♪ >> you're watching daybreak asia live from new york, sydney, and hong kong. >> we're coming down to asia's major market opens. >> caution is the watchword

after wall street managers earned narrow gains. the outlook for interest rates and debt ceiling talks. fears of the looming credit crunch adding to concerns with a fed survey showing weaker demand for business loans, and tendo's guidance will be in the spotlight when it reports later. markets watching for confidence in its flagship gaming console. >> nintendo, one of the stocks we are watching with the open of tokyo in the next hour. ahead of that, sticking with australia, the big event is the australian budget handed down by jim chalmers. we're expecting a narrow surplus of 4 billion aussie dollars, support measures will be limited. focused on low income earners, the most disadvantaged groups. speaking of that we got spending data coming out from cba, so be watching those metrics closely given that we saw a strong

rebound in the past month and a signal to the sj an economy that it is returning to pre-pandemic norms. let's take a look around the rest of the region. our main benchmarks in asia, new zealand indicating futures fell flat. it could be aided by the weaker yen, a fraction below the 130 five level. keeping an eye on china given that the chinese trade data is a big agenda item for us. bloomberg economics says strength in the headline figures will be better than the reality given at low base of facts. they are saying there are other indicators that tell us external demand is weakening. year on year shipments have been declining. so another event on the agenda. it is quite a busy week. shery: should we go through what we are expecting?

inflation numbers, producer prices, import and export costs on friday. no wonder we saw that trading sideways. u.s. futures are under pressure. the session is fluctuating between gains and losses. the fed saying the credit market was tightening. seeing business loan demand was weakening, we are watching bank stocks. we had a pack west jumping 14% after saying its business remains sound. it was cutting quarterly dividends. we heard from california's financial regulators, saying babel closely scrutinized banks with over $50 billion in assets. but let's delve into the latest from the fed's latest survey, that's confirming that banks are lending less and applying tighter standards, boosting the chances of recession. our global economics and policy editor kathleen is here with the latest. what are the key takeaways? >> what everyone has been

expecting, so much banking turmoil and uncertainty, banks will pull back, borrowers will pullback and that is what we are seeing in the survey. is the fed's senior loan officer opinion survey. it comes out every quarter. usually it does not get much interest but starting with svb, silicon valley bank and more, we are not surprised it has gotten so much attention this time. here are the takeaways, 46% of banks in the first quarter tightened terms on the commercial industrial loans to medium and large firms. this is the lifeblood for many companies doing business in the u.s., small medium and large, that was up from 44.8 in the fourth quarter. look at how much loan demand fell. it weakened because in the fourth quarter, 31 .2% of banks surveyed loan officers said they had seen weakening demand. in the first quarter, 55.6% are seeing less loan demand.

they're focused on the medium and larger sized banks, one of the reasons i reached out to kevin o'leary. he is the chair of o'leary fund management. you might know him from shark tank as well. he was asked about lending to small businesses and here is what he said. >> 68% of the economy is driven by small business. the kinds of companies i invested in and many others do. we talked to ceo's. it's not that it is slow, it is 100% dried up. there is no money for small business. >> looking ahead at the summary of what these officers are seeing, it's not great, rather grim. concerns about the funding liquidity could leave banks and financial institutions to further contract credit to the economy. a sharp contraction in the availability of credit, you might call it credit crunch would drive businesses and hospitals resulting the photo.

we seen that houses and businesses. it is expected to hit the smallest and medium-size businesses and banks the hardest. they will feel the fall out and they are the drivers of the economy. they are dynamic at a time when you need dynamism and that might be right now. haidi: if the economy could weaken, we've seen big banks betting against rate cuts this year. >> this is an interesting thing happening. investors for over a year expect the fed to start cutting rates. it's interesting that goldman sachs has joined the likes of barclays, saying we do not see rate cuts in the second half of the year. markets are pricing in 70 basis points, 325 basis point cuts in the funds rate by the end of 2023. they're looking at work which suggests that there may be on hold fed work ahead because they

are seeing in the past when the fed has done rate hikes and paused, they tend to hold on to higher rates for six months. reinforcing that is a story on the bloomberg that firms are favoring raising prices over selling. basically, for example, ford motor saying if it wants to maintain high prices rather than sell cars, the giant hotel is saying they will increase room rates for corporate accounts because they can. southwest airlines, they're pulling in record revenue with tight capacity so rather than putting more flights in the air, they're going to keep the fares high. this is not reassuring news for the fed and it makes it look like sticky may be a word not strong enough.

haidi: bloomberg's kathleen hays. what is not reassuring is levels of household spending that we are seeing, a big contraction when it comes to the month on month number falling 4.3% to 114.3 from a month earlier according to the index released. if you want to break it down we saw homebuying down almost 14% month on month. health and fitness falling by 14%, transport down over 1%. cars rising 5.3% and a whopping almost 40% rise year on year. this comes on the eve of the delivery of the australian budget. we are expecting to see the first budget surplus in 15 years on the cash search windfall from taxes as well as elevated commodity prices. were watching australian assets. we've seen weakness when it comes to australian bonds. yields have been rising on the

back of that across the three in 10 year. we've seen support when it comes to the aussie dollar as well. the 67 level is above the april 20 hi. we will see if we can find support for the aussie dollar after an 2% last week. the biggest weekly gain since early november. there are calls for another hike and that is getting support when it comes to the kiwi dollar as well. traders are betting on another rate increase from the rbc on expectations that there is further to go in the global inflation fight. let's get you vonnie quinn with the first word headlines. >> china has confirmed an anti-spy campaign is underway targeting consulting firms. state run media says that crackdown is over national security violations. the local branch has been searched with other operations carried out.

multiple firms has been the source. canada expelled the chinese diplomat. the finance ministry ordered them to leave accusing them of interfering in canada's internal affairs. according to media, they had been looking into penalizing conservative lawmaker michael truong on his standings. they european union has proposed extending trade restrictions to several chinese companies, allegedly supplying russia with banned goods and technology. documents show 35 entities being targeted including businesses in mainland china and hong kong china's ministry says it's change is above board in beijing will respond firmly if the eu goes ahead. california's financial regulator says it will scrutinize lenders following the collapse of silicon valley bank. it plans to overhaul the process for escalating concerns among employees and increase staff overseeing banks of assets of

more than $50 billion. australia is heading for its first budget surplus. jim charmers will announce 2.7 billion u.s. dollars for the coming financial year when he hands down the budget on tuesday. he forecast a smaller budget. tax revenue from commodity prices have been boosting the government. global news, 24 hours a day. on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries. on vonnie quinn. this is bloomberg. shery: still ahead, anz joins us to discuss the deepening oil selloff and why they are seeing recovery. up next, we talk investment strategy with ubs who think markets are pricing in excessive optimism for growth, earnings and inflation. more analysis next. this is bloomberg.

