shery: your marching "daybreak:

asia." coming to you live from sydney and hong kong. annabelle: we are counting down to asia's market opens. haidi: the top stories this hour. turkiye may be set for ever enough election as the president's share of votes in the presidential elections drops below the 50% level needed to win. in thailand, pro-democracy groups deutsche's resounding victory -- notche resounding victory. an agent shares face a sellout. shery: that is adding to the pressure in the u.s. markets, we are seeing u.s. futures under pressure early in the asian session after already a weekly loss for the s&p 500. data ceiling concerns, not to mention a hawkish fed. we had some more comments that pointed to a hawkishness from the federal reserve.

perhaps justified given we saw the university of michigan survey pointing to the inflation outlook exceeding expectations. not only for the one year, but for the longer term as well. we had treasury yields rising across the board. the 2-year yield is headed around the 4% level. we also had pressure on oil prices. the asian session seeing a rebound. but we continue to see concerns about the broader economy. not to mention weakness in the physical markets as well. annabelle: absolutely. when you put the recessionary outlook, it is a lot on investors' focus. perhaps the expedition that we are not likely to see the fed pausing anytime soon. you can see that investors would be looking at the risks tilted to the downside. in terms of how this is setting up, because --

australian futures are heading to a disappointing open. the japanese yen weaker. the other factor is what is happening in the emerging markets landscape, because not only is there china in focus, we have seen equities drifting lower. a lot of concerns around the evenness of the economic recovery. we could see the pboc cutting the rate today, that is the call from bloomberg economics, a ton-basis-point production to try to spur growth. -- a 10--basis-point reduction to try to spur growth. the asia pac index falling below the world index in yellow. a lot of different things in emerging markets to be focusing on. we had seen thai and turkiye's stocks moving higher after the elections, but still a lot of details there to be worked out.

haidi: the turkish president recep tiger paw erdogan looks headed towards a runoff in two weeks. his lead is narrowing against the main challenger. we are also watching thailand where the pro-democracy party grabbed the lead in the vote. let's bring in our two guests, the chief international correspondent for south east asia haslinda amin is in hong kong, and simin demokan in turkey. what do we know about how likely we are to see that runoff vote in a fortnight? simin: presidential elections in turkey taking place, it was 64 million people eligible to vote, and the voter turnout was extremely high, around 80%. votes are still being counted. however, it looks like, as you said, we could have a runoff two weeks later. that is because none of the two main contenders have managed to get more than 50% of the vote.

of course the two main contenders -- president erdogan against kemal kilicdaroglu who is the main candidate of the anti-erdogan 6-party coalition. the main surprise of the night was actually the third presidential candidate sinan ogan. he is from a nationalist party and managed to get more than 4% of the vote. this was one of the main key factors for keeping the front runners from securing an overall majority. sinan ogan spoke earlier today, and right now he has not thrown his support behind any of the other candidates. of course if there is a runoff two weeks later, it will be between president erdogan and camilleshery: we are watching pt erdogan addressing supporters in ankara, we are looking at live

pictures from the ak party headquarters. let me ask you what happens after the runoff, the fate of the economy that has gone through an inflation crisis, depending on who wins, it seems that it is so close that whoever wins will have a stronger opposition anyways. simin: that's right, turkey has been dealing with a cost-of-living crisis and many actually blamed president erdogan for this. late last year, inflation surged more than 85%. this was sparked by a currency crisis a few years earlier. while most central banks around the world have been hiking rates in order to curb inflation, turkey, encouraged by erdogan, has been cutting rates. many turks are finding it really difficult to even afford staple items such as red meat and onions. now kemal kilicdaroglu says if

he wins, he will undo all of erdogan's and orthodox economic policies. but of course it is such a close race, so time will tell who will actually win the race. and of course, money managers are waiting for the outcome of those elections, probably two weeks of now, to see if turkey will become a buy again. shery: we are listening to president erdogan saying that he leads turkey's boat with a clear margin, as he speaks in ankara his followers. let's turn to haslinda. it was a different outcome in thailand, a resounding victory for the opposition, what is the latest. haslinda: after eight years of military rule, the people are saying that enough is enough, we want to chain and freedom of speech, we want democracy, we want a government that reflects our aspirations, a government that would place the country for

the future. that is what we are reading from the results so far. 98% of the vote already counted and that top-two opposition parties garnered more than 280 seats out of the 500 at stake. now of course, bear in mind that having the most number of seats doesn't necessarily mean that you get to form the government, you get to see how alliances are forged in the coming days and weeks. what is worth noting is how one party in particular moved forward -- move forward party let by pita limjaroenrat, a pro-democracy candidate end product of harvard and m.i.t.. he has garnered the vote of the youth, including 3.3 million first-time voters. if you have been listening to the campaign of move forward

party, they have been campaigning on very bold ideas. they want military reform for the monarchy, something that hasn't been heard of until now. it has been a taboo for the tie people -- thai people because the royal family had been revered up until now. so that would be one of the issues brought forward by this party. haidi: simin, just getting back to you, we are getting these fresh comments from president erdogan, talking about how he thinks he leads the turkish vote with a clear margin. as he is speaking to supporters in ankara, he says the opposition is trying to mislead turkey when it comes to the outcome and that he is still waiting for the final vote results as he speaks to supporters at his headquarters in ankara. how expected was this, particularly as we had the news about twitter restricting some

