and to have a better life, then you don't stop. we have been able to reach over 100 million people impacted and affected, and at risk of hiv. the rocket fund takes all of the work that we're doing, all over the world, and looks at the most effective ways, to get resources to them, to get services to them. the idea that we have saved five million people's lives, it's overwhelming. it's everything. haidi: you are watching

daybreak: asia coming to you live from new york anthony. annabelle: we are counting down to asia's major market opens. haidi: asian markets are set to write a tailwind. wall street stocks closed at april 2022 highs amid hopes for a fed rate hike pause. a subdued print would support a fed skid. ubs says top credit suisse executives including their cfo will depart as they close the biggest decking deal since the financial crisis. shery: take a look at u.s. futures trading in positive territory. this of course after we saw the s&p 500 touch that april 2022 high in the regular session. nasdaq 100 futures leading the gains, up .2%. tech led the rally in the regular session as well. this of course as treasury yields are broadly lower.

the two-year yield being below the 460 level as traders are gearing up for a potential fed pause. that leading to a little bit more of a boost and rotation back into those tech giants. we are also watching oracle. in the after hours they gained more than 3%. the beat in their sales estimates, given that their cloud business had benefited from the ai hype and that is also leading to more optimism broadly in the tech sector as well. we are seeing oil prices rebounding in the asian session but still below the $70 barrel level. it slumped to a three month low given global demand concerns. it really is what to do with the tuesday cpi numbers here in the u.s. could signal to investors. annabelle: that's right. perhaps some cautious optimism. i say cautious, because i was taking a look at trading

volumes, well off their 20 day moving averages. the indicates it of wait-and-see mode. we're waiting to gain around much of the region. china continuing to be a standout for a lot of the wrong reasons, because still to the downside. investors pointing out issues around the property sector persisting. full-scale stimulus from officials in beijing also looking unlikely. they are not looking to rely heavily on that sector to try and stimulate growth. other moves we are monitoring today, it is fairly flat at this point in the session. taking a look at the aussie three year yield, barely changed, as are currencies. the aussie has been one of the few gainers. continuing to monitor moves in bitcoin, but that is more down to the regulation aspect, concerns around the sec and its targeting of coinbase. still very much focused on

inflation data and what that means for the fed. shery: let's bring in our global economics and policy editor kathleen hays for more on those inflation numbers and what that could signal for the fed. as we are hearing more officials now signaling that they are ready to hold. so what could we see in the u.s. cpi numbers? kathleen: well, we are going to see numbers that could definitely tilt the fed one way or another. they are expected to pause or take a little rest. but the question is, could this number be just hot enough to move towards another hike? what are we expecting? in the monthly numbers we can see the headline number is expect it to be 0.1. that is how monthly numbers looked all the time before the great inflation took hold, down from 0.4. the core cpi unchanged at 0.4%. you can see year-over-year, nice drop in the headline cpi. the core, a decent drop as well.

what is driving this? that is always what is important, what the factors are. let's take a look at energy prices. broadly speaking, commodities prices. this is one of the main reasons we are seeing that nice slow down in the headline cpi, both monthly and yearly. energy prices fell three .1% last month. so -- fell 3.1% last month. that is a good trend. but services is what the fed is more concerned about. let's take a look at another chart. the core cpi ex-housing, the green bar has come down as core services comes down. bloomberg economics thanks -- thinks inflation might hit the lowest in september 2021, particularly the super court jay powell follows that takes up not just food and energy but also rent. a citi strategist, this is one of the best read stories on the

terminal, underestimating how much the decline in inflation will be. it could help in a rally. he thinks they may be surprised in a pleasant way to see what the number looks like when we get. -- get it. haidi: the fed seems to be -- how does that play into what we see this week as well? kathleen: i have been thinking about that. it seems to me if you are more the dovish camp, if you want to pause and you think you hike rates enough, you say we have seen other xi's they are not the main driver of inflation and not even a big one. so let's not worry so much about a hot labor market. let's consider inflation can continue to drop even with wages staying fairly healthy. if you are more hawkish, you might see a hot labor market and rising wages means people are going to spend more money. and that will continue to fuel inflation. now let's talk about inflation expectations.