♪ >> you have a misallocation of capital where it goes into a narrower group of governments in the advanced economies. they are borrowing huge amounts of money and big corporations. you do not get the dynamism in the global economy that you need to get growth going. shery: world bank president david malpass on the global economy. our next guest says consumers should be diversifying beyond the u.s.. joining us is chief financial advisor and managing director at ubs. good to have you back. is this a valuation issue, the potential recession concerns in the u.s.? what are your price targets for the year? >> you would be surprised since the market has been bullish.

we are pricing in about 3900 for the year and a lot of that is because we still have a lot of uncertainties in the markets. tighter financial conditions, declining earnings, jobs are strong. we feel the market has priced in a lot of the pause on the price cuts. i'm sorry, the rate hikes and potential price cuts, we are pricing that in. we feel like the market is going to have to deal with it. shery: the trajectory for the u.s. dollar and on the other side, what does it mean for the asian currencies we have been watching? >> the u.s. dollar is definitely going to be -- it had a nice run

but the u.s. dollar is not going to be as strong. some of the currencies, we like the us trillion dollar, japanese yen and also beyond the currencies, we like to have investors look into diversifying into other economies, particularly emerging markets. china's reopening, recovery, some of the valuations. emerging markets are trading at a 30% discount. haidi: speaking of discounts, australia is typically seen as kind of a boring market. where you see opportunities? >> the main reason we are seeing opportunities in australia is because a lot of that region, not just australia but emerging

markets, will be possibly associated with the reopening of china. and also, u.s. markets is trading at a 16% premium to the 10 year average. so as you said relatively australia may seem like a boring market but it is going to be -- the valuation is good. it is a very stable and solid economy. we feel like we have a lot of potential in the current market conditions. haidi: with the return to surplus in the budget expected, speaking of not a boring market, we've got to talk about china reopening. where do you see the potential? is it still at the consumer, the services side, much less on manufacturing, on production and investment? >> i think china, there will be a lot of potential with digital economy.

industrials, consumer goods. real estate is in recovery with government support as well. so q1 china is slowly recovering but it will take some time. but it is a massive economy. and with the proper support from the government as well, this is a great market. it's not only going to lead growth, also the surrounding economies and the emerging markets as well. shery: i have heard a lot of contradiction to that point, especially that china's growth is domestic lead, there's not a lot of spillover to other economies. that is not going to take emerging markets higher. what do you say to that? >> there's a lot of different debate on how china is viewed, but we feel like it's not just

the consumer driven economy, but the emerging markets are going to be relying on china as well. so it is such a massive economy that any type of growth will affect the surrounding economies and lead those economies higher. shery: what do you like in emerging markets? >> we like the valuation. right now the index is trading about 30%. discount. so the u.s. had a very strong growth this year, particularly tech and growth stocks. there's is still a lot of uncertainty surrounding macroeconomics. to stay invested and diversified, this is a great opportunity for an investor to get out of the u.s., start diversifying. one of the best places to look is emerging markets. shery: xi, two to have you back. managing director at ubs. thank you. you can get a roundup of the

stories you need to get your day going in at today's edition of daybreak. terminal subscribers go to dayb also available on mobile in the bloomberg app. customize the settings on the industries and assets that you care about. this is bloomberg. ♪ guests check in, then check out their phones - for financial insights from merrill. this gentleman? he's learning how carbon-neutral investments could energize his portfolio. and with advice from their merrill advisor, they've decided that the future is women-led startups. she's got a million followers, but she's following trends in next-gen tech. personalized advice so impressive, your money never stops working for you, with merrill. a bank of amera mpany. and your store was also the first time you realized... well, we can do anything. cheesecake cookies? the chookie! manage all your sales from one place with a partner

that always puts you first. (we did it) start today at godaddy.com old school hard work meets bold, new thinking, ♪ to help you see untapped possibilities and relentlessly work with you to make them real. ♪

shery: the bloomberg wealth asian summit has returned to hong kong after three years. look at the innovations and investments and wealth creation. chief markets editor david ingles is there. with a preview, david, what an exciting event. back in hong kong. what can we expect? david: it is an interesting time to be having real conversations

around wealth in many iterations. i heard you guys just play that, the panel that bill winters did with our colleague manus cranny. the reason i bring that up as we have had to have what's face it very difficult conversations around wealth and the most sacred covenant of wealth is your hard earned cash at banks. not all banks but several we have had those conversations around places in the u.s. and certainly conversations around that in europe as well. when you have the challenge, it makes a very difficult conversation. certainly the reason i bring that up is in hong kong it presents a distinct contrast to what is happening outside. we just wrapped up old and weak, this long holiday weekend.

alongside the opening of the borders, we have seen an increasing influx of mainland chinese tourists and visitors. they did not just shop, they wind up in the hundreds and thousands of banks in the city open to -- eager to open bank accounts. in the conversation a higher interest rates in the fed, we have higher interest rates in hong kong because monetary policy is tied to the fed and not with the pbc is doing. you know, there's a great story in the bloomberg which is essentially outlining the incentives that people have come to hong kong for. they bought products, took advantage of higher rates at the bank. they purchased a lot of insurance products. it is a good time to have this conversation. this anchor to what is happening globally. haidi: so much of that focus when it comes to the wealth and capital flowing from china post

the reopening. in terms of alternatives, new asset classes, new trends, what will you be watching out for? david: this is a good question because we have all been talking about this these last 16 months, the snapping of co-relations of traditional assets. so you 60/40 portfolio, sprinkle some banter, 100% loss. correlation it snapping back in a big way. people got really burned. to some extent, that damage has decreased with bonds rallying. equities are kind of painful. so there are different vectors of wealth which we will be exploring today. this new affluent client, tech savvy, hong kong has positioned itself as perhaps a hub for

virtual assets. we will be having those conversations. there is one panel that discusses web three. will be talking about art. nicholas will be joining the event to talk about chinese art for example. how does wealth go beyond your traditional definition of wealth? those are some things will be tackling throughout the next few hours. haidi: this is a fun one, david. setting up for some good conversations. chief markets editor. let's get you caught up with the business flash headline. paypal shares fell after the company lowered its operating margin forecast. the giant says it expects the metric to grow by 100 basis points this year. lower than its earlier forecast. the week guidance overshadowed paypal's first quarter earnings beat and its higher profit forecast. apple has tapped the u.s.

blue-chip bond market selling bonds and a five-part deal that topped its target. a source says the longest portion will yield 108 basis points over treasuries. apple is the second major cap issuers to sell bonds. meta raised in a billion dollars. coinbase is considering making the uab its international hub. the crypto exchange's been navigating market downturns in a u.s. regulatory environment. ceo brian armstrong said coinbase will not leave the u.s. but is looking for a hub to serve more countries. >> we have expanded into major markets around the world. now what we are doing is looking for a home to set up an international hub that could serve the countries in the world. the middle east, africa, parts of asia. the uae is attractive. it deserves a ton of credit. there the first country that created a dedicated new regulator to crypto.

