shery: coming to you live from

new york, sydney and hong kong. annabelle: counting down to asia's major market opens. the top stories this hour. the u.s. debt ceiling deadlock. talks remain at an impasse with no new meetings plane. uncertainty is seeing a wave in asian markets. the rbnz is excited to hike rates for a 12th straight meeting. the kiwi dollar and volatility surging ahead of the decision. >> one of the moves we are watching in asia, you can see futures are going for a weaker open with debt talks continuing to drag on. the impasse affecting the appetite for risk taking. futures are looking eager. kiwi stocks are online to the downside. we are tracking what is happening in the currency space. we did see the kiwi dollar early

down as .6%, it was a haven appeal coming back into the u.s. dollar. the kiwi dollar is in focus, we do have the rbnz decision coming today. the expectation is we see the 12th hike from policy makers. we are positioning for a spike in volatility, 18%, the highest in the g10 space. i yield to the front end of the curve rising a little bit ahead of the meeting. let's take a look at one major market, the nikkei. we are seeing futures looking flat. yesterday we saw the eight day rally coming to a halt we did get news coming out on to pick year export curbs, which spurred a level of profit taking.

japan saying the earnings and corporate outlooks for this fiscal here have not been fully factored in, this down drift should not be sustained. shery: take a look at how u.s. futures are trading. we are seeing an upside early in the asian session after stocks fell in new york. we had a solid economic data, home sales, business activity growing. we have uncertainty over the debt ceiling negotiations. some house republicans questioning the x date. we heard steve scalise talking about transparency over how they came to the date. secretary yellen warning that is highly likely that her department would run out of sufficient cash in early june. speaker kevin mccarthy also asking republicans to stay united the gop's demands for spending cuts. we have a mixed picture of treasuries, with a 10 year yield

holding below the 370 level. the dollar is into a two month high. let's bring in the senior markets editor for more on how the markets are reacting, does that make sense than what we saw with the rally? guest: today is the first day that you can see the debt ceiling crisis show up in any markets other than t-bills, which are most directly affected. remarkably, the s&p 500 hand made a new high relative to bonds only yesterday. which is absolutely as risk-on as it gets. the degree of risk off that we had today is not that much as yet. haidi: you have to be asking

about the drivers for this rally. if it is not earnings or rates, even fed expectations have muted somewhat. is it still ate the quiddity story? guest: it probably has been, and that is because central banks have been keeping the markets awash with liquidity to offer the possibility of further accidents such as we saw with the u.k. pension plans last october, or with the u.s. regional banks. the rates are going higher, but money is fungible and the fact the central bikes -- central banks are tightening to make sure there is not an accident means that money is finding its way to places where you hope you are going to make a buck. shery: 1 -- when are we going to

see from the debt ceiling negotiations. ? guest: i have been looking through my cuttings from 2011, when i was a financial columnist as well. the thing that is most important to notice, all the losses in 2011 happened after the debt ceiling had been raised. this isn't a binary thing where, if we avoid a default, everything is fine and we can go back to the beach. it is very much that, once the limit had been raise, you saw a selloff the next day. then you had s&p downgraded four days after that, then you had a selloff, which people refer to as a black monday. we were almost 20% down, you saw the fed's promise amid selling,

after the ceiling has been raised. it was necessary to stop at the selling at that point. we ain't seen nothing yet, 2011 is a died, it is about what deal is done. the problem back then was, the whole spectacle looked awful for the whole world, because it was. and secondly, the cuts that were agreed seemed unrealistic. nobody seriously thought you would be able to make those cuts, and if you did he would weaken the economy. it is not a binary situation. what the deal is and how people respond to it could matter more than just avoiding a default. shery: a compelling preview you

have given us. we are looking forward to the full column out tomorrow. speaking of central bank, the reserve bank of new zealand is excited to raise rates for this 12th street meeting. our global economics and policy editor kathleen has the details. 25 basis points expected, a higher chance than before of potentially 50 basis points. guest: you look at monetary policy, inflation, fiscal policy all playing a part. 18 of 21 economists were looking for the 25 basis point hike after a total of 500 basis point hikes in a year and a half. 12 meetings in a row. look at inflation, it is off the peak, but it is still at 6.7%.

the official cash rate, there is a big difference. most would say that is not yet a restrictive policy. have to get your key rate and official cash rate above the inflation rate for policy to be restrictive. single gabrielle devastated new zealand, there will be billions of dollars spent. the budget is more expansionary as a result. twice as big as expected. that is another reason. if you are worried about the rate hikes, this seems to -- the forecast. then you have a big wave of migration post-pandemic expected to total 100,000 people, adding 2% to the population in new zealand. those people are going to buy stuff, they are going to buy clothes, cars, they are expected

to keep the economy going. this gets us to the 50 basis point argument. even with people who have the 20 five basis point hike forecast, they are very much thinking 50 basis points is possible. sticky inflation, expansionary budget, he has never been reluctant to surprise people. we were expecting 25 basis points in april, he did 50. td securities is one of the few that thinks it will be 50. the rbnz has been on the front foot from the get go. they will leave the door open to more rate hikes. that is what people are saying. we will see in a few hours. shery: let's get to vonnie quinn in new york with the first word headlines. >> china's new ambassador to the u.s. has acknowledged challenges in relations between beijing and

washington. he says he intends to engage extensively with americans and handle sensitive issues, including taiwan. he served in several roles at the embassy in washington. >> at present, china-us relations is facing serious difficulties and challenges. we hope that the united states will work together with china to increase dialogue, to manage differences and also to expand our cooperation so that our relationship will be back to the right track. >> our top australian defense official says loaded u.s. democracy -- bloated u.s. democracy -- he blamed what he called permafrost layer of middle-management in the u.s. government. he says export controls and

regulations stand in the way of ai and quantum technologies. bloomberg has learned ron desantis desantis will announce his 2024 residential campaign on twitter with elon musk. he will speak with him on wednesday, the campaign will release a launch video. global news, 24 hours a day, powered by more than 2700 journalists and analysts in over 120 countries. this is bloomberg. haidi: still ahead, tiktok says it is on track to have all its u.s. user data hosted to allay national security fears. he has an x was interviewed with bloomberg later this hour. an ongoing feud between brazil's president and the central bank shines a light on a growing of rate hikes around the world. more on that story. this is bloomberg. ♪