content, mostly from his opposition in turkey, they were not accessible ahead of the sunday vote. will it be a difficult path forward in terms of accepting a result if it goes against the president? simin: well, earlier today the opposition also came out and said that according to their vote, they are actually in the lead. so right now there is a power struggle between president erdogan and, two sterile group about who is actually -- kemal kilicdaroglu who is actually leading the race. last week during an interview, president erdogan was asked if he would leave quietly were he to lose the elections. he said this is a democracy and if he loses, he will leave quietly and not make a

fuss. we. were expecting there to be a lot of chaos during these elections, so time will tell exactly when we get the final vote. haidi: simin demokan in istanbul, and our chief international correspondent for south east asia, haslinda amin there. we continue to watch the outcomes of these two emerging market elections, and president erdogan continuing to speak to his supporters in ankara. look at how this will play out for markets in asia. chief correspondent for asia and mliv contributor garfield reynolds. investors are hoping for turkey, a return to economic orthodoxy, right, to make the country more investable again. is it great to have an impact on

the broader em? garfield: not sure. turkey has been out of it for so long and in some ways, investors might actually prefer to see a rapid resolution and where they allocate, even if it is in favor of erdogan, rather than a situation where you have turmoil in turkey. turkey matters a lot because it is right there in the midst of ukraine, russia war. that whole makes. it helped negotiate the grain agreement which sometimes has work and sometimes has not. i think the main thing investors want to see out of turkey is a settled, rapid resolution either way. and if that came with a more orthodox economic policies, that would be welcome. but the most important thing is to avoid any fresh turmoil in an area with a lot of turmoil.

shery: speaking of turmoil, we have seen political uncertainty in key emerging markets. the dollar saw a huge rotation last week, becoming a safe haven trade again. is that the trajectory this year as we see more of these idiosyncratic risks emerge? garfield: potentially yes. also because there is a sense that maybe u.s. yields have come down as far as they are likely to over the medium-term. until we get an actual drop in inflation or an actual u.s. recession. but then i get remember, a u.s. recession could set off a bid for the dollar as a haven. counterintuitively, the debt ceiling drama and the potential of default, that could send people into the dollar again as the ultimate haven, especially with short-term yields so high.

that helps to feed demand for the dollar. so there is definitely a sense, just generally -- and we will be watching china for economic data this week, to see how much -- whether they economy can shake off some of the recent difficulties it has had, to help risk sentiment. but that dollar strength does you that risk sentiment is both fragile and also vulnerable to further dollar strength. haidi: our chief rates correspondent for asia and mliv controller garfield reynolds there. shery: let's get to vonnie quinn with the first word headlines. vonnie: indian prime minister narendra modi's party considered a loss in a southern swing state, every victory for roll grandes congress party as it looks to build momentum ahead of national elections next year.

it is its biggest victory against the ruling parties since 2014. the winning party's campaign promises included direct cash benefits for women, and free electricity. the g7 finance chief presented a uniting fraud with more support for ukraine and a plan for diversifying supply chains. in their statement, condemnation for russia's war of aggression against ukraine was front and center, and though china didn't get a direct mention, there were veiled plans to counter its growing sway in the global south. the second major visit banisters and restarted china has happened. the australian minister described the talks is warm and candid. austria is hoping to negotiate an end to sanctions over its agricultural exports, will china is pushing her better access

to investment. wildfires in canada are on the rise. 83 active fires were reported in alberto province, up from 70 six on friday. recent rains" with or have allowed oil and gas producers to restore some output, but analysts say more wildfires will mean heavier canadian oil prices this year. global news, powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie quinn. this is bloomberg. shery: still ahead, japan is pushing to use more ai to help plug labor shortages. or interview with the japanese minister this hour. but first, we preview china's key activity data this week with hsbc's kai: economist next. this is bloomberg. ♪

haidi: key data from china this week might suggest that economic recovery is doing better than it actually is in reality. industrial output and retail sales for april are expected to show rapid growth that comes with a major caveat, the numbers will likely by a very weak case. many cities were paralyzed by

lockdowns from restrictions at the same time last year. in terms of what the pboc might do, bloomberg economics is expecting the central bank in china to cut it one year mlf rate for the first time since august later today, to support growth. let's talk the outlook with frederic neumann, chief asia economist and global head of research on asia at hsbc. let's start with the policy reaction, given that it's top of mind. bloomberg economics expecting a move from the pboc. does the data, patchy as it is, and bifurcated as the recovery has been, suggested there is further need for policy support? frederic: it certainly is. we have seen a slowdown bring into april. this week's data will perhaps reinforce that view that march was a strong month. but as we start the second quarter, number 10 is starting

to ease. that is very early on in the recovery, and it would suggest the government would have to bit more in terms of supporting growth. not sure that they will do it right away. but certainly in the coming months, interest rate cuts and liquidity injections and even more fiscal support is needed to sustain recovery and create jobs. we saw last week that cpi numbers are very weak suggesting that underlying demand is not overheating at this point. haidi: so much has been consumer and services demand. as we move out of that reopening , the revenge spending and the reunion, the pause in the numbers and when it comes to the return of the consumer, what is the risk that that will fade and not translate into a self-sustaining cycle? frederic: a big risk. the chinese economy cannot just run on services and travel demand alone.