they've published a clear rulebook that is business forward and protecting of consumers. haidi: coming up next, all things commodity. energy and the trend in gold. anz joins us with what they expect on china's recovery to make jet fuel the next catalyst for oil demand. this is bloomberg. ♪

shery: breaking news out of japan. we are getting you the household spending numbers, a contraction of 1.9% for march. this is a contraction after a gain in the previous month and it is a fall that was not

expected by economists surveyed by bloomberg. we were expecting a slowdown given how price inflation was weighing on spansion and the base. a contraction was not expected for march. labor cash earnings year on year , growth of only .8% which is easing from the previous month. below expectations and pay growth has decelerated from the previous month. when you actually adjust for inflation, it gets worse when it is a contraction of 2.9% for the month of march which is a bigger contraction than was expected as well. suffice it to say inflation is having an adverse effect when it comes to household spending, not to mention pay growth for japanese households as well. the japanese yen holding steady at the 135 level.

how are we setting up for the broader markets? annabelle: i think it is interesting to note that the wage gains we have seen broadly have been down to what we have been seeing because this chart here, taking a look at foreign visitors and in march, we hit 65% of pre-covid levels. part of the appeal of japan comes down to its weaker yen and slow inflation with the numbers getting interesting to watch for the golden week holiday that just ended. you can add to that japan's classification of covid being lowered to the same level as the common flu and some economists are saying that will add $30 billion to the local economy. one factor playing into some of the wage moves over the past few months. let's change over because a weaker yen has been part of the story. we're sitting around 135 level. it could boost japanese stocks and we look at futures, the

nikkei futures contract in singapore just online pointing to small gains. we are also watching in the session kiwi stocks trading online to the downside, s&p 500 futures flat. but in little bit of wait and see given that we are looking down to key events on the calendar including chinese trade data to out later and the u.s. inflation report. these big factors will way into commodity prices. haidi: absolutely, some of the biggest reactions when it comes to global growth concerns, inflation concerns, potential risks for policy missteps, playing out when it comes to precious metals and energy markets. take a look at new york crewed, often quarter of 1% under $73 a barrel. this is a technical correction overnight to the upside, supply disruptions in canada and positive demand indications. we are seeing a loss of footing

in the asian session. gold is trading flat at the moment. we saw it more when it comes to the piling on of gold into the precious metal in hopes of the fed pause or cut and weakness in the greenback has been aiding that play. as i have been saying, recession concerns have been weighing on the outlook, in particular when it comes to energy demand. our next guest sees that playing out but the market will tighten thanks to chinese demand as well as falling u.s. inventory. joining us is daniel, senior commodity strategist at anz. great to have you. second quarter, we can start to see in improvement? >> i think so. if all the indications in the first quarter were not that bad. clearly the market is taking a glass half-empty approach to things considering i suppose the tighter monetary policy, the fight to contain inflation has

impacted sentiment. china has always been there, certainly for 2023 as the driver for growth. so far we are seeing good signs. domestic travel has been quite strong in the first quarter. there is another leg up for that through the second quarter, which will occur at the same time as we see the opec supply cuts implemented. and other sort of ongoing supply issues which should tighten the market considerably. haidi: commodity plays for china or consumer services travel side as opposed to the resumption of any industrial-strength. >> yes i think so yes. certainly diesel demand in its self will remain muted in china because of the subdued outlook for industrial activity. that is why we are more cautious on the industrial metals side in particular. energy i think has quite some upside to it, particularly the

next couple of quarters because there have been constraints on international travel for a lot of chinese tourists in particular and that's not just going to benefit chinese demand, it is the asian market which will get a boost. i think the easing of restrictions, more visas obtainable by business travelers will benefit the demand over the next few months. shery: of course we have seen more signs of tightening credit conditions in the u.s. given the banking turmoil. we are expecting more from now on. how will that play into the u.s. shale picture and just the broader impact of that into global supply? >> the focus has been all about what the banking crisis and the overall sort of monetary policy environment will make for demand

in the u.s. but we will see that offset by subdued growth in supply. the fall in prices will impact intentions by shale producers but i suspect the sector has been well supported by u.s. regional banks. so the tighter credit conditions, the easing risk appetite of a lot of u.s. banks could potentially curtail i suppose the short to medium-term growth within the u.s. shale industry, so i think while demand could be lower, we're not expecting a huge fall, the supply side will be more than offsetting any sort of weakness there and we do think the u.s. is probably going to be a slight positive for the global oil market. shery: on the other hand, how

much of an upside risk could financial risk actually be when it comes to haven assets like gold? >> it has benefited from it so far and i suspect we will see a record high reached in the not too distant future. as those issues persist. it will be interesting to see how that dynamic plays out between those other risk asset markets within commodities in particular, because there will be a point where gold demand will start to ease. if we do see the macro backdrop improve. until then, i do think that it is going to benefit substantially from that investor side. haidi: take a look at that chart when it comes to the bets we are seeing. is the appeal -- how much is the currency effect and how much will be impacted by what we've seen with inflation numbers and

how the fed reacts? >> at the moment it is technically driven by a in lot of these macro issues, some they will be important markers and events for the oil industry and commodities sector. we will certainly be looking for any signs that inflation starts to ease. and what the u.s. federal reserve full due for rates going forward. that ultimately will terms of the bond market. investors having quite a hand on the short moves within the oil market. haidi: so much surplus is down to elevated prices. we know there has been weakness in industrial metals. do you see that outlook continuing to be positive? >> a couple of issues.

on the ironside, we are being bearish on that this year. we've seen it dipped below $100 recently. a bit concerned at least for the australian potential surplus that that could be under threat if we do see iron fall further. at the moment the prices have been holding up relatively well, so that could offset some of that. we are positive on the energy sector. that should be a net positive. clearly the weakness in metals and industrial metals will present downside risk. haidi: daniel, senior commodity strategist. let's get you to vonnie quinn with the first word headlines. >> chinese foreign minister has met with u.s. ambassador nicholas burns for the first time. he asked him to serve as a bridge between the countries saying the top priority was to stabilize ties. high-level exchanges between washington and beijing have deteriorated over an alleged

chinese spy balloon. tech curves, taiwan and the ukraine war. senate republican leader mitch mcconnell will not come to president biden's rescue on the debt limit by breaking a partisan deadlock. he told the president it was up to him and house speaker nancy -- kevin mccarthy to find a solution. the stakes between biden in congressional leaders are growing as both sides face a deadline to act before june. the federal reserve says banks reported tighter standards and weaker demand for loans in the first quarter. the proportion of u.s. banks tightening terms on commercial and industrial loans rose to 46% . those reporting weaker demand from credit rose to 55.6%. highest since the global financial crisis. global news, 24 hours a day. on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries. i'm vonnie quinn. this is bloomberg. shery: the world bank expects global growth this year too slow

to 2%. president david told us exclusively that a misallocation of capital is hampering the path to dynamic economic expansion. >> virtual derringer worse for her trouble golf outside char not in their affiliate from the rest of the world. that is in part because investment is not going into the right places. you have a misallocation of capital where it goes into a narrower group of governments in the advanced economies. they are borrowing huge amounts of money and big corporations. you do not get dynamism in the global economy that you really need to get growth going. we've got global growth below 2% following below 2% in 2023 and into 2000 to four, continued slow growth. >> one of the things you brought