>> both sides know there needs to be a part of partisan -- i partisan deal. >> no deal gets done until everybody walks away from the table at least once. we are doing that in a global environment with a lot of media. but i think sooner or later the debt ceiling will be yesterday's

news. >> i heard the reassuring comments from president biden and speaker mccarthy. i have to think these guys know what they are playing with. i'm ok on that. >> my hope is that we stop playing games. i am not saying we are, but i believe there is a solution. the longer we take to get to it, the worse it is going to be. haidi: commenting on the current debt ceiling. our next guest says while the uncertainty -- how spending cuts will be key when it comes to implications. a global portfolio manager. always great to have you with us. it is a weird time that investors find themselves in, not wanting to focus too much. we have been here before, no default has been the outcome.

are you strategizing with the limited amount of information we have? guest: it is a very interesting time with a lot of volatility in markets because of the debt silly. we are long-term investors and would reorient -- would not orient the port you. we are focused on the x-date, is it june 1 or later? that has major implications for short-term market movements. once we know where that spending cap is set, and how long that lasts. and what spending cuts need to happen in order to make those limits. one thing we are watching is the ira, that is something that has been mentioned as a potential area for cuts. the ira was passed last august. there were implications for renewables, ev's, the supply

chain. there are stocks that could be impacted. >> the backdrop is uncertainty when it comes to monetary policy outlook. you are a fan of -- i will throw it up now in terms of speaking of volatility. that side of optimism when it comes to whether the fed might cut seem to have tamped down a bit. is it compounding the worries in the sense that we don't have certainty on this front? does that make the lack of volatility a little bit surprising? guest: there is a lot going on. one thing that lends to your comments is that, if you look at the stocks that have been performing well, it's a small subset. it is the big tech stocks. it is why the market looks like it is up, and why there is lack of volatility. under the hood, there are a lot

of mid-caps and small caps that are having volatility and have not performed well. there is a lot of volatility and the stocks that are performing are masking the underlying volatility in the market. shery: we have seen the breath of the nasdaq 100 much higher, which tells you what the broader markets looks like. what do you like in this sector that continues to rally despite the higher yields? guest: within the big, have differentiated views on the stocks. some were folio managers by all of the banks -- things, right now we like microsoft for the ai and because of the deceleration in cloud appearing to be in the rearview era. we like google as a long-term ai winner and the resiliency in the

ad market. we have a small position in apple. do not hold amazon or meta. shery: how much do you differentiate within the luxury sector? we saw a of $30 billion in the last 24 hours. is there anything specific that you like that you can bet on? a lot of it had already rallied so much. guest: luxury has had -- has performed well. there have been different the medics. then it was inflationary pressures and luxury is well positioned in that environment because they can pass through any cost. that is why the stocks are at a high level, there has been multiple things driving them. we differentiate between luxury. lvmh has the best brand

portfolio and is a beneficiary of the china reopening. more cautious on the u.s. consumer, even the high end consumer. haidi: how do you pick apart the winners from potential targets for consolidation or being washed out when it comes to ai? that is the fact that it has been masking the weaknesses in the s&p 500. guest: it is important to differentiate between what is chatgpt and overall ai. microsoft, a lot of the hype has been specifically because of openai and chappy -- openai and chatgpt. nvidia would be the same, a direct link between chatgpt and demand for nvidia. thing away from that, there is the second order, which are companies that have a very

competitive advantage in ai, have a suite of ai products and will continue to drive that. that is more interesting in the long-term. that is why we own microsoft for the short-term term, you can see it in the beginning of 2020 -- 2024 earnings. haidi: much more to come here on daybreak asia, this is bloomberg. ♪

shery: central banks have raised rates to levels are uncomfortably high for politicians. in brazil, hikes have kept nine months of tightening, and its central bank pushed rates

earlier and higher than others. there is no leader in the g20 who have lash out at central bankers more than president lula. we are joined by martha, what is the outlook on the brazilian economy right now that is allowing president lula to criticize and hit the central bank harder? guest: in brazil, we are seeing economic growth, but not in the level that president lula would like. the thing he sees as the biggest obstacle for economic growth in brazil is height interest rates. inflation in brazil is high, but interest rates are even higher. there has been a fight between the president, he chose the

president of the central bank as his antagonist, that is what he has been doing since day one. he is not totally incorrect, because high interest rates are slowing down the economy. this is causing trouble for companies to get credit and capital markets with banks. some businessmen are getting personal loans in order to get cash flow because of that. this is the outlook. as president lula keeps criticizing the central bank, they keep saying that because there is political noise, they, lower interest rates. we don't see it happening in the short-term. haidi: of course it is not just a brazil problem, we have seen tension in a lot of economies.

how much does this threaten the credibility of the brazilian central bank? guest: that is the problem because brazil is a country that has central-bank autonomy as something new. it was only approved in 2021. it is dance -- a new dance for president lula. he is not used to that, the central bank head is not used to that. this is something that investors and the central bank keep saying publicly, as every time the president criticizes the central bank and pushes for lowering interest rates when inflation is still high and above the target, it hurts the central bank credibility. it prevents them from lowering rates. this has been the most important economic topic of brazil fourth the past five months.

haidi: the battle between the resilient leader and the central bank. coming up next, china's move to ban migrant products in retaliation for the complete of the u.s.. we will be talking about the risks ahead with the eurasia group. this is bloomberg. ♪ these days, our households depend on the internet more and more. families grow, houses get smarter, and our demands on the internet increase. that's why we just boosted speeds for over 20 million xfinity customers, on us. so you get more of the speed you need for day and night streaming. more speed you need when you're work from homeing.