this lead was helpful in the last few months. we saw demand for housing. but you need a recovery towards construction. you need it going to manufacturing and private investment, sectors that still need to wrap up. we have seen very strong credit growth at the beginning of the year. that will still translate into strong investment with a lag. but we can't just take this for granted. we need to make sure the policy stands remains accommodative to support that recovery. and remember, externally, things may get tougher in terms of the export growth slowing, slowing in demand in the u.s. and europe, for example. shery: manufacturing activity pretty weak, what are you seeing for electronic producers? frederic: electronics globally actually has had a stabilization. for example new orders for electronics picking up again,

that potentially has to do with china's demand coming back on that front, at least it is a leading indicator for strong investment in china -- strong demand in china. there is also strong demand for energy investment, energy systems and that helps the industrial electronics side. consumer electronics is not picking up. it is still payback, if you will, from endemic-induced demand. not seeing a strong recovery there. broadly speaking, consumers globally are still pulling back. maybe not in china, but in the rest of the world, the trend is towards weaker consumer spending given that everybody is struggling with high inflation, v low which growth. you need to preserve your pocketbook and economize a little bit on splurging on electronic gadgets. shery: how is thailand economics doing? we are watching the market closely given the resounding victory by the opposition party there.

we have seen a recovery in tourism, it seems like the broader recovery had been stalling. the broader frederic: economy has been struggling a bit, the effects of the pandemic still being felt. thailand is an interesting story because you have the tours impart still playing itself out. in fact, the government itself forecasted that it is only in the fourth quarter that you will see chinese arrivals go back to 2019 levels. that will be key to drive that services part of the tyra banks -- thai economy. what we need is clarity on where we land, we want to see policy consistency. and, of course,, all parties have promised generous spending. it should help, if it is actually being converted into actual policy, it should help consumer spending in thailand. compared to other economies in asia, the thai economy might pick up steam.

and the election yesterday might be a catalyst. we see a new government fulfill pledges in terms of more spending to help consumers. shery: does the lack of clarity when it comes to the u.s. debt ceiling have a meaningful impact on asia? frederic: so far, not really. but as we get closer, expect investors to get more twitchy, because, of course it matters what happens with u.s. debt. it very potentially could help the dollar and lead to rates volatility and that impacts asia and impacts risk assets across asia. but so far, it has been relatively calm. don't discount the coldness, it might just be that we still see a spike in volatility as we get closer to the x date. as we get closer to june, what the asian markets, there could be a rough ride if we get to the

actual deadline of raising the debt ceiling without a quick resolution. shery: another 11th hour decision there. frederic neumann, great to have you back, chief asia economist at hsbc. plenty more to come on "daybreak: asia." this is bloomberg. ♪

markets are trading. continuing to see a little dull this drink after the best way for the greenback since september. we are watching the japanese yen as

>> there is no satisfactory solution for the united states.

this will be good for the economy and financial markets. there are different halves that could be taken. there is not a single thing that can be done that will save the united states from considerable economic and financial damage. >> janet yellen speaking exclusively from -- to bloomberg. president biden and u.s. congressional leaders planning to meet on tuesday to resume to negotiations. kathleen hays is here with us. is there reason for any optimism in the air? >> democrats are expressing optimism including the president, joe biden as he got on air force one today.

he said there are discussions going on about changes we could all make. we are wondering can the democrats and republicans -- they seem pretty far apart on some of the key points. can they get it together? they are not there yet. that is the desire on their part as well as hours to reach an agreement. the republican's don't want to make any concessions on spending on taxes. you may remember kevin mccarthy had to make agreements with the most conservative and hard on the debt limit kind of republicans is dealing with in his party. no tax increases.

they want some promises that they will be constraints on federal spending. many regions with money they have to spend by 2024. some would say they have a legitimate issue there. the democrats say we need to address these two things separately. they want to keep every aspect of the inflation reduction act in place. the u.s. could have to default on its debt payments as early as june 1 if some agreement is not agreed. a couple of weeks will almost be june 1. that is what she says you have a better idea of what the x date is.

a lot of questions still. they are going to be meeting on tuesday. that is the word from the white house. there are some important discussions getting them some kind of point where they can see the compromise that needs to be made to avoid default. >> kathleen hays there with the latest that we know on those debt negotiations. finance chiefs from the g7 presented a united front. a plan for diversifying supply chains. stephen engle joins us now for more. what really stood out when it comes to what we saw and heard over the weekend?