to your term is time on wall street, you know how the markets and banks work. reporting on the senior loan officers opinion survey it shows lending demand is down. shows tighter credit. how big of a concern is that? how will that play out? too much capital going to the developed nations and not enough to the developing. >> it is already having an impact in that you are seeing slower growth in the advanced economies because there's not enough credit growth. the concern is this is not cyclical, but is secular, that it could continue into future years because new investment is not taking place now as much as what is needed. and especially for developing countries, their capital is going the wrong way, is going toward the advanced economies as people pull out and they do not get the rollover of debt that

might have occurred. i think there is quite a long phase of repricing needed because of the higher interest rates. you are at 0% for a decade or more. it will take a while or those that have a duration mismatch, that is what you saw in the silicon valley bank balance sheet, it takes a while to sort that out. >> what about fighting inflation? is the fed done fighting inflation and having to do aggressive rate hikes that exacerbate this problem of mismatch, that have caused other countries to try to match it and maybe that is one of the things that is not great for developing countries? >> i'm not sure that rate hikes actually causes inflation to go down. what causes inflation to lower is more production. supply and demand. you need to have more supply.

if all you have right now is the effort to bring down demand, that has not been working. we see high consumer demand in the u.s.. the fed and central banks should be using more tools, not just the rate hike tool. haidi: that was the world bank president david malpass speaking to us exclusively. coming up, the opportunities when it comes to energy collaboration between japan and south korea as the two countries embark on a new chapter of bilateral ties. this is bloomberg. ♪

if sports fans built a streaming service... movies and shows, live tv, more local sports. this is your big three that crushes cable. and he changed the batteries on all three smoke detectors. fubo!

shery: japanese prime minister's historic trip to south korea focused on geopolitical risks that the two nations base. talks could open the way to collaboration of energy transition goals. let's bring in ali. where can japan and south korea worked together and where the challenges ahead? >> historically japanese and korean companies have collaborated on procurement. this is where south korea's deputy prime ministers said they could strengthen cooperation.

where they have more opportunity to accelerate decarbonization growth is collaboration around nuclear power. if you look geographic the body of water between japan and south korea, this is where both countries are looking at developing offshore wind. if they follow the european example of coordinated cooperation in the north sea, they could actually reduce the cost of deployment of offshore wind and accelerate timelines. we have not sepen. part of this has been the challenges and geopolitical tensions between the countries and the lack of certainty around when the two countries reach the agreement. as we saw last time around when the prime minister was the foreign minister and negotiated an agreement with korea. haidi: and of course when it comes to japan and korea we are

watching these earnings from japanese automakers. from your point of view, what are you watching in terms of indicators for the ev transition? >> in terms of the supply chain historically, automakers have had dependence on japanese parts suppliers. this was reduced as tensions flared between the two countries. in terms of the ev market, they are fairly separated given that neither japanese automakers have a presence in korea north korean automakers in japan. korea has led in terms of ev adoption. korea was just under 10%. in the case of japan it was around 2.6%. we do see a growth in both countries continuing. we expect korea shares to re-exceed 12%. for japan it will be around

under 4%. shery: we are also following the asian development bank's annual meeting and south korea. it did announce a climate program. what can you tell us? >> so there were many announcements but the one i think was most interesting is trying to utilize $3 billion of guarantees. to leverage that to provide up to $52 billion of loans for climate change projects. the new initiative, the innovative finance facility for climate change in asia and the pacific is a good step toward the goal that they have set for itself to become a climate bank by 2030. it is just one step toward that goal and we need to see how this plays out. haidi: bloomberg nef head of

research with us. coming up next, a preview of nintendo's fourth-quarter results, facing rising competition from sony. this is bloomberg. ♪ when you automate sales tax with avalara, you don't have to worry about things like changing tax rates, exemption certificates or filing returns. avalarahhh ahhh

ahhh ahhh ♪ nintendo will report fourth-quarter results later on

tuesday. the numbers are expected to show rapidly slowing sales for its flagship switch consol. bloomberg intelligence equity analyst nathan joins us now with more. what are the key drags when it comes to nintendo? we've seen shares underperforming the broader benchmark. >> morning. it's all about the switch, you know, so the switch is in -- it is more than seven years old compared to a tipple -- typical lifespan of a typical nintendo home consul, it is considered to be late stage. we've seen that the switch unit sales has fallen for seven consecutive quarters in fiscal three q. with fiscal four q reporting we are seeing another 20% decline in sales. close to 50% of sales, that will be a big drag. we have seen historically but there is a huge correlation between hardware like the switch and software sales.

with the switch not doing well, it will ultimately affect software sales as well. shery: i did love my switch when i got it but i stopped playing animal crossing for a while now i guess. i should be looking at the new zelda, one of the biggest videogame franchises, i do not have one. is that going to help? >> zelda is one of the more exciting things happening to nintendo. with the first installment released earlier in 2017 along with the switch, the first installment, breath of the wild. breath of the wild, excuse me. and it doubled sales in the release quarter and for the subsequent three quarters following that, it boosted the profit in the following fiscal year. if history is any indication, this should help nintendo, but with a second installment, tears of the kingdom releasing in three days, we are hoping that will help nintendo but it could potentially expose us to the

switches hardware limitations because with the game experience is improving, the switch hardware is pretty maxed out at this point given that it is late stage. we've seen that with the release of pokemon. there are bugs and issues with the gameplay, so that is something we are watching closely for sure. haidi: pokemon was one of the foreign names approved by china for local distribution. what else are we seeing and could that be a meaningful market? >> there was pokemon unite and that is a mobile game that was already released globally with tencent in 2021. with tencent's expertise in the immobile genre because they are one who topped global charts, the expertise is going to help nintendo pokemon unite. the chinese market for nintendo

is not big. the other segment, other geography is only accounting for less than 10% of sales. shery: lots of games for me to try. great to have you with us. bloomberg equity research. we have more coming from the bloomberg wealth asia summit in hong kong after three years. these are some of the names will be hearing from including the hong kong monetary authority. this is bloomberg. ♪ go. go scientist. go software. go cure. go production. go faster and safer. emerson automation software helps breakthrough medicines get to market at warp speed. go human go. go boldly. emerson.