this came out today from the new york fed and what we saw is some nice drops in the near term, the one year outlook fell .3% to 4. 1%. that is still kind of high. but the three year and five year ahead numbers eased up a little bit. .1% on each one. the problem with this is your near-term expectations for inflation are formed by what is right in front of you. inflation has been easing and decelerating lately. one year expectations have gotten better. when you ask people what you're are going to think longer term, that is more of a negative for the fed. because those have not really come down that much lately. on this particular survey they actually went up a little bit. haidi: kathleen hays there. turning to the banking sector, ubs has completed its acquisition of credit suisse, the biggest merger in banking since 2008.

bloomberg intelligence thinks the deal brings challenges to the near term investment. for more let's bring in analyst alison williams. you have been looking at the risks in particular for ubs. how does that scenario shape up for you? alison: there is obviously a lot of opportunity combining a bank, especially in the wealth management use meant -- even though that unit is slated to shrink under ubs. but there's sizable execution risk, especially due to the cultures. and can ubs retain the talented wants? these are -- talent it wants? these are people, not businesses. these are businesses everyone wants to get into. so they have a positive outlook but it is not a secret,

especially the franchise in asia. there are banks, deutsche bank, citigroup, very aggressively looking to go after parts of the business. goldman sachs and morgan stanley have also talked about regions where they want to become more aggressive. i think that is the challenge. specific to the investment case for ubs, buybacks and dividends, and this is something i think we'll get a little bit more global attention as some of the u.s. banks undergo stress tests, so their announcements are coming. ubs has had a very strong buyback story. they historically had the highest dividend. they actually pulled back on that dividend during the pandemic and they wanted to keep more flexible with buybacks. with this deal they are pausing the buybacks. keeping the dividends what caused -- pausing the buybacks, until they can get past the uncertainty. that hurts the investment case a little for the people that would

like to own the stock for that payout yield. shery: when you look at the latest news on 10% of the credits we staff leaving on the top managerial positions also being reshuffled, what impression does that give you of how difficult and challenging the change of the culture that you have talked about will be? alison: i think that that is not a surprise that you would see some of the top managers from credit suisse depart. we have seen some announcements of some people that they are keeping, which actually originated from ubs. so i think that is an easier cultural fit than bringing people back to ubs. but risk management is really something that i believe is part of the culture and it is something that perhaps got away from credit suisse, especially in recent years, and the bank

was looking to rein that in and change the culture, but that is a very hardship to turn. so it's not surprising that some of the leadership from credit suisse will not be staying with the bank. keep in mind that at the top is probably where you would see the most duplication of roles, obviously. so the question is can they maintain the next level of top moneymakers or rainmakers, if you will, within the wealth management and investment banking franchises. haidi: alison williams there with a look at some execution risks intentionally pose for ubs as this deal gets finalized. let's get you to vonnie quinn with the first word headlines. vonnie: jp morgan has agreed to pay $290 million to settle a lawsuit alleging it knowingly benefited by sex trafficking from jeffrey epstein.

it would settle a class action filed last year by an unnamed epstein victim. the bank will not admit liability. in a statement, jp morgan said its association with epstein was a mistake it now regrets. u.s. secretary of state antony blinken says the trump administration was slow to counter chinese spying overseas. he says the past administration was aware beijing was expanding its intelligence efforts and failed to slow it down. the white house acknowledge the presence of chinese facilities in cuba that could be capable on spying on southeast parts of the u.s. the netherlands a set to be working on legislation that will be used to bar chinese students from university programs teaching sensitive technologies. the proposal would avoid mentioning china directly, but is intended to limit beijing's access to dutch knowledge. the education ministry has confirmed plans to screen students, though rules will be country neutral. the deat -- the deat --

the 86-year-old billionaire was one of italy's most influential politicians over the past three decades, but his career was plagued by sex scandals and corruption. investigators are already speculating about a selloff spree from his heirs. global news powered by more than 2700 journalists and analysts in more than 120 countries. i'm vonnie quinn. this is bloomberg. shery: still ahead, toyota's chief technology officer lays out a path to accelerate the carmaker's electrification. details of his 1.5 million ev goal later this hour. but next, as we count down to the fed's rate decision, brandywine global joins us to explain why bears and bulls can expect a frustrating second half. this is bloomberg. ♪ j.p. morgan wealth management knows it's easy