>> they were gathering in india where they were not able to put out a communique because there was an impasse on the verbiage of condemnation over russia's war in ukraine. the g7 wanted to put together a unified front and portray unified front. essentially, russia and its illegal war in ukraine was front and center throughout that communique. and the g7 of like-minded economies. there was the term i heard a lot over the weekend. providing more support for ukraine. they are talking about diversifying supply chains. there is this new partnership being put together for an inclusive supply chain and has

been. it is a program that will likely be discussed even further in hiroshima later this week. they are away from rely too heavily on china for supply chains going forward. they talked a lot about the resiliency in the wake of this bank collapses. they say the global financial system is resilient but they have to avoid being complacent. i think geopolitics will be front and center. we are hearing from the south korean government official that there will be a sidelined trilateral meeting. not surprising.

we will have this trilateral meeting with those dumb meeting with joe biden. those export controls as the united states tries to get south korea and japan on these export controls and perhaps the limits of selling to china. we are still awaiting that executive order coming from joe biden. that would allow them to invest in chinese top tech. we are talking quantum computing. there is lots to be discussed over two days in hiroshima. that is where we are going after we pivot. quick that was stephen engle there with the latest from japan. we need geopolitics front and center with the elections in turkey and thailand.

>> these two elections are sounding off in turkey because erdogan's is hanging in the balance here. he believes he will win in the first round of and then take a majority led alliance in parliament. the opposition is saying the opposite. a runoff vote looking quiet lately. taking a look at the moves we saw here. erdogan could lose control. we saw bank stocks moving higher. we saw an end to what has been an unconventional rate cut policy. the central bank could gain more

independence. let's look at what happened in thailand. the -- the results have been a lot more clear-cut. we saw thai stocks up around 2% over the past two sessions. we could see further measures to stimulate the economy. thailand really liking its regional peers -- lagging its regional peers. >> you can get a lot more on the bloomberg as well. get that commentary and analysis from our team of expert editors. let's get you to vonnie quinn with the first word headlines. >> this is a planned income tax cut next year for some earners. he told the abc the administration has always backed

giving tax relief to low and middle income earners. new zealand has announced a $619 million recovery package following a string of devastating cyclones. it could range between nine and 14 billion new zealand dollars. the pack is part of the upcoming budget includes infrastructure repair and investment in flood protection measures. a brutal heat wave continues to scorch parts of southeast asia. malaysia recorded more than a dozen heat stroke cases. thailand said that a drug could drive up food prices. global news, 24 hours a day on air and on quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. >> we have more to come on

daybreak: asia. this is bloomberg. ♪

♪ ♪ the biggest ideas inspire new ones. 30 years ago, state street created an etf that inspired the world to invest differently. it still does. what can you do with spy? ♪ ♪ preparations underway for the g7 summit. it is a big day when it comes to

earnings in tokyo. we will also be getting the inflation rate for april. producer prices looking to rise 7.2%. let's look at japanese assets trading this monday morning. this as we get increasing uncertainty. we are expecting for the talks. we are also watching key political development when it comes to the election results of turkey and in thailand as well. the dollar yen is trading at 135. we can see the global inflation forecast. the dollar to seeing a resurgence.

-- the dollar is seeing a resurgence. the japanese digital minister tells bloomberg why it is crucial for japan to implement generative ai. >> japan is losing population very fast. every year, nearly 700,000 less people. they are not a threat to the labor forces in japan. society and japan is aging. we need to utilize those technologies like ai.

we are now talking to microsoft and other providers. we are hoping technology could replace where technology could do better. human beings will concentrate on what human beings need to be doing.

we are hoping to try in the government ministries. i am asking all of the ministry for ideas about how you can utilize ai technology to make their work more productive and efficient. we are very excited to do that. >> and know you have experienced deepfakes. have you toyed with cap dpt? what do you make of this new technology? >> check tbd is great. i feel a lot of possibility. you need to be very careful. he came back with wrong answer. you need to be careful. i think the technology will get better.

what we're really concerned about is most of the data set that has been fed to check dpt for other generative ai, mostly in the english language. there are very small amounts of data set in the japanese language as well as korean, tagalong, the minority language data set is not big. it could be skewed. we are now trying to come up with a strategy about how we are going to feed the data set in the japanese language. >> i am curious what answer check tbd gave you when you asked. >> the prime minister of japan,

born in 1977. i was like what is this? >> on that note, do you still have ambitions to become prime minister? we have to ask. >> i am trying. as a leader, what you think is the one thing japan needs most right now? >> we need to energize the private sector. i think the private sector in japan is sitting on a big amount of cash. the private sector in japan needs to invest wisely. >> our next guest as japan has a severe shortage of workers. and a big productivity issue. they say this reinforces the need for digitalization in the country. it is great to have you with us. how fast has the adoption of

digital tools been? what are the biggest challenges? quick thank you for your question. digital penetration has rapidly increased since covid. i would say it is probably about a third, penetration is about a third of the u.s.. 2.5 million in japan have top management above 70 years old. there is a mix back -- there is a mismatch there.

70% of the digital talent is in i.t. services. this would be in the company is needed to push this forward. >> was sort of policy reforms do you think would hasten progress? >> i would say the government is really pushing it starting with the government itself.