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>> this is "bloomberg daybreak: asia." the u.s. house speaker says the two parties have yet to reach a

deal to avert a u.s. default with another top lawmakers saying no more meetings are planned yet. he has told republicans the talks have some distance to go and urged them to stay united on proposed spending cuts. another lawmaker has said it is unclear what happens next as the deadline for june 1 new year's. pakistan's former prime minister has bail until june 8 -- has won bail and a number of cases until june 8. it may call tensions with the military and the government. the star turned politician faces a number of charges including hiding assets and insulting a female judge. he has denied all wrongdoing. saudi arabia's top energy official has issued another warning to oral short-sellers or than a week before the opec transit lines is due to meet. at 23 nation bloc will review output for the second half of the year when they meet in vienna in june. the prince says consumer forecasts and policies are causing volatility in crude

prices. >> speculators in any market are there to say, i keep advising them that they did in april. >> global news, 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i'm vonnie quinn. this is bloomberg.. >> tiktok says it is on track to have all u.s. data hosted and overseen by oracle as the app deals with security issues. we have more from the economic forum. >> we believe the bill is simply unconstitutional. we very recently filed a lawsuit to challenge this in the courts. we are confident we will prevail. i think ultimately it is about providing value to the users and making sure that we continue to

provide them a great service that benefits them. and that is our key focus at this moment in time. >> expressing oneself, was not quite hard to express yourself -- that quite hard to express yourself in congress when you were trying to tell your story of why tiktok is important to the u.s.? >> i think it was a very important process. and i'm very grateful for the opportunity to show up until all sides -- are side of the story. >> did you tell your side of the story? >> i believe i had time to do that. i believe it is a good opportunity for us to explain ourselves because there are some misconceptions about the company out there. beyond that, we have built over the last two years something we call internally project texas. what it really is is to ensure that american data is stored on american soil, by an american

company, and overseen by american personnel. and this is truly an unprecedented project that none of the other companies in our industry have ever attempted. and we believe that we have taken steps above and beyond what our industry has done to protect the safety of u.s. user data which is very important. >> where are you with project texas? there's been some reporting and i know that you have come out and said very soon, oracle will have the unprecedented access to our data or indeed your source code. but that is not now. when will oracle be able to enact this unprecedented overseeing and transparency of your company? >> project texas is a very complicated project. and a lot of the elements of the project is already in place and operational. for example, today, by default, all u.s. data is stored in the oracle cloud service already. the oracle cloud infrastructure.

no longer in our own service. >> you have already done that transfer? >> it is already done by default. correct. separately, oracle has begun the review of the code. although as you can understand, it is a complicated project that will take time for us to finish the details. it is on track. oracle and ourselves are working together with the u.s. government to finalize the details of project texas. >> the tiktok ceo, speaking exclusively to bloomberg at the qatar economic forum. our next guest says, we will continue to see an incremental slide in u.s.-china relations. we have the director of technology at eurasia group. is it inevitable in the relationship right now that we will see more action coming from washington when it comes to raining and china's access to advanced technology and what can beijing realistically do?

>> i think at this point, it is not realistic to expect the tide to turn. given last year, jake sullivan gave the speech saying the sliding scale approach we used to take is no longer visible. that's why you see the escalation, coming out of the commerce department last fall. and the continuation of ramping up of pressures. putting more chinese companies on lists. it is hard to change the game at this point. to change that trajectory. i think realistically speaking, the chinese government doesn't really have the technology leverage to push back directly against these u.s. sanctions. that is why it took a kind of beat around the bush approach and picked micron as a company to target, to retaliate, in

response to these export control actions. the company has been an advocate of these types of restrictions. as well as avoiding domestic damages to domestic companies. >> we just heard from the tiktok ceo. where are the new fronts of this fight in the u.s.-china battle for advanced tech? >> yeah, actually applaud the ceos efforts in pushing the boundary and providing more safeguard and building data security measures around this controversial chinese social media platform. i think he is really trying to push the needle there. way back in march, his performance in congress, the interview you just played shows how difficult that conversation has been.

but i think given his performance back then, as well as his popularity -- the popularity of his platform, add to it the malfunctioned u.s. congress, tiktok is stuck in limbo these days. there's a group of bipartisan members of congress that backed to restrict act. that seems to be in imminent comprehensive solution to tiktok. but given the factors i just mentioned, the confluence of influence on this case, it is hard to say that the deal will pass this year at this moment. >> on the others, the micron ban was seen as pretty significant in terms of the tools beijing has to retaliate. is there a risk of going after her even more significant targets, even if it means potentially harming china's own economy?

>> i think the chinese government in this case is showing their methodology is very surgical. they pick a company where if you bend the product, you can find a ton of them somewhere else, another player can fill in the gap. the company has a lot of mixed history with china. it has a major ip controversy with a chinese semiconductor company, they made the decision to dismiss all of itsstaff in the shanghai center. over 100 of them overnight. i think all these factors contribute to the chinese government's decision. they are trying to gauge and mitigate the risk and limit the damage to domestic players when

they take actions like this. >> it's interesting you call that move surgical, right? so that end, does that mean we are not likely to see a necessary repeat, that these moves are very carefully calibrated on the side of beijing? >> i think there are potential secondary targets on the heels of this section. for example, the u.s. government has warned hynex, don't fill the gap. potentially they could become a target of china's further retaliatory measures. there are other companies in d.c. still lobbying for more entity lists, when it comes to chinese companies. those companies may also be

added to china's list, to retaliate against in the future. >> how is beijing preparing for the long battle? are they boosting their own defenses domestically especially when it comes to reshuffling agencies, preparing their officials for the long game here against the u.s.? >> of course. i think they have been thinking long and hard about the long-term recourse to these escalating u.s. technology restrictions over the past few years. in the past year or so, there is a serious rethinking of the china semiconductor policy. decision-makers realize they made a mistake. the fact that their national fund is $20 billion into the industry sponsoring local champions that are invited to

certain extent -- that invited to a certain extent a u.s. clampdown of chinese companies. they didn't raise meaningful outcome. they didn't strong enough -- raise it strong enough. there's been a rethinking of the strategy. some sources told me that for the next phase of chinese industrial subsidy, they are not going to disclose the number of subsidies they are going to give to the industry. they are going to handpick a few companies that have the most potential to become a strong industry player. they are likely more concentrated in the mature sector. the higher end segment of the market. critical supplies and technology that has already been blocked by u.s. restriction.

in that p always great to have h us, xiaomeng lu. director of geo technology at eurasia group. let's take a look at what we are watching when it comes to china stocks. belle? annabelle: when you talk about geopolitical tensions, you add that to a weaker yuan coming through, there is a lot of reason for traders to be turning more bearish on this market. it does appear perhaps patience is starting to wear thin. on tuesday we saw the highest amount of outflows from mainland stocks since the end of october last year. that was about $1.1 billion of outflows via trading leaks and hong kong. we have seen this chart here, the csi 300 is close to erasing its gains for the year. before we get to the levels we started at back in january.

