the

universe -- unification church and lvp, which damaged its reputation. we do not know the motive of the suspect there is always the risk it could expose something that could be damaging for their reputation. shery: also concerns about security on the ground. this is happening as g-7 foreign ministers gather. so what is topping the agenda? stephen: if i can pick up on that, this adds more uncertainty to this g7 gathering and the other subsequent gatherings that are coming in may. you have this one and chorus hour which is the foreign ministers, and then starting around may 11 you have the finance ministers of g7. and then a week later on may 18 you have the leaders summit in hiroshima. you have three different venues that will have to see tightened security in addition to the main areas of tokyo and osaka. so it adds more uncertainty to

what is already starting to shape up to be some internal form oil -- turmoil, if you want to call it that. one of the keywords i have been seeing is the summit that began yesterday with the foreign ministers, is many leaders are trying to downplay conflict within the bloc, within g7, because of some comments made by emmanuel macron when he visited beijing about taiwan. essentially that the eu does not, or should not be caught in between the u.s. and china on their conflict. and none of course also last week you have the german foreign minister in beijing and xi had a rather test -- and she had a rather testy press conference with our counterpart, saying any confrontation and the taiwan straights would be a horror scenario. so there may be concerns that the eu is not necessarily unified on a g7 or a europe and u.s. response to what they see

as provocative moves by beijing. the eu's foreign policy chief tried to downplay any differences within the eu ahead of all these meetings of the g7, saying the nations in the e.u. have the same approach, just perhaps different wordings. the last thing i will say is the u.s. also downplaying concerns that might have risen within the g7 because of the highly classified intelligence leak from the united states. antony blinken is there now and is essentially downplaying that. he is coming from vietnam, and he said no one has essentially raised the concern about unity because of that leak. haidi: our chief north asia correspondent steve engle and tokyo bureau chief kana nishizawa. the pboc governor says the days

of regular fx interventions are largely over. of course we do not often hear from him, so when he does speak we are focusing very intently on the message. annabelle: that's right. these are some rare words we got from him. we have been in washington attending the world bank and imf spring meetings but on saturday he spoke at the peterson institute and what is really grabbing people's attention from those comments is what he set around the yuan. you mentioned the headline, that the pboc e says has retreated from regular intervention in recent years. is it freely convertible? no, he did not say that, but said it is primarily determined by the market. he did not really give a date. he was asked when it could be. from his own perspective he said when you put the market against the central bank,'s now get ovee

quinn. vonnie: vladimir putin has praised ties between the militaries of russia and china during a meeting with a top official from beijing. the chinese defense minister's visit to moscow becomes a month after president xi jinping's. he also plans to meet with his russian counterpart and visit military institutions. china has become russia's biggest supporter since the invasion of ukraine. india says it could buy russian crude near or pass to the g7 price cap of $60 a barrel if costs continue to rise due to supply cuts. the finance minister told bloomberg the priority is getting enough you will for the population of 1.4 billion people. india on boards about 80% of its crude and russia is now it's top supplier ahead of iraq and saudi arabia. >> we have a large population, and we are also therefore, have

to look at prices which are going to be affordable for us. otherwise we are going to be paying far more than what we can afford. vonnie: thailand's main opposition party remains the top choice for voters. the survey taken in early april found -- was backed by 47% of respondents. the prime minister and his party fell further behind. more than 60 parties have registered candidates for the election to the 500 seat house of representatives. fears of a full-blown civil war are rising in sudan, as deadly battles between the army and a rival military group continued. clashes that broke out saturday across the nation have killed at least 61 people. the rival forces are believed to have tens of thousands of fighters each in the capital alone. the two sides have been at odds over a proposal to integrate forces.

