♪ haidi: good morning and welcome to "daybreak: australia." i am haidi stroud-watts in

sydney. annabelle: i am annabelle droulers in hong kong. we are counting down to asia's major market opens. shery: good evening from bloomberg's world headquarters in new york, i am shery ahn. the top stories this hour. the white house and congressional leaders are optimistic and getting a debt deal done within days, even as both sides say there is still a lot of work to do. president biden scraps plans to visit australia. haidi: the deadlock spurs a late-day slide in u.s. stocks. 30-year yield claims to the highest since the banking tuoil erupted amid pfizer's jumble that's all. shery: and whether rates are high enough for a pause in june, or if they still need to hike more. take a look at how u.s. futures are in the asian session, a bit of upside. this, after stocks fell in the new york session ahead of that feeling negotiations and the results of where that went.

-- debt ceiling negotiations and the results of where that went. consumers still buying despite inflation and high borrowing costs. you are looking at the 30-year yield. it just hit the highest since the banking turmoil in march. not only on that solid economic data, but also because of pressure on supply. we are talking about the pfizer deal, the fourth-largest data sale- debt sale ever in the u.s.. boyle under a bit of pressure in the asian session. it was down in the new york session as well. disappointing china data outweighing the strong u.s. data that i talked about, and also outweighing the bullish outlook from the iaea, raising their global outlook for the year. for more on these top stories, let's bring in cross asset

reporter emily graffeo, enda curran, and our global economics and policy editor kathleen hays. it was really about the debt ceiling negotiations and the fact that there seems to be some optimism, but at the same time, they keep saying they are still far apart. what is going on? enda: seems to be a new sense of urgency in the stocks. all leaders make the point that the u.s. must avoid a default. kevin mccarthy thanks ideal could be done by the weekend, he says it is not that hard. we are not getting much on where the common ground could be. there is a significant gap in both sides, republicans want deep spending cuts and changes in the area of spending on social welfare. we don't know if democrats will come to the table. nevertheless, the officials at the white house and congress will keep talking to each other. there seems to be a sense of urgency now.

we saw an increase in bond yields across the curve. heightened expectations perhaps of a deal on the debt ceiling in the coming days. haidi: there is already collateral damage when it comes to the geopolitical situation, the canceled trip to australia an or new guinea, so core to washington's effort to try to strengthen ties and counter the influence of china in asia. enda: that is a very aggressive move by the u.s. administration, given that the pacific islands are at the center of the tussle between the u.s. and china influence on the part of the world. it would have been a gathering, so that will be a setback to relations with those islands. it speaks to the idea that the u.s. is -- the talks being postponed in australia, some of those discussions will still go ahead in tokyo anyway.

president biden has invited prime minister albanese of australia to visit the u.s. at some point in the future. it speaks to the idea that the u.s. debt ceiling is denting the u.s. economic reputation, and president biden now canceling the visit there he is. shery: no matter with all of this uncertainty we have demand of haven assets again, emily. emily: we are seeing investor angst in the bond market. about the t-bill curve, very inverted. but in the stock market, besides the last hour of trading today, we have not really seen that much reaction. there is a basket of stocks made up of companies that, a lot of your revenue is tied to the u.s. government, it was actually up 0.6% today. its implied volatility has been falling all year, so we really have not seen a big washout in stocks related to the debt ceiling yet. there are some portfolio managers concerned that there could be more volatility, but so

far, we are still in the trading range on the s&p 500. haidi: kathleen, meantime,, of course, the bread and better of watching what the fed is saying and what they could potentially do, we are seeing gaps in terms of how fed members are feeling about the fight against inflation and where policy goes from here. kathleen: certainly the divisions are not wide. they are not looking across a deep canyon at each other, however, you get a sense that there are a growing two camps who are saying, let's go ahead and do more. the other camp is saying we don't need to do that just yet. the president of the federal reserve bank of richmond, have always considered him the centrist, tom barkin. couple of times he spoke he seems to be in the hawkish camp. today he told bloomberg television that demand is cooling. the labor market is still tight, and he wants inflation put to

bed finally and firmly and he is ready to raise rates if that needs to be done. >> i do want to learn more about what is happening with these lagged effects, but i also want to reduce inflation. if more increases are necessary to do that, than i am comfortable doing that. kathleen: he did mention that he is waiting to see the next few economic reports, particularly jobs and inflation, and the outcome of the debt ceiling talks. loretta mester is a firm leader of the hawkish camp, president of the cleveland fed. she was speaking at an event today and she said the economic data show that the fed policy is not yet sufficiently restrictive . she needs to see more evidence that inflation is still moving down, so she is making it clear that she is ready to raise rates at the next meeting. that doubters are saying they want to wait and assess conditions. start with lori logan, president of the dallas fed.