>> what is next in the digitalization era? how much has this government done so far? >> we are seeing a lot -- we are seeing three themes going on in the private sector. one is the need for digitalization in industries. we have been investing into certain vertical companies. this is a company that provides software and the construction industry. starting from here, there is a need for marketplaces so people can buy automatically what they need for the construction project. also providing financing for

companies when they need it, if they need it. in this aspect it is not like the policies that the government needs to be put in place, it is more allowing companies to make more efficient the industries. and maybe not getting in the way. >> good to have you with us. we are getting the ppi numbers. you're on your growth, 5.8%. we are seeing the effect of inflation for the month of april. coming in with low -- below expectations. the ppi number has been upgraded to 7.4% growth in the previous months. we are getting the month on month numbers. also a celebration of .2%.

that is above the 2% inflation target. something that the boj does not think is sustainable. this is bloomberg. is it not

>> a quick check of the latest business flash headlines. global management considers hundreds of million dollars worth of private companies into the secondary market. the financial times said it has hired an advisor to explore options to sell a portion of that. they are turning to the secondary market to find an exit as pure companies go public. two companies in the empire are seeking to raise as much as $2.6 billion. they will raise money through a qualified institutional placement. more than $100 billion of market players after it was accused of corporate fraud by hindenburg research. this deal is worth about $19.2 billion. the transaction is the biggest

ever m&a deal for a gold binder. -- gold miner. giving them 31% ownership of the group. gold miners are facing stagnating production, parts of my deposits as well as rising costs. all of the market opens in sydney, seoul and tokyo are upon us. this is bloomberg. ♪

>> this is daybreak: asia.

we are counting down to major market opens as they become more skeptical of a federal reserve pause next month. >> huge implications when it comes to emerging markets and asian markets. you can watch the outcomes in turkey. president erdogan says it is not clear if we will see that runabout despite earlier suggestions that would be the case also, watching those results in thailand as well. >> a lot more clear outcome in the thai elections. they're also keeping an eye on cash treasuries here. investors are weighing out the signs of any progress we are seeing in the debt talks in the u.s..

the department could run out of money as soon june 1. the u.s. dollar has been a little bit lower in early trading. broadly, investors in asia have a lot to pass through including the results of these elections in turkey and thailand and looking ahead to what china does with this today. in terms of japan, the focus is on ernest today because we have the country's top three banks reporting later. also driven by a pickup in client activity. in terms of other sectors to watch, utilities are in focus today. japan could allow seven major

power companies to raise the charges. let's change on. we do have korea likewise see power and gas companies that they could trade actively. also focusing on today, more of the natural environment in korea. an earthquake was detected off the east coast. we do have the cost, that is the tech heavy sector outpacing those losses. we are seeing the korean won there a little bit weaker against the greenback here. moving back down to that 1300 level. that is the biggest ever m&a

deal for the u.s. gold miner. gold trading is near an all-time record. that is a metal that is seen as pivotal to this transition away from fossil fuels. oil is looking fairly flat. it has just come off a fourth weekly loss. >> let's bring in the next guest. this is a senior cross act -- senior strategist. great to have you with us. not to mention of the debt ceiling talks continue. how do you position in this risk environment? >> we are maintaining a lot of things even though that is a lot of risk in the markets today.

our strategy has been to maintain a safe foundation. tight monetary policy does impact the market. >> bloomberg economics thinks that the central bank of china could be cutting is facility may today for the first time since august. if you are talking about tight monetary policy being really negative for stocks, does that

mean china could be an alternative? >> china is probably on the other side of the break from. china is on the other side of the break's room where was he policymakers. ticket sales and then we have seven more people trapped in this time.

we do expect him to come up with further policies. those are pretty supportive measures. >> what do you think of those undervalued opportunity areas? >> we see a lot of the risks we have seen that weighed on the tech sector -- those companies actually help that.

we see them as undervalued as well. >> when it comes to bond market opportunities, what are you looking at in particular? it is about 6%. we do expect them to benefit more. they also offered an attractive new pickup.

>> it was great to have you with us. this go back and look at some of the movers. we are seeing a reaction here. >> it is moving a little bit higher. this is new crest. it will make the world's biggest gold producer here. this is a deal worth nearly 20 billion u.s. dollars. it is the biggest m&a deal we have ever seen for newmont. surpassing his purchase of go core back in 2019. this is coming as they already trade amount of record high. it will give newmont further access to copper. that is the state apply for a crest.

we are focusing on these japanese utility stocks. there could be increases in around 40%. companies like tokyo electric power could be pressure to reduce this. we have utility stocks rising about 10% over the course of this year. let's change on. there are earnings underway. one of the big stocks we are focusing on today are the megabanks. they are expected to forecast the highest profit in years. they are not quit his bed. the incumbent may raise to ¥1.2 trillion in the new fiscal year

that started in april in terms of what we are seeing with the stocks, this chart here just showing the steep outperformance we have seen for the three biggest lenders against the topics here. >> let's get the vonnie quinn in new york with the first word headlines. >> thank you. the trade ministers of australia and china have held their first toxins 2019. he described the talk with his chinese counterpart as constructive and candid. china is pushing for better access for investment. the australian says it could further fuel inflation.

he told the administration debt there are always low and middle income earners. they put the government had a house with the central bank. new zealand has announced a $619 million recovery package following a string of devastating floods. the treasury estimates the damage could range from nine to 14 billion new zealand dollars. this covers infrastructure repair and investment in flood protection measures. a brutal heat wave continues to scorch parts of southeast asia. singapore posted its highest temperature in 40 years while malaysia recorded more than a dozen heat stroke cases. thailand warned they could drive up food prices. global news, powered by more than 2700 journalists and analysts. i am vonnie quinn. this is bloomberg.