global news powered by -- haidi: she explains what she sees as the biggest threats to india's economic growth. first, australian split -- treasure plans to reveal a review in less than a month. jim charmers tells us what to expect. this is bloomberg. ♪

shery: it is time now for the week ahead. key economic data out of china this week likely to show a pickup in growth after beijing dropped its covid zero rules. but markets will be watching for signs of how solid or sustainable the recovery will be. early indicators have been mixed, while credit and export growth beat expectations last month. weak inflation suggests demand

remains subdued. bank indonesia expected to keep rates unchanged for a third straight meeting. on tuesday, their governor previously said the central bank has done enough to tame inflation. in the u.s., the fed releases its book that outlines recent outlines by region. officials will be speaking this week ahead of the blackout period that precedes the may fomc meeting. haidi: it is another big week when it comes to big bank earnings. bank of america, goldman sachs, morgan stanley, all due to report. likely to face questions from investors about the competitive implications of ubs's acquisition of credit suisse. also watching for the results when it comes to any more insights on u.s. recession risks. take a listen to what j.p. morgan and citigroup, their ceo's had to say during those earnings calls. >> the short-term read is higher recessionary risk.

and then inflation coming down. i think inflation will come down a little bit, but it can easier be stickier than people think. >> we believe it is more likely the u.s. will enter into a shallow recession later this year. that could be exacerbated in debt and duration in a more severe credit crunch. but right now, the biggest unknown is the impact on terminal short-term u.s. interest rates. and of course, how the debt ceiling plays out. haidi: and that is your week ahead. shery: our next guest says she does not believe we are out of the hard landing woods just yet. optimal cap demo advisors director of strategy joins us now from tampa, florida. good to have you back. how do you stay offensive in this environment? >> staying defensive with precious metals, staying defensive with duration and

these markets have risen a lot lately so expect a short-term pullback. but generally the trend is up because there is still a lot of risk in the system. see and i lending is going down. lending conditions are tightening significantly. the fed is still committed to tightening despite the fact they put back 63% of what they put off the balance sheet with lending facilities from the banks. i do not think all the rate hikes have worked their way through the system and it looks as though the fed will continue to tighten. and that of course we have the infamous debt ceiling conversation coming later this summer. shery: we cannot forget about that one. of course we have earnings season in full swing. expect this to be the worst in about three years since the start of the pandemic or so. how do you position going into all of this? frances: just remain defensive. if you are going to go along in this market you have to be very tactical. the thing is we still have a lot of rising in the system. the critique goes down globally

and with all the tightening going on it is likely we will hit another threshold even of the banking seems to be quelled for the moment. but those banks borrowed from those facilities at much higher interest rates than the loans are paying them. so they still have negative revenue on all of those loans that if you mark them to market would be upside down. and the banks have their balance sheet and the fed has the same assets. i do not think we are completely out of the woods yet. that does not mean the risk is going to happen overnight. when something does hit, markets can go down pretty dramatically. tactical on your long positions and i would not assume the bottom is in. haidi: further on the fed conundrum it feels like hikes are back and play when it comes to june. take a look at this chart that looks at that as a possibility after we had some confusing fed speak that calls for movement in market expectations.

this is markets pricing in a full 25 basis point hike. and we saw that big jump in one year inflation expectations as well. to what extent do you think investors have meant think -- mentally, adequately priced in that market risk now? frances: the thing is they are going to keep tightening because again, all of the tightening they did on the balance sheet, they reversed that with the lending facility. even though powell was clear to say that is not quintessential quantitative easing, it is sort of like me eating a hamburger that is calorie free. so because they undid the nine to 10 months of almost half a trillion or more balance sheet reduction, up to the tune of 63% in two weeks, that is a lot of liquidity. also yellen has been injecting money into the system without account, because she is trying to stave off the debt ceiling conversation. so these things are not sustainable.

and the fed is therefore going to probably commit to continue raising rates, since it is unable to continue reducing the balance sheet. so it is kind of counteracting itself. and i do think we are going to have more credit problems. one of the problems that most people are not really talking about in the system is that for years and years, the fed remitted a profit of about $90 billion to the credit general account after its expenses and coupons to the commercial banks, the shareholders. now in the last six months it has reported a $42 billion loss. so it is not remitting money back to the treasury, while yellen is trying to stave off the debt ceiling conversation, while the fed is bailing out the banks that are trying to basically having problems because they do not want to sell upside down. in the background you have credit default swaps, credit spreads rising. and so the risk is still very

high. does that mean something will happen tomorrow? not necessarily. but as we continue to tighten, as the rate hikes continue to work their way through the system on a lag, you could definitely hit another liquidity threshold this summer. haidi: so how are you hedging for all of that? because it is a pretty dire set of risks. possible more credit events, declining earnings, and the overall policy uncertainty. frances: when real rates are going down, gold does as well. the other thing to watch in the system is we have double bottom support from february 2 for the dollar. that is pretty significant. when stuff is really starting to get ugly you will notice the correlation between the u.s. dollar which has been negatively correlated actually comes together. if you see that correlation changing, the dollar holding support, if the system gets really risky the dollar becomes a flight safety alongside gold. you will see positive