>> this is daybreak: asia counting down to the major market opens. no clear direction coming to u.s. market trading, and mixed picture with the s&p 500 higher

but following breaking news with goldman sachs i agreed to pay 250 million dollars to put an end to a class-action lawsuit that accused the bank of systematically underpaying women. >> this had to do with this cremation claims when it comes to pay and promotions, about one third of that settlement is expected to be set aside for attorney fees. this was a case that was due to go to trial in new york this month, and we are getting more on the details of this breaking story. let's get you over to the market open with bell. >> we have the opens of sydney, seoul and tokyo, also trading cash treasuries, watching that two year yield quite closely. it did move higher in the prior session following the fed survey and the results showed banks not only tied up their lending standards -- tidied up their lending standards but there was a big drop in loans and that purchase recession also been high. in japan, we focusing -- we are

focusing on the near term, and real wages fell more than expected in march, aching -- contraction of 2.9% versus estimates of 2.4%. that week result adds to a boj governor -- the boj governors resolve to keep up policy for now. with stocks we have the nikkei coming up to the upside, just a fraction higher. we have the likes of nintendo and mitsubishi due to report dated tuesday. do -- due tuesday. so far the kospi is looking weaker, we will be watching the moves that we have seen in tech stocks given that we saw the nasdaq peaking out a small game. -- having out a small gain.

a small game related to the s&p 500, according to goldman sachs. we also are taking a look at the korean index this morning, under pressure. but the dollar is likely past its peak in the -- dollar-won do for remediation in the that half of this year. in australia the indexes are coming online and we are on the countdown to the budget due later. we expect to see the first surplus since 2008, targeted spending measures coming through through -- four disadvantage -- disadvantaged groups. we want to watch when it starts trading in a few moments from now. it reported a cash profit of 1.8 million -- million dollars up 10% from a year earlier. but the bank ceo really joining his peers in warning on the

outlook and likewise we have crude under some pressure as well. >> and just to recap our breaking story, goldman sachs has agreed to pay $215 million to put an end to a long-running class-action case accusing them of underpaying women. let's get more from our finance reporter in sydney. let's hear what we were expecting. >> the try was due to begin next month and goldman sachs did not want all of its internal workings out in public. the court also steps away -- is just steps away from their office. there was conjecture about what would come out because women have complained for decades about sexual discrimination and harassment and about retaliation if they do complain against these issues. a lot of women have said that careers have been derailed when they raise these issues. there were a lot of things in

there that would hopefully have come out that goldman would not have liked. >> 2800 women, 20 and hundred in this class action. how did it get started -- 200 and 80-- 2800. how did this get started? >> it started with christina chan who began as a convertible bond salesperson and she can pay -- complaint to the equal opportunity employment commission in 2005 and sued in 2010. obviously now we are in 2023, a lot of others have joined that complaint and joined that lawsuit. it was a huge victory. that amount, $250 million, is more than doubled the amount that smith-barney paid decades

ago to settle a similar action. >> and a lot of that will be set aside for attorney fees. a lot of progress has been made, this has become a tale as old as time in terms of complaints, has there been progress in terms of goldman with representation? >> they certainly are making the right noises and whether that leads to action they are trying. goldman said that they would not take the company public on the so work women on the board and unless the board of directors had diversity. that is in the u.s.. what their partner class last year was about 29% women and that was the most diverse they have ever had. you can see that there is a lot of work to be done unfortunately. >> our finance reporter in sydney with the latest on goldman sachs. and we continue to watch the market opens across asia, and mixed picture. the nikkei up .04 percent, let's

bring in our next guest, who remains wary of risk. mark franklin, senior portfolio manager for multi-asset solutions at manna life investment management. great to have you. so many different challenges ahead. whether it is on the economic front or valuations, where do you see the biggest risk? >> good morning shary and heidi. -- sherry and heidi. what we notice is that there is a lot of risk across asset classes, and lack of term premiums. we have to be very selective and wary of allocating risk to the market when there is an unfavorable risk-reward. what we think is important is that there are a lot of rate cuts pricing. 65 basis point cuts in this year, and around a hundred next

year. that is predicated on the assumption that we will probably enter recession and inflation will fall quite precipitously over the coming six quarters or so. the question will be if that does not happen, or if the economy models through. what happens if inflation remains stubbornly high, or falls only at a modest pace. you would at -- that argued that the rate curve does not look attractive from a risk reward perspective even though we believe that we do ultimately end up in recession and the dynamics to present themselves from the end of the year onwards. >> can china provided -- provide the much-needed upside when it comes to economic growth and investment sentiment as well? >> -- we heard that people were rushing to hong kong in order to open investing accounts. >> the credit impulse is picking up.

but the ultimate cyclical recovery is starting to fade in terms of its power. there is a lot of latent spending potential by businesses and households, but one area that has benefited from that particularly has outbound tourism and oversee spending. you see some of the lecture brands sit in europe, they have really started to capture that spending if you like. when it comes to domestic spending it has been a slower grind higher. that's because of the disinflationary and secular overhangs to the economy, more stimulus is needed. what their the limited fiscal room to maneuver by local governments. it's a bit of a challenging macro backdrop. on top of that we have to watch carefully what the regulatory landscape looks like because it is not the case that the regulatory of rates -- risks are behind us, they are just rolling through different parts of the economy. from an investor's perspective we have to watch cost to

capital, whether it is moving correctly, and overseas applicators don't like surprises. they like continuity and certainty when it comes to policy. >> it is interesting this idea of the respect -- revenge spending that is driving, you see so much when it comes to the likes of lvmh for example, in european markets, is that sustainable? does it limit and elasticity of that high and -- and grow-- end growth that we don't see very consistently in china? >> yes it is sustainable for a couple of reasons. when you look at the pricing power of some of the brands that have done well with a design perspective, tremendous pricing power, often more than two or three price marks in any given year and that shows there is huge demand for some of these high end items that are invoke

-- in vote. they are also clever at managing supply, constraining it to create scarcity, even at the market, chinese economic growth does start -- slope in terms of that growth, but these luxury brands should be insulated because of that scarcity of supply. >> the i found it interesting -- i found it interesting when you talked about relative value of opportunities. australia is one of your preferred pix because of what you perceive to be robust policy settings. we are about to get a return to surplus in the federal budget for the first time in 15 years. >> that's right. one of the things that we are not talking about is the ration exposure across the board and all markets. we think it is a relative value game and we are trying to differentiate ourselves in terms of issuers that have benign inflation dynamics where

inflation dynamics look under control, at policy settings and policy credibility which gives the market a certain degree of comfort. australia is case in point. even though the rba surprised by hiking rates 25 basis points, if you look at the curve it is flat because the market believes that the inflation backdrop with beat coming down, and there are not any nasty surprises. by contrast, if you look at the u.k., the problem there is that you have inflation pressures coming from multiple sources, food and energy import inflation, and extremely constrained labor supply, partly for demographic reasons but also policy reasons because of brexit. there has been a certain amount of confusion with the bank of england's given occasions market, -- communications to the market, and when you compare them, australia looks more

stable and we think that the market is not pricing in the potential terminal rates in the u.k.. long in the australia, short in u.k.. -- australia, short in your care. >> always good to chat with you, that is the second guess that has been keen on australia. and in fact maybe even the australian banks. >> that's right, interesting points there. in terms of what we are watching today, we just had the cash profit come through for cba, that was up $1.8 billion. a gain of 10% on the year. but still a warning coming through on the outlook that we have from the ceo saying many customers are starting to feel the strain of high interest rates, but -- the rising cost of living express -- expected to be addressed on tuesday. we see cba coming online and