>> we discussed business strategy with the philippines largest restaurant operator. we get more on the global expansion plans later this hour. we will be back live in bangkok as the pro-democracy party has been big. we will bring you the latest when it comes to silence elections next. this is bloomberg. ♪

>> fully democratic. i think that is the way out for this country to move forward so that we have the right momentum to contribute as well as in asia and the road going forward. that was the move forward party along with other thailand pro-democracy parties. they not a resounding victory in the parliament or vote. let's get the latest from the latest -- let's get the latest from our correspondent in asia. we know that winning the most seats in the high election does not mean you get a place in government. when will the future look like in thailand?

>> there is a much uncertainty. 90 but -- 99% of the votes have been counted in both parties. they have a majority but given the constitution which is put in place by the military in 2016, they will need to guard enough support from the lower and the upper house of parliament. bear in mind that this is a big task. 250 members were appointed. handpicked by the military. that alone means they are more likely to give their support to a military backed party. we have heard from peter himself saying the senate should respect the vote of the people. looking ahead, this is what we

should be looking out for. coalition. will there be an alliance between these? it is not necessarily the case. if you take a look at the platform on which the move forward party has campaigned on, it is bold ideas -- reforms for the military for the monarchy. those ideas may not be appealing to a party that may not want to take the risk. >> what are we watching out for? >> it was exactly that. who will be the next prime minister? what will the alliance look like? we talked about how it is dependent on both the upper and lower house of parliament.

that will dictate if people take to the streets. if it becomes a scenario where the move forward party is disbanded like what we saw back in 2019, we may just see people come to the streets. will the military then take it upon itself to bring stability back? we have been here before. we have the party winning the most number of seats in previous elections. that is what the voters are looking for. it is a system that has been put in place by the military. it will be a herculean task for the opposition to come forward and form a government. >> i was haslinda amin there in bangkok. >> finance chiefs from the g7 presented a united front with more support for ukraine.

a plan for diversify supply chains. stephen engle joins us now. >> there weren't a lot of surprises other than the fact that the debt ceiling overshadowed some of the pressing issues of the global financial system. a few guests were a little upset . it is a very important issue that overshadowed some of the other key issues. the 14 page final communique that came out showed that russia was front and center of the united g7 members, offering more support for ukraine and condemning the legal war waged into ukraine by russia. that was a key point. supply chain resiliency also a

key point. china was not named by name in that communique. anytime they talked about supply chain resiliency and bolstering or diversify, it is a thinly veiled reference to china. especially for the g7 nations to not overly rely on china for its supply chain. going forward, that is likely to be a key topic of discussion later this week as they shift from the financial governors to hiroshima. >> how does this at the stage for the g7 happening later this week? question of politics did play a central role. it will play an even larger role later this week. we are hearing from the south korean government officials that a trilateral meeting has been set up for the sidelines of the

leaders summit in hiroshima. between joe biden and president yoon of south korea, this follows on the heels of south korea and a warm relationship between south korea and japan. that obviously helps boost the prospects. there was a lot of animosity between south korea and japan but to get them on board with some of the move the united states has been making, to curb a sale of advanced technology into china would be a key part of the white house agenda. this is what japanese finance minister suzuki had to say following the conclusion of the finance minister meeting. >> over the three day time, we think we were able to agree on many other results that will be

linked to the upcoming hiroshima leaders summit. >> in addition to those issues of geopolitics, we will likely get more talk on supply chain resiliency as well as north korean issues and more on russia. energy security is a key issue. >> we do have more on those stories and the top stories you need to know to get things going. you can customize your settings so you only get the latest on the industries and assets that you care about. is bloomberg. ♪

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two companies are planning to raise as much as 2.6 billion dollars just months after -- months after a scathing report for us to the group into damage control. what have you learned? >> there were a lot of expectations about the meetings happening in mumbai on saturday to bring details about that fundraising. we know this is the biggest in the flagship company and it is seeking to raise as much as $1.5 billion and also they are seeking to raise close to $1 billion as well. this is way lower. for the amount of money they are seeking in the market is way lower than the 2.5 billion they were expecting to get through on equity. in february. at the same time, this

fundraising right now will happen just through institutional investors. professional investors are not worried about it. we don't know when or what the terms are. or even what will happen through equity or even through fixed income bonds. at least there is a number on the table right now. >> what sort of investors are they looking to tap? >> institutional investors. they made a quiet clear in the announcements that were made on saturday. there was a lot of speculation. they could be tapping some of the investors they have been very close thpast few months. they had very close contact with this group over the past year.

also, a key group in the u.s.. they have also had very close contact with several companies over the past few months. so who are these specific investors they are tapping for this? we still don't know. but we know we are not talking about retail investors. >> what are we expecting on the mumbai open? >>, think we should see a very strong reaction as we saw on thursday. this was the first time the market was reacting to the news that the fundraising would happen. do we know more than we did last week? yes. we know we are talking about $2.5 billion. at the same time we don't have a timeline or terms. we have details -- we could be talking about biomarkers as well. as soon as we have more details, investors will able -- be able

to assess the terms of the offers and how they could impact these companies. >> more to come on daybreak: asia. this is bloomberg. ♪

>> now is probably not the best time to jump in.