correlation going on. the dollar gold duration. and eventually i do think the fed is going to have to have a pivot conversation whether they want to or not. haidi: always great to chat with you. frances stacy, director of strategy. you can get a roundup of the stories you need to get going in today's edition of daybreak. terminal subscribers can find that at dayb and you can customize your settling so you just get news on the industries and assets that you care about. this is bloomberg. ♪

haidi: australian treasurer jim chalmers says he plans to release an independent review of the central bank before the national budget in less than a month. he spoke with kathleen hays at the world bank meetings in

washington. jim: i will be looking to release it really soon, hopefully in the next week or two. we received the report from a really terrific panel. i think they have made some very wise recommendations. i will confer with my cabinet colleagues. i will also confer with the opposition and the parliament to try and get an element of bipartisanship around the reserve bank review. i think it is a good opportunity for australia and its central bank to see what we can do better. so that is the spirit with which i will release it. kathleen: is this more than tweaks, is this some kind of shakeup? jim: in order for it to be worthwhile, the recommendations need to be robust and meaningful, and they are. so when i release it, whether in the next week or two, certainly before the budget on may 9, people will see the thought as got into it. and the opportunity not to second-guess all decisions taken in the recent past, but to try

and work out, have we got the right processes and structures to make these important decisions. kathleen: what objective would you change? jim: obviously inflation targeting is a really important role, and i would not expect there to be substantial changes there. nor would i expect there to be a winding back of the independence of the reserve bank, which is a key feature of our central bank in australia. there are other meaningful changes which will be proposed in a look forward to perhaps coming back on the program and talking about them when they are out in the wild. kathleen: we will be glad to have you back. governor lowe has said he would like to have another term. have you made up your mind yet? jim: we have said both privately and publicly that in the normal course of events, an appointment that comes up in september would be considered closer to the middle of the year. we also want to get this reserve bank review out there and get it talked about and discussed and consulted on, because that is an important part of the future of the bank as well. shery: jim chalmers speaking

with bloomberg. here's a quick check of the latest headlines. merck will buy prometheus biosciences for about $10.8 billion. the agreed price of $200 per share his or 75% premium to what prometheus closed on friday. merker is looking to bolster its research pipeline and strengthen its portfolio of autoimmune drugs. the pharma giant hopes to secure revenue as its blockbuster cancer drug is set to lose patent protection in a few years. moderna and merck say adding their codeveloped cancer vaccine to a drug keeps more melanoma patients in remission than the immune therapy alone. it's the pharma giant's first detailed presentation of a key study into the therapy. they now plan to test the combination in other cancers where it's already used. barclays is reportedly cutting its banking division.

the job cuts will not be combined into a single country or function within the business. this marks the company's second round of layoffs in less than six months. other banking giants have also trimmed staff as they come under pressure from rising interest rates. plenty more to come on daybreak australia. this is bloomberg. ♪ everything's changing so quickly. before the xfinity 10g network, we didn't have internet that let us play all at once. every device? in every room? why are you up here? when i was your age, we couldn't stream a movie when the power went out. you're only a year older than me. you have no idea how good you've got it.

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vonnie: you are watching "daybreak australia." ecb president christine lagarde

says she does not foresee the u.s. defaulting on its debt. in an interview with cbs she said she is confident the u.s. will not allow that to happen, as it would have a negative impact globally. the biden administration is locked in an impasse with republicans who want to link it to spending cuts. geopolitical challenges from china are in focus as leaders meet in japan. tensions with beijing are high on the agenda. he said the ministers will also discuss how to ensure ukraine has weapons and other defensive equipment it needs, as the russian war efforts continue. german chancellor olaf scholz says indonesia will join new climate group established by the g7 nations. the group was created last year to coordinate global rules on climate matters and avoid trade disputes over green tariffs. he said indonesia is set to receive billions of dollars from rich nations to accelerate its shift away from fossil fuels.