she said today that when conditions are uncertain, you may need to travel more slowly. it doesn't mean you are still not fighting inflation. here's what she said. >> i think gradual policy adjustments can be helpful. financial conditions can sometimes deteriorate non-linearly, doing damage to the broader economy, but the risk of a nonlinear reaction can be mitigated by raising interest rates in smaller and less frequent stops while using other dimensions of monetary policy to maintain restrictive financial conditions. kathleen: basically, she is concerned we have not seen the impact of the regional bank meltdowns and tightening credit conditions, and that is reason to be more prudent and move more slowly. austan goolsbee, president of the chicago fed, he is in that camp too. we have got banking stress right now. we have had all these big rate hikes. you have to look at all of that when getting ready to land the

plane -- i love metaphors and that is a good one. john williams, president of the new york fed, #3 at the fed in fact, says inflation is too high, but he thinks it is moving in the right direction. by the end of the year it will be just a little over 3%. he is a bit harder to read. very much in the middle, but he definitely seems to be moving more on the side of "maybe we can wait and see." but as they point out, four more weeks until the next meeting and there will be a lot to be seen between now and then. shery: and between now and then, a lot of safe haven assets rallying, emily, but there are other hedges, i heard the likes of alternatives to the dollar like the swiss franc, even the brazilian real. what are some of the popular trades right now? emily: we are seeing a pretty big bid for gold, i think it has to do with fears of lingering inflation. also perhaps of recession. and the drama around the debt ceiling. i have heard strategists say go

into gold right now, and you see that in the price action. to go back to the citi basket of stocks, that citi team has set a lot of clients have not been asking yet how to hedge this debt ceiling drama, maybe we'll see more of those questions as we get closer to the xdate. but at least right now there are observations of a lack of caring by part -- on the part of some equity investors, or at least a lack of fear and positioning in really defensive sectors of the market. haidi: bloomberg's cross market reporter emily graffeo, bloomberg economics first point and enda curran, and bloomberg policy and economics editor kathleen hays. let's get to annabelle on how we are setting up for this mid-week session. annabelle: annabelle: you talk about safe havens, has there is the safe haven of japanese stock split take a look at the huge performance for the topix, the

lying in wait versus the u.s. and europe. yesterday we were tracking the moves, it closed above the level that we have not seen since august of 1990. a33 year high for the benchmarks. strategists saying these gains can extend. not only are we seeing bullish activity in options data but on top of that, you have the japanese economy holding up better than its global peers. a still dovish boj coming in on the corporate side, strong numbers coming through, good and share buybacks. so a lot standing out for japan against global stocks. let's change that and see what we can expect across the asian trading day. we are pointing to a weaker open for other markets, including aussie stocks. looking to drop at the opening. new zealand is waiting online. and we are seeing the dollar space, the strength in

the u.s. dollar. the other side of this was that disappointment in the session yesterday in asia, the china numbers, another signal to us that the chinese economy is still looking quite rocky, that pace of recovery there. shery: yeah, that was quite surprising, showing that patchy recovery. that's good to vonnie quinn in new york with the first word headlines. vonnie: tagger brokers will remove your trading platforms from app stores in mainland china this week. the two leading cross-border online brokerages have been allowing millions of local investors to evade capital controls to trade shares in markets like hong kong and new york. futu's app will be removed friday and tiger's on thursday. key u.s. lawmakers blamed former senior managers at silicon valley bank and signature bank for their collapse.