>> as we get to the 11th hour, then volatility spikes and equity markets counteract. you don't want to position and adds equities red of that. quickly although it's a play this is to stand back and be careful. there is a huge flight to safety. >> a lot of defensive sectors -- investors continue to seek shelter there. i'm not sure as -- it is as safe as it looks. close i won't want to tie my portfolio based on the whims of the handful of politicians in washington. >> guests answering our survey as the standoff continues. resident biden and u.s. congressional leaders planning to meet on tuesday to resume those negotiations. kathleen hays is here with the latest. how optimistic should we be?

>> the president is expressing some optimism today. you know the debts also started off. by thursday, they said things seem to be progressing. we will meet next week. today, before they got on air force one, the president said i remain optimistic because i am an optimist but i really think the desire on their part, he means the republicans involving negotiations as well as hours to reach an agreement, i think we will be able to do it. you think -- he says things are constructive and moving forward but just not there yet. so is the president talking things out? is he trying to make it other than we think? we don't know. we know the issues on the table are very different. the start of the republican side. they want the federal debt the federal spending part of this addressed everything from the debt limit. let's pass a budget and decide on tax hikes and spending and

then we'll get the debt limit done. they want to keep everything in the inflation reduction act. a lot of it is very stimulative. the republicans say we want no tax increases. and we want to rein in that budget. they are very outer limits. 100 a degree line. you have to wonder what they can be agree on this point. we do not know yet. we do not the debt limits, they are running out of cash and that could be reached as soon as june 1. treasury secretary yellen has said that three times. we got 88 billion in extra ordinary measures. people called the county and said they will help us pay our bills as of may 10. we are about 2.5 weeks away from the xtag, limits when that

running out of cash could be hit. janet yellen has said she can't set that dropdead rate yet. she says that over the week and at the g7 meetings. she says she will be able to friday. she says debt default is unthinkable. the u.s. has never defaulted on the debt. it got close in 2011, just getting close to a downgrade in terms of what everyone is looking for, i think that is important that what yellen keeps stressing, the national economic council, joe biden's chief economic advisor saying the same thing. congress has the tools to do it. congress has to agree. congress has to get together and get this done. it is not up to the white house. optimism being expressed. so far, not too many details. that is a good time because they

don't want to -- you don't want to threaten some delicate negotiations. maybe it's a not so good point because they have a long ways to go and only a couple of weeks to get there. >> kathleen hays there. janet yellen yellen is wanting the government will have to renege on some payments if the nation's debt limit remains unchanged. they spoke exquisitely on the sidelines of the g7 meetings in japan. >> there is no satisfactory solution for the united states. a solution will be good for the economy and financial markets other than congress acting to raise the debt ceiling. there are different paths that could be taken if that doesn't happen. there is no single thing that can be done that will save the

united states from considerable economic and financial damage. >> this plan was outlined back in 2011. you were there about it. it said treasury principles and securities would be paid. is this something that has been discussed with the president? >> my understanding, i was at the fed in 2011. this plan was never presented to the president and never approved. >> would you present it now? >> we were working full-time to work with congress to raise the debt ceiling. that is where our focus is. we know the only good outcome is one in which congress acts as it has many times, almost any since

1960 to raise the debt ceiling. global markets and american households and businesses need to see that we have a congress that is committed to paying the bills we have incurred as a consequence of our legislation. that we are not a deadbeat country. if congress fails to do that, he really impairs our credit rating, we have to default on some application whether it is treasuries or payments to social security recipients. that is something america has not done since 1789 and we should not start now. we have not discussed what to do if that doesn't occur with the president, our focus is on getting it done. >> treasuries are the bedrock of the global financial system. the asset managers i speak to,

they don't have the luxury of not contingency planning. should they assume that debt may not be serviced if there is no deal? >> if congress does not raise the debt ceiling, we face economic and financial catastrophe. one way or another. that is why our focus is on making sure congress does raise the debt ceiling. i feel that is something we are going to succeed at doing and we are working hard to make sure that gets done. >> that was secretary jenny on speaking with anne-marie. a little bit of a mixed picture in ebony markets. annabelle is following what is happening there. >> it is looking fairly mixed here. we are 30 minutes into the session.

it is that focus on debt ceiling talks in the u.s.. we saw inflationary pressures stand firm in the latest university of michigan survey. >> trading is looking very thin. with the exception of japan, you can see that is pushing higher. but earnings very much in focus with the megabanks coming through. those names have been outperforming the drawer -- broader japanese benchmark. there is so that concern around the recessionary backdrop. there is this growing realization with traders that the fed may not be going on pause anytime soon. we are seeing bond yields moving higher. commodities holding up a little bit better even though we do see dell strength coming back in. most currencies looking a little bit weaker here. this is climbing .4.

speaking of elections, the other focus is coming and on turkey this morning given we have it looking like it will be heading for a run about two weeks from now. we have traders started to cast their views on what we're hearing now. some are saying that if these results hold, it would be one of the worst outcomes for markets with what kind of reaction we can expect over the coming fortnight. others can expect low predict ability, high volatility in equity and bond markets over the coming few days. others say in this market impact is going to be a little bit limited given market participants did not expect a clear winner in the first round anyway. certainly a lot more to dissect with this turkish election still playing out.