australia's government is optimistic that punitives trade sanctions imposed by china on exports could be lifted by the end of the year. it comes as beijing announced a review of the tariffs imposed on australian barley and wine during a low point in relations between the countries. the trade minister told bloomberg it could mean the barley dispute could be resolved in months rather than years. spacex is planning to launch its massive space rocket starship on monday. if successful, but test flight would be a critical milestone in the company's ambitions for manned missions to mars. nasa also plans to use the same spacecraft to return to the moon. once operational, starship will be the most powerful rocket ever built. global news powered by more than 2700 journalists and analysts in more than 120 countries. i'm vonnie quinn and this is bloomberg. shery: time now for morning calls. we are seeing u.s. futures pointing to modest gains as investors debate what to expect from the first quarter earnings season. annabelle joins us from hong

kong. could this finally be the low point for profits from s&p 500 companies? annabelle: that is the big debate of course in the markets, how deep is any sort of recession likely to be, when will the fed be ending his tightening cycle. with the bulls are saying this will mark the low point and the equity rally can continue. others are more sanguine on the outlook. they say yes, perhaps we could see another late high, but that is not their base case. they say their we more cautious outlooks coming through in the earnings calls. we have still not seen the full effects of the fed's tightening. lots of different key areas for investors to be looking out for an one of them will come down to sales versus margins. this chart here taking a look at the outlook for global stocks. you can see on a 12 month basis, forward sales estimates are still tracking higher, but it is

margins that are set to come under pressure. we have seen that compression coming through in the likes of tesla for instance, cutting car prices globally. yes, we saw a record number of deliveries in the first three months, but what was the real impact on profitability. blackrock is among those saying expect more earnings pain ahead because we have only really started to see the tip of the iceberg with margins. haidi: u.s. consumers still expect prices to rise? annabelle: that is what is interesting. you see the price cuts, but at the same time it is u.s. consumers who are saying they do expect prices to continue gaining. this is the results we got from the latest university of michigan survey. essentially, the headline from that is that consumers expect prices to climb 4.6% over the next year. that is up from 3.6% that you can see in the march survey. so essentially on a five to 10 year basis. still see prices climbing around 2.9%.

what the university of michigan says about this is essentially that their results is consumers are still feeling less financially security here because they are aware that inflation has fell from its peak when there are still paying to be felt. it is something the fed will be tracking very closely because we have seen really that positioning coming back into the markets that we could be nearing the end of the timing campaign. perhaps one more cut on the table. the effects of that also coming through any dollar gauge which is down around 10% over the past few months alone. haidi: and of course we heard from janet yellen about potentially the pullback in credit possibly doing some of the work for them. our next guest says there is still downside risks. jason, always great to have you. even as we see some of the banking risks be alleviated for

now, that we know of, does the fact that the fed say they will have to keep tightening have any meaningful impact anymore when it comes to the momentum trading that we see in the dollar? jason: it might have a little bit of an impact here, especially if we look at the fact that now there is a higher probability of a june rate hike. that i think has a lot to do with concern about the core cpi year-on-year number which actually accelerated in march from 5.5% to 5.6%. underscoring a risk the imf called out last week that cpi could be at risk of plateauing across economies. and for that core inflation number i think that is something the fed will be watching closely. they might have a couple more rate hikes or more in them but no matter how slice it we are pretty close to the end of the tightening cycle whether it is one or three more rate hikes. we are almost there. so while there might be a little

more upside for the dollar as we see those things get priced in, if we look later in the year i think you will see rate cuts get priced and the timing of that and that could weigh on the greenback. haidi: of course the fed story, the u.s. story, banking is one side. the other is how much the countercyclical impact of the china recovery can come into play here. so when you are taking a look at the big tranches of data we are expecting from china this week, what are you watching out for? particularly as it has the ability really affect global commodity markets and where oil goes from here. jason: on the one hand, there is going to be a big focus on the gdp number. a question of how is growth doing, how is the chinese economy recovering now that zero covid policy is in the rearview. that is something that is going to be very important for commodity prices especially. i think people are going to be watching for those next round of chinese pmi's.