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haidi: asian markets are looking to ride the momentum that was moving the wall street session. there is increasing expectations that the june rate rise in the u.s. is unlikely. there are more bets on july and a skip and a pause ahead of the fed. sydney futures up the long

weekend up about .3%. kiwi stocks on the back foot chicago nikkei futures looking to extend that rally. asian stocks hitting that four-month high ahead of the central bank meetings. japanese shares continuing to gain momentum on the back of the weaker yen, just the latest catalyst given we have seen this drive the nikkei to nine straight weeks of gains, the longest winning streak since 2017. those levels when it comes to japanese equities are pretty close to record highs as well. tech and health care in particular across the region have really been performing. s&p futures are looking modestly higher at this point. shery: our next guest says the financial markets might be range bound for the rest of 2023, frustrating both the bears and the bulls. joining us is jack mcintyre, portfolio manager at brandywine global. always great to have you with us. we are now looking at many markets around the world in bull

market territory. we are talking about the s&p 500, further deepening its bull market change, not to mention the stoxx 600, nasdaq 100, and the emerging markets close to 20%-plus from their 2022 lows. so i understand when you say bulls can get frustrated because where can you go from here, but isn't there also the possibility these frothy markets could fall? jack: when i was sticking about that, that markets might be range bound, i kind of gravitated a little bit more towards the bond market. because i am not sure there is a clear catalyst right now, or m ight be the rest of this year. you think about some of the drivers this year, we have gone from a price worrying about recession, to all of a sudden we are not going to get a landing, inflation is stickier. so we just get these kind of crosscurrents. that is not my base case.

i still think it is going to be an overall constructive environment, but that is all contingent upon inflation starting to head lower on a more sustainable basis. if that is the case, then the rallies we see in equities, the rallies we have seen in some emerging market bonds, and even treasuries to a lesser degree, they have been range bound. but that could continue through the rest of this year. shery: which is why you are overweight treasuries, and it seems european debt as well? jack: yes. again, i kind of go back to the response to the prior question. we are all struggling about the concept of timing right now. i do think inflation is going to be heading lower. the lag effective all this tightening, we are still waiting for it to hit the economy. i think it will in the second half of this year, or maybe early 2024, but that's an environment where you want to be long treasuries. remember, range bound markets are not a bad thing given you

can earn some -- last year was a disastrous year for bonds. but the good news is yields moved higher to the point where the coupon is a bigger source of return. so that carrie means that time actually works for you as opposed to what we are seeing the last decade. haidi: your long yen call, anything in particular driving it? the markets are generally not expecting the boj to be in any kind of hurry to be tweaking sec or otherwise removing forms of easing monetary policy. do you have a different view on that? jack: there are two things driving are overweight pattern. first is tied more to the u.s. right now. we ultimately think the fed, they could be done for the rest of the year. this year maybe they are on pause, maybe they tighten one more time. but the key is they have done the majority of their tightening

right now. there are other factors in play that will be tightening as well. on the credit side, it will drag, etc. the point is that yield differential supporting the dollar versus the yen might go away. meanwhile, going back to japan, i think japan has an inflation problem. it is sticky. again, i get the boj is a little worried about it, tried it in the u.s. to get more stability than those two countries. i think there is a good chance they might have to back off ycc, and that should be bullish. haidi: you underwent the dollar based on the dovish nest between china and the u.s. and you think when it comes to the recovery story that it is too pessimistic? jack: i do. i think this is why we are underweight the u.s. dollar. it is the relative growth differential. the fed has been tightening now aggressively, china. that leg affect, we are still waiting for that to kick into an

economy that is already slowing. i get it, china has been bumpy. china does not have an inflation problem. if needed, they can do both monetary and fiscal stimulus, they can get better growth. i think the big driver of the dollar weakness through the rest of this year into 2024 will be that shift in relative growth. u.s. slows down, china stabilizes and starts to improve, and that has a bigger flip on overall global growth. historically when the u.s. underperforms the rest of the world economically is dollar bearish. shery: jack, always great to chat with you. jack mcintyre from brandywine global. you can get a roundup of the stories you need to know at dayb , and also write on the mobile in the bloomberg anywhere app. you can customize your settings so you just get the news on the industries and assets that matter to you. this is bloomberg. ♪