>> annabelle is having a look at the latest when it comes to those market gyrations and implications of those two key elections. let's get to vonnie quinn with the first word headlines. >> thank you. g7 financed is provided more support for ukraine and a plan for diversifying supply chains. in their statement, condemnation of russia's war of aggression against ukraine was front and center. and while time did not get a direct mention, they were thinly veiled plans and growing sway over the global south. the indian prime minister's party conceded a loss on the southern swing state here. it is a rare victory for the congress party as it looks to build momentum ahead of national elections. congress took 135 seats. the biggest victory against the bjp since 2014.

wildfire is in the parkland. recent rain and cooler weather have allowed oil and gas producers here. global news, power to more than 2700 journalists and analysts in more than 120 countries. i am vonnie quinn. this is bloomberg. request of philip's largest restaurant operator looking to open up to 600 more stores this year. we get more from their cfo just ahead. this is bloomberg. ♪

>> a mixed picture across markets in asia were you have the kospi falling today. they are gaining ground. keep an eye on the nikkei and the topics. especially the topics.

you can see the 30 year high right there. those were around those levels right now. they are on track to open up to 600 new stores this year. >> i wanted to clarify, this was a bit technical. systemwide sales, 78.6 billion. what is the difference between the two numbers?

>> they are coming in from company-owned stores as well as franchise stores plus revenues and or company-owned stores. so you will always be a gap with system >> as being higher. that is because we are 57% franchised and 43% company-owned stores. >> understood, thank you for the clarification. i am looking at estimates from analysts. full year revenues they spec for 2023. 240 billion currency philippine pesos. what do you think of that estimate? is that an easy target for you? fingers crossed? >> we had a very strong first quarter so we are very encouraged by the fact that it wasn't only growth year on year but also growth versus pre-pandemic.

we believe the first quarter being our softest quarter in terms of seasonality, we believe this trend will continue through course three and four. the fourth quarter is typically our strongest. we are sticking to the top line. and bottom line growth somewhere between 20 and 25%. >> what is your outlook when it comes to china where the consumers and services growth has been so strong in this recovery? we are also seeing a lot of food operators and restaurant operators like young china heavily discounted. >> right. 2022, that was a difficult year for us. most operations in china due to the covid lockdown. we are seeing very encouraging signs in the first quarter. china is up double digits.

we think we can continue this momentum. we think the three branches are well catered. they could demand to come back to in dining. >> we spoke with the ceo late last year and his guidance for this year was for the china business. looking to open around 100 stores. are you guys on track for that? >> there or we will perhaps even see that target. we believe that will be obtainable. >> i am wondering whether or not you see that play out as far as these pressures.

>> 2022 was an incredibly challenging year. they have been for 45 years. we are very happy that our process was able to take this on. having a very robust process in place, we are able to absorb a lot of the inflation. cost efficiency programs. we did not pass on all the price into consumers. we want to provide very tasty and great food. >> what is the interest?

? much every other one here through the course of long history, we believe we are well-positioned to represent key brand in four strategic pillars. what we will spend our focus on is building out these brands and also optimizing opportunities outside the philippines. >> we will take that for now. you are focusing on organic growth. the final question for you. interest rates have been high globally. are you looking at raising any funds this year in the public markets? >> we have been very fortunate in terms of our debt and total obligation portfolio. we are at 86% fixed rate. these were at the start of the

interest rate hikes last year. i think we are in a good position. we will full to capital structure as we have it today. we are very fortunate our operating cash flow is very strong. we are funding or growth as well as working through our liquidity programs that we have through our regular business. >> you can watch us live and catch up on that on our interactive tv function. you can dive into any securities or the bloomberg functions that we talk about. you can set up instant messages for our show. this is were bloomberg subscribers only. it is at tv . this is bloomberg.

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they will get fresh forecast for the coming year as the fiscal year ends this quarter. there is also a high possibility that any or all of the three banks will announce share buybacks well their profits are expected to trend higher. >> they will resume revenue growth from last quarter. what are we expecting? >> tencent is expected to continue to show strength in his online advertising business. our bloomberg survey shows that could jump. analysts are saying growth could be short-lived due to weak fundamental outlook. >> alibaba, the big one, what are we expecting? >> alibaba is expected to post

sluggish revenue growth. and investors will be watching out for this. they reported that the company is getting rid of its cto officer as part of the restructuring. the only global shopping unit is exploring a listing. request that was olivia joining us out of hong kong. let's get you a quick of get a quick look at the latest business flash headlines. the transaction is the biggest ever deal ever. giving them 31% ownership of the combined group. they are facing the prospects of stagnating production, harder to my deposits and rising input

costs. they are considering offloading hundreds of millions worth of private companies into the secondary market. the vast majority of assets is and start ups. in the financial times says it takes more options to sell a portion of that. investors are turning to the secondary market to find an exit as fuel companies go public. >> we will keep an eye on japanese stocks. especially the topics. we are very close to that 30 year high already at the highest level since september of 2021. >> plenty more to come. including the china open. this is bloomberg. ♪

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