it was a surprise to the downside and a breakeven level for the month of march. we will not get that for a little while yet. that is what people really watch for implications of commodities going forward. eurozone manufacturing pmi is likely to be below 50 for the month of april. so i am concerned about what that could do for the nettle side of things. but for oil prices, the biggest factor really is that opec cut production. they announced that may 1 production cut that was a surprise a couple weekends ago. and that is something going into the u.s. summer driving season that could present upside risk for oil prices. they have risen since that announcement and in the u.s. we still have really robust jobs data. there is currently over 9.9 million open jobs even now. and we look, a record level of pay reports, wages have never

been this high. things rick -- things look really good for the labor market. it could send prices higher in the summer regardless of china. shery: so when you talk about be concerned about metals you are thinking more industrial metals? because precious metals are being loved right now. jason: i am talking specifically industrial. if we want to take a closer look at it, it will probably be the nonferrous side because they tend to trade liquid late. if we see weakness in china that is where we see weakness. especially gold prices, that is up on a number of factors. we have seen a little bit of weakness in the dollar. we have concern about banking, concern about global growth, concern about global cpi. and then there is everything going on with cold war two in the background supporting the price of gold. those factors are not likely to go away anytime soon. shery: how is the war in ukraine impacting u.s. net gas prices at the moment? jason: nat gas prices are under pressure recently.

it has a lot to do with europe putting caps on nat gas prices. we have seen europe using more coal, we have put it cap on those prices. that could keep u.s. nat gas prices under pressure, because they have improved significantly from where they were last year. shery: jason schenker, great to have you back. india says they may have to buy russian crude near or past the g7 cap of $60 a barrel as it seeks to tame inflation. the finance minister told us the government's priority is getting the best deal for its population. >> mostly external factors. whether it is the fuel price, the recent announcement that opec might cut down the production and possible impact it can have on the prices.

as much as the spillovers of much of the decisions related to the russian ukraine war. the two main things i would be more worried about than anything internal. kathleen: you mentioned oil and with the recent oil price rise and opec cuts, the price for russian oil is getting very close to the cap. how do you manage the risk it hits that cap and rises above? you import a lot of russian oil yourself. >> that's right. the move to get the russian oil, at a time when global prices are moving upwards, and russia give not just us, many others, a discounted price. so, we import almost 80% of all that we consume. so we will have to constantly refigure where we get the best deal. because for us, it is a very

critical import for the economy. we have a large population. and we also therefore have to look at prices which are going to be affordable for us. so, if production is going to cause an increase in price in the opec created oil that comes out, and brent will be affected, the russian oil is still an option for us. kathleen: so even if it breaches the cap, you will have to keep importing it? >> yes. because otherwise i will be paying far more than what i can afford. shery: india's finance minister there speaking to bloomberg's kathleen hays. haidi: next, colombia's finance minister tells us why he believes inflation has picked. we will get more discussion when it comes to food and oil prices in just a moment. this is bloomberg. ♪

>> the banking crisis is a crisis of the banking system. this is a banking tremor. if you banks that were badly supervised went down. the big banks are just fine, and we see that. the big banks are even benefiting from this. not only are they viewed as safe, but they have diversified

business models. haidi: queens college cambridge president there. citigroup and wills fargo are in windfalls -- three giant u.s. banks -- let's bring in our finance editor. this is all about the tightening rate environment or is it other stuff going on when it comes to obviously the big diversions and fortunes? >> if you remember going back to friday going into the numbers the big worry was expectations were broadly sitting in that camp. to have that increase in deposits is fairly notable. we have seen that big reaction in the share prices. a lot of it is to do with the broad interest rising just rate environment. net interest income is the key variable and of course that is benefiting. i think more so, and to the

point earlier about how these banks have been able to benefit from disruptions in regional banking, i think that is maybe being slightly understated and you're seeing that playing out in the numbers that might be materially more than people were expecting. so on the one hand we have this big increase in interest income, and that looks like the trajectory is still ok for now. people are not massively dialing back their numbers. but of course there is some caution now as to how this plays out really into q3 and q4. shery: especially about a potential credit crunch for the industry going forward. this is what jamie dimon had to say. take a listen. >> i would not use the word credit crunch. obviously the world -- there will be a little bit of tightening and most of that will be around certain real estate things. you heard it from real estate investors already. i look at it as a thumb on the