svp's ex-ceo drew criticism for selling company stock less than two weeks before the firm disclosed its extensive losses. some lawmakers also questioned u.s. watchdogs for not doing more to prevent the turmoil. >> we know that your banks were fairly mismanaged. the next obvious question is why, why did you let things get this bad, why to ignore admonitions from regulators. the simple answer, the same answer we find in most questions about big bank failures, because the executors were getting rich. vonnie: the international energy agency expects global demand to climb more previously than expected thanks to china's rebound. it says fuel consumption will rise by 2.2 million barrels per day to a record 102 million this year with chinese demand reaching an all-time high. the agency also sees oil markets on track to tighten supply sharply in the second half. india's crucial monsoon season we arrived later than usual this

year. it delays relief from scorching heat and potentially affects the planting of major crops. india's meteorological department expects the monsoon to reach the southern kerala state on june 4 instead of the usual june 1. this season provides about 75% of india's annual rainfall and irrigates more than half of its farmland. global news, powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie quinn. this is bloomberg. haidi. haidi: still ahead, pfizer is said to be selling $31 billion of debt, the fourth largest u.s. bond sale ever. will get more details. but first, more of our exclusive conversation with the richmond fed president. hear what tom barkin needs to be convinced on what it to the u.s. inflation. this is bloomberg. ♪

>> when you think about it trajectory of inflation, i think we have made really good progress on it. >> inflation continues to make progress. it's not as fast as we wanted it to or we expected it to be. >> i also want to reduce inflation and if more increases are necessary to do that, i am comfortable doing that. >>. >> you think about where the economy was and inflation was last summer compared to where it is today, we have seen really positive things happen. >> we should not be fooled by a few months of positive data. we still are well in excess of over 2% inflation target and we need to finish the job. shery: fed officials weighing in on inflation effort. back of america's latest survey shows sentiment in this environment among fund managers deteriorated to the most bearish levels this year with more than 60% of participants expecting a weaker economy. our next guest prefers bonds

over equities. let's discuss with ubs global am management's senior u.s. equity strategist nadia lavelle in new york. we are seeing more people preferring safe haven assets, including cash. as an equity analyst who has to focus on stocks, are there any sector that can bear the brunt of deteriorating economic conditions right now? nadia: absolutely. even though we downgraded global equities in favor of high quality bonds, we have positioned to more defensive sectors. talking about the consumer staples of the world and utilities of the world. it tends to have more resilience due to economic slowdowns, specifically on consumer staples. this is a sector that is flexing some of its pricing power. we saw that throughout the earnings season where these companies have been able to raise prices in the high single digit to know couple digit range

and not see much impact for their volume. elasticities have been holding up in that sector. also, they are starting to see some relief on the cost side, surprisingly enough, and that is helping to drive margins. they are starting to see some disinflation, and even some deflation when you think about it labor or also transportation costs and material costs. this is a sector that is still trading at reasonable valuations. we prefer to be in consumer staples and utilities on the defensive standpoint, because we think valuation is more reasonable in that sector. shery: you have your s&p 500 index december price target at 3800. you are expecting more pressure from this point, and are you factoring in potential more rate cuts from the fed or just hold fire for longer? nadia: we think the fed will pause in june. of course this is a fed that

remains data dependent, so we can't completely rule out a june hike given that we will get more inflation and jobs data over the next couple of weeks. we also remain concerned about the aggressive price cuts -- rate cuts that the market has priced in for the rest of the year. we think we are likely to see in aggressive cuts. unless we see a great recession, any sort of fall off the cliff of the economy, which we think is unlikely. inflation is still quite high. we have an unemployment rate at historically low levels, well below the level that the fed thinks is neutral. so unless there is something really broken in the job market or credit lending standards tighten to the point that it really chokes off economic growth, we find it harder that you will see that sort of aggressive rate cut the market is pricing in right now. haidi: so is higher for longer

the reason why you are not going in on tech, because that is selectively a place where we have seen a rebound already. nadia: yes. you know, tech had a decent earnings season and beat very low expeditions, but you are still seeing earnings down year-over-year. the reason we are conscious is less about whether we are at higher interest rates for longer and more about fundamentals. it is about valuations. valuations look quite extended in this sector. that is not seeing the sort of growth we have seen in the past. valuations from a relative standpoint are at a 40% premium to the market, a 16-year high. the hyper growth phase of tech we think is behind us. we have been advising our clients about trimming exposure to tech for those who are over allocated, particularly for the highly cyclical areas of tech like semis. within tech, we do like the

defensive part of tech. that is in line with our overall defensive positioning. i am talking about software companies that have a higher level of reoccurring revenues. we also want to get exposure to some of those areas that we think will really drive future growth. i am talking about artificial intelligence and cybersecurity. so it is not necessarily saying that you can't have exposure to track. it is about selectivity and paying the right valuation for the growth outlook. we think there will be growth this year in software. haidi: when it comes to a turnaround for consumer discretionary, what would be some of the signals that you are looking for? is it that we need to see clear signals from the fed that we have peaked when it comes to meaningful steps lower? nadia: consumer discretionary -- this is a very concentrated sector.