the other big event today on the calendar is this decision from the rba. the further 25 basis point hike. investors, split on the director for the kiwi dollar off this. essentially some saying it is more bearish. others saying you could see further gains against aussie dollar. -- against the aussie dollar. >> one foreign leader said we are watching carefully at the moment, the indian leader, being welcomed there at admiralty house. this is a highly anticipated visit. he had a huge amount of interest when it comes to crowds last night. he spoke alongside him [indiscernible] there will be talks today centered on everything from geostrategic alliances within the asia-pacific, trade, and

economic ties coming on the back of the drink -- the truncated visit in australia. president biden, having to scupper that part of a strap on account of returning to the u.s. debt ceiling talks. we will bring you more from modi's visit to australia as we get the details of those talks today. much more to come here on ""bloomberg daybreak: asia." -- here on "bloomberg daybreak: asia." ♪ this is bloomberg. ♪

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>> the indian prime minister, receiving a salute as well as that welcome at admiralty house. we are seeing that live here in sydney. this comes after thousands of expatriate indians from sydney welcoming the indian prime minister at the biggest entertainment and sporting arena yesterday. there are performances and start writing and celebratory elements to welcome the -- sky writing and celebratory elements to welcome the indian leader. the ceremonial aspect, we are seeing now. he will be sitting down with the australian prime minister to talk all things trade and economic ties as well as these

thorny issues when it comes to the geostrategic alliance in the asia-pacific. the stocks were supposed to take part of the quad leaders' meeting this week that was canceled by u.s. president joe biden who also canceled the png trip in asia, due to the debt ceiling negotiations back in washington. but in what is seen as a sign of india's commitment to the bilateral relationship with australia, prime minister modi, choosing to come so low for these bilateral talks. >> a lot of pomp and ceremony here with prime minister modi, with australian troops. look at those salutes. [laughter] a very ceremonious event. it's not surprising, when the australian prime minister visited india earlier this year.

the leaders entered the stadium named after prime minister modi in his home state. there was a gold chariot and thunderous applause. it seems to be the case prime minister modi does sort of receive and give these very high rock star like welcomes. you were talking about what happened yesterday as well. [laughter] with indian ex-pats as well. >> it's really interesting, the rockstar welcome, as you say. it comes as australia strengthen economic ties with new delhi to offset what we know is the elephant in the room, the growing strategic competition between the u.s. and china. also looking to try to diversify australian markets away from the biggest trading partner which remains china. that burgeoning little class of india and a number of other economic trading partners as a key to future growth.

those talks will be taking place. you can see the australian prime minister as well as pm modi. we are talking about the rockstar welcome by the indian diaspora. thousands of exx-pat indians traveling to a stadium to welcome prime minister modi. our very own paul allen was there as well. reporter: the crowds started arriving in sydney hours before the prime minister was due to speak. the stadium usually hosts indoor sports events and concerts but today it was modi getting the rockstar treatment with the australian prime minister, the warm-up act. >> the last time i saw someone on the stage was bruce springsteen and he did not get

the welcome that prime minister modi has gotten. [cheering and applause] prime minister modi is the boss. reporter: the warmth between the leaders was palpable. 16,000 strong crowd here underscoring his public appeal despite his party losing a crucial state election earlier this month. the indian community is australia's fastest-growing diaspora. the census counted a little over 700,000 of indian descent. 2.8% of australia's population. the visit from pm modi is not just exciting for them, but for australia as well. >> the largest economy and it will be the third in the ticket. we have the largest publishing in the country and one third is actually [indiscernible] so we are talking about a huge market.

reporter: today the imf considers india a bright spot in the global economy. the world bank believes that if there is any country that is challenging global headwinds, it is india. india is currently australia's fifth largest trading partner. australia is india's 11th largest with a free-trade agreement likely to be finalized this year, a warm political and defense relationship and numerous other areas of joint interest, it is a partnership poised for growth. paul allen, sidney, bloomberg. >> prime minister modi right now with prime minister albanese at admiralty house, performing that ceremony to welcome him. we have more to come on "bloomberg daybreak: asia." this is bloomberg. ♪

>> toyota shares, plunging in tokyo. accounting for 25% of the fall in the topix. a dramatic and to an eight-day rally that set stocks rally. -- end to an eight-day rally that send stocks rally. that rally was historic. >> yes, indeed.

we saw this reversal of these gains after the rally starting in the afternoon trade yesterday. toyota indeed was the biggest drag on the japanese stock benchmark. we have seen it reversing some of its earlier gains yesterday. japan started to be led lower by stocks like toyota. some investors saw losses deepening and china -- in china. nearly wiping out all of its gains so far in 2023. >> bloomberg's asia stocks

reporter ends soul -- in seoul. we are also watching the kospi at the open as well, close to a bull and trading at the highest in about a month. park -- perhaps catching up to the exuberance and japan. we are heading towards adownside session. we have the uncertainty over the u.s. debt ceiling negotiations. we are seeing some weakness when it comes to trading in australia. kiwi stocks also on the back foot ahead of that rbn said -- rbnz a decision today. this is bloomberg. ♪ rement 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.

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>> this is "bloomberg daybreak:

asia." we are counting down to asia's major market open. after a risk off session on wall street, not a lot of progress when it comes the debt ceiling negotiations in washington. the dollar at a two month high. >> there's broader uncertainty fitting through to the asian open as well. also watching the rbnz, 25 basis points expected. this is outsized concerns that we could even see 50 basis points. >> absolutely, a few calls coming in for jumbo sized hikes -- more jumbo sized hikes. head of the open today in japan, south korea, and austria there is the direction of what happens in the u.s. with those that talks ongoing there. keep an eye on treasury yields at the open here. the u.s. house speaker, kevin mccarthy, saying the parties are yet to reach a deal. one of the chief negotiators,

suggesting the two sides are at a standstill. this will really sap any sort of appetite for risk appetite or risk-taking in the session. it's been putting strength back into the u.s. dollar. but the yen this morning, trading quite flat. mitsubishi you jason saying if market expectations are seriously challenged in the coming weeks, it could trigger a squeeze of positions and spark a sharp move lower for the dollar versus the japanese currency. we do see the nikkei 225 coming online on the downside. yesterday really one of the key stocks that we were watching was toyota. it is yet to start trading. we are seeing the rbaz not really matching. we a sentiment slightly improving for june. expectations in earnings in key sectors could improve as well. we saw the manufacturing rating coming in at 73 up from 72 the month prior. this is an index that measures corporate projection or

prospects of business conditions in the following month. the korean won is a little bit weaker. and has been trading at around a one month high against the dollar. turning to australia, it is the open of the asx 200. . the start of the day here as well. we are seeing how it's moving. it is fairly flat. a stagnant start. the debt impasse drags on and the focus is really what happens in new zealand today given the expectation for the further hike from the rbnz. we are seeing elevated volatility coming through for the currency. a lot of traders are expecting moves in either direction but a split on whether it is bullish or bearish for the kiwi. >> let's bring in our next guest who says japan is a safe haven in the short-term, but it could reverse once the debt ceiling negotiations succeed. olivier, good to have you back.