shery: artificial intelligence is said will -- with the potential to treat illnesses including cancer and dementia. he spoke exclusively to bloomberg at london tech week. >> i think in the next decade, i think it could be very possible we could build these kind of ai tools to help the world's experts and medical researchers make some breakthroughs in these areas. we have folded all 200 million proteins known to science. we did that in just over one year on our computational systems. we like to call that science of

digital speed. i think that will come to a lot more fields including medicine. haidi: he is also among some industry experts warning of the existential threat of this fast developing technology. the nonprofit for ai safety says mitigating the risk of extinction from ai should be a priority alongside other risks like pandemics and nuclear war. >> the number one thing that needs to be done right now is put more investment into ai safety research and understanding what the systems can do, analyzing them, interpreting them, and coming up with things like evaluation benchmarks so we can understand what capabilities we want and what guardrails we therefore shipped have to make sure society reaps all the benefits of these systems an incredible potential to have and mitigate the risks. shery: of course there is a reason we are talking not only about the opportunities but the

risks around ai, because it seems that this could be a monumental change in the tech industry and just how we go about in our daily lives. not surprising, anything related to ai right now is getting a boost, including the wealth of ceo's, founders, related to ai companies. oracle for example could benefit, given that generative ai needs tremendous computing power. we have seen larry ellison's net worth rise to record highs, surpassing that of microsoft founder bill gates. to become the world's fourth richest person. he now has a net worth of $129.8 billion. and of course he is not the only one to benefit. we also have larry page and larry brainard. haidi: oracle really has benefited from the ai boom. we have seen the stock price

pushing records. within that boost when it comes to cloud computing continuing to be seen to grow so rapidly. as you say, we have seen the riches to be made out of ai. important to note, a lot of concern as to what the regulatory framework could look like, how that is potentially going to curtail innovation or development, and whether that is even possible. and some of the more existential risks coming from ai technology as well. we know that when it comes to larry ellison, his net worth is up almost $38 billion this year, bill gates shy of $20 billion up. a lot of that is down to oracle, but also that stake in tesla. this i we moved out of the city so our little sophie could appreciate nature. but then he got us t-mobile home internet. i was just trying to improve our signal, so some of the trees had to go. i might've taken it a step too far. (chainsaw revs) (tree crashes) (chainsaw continues) (daughter screams) let's pretend for a second that you didn't let down your entire family.

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

>> this is daybreak asia, with a

check on markets here we are 30 minutes out from the open in seoul, sydney and tokyo and are taking a look at what is happening in u.s. futures. we are continuing to see them trading fairly flat but big moves expected for the nasdaq which has been higher, auricle one of the names we are watching in after hours but a lot of investors turning back to those big cap names. in terms of what we are watching, u.s. inflation data that comes ahead of the fed rate decision later this week but the expectation from traders is that we will see a pause, something else that has been leading to that optimism in markets. in terms of how long this lasts they are saying goldman sachs has been talking about -- and other banks as well including j.p. morgan, essentially he is looking at those beaten-down cyclical names and says the rally we have seen in that is going to prove fleeting. the reason is we can still expect further rate rises ahead it given inflation is still not tamed.

he says the consensus view, the worst of the pressure is behind us to for now and is going to be proven wrong do further rate rises, plus winning growth. today when you take a look across the asian session we are still looking to take those cues from the moves on wall street. he had nikkei futures coming online and those are pointing to gains of 8/10 of a percent at the open in half an hour. sydney futures likewise in the green, new zealand already online fairly flat, we are not seeing much movement in the currencies like the japanese yen. >> you were talking about inflation in the u.s. cpi print, while inflation has been the global bogeyman forcing central banks to rapidly raise borrowing costs, it is a different story when it comes to japan. price rises are being welcomed with open arms. for more let's bring in bloomberg analyst in tokyo, we are not sure how much the

japanese public would be to have prices rising across the board but the stock market is lovingly signs of inflation. >> exactly. if you think about the reason, the central bank target inflation rate of 2% and the reason for that makes things a lot easier when you have small inflation. japan is moving towards that target whereas in many other countries inflation is moving away from that target. to a much higher level. in that sense it makes sense that investors love inflation in japan at the moment. >> how good the changing dynamics around price pressures in japan affect how equities move given we are at such high levels. what are investors seeing?