echoing the calls that we had heard from other banks and lenders in their earnings. let's change off because we are also keeping an eye on payment firms with static trade here given that paypal reported its earnings out earlier and they warned that its adjusted operating margin is not going to be quite as quickly as the company previously anticipated so they are adjusted operating margin is likely to expand by at least 100 basis points this year, compared with an earlier forecast of 125 basis points, you can see that drop that we see in shares of about 6% there, mixed for the outlook of some of these payment place in asia. let's change on because bitcoin is in focus today. we have seen the currency slightly below the $28,000 mark, it is being affected by two different factors, the macro fundamentals, it's deterioration and concerns around session on the one hand and the trading halts that we have seen in

binance and concerns around that exchange. so we are also seeing crypto-linked stocks moving lower. we are now 30 minutes into the session for japan, korea and australia. >> let's get to vonnie quinn with the headlines. >> a chinese diplomat was expelled, -- from canada, accused of interfering with internal affairs. he had been looking into penalizing a conservative politician on his positions on beijing. the u.s. is proposing extended strict trade research and through companies allegedly supplying russian with manta goods and technologies. 35 entities are being targeted, including businesses in mainland china and hong kong. the foreign minister he says it's trade with russia is aboveboard, -- ministry says it's trade with russia is

aboveboard. which o'connell says he will not come to the rescue by breaking the partisan deadlock. mcconnell says he told the present -- president privately it was up to him to find a solution. the meeting -- the stoxx -- stakes for the meeting tomorrow grow as they have to act before june. australia is headed for its first budget surplus since 2008. the treasury announced a surplus of $2.7 million. he also forecasted smaller deficits that anticipated. he cited better unemployment and boosted economic factors. 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. heidi. >> we get analysis as we await trade data for the signs of strength in the post-covid recovery in china.

this is bloomberg. ♪ and then when i was diagnosed, there was just such a big weight put on my shoulders. every night, i felt like maybe i won't wake up tomorrow. but there's no way that this is going to win. i'm winning. announcer: st jude children's research hospital works day after day to find cures and save the lives of children with cancer and other life-threatening diseases. beth stewart: there are treatments that were invented within the walls of this hospital that have continued to improve the cure rates for pediatric cancer, and st. jude's not going to stop until every single kid gets that chance to walk out of the doors of this hospital cancer free. lila: if it weren't for st. jude, i wouldn't be sitting here today. peter: this place has really shown us the strength of what can happen when so many people work

together as one. people want to be a part of the cure. announcer: thanks to generous donors like you, families never receive a bill from st. jude for treatment, travel, housing, or food so they can focus on helping their child live. for just $19 a month, you'll help us continue the life-saving research and treatment these kids need. join with your debit or credit card right now and we'll send you this st. jude t-shirt that you can proudly wear to show your support. christen: i think it's the most worthwhile place to put your money when it comes to childhood cancer. lachaka: because it takes a heart for somebody to say that i'm willing to give to st. jude so that they can help save more lives. that's huge. damon: our giving to st. jude is right up there with our mortgage. that's the priority that we put on giving to st. jude. announcer: please call or go online right now. become a partner in hope today.

>> the latest survey from the for firms that banks are lending last -- less and boosting chances of recession. kathleen hays has been following this. what are the takeaways? >> things are tougher, the banking term out that we see in the u.s. showed up in the quartesurvey of senior lending offices. this is an opinion survey of what they are seeing. let's get to it. 46% of banks tightened terms on commercial loans to medium and larger size businesses, to -- 40% in the fourth quarter, 6% in the first quarter, and that may not seem like a big difference but bloomberg economics pointed

out that this could lead to less lending down the road. also, the survey showing loan demand down 55% -- rather 31% of banks that had weaker loan demand gone as high as 56 percent now in the third quarter. -- first quarter. they are making it tougher to get landing. in the going to keep cutting because loan officers are concerned about credit quality, the outlook for the economy and all of these do not bode well for what will happen in the first quarter of the year -- the second quarter and beyond. >> so why are they betting against fed rates? >> when you look at what goldman sachs is doing, they have hopped on board with barclays for example and others, who do not agree that there will -- with

the market, who think that there will be a basis cut by 70 points this year, and that is because of concerns about the economy. when you look at it that you asked white anyone is betting against the fed cutting rates. goldman has looked into this, and despite this concern about sharp contraction of credit and other things, what they are saying is that when the fed has done a big series of rate hikes and then paused for a couple of meetings, they tend to be on hold for a long. of time, say six months. even though they are not quite there, they are betting on that happening. we are also seeing that hedge funds according to the latest data, there is futures positioning data, expecting the fed to be higher for longer. a lot of economists have said that, and maybe they are finally just getting on board with reality. we note that the cpi is coming out this week and it is expected to be unchanged at 5% year over year in april.

we just have to finish with this great story on the terminal about how big companies like ford are keeping their sticker price is high -- price high, it worked out during the pandemic, people were willing to pay higher, and there are relying on people paying more for less. that makes it harder for inflation come down. >> kathleen hays they. the bloomberg west asia summit has can -- returned to look at the latest investment innovations and wealth creation innovations. there's david, after three days back at the event, what are we expecting? >> it's fun. it's getting fun, they are putting out coffee and waking up and smelling the freshly baked dim sum which is right next to me, i have to give a trophy to

our producers who were slotting kathleen in outlining the macro environment ahead of this because the contrast in the narrative of hong kong against what is happening globally cannot be clearer, i think, in some sense. we had a difficult conversations around banks and the safety of several banks. the contrast has actually increased over the course of the last few months during this difficult time. we put out a great story out that golden week is done and we have seen thousands of visitors coming, opening accounts in hong kong and taking advantage of the higher interest rates of the city, which underscores hong kong as a wealth hub and we had a lot of good conversations about the longer-term strategy of hong kong to sort of bolster its case and cement that status as a wealth help, whether that

is traditional finance or virtual assets, whether that is alternatives like mark for example, the hm monetary authority cheek executive -- chief executive be joining us, and we will get lots of thoughts on what is happening. lots of good stuff is coming up from here at the rosewood in hong kong. back to you guys. >> purchase markets editor -- our chief markets editor david ingles in hong kong. an anti-spike campaign is underway targeting consulting firms in china, dan, what do we know about this? >> we have confirmation from china that it is extra taking place. it's a drip of information, reports of rates at various

firms, last night was the first time that we saw china actually confirm that this is underway, that it is nationwide and they have sent law enforcement officers to beijing and shanghai and shenzhen, they only named one company so far, which does the dude joe visions for foreign companies -- do diligence for foreign companies investing in china. they have asked experts to give them information that china says was illegally acquired, providing data on specific industries that are sensitive to national security. >> on international forums, beijing has vowed to be open. how much does this raise concerns for the business community operating in china? >> there is a big disconnect between some of the speeches we have heard from the premier and

the form welcoming foreign investment saying that china wants foreign companies to invest, and then you have this campaign against essentially foreign companies, companies that allow multinationals to figure out who they are doing business within china, it is what a lot of these consulting companies do. thank -- i think there is a disconnect between their presentation and their investigation. >> our editor there in hong kong with the latest. much more to come here on daybreak asia. this is greenberg. -- bloomberg. ♪

thanks to avalara, we can calculate sales tax automatically. avalarahhhhhh what if tax rates change? ahhhhhh filing sales tax returns? ahhhhhh business license guidance? ahhhhhh -cross-border sales? -ahhhhhh -item classification? -ahhhhhh does it connect with acc...? ahhhhhh ahhhhhh ahhhhhh

>> take a look at how we are tracking this tuesday session, just hours ahead of the delivery of the australian budget,

expecting that return to surplus for the first time since 2008. we are seeing a mixed picture up there, japanese stocks up by half a percent and we are half an hour into the start of cash trading, the kospi down by almost .3%. further pressure as receipt oil pressure in the asian trading session. stock split commuted with the downside of over half a percent, watching a lot of these real estate consumer discretionary and commodity when i was his age, we had to be inside to watch live sports. but with xfinity, we get the fastest mobile service and can stream down the street or around the block! hey, can you be less sister, more car? all right, let's get this over with. switch to xfinity mobile and get the best price for 2 lines of unlimited. just $30 a line per month. i should get paid more for this. you get paid when you win. from xfinity. home of the 10g network.