you have the top two companies accounting for 40% or so of the index, a sector that is more skewed towards goods than services. services is where we are seeing consumer spending shift to. you're also seeing, as you noted earlier in the broadcast, some recovery in the housing market, at least temporarily. this is a sector skewed towards housing, but yet what we are hearing from companies so far in this earnings season, even this morning, some of the home-improvement and home furnishing companies are really seeing a slowdown. the consumer is pulling back on key ticket items. this is why we are cautious on the sector. it's less about the fed and more about where consumers are being selective with their purchases and more focused on services and as social goods as to why we continue to like consumer staples over discretionary. haidi: i have to get your views on how and if you're getting

exposure to ai. i know we talked about big tech already, but crunching the numbers, if we didn't have the rally in artificial intelligence-related stocks, we would be seeing negatives on the s&p 500 this year. what is your approach to this new sector? nadia: you know, you want to look beyond some of the companies. everyone who is in ai seems to be getting a little rally behind that. you have to be careful. some companies, it might be more hype. you want to focus on companies that have the infrastructure on how to leverage and integrate ai their existing products. they are not starting from scratch. some of those software companies as well as the select companies that will be the building blocks behind in terms of additional memory and chip capacity that will be needed for this technology.

but i think again, you have to be selective because every so often, we have excitement around new technology. we have heard some of over the last three years, but we think artificial intelligence and generative ai is different, but you have to be selective and be careful as you select these stocks. haidi: ubs global wealth management senior u.s. equity strategist nadia lovell, great to have you with us. and you can get more stories and what you need to know on today's edition of daybreak hour and dayb you can customize the settings as well for the news on the industries and assets that you care about. this is bloomberg. ♪ or filing returns. avalarahhh ahhh

haidi: a quick check of the latest business flash headlines. pfizer is set to be selling $31 billion of debt to fund its purchase of another company. according to a bloomberg source, the firm rated orders for the deal. it is the fourth-largest bond sale in u.s. history. blackrock is calling employees back to offices at least four days a week, saying that room has found benefits from working together in person after the pandemic. the new policy will take effect on september 11, with flexibility to work from home one day a week. more to come here on we moved out of the city so our little sophie could appreciate nature. but then he got us t-mobile home internet. i was just trying to improve our signal, so some of the trees had to go. i might've taken it a step too far. (chainsaw revs) (tree crashes) (chainsaw continues) (daughter screams) let's pretend for a second that you didn't let down your entire family. what would that reality look like?

well i guess i would've gotten us xfinity... and we'd have a better view. do you need mulch? what, we have a ton of mulch.

>> mr. speaker, you said earlier this week you were still very far apart.

>> we are. it is still possible to get a number billion of the week. it's not impossible to get agreement. when you think about it bill we passed, we raised the debt ceiling we kept future strandings. haidi: house speaker camille mccarthy there with the latest on the debt ceiling negotiations. our next guest says even a short impasse on the toxic risks to the economy. she is director of a -- project and also worked at the congressional budget office. wendy, thanks for being with us. any of us that have been through previous iterations of when we get to this point in time, this time does feel like perhaps the broader economy, the way interest rates are now, where the uncertainty is when it comes to the growth and recession risks, does it make it feel like

a more tenuous situation at the moment? wendy: what feels different to me is that there are policymakers who have clearly already framed their talking points for after we allowed the debt ceiling to bind and miss payments. it suggests to me that some of them are gunning for this to happen. haidi: right. does that really go to the problematic nature of having a debt ceiling? we have been speaking to guests who have printed out that places like australia used to have a debt ceiling and it was scrapped a number of years ago. does this give rise to good budgeting? wendy: absolutely not. we have three things that are supposed to happen. we passed spending and revenue laws which put in motion requirements for what shortfalls will be and how much treasury