>> when you look at the very long-term -- long-term chart of japan's gdp, you can see it has been growing steadily since the early 1990's. inflation has failed, deflation has set in and basically since then japan's nominal gdp has been range bound. it is hard to grow topline for companies when there is no nominal growth in the economy but that may change, so that is one thing that could change the dynamics. another thing is that japanese corporate and individual investors have a lot of cash. japanese companies have more than 3 trillion -- sorry ¥300 trillion and that is more than half of japan's gdp. that is in their savings account and and japanese do hold and hold about half of their wealth

in cash and deposit. if they realize that inflation will decrease their value, even if a small portion of their savings move to somewhere else like investment and securities, etc. and that could have a big impact on markets. >> certainly very interesting to hear, taking a look at that ahead of the bank of japan decision later this week. let's get you back to new york, vonnie quinn has first word headlines. >> thank you, pakistan central bank has left interest rates unchanged at a record 21% to stop growth from weakening and rein in inflation. policymakers expect price pressures to ease beginning this month. the central bank hike -- the discount rate during last four meetings as part of efforts to help the government unlock a

long-delayed imf loan program. . vietnam has allowed factories to increase production hours as power shortages begin to ease, governments in vietnam and surrounding areas said manufacturers in northern provinces which include apple suppliers and samsung can now operate for up to 17 hours. thousands of factories in vietnam have been forced to curb power consumption as rolling blackouts swept the country. a severe cyclone is set to better coastal areas of india and pakistan this week prompting authorities to start moving thousands of people to safer places. india's weather bureau says wind speeds could hit 150 kilometers per hour, the storm is expected to make landfall thursday and includes a home of major ports and refineries. a measure has already been declared at that port. ups says a slew of top credit suisse executives will leave while others will take on lesser roles, this is the larger bank exerts its dominance following the historic takeover.

high-profile departures include credit suisse cfo and investment banking cohead. only a faith of the 160 leadership positions in the combined bank are coming from credit suisse. local news powered by more than 2700 journalists and analysts in more than 120 countries this is bloomberg. >> sounding more confident in their ability to build and sell ev's, as the world's largest automaker plays catch up to tesla. let's get the details now from bloomberg's analyst in tokyo, this seems to be a realization of the potential for this market. i guess this question is whether that late adopter disadvantage is going to be at play here. >> indeed, it is not so much a disadvantage as short of a shift in thinking and messaging at the world's largest carmaker. so now and still continuing, toyota is espousing this idea that there is multiple paths to

carbon neutrality including everything from battery based ev's to hybrids to hydrogen and other technologies. what was kind of clear at this workshop last week near the base of mount fuji was that toyota is really going full throttle on a variety of technologies, most notably batteries where it has given up the lead to the likes of tesla, byd, as more consumers embrace battery-based ev's and so we heard a lot around that as well as technology and strategy. >> strategy aside, how feasible are these goals given at that in the past fiscal year it seems toyota only sound -- sold around 38,000 battery ev's. >> that is really the big question. it is a tiny number compared to the 1.5 million they're planning to sell by 2020 -- 2026 and

three and a half million by 2030. you have to remember toyota makes 10 and a half million cars each year that surpassed volkswagen as the world's largest carmaker. its manufacturing methods are studied in business schools around the world, so it would be a mistake to underestimate toyota, i think when they do get serious about things they will try very hard to execute them. until 2026 we are not going to know. >> we will be watching, bloomberg's reed stevenson there, we will continue this conversation on electric vehicles in a moment as we discussed bloomberg any eft's latest report on the rapid growth of ev adoption over the next three decades. this is bloomberg. ♪