>> this is daybreak asia, with a check on the markets. 30 minutes into the session for asia and it is looking mixed but there are couple of key events on the agenda today, including in australia with the government

set to hand down its budget later, expecting the first surplus since 15 years ago, but we are also watching that broader economic backdrop because we did see household spending dropping in the prior month, led by the declines in homebuying, health and fitness as well. expecting target emissions coming through the government. in terms of what is standing out, we have the nikkei pushing higher, aided by that weakness coming through in the japanese yen there. we also have real wages data declining more than four points down 2.9% versus estimates for a 2.4% drop, certainly something that will assist the boj governor to keep his monetary policies in place. we are also watching bond yields moving higher across the complex, given what we saw and treasuries in the prior session, yields moving higher after we had the fed survey out showing that there has been a big drop

in loan demand and also tighter conditions for criteria there. in terms of what else we see, hong kong futures 40 -- pointing to a weaker start, but trade data is very much in focus as well. we will have that do in the hours ahead in terms of what we are expecting, some pretty strong headline numbers, including exports there. the median estimate for an 8% jump, but bloomberg intelligence highlights that this could also be down to those base effects, when you look at other effects we are looking at a weakness in external demand, shipments are also dropping your on you -- year on year. >> jeremy stevens is the chief economist at standard bank. great to have a with us. it is not just concerns over the trade demand pulse but also the question as to how sustainable this rebound is in china. you have been on the road speaking to clients. what has been is concerns and

the areas where there are enthusiasm -- is enthusiasm for clients? >> we can get back to the trade data if you want, but yes, i have been on the road and it has been very very busy, we have been desperately seeking information from people on the ground here in china as to whether and where the economy is having. we covered many topics, i have not been working this hard in three years, there was a lot of discussion around zero covid, and policy effectiveness and the function of policymakers, what does that mean going forward, the geopolitical risks will be very very familiar, and party state relationships and the relationship between the party and business, and the markets. was a lot of discussion around

pausing on the three red lines, and also cleaning up the housing sector in the future, we spent time speaking about regulation in the era of compliance, leadership willingness to commit growth to be less than 4%, could it be 4% in 2024 as a target,, prosperity, we really covered a wide arc of topics, so it was very busy. but clients are very desperate to get information like the stuff that you provide them on a daily basis. >> we saw exports to china. the in april -- fall in april from korea. do you expect another surprise to the upside if we go back to trade or does the oval environment of recession fears and other economic factors play in here? >> this is the real conundrum

for this year that interim -- april will have these base effects, and these effects are going to ring through the rest of the year and will likely cascade towards the tail end. it's very difficult to make heads or tails of what is really happening in the chinese economy. so in this month i am expecting almost 15% growth in exports year on year, but basically, that can be delivered with flat month on month numbers. so this is going to be a really confusing set, and some people will say they are flashing and others are going to be a little bit smarter and realize that this is unsustainable, and the underlying fundamentals don't suggest that this will continue. we recently had pmi numbers of new export orders down 48.8, i think they declined by almost three points, which is the

greatest decline on one month since 2021. it has been below 50. the real story is softness. a headwind in exports being a headwind to growth, and to be frank, beijing gnosis. they are not believing these headline numbers. that is why they released the 18 point plan on the 28th of april to support exports and they note that one third of their labor force is in exports. so they are going to have to continue's -- know that one third of their labor force and experts. so they are going to have to continue to deal with that and make sure that it grows going forward. >> there have been two sides of the debate and how that will impact neighboring countries and countries dependent on trade with china. one is the uncertainties were talking about right now and maybe that is domestically focused, any recovery that we see, the other one knows that

there will be a boost for those developing economies, where do you stand? >> china is not going to give up its export position very easily, and it's going to try and grow its share of the market, and you see a push of exports into the emerging markets, so the fastest growing export region in the first three months of this year was africa of 20%, the next process was asia, so is expanding into those countries resulting in significant trade deficit. -- deficits. kenya exports $8.5 million of good -- goods from china. if china is going to champion emerging markets and geopolitical forces are going to shake that narrative, and they are going to have to find ways to reduce the growing trade deficits it has got with these emerging markets. it's not going to do just by coincidence. the emerging markets and the

partners will have to come to very clear targets that they want for the engagements with africa and a matrix for success. >> we talked about the weakness in the manufacturing side of things, factories and pmi numbers, how about the surface side of things, consumption and golden week holidays, and that giving the economy a boost? >> those were surprising numbers and really great, and i will take those for sure. it is undeniable that we are all relatively cautious and that suggested to me that was a matter of the spending story. when you look at the underlying numbers for consumptions, forte sentiment or consumer confidence or income growth or prospects for employment, they are still a little bit concerned, and that massive surge in household deposits that we have seen has been grossly weighted towards the very where -- very wealthy

-- very wealthy families, it is not an average or lower income household debt has been able to save. they are still vulnerable and we would like to see a rollout of policies to support and try to encourage consumption, but also to try to increase income for middle and low income households. beijing knows this is still a waypoint, it will take the numbers of course, but certainly this doesn't suggest that households are saturday back to where they were in pre-pandemic and none of the covid pandemic happened. that has been a significant hit and it will take time for that to metabolize. forward this year. but will it be levels that we

saw prepend them, probably not. it's still good enough to drive the economy forward for the year. >> that suggests that as things stand now, this is not a virtuous cycle. do you think that policy measures could get them there --? >> if consumption could rise to 6% versus 9% pre-covid, that is fine, that would drive the recovery forward, and with base effects that would be incredible. you have base effects li numberl print and it a year

of rebalancing and certainly drive the economy forward. the question is what will it look like in 2024 once these effects come out of the wash and the underlying numbers reveal themselves, are we looking at 5% growth from consumption, 30-40% of gdp, and what does it mean for the rest of the economy, how much will they rely on parts of the economy that will rely on soft budget constraints to prop up growth, what they support the same growth next year or will they want to think that will need to push on policies that