would have to borrow to make up the shortfall. we required treasury to pay all of the obligations that the u.s. taxpayer owes, and we have a debt limit. those three things are not compatible. the debt limit has never really served a useful purpose, and it should have been done away with a long time ago. and to get back to this time feels different, i mean, financial markets certainly feel that this time feels different. treasury bills which are scheduled to come to maturity in the first half of june and get their principal paid, those bills are trading with a nearly one percentage point premium. that is crazy. and away higher than what we saw in previous rounds. shery: so we are now seeing both sides digging their heels when

it comes to positions and especially republicans wanting the spending cuts. president biden saying he is willing to discuss measures to reduce the fiscal deficit. where is the compromise? wendy: i am not sure where the compromise is. i agree that the two sides are quite far apart. what i find particularly frustrating about the bill passed by the republicans in the house is that it only actually kicks the can down the road by less than a year. it raises the debt ceiling no longer than through march of 2024. what that will mean even if it were passed, and i doubt it would get passed in its current format, if it was passed and enacted into law, financial markets would still continue to be on edge between now and then and we would probably be having conversations about brinkmanship just a few months down the road.

shery: the various remedies discussed, from a trillion dollar coin to another amendment, is there anything that is feasible at this point? wendy: i strongly feel that the answer to that question is no. what treasury needs to do, the reason it wants to pay all of its obligations on time, is to keep financial markets stable. to create continued confidence in the full faith and credit of the united states. so we know, we are confident that if treasury or term miss a payment, even a non-interest meant, that would roil financial markets. so let's contemplate some universe where the u.s. treasury issues bonds with questionable legal authority, it takes some step that obviously is circumventing the will of

congress, that also will create an environment of uncertainty and suggests that there is chaos in washington, d.c. among federal policymakers. so i don't think any of these workarounds avoid the very outcome that we are worried about if the debt ceiling binds. haidi: does this chip away at u.s. credibility on the global stage? we just heard president biden will not be making it to papa new guinea. he would have been the first u.s. president to visit png. it would have been critical to washington's ambition to counter the influence of china, and also he will not be making it to australia for the quad meeting. so there is collateral damage already on a global stage. absolutely. wendy: i can only imagine what financial market disciplines across the globe are thinking about the united states right now.

treasury securities are a $24.5 trillion market, perhaps the most important market in the entire world. and if we were to wreak havoc in that market, we would be talking about widespread losses and widespread counterparty risks. so, no, i can only imagine how our irresponsibility would ricochet through the financial system across the globe. shery: wendy edelberg, director of the hamilton project with her views on the debt ceiling. the view uncertainties out there especially as we continue to see macroeconomic challenges, which meant fed president tom barkin says he is yet to be convinced information has been defeated and he is willing to raise rates further if needed. he spoke to us on the sidelines of the fed's annual financial markets conference. tom: demand is cooling, but it is not yet cooled and that is

what you saw today. we had this big spike on all the demand metrics in january but in march through april they are coming in more flat-ish, in retail sales. that is a sign that the combination of all these things, the rate hikes eroding consumer savings, leaning fiscal stimulus, they are affecting demand in the way that you would think. >> we have come down from 9% inflation to around 5%. the low-hanging fruit has been picked, as they say. do you still need more restraint in order to get down, or at least get us moving back down towards the 2% target? tom: is a plausible story that combines the things we are talking about and adding credit tightening to say that they will bring demand down and in time bring inflation down. that is a plausible story. for me, i am still waiting to be convinced. i still see or inflation in the

0.4% range month-to-month which shows we are operating at an annual rate of around 5%. i still need to be convinced that demand will come down and that would bring down inflation at a pace that will not erode expectations. >> what that becomes the tactic you would use? do you need to probably go into the june meeting leaning towards a rate increase? or do you want to pause and see what happens, even though people don't want to see the stop-start? tom: i like the memorandum at the last meeting. obviously in this period, even this month we will have a full months worth of data coming, you have questions about that debt ceiling and what impact that might have. questions about credit tightening and how significant that might be. i think it gives you time and optionality to say there is still more we need to do so let's do more, or it is still ok