we didn't have to wait for any resolution in the debt ceiling. what happened yesterday with japanese stocks -- what reversed the rally? could we see more fragility going forward in any future rallies in japanese markets? >> i think right now, the situation is a little bit uncertain. we don't know what's going to happen with the debt ceiling. there is a low probability the u.s. let's itself run into a default. let's not really priced into the market right now. you have some news and china about raising -- in china about rising covid cases. we don't know what the reaction will be from the authorities. there is a little bit of nervousness. japan's been doing well. profit-taking is in order. that is what we are seeing. we are not seeing every rebalancing away from japan yet. not at this point. >> especially when you look at

the policy divergence, how sustainable is that for a rally given of course we are not expecting the boj to change course anytime soon? >> that's right. it's benefited the last few months from a little stability. monetary stability in the sense of the policy is the same. it does not deviate. meanwhile the u.s. is the riskiest bit in the global market and people have been trying to avoid that. . they have been reallocating their money to safer places like japan and europe and away from the debt ceiling situation in the u.s. away from political instability, from the lack of visibility as to where the economy is going. this is now not just the most anticipated global recession but the most prolonged one -- the most postponed one. the earnings season for the u.s. shows will the economy is resilient, the earnings are defiant almost.

>> i find it interesting you see that reversal once we see a u.s. debt ceiling resolution for japan. does that mean you don't believe so much in the fundamentals of governance and reform that so many people are seeing drive the long-term rally in this market? is this less of an offer opportunity and more of a be to hedge against what's going on in washington -- beta hedge against was going on in washington? >> beta hedge is more likely right now. the long-term things are always interesting and there. but the short-term issues are what drive flow in the near term. right now the u.s. had a bad year last year. tech had a bad year last year. doing better this year because of defensive qualities. investors are waiting for, when is the time to go back to the u.s. market? from whatever money they took out to put in japan or europe.

that will depend on whether the pivot theory israel. it will depend on whether the debt ceiling issue is over. it might take a little bit -- one or two more months of uncertainty before they get clarity on any issue. >> i find it interesting you say continue to buy tech/supply chain outside of china. how do you approach the risk that we have seen play out with something like micron? where we are seeing companies getting caught up in this battle between the u.s. and china over to an broader tech -- chip can broader tech supremacy? >> we're definitely seeing that. this is a longer term trend now. nearshoring and moving away manufacturing in case of supply chain management. we see a lot of the asian tech -- ex-china asian tech stories

doing well the last couple of months. probably for longer. it's never good for equity markets when the two largest economies are not getting along. definitely money and supply chain moving around. we saw the announcement today with apple and broadcom. they are trying to on shore as much as possible. >> we have heard these calls about optimism over southeast asia, other countries given the changes in supply chains and the flows of money. what have you seen in terms of capital flowing into international ex-u.s., ex-china? >> it takes a while because you can't just builds a new plant, new capacity quickly. we're definitely seeing more talks about this. we are seeing friendlier government, in terms of openness

to direct capital investments to increase their capacity. even in places like thailand and vietnam that are usually chaotic. they've quieted down a little bit. we are seeing more natural movement i would say. we are definitely seeing a lot more interest in that story now than we did may 5 years ago. >> always great to have you, olivier. let's get you to vonnie quinn with the first word headlines. >> china's new ambassador to the u.s. has acknowledged challenges in relations between beijing and washington as he arrived. he says he intends to engage extensively with americans and promptly handle sensitive issues including taiwan. he served in several rules at the embassy in washington and was beijing's top represented event hong kong. >> at present, u.s.-china

relations are facing serious difficulties and challenges. we hope that the united states will work together with china to increase dialogue. to manage differences and also to expand our cooperation, so that our relationship will be back to the right track. >> saudi arabia's top energy official has issued another warning to oil short-sellers more than a week before the opec-plus alliance is due to meet. the 23 nation bloc will review output for the second half of the year when they meet in vienna in june. the prince says consumer forecasts and policies are causing volatility in crude prices. >> speculators in any market are there to stay. i keep advising them that they they did ouch in april. >> imran khan has won bail

until june 8 in an islamabad court. it may call tensions with the military and the government. the star turned politician faces dozens of charges including hiding assets and insulting a female judge. he has denied all wrongdoing. global news, 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i'm vonnie quinn. this is bloomberg. ♪ >> let's take a look at some of the movers in the early part of the tokyo session. >> 10 minutes into the session, toyota, one of the main companies that we are watching, given its now recovered from the plunge n the final few minutes -- in the final few minutes of trading on tuesday. it closed down about 4.8%. toyota, not immediately available to comment on this, but our intelligence team, weighing in on what sparked the sharp move lower. saying they have never seen such

a sudden plunge. it could be a fat finger, closing out of positions. no fundamental reason to be selling off the stock so greatly. the stock, recovering all the moves lower from the day prior. in japan, softbank is issuing a very sharp reviewed snp global ratings, which has cut its long-term credit rating a notch into junk territory. they are concerned about the softbank exposure to changes in the external environment given they have been selling off public assets like alibaba, and increasing their exposure to private startups that have more volatile valuations as a result downgrading the company's grading from bb to bb+. softbank, pushing back on that. we did have some moves lower in the nasdaq overnight. the philadelphia stocks index, closing a negative territory.

down 1.2%. trade with china, a major issue given we had the news of a firm date for japan's restrictions on tech exports. that triggered the selloff we had in the session for the nikkei on tuesday. >> still ahead, hong kong retail investors trade crypto under a new push. we will take a look at the rbnz, expected to deliver another rate hike later today. we will be previewing that decision. 25 basis points is the expectation, some calls are for 50 basis point. this is bloomberg. ♪