add to imbalances emergency in the economy. -- emerging in the economy. how do you overlay that with what you mean for common prosperity and china has been trying to pursue a better distribution of wealth and income across the economy and that is obviously a long-term agenda that is going to continue throughout the years to come as the chinese government decides that they are less focused on rapid economic growth and more worried about the distribution of that growth. it is not clear and then when you have manufacturing slowing and real estate struggling and infrastructure investment coming off as , and then you have 15-60,000,000 university graduates. if you can buy the ones coming out of chinese universities plus the ones likely to come back from overseas, how do you absorb them into a fast-growing economy. it's a big growth that lemon and

i think this year they have gone for stability, a relatively subdued growth target so that they can keep the economy on an even keel and avoid unearned goals. >> jeremy stevens, chief economist at standard bank. let's get to vonnie quinn with the headlines. >> bloomberg has learned that goldman sachs is paying $250 million to and a class-action lawsuit that accused them of underpaying women. it struck the deal with lawyers representing 20 and hundred women alleging discrimination in pay and promotions. the two sides handed -- have not finalized a deal, as goldman sachs is trying to finalize before the trial. china says that an anti-spike

campaign is underweight targeting consulting firms. crackdown is over national security violations, according to china. a local firm has already been searched and other operations being -- are being carried out. multiple firms have been subject to investigations in recent weeks. foreign minister has met with the u.s. ambassador the first time. he was -- he asked the semester. -- ambassador to serve as a bridge between the two communities. ties have decayed over an election spy balloon. taiwan. at the ukraine war. caliph on his financial regulator says that it will more closely scrutinize lenders following the collapse of's -- silicon valley bank, and its prr evaluating the complaint of employees. three of the banks that collapse were in california. -- collapsed wearing company. global news 24 hours a day on air and on bloomberg quicktake powered by more than 2700 journalists and analysts in over 120 countries. >> the first budget surplus in

australia since 2008 on the back of higher tax elevated for prices. we get a preview of the fiscal blueprint next. this is bloomberg. ♪ he

>>es to trading across asia, the msi asia-pacificwe have sectors hig,

especially sectors that are lower, real estate, energy, a little bit of a rebound in oil prices in the regular wall street session, but in asia trading, we still hold down that $73 level. so, really, the nikkei graining muted trading -- >> mute a surplus in the budget, over 2.7 billion u.s. dollars for the financial year, he will be handing down the budget this evening at local time. it's a pretty fine balancing act politically for this budget. >> i government is trying to give cost-of-living related to

consumers while not putting too much money into the economy and boosting stubbornly high inflation. what we expect is $15 billion in cost-of-living relief which will come in the form of roosts for job seeker payments, or employment payments as they are known elsewhere, for average australians. as well as relief for households on prices. that checkbook go to households, they will go to energy prices to bring down prices -- companies to bring down prices. we could have an ongoing inflationary effect, as we see those energy prices come5 years. for the first time australia is seeing a surplus. this is significant. >> absolutely. every country wants to have a surplus. there is no treasure in the world who would not want one, but australia has -- has

seen it as a marker of economic competency from the government, and what we have seen in the past decades was that treasurers have promised a surplus but have not managed it yet. if he can get to june with his surplus intact he will make history as the first treasure in 15 years to deliver it. what he is warning us is that it will be a now you see it now you don't, it wi and the budget will go back into deficit as a long-term spending pressures in health and social services begin to pile up again. >> anay when it comes tois surplus with commodity prices and so much uncertainty over where china goes? >> what he said was that

obviously the reopening of china and the end of the restrictions had been a huge boon for the australianrnational economy ande already seeing the imf downgraded expectations for global growth, china has the latest pmi figures that have not been exactly shining. so what he was saying was that there was a, vacated --er that budget out -- forecasts have low commodity price predictions. if things turned out to be higher, we might see more budget deficits going forward with a bit of a grain of salt. >> ben wescott there ahead of the budget. we will be live on wednesday with a full debrief of the budget, joining us will be the finance minister katie gallagher as well as the shadow treasure angus taylor. -- treasurer, angus taylor. this is bloomberg. ♪

( ♪♪ ) ( ♪♪ ) constant contact delivers the marketing tools constant contact. helping the small stand tall.

making the united arab emirates its international hub.

the crypto exchange has been navigating a s. regulatory requirements. the ceo told us coinbase is not going to leave the u.s., we havr major markets throughout the world. we are looking for an international hub that could serve the -- other parts of asia. the ua is very attractive and they deserve it. there the first country in the world that has created a dedicated new regulator to crypto and published a rulebook that is protective of consumers. >> paypal shares fell after they posted below forecast numbers. they were expected to raise basis points lower than their forecast, the wiki guidance overshadowed paypal's first quarter earnings and its higher full year profit -- four-year

profit forecast. chinese banking stocksmonday's 6 billion in value, let's go to our chief china markets correspondent, who joins us in hong kong. look, i understand any banking stocks outside the u.s. are looking more compelling but what is driving this rally in chinese financials? >> it's a great question. i mean, it's a value trade. these stocks were crudely cheap and have been on a historical basis. when you look at the price-to-book ratio it looks to be around 0.8, it was 0.6. but what is happening is that traders are latching onto the latest trend in the stock market and they have d obese and withis oe's, and withiis risk and momentum. if you look at the value trade in china, it is by far the best for forming vector year -- performing factor year for -- today. if you look at the options

market, and there is no kind of single stock options for sure, if you look at the options here volume for ccb, icbc, showing that there is speculation in the market chasing this rally. the idea is that the stocks are cheap, and if you look at the fundamentals, the earnings are not good for the banking sector, with the pboc expected to keep rates incredibly low, and maybe even increase stimulus, that is not a good story for the banking sector either, rates are falling and yields are fallen, -- falling, that's a -- big factor. >> rally in china? >> that's interesting because

the equity market is telling you one thing at the bond market is telling you another. the bond market is saying that we have seen all these deposit rate cuts from banks in recent weeks. this suggests that the pboc is likely to add to stimulus in the coming months, the speculation and expectation of more stimulus has been in the market for a few months and that has come through, but we will get trade data to date that could showed that the exports that you see a rally in the bond market close to raising the -- the slump that we saw since the reopening, so the bond mtrade. and the equity market is saying by thanks, these are cheap stocks, and it doesn't matter whether the stimulus will put a damper on their business models. and a really really interesting dy in hong kong, and don't

forget, we will be live at the bloomberg wealth asia summit which is back in hong kong autht discusses innovative approaches to investment and wealth creation. this is bloomberg.

when i was his age, we had to be inside to watch live sports. but with xfinity, we get the fastest mobile service and can stream down the street or around the block! hey, can you be less sister, more car? all right, let's get this over with. switch to xfinity mobile and get the best price for 2 lines of unlimited. to comcast business internet customers. so boost your bottom line by switching today. comcast business. powering possibilities™. hi, i'm katie, i've lost 110 that helped with insulin resistance. i had had conversations with my physician indicating that that was probably an issue that i was facing and making it more difficult for me to sustain weight loss. golo has been more sustainable. i can fit it into family life, i can make meals that the whole family will enjoy. it just works in everyday life as a mom.

♪