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asia live from new york, sydney and hong kong. annabelle: counting down to asia's major market opens. paul: asian stocks are facing pressure after wall street wipes out its monthly gains despite fed officials talking about a rate hike in june. talks on the debt ceiling deal have both parties confident that it will pass. china is the place to be with jamie dimon and elon musk there. shery: u.s. futures are not doing much as we await the house vote on the u.s. debt ceiling deal. we had the s&p 500 falling below the 4200 level in the new york trading session. we have u.s. job openings surging to more than 10 million giving rise to speculation that

the fed may have more room to hike. until july. that is leading to concerns about economic pain so we had treasury yields down for another session. not to mention of course we were watching how traders were trying to digest the debt ceiling deal. at the same time, the dollar strengthened. the best month for may which led to pressure on crewed prices which are falling below $70 a barrel. the chinese pmi numbers did not help. annabelle: that's right and it's worth taking a look at how the bloomberg commodity spot index has performed since the start of the year because that is for a slump of more than 10% at this point. it's a reflection of macroeconomic concerns, the downshift in the chinese economy, the industrial pullback in europe, recession risks at a

global level including the u.s., that is playing into sentiment. in australia we have local economic data points in focus. we got the latest pmi reading coming in at 48.4. that again does not paint a good picture of the health of the australian economy even though we see factors like house prices rising. inflation numbers are harder than expected which tells us the rba like the fed may have a ways to go with their hiking path let's change over and take a look around the region because today's session is setting up with most markets looking to be mixed. kiwi stocks online, nikkei futures in chicago are flat. watching the outlook for china given that we've seen the downward spiral in markets in the prior session from the pmi miss that came through. citigroup is saying further stimulus support is needed from the pboc, keeping watch on the

japanese yen close to the 140 level. that is a reflection of the yield differential between at the boj and the fed. paul: for more on today's top stories including the fed let's bring in kathleen hays. bloomberg's eagan and paul dobson. you been reading it deep into the glossary. officials calling for a pause or a skip? >> we have to think what that means. a pause means you pause. a skip means you are not sure what you're going to do over time but for now you want to sit back, see what is going on and make up your mind about the next hike. let's listen to what top fed officials said today and that's the philadelphia fed bank president patrick and the fed board of, philip jefferson. >> we are getting close to the point where we can sit in terms

of policy. i do not know if we are there yet but i think increasingly we have been coming into this meeting thinking that we really should skip, not pause. i don't like the word pause. but skip and increase. >> are policy rate constant, a coming meeting should not be interpreted to mean we have reached the peak rate. skipping a rate hike at a coming meeting would arouse the committee to see more data before making decisions about the extent of additional policy firming. >> fed semantics so important. philip jefferson saying today inflation is too high. he see's core services decelerating. that's an important number for the fed to watch. pat harker saying the fed should not slam on the brakes. that's why it wants to sit back.

big numbers from the job opening and labor survey. job openings are rising to 10.1 million in the second quarter, up from 9.7 5 million. if the market were cooling off the expectation would be the number of jobs would be falling. it is not, it is getting stronger after pricing in a stronger chance of a rate hike in june and july. two more forces -- voices entering to the table, they said inflation is too high. michelle bowman saying the real estate rebound, how is the market settling into a stronger mode, it will affect the fed's fight against inflation. it's going to be a big debate when we get to the june meeting. shery: it big debate happening in washington. what happens tonight with the debt deal, megan, what are we expecting in the u.s. house of representatives? >> the house will start voting

in one hour on this deal. they have passed a procedural hurdle a few hours ago. so you know, it is looking very likely, very expected that the bill will pass the house on the backs of moderates in both parties. the right and left flanks have already signaled that they are going to oppose the deal but the leaders are very confident that it will get through the house tonight. paul: megan wants a gets through the house it is on to -- when it gets through the house it goes to the senate where there is a different set of rules. we've heard from republican senator mike lee who might use procedures to slow things down. what is the latest on the chances of getting through the senate? megan: we were doing calculations to see if procedure could delay the bill in the senate up to or passed june 5. looking at the worst case

scenarios, that looked possible. today what we have seen and heard in the senate is that leaders are arm twisting over there, trying to get folks like mike lee tune not run out the :00 on all the various procedures. they are trying to cut deals to allow some amendment debate. the amendments are likely to fail but it would provide a compromise of sorts to speed debate along in the hopes of passing it as early as thursday. that's what we all hope, having covered this for going on a month now. but you know friday is looking very possible that this will not drag into the weekend. shery: investors seem to be less concerned about the debt ceiling. paul, what are we seeing in terms of market reaction? paul: remarkably little market

reaction. it is in those areas where we felt the most precious. across the short-term interest rates and the bills that had been showing the premium, some concern over nonpayment. they flatten into line now and likewise cds which had spiked very high above emerging market levels for a short while on the one year tenor has come all the way back now. there is a lot of confidence in the market that the deal is going to get done. that makes us worry about the other things as well. we did not have a great day for u.s. stocks overnight. gains in treasury markets, a haven play coming in. as they were saying earlier, when you look at the commodities market, an expression of global weakness. not albright even though we are going to have -- apparently get through this debt deal at long

last. paul: not particularly bright on the others. we had a horrible pmi read out of china. we will tell you some numbers later on today. what can we anticipate when the opening happens in china? paul: i think you know, as you say it was a weekday in china yesterday. and these sort of sentiment now seems to be he could use a little bit more stimulus but when is he going to come? there has been a debate running among strategists over perhaps we will see something soon it given how bad the ratings have been. the counterargument to that is that last year's qt was so bad that this year's quarter to will show a strong decrease year on year we get the data. officials in china would choose to sit on their hands for longer and get more of a spur into the

second half of the year. if you are in the market that does not give you a lot of reason to be in china. we are seeing money flowing into alternative assets across asia. big gains in south korea. india's markets close to a record high. seen some strong gains in japan. the sentiment is pull your money out of china and stick it elsewhere and wait until we get a concrete turnaround and perhaps from fed officials. shery: bloomberg's paul dobson, megan skelley and kathleen hays with a wrap of our top stories on a busy day. let's get to vonnie quinn in new york with the first word headlines. bonnie: 50 credit suisse bankers are suing switzerland's regulator for rendering their bond base bonuses worthless. this as a court spokesman says staff are suing over contention capital awards based on 81 bonds. the court has received 230 appeals representing 2500 claimants who saw the value of

their bonds written down to zero. iran has reinstalled monitoring equipment and boosted its cooperation with international inspectors, even as engineers added to stockpiles of uranium. the quarterly report finds iran is less likely to face century when diplomats discuss their nuclear program. they had raised concerns in march over the presence of uranium enriched to 34% purity. tesla ceo yuan musk has met government officials on the second day of his trip to china. he met with china's minister for information technology. the pair exchanged views on the development of energy vehicles and intelligent connected vehicles. photos on chinese social media showed him visiting the ministry of commerce. jp morgan ceo jamie dimon testified that a former head of private banking could have decided to drop jeffrey epstein

according to a newly released transcript of jamie dimon's deposition. they accuse the bank of benefiting. jp morgan's general counsel stephen cutler would have had the ultimate authority to cut ties with epstein. global news, 24 hours a day. on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries. i'm vonnie quinn. this is bloomberg. paul: still to come, as china rolls out the red carpet for u.s. business leaders we take a closer look at president xi jinping's efforts to boost trade relations and the economy. up next, economic implications of the u.s. debt deal with ubs chief economist. this is bloomberg. ♪

♪ >> we already saw a few years ago what happens with the default of the credit of the united states if we went near not raising the debt ceiling and jeopardizing the credit. i do not think the senate will play with that. the timing is challenging. >> from here we set the stage for future compromise and negotiation. to confront the challenges facing americans. shery: members of congress

discussing at the debt ceiling deal. let's discuss the deal and economic implications with global chief economist at ubs. great to have you with us, thank you for your time. economist at bloomberg went through the deal and this was their conclusion, the debt deal has the potential to make the u.s. recession deeper and longer and bottom line, it increases headwinds for the near term outlook while doing almost nothing to resolve severe fiscal challenges. what do you make of this agreement? >> it is a pretty strong statement that it makes recession more likely. it's worth 20 to 30 basis points gdp drag. it is not going to move our baseline. but the other bit is true, they have not done anything with the deal. so all that is there is a temporary cap on spending. it does not resolve the underlying issues.

they've taken money from the irs so it makes tax collection more difficult. so that i agree with. shery: of course we are going to show viewers live pictures of capitol hill at the moment as we await that vote at the u.s. house of representatives happening in the next couple of hours. of course we are expecting perhaps the debt deal to pass the house and head to the senate. we are going to see what numbers we get in the eventual vote tally but when it comes to those spending caps and the fact that we had to see some of those cuts in order to get to that compromise, what will it do to the consumption that the u.s. was hoping to achieve? in a very strong economy and labor force that we've seen so far? >> the issue is u.s. consumption.

it is unrelated to the debt deal. so there is a lot of expiring programs this year so that the child tax care credit and we've got student debt payments kicking in. those are consumer drugs. there's all kinds of signs of consumer distress. if you look at the borrowing of 401(k)s and extent of credit card borrowing which is funding half of u.s. consumption, there is good reason to believe in the second half of the year we will see lower consumption growth. that is the mechanism to get to labor shedding which is what we are expecting. paul: consumption growth slowing and labor shedding, these sound like similar goals to what the fed has. to what degree will the debt limit deal take pressure off the fed in terms of tightening? >> it does. i think it is obvious june is

not in play, so the debt ceiling would have been resolved before the july meeting. but it does remove the risk. they can refocus on the data. two things have happened. one is in banking stress they told the market they wanted to pause and now that the lending surveys are coming in the less bad than they might have feared, plus the fact that there is a debt ceiling deal allows them to focus on the data. the data is mixed. they are shifting back to thinking perhaps that was not the last one. we think the data will come their way so we have obviously two more important data points before the june meeting and the july meeting is the one -- we think they will stay on hold. that is because we are expecting inflation data to step down in the summer months. paul: what is the ubs position

on recession risk? your latest report notes slowing of economic momentum globally. you see any bright spots? >> not many to be honest. yes we have a recession in the forecast for the u.s. senate does look like we have avoided it in the euro zone, not all countries. we seem to have avoided it there although it is touch and go. so we have the recession in the u.s. starting in the third quarter. that is contingent on the payrolls turning negative. we are not there yet. we are seeing a material slowdown in underlying hiring rates. what has happened is labor forces have been replenished. everything looks less stretched. we do need an additional shock to consumption to get to the labor shedding which you need to get into a recession. that is the baseline.

having a recession and largest economy is not helpful to the rest of the world. we are seeing global trade and manufacturing looking recessionary. china was a data point. but china started catching up to where the rest of the world is. so the cyclical sectors in the global economy look weak right now. shery: given the china story we have seen pressure on a broader commodities. will that lead to disinflationary wins that the fed has really looked form and perhaps really lessening the pressure coming from rising prices globally? >> it certainly helps. when we forecast inflation and try to predict what banks will do the things we worry about are the things that we are forecasting. commodities, energy are among the things that we are better forecasting. that is always a risk. if you are in a more

disinflationary environment with china being weak all of that will give comfort to central banks in thinking about inflation risks. the problem with china is the disinflationary effect is in the metal space which does not matter to the cpi. if they slow enough that they reduce energy consumption that will be helpful. paul: aaron captain, global chief economist at ubs, thank you for joining us. get a roundup of the stories you need to know to get your day going in today's edition of daybreak. terminal subscribers go to dayb and it's available to mobile in the bloomberg anywhere app. customize your settings so you only get news on industries and assets that you care about. this is bloomberg. ♪

shery: where counting down to the start of trade in tokyo. some stories we are watching, over in japan this hour we will get data on capital spending for the first quarter. the bank of japan and manufacturing pmi for may do out in a little over one hour and we will continue to watch the yen and how it reacts to the results of the debt ceiling vote in the u.s.. in south korea the government is set to post trade data for may at the top of the next hour and we will get manufacturing pmi numbers from s&p global. it just 30 minutes after that. and keep our eyes on crypto-linked stocks including technology after a bitcoins first monthly decline of 2023. paul: let's get a quick check of the business flash headlines. tesla is planning to give an early glimpse of its revamped

model three sedan as part of elon musk's visit to shanghai. the first cars coming off the line our prototypes and only slightly longer and sportier than the early version. with increased competition tesla is facing pressure to refresh its product line in china as their second-biggest market after the u.s.. nvidia ceo jensen along is headed to china to meet with tech executives in the world's biggest chip market. the source says companies on the itinerary included tencent and tiktok owner bytedance. his first china trip in years will come with the u.s. trying to curb access to leading edge technology. shares of this group are falling sharply in trending as they eye fresh capital. they are raising $3 billion with the majority of the money coming from the saudi public investment fund. the kingdom's main wealth fund

says this is their largest shareholder. plenty more to come on daybreak asia. the market opens in japan, south korea and australia, coming up in a little bit over half hour. the yen hovering just below 140 against the greenback. keeping our eyes on developments in capitol hill and washington is the debt limit deal approaches passage in the house. this is bloomberg. ♪ when i was his age, we had to be inside to watch live sports. but with xfinity, we get the fastest mobile service and can stream down the street or around the block! hey, can you be less sister, more car? all right, let's get this over with. switch to xfinity mobile and get the best price

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shery: we're live in capitol

hill waiting for voting to begin on the u.s. debt ceiling deal. we expecting fiscal responsibility act to suspend the u.s. debt ceiling until 2025 and also cap federal spending. there has been growing momentum. the expectation is it will pass the number for kevin mccarthy to get. it's around 100 12 votes, half of the republican congress in the house. this has to pass in the house today so we can get to a vote in the senate before the x date, june 5. that would be monday when treasury secretary janet yellen has warned the u.s. risks default. we are going to be taking you live to get the vote tally as the vote is set to begin. let's turn to the markets because we have a busy day ahead for investors across asia. annabelle: that's right, it seems investors are sort of

putting the debt ceiling drama aside and focusing on other factors like jobs numbers in the wall street session overnight that really enforce the case that the fed may need to hike further. blackrock ceo said up to four more moves could be possible. looking at range bound. it kiwi stocks online, a little bit higher. nikkei futures for japan pointing to a drop as are the asx 200. putting it in context, the s&p 500 ending the month up .3%. other markets have been faring better. bringing up the terminal chart, given geopolitical tensions, the weakening backdrop, the yuan as well pushing past the seven level in the offshore market. investors have been looking for where they can park cash to look for any sort of gains. essentially what we are seeing is there is a divergence on this

chart, taking a look at the five main benchmarks. first the gains we've seen, in india, approaching an all-time high. the outperformer's for taiwan and korea, korea on watch to enter a bull market. it's that chip story, the ai theme that is playing out, closely correlated with the nasdaq that has managed to gain over the month of may. something we are watching closely. tokyo stocks as well, multi-decade highs. paul: thank you. let's get to vonnie quinn for the first word headlines. >> some federal reserve officials are signaling that they plan to keep interest rates steady while maintaining the option to skip further months. skipping way to give the fed time to assess data. they say officials could pause in june barring what may be seen

in friday's jobs report. pakistan plans to import up to 35% of oil from russia. petroleum minister says the move will lower prices for consumers. two ships carrying 50,000 tons of russian fuel are set to arrive in pakistan in the next 10 days. the philippines congress has approved the creation of the country's first sovereign wealth fund. in needs to be signed by president ferdinand marcos, jr. who push for the measure. finance secretary benjamin ensures the wealth fund will generate returns for economic growth. critics say this is ill-timed and its swift passage had political undertones. astray as house prices climbed for the third straight month in may. consultancy corelogic says they jumped 1.8% with a 1.4% rise across major cities. the data suggests rate hikes may be needed to cool demand, adding

to inflationary pressures. consumer prices accelerated faster than expected in april. global news, 24 hours a day. on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries. i'm vonnie quinn, this is bloomberg. shery: official relations between the u.s. and china could be severely strained but beijing seems to be rolling out the red carpet for top u.s. business leaders. this as the chinese economic recovery sputters. let's bring in chief north asian correspondent stephen engle in hong kong. we have been following top leaders like elon musk, jamie dimon, and china and their meeting with senior chinese officials. >> that's right. interesting timing obviously as official ties have deteriorated quite badly. joe biden and xi jinping have not spoken in about seven months, not since the sidelines of the g20 meetings in bali.

military to military, dialogue has been nonexistent. china has rebuffed attempts to have lloyd austin, fed secretary, meet with his chinese counterpart. so let's face it, it leaves the business leaders of the two countries to try and keep these two major economies from decoupling. and it is something the biden administration try to do, de-risking with these various measures to clamp down on investment in china's top technologies like chips, ai and quantum computing. china sees de-risking into decoupling as the same thing, attempts to limit china's rise. we did speak with jamie dimon exclusively yesterday. this is what he had to say about the risks of doing business. >> when we visit a country and do business in other countries,

we are therefore the citizens of the country. we are there through the good and the bad times. we are not predicting war or civil war. it has become a more complex situation. some for good reason, some for not good reason. there will always be risk. >> jamie dimon did tell me that over time there will be less trade between china and the u.s.. it will take years for this to take place but it will not be decoupling end of world will go on. decoupling was a term that elon musk has used in his now three-day visit to china. we have pictures of him meeting with government officials. he met with the foreign minister , i'm talking about elon musk, again the world's richest man. he met with foreign minister qin gang and he voiced the opposition to decoupling from china saying the interest of the two countries are intertwined. he also met with the i.t.

regulator of china, the ceo of ev battery maker see atl. he is said to be visiting his giant tesla factory in shanghai and meeting premier li qiang, potentially today. that is unconfirmed but li qiang was the commonest party chief in shanghai when elon musk got approval and the groundbreaking in 2019 for the big tesla factory in shanghai. these two gentlemen, a microcosm of other big leaders trying to make their impact in improving business relations between china and the united states. paul: nvidia's ceo is headed to china. they are at the heart of the biden administration curbs on chips and ai. do you feel like jensen wong has his legs astride an electric fence? >> that is interesting. it has not been confirmed by the chipset maker. jensen wong this week was in taiwan rolling out new products.

there chip sets are seen as the gold standard for training of ai systems and ai also has become the heart of these restrictions that the biden administration is talking about. this executive order to limit u.s. investment and management in chinese ai development and quantum computing. nvidia, jensen wong has reached rock star status as his company reached $1 trillion in valuation this year. keep in mind they get a fifth of revenue, nvidia does, from china. he has got to make that up to comply with the u.s. restrictions coming down the pike. it's a delicate balancing act but we are hearing he will meet with top tech and ev makers in china. not confirmed by the company but were hearing he will meet with tencent, bite dance, lee oddo, byd and others. watch this space, sometime this month.

yes, june. paul: bloomberg's stephen engle there and you can catch exclusive interviews on day two of the jp morgan global china summit in shanghai. north asia president and the banks chief china strategist will be joining us later. shery: staying with jp morgan it is interesting how the bank is leading the way when it comes to hiring around the hype on artificial intelligence. for talking about globally advertising more than 3600 jobs, that is from february through april, more than double other lenders and rivals like citigroup and barclays. the fact that we're seeing lenders being this global arms race for ai talent, 40% of open job roles that banks are now for ai related hires. were talking data engineers, this according to the consultancy.

not everybody is that optimistic about the sector. we heard from warren buffett on may 6h said that if something can do all kinds of things paul: some interesting views in the big take article. some of this might seem a little familiar in terms of blockchain and crypto. hype around that. the applications did not live up to expectations. we heard from mckenzie as well, saying there are risks in the technology. it's in its infancy. they talk about ai's hallucinations where the system fabricates consistent sounding information. we are in the hype cycle but mckenzie is saying lots of banks are realizing what is needed to scale. others are trying to figure out what is going on with ai in the future. recommend you check out the article on the bloomberg terminal. still to come trade commissioner for asia-pacific will join us to

talk about the uk's first trade deal, negotiated from scratch post-brexit. our exclusive interview with natalie black in just a moment. this is bloomberg. ♪ this electric feels different... because it's powered by the most potent source of energy there is ... you. this is the lexus variety of electrification ... inspired by, created for and powered by you. ♪

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force. it deals with australia and new zealand were the first to be negotiated since written left the european union. joining us is the uk's trade commissioner for the asia-pacific. natalie, can you give us a sense of how this will benefit the three economies involved, u.k., australia and new zealand? i understand the boost is a boost but quite modest. how much room is there to grow? natalie: hi, paul. it's fantastic to see you, thank you for the opportunity to join you and talk about these exciting deals. as you say, they are the first ones that we have negotiated from scratch since leaving the european union. they do a number of things. they remove tariffs off goods, make it easier for the services industries to work together. they facilitate smes to make it easier for them to trade between australia and new zealand. this is a deal that helps

producers and consumers across a range of sectors. in the long-term it is projected to grow trade with both countries by over 50%. these are deals that will not stand still. it is about how we trade at the moment but it is looking to the future, the australia deal is the first trade deal to have an innovation chapter. we will have opportunities to collaborate on quantum and ai. we are excited about these deals. paul: it opens more pathways for citizens to work in each country. how do you view the exchange of labor benefiting the parties involved? natalie: you're right. we have deep friendships with australia and new zealand. these deals are not just about trading relationships, they are about the people to people relationship. enabling people up to 35 years old to be able to spend three

years in both countries in a much more flexible way and we hope that that deepens our long friendships with both countries. shery: the symbolism of the deal as you mentioned is great. the first fta from scratch. having said that, how do count her critics to argue the fta's from a u.k. perspective may be giving away too much for too little? natalie: you have to look at the picture in terms of what the u.k. is trying to do in the indo pacific. we are committed to this part of the world. we recognize that over the coming years half the world's projected growth will come from this part of the world. half the world's middle classes will be in this part of the world. so australia and new zealand deals are fundamental to our relationships in the region.

it is broadly about what we are hoping to achieve. we are about to sign up to the progressive transpacific partnership. arguably the most exciting a trade deal in the world, projected to be worth 11 trillion pounds when the u.k. joins. so we're going to have a whole network of increased conductivity in the most important region in the world. shery: this is a step for future vision because in terms of numbers you have allowed australia to refuse to lift a ban on a british beef introduced in the 1990's. the reality is that it is free to produce most of this food as well. natalie: when you look at who is going to benefit, it is a broad spectrum of consumers and producers. on agriculture, australia and the u.k. and new zealand were careful to make sure the deal works for all parties. you are seeing a phased approach

and we've got to recognize the reality of how the agricultural sector works in the region. we need to put australia's 75% of australian goes to asia-pacific. there is not going to be a mass entry of beef into the u.k.. that kind of careful thought shows the hard work behind the scenes between and negotiating teams to make sure the deals work for everyone involved. paul: some of the things you were saying about the growing middle-class in the indo pacific reminded me of the rhetoric from the australian prime minister, anthony, last week. talking about the fta between australia and india. they u.k. is progressing the trade deal. have you got any update on that? natalie: we are excited about progressing our relationship with india. teams are in close contact and working carefully. both sides are clear that we need to get the best possible deal for both parties.

we will focus our efforts on making sure that we make good progress, but we want to make sure we end up with a great deal for india and the u.k.. shery: there's a little criticism when it comes to the climate change and climate action, that part of this agreement. what would you say to that? natalie: when you look at both deals, the australian and new zealand deal, you will see a strong environmental chapter, both of which recognize the paris agreement, recommitting to that. so we can have an ongoing discussion with the australian government about how we work together on this important issue. that's an area of focus. it's not about standing still. we recognize the nature of trade

is changing because of the pandemic. having these deals in place gives us the architecture to make sure that we can work together on the most important issues that face our countries. shery: natalie black, united kingdom trade commissioner, thank you for joining us. of course you can find more conversations on tv . watch us live and listen to past interviews. you can dive into the bloomberg functions that talk about. become part of the conversation by sending instant messages during our shows. this is for bloomberg subscribers only. check it out at tv . this is bloomberg. ♪

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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: breaking news out of japan, were getting first-quarter capital spending numbers, rising 11%. this is a massive beat. the expectation was 6% gain coming on the back of the rise of 7.7% the previous quarter. you take off softcore spending, a growth of 10%, beating expectations. this is surprising given that we've had more capital spending across japan. it comes at a time when we are

seeing perhaps more signs of a global economic slowdown already. the first few numbers and data points for the second quarter had signaled some weakness for japan with factory output dropping in april. when it comes to first-quarter numbers were talking about capital spending year on year growth of 11%. we are getting company profit numbers, year on year growth of more than 4%. sales numbers growing about 5%, paul. paul: we will be watching south korea's kospi after it flared into bull market territory and wednesday. the benchmarks showing has been fueled by an investor frenzy. for all things tied to ai. let's bring in asia stocks reporter. impressive gains for the kospi and stocks performing strongly. give us one example, samsung electronics up 40% since the end of september. it is giddy stuff but how

sustainable is it? >> good morning. yes, i'm going to watch kospi today after it failed to land in the bull market even though it did touch on the bull market level. it's one of the best performing stocks in asia. it's rising about 15% this year. however we are going to likely see downside pressure today and profit taking after we saw nvidia stocks falling 6% overnight. philadelphia semiconductor index close lower. a lot of the chip stock on the supply chain and the semi conductors, which have been primarily charging the kospi index to gain more than 10% so far this year. there are other factors that may not be favorable to investors.

we are waiting for the may export trade data today and we are likely to see continued weakness in chip exports. shery: so what does that mean for kospi heavyweights like samsung electronics. we know the market is skewed on tech giants. what are analysts saying about the future trajectory? >> yes, so samsung has been the biggest boost to the kospi. we have seen heavy foreign inflows that were primarily buying samsung. we see 10 billion and out of that more than 8 billion has been focused on samsung. especially on the news that the chip down cycle is going to bottom out soon. and also the view that ai is going to continue to grow.

and there may be more legs to this rally. shery: bloomberg's asia stocks reporter as we head to the south korean open. we are watching the latest on the u.s. house of representatives because we are waiting for the vote to begin on the u.s. debt ceiling deal and of course watching house speaker kevin mccarthy, who has been confident the gop will be able to get done numbers, the votes, in order to pass it here. this is crucial given that then the deal will be headed to the senate. it needs to pass before the june 5 deadline when the treasury could be running out of cash. the market opens next. this is bloomberg. ♪

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>> course his daybreak in asia.

counting down to asia's major market opens as we watch for voting to begin on the u.s. debt ceiling. we are expecting that to start this hour. this would suspend the u.s. debt ceiling. it also needs to pass the house and the senate. >> pmi numbers out of china falling on from yesterday, the terrible official bmis. annabelle is taking a look. >> we will have good trade numbers from korea in just a moment. we have japan and australia coming online as well as cash treasuries. we are seeing those that sling talks in the u.s. to the side

right now. they are endorsing a bit of a skip. michelle bowman saying that rebounding prices could affect inflation. this is what we are hearing. larry fink saying we could see up to four more fed hikes from here. bond yields having a little bit lower. that is the state of play. in terms of what else we are watching on the session, we see the nikkei coming online fairly flat this morning. bank of america saying that japan stocks could reach a record high as early as -- you can couple that with the

reforms we are seeing spearheaded by the tokyo exchange. trade figures are coming in for the month of may. we are watching those exports down 15.2% year-over-year. we are watching the sector breakdowns in particular, in chips, big focus given we are seeing stockpiles swelling by moses 2016. the trade deficit narrowing to $2.1 billion for the month of may. korea is on the verge of a bull market. we saw nvidia slumping around 6% overnight on wall street.

we are watching the korean one there adjusting a little higher against the greenback. let's take a look at the session. we have expectations that the rba could be forced to hike in the coming months. property prices rising nationwide. they came in how to expected. the trade is fully pricing in higher by the august meeting. what else could set the tone for trading? the private pmi readings for china. we did see the official numbers yesterday showing further weakness coming through in the manufacturing sector. the services sector expansion continuing to go. something else has been playing out in oil prices, that weakening demand.

>> our next guest says the deal will bring a sigh of relief to markets but investors should not lose sight of the bigger picture which remains marking. always great to have you with us. tell us how a debt ceiling deal will play out in the markets. we are already starting to see that reaction of investors being less concerned about a potential default in the u.s.. we are seeing it in the cost of insuring u.s. debt. early june as well. >> it looks like the bill will pass the u.s. house of representatives. kevin mccarthy has enough support from democrats to offset dissenting republicans.

hopefully we will see it when the debt deal is put on the table in a few hours. then it has to go to the senate. there is clearly opposition among senators. they say they will try their best to past -- past deal. there is no plan b in the u.s.. the u.s. government will default. the question is how the blame game will play out. i think we will go all the way to the wire. eventually the deal will be passed. that will bring some relief to the markets. >> they expect this debt doesn't actually make the potential possession debris given the suspending because they come with her. how do you see this playing out

for the federal reserve? we have seen conflicting messages coming on whether or not we pause this month. >> absolutely right. clearly spending caps are going to hurt the u.s. economy. the deal will bring a sigh of relief. i think the deal will result in lower government spending. not sure whether that alone will tip the economy into recession. that coupled with the fed funds rate, i think the fed will welcome ahmad recession in the u.s.. that could make the job of the fed easier. it is a deep protected decision and that is bad news.

the fed could pause in june. they could continue to hike rates down the road depending on how inflation plays out. i think the key focus of the fed is inflation. the fed seems to be less risk -- less concerned about session. >> i want to get your thoughts on china as well. another downside surprise. the further you dig into those manufacturing bmis come the worse it will get. this is just the latest in a line of data we hau china. are there any pockets of china that look appealing to you right now from an investment perspective? >> we are not negative on china. the momentum could pick up.

we have good news and the markets. we have manufacturing pmi numbers. i think it is possible this could work. the previously as well as the government. i think clearly the chinese government is very focused on the economy. this latest batch of data would be a concern for them. i would not be surprised it was saw statements coming out of the central bank. >> i want to talk about a couple things in the markets. standouts this year. the cosby on the cusp of a borough market. is it too late to get in? is the best the action still over?

>> we are not negative on japan or korea. one has to bear in mind that this market might be doing well because of the fact that funds are looking for china. you can see japan and korea as alternatives to the slowdown. they are taking place in china so money is flowing out of china. they are benefiting from the out the way from china. if things are looking a bit more upbeat, money could be for the chinese stock market. it could result in the market pulling back. i would be careful.

so many consider hiking rates. cliff the bank of japan very good at keeping is waiting period thank you so much for joining us. let's get to vonnie quinn now for the first wood headlines. 50 credit suisse bankers are suing them for rendering there policies worthless. staff are suing over contingent capital awards. the court has received at least 230 appeals representing about 2500 claimants. pakistan says the plan to import up to 35% of oil needs from russia is a good price. the move will help lower prices.

he says to ship carrying tons are said to arrive in pakistan over the next 10 days. the philippines congress has approved the first sovereign wealth fund. the fund will be able to generate this from economic growth. some say this is in attempt to a swift passage. the test is a yeah has meant more government officials on his trip to china. this is china's minister for information technology. the pair exchanged views on the developing of new engine vehicles and intelligent connected vehicles. global news, however, the 2700 euros and analyst and more than a -- in more than 120 countries.

>> let's turn to annabelle for a check of what is moving in the market. we had those export data there. we saw nvidia giving up around 6% in the session given there are concerns of this rally of a island stocks. which are traitors today prophets. we are keeping an eye on bitcoin link stocks as training gets underway. we did see bitcoin capping its worst month since the ftx collapse. the debt deal could provide some relief to cryptocurrency investors.

>> thank you, and it up. still to come, china was at carpet for u.s. ceos as they grew over the health of the world's second-largest economy. then later, we are going to get the outlook for credit suisse wealth management. this is bloomberg. ♪

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>> you know he's a a few years ago, they do not even go near raising the debt ceiling. i don't think if we pass it, i would take the senate will play with that. i think that they will ultimately get it done. >> we have set the stage for future compromise and fusion negotiation to confront the challenges facing americans. >> you're looking at the house majority leader steve scalise given an outlook on death, deal.

for more details, let's bring in derek. how are we expecting tonight to play out? >> you will see a houseboat sometime starting in the next hour. that could be 50 to 20 minutes, something around there for a vote. we are looking for 218 in the affirmative column. so far it seems like that will be able to get breached. they need to move a little bit quicker than it sometimes does move in order to get all of this done by the june 5 deadline. i think you are seeing that a lot of this will get done. the drama from previous weeks seems to be over. republicans definitely walking away. they get a little bit of a movement on spending levels.

i think some in their conference are trying to sow that we have established that the debt limit is something that can be negotiated on. democrats, ucl a bit of grumbling and complaining in some quarters but by and large they think they came out rather well. so on that biden when talking to reporters has declined to say exactly how good of a deal he got because he did not want to hurt the republican vote numbers. >> you say after the senate next, you are almost certain to get through the house. things are also going to have to move a little bit more quickly than usual. what are the chances of getting this through quickly? clerks there is an oh-fers in washington the descendant was

designed to cool things like a saucer on a teacup. they can't through a full wrench in the gearbox. this is giving people space to air their grievances but i don't see the desire right now to stop it dead in his tracks. no dorsey debose to do that. all indications are that the senate should be able to get this done. i think the market has based all of that in. close it is not just about

finding emotions. it is that command they would get from his peers. this will be the majority of the majority. if mccarthy can get more yeses than those, there can be equally problematic for his peers are bipolar. i think that is the best case scenario that there will be more republicans. there has been a lot of grumbling within there.

the leader of your party comes immediately by consent of the people they are governing. republicans have to like the speaker. i think there was a lot of worry in an ideal that republicans would immediately try and have some problems. even some of the people opposed are suggesting they will not go after mccarthy. close you can get -- bloomberg subscribers go to their terminals. you can customize your settings. this is bloomberg.

♪

>> >> beijing seems to be rolling out the red carpet as the chinese economic recovery sputters. let's bring in our chief nor the asian correspondent. it is surely not a coincidence that top leaders like elon musk and jamie deming are in china now. lake street -- clearly the chinese officials are trying to boost u.s. china ties business leaders. military to military, overtures from the u.s. -- there has been

no dialogue officially. he has already had meetings with officials from the chinese foreign ministry. he has met with the foreign ministry. by comparison, nicholas burns, the u.s. ambassador to china, it took five months after his appointment there to beijing before the foreign ministry would even meet with him essentially. you could see that china is putting a premium on business ties. maybe that is a way to restart dialogue between the two countries. keep in mind, the chinese economy is not doing very well. the pmi numbers were bad yesterday. fbi for interest or investment has invested pulling a $30 billion in the first quarter. the msci china index down more than 50% from the 2021 peak.

the chinese economy and recovery from the pandemic and covid zero is sputtering. they need this kind of relationship with business leaders. never mind the headwinds of geopolitical issues and efforts that china says the u.s. is making to contain china. this came from my exclusive interview yesterday with jamie dimon about the risk associated with doing business in china. we visit a country, we are there . they tend not to leave other than there is more civil war. there is always going to be risk. >> he said decoupling is not

going to happen. it is a similar message that elon musk had with chinese officials. even though it is a lot of the rhetoric bandied about as of late. this company is supposed to be at the heart of the biden administration cost curves on chips and ai. >> that is right. they brought them up to become a $1 trillion company. it is a leader in ai chipsets. now more important, it is critical, considered a gold standard for the critical training for ai systems and ai is at the heart of many of these restrictions coming from the white house and the u.s. government on china to limit advancements and to share such technology with china on ai quantum computing and other chips. the fact that we are hearing

from sources that jensen wang will go to china and meet with clients like that, very interesting indeed. >> that was stephen ingle there with the latest. we are seeing u.s. futures bouncing back a little bit as we await voted to start. the passage critical to getting that bill through the senate. plenty more to come. this is bloomberg. ♪ (announcer) enough with the calorie counting, carb cutting, diet fatigue, and stress. just taking one golo release capsule with three balanced meals a day has been clinically proven to repair metabolism, optimize insulin levels, and balance the hormones that make weight loss easy. release works with your body, not against it,

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>> course looking at live pictures right now from washington dc.

the debt almost certainly going to pass the 218 votes required. the interesting part is how many republicans will vote for this bill. they will give us a sense of how secure kevin mccarthy is in his job. once the deed is done, it is onto the senate where a whole new set of challenges await the debt limit bill. we are just watching some speakers there. for now, let's get to vonnie quinn with the first would headlines. some federal reserve officials say they plan to keep interest rates steady antigen meeting while retaining the option to hike further. village jefferson says this will give the fed time to assess data. the philadelphia fed president also says officials could pose engine barn where it be seen in friday's jobs report.

iran has reinstalled monitoring equipment and boasted this cooperation with international inspectors. the quarterly report found that iran is less likely to face sent jenna when they discuss the nuclear program. the organizations had raised concerns in march. jamie dimon testified last week that the former head of private banking could have decided to drop jeffrey epstein as a client. stephen kelly would have had the ultimate authority. australians house prices client or third straight month in may. bryce is tempted to want -- to 120%.

consumer prices accelerated. global news, powered by more than 2700 journalists and analysts, i am vonnie quinn, this is bloomberg. let's start with japan. they now downgrade to 56 -- 50.6 but still an expansion territory. also at the highest level since october. perhaps not surprising given that we have not seen momentum here. this is much more than expected in the first quarter. we are looking at pmi numbers from other parts of the region.

we are looking at contraction territory. the software pmi manufacturing 44.4. start strengthening but still in contraction territory. let's see how we are trading in the asian session. class will be getting those private numbers. we are expecting for the contraction in the manufacturing sector. this is certainly something that will be laying on the session. we are trading a little bit mixed in the session. they are holding fairly flat alongside australia. they are really looking past what is happening in washington.

both are signaling a preference to keep rates on hold. they can sit indicate two to 5% higher. other factors at play, this will have the interest we are seeing from foreign investors. this is based on a weekly basis from the japanese government. we have a note out from bank of america and they are saying japanese equities could hit record highs early 25. there are a few factors they are looking at for this. we are seeing inflation becoming sustained and cpi holding above 1.5% and that focus still on

corporate governance reforms being spearheaded by the tokyo stock exchange. >> of course, we are awaiting china pmi numbers from these things. this as both wall street calls on china falling flat. as both concerns, also, geopolitical tensions way on investor sentiment. we are joined by the asian stocks reported. we are talking about these inflows into japanese assets. not to mention that the cosby has been flirting with market territory. why are we seeing such a big divergence between the rest of asia and china? >> hello, what a divergence it is. japan is at record highs. india is at record highs.

japan is at a three decade high. what is driving these are domestic drivers. we saw a long reallocation away from china. you are seeing inflation back again. you are seeing investors continue to come to the market even after it reopened, the economy reopened from the pandemic. you are seeing strong consumption trends there. the chief bradley is driving those stocks higher. a lot of local drivers in these markets right now. >> the cosby and the nikkei 225 were reading at 23%. at this point, the funds have

been so underweight in these markets. these markets have been languishing for quite a while. at this point we are seeing goldman sachs same valuations are really not a concern to them. >> let's bring in the head of greater china equity. in terms of china stocks, it has been a pretty wretched year so far in 2023. 23% from a january peak. through all that, tell us something good. what are the right spots? >> firstly, i think the economy is on track to a recovery. the uncertainty is mainly the magnitude, the speed of the recovery which can be off-track

by external pressures for example, the jim littell tension between the united states and china. that is ongoing at the moment. and the weakness against the u.s. dollar helping out on the valuation. that is true in the hong kong dollar. their voices and going forward. >> does that recovery happen without stimulus? do you see anything more that might need to be reduced in china?

>> this is part what is expected. this is economic recovery speed going forward. that can be a catalyst going forward. qwest consumption has parted. it has been a little bit of a mixed picture. we have seen some restaurant chains. they are doing really well.

>> is that where the upside for chinese markets lies? the expectation that the government would come in? >> they are speedy. unless there is external pressure. we are seeing some pressure that is coming in. >> we have a pre-confronting set

of bmis on wednesday. these are very low numbers. what is your take care for china's industrial and construction sector? this is lagging behind what is expected. the raw material price weakness would deftly help the cause. we will not be back.

qwest government intervention and china works both ways. we have not seen a lot of transparency. this is the restriction on this companies. i think they would behave and try to limit these companies.

>> good to have you with us. thank you. we are headed toward the market opening. we are watching chipmakers. they have start again. with prospective buyers on evaluation.

close we will be waiting on a vote on that debt, deal. it is widely expected to pass by the final numbers will be pretty interesting.

>> let's take a quick look at

how we are tracking on markets. we are little bit weaker here in australia. the cost be on the cusp of a bull market. a little bit of softness in the early going. the cosby off by a third of 1%. >> investors have -- -- this will not really resolve underlying issues.

the reason is twofold. one is we don't have a recession. that is what happens when mna comes down this much. it doesn't mean it won't happen. one of the things that is fantastic is we have historically been very focused on the debtor side. it is expanding into the creditors so we can do both sides -- the activity on both sides of that business. >> so good to see you. congratulations on the gig. i hear you on this is how we are setting up. do you guys have an idea when stuff will turn?

>> anything anyone has a great sense of that. there are some key underlying drivers. they are all very positive. the headwinds are market volatility and the interest rate trajectory. the underlying drivers are durable. -- >> that is the long term view. it is all here in london.

this is when the dealmaking comes back and when that mna comes back. do you see that coming back up by the end of this year? because we are very well-positioned for whatever market conditions come our way. because if you look at the news yesterday, goldman calling a couple hundred more jobs. those made a decisive decision here to cut 10% of its workforce. how does this affect jobs across the financial industry? it was figuring out it's fake. is there more pain to be had across the financial industry? >> i think there is a lot of

stress on the regional banking system in particular and then also as we have discussed before, and lines are down 60% over the past two years. for understandable reasons, that is what i would hope companies would do. the combination of that and a substantial decline in the market as a whole is late into the kinds of headlines you were just referencing. >> that is the incoming ceo of lazard. be sure to tune into bloomberg radio to hear from the days big newsmakers and broadcasting live from our studio in hong kong. plenty more ahead. stay with us. ♪

>> >> a decision to hold our policy rate constant at manner should not be interpreted to mean we have reached the peak rate for the cycle. indeed, skipping a rate hike at a coming meeting with a the

committee to see more data before making decisions at the dish about the extent of additional policy firming. >> we are getting close to the point where we can sit a little bit in terms of policy. i don't know if we are exactly there yet. we were thinking we really should skip, not pause but skip increase. quick some fed officials there and their views on the policy path. considerations of where the fed goes from here really hit the markets today, we have the s&p 500 raising most of its gains for the month of may. despite the fact that some of those officials hinted at a potential pause in june. we have the job openings number surging to over 10 million and more speculation that we would see more tightening.

we saw them falling below the 3200 level. right now it is all about what is happening with the u.s. debt ceiling negotiations. that debt limit deal now headed toward a vote in the u.s. house of representatives. that is supposed to happen anytime now. the idea is that it will pass the house and then it will be taken to the senate and this needs to pass in order to avoid a default by that according to secretary gale and when the treasurer runs out of cash but it is not magic number they have to get to today. 218 to move it out of the house to take it to the senate. speaker kevin mccarthy needs to get the majority of the majority in the gop. we have already seen the dissatisfaction in the conservative ranks. " that is the interesting side

of the story. the bill expected to clear the house but how many votes to the republicans give this? if he struggles a getting republicans over the line, it might be another interesting story for the future of speaker kevin mccarthy. plenty of procedural opportunities to slow things down. john thune has said he could see a deal there by friday night. that is it from daybreak asia. coverage continues as we look at to the start of trade in hong kong shanghai and shenzhen. ♪ d. plus, free home delivery when you add an adjustable base. only at sleep number.

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