to wait and we will wait a bit. you have optionality either way. >> so we put you down as undecided for the june 14 vote? >> put me down as tracking the debt ceiling, tracking credit tightening and we will make a call when we get closer to the meeting. >> when you put it altogether, is a soft landing still a good possibility? you said that most people you talked to were forecasting a downturn. what do you see? there>> is a plausible story that we get inflation down due to other actions taken in the past both by us and by others, but i am still looking to be convinced. and it may take more. >> when you say you are looking to be convinced, do you think it is a good idea to stop for a while and then start again because that sends mixed signals , according to chairman powell, or is it better to be cautious because you have done so much and you don't know the full effect of tightening on the economy? >> i think the message sent in

the last statement was one of optionality. it wasn't about a pause or a peak. uncertainty is high. environmental uncertainty and also uncertainty about the impact of what has happened to date, lagged effects of rate increases and the like. the context of that uncertainty, a path that is cautious but not stock would be a good way to put it. so i do want to learn more about what is happening with all of these lagged effects, but i also want to reduce inflation and if more increases are what is necessary to do that, than i am comfortable doing that. haidi: which fed president thomas barking speaking to bloombergs michael mckee there. optimism that china could help drive global growth is starting to fade. let's look at that outlook and bring in annabelle for her morning colors. some investment banks there are turning more bearish. annabelle: that's rate, it has

been interesting the reaction, particularly on the numbers that came through yesterday. big maces to the downside particularly for industrial output and retail sales. the base effects that were coming given that china's economy was under lockdown at this point last year in shanghai . certainly not painting a very good picture for the outlook for the economy. already we are starting to see economists ponder whether that means that given what we have seen to date in 2023, does mean they have to rethink their entire growth projections this year? barclays is one that has actually reduced its gdp forecast and they are now seeing growth at 5.3 percent in 2023 down from 5.6%. they say the higher figure is simply out of reach. they are concerned about the monthly activity data. they also say it confirms a

waning household demand and consumption. importantly when it comes to some sort of stimulus measures, there is perhaps a debate whether we will cease stimulus from the pboc. barclays saying that is still unlikely given that gdp growth projection is still above or around 5%. shery: beijing will still achieve that around 5% target for the year. then you have other economists maintaining their growth forecasts? belle: yes, this chart shows we're still sitting at the 5% level. it comes down to whether economists expect any sort of policy support coming through. some say that there could be a reason why we get that higher growth level. of course, barclays is coming it at 5.3%. in terms of what else we are hearing from investors, ubs says we could see targeted support coming through in the next few months. they have left their projection

at the 5.7% level. but others if you change now, including j.p. morgan, not counting on their consumption stimulus, throughout all, instead they say we could see adjusted industrial policies in order for stimulate a more entrepreneurial environment. we are watching china and india, two countries, economies that we had been pinning a lot of hopes on over the course of this year. haidi: haidi: you can watch us live and catch up on past interviews with our interactive tv function as always, tv . you can also dive into any of the securities or bloomberg functions that we talk about, and become part of the conversation by sending us instant messages during our shows. this is for bloomberg subscribers only. check it out -- tv . this is bloomberg. ♪ i need it cool at night. you trying to ice me out of the bed? baby, only on game nights. you know you are retired right? am i?

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vonnie: you are watching "daybreak: australia." president biden is shortening his trip to asia as the u.s. debt ceiling talks grind on. he will no longer visit australia and pup for new guinea after the g7 in japan. he will instead meet with the quad leaders in tokyo after the hiroshima summit. the president criticized the talks. jp morgan says there are

unlikely to purchase anymore regional lenders. jamie dimon said the banking industry was hopefully coming back to stability. he bought first republic bank earlier this month after he became the second largest bank failure in u.s. history. the creator of chatgpt is calling on u.s. senators to more heavily regulate artificial intelligence technologies. openai's sam altman told congress that they should regulate ai models. senators noted the coalitional process often lags far behind the pace of technology advancements. the poll powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie quinn and this is bloomberg. shery: vonnie, former executives of collapsed banks were grilled the senate this morning in a rare bipartisan rebuke of management, already

facing intense scrutiny. >> i am very concerned about where we are within the regional banking sector and we need to bring the -- spot stability to that sector. >> one of the problems with a lot of the failures is, concern becomes contagious and contagious in some really detrimental ways. >> i actually think we are past this immediate storm. if you look at your community banks and regional banks, they are in good shape. shery: joining us now is bloomberg's su keenan who has been following the story. should we start with the ex ceo of svb, who got a $10 million compensation and is not committing to give any of it back. kathleen: you don't want to be on the hot seat with senator elizabeth warren drilling down on are you giving any of that money back and saying "i take that as a no." it is a tough place for a former executive of a failed bank to be and that is exactly where former xbb ceo greg becker, and scott

shea who served as chairman of signature bank, were among those testifying. lawmakers have blamed former senior management at svb and signature bank for the banks' collapse. the key question of why did you let things get these bad -- get this bad? let's take a listen to how the former svb chief explained the decline. >> i believe xbb's failure was brought about by a series -- xbb's failure was brought about by a series of unprecedented events. kathleen: unprecedented. at the hearing, the xbb x ceo -- the svb ex-xeo really drew the most ire for selling stocks before the firm disclosed extensive losses. on the issue of whether he would pledge to give back some or all abused and within a dollar a year compensation, he declined,

but he said he is willing to work with fdic and other regulators to review his compensation and see if some of it should be given back. it has been pointed out that the collapse of these banks cost the fdic fund billions of dollars. haidi: the fed and the fdic were also in the hot seat, what did we hear? kathleen: plenty of blame to go around. you had lawmakers at the hearing questioning u.s. watchdogs for not doing more to prevent the turmoil. the fed and fdic officials testified as well. and it is important to point out that in a report from the fed, and the insurance report released last month said mismanagement was the root cause of bank failures, looking at some of the regionals, how they performed while the hearings were going on. government officials have acknowledged that regulators bear some of the responsibility. the fdic's chair, the national credit union adversative

chairman, the acting comptroller of the currency, all were testifying as well. and this was the first of three days of oversight hearings, so a lot more to come. shery: bloomberg's su keenan with the latest on the banks in the u.s.. be sure to tune in to bloomberg radio, you can hear more from the day's big newsmakers getting their analysis from the daybreak team, broadcasting live from our studio in hong kong. listen through the app radio+ or bloombergradio.com. plenty more ahead. stay with us. ♪

fabulous surroundings... but everyone's looking at their phones for financial insights from merrill. is he hailing a ride to the concert hall? no. he's making sure his portfolio and retirement plans work in harmony. they want to adopt a child and build a new home. so they're talking numbers with their merrill adviser. she's not researching her next role. she's learning how to handle market ups and downs without the drama. personalized advice so impressive your money never stops working for you with merrill. a bank of america company.

shery: pfizer is said to have sold $31 billion worth of debt to finance its purchase of seagen. the company raked in $85 billion dollars in orders for the deal. our guest joins us. this really pressured the bond space today. it was a big deal. olivia: 30 billion of supply coming into the market. bank of america thinks we could reach $45 billion in sales at the end of the week, helped the pfizer deal. haidi: what does this say about pent-up demand what it comes to corporate credit markets?

olivia: demand has been front and center even all the credit crunch happening. 85 billion is huge, over three times subscribe. it shows there's still a lot of demand still. shery: what happens if the merger fails to get rid a approval? olivia: there is language called special mandatory exemption. it says that if the deal is to not go through, fighter will need to redeem those notes at 100 one cents on the dollar, that will protect investors who bought today from any interest rate risks in the in between. haidi: our bloomberg corporate finance reporter olivia raimo nde there. because that is said to be nearing the final stages before starting trial production of the revamped model 3 car in shanghai. a senior tesla executive plans to visit india this week to meet

with government officials in a bid to diversify its supply chain beyond china. shares for se aa singapore-based internet firm, reported, a profit. but revenue only grew 5%. sales slumped by 43%. the company has been cutting costs on spending for global expansion. the new chief of vodafone has announced the biggest job cuts ever at the telecom company. the ceo plans to cut 11,000 jobs and streamline operations. she says her turnaround plan would pay off immediately. vodafone forecast flat profit at a 30% decline in free cash flow for the fiscal year. the annual investment leaders conference with -- returns to hong kong for the first time since before the pandemic. we will be hearing from the likes of posco find telling us

about their new investment strategy -- tosca fund about their new investment strategy. and terra o telus about opportunities when it comes to natural resources. that is just about it for "daybreak: australia." "daybreak: asia" is next. this is bloomberg. ♪

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