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>> talks in washington to avert the u.s. default remain at an impasse, with republican lawmakers saying no more meetings have been planned yet. let's bring in bloomberg's managing editor for more. here we go again, derek. when we heard from the house speaker, i thought the communication was they would be talking basically everyday until we get a deal. >> well, let's write. i think that right now -- that's right. right now, we are in a position where both sides know what they

want, they are cognizant of the time we are facing here. there is a sort of widing which i would say is another critical variable which is, what is the date that a deal has to get done in order for it to move through congress? that is earlier. kevin mccarthy said a deal needed to be done this week, in order to have that done. it is very possible a deal could get reached in the coming days. lawmakers could vote on it next week. that is certainly possible. but we are running up to the point where clocks are ticking down and you start getting into points of increasing risk. the two sides have gotten an idea of where they both are. they know where the differences are. it will come time to try and force some quite painful decisions that will be augmented by vote math on what can actually get through.

it appears you need a bipartisan sign off on this with a large bulk of republicans and democrats to get something through, which means one side cannot completely come away with a massive victory even as partisans on the far sides of the right and the left are pushing their leaders to hold firm. >> what are some of the issues both sides could actually compromise on? >> i think the outline of this is, it starts with the top line of spending. the question is, do you freeze spending in upcoming years? do you set caps? that is a point mccarthy has described as an area of difference. but it is something where the negotiators may be able to find some commonality. i would expect some language on that somewhere. there may be bipartisan things both sides wanted to push anyway like a permitting reform. there might be some things that

raise revenues or trim spending in ways that look good on paper than in the real world like spending back money authorization for money that would not be spent and would it be anyway. i think one of the biggest questions right now is around unrelated policy such as tightening eligibility requirements for social safety net programs, which is something republicans really want and is a redline for democrats. the question will be, can both sides figure out a way to come together? remember the entire part of this started when the republicans decided months ago early on that this was an leverage point to be able to get some things out of this white house and they are bound and determined to do that and have been signaling for months that is the plan. here we are at the endpoint of this. they are trying to get what they can out of this even as mccarthy is very mindful and has said he doesn't want to default.

so far we are seeing optimism from everyone in washington that there will not be a default. if that changes, that will be really meaningful. but how we get from here to there is a story very much not written yet. >> derek wallbank there with the latest on the debt ceiling negotiations in washington. the rbnz is expected to raise rates for its wealth straight meeting as -- a 12th straight meeting as a sticky budget keep it on a tightening path. policy editor kathleen hays has the details. a 25 basis point rate hike is expected but it is a close call. >> potentially a close call. definitely not on the 25 basis points or the need for a rate hike. the rbnz has noticed -- is observing inflation is still very high. that is their main problem. they have hiked 500 basis points since late 2021.

12 meetings and a rope you would inflation is around 6.7% are above their target -- 12 meetings in a row. inflation is around 6.7%, far above their target. policy is not yet restrictive. there was concern these rate hikes might lead to a recession. expressed by rbnz officials. with this budget that has come in double what was expected to be in december, before the gabriel storm that devastated the north island of new zealand, repairs are going to be going on for months, it will need billions of dollars, that will be an expansion -- expansionary, it will add to output. along with a surge of migration, 100,000 or more migrants are expected, new people in new zealand, helping to fill job positions, etc.

a 2% rise in the population will result. they will be bringing more demand. that is another reason why people are saying, maybe they will do a 50 basis point rate hike. he has never been loathed what something that surprises people a bit. -- with something that surprises people a bit. some are betting on 50 basis points. they at least as they update their forecast, could not move that vision of a 5.5% terminal right to 6% --ate to 6%? at least a 25 basis point hike is the messaging it will be focused on. >> speaking of messaging,

with a meeting to out tomorrow, what are we looking at here? >> may 2, may 3, what happened? there was a big call that the fed might pause because of banking turmoil and banking upheaval. that is why people thought they might pause but they did not. they went ahead. have been two rate hikes -- there have been two rate hikes since those banking issues emerged. what was a conversation around that? what were they saying? it was a close call. that was also the meeting where they rendered a 25 basis point hike and they signaled they were open to a pause at the next meeting becaus of credit conditions and the concern about that and uncertainty about the effect on the economy. jay powell didn't sound super worried about inflation. he said he doesn't see a wage price spiral yet.

but in may, and of saying they expected more rate hikes ahead, they said they will take into account the accumulative tightening to date. looking like it's going to be potentially a turning point for the decision. bloomberg economics does see a pause but we see fed hawks supporting more hikes. craig torres on the fed team in washington, writing today that this is about separation principle. you monetary policy separate from financial stability policy. how much can the fed do that? how much can they continue to? end of this is something we might see as part of the discussion -- and if this is something we might see as part of the discussion. these minutes will be closely watched because there is a juncture and so much back and forth. we want a sense of how far apart they were in may and what that will mean for the june meeting. >> bloomberg's economics policy editor, kathleen hayes, with our story today.

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>> here's a quick check of the latest business flash headlines. alibaba's cloud division has begun a round of job cuts that could reduce its staff by about 7%. we are told that is offering severance to employees or transfers to other parts of alibaba but those are not guaranteed. the moves are intended to streamline the business, which alibaba aims to fully carveout into a separate company within a year. apple has signed a new multiyear

multibillion-dollar deal with broadcom to get 5g radiofrequency components, extending a contentious relationship between two of the world's biggest tech companies. the collaboration will include wireless connectivity parts and filters which help mobile phones focus airwaves signals and reduce interference. netflix is bringing its account sharing crackdown to the u.s. and has alerted customers they must pay an extra eight dollars a month, if they want to share their passwords with people outside their household. the crackdown began in latin america last year as part of its strategy to generate more revenue from users. >> take a look at the trading session so far. just about half an hour into the start of the cash session in australia, and korea and japan as well. the nikkei 225, continuing to

see that pullback after what's been an incredible rally that we've seen. off by just about half a percent. looking at potential futures showing we have more upside to come after a shorter-term stumble. the nikkei 225 is up more than 7% from the start of the month. and has not exactly been a uniform rally. we are very close to bull market territory, looking pretty flat so far into this trading session here in australia. we are off those session lows. about .3% lower. watching kiwi stocks treading water.

>> the westpac leading index crossing the bloomberg, seeing a fall of 0.03% month on month.

this is a composite index made up of nine economic indicators. it is intended to predict the overall direction of the australian economy. taking a look at the breakdown, annualized growth over the past six months has been down by just about .8%. some of those components seeing weakness include stock market activity as well as anticipation when it comes to industrial production out of the u.s. commodity prices have been a major drag, with falling iron ore prices as well as that weakness that we have seen in dwelling approvals and the property market as well. let's take a look at broader markets. we do continue to see some of that weakness play through. not much of a movement when it comes to broader fx. the aussie dollar holding pretty steady. we are also watching the rbnz decision and the impact on peewee volatility. -- on kiwi volatility.

very much determining the recovery on china. >> talking about utilities and energy leading those gains, but there's a lot of downside, health care and communication services, consumer staples down. haidi, you said it, we are setting up for the china open. we have an exclusive story in the country. china's vast web of expert networks has become a tool for global investors to navigate. a potentially lucrative economic powerhouse. but the communist party sees this as a national security threat that must be reined in. let's bring in our politics correspondent, rebecca wilkins.

this is crucial for investors and china. what is the issue right now? >> absolutely. this is an extra ordinary fall from grace story for an industry that was really critical to how they invest in china. not just for investors but also for management consultancy firms and other firms looking to do due diligence to direct investment into china. but really from an industry that back in 2014 was a central part of developing china's financial market, providing and connecting clients and investors to experts, in this case particularly in mainland china, essentially opening up and allowing more information, not concern around precisely what information is being transmitted is the heart of the issue now. it is seeing these expert knowledge platforms atthe center of xi jinping 's

espionage campaign. there are reasons to see why china might be uncomfortable. we spoke to nearly a dozen different users and lawyers and experts connected to this industry, and we do see that investors were talking to former government officials, understanding any sort of coded language, how to make investment decisions. there are these areas where we can see why precisely authorities really now are concerned. >> it certainly does not help when it comes to reviving that tag of china as being on investable -- uninvestable. >> this uncertainty precisely as to how far a cracked on go is the issue for china. although the short-term effects of this ar sort of being investigated and investors are perhaps pulling back relatively short-term.

it underscores this feeling another china -- another channel of information to china is been closed off. and that is part of this bro ader agenda where national security is being prioritized over economic growth. we have seen other forms of what was once considered basic information, financial data, being closed often particularly -- closed often particularly foreign investors. trying to restore faith in investing in the chinese market and trying to woo and attract foreign investment, too, even as it rolls out these types of crackdowns. it's not so long ago investors were shocked by these very sweeping regulatory crackdowns on sectors like property and education, technology that fundamentally reshaped those industries. >> bloomberg's asia government and economics correspondent.

let's get you to vonnie quinn with the first one headlines. >> kevin mccarthy says the two parties have yet to reach a deal to avert a u.s. default. another top lawmakers saying no more meetings are planned yet. mccarthy has told republicans the talks have some distance to go and urged them to stay united on proposed spending cuts. another gop lawmaker has said it is unclear what happens next as the deadline for june 1 new -- june 1 nears. florida governor ron desantis will announce has 2024 presidential campaign. the santas will speak with elon musk at 6 p.m. eastern on wednesday and the campaign will release a launch video. the announcement will set up a confrontation with republican front runner donald trump for the party's nomination. tiktok says it is on track with its efforts to have all u.s. user data hosted and overseen by oracle. the ceo says oracle has begun a review of tiktok's source code and his team is also developing

a european version of the local hosting initiative. it is designed to allay fears of sensitive information reaching the chinese government, with data centers in ireland and norway. >> tiktok is not available in mainland china today. as we said many times, the chinese government has never asked us for u.s. user data. . and we will not provide it even if asked. >> global news, 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i'm vonnie quinn. this is bloomberg. ♪ haidi. >> the temasek ceo spoke to bloomberg's haslinda amin at the qatar economic forum. >> you have to have a balanced portfolio that can do well across most environments or not be exposed to political environments. the middle east clearly is an

emerging area where the there is a lot of energy growth, etc., and we need to see which opportunities we have, but it has to be in the context of a global portfolio. clearly there are risks. when we do this in a real planning, there are also upside scenarios and china. you can't have a portfolio that completely avoids china just like you can have a portfolio that completely avoids the u.s. or china. we look at a portfolio that is more balanced and there is a lot of energy on here and this is one of the fastest growing regions. also i would say regions that are relatively not in the u.s. or china camp will benefit in this geopolitical environment. southeast asia, india, the middle east will be beneficiaries of that. >> and wondering and curious about india.

there are questions about the scale compared to china. if you take a look at the private equity market for instance, is it ready to absorb the capital that is being diverted/rotated out of china? >> i don't think it can be a substitute for china in the near term. china's five times the size of india and 10 times the size of the economy. from a structural and cyclical perspective, india's looking good right now. china's response strategy, india will form part of the alternative out there. there's a lot of investment in infrastructure and other areas the last few years, setting up india for growth. but you've got to be calibrated to how much you can do. you've got to be realistic. it's not just going to be

a substitute for china. but it will be one of the areas where you will see more money flowing. >> thetemasek ceo, speaking to bloomberg at the qatar economic forum. we have more to come on "bloomberg daybreak: asia." this is bloomberg. ♪ when you automate sales tax with avalara,

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has not yet priced in a bad outcome when it comes to the u.s. debt ceiling. he spoke an exclusive interview with bloomberg's francine lacqua at the qatar economic forum. >> we're worried about the debt ceiling but i heard reassuring comments from biden and mccarthy yesterday. i have to think these guys know what they are playing with. i think the structural resistance of inflation to come back down is the biggest concern. not right at this moment. as it plays out over time, i would be impressed by the resilience in the u.s. and europe asia and india is booming. >> if you look at the debt ceiling, even if we have a resolution, are we playing with fire? does that put the leaders of the free world at risk? >> the politicians in washington have been playing with the debt ceiling for decades.

so far there is not been an accident. every time it happens, we wonder. given how crazy the politics is in the u.s. right now, is it going to be the time? but the treasury markets are behaving well. the market is not pricing in a better outcome here. >> there a lot of money in the middle east. do you think they are after a bank like yours? >> i think everybody in the world would love to own a piece of standard chartered bank. with -- we are doing well. and we are cheap. like i say, if somebody wants to add more value to this bank than we are doing today, substantially higher, if you can do something better, please let us know. we will come in. we are a global bank today. we are adequately skilled for the environment. that is all i'm focused on. >> if you look at regulators and elsewhere, would they be

ready of a bank? >> in the right circumstance, regulators can get things going. it is impressive to see the various investors in the gulf, sitting here and qatar today holding a session with the head of the qatar investment authority, a lot of experienced investors. the various countries are accumulating savings right now and diversifying their economy. that is why we are here and investing so much capital. we see these huge opportunities to connect that capital with all the opportunities in asia and vice versa. a bank like us is prepared to play that bridging rule.

>> take a look at how cryptocurrencies are trading at the moment. we are seeing a little bit of pressure for bitcoin after two sessions of gains. really interesting that the cryptocurrency is lingering at the $27,000 level for the third consecutive week. we are seeing a little more stability in terms of prices. this is also coming at a time when bitcoin has been under performing u.s. stocks during the second quarter. there's a lot to watch out for in terms of how these currencies trade. and how they are trading as risk assets and how sometimes people have talked about being haven assets when there's a lot of volatility as well. >> speaking of an acid that's gone from risk to haven and to risk again, crypto, hong kong, pushing ahead with plans to

allow for trading with select tokyans. here are details of the upcoming changes. >> this regime will regulate centralized virtual asset trading platforms and hong kong. under the new regime, the sse will be response of a for licensing and regulating these platforms. this licensing regime will take effect the first of june, 2023. >> let's bring in annabelle for more details. belle, this pushes different to what we are seeing in other jurisdictions. >> that's right. is really about hong kong trying to position itself as a financial hub into the future and also of course a little bit of damage control given that has been sort of tested, the safe haven status, the financial hub status in the last few years. the ambitious to be a virtual asset hub play into that but it's important to know virtual assets is a broad term because there's lots of different parts to the pie.

allowing the start of retail trading is only the first step some would consider. an important one at that. talking through the changes here, tuesday we got the final results coming through from a week's long consultation period conducted by the regulator here in the city, they put out a blueprint earlier this year that would be to allow retail trading for certain tokyans. they invited certain responses in and they had more than 152 replies to the framework. this is the new set of rules that's going to be starting to take effect from june 1. >> what do we know at this point about the key details of the regulations? >> the main thing to take away really is that it's really high on investor protection here in the city. that is going to be a lot of checks and balances for any exchange that is looking to set up here. one interesting point of difference is the amount of tokens that will be offered here to retold ratings. they will be needing to meet certain criteria in order to be offered. it will need to be included at

least in two acceptable indexes. that would prompt her liquidity in these token spirit is going to be up to platform operators to remain eligible as well. you can expect a slim set of offerings here. the big ones like bitcoin and ether and anyone looking to sign up to these exchanges, there will be safeguards like appropriate risk for it falling, reasonable risk and exposure. the big question is how many exchanges we will see set up here in the city, given that the exchanges rely on high-volume activity in order to be profitable. probably just a few names will be in the mix. >> bloomberg's annabelle there. be sure to tune into bloomberg radio is what to get in-depth analysis from the daybreak team, broadcasting live from our studio in hong kong. listen through the app, radio plus, or

bloombergradio.com. plenty more ahead. stay with us. ♪

>> a quick check of the latest business flash headlines. they are increasing their stake in the adani group by 10%.

gqg will take part in future fundraising and wants to become one of the conglomerate's largest investors. they bought $2 billion worth of shares in march, helping adani group whether the hendrick report -- weather the hindenburg report. the top offices have been sued in a class action filed by first horizon shareholders. the complaint alleges td bank made knowingly false statements and acquisition deal would go through this year. despite problems getting regulatory approval. first horizon stock tumbled after the deal failed. the bankrupt space launched company tied to richard branson, virgin orbit, will sell as modified 747 to strader lodge for $17 million. it is also selling its primary rocket factory in california to rocket lab for $16.1 billion.

the piecemeal sale indicates there was no adequate bid emerging for the whole of virgin orbit sharing. >> take a look at how u.s. futures trading at the moment. a little bit of upside but not that much considering it was a risk obsession here in new york. we are talking about debt negotiations stalling in washington. some house republicans even questioning when the treasury runs out of cash. we got solid eco-data. new home sales and business activity growing. so the treasury space was pretty mixed. we are looking at the 10 year yield in asian trading of around -- at around that 369 level. one stock we are watching in new york trading was alibaba, which was down almost 4%. we will be watching the open and hong kong. the cloud division nest had to have begun around of job cuts in preparation for the unit spinoff and eventual ipo. for more, let's bring in our executive editor for asia, peter elstrom. what do we know about that layoffs -- the layoffs and how

much will it help alibaba's cloud division? >> good questions. just to step back a little bit, alibaba is known best for its e-commerce business, it announced a few weeks back that it is looking at splitting into six different groups in order to give individual units a bit more room to run. separately, e-commerce will be part of those. the one probably gaining the most attention is the cloud computing business. if you look at some comparisons like amazon, cloud computing can be a very lucrative business. amazon has built that into really a profit driver for the company. alibaba has struggled to do the same in its own operations. so people are paying a lot of attention to this cloud computing business at alibaba trying to figure out exactly what the prospects are for profitability here. as alibaba prepares to do the separation, they are cutting

what we have learned is 7% of the jobs at the unit. we think that is as they position the company to spin off, they want to get the costs under control and ensure that it does have the potential to be able to reap big profits like some of its peers have done in other markets. >> what is the verdict on whether the 7% cut and the cost savings is going to be enough to offset the prophet drag? >> they have not broken out individual financials for these units to the point where you are able to see exactly how many jobs are going to be cut, what that is going to do to income statements in particular and how the cloud computing business is going to be able to grow in the future. cloud computing has been a very promising business. there's a lot of new business up for grabs in china. much of that is coming from either state institutions or state backed institutions in the

private sector in particular. those companies have been a bit weary about working with alibaba. they've had some political clashes in the past. where the cofounder, jack ma, was leading the financial division and got into a clash with beijing. that may have held back some of the demand for alibaba's related businesss. part of what alibaba may be doing here is severing -- separating out the cloud operation so that it can compete more effectively with some of that opportunity in either the government enterprises or the state backed institutions that you see. there is a lot of business there . it is certainly a growth area more broadly. they just need to be able to compete more effectively here. >> bloomberg's executive editor for asia, peter elstrom, joining us. it is our first hour into the start of cash trading. we are seeing the exuberance fading when it comes to japanese

equities. you will hear mark cudmore is calling time when it comes to the japan stock lovefest. when it comes to evaluations, they are not cheap, they are certainly not expensive, but we are looking at quite a bit of increase from where we are. potentially some macro sale once pulling back as well. elsewhere in the region, the kospi down about a quarter of 1%. we are in bull market watch for that. perhaps that will not come today. when it comes to australia, a little bit of downside as well. watching new zealand assets, especially as it comes to the kiwi dollar ahead of the decision by the rbnz. this is bloomberg. ♪

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