scale. it makes the basket tighter and increases the odds of recession. shery: any takeaways from these earnings that could be disruptive for the broader economy, not to mention fed policy ahead? jose: his quot ethere i think shows fairly instructive increasing chances of a recession late in the year. you cannot really understate that. that i think is why we are seeing so much nervousness around, yeah, this quarter has been may be better in some ways. of course banks like citi did very well from the change in rates that happened quite quickly and the fixed income trading that does well in that environment. but there is still a large degree of caution as to how the tightening that diamon was referencing, how that plays out and manifests in deteriorating quality in certain areas of the economy, but how much of that is a broader story that brings or

lays apart in the overall slowdown of the economy in the u.s. there are still a lot to watch out for and to the magnitude of how much that slowdown occurs. haidi: pressure when it comes to investment banking as well this week. and barclays continuing to feel the pain. jose: we are getting some reports to suggest they might be embarking on a second round of jump cuts. the numbers seem to be around 100 roles across investment banking. not a huge number in and of itself, but one of many series of layoffs that not just barclays have been doing, but many of the banks positioning themselves for the slowdown in the businesses already happening, but further slowdowns later on in the year. shery: our finance editor adam haigh with the latest on bank earnings and fortunes. we continue to watch price pressures across the world. colombia's finance minister says

inflation in his country probably peaked in march after soaring above 13%. jose antonio ocampo told me price pressures are easing for producers as well as the country's poorest households. >> let me say that inflation has peaked. i'm pretty sure that 13% inflation is the peak. for example, the food price inflation is already declining. it's because of self services in particular. so the 13%. there are many other positive things. producer prices are reducing about 7%. this is the first one digit inflation we have had in several months. i -- in terms of borrowing

costs, they have declined substantially for months. yesterday, the interest rate on a 2024 bond for colombia was about 10.5%. so the trend is also positive. also, some banks have also offered to reduce the interest rate for small loans. shery: colombia's peso has also been pretty strong. how helpful is that, and why is that strength there? are there great differentials? jose: i think the peak we had in october of last year was based on wrong expectations, let's call it. fortunately a correction has taken place, particularly over the last month or so it has been

quite impressive, actually. so we're now with an exchange rate which is more like the one we expected. shery: what are your expectations for oil prices given you are a big producer? jose: i think we expect them to remain high this year, but more with the decisions to reduce the price. but the medium term will be a declining price. for example, we have a tax for oil producers. we expect the tax to be the highest this year but gradually decline in the next year because of the expectation of falling prices. shery: colombia's finance minister jose antonio ocampo there. haidi: be sure to tune into

bloomberg radio to hear more from the days big newsm akers. we're broadcasting live now from our studio in hong kong. you can listen via the app or bloombergradio.com. much more ahead. this is bloomberg. ♪

haidi: take a look at data

coming out from new zealand. when it comes to price pressures, watching for food prices. in march we are seeing new zealand five -- food prices rising by .8%. this of course as we continue to watch me signs of the end of the cycle when it comes to the rbnz. there are indications the retreat in inflation could be a downside surprised with the central bank which has really been at the forefront of the global tightening cycle. the cpi data that we are expecting this week is also likely to show further softening of inflation pressures. interestingly we are seeing food prices up by .8%. so whether that changes the factoring the reserve bank of australian of new zealand has done when it comes to its projections will be quite interesting to watch. take a look at what we are watching when it comes to the start of the trading session monday morning.

the aussie dollar is not doing very much. the dollar has been trading quite range bound. the kiwi dollar is seeing a little bit of strength, trading at 62 u.s.. dollar-yen, indications of what has happened over the weekend when it comes to the potential implications for both the government, the election, as well as the timing of any boj move will be one to watch as well for dollar-yen. dollar china also in focus after we heard from yi gang there speaking about the end of intervention into the yuan. shery: here's is a quick check of the latest headlines. chinese ev maker hopes manufacturing cost cuts will propel the company to profitability. the copresident says xpeng plans to shave 25% off its cuts by using cheaper battery materials and fewer chips.

google is reportedly ramping up efforts to integrate ai into its search capabilities. the new york times says it is not working on an all new ai powered search engine, and also adding ai features to its existing offering. samsung has reported the considered making microsoft's bing the main search on its phones instead of google due to its ai features. that is it for "daybreak australia." daybreak asia is next. this is bloomberg. ♪

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shery: