heidi: you are watching it daybreak asia, coming to live from the morgan stanley australia some in sydney. shery: the top stories this hour, or risk on start of a head for asia after wall street rally led by small caps and financials hints at broad-based strengthen u.s. shares. bloomberg scoop boosting sentiment, china asking banks to cut deposit rates, escalating efforts to boost a faltering recovery. more gloom for crypto as the sec widens a sweeping crackdown accusing coinbase of running an illegal exchange. we saw credo assets resilient because of the risk on sentiment. we had u.s. stocks gaining ground in the new york session, the rotation towards the financials, kbw regional bank index getting more than 5%.

we had the russell 2000 of the small caps gaining more than 2.5%. u.s. futures unchanged, muted early in the asian session. following what is happening with the treasury space, a mixed picture. the 10-year yield below the 378 level as we continue to watch economic growth prospects as well. we have the world bank talking about the world economy being precarious. oil prices continuing to feel the downside, extending the declines that we saw in the new york session. and giving up the gains we saw after saudi arabia's announcement that they are cutting supplies. annabelle: the optimism did not last long in terms of the pricing. what we are watching today in asia, we will be taking a lot of cues from the u.s. session. most futures have been pointing high even though you do not see that reflected in the set up for japan. australia looking to gain .2% at the open. the question is if the market

breadth coming into market, financials is want to watch today. the focus on currencies, the japanese yen still close to the 140 level, the weakness is something that will support japan stocks as we get trading underway in one hour. the other focus in the session for us is what we are seeing in terms of chinese assets this morning. we had the chinese yuan drifting back to its lowest level. that is being pressured by the moves we are seeing in the chinese yuan that is dropping. it is the new support measure coming through from chinese officials asking banks to cut deposit rates for the second time this year. it is a focus on propping up the local economy. heidi: we are keeping an eye on australian risk assets, they usually get a boost when it comes to sense of chinese easing.

gdp data on tap as well, still processing the surprise rate hike from the rba. this week we will be hearing from governor philip lowe. we spoke at the morgan stanley australia summit to the australian ceo richard wagoner. he said it does not matter how they get there, they want the certainty of getting to the peak rate. >> i think the consumer is hurting. it has already turned as you have seen with a number of consumer stocks already coming out with downgrades. i would recommend caution from this point. we at morgan stanley have one more hike in our forecast. and so i think it would be great to see the end of the rising cycle so that we can get on with the next cycle. shery: we will see how the recovery in the chinese economy

affects australia, its biggest trading party -- trading partner. number earning that chinese authorities have asked the nation's biggest banks to lower their deposit rates for at least the second time in less than a year. let's bring in bloomberg's global market reporter. the question is, how much does this matter given that you are making it easier to lend, will consumers actually borrow? ye: this is a great question. we know that the chinese economy is under pressure. we see the pmi manufacturing is retracting again. local government, financials under pressure. the markets are looking for the central banks to provide stimulus signal. this could potentially be the signal to cut deposit rates, and open up space for the pboc to produce some lending rates to provide support for the economy. you are right, this is not

really the price of money that is the issue. it is a lack of confidence and demand for credit that is dragging. it remains to be seen how effective low rates is going to have. heidi: the broader lack of confidence, this is not seen as an incredibly assertive move from authorities. does that mean we will see sluggish when it comes to chinese equities? ye: the equity market has been arranged trading for a while. people are waiting for stimulus, but an expectation of a large stimulus is not high. at the same time the chinese government provides 5% of gdp growth target this year. expectation is not that high in terms of large stimulus. this more clear trend in the

foreign strange market, where the chinese yuan is under pressure. if the chinese government is going to provide more stimulus, it would chinese -- it would cost the chinese yuan to trade lower. shery: how effective is monetary transmission right now in china, especially when you consider that you have the divergence in monetary policies with the u.s.? ye: absolutely, this is the classic impossible trinity issue. you cannot have a stable exchange rate while maintaining open market and independent monetary policy. it does not provide -- it does provide constraints, there is also a lot of talk about japanese vacationing on the chinese economy. the central banks can push borrowing costs lower, it would push on the string.

that is a difficult moment. heidi: that age old challenge. let's get more when it comes to the latest on crypto, the sec suit against coinbase for running an illegal exchanges following hot on the heels of its action against binance. su keenan has been following all of this. a common denominator has been rig leaders alleging that coinbase uses tokens that are unregistered securities. su: this is a one-two punch i the sec that makes sure there line of attack in alleging that coinbase is trading in multiple nonregistered securities. the suit is basically stating its u.s. business is illegal. you see the reaction by the stock, it took a dip yesterday on the suit against binance, and

was down as much as 20% on the latest su against itself. it minister cut most of that loss in half by the close. the sec suit against coinbase alleging the firm acted as an on restaurant broker, that it broke rules with its staking service, that is something that brian armstrong has repeatedly denied. it follows on the heels of the major sweeping suit, humor looking at the tweet from brian return. he said instead of publishing or clear rouble, the sec has taken a regulation by enforcement approach that is harming america. if we need to avail ourselves the courts to get clarity, so be it. sounds a lot to many observers like he is throwing down the gauntlet here. the sec's chief is working together with 10 different states to bring this case against coinbase, the largest u.s. crypto exchange.

it is designed to protect the u.s. investor and the integrity of the u.s. markets. he made an analogy that if the nyse operated at hedge fund and bet against itself, that would be what he is trying to protect against. it follows on the heels of the binance lawsuit which alleged much more serious allegations, 13 in total, combing wing of billions of dollars in funds, allowing crypto to be stolen and laundered is what the sec is saying. and therefore it voided or try to circumvent the anti-money laundering rules. th billionaires excited to fight back vigorously. shery: we are seeing crypto assets rebounding, where do supporters see this going? su: they see it going to court. if you drop into the bloomberg and look at crypto itself, the highs and lows are something many of the diehard crypto fans

have been used too. we are down more than 70% from the peak. even the crypto winter that crypto just came through has not deterred a lot of investors from getting in. the debt we have seen in the last 48 hours to many of the crypto coins will be short-term because many of these coins are traded around the world. as for coinbase, a different story. analysts are saying this is a life or death case for coinbase. it operates entirely in the u.s., and more than 50% of its revenue could be immediately at stake. armstrong seems to indicate they are going to court. heidi: su keenan there with the latest. let's get to vonnie quinn with the first word headlines. >> u.s. secretary of state antony blinken is said to be planning a visit to china in the coming weeks for talks with top officials. sources tell us the discussions could include resident xi jinping as a quest to zoom

high-level -- to resume high-level communication. the price of wheat searched for a fifth straight day after the destruction of a dam amid intensify fighting between russia and ukraine. the torrent of water forced tens of thousands of people from their homes in southern ukraine and is renewing fears for the safety of europe's largest nuclear power station. kyiv and moscow blame each other for destroying the dam. >> what happened today without any doubt, should be called the biggest man-made disaster. russia has proven once again that the whole world -- they act like a terroristic state, and i think they used this disaster, it seems to be an ecological weapon of mass destruction. >> the pga tour and saudi backed liv golf have agreed to a

merger. it ends a battle. the deal marks a significant victory for saudi arabia which backed liv golf. the new tie up is lightly to draw antitrust scrutiny from you leaders. sequoia capital is picking up into three entities, splitting the china and u.s. operations as tensions grow. the firm will separate into independent partnerships and separate firms operating under different brands. this move is expected to take place no later than at the end of march of next year. global news, 24 hours a day, powered by more than 2700 journalists and analysts in over 120 countries. this is bloomberg. shery: still ahead, our interview with sec chair gary gensler on the regulators widening crackdown on the biggest crypto exchange is. later, anz tells us why they see the oil market tightening.

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>> we think there will be volatility ahead. we are thinking we are seeing a tremendous amount of tightening and we are dealing with a period now where we are exciting the economy to slow. it will lead to ongoing volatility, we could experience it in fixed income. we expect volatility to work its way to equity markets. it will create challenges for opportunities for an investor. shery: the pimco cio speaking to will big tv. our next guest says changing dynamics in the markets of --

have created focus for active investment antigen. winning us in the new york studio is head of active equity. always great to have you with us. what does this mean in this market environment? we have seen a bit more rotation, how comfortable are you with the breath right now. >> the breath is pretty narrow. it is very focused on technology, and the seven main stocks in the s&p. that is frustrating. but when i talked to our investment professionals, what excites them is that fundamentals really do seem to matter. companies at the more mid and smaller cap space, if they are doing well, their stock prices are doing well too. if they can produce free cash, if their balance sheets are holding up, if they are competitive in the right

direction, their stock prices are moving in the right direction. that is different than what we saw in 2021 and 2022 when most ships were rising together or falling together. and very little distinction on the micro level, it was all driven by macro. shery: a lot of tech giants rallied because of the defensive call. even with all of the uncertainty, the rally seems to continue again given that they are perceived as safer. are there any other sectors where you see those strong fundamentals? ann: there are some sectors that when i talked to ever portfolio managers, health care is an area that had lagged in the recovery and an area that they see a lot of opportunity. but outside of that, it is a cross market caps, small and mid-cap especially, there is a lot of opportunity.

across sectors. in across value and growth. there has been a focus on looking at growth, value, and it is across all of those places right now. really looking at stock selection and not buying one industry, one index, looking purely at finding the right stocks to own right now. heidi: so much has been set in terms of the contribution of a handful of ai exposed stocks to the rally. is it overplayed to the point where you would not be looking at that theme as an opportunity, or are they underplayed -- are there underplayed ways to do this? ann: some of those stocks have good fundamentals and strong balance sheets. we do have teams that are exposed to some of those names. but the risk reward is less favorable. because the multiple expansion has been really great in those names.

where we are seeing more opportunity is away from those names and in other areas of the market. if you look at earnings, you have seen very little earnings momentum happen. it has mostly been multiple -- multiple expansion that has happen. earnings are only up 1%. outside of that, we have been almost in an earnings recession up until this last quarter. a couple of stocks cannot continue to pull earnings along. heidi: how do you feel about the consumer? ann: the consumer has been strong, but we are seeing signs of practice. when you look at retailers in the u.s., it is all over the board. we are seeing strengths in consumer durables, what you need, groceries, things like that.

but in the retail space, we are starting to see crack's, macy's showed disappointment. i think the consumer is starting to show signs of weakness and that is an area we are watching. shery: do you watch chinese consumers as well? we are exciting more stimulus to come from there. we know they have acted as the anchor for the emerging markets broader space. do you like any of those names? ann: i do think emerging markets are interesting. what china is a huge component. the stimulus we are starting to see with the banks in china, or at least the chinese suggesting they need to lower the rate, is interesting because that the recovery has been more on even then anyone would have believed. -- on even then any wouldn't have believed. there is probably more to come.

we have to be cautious about the data we are seeing coming out of china. i don't take it has helped the global recovery as much as we thought it could. heidi: always great to chat with you. global central banks and where they go from here is a big part of how we are seeing a lot of sentiment that is being driven by uncertainty when it comes to investors. what we are exciting to hear from philip lowe, he is poised to speak any moment at the morgan stanley australia summit. he is protected to talk about the path to a soft landing, significant risks and the back of the surprise rate from the rba, suggesting that there is more upside risk when it comes to the inflation outlook. perhaps more hikes to come. talking about they are on alert as these two high too long inflation risks that need for

further policy tightening may be required housing is want to watch out for when it comes to australia, they could move from the headwind to tailwind for spending your it and looking at wage growth. a number of the states are looking at the wage policy moves, sustainable age growth, there is a risk there as long as that week on activity pace is still missing. shery: it was interesting that this came on the back of the decision office really a two race the minute -- to raise the minimum wage. not surprising governor low is talking about hikes and being cpi back to target at a reasonable time. we have plenty more to come on daybreak asia and more on the rba's latest actions. this is bloomberg. ♪

shery: a quick check of the latest business flash headlines. the japanese drugmaker says it is expanding its sales and development staff overseas aiming to handle its cancer drugs business entirely on its own. that follows its tieups with astrazeneca on a breast cancer treatment on track to generate over $10 billion in annual sales. the president told us exclusively that the company expects a rocket on their growth in the next few years. >> the second or third rocket engine will be fired, then the tremendous growth we can expect. shery: merck is suing the u.s. over a law that would allow governments to negotiate prescription drug prices with pharmaceutical companies. the law aims to cut costs for

the elderly and disabled patients. merck says it is tantamount to extortion. it is the first major drug company to bring a legal challenge, them measure is an president bite into legislation. boeing will delay deliveries of its 787 dreamliner after uncovering flawed parts. the plane maker says it may affect 90 already built jets. boeing and u.s. regulators have not cited if they need to take action for jets currently in service. production will not be halted and they expect to deliver about 70-80 dream lenders this year. two groups of chinese carmakers are said to be among those leading the bids for a plant that ford is selling in germany. sources tell us byd along with a group of several smaller chinese manufacturers are in talks with ford as it looks to seize production in 2025.

ford is seeking to reach an agreement on the sale later this month. heidi: let's take a look at australia assets, we are hearing from the rba governor philip lowe speaking at the morgan stanley us really a summit, reiterating that they are being attentive to the risks of inflation staying too high for too long. he could see more hikes to come. take a look at how we are trading, a little bit of upside when it comes to equity assets, .3% higher, watching the aussie dollar had led the gains in g10 with a 1% rally to the stronger since may 16. the question is whether that strength can be retained. this is bloomberg. hi, i'm jason and i've lost 202 pounds on golo. so the first time i ever seen a golo advertisement, i said, "yeah, whatever. there's no way this works like this." and threw it to the side. a couple weeks later, i seen it again after getting not so pleasant news from my physician. i was 424 pounds,

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shery: this is "bloomberg daybreak: asia."

lamar has learned germany is nearing a more than $5 billion deal for six submarines in india. they are likely to submit a joint bid for the project. the chairman defense minister is in new delhi and is expected to witness the signing of the agreement. the u.s. sanctions several companies in iran, china, and hong kong, including tehran's defense attache in beijing, saying they obtained instruments such as gyroscopes and nonferrous metals to help iran's missile program. they were also involved in a network that used chinese companies to get centrifuges for iran's defense industry. the former new jersey governor chris christie became the latest republican to enter the 2024 race for the white house. in an already crowded primary field for the republican

nomination. the 60-year-old filed paperwork for the federal election commission ahead of a town hall in new hampshire, where he is formerly announcing his candidacy. -- formerly announcing his candidacy. a sweeping crackdown on crypto by suing coinbase for allegedly running an illegal exchange. regulators argue they evaded rules by letting users trade numerous tokens that are on registered securities. the sec filed a lawsuit just a day after it sued binance over a series of alleged violations. 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. ♪ shery: staying with the crypto crackdown, the sec chair explains the industry in this current state could undermine trust in capital markets. i spoke to david westin about the actions against coinbase and binance. >> this is actually a straightforward securities case, but it is in the context of crypto. let me just say that crypto

tokens, the investing public leads that same disclosure, full, fair, and truthful disclosure. in the crypto space, it is largely built on a business model that is known compliant with -- non-compliant with the securities laws. there is commingling of the customer funds. it's as if the u.s. stock exchange is operating a headphone fund and trading against our customers -- their customers, or add to it they don't have proper controls to avoid manipulative trading on their platforms. here binanbce had a sister organization called sigmachain. so, absolutely it is straightforward protect the public to the securities law, build confidence and trust. but it is in the context of crypto. >> you have said elsewhere that there are certain custody rules year that they have to pay attention to, when it is something like binance.

are you looking at those for possible violations? >> i'm not going to get into anyone investigation or case that we have not yet brought. but i would say this, to all of those investment advisors out there that may be interested in trading in crypto, your client funds, under an existing 2009 r ule, have to be properly qualified custodians. and that is not what you have on binance. make no mistake, in fact, as we alleged, your funds are in custody of binance. you don't really know where it is. you know mr. zao is ultimately controlling it but may have actually moved it to a sister organization. there's another one that we alleged, meritpeak. with millions of dollars of funds they are moving to.

haidi: let's get you back to hong kong, with annabelle taking a look at the shape up when it comes to the asian trading session. abigail: also we are seeing a crypto market underway this morning in asia because it is interesting to note, even though the sec has coinbase, binance in its sights. we just heard from gary gensler, we are seeing crypto prices moving to the upside this morning. there's a lot of analysts out there like td securities saying that actually the suits could bring more clarity into the sector, from a regulatory perspective. because of course until now the u.s. has been really focused on enforcement actions instead. we are seeing bitcoin for instance pushing up 1%. let's take a look across what happened in the u.s. session. some interesting moves, fairly mixed. gains into the close here. what is interesting to note is we are seeing the moves

starting to become more broad-based and moving away from those big tech make a cap names into smaller cap stocks. we are seeing the russell 2000 outperforming the s&p 500 by the most since 2021. let's take a look at how this is setting us up for the open in asia today. we are looking to take stock of these gains and futures. we've got them coming online for japan. a gain of .6%. watching china very closely. particularly the offshore yuan continuing to weaken this morning, pressure coming in on china's's 10 year yields dropping. down to their economic prospect that chinese officials are asking banks to cut their deposit rates for the second time within a year. certainly more measures coming through to support the economy there. haidi: perhaps more tightening measures expected in australia as well. we are seeing the rba governor speaking at morgan stanley's

australia conference just taking the stage. this is his speech entitled "a narrow path," how the rba is having to navigate the conflicting factors here. he will talk about nominal wage growth and -- talk about the gap between nominal wage growth and productivity. the governor is expected to reiterate the further policy tightening. i'm hearing the applause as the government takes the stage behind me. let's get some analysis from james mcintyre. joining us out of hong kong today. what do you make of this narrow path the governor's expected to talk about? >> thanks, haidi. the past has gotten narrower -- path has gotten narrower, delivering the rba hikes back to back. both of those were a surprise to us.

they tilted the rba very much along this path that having gone through the speech he just delivered, they are very concerned about inflation expectations and where those are going, and whether that labor productivity, the wages versus labor productivity trade office something that could come unstuck when it comes to that downward glide path for inflation that is in the mix. it is in the data we've got. we've got a weaker economic outlook coming through for the economy. there is a very narrow path the rba is treading there. there are very clearly focused on making sure it doesn't come through and come unstuck on that path on the inflation front. shery: especially since about two hours from now, we are expecting the first quarter gdp numbers out of

australia to show the recovery has actually stalled. i know the numbers are backward looking. but what are we expecting in terms of the economic outlook? >> well, we've got a lot of pieces of the gdp puzzle that have come through the last few days. a consensus is for a very weak outcome quarter on quarter. my own figuring is a .1, from the .3. we have a lot of the information. what we have seen from the data that's come out is it's really been a mix of a boost from government spending, but net-net it is going to boil down to what's happening with those consumers. those consumers, looking at the first quarter gdp, we have seen 350 basis points of hikes by then. we are now up to that 400 basis points with the rba delivering yesterday. the consumer side of the economy is going to be really key here. it's looking like is going to be weak from the retail numbers. talking about the flatlining and

retail sales. the other thing that's going on in australia's economy, if we talk about the quarter on quarter gdp being .1 or .2, we know in the quarter that the population has grown. is been surging. it's grown by about half a percentage point. even if the economy might expand, we might be avoiding a technical recession of two negative quarters of gdp growth in a row on a per capita basis. that economy is very weak. it is likely to remain in a recession for the most of -- for most of this year thanks to what the rba's debt on the inflation front. shery: new zealand's james mcintyre there with an outlook for the astral and economy. coming up next -- the outlook for oil prices and broader global commodities. we get analysis from the anz senior commodity strategist, daniel hynes. this is bloomberg. ♪

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without the drama. personalized advice so impressive your money never stops working for you with merrill. a bank of america company. it's easy to get lost in investment research. introducing j.p. morgan personal advisors. hey david. connect with an advisor to create your personalized plan. let's find the right investments for your goals okay, great. j.p. morgan wealth management. shery: take a look at how commodities are trading at the moment. oil under pressure after we saw the downside in the new york session. really giving up those gains from the news saudi arabia is now cutting more supplies. we are seeing the strength in iron ore for a few days already given of course a little bit more optimism about the chinese economy. especially given bloomberg has learned we might see more

monetary policy we saw wheat -- monetary policy futures. we saw wheat futures search. we are expecting dry weather in australia. to slash australia's wheat production. haidi: let's get more when it comes to the outlook for crude. joining us is the anz senior commodity strategist, daniel hynes. always great to have you with us. we saw a couple of things, obviously the background demand, outlook concerns. we heard the u.s. is releasing oil demand halving as diesel consumption stumbles. how bad is the demand side of the equation right now? >> it is taking a glass half-empty sort of approach to the numbers we are seeing. we've always expected a little bit of weakness. particularly for europe and the

u.s. it's holding up relatively well. it's certainly been mitigated somewhat by strength in other areas of the oil market. on not to -- i'm not too worried about the demand outlook overall for the developed markets. there's been a lot of noise about the industrial backdrop, no manufacturing backdrop -- the manufacturing backdrop, which has struggled to gain some sort of momentum. when you look at the mobility data, the airline numbers, and then the indications that international travel particularly through asia is

going to increase with less restrictions out of china, it looks like a relatively positive backdrop for the men and china as well. -- for demand in china as well. it does not look as bad as i think markets are probably indicating by the price action and line up. haidi: less robust when it comes to demand for china for iron ore, though? >> certainly, the issue with the property sector is something that's been bubbling away in the background for some time. the easing of restrictions late last year and the possibility of further stimulus measures provided some thought for a turnaround but clearly that has not happened. there were reports just this

week there will be again some restrictions and requiring downpayments on properties. it still feels like the consumer and china is sort of very reluctant to put money back into the property sector. particularly for an investment reporter: -- particularly for an investment. new construction in particular. for the moment, we still feel like there's a little bit of positivity around the property sector for completion and that could result in relatively ok demand for some materials. lik cooper. resulting in stronger demand. -- like copper. resulting in stronger demand. we could see that turning around in the near term.

it does look like for us a negative background for iron ore. shery: to your point on copper, we actually saw them and improving a little bit. but we have also seen some false starts for copper. what is the outlook for the price here? >> it depends where you look. suddenly that broader sort of manufacturing outlook does cast a bit of a spill across the market -- spell across the market. when you look at government efforts to increase in effort and infrastructure, energy, technology, something they are trying to boost the sales of, like electric vehicles and that market, they are continuing to invest strongly in green infrastructure, certainly solar and wind, going gangbusters. there's been a little bit of upset against that manufacturing backdrop.

i think that will take hold a lot more the second half, as things sort of stabilize. shery: are there any commodities we are overlooking at this point especially when we are a little bit -- when we are seeing a little bit of a mixed picture when it comes to the dollar demand and the strength and we as of the dollar for the rest of -- weakness for the dollar as of 2023? >> the whole sector has been wiped down. there's unexpected strength in the u.s. dollar. i do think there will be a point in time where they will start to pause on interest rate hikes and that should provide some relief for the u.s. dollar. which in all aspects has been a strong bacon for commodity markets. that weaker dollar that we expect to see the second half of this year should provide some additional sort of tallys for

markets like gold and sort of combined with the strong demand particularly from central banks. haidi: daniel hynes, always good to have you with us. be sure to tune into bloomberg radio. you can hear more from the day's big newsmakers, getting deep analysis from the daybreak team broadcasting live from our studio in hong kong. listen to our app, radio plus, or bloombergradio.com. stay with us. ♪

shery: a japanese drugmaker, planning to boost capacity to handle their cancer business on their own. they are tied up with astrazeneca with a treatment tract to generate over $10 billion in annual sales. the president told us exclusively where the company sees growth in coming years. >> we are very much confident in the upcoming data release, because the adc is very much excellent -- an excellent

platform technology. the excellence was proved by the clinical data so far. therefore, using this technology, we have other adc programs and compounds. our confidence in the future clinical data is enhanced. >> the stock has risen more than five times since 2017. how do you envision your company's growth after the plan? where do you want the stock price to be? >> thank you. i think the current stock price was composed by our value of the pipeline product and also the

nr2. if the share price can be evaluated in that same way, we are very much confident in further increasing our share price because of the adc programs. beyond 25. we will be launching the other adc programs. therefore, our growth, if we say an oncology rocket has been's launched -- has been launched smoothly and rapidly. however we can say it's just the very first rocket engine that was ignited. but in six plans.

the second or third rocket engine will be fired. then the tremendous growth we can expect. >> so there is a hype that ai is revolutionizing the industry. how does ai fit into your organization? >> already in our research laboratories and also manufacturing site. we are exploiting the ai technology for discovery, research, manufacturing. it is very much effective and we are enhancing the activities. on top of that, people are talking about chatgpt or other new technologies -- i think in our company, in our industry,

there are a lot of opportunities to make such ai technologies. we can save our labor or fde's and shift those people to much more productive work. have -- i have big expectations on that point. haidi: that was the daiichi president speaking exclusively to bloomberg. this is what we are watching into the market open. we are waiting to hear from the rba governor, just speaking behind me at the australia summit. there could be further tightening when it comes to monetary policy in australia after this week's hike from the rba.

watching the likes of the aussie dollar. we saw the 1% jumpm whether those gains can be held onto. we saw chinese assets and focus after the overnight session. shery: we saw theyuan weakening and bond yields falling across china given bloomberg learning that we may see more moves coming from monetary policymakers to booost the economy. coming up in the nexthour, we will talk market strategy with mbmg group. they will tell us why they have downgraded the china growth forecast. this is bloomberg. ♪

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shery: this is "bloomberg

daybreak: asia." we are counting down to asia's major market open. we saw gains in u.s. stocks into financials and small caps. we have the potential action from chinese policymakers to support their economy. haidi: we will see whether that will be supported for risk assets particularly into the open of the chinese trading day. i'm here at the morgan stanley australia summit. they've been talking about the risk of inflation being sticky, staying higher for longer. also the possibility of further tightening from the rba even after the surprise hike this week. shery: certainly interesting -- annabelle: certainly interesting lines coming out of that. we are tracking a few different factors.

firstly the lead and we had in the u.s. session. he mixed trading day. it did give way to gains. we are seeing japanese stocks coming online to the upside. then he could to pursue five -- the nikkei 225, .3% higher. we are seeing persistent yen weakness. we are watching the japanese bonds in particular because we are seeing improving liquidity in futures. that suggests the pressure on the boj to make any sort of policy to week -- tweaks any soon is starting to ease. some saying we could see changes as soon as july. also the start of trading here for cash treasuries underway. that is fairly flat to start the day. let's take a look at what's happening in korea. you mentioned the focus we are seeing in the rotation to financials. big names have been amongst the big gainers. still it is the rotation into

the smaller caps and the russell 2000 beating the s&p 500 by the most since 2021. we are seeing the cost beginning this morning. the korean won below the key psychological 1300 level. let's take a look at australia today. you have been getting those lines coming up from the rba governor, phil lowe. the focus very much on this risk now that the rba is tracking inflation and it could stay higher for longer. the rba had been expected to be one of the first central banks and asia to start up a bit -- start to pivot or end the tightening campaign. we are keeping an eye on the bonds space. brent crude again, it is really that move lower we have seen all of those gains post-opec now given up. haidi: saudi arabia's

announcement, not lasting that long. let's turn to vonnie quinn with the first word headlines. vonnie: the u.s. secretary of state is said to be planning a visit to china in the coming weeks for talks with top officials. sources say they discussions could include president xi jinping as the u.s. looks to resume high-level communication. lincoln had planned to visit beijing in february but scrapped the trip after what washington said was a chinese spy balloon crossing over the u.s.. the price of wheat surged for a fifth straight day after the destruction of a dam amidst intensified fighting between russia and ukraine. the torrent of water may force thousands from their homes in southern ukraine and there is renewing fears for the nuclear power station. moscow and ukraine are blooming each other for destroying the damp. >> what happened today should be called the biggest man-made disaster. russia has proven once again

they act like a terroristic state and they used this disaster as an ecological weapon of mass destruction. vonnie:vonnie: the pga tour and liv golf have agreed to a shock merger. the deal marks a significant victory for saudi arabia, which backed liv golf through its sovereign wealth fund. 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. ♪ shery. shery: we are seeing broad upside in risk assets early in the asian session. our next guest says any dips in china and japan are buying opportunities, even though those dips could still get deeper. with us as the cofounder and

managing partner at mbmg group. this must be longer term horizon. when you say the dips could get deeper but they are still buying opportunities, what exactly are you talking about? >> so, we are drawing a big the extraction -- a big distinction between chinese and japanese markets and a lot of the western markets. particularly after what's happened with the debt ceiling in the american market. in each case, they are not going to bring a bill. the american market -- tech and the main stuff we are seeing really is in danger of hitting a peak and crushing quite badly. we don't know when the peak is going to come. similarly, if we look at things happening in asia, there is a lot of constructive things happening in china, in japan. the whole policy framework is completely different. it's constructive as opposed

to after the debt ceiling -- which was destructive. which is how we categorize america. we see increasing amounts of supportive monetary policy, fiscal policy. and some kind of coordination between those. in china, in japan, we start to expectancy ultimately that feeding through to the economy and being supported. particularly in things like the consumer. we see this as a buying opportunity. but we don't think anything is going to be a straight line. the american markets are not going to ring a bell when they are at the top and the chinese markets are not going to ring the bell when they are in the bottom. don't go all in because there could be bigger opportunities and bigger dips to come. shery: how constructive are you on china when we are talking about seeing those bigger banks cutting their deposit rates? although we have seen this

sort of moving the pass, there hasn't necessarily been demand. >> i think you've got to look at the totality of it. we are also starting to see some support coming back for the housing sector. we are expecting to see stimulus into the housing sector. the whole banking focus is going to be policy driven by the government about trying to get people spending and investing in sectors like property again. it doesn't happen overnight. in the past, policymakers and china were able to get much more -- get a much more direct response to policy than they are able to get today. there is a lag time and an implementation issue so it's not immediate. but that is a sign that the focus now is really all about trying to stimulate domestic spending.

shery:shery: given your skepticism when it comes to the u.s. market at the moment, the u.s. economy and the policy issues you have identified, what other international opportunities would you be hedging into? >> you have to remember, this creates opportunities. this is why one thing that's been really successful the last 18 months or so has been equity hedge strategies. long short strategies have barely had a losing month in that time, when everything else has really been a roller coaster. what it does is it really continues that bank drop that we've had. you'd expect long short in particular, equity hedge and general are having a pretty good time because it's really creating good shorting opportunities. over the last month or two, it's really been long tech

and short everything else. we could easily flip that and go into the reverse. globally and in america. even in asia, equity hedge and long short are a really good way to play things. but you get volatility. it does create a lot of opportunity. shery: we are just getting sort o more comments from philip lowe behind me, saying the rba is committed to getting inflation back down. interestingly we are hearing from the west back ceo saying they've seen delinquencies start to move up and an increasing number of troubled customers, trying to weigh out their options. is the risk of a policy misstep for a lot of these central banks high at the moment and how vulnerable do you see consumers and businesses? >> that's a great point, haidi.

that's pretty much been 100% i think. most of the west has followed not such an extreme version but basically sort of followed the fed's blueprint for how to make a mess of an economy. we have seen was happening the last few days. the humanitarian situation that's happening in the ukraine at the moment. that's potentially an inflationary event. it doesn't matter what the rba are doing. they are not going to do anything to drag down wheat prices by keeping the aussie dollar cash rates high. but they are going to hurt the australian consumers and australian businesses. and this standoff is getting worse and worse. we've got up -- we've got a bleak prognosis. have followed a similar kind of pasta the fed.

may be not as extreme. maybe they will jump off that path a little bit quicker. that is really the key. if we do see pauses, they might be presented as hawkish pauses. don't believe the hawkish pauses. they could be a pause that turns out to be more dovish than the policymakers are intending. because they are really starting to lose control of this. we don't know how quickly that's going to happen. economies and markets are trying to take back control from policymakers at the moment. but it's how much damage has been done by the fact we've had 18 months of such aggressive monetary policy. shery: yet when we look at asian markets right now, the party seems to be continuing. lou correa won, jumping to a two-month high after -- the korean won, jumping to a two-month high. we were talking about japan. the nikkei at that high, continuing to rally. given the gains we have seen in such a short time, we still have

room for upside? >> i think we do. you're absolutely right there. you've got to be careful. this is why we are saying, when you get pullbacks, try to take advantage of them. but in a more nuanced way. don't go all in. i think the big difference is, in asia -- in asia, we do see significant potential for short, medium, and long-term upside but also quite a lot of downside. it is still balanced in asia. what is happening in the west is taking away the upside for most western markets. in asia, we still have that. but we also still have the downside. we are not going to be completely immune from the fallout from western policies. when america slows, the whole world will slow. asia will catch part of that. that's why you've got to be selective.

domestically focused companies in most markets are going to be a lot more interesting than the big exporters. i think a lot of those export markets are going to change. we will see structural changes in asian markets going forward. we are definitely going to see opportunity as well as downside. haidi: don't believe the hawkish pauses, we will get that on a baseball cap. [laughter] thank you to paul gambles. certainly believing in the won today. annabelle: we are taking a look at the movers as well we are focusing on this morning. the domestic facing companies. these chip names, and focus and japan this morning. the japanese government. has renewed the chip strategy. the goal is to triple exports of

locally made semiconductors by 2030. we are also keep an eye on japanese airlines today. we have reporting out that japan airlines could be announcing marriages -- announcing major airbus orders coming through for the neo airfract saying it can offer more range and fuel economy. let's change on. another sector we are focusing on is what's happening with the crypto link stocks this morning, given that we had the coinbase news overnight, the sec now targeting this exchange after binance just a day earlier. the impact that is having so far in japan, korea names linked to crypto, it is a little bit mixed. we are seeing those moving to the upside and japan -- in japan. haidi: we are still really

observing some of the comments being made by the rba governor speaking behind me at the morgan stanley australia summit on the back of that surprise rate hike we had from the rba yesterday, flagging potentially the need for more tightening to come. the risk and the upside when it comes to stickier inflation for longer is really the core theme to the speech called "a narrow path," talking about the strong correlation between the inflation abroad and australia. the rba's patients has -- patience has a limit and that the inflation levels has really tested that limit, that the recession risk has changed. there has been no shift when it comes to the inflation tolerance. quantitative tightening really is an effective policy tool when you have the rates. whether the 2% inflation framework is still appropriate,

he said the rba did too much stimulus during the pandemic and that was really core when it comes to some of the more difficult guidance that was given by the rba that eventually turned out to be wrong. they are still committed to getting inflation back down. much more to come here on "daybreak: asia." this is bloomberg. ♪ get help reaching your goals with j.p. morgan

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shery: the sec chair, gary gensler, i'm crypto gary -- on crypto regulation. we are now seeing bitcoin erasing all the losses we saw after the sec sued binance. today the agency accused coinbase of running an illegal exchange. su keenan has been following this. it looks like there could be a court battle on this. we heard from coinbase. su: sonali basak talked to the top attorney at coinbase and they are bowing to take the legal battle all the way to the u.s. supreme court, the highest court in the land, if needed. they believe any court that would take a look at this might find the sec fundamentally wrong. of course the sec, dealing a one-two punch, claiming both binance and coinbase are illegal

exchanges. the stock took a hit yesterday when the sec sued binance. it took a big hit, down as much as 20%, before recovering when the sec lobbed a 101 page suit at coinbase, alleging the firm acted as an unregistered broker, the same as binance. that it broke rules with its staking service. offering a return for putting up tokens to help facilitate transactions on the blockchain. it follows again the heels of the 136 page sweeping lawsuit against binance monday that alleged commingling of funds to the tune of over a billion dollars. the ceo of coinbase, brian armstrong, struck back in a tweet saying "instead of publishing a clear rulebook, the sec has taken a regulation by enforcement approach," he believes this is harming america and says if we need to avail ourselves to the courts to get clarity, so be it. a gauntlet has been thrown down.

the sec, aiming at sites -- its sights at coinbase. they want to see protection of the consumer and they want to ensure integrity of the market. the two suits combined in a matter that is huge in terms of impact for crypto as a whole has basically determined more than a dozen coins are unregistered securities. this is a foundation upon which it is basing its lawsuits. these coins, not registered, therefore they are arguing they are illegal exchanges. shery: that question has hung over the crypto industry for years. we are seeing crypto trading sort of stabilized. what is next? >> probably this court battle and also many in the crypto industry believe we are getting clarity. we have seen huge dips in

crypto before, mainly bitcoin. and that has come back. many of the supporters of crypto are immune to some of the huge drops, as your typical trader might be. analysts say the denseness and price is likely short-term because they trade on international exchanges. different story for coinbase. analysts are saying that it could see up to 50% or more of its revenue at risk. that it is a life or death issue for coinbase. this could possibly explain the rationale why coinbase feels so strongly that they are going to have to fight pretty hard in court because of this suit. shery: su in new york with the latest. we will be speaking to the coinbase ceo about the lawsuit on bloomberg technology later on wednesday. do not miss our conversation with brian armstrong at 12:30 p.m. new york time. this is bloomberg. ♪

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shery: the pga tour and saudi backed liv golf in a surprise move have agreed to a merger, ending a seismic dispute between the two tournaments, which had billions of dollars at stake. let's get more details from our legal news reporter in san francisco. what does this mean for the very lucrative pro golf business? >> you are right that this deal involves vendors, sponsors, broadcasters, the players of course. we have to see how all the financial details of this deal unfold. those are still being

. -- those are still being worked out at the moment. the pga tour and liv golf have agreed to come together and form this partnership. but we will have to see in terms of, monetarily, once the advisors value their assets, what the deal will look like in terms of the monetary details to see how this will actually impact sports news in terms of the broadcast world and player contracts as well will be impacted. shery: what are some of the sticking points that need to be worked out then? >> i think one thing is there could be regulatory scrutiny. regulators could be concerned. already the doj is investigating the policies. there was also a lawsuit claiming that the pga tour was

monopolist. now the saudi backed league just joined this dominant player . there are questions in terms of whether regulators will be ok with this sort of deal, whether they allow it to go through. if you look at the way the pga and liv golf have designed the deal, they are calling it a joint venture, not so much a merger. have avoided using the word -- they have avoided using the word merger. regulators will look and see whether this deal should continue moving forward. shery: are illegal news reporter in san francisco. here's a quick check of the latest business flash headlines. daiichi says it is expanding sales and development staff oversees aiming to handle its cancer drug's business entirely on its own. that follows its tie up with

astrazeneca on the breast cancer treatment on track to generate over $10 billion in annual sales. the president told us exclusively the company expects a rocket under growth the next few years. a chinese court has started initial hearings in tesla's lawsuit against a protester that climbed onto a model 3 car at the 2021 shanghai auto show shouting her brake failure almost killed her family. she denied the claim and filed a case against. we have many more to come on "daybreak: asia." this is bloomberg. ♪

annabelle: we have a check on

markets. we are 30 minutes into the session for japan, korea and australia. one group of stocks is standing out in particular. this is the shock merger between the two rival golf circuits, the pga end then of course the one that is backed by saudi arabia. essentially what we are seeing on the back of that are golf stocks starting to climb. particularly those names in japan at the start of trade. this is the most read story on the bloomberg terminal this morning. . let's change on and take a look at the broader asian market landscape as we get underway in the session. there are a lot of factors and reasons why investors are choosing to stay quite positive in the session. he had to lead in from the u.s. where we saw the breadth of the market rally starting to expand and geopolitical tensions perhaps starting to ease. there are signals the u.s. officials and the secretary of state could be heading to china within a few weeks for a meeting and adding to that is this call perhaps that we are going to see further support measures coming through for the chinese economy.

we are seeing gains and benchmarks, the kospi up half a percent and big gains coming through in currencies. with got the south korean won at a multi-month high and strengthening below the key 1300 level. in terms of what else we are watching in the session, bond yields, little changed. we are looking ahead to the open of china the next hour in hong kong. priming for a 2% jump. shery: bloomberg has learned china has asked a banks to cut deposit rates as early as this week. they have been advised to cut rates by at least 10 basis points. lome trade due out on wednesday

is likely to show stalling again. bloomberg intelligence seeing outbound shipments rising 0.4% year on year. imports have been falling at a faster rate. shery: let's now go to our next guest, carlos casanova, the senior asia economist at ub p. always great to see you. we were talking about the exclusive reporting when it comes to potentially chinese banks cutting those deposit rates. how much is that expected to help? is there a demand among chinese households right now? >> good morning. definitely, that is one of the main stories this week. we think that it won't be enough to single-handedly lift the chinese economy. but it is a step in the right direction. we think the move to instruct state owned banks to lower the deposit rate is probably going to be the first and many targeted efforts to try to boost activity.

household sentiment remains very weak. so this won't help immediately. it might take a little bit of time before the lower deposit rates instigate households to take money out of the deposits. to use it for consumption or investment. the other side of that coin, the one that could gain faster is the fact that banks should experience an increase in profitability as a result. it should make them more inclined to lend to them more productive sectors that are also riskier sectors of the economy such as the private sector. remember that those account for a larger chunk of employment and china. we are talking 80%. -- in china. we are talking 80%. to try to stimulate demand and activity across the smaller private sectors. shery: how much will that help when external demand has been so weak? we are expecting the trade numbers but they have not really been that strong? >> that's right. the trend this year is for exports to remain weak.

we have an impending deceleration and the man from key markets in europe and north america and the second half of the year -- in the second half of the year. the trend is for exports to decline. the data is pointing towards a faster decline in may. we have south korean exports at -15%. that is a barometer of global demand. on the chinese front, the official pmi new export orders came in more contractionary at 47.2%. compounded with the phasing out of the base effect we saw in march and april, we think we are in for a bigger deceleration i export growthn. imports are also looking quite weak. we are seeing sluggishness across domestic demand. services are doing well but you are seeing weakness across manufacturing and investment. also consumption of goods. we are likely going to see more negative than expected figures both in exports and imports and the larger trade surplus.

shery: might we see less inflationary pressure in china? that's been the saving grace in terms of the pboc having more room to do more when it comes to stimulating the economy. >> i think short-term, there is still downside pressure on cpi and ppi numbers. we will see that on friday this week. an en -- it is nearing an end. we should see stabilization over the next quarter. of course it means the pboc has enough room. most analysts outside of china are hoping for more pboc support in june. there is definitely some space for the pboc to do targeted things like cutting the rrr in june but the bank has to contend multiple objectives. it has to stabilize the economy. and has to ensure that inflation is not too hot or too week. -- weak.

now it has to consider financial risks that have been piling within the local governments fear. that's a lot of objectives to balance. -- government sphere. that's a lot of objectives to balance. the sign to lower the deposit rate is a signal they should be doing more targeted things. the rrr is a targeted measure. we are expecting to see more of that. shery: why haven't they done more? it's always been so targeted despite the fact that we are seeing this downside pressure on the economy. the fact that policymakers are also keeping this sort of modest about 5% growth target, does that mean they are not expecting to do much more than just rrr cuts? are we not going to see broader rate cuts? >> that means the likelihood of a broader rate cut is lower. we still expect an asymmetric rate cut to take place the second quarter.

we are different from the consensus over there. there are a few reasons why they have remained on the fence for so long. first of all the transition is an issue. domestic demand is sluggish. households are still worried, paying back for some of their mortgages. and that sort of environment, there could be transmission issues. at the beginning of the year there was complacency because of the expectation the rebounding consumption was going to be strong enough to offset some of the other downside risks. lastly the bank is considered -- considering fueling risks and some parts of the economy they are trying to deleverage. for example local government debt. for those three reasons, we think the pboc is going to err on the side of caution and be more targeted. diminishing the likelihood of an asymmetric rate cut. which would be what markets are waiting for an would push sentiment. shery: are you seeing a return of foreign inflows into china? we have seen policymakers trying to court international

businesses. we saw elon musk, we heard nvidia's head was headed to china. have we seen that interest coming internationally back into china? >> i think there are going to be key sectors where you have still investors into china. unfortunately overall, at the economy level, we are seeing significant declines in inbound for interest investment. we do think this will be a trend that will drive for the remainder of the year if not longer. there are several reasons for that. there's talk about a fall in bilateral relations between the u.s. and china. this is about long-term strategic competition. we are going to see diversification of supply chains out of china. the second reason for it is during covid we saw concentration in certain sectors.

china was able to turn out specific goods that key markets in europe and north america required. now we are seeing unraveling of that situation. we are expecting to see outflows. that's going to drag on the economic outlook and one of the reasons why we have also decided to lower our gdp forecast recently. shery: got to have you back, senior asia economy at ubp with his outlook on the chinese economy. let's get to vonnie quinn with the first word headlines. vonnie: bloomberg has learned germany is nearing a more than $5 billion deal to build six submarines in india. are sources say -- our sources say the ship builders are likely to submit a joint bid for the project. the u.s. sanctioned several people and companies in iran, china, and hong kong, including tehran's defense attache

invasion, saying it obtained instruments such as accelerometers, gyroscopes, and nonferrous metals in order to help iran's missile program. he was also involved in a network apparently that used chinese companies to get centrifuges for iran's defense industry. the securities and exchange commission has widened its sweeping crackdown on crypto by suing coinbase for allegedly runningan a legal exchange. they argue the biggest exchange has aided rules by letting users trade numerous tokens that are unregistered securities. the sec filed the lawsuit one day after it sued binance over a series of alleged violations. sequoia, splitting the chinese and u.s. operations as tensions grow between the two largest economies in the world. the firm will separate into independent partnerships and separate the farms, operating under different brands.

this will take place no later than the end of march of next year. 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. haidi: we are about to see -- to get more on the bank of australia? economic outlook, next. -- of australia's economic outlook, next. this is bloomberg. ♪ it's easy to get lost in investment research. introducing j.p. morgan personal advisors. hey david. connect with an advisor to create your personalized plan. let's find the right investments for your goals okay, great. j.p. morgan wealth management.

shery: take a look on how asian markets are trading at the moment. we are seeing more upside for japanese stocks. gaining ground, being led by energy and materials and real estate. only tech losing ground at the moment after the nikkei touched a high. we are seeing continued gains for five days as the japaneseyen is holding just below the 140 level. the kospi, also extending gains into bull market territory. it's rallied more than 20% from last year's low. the korean won, at a high against the u.s. dollar. the aussie continuing to strengthen after the rba unexpectedly hiked rates. the highest level since 2012. a little bit of downside for kiwi stocks.

haidi: morgan stanley's australia ceo believes the rba will raise interest rates just one more time. speaking to me earlier here at the bloomberg -- timmy earlier here at the morgan stanley australia summit. >> certainly this year, we are seeing suppressed volumes in m&a and ipo's. m&a and acm are largely confidence driven activities. we've got a great deal of uncertainty in the markets. inflation is running very high. the wage increases we saw a couple of weeks ago have to put in men's cost pressure on a number of companies. companies are focused on their own operations and profitability. so therefore in th -- this period of uncertainty, there's a lack of conviction. i think the quicker we get the

data, we can get into the next cycle. haidi: how do you see this year playing into your business? >> certainly has been a quiet year in the investment banking activities with m&a and acm and ipo's, but we remain very strong across business and equities and wealth management. which are very stable businesses. we have an integrated business model that we have. we've managed to ride the waves, the ups and downs of transaction volumes. shery: in terms of international interest? >> international interest is increasing. we have seen an immense amount of dry powder, capital on the sidelines waiting for stability to be deployed in australia. we have certainly seen less interest in china. especially when you look at the level of interest 2-3 years ago. australia was seen as a safe place to do business.

the economy is in pretty good shape. one of the only developed nations to have a budget surplus. easy to say we are the lucky country riding off the oil and mining anf gas burn we have seen. we see stability in inflation, then we will see an increase in activity in australia. shery: what about when it comes to china as a trading partner? >> obviously the last few years and in a global, sense there's been a lot of geopolitical tension. we are back on a much more stable ground. haidi: what are you worried about the most in terms of the possibility of a policy misstep? more broader structural disruption in the global economy? >> clearly, australia relies heavily on what's going on in global markets. we essentially take our lead from global markets. if you look at our house view, the other investment banks, no one is forecasting a deep

recession in the u.s. a soft landing is the terminology people are using. i subscribe to that thesis. i don't think there's any major risk or major shock to the downside. i just think we need to get through this cycle and inflationary pressure as quickly as we possibly can, get to peak rates, moving to the next growth cycle which is going to come. haidi: -- shery: if you missed any part of that conversation, tv is your function. watch any past interviews. you can dive into the securities and bloomberg functions that we talk about. also become part of the conversation by sending us instant messages during our show. this is for bloomberg subscribers only. check it out at tv. this is bloomberg. ♪

haidi: the japanese drugmaker daiichi is planning to boost capacity to handle their drug cancer business on their own -- there cancer drug business on their own. the business is on track to generate over $10 million in annual sales. the president has told us exclusively where the company

sees growth in the coming years. >> we are very much confident in the upcoming data release, because the adc is a very much excellent platform technology. the excellence was proved by our clinical data so far. therefore, using this platform's technology, we have other adc program compounds. therefore our confidence in the future of clinical data is very much enhanced. >> the stock has risen more than five times since 2017.

how do you envision your company's growth after the current return plan and where do you want the stock price to be? >> thank you. [laughter] i think the current stock price was composed by our value, of the pipeline product and also the nr2. if the share price can be evaluated in that same week, we are very much -- way, we are very much confident in further increasing our share price because of the dxd/adc programs. we own 25. we will be launching the other adc programs. so therefore, our growth, if we say -- let's say the

oncology rocket has been launched smoothly and rapidly, going up. however, we can say that it is just the very first rocket engine that was ignited. but in the six business plans, the second or third rocket engines will be fired, then we will see the growth we can expect. >> so there is a hype in the industry that ai is revolutionary -- revolutionizing -- the industry. how does ai fit into your organization? >> already in our research laboratories and manufacturing sites, we are exploring the ai technology for discovery, research, or manufacturing.

it is very much effective and we are enhancing that activity. on top of that, the people currently are talking about chatgpt or any technologies, i think in our company or in our industry, there are a lot of opportunities to make use of such ai technologies, and we can save our labor, our fde's, and we can shift those people to much more productive work. i have big expectations on that point. >> the daiichi sankyo president speaking exclusively to bloomberg. here's a check of the latest business flash headlines. two groups of chinese carmakers are said to be among those leading the bids for a plant ad

in germany. manufacturers are in talks with ford as it looks to increase production in 2025. reaching a preliminary agreement on a single earlier this month. boeing will delay deliveries of its 787 dreamliner after uncovering flawed parts. the playmaker says it may affect about 90 already built jets and if you being assembled. boeing and he was regulators have not decided if they need to take any action for jets currently in service. the company also assured production will not be halted and still expects to deliver about 70 to 80 dreamliner's this year. merck is suing the u.s. over a law that will allow the government to negotiate drug prices with pharma companies. merck says it is tantamount

to extortion. shery: some stocks we are watching ahead of the open of trading in hong kong and china, of course we are watching the asia lenders. the chinese authorities have asked the biggest banks to lower their deposit rates. it is not a binding order but certainly a strong guidance. also crypto related stocks and focus following the news of the sec accusing coinbase of operating illegally. still to come here on bloomberg, we will take a look at asian equities and the outlook of jp morgan. they are saying they are overweight when it comes to the markets of china, indonesia, and japan. plus we have more from the morgan stanley austerlitz summit, why they expect chinese stocks to start underperforming the second half. this is bloomberg. ♪