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>> bloomberg any eft's latest electric outlook report shows the global electric passenger fleet could triple by 2026. the report also says the rapid growth of ev adoption over the next three decades could be a

massive investment opportunity to deploy new infrastructure across the world, asia-pacific lead transport analyst allen tom abraham joining us now with the latest. we are seeing huge transformation in the automotive sector right now. what is your biggest take away from this year's report? >> good morning and thank you for having me. this year's report has several new findings but let me focus on a couple. ev adoption is now quickly spreading into more markets and more segments and is now catching up to be one of the most promising, cheapest and pragmatic pathways to get to net zero omissions in the transport sector by mid century. markets like india, southeast asia, japan and australia which were historically considered laggards when it comes to electric vehicle adoption are now starting to act. in 2022 passenger electric

vehicle sales in india and southeast asia tripled compared to 2021 and in australia and japan it doubled. it is also spreading into other segments, previously considered hard to electrify like heavy duty trucking, especially in markets like china and europe. the second point is the unprecedented price and battery prices we saw in 2022 could delay the timelines for one electric vehicles achieve purchase price parity with other vehicles but we do not think this could derail the industry or the growth of electric vehicles over the medium or long-term as the industry innovates around these bottlenecks. >> are we on track to achieve net zero when it comes to the transport sector by mid century? >> unfortunately no. for the world to get to a fleet

that is zero omissions capable by 2050 the last gasoline and diesel powered car needs to be sold somewhere around 2035. the last gasoline two wheeler needs to be sold somewhere around 2040 in the last diesel truck needs to be sold somewhere around 2045. we are not on track to hit any of these milestones. policymakers, the industry, and consumers will need to take more action in order to bend of the curve and get us to net zero omissions by 2050. >> what is the size of the opportunity? >> we see a massive growth opportunity both over the next few years as well as the next few decades. in a scenario that is driven by economics and current policies we expect passenger electric vehicles to form close to 30% of new vehicle sales globally by 2026 and by 2050 about 88% of

new vehicle sales will be electric in our scenario. this is just passenger vehicles, in municipal buses and two or three wheelers that share of electric vehicles could rise to between 90 to 100% by 2050. what this would mean is consumers would spend about $57 trillion in purchasing electric vehicles between now and 2050 in this scenario. a massive opportunity if the world wants to get to net zero that spending amount would increase to about $88 trillion. a massive amount over the next two to three decades. this is also an opportunity for a lot of countries as they set up new manufacturing hubs and also use and capture more value from their reserves. >> the asia-pacific lead transport analyst there with us.

let's take a deep dive when it comes to indonesia's energy sector. our next guest presents an investment potential of three and half trillion dollars under their net zero scheme. it discuss where the opportunities are with the president director of indica energy and chairman of indonesian chairman of commerce. really great to have you with us. tell us about the scope of this opportunity and do you see industry mobilizing to try and fulfill the full potential of that? >> good morning. we should be very optimistic about the potential for investment and specifically in asia we have various potential to harness. my strategy is look at the facts, renewables account for 35 percent of billable power by 2035 and $43 billion investment

opportunity for that power system in asia. that is another opportunity. >> who do you see as being the market leaders and what are the biggest challenges to getting to that point? >> we have to look at -- we have to talk about ev itself. it is promising, the demand is growing and southeast asia can become a global ev producer. indonesia's energy sector presents a new investment potential as you mentioned, 3.5 trillion under the net zero scheme where 45% is ev sales. the ev market is more than just vehicles, we have ev echo systems -- ecosystems and recharging stations and recycling. all of these are opportunities but of course we talk about the

challenges, how do we actually create this ecosystem because all of this takes a lot of funding and at the same time it is the growth of the market itself. at the end of the day the indonesian government is pushing for electric vehicles and that helps a lot and also the incentive programs so all of this there are challenges but the opportunities are great and we do believe it will be there. we have the resources, critical minerals to do it. >> i was going to ask, how much are you seeing in terms of public and private partnerships and what more could be done? >> when you talk about partnerships today, we call

indonesia inc., the government and ourselves in the private sector are moving together and in this the collaborative approach has created an environment for investors and developing opportunities in the energy industry. and we are acting as a facilitator and regulators and it plays a vital role in these investment climate. we have new policies, regulation and sort of an incentive but again for the private sectors we are actually very much optimistic and actually investing in this ecosystem. for example our self. we are investing into wheelers electric vehicles and this is something we are moving forward and at the same time the government is also giving

support in the private sector to drive investment in energy. it is a collaboration, for example hydro energy is a collaboration. for the hydroelectric project, there are 17.8 billion as a prime example. another one as you mentioned is about the partnership with stakeholders of the $20 billion, just energy partners. >> tell us about what you are doing because indica energy is an integrated energy company and you do have businesses that include coal and dirty fuels and logistics and shipping as well, how does a company like yourself that is so big try to transition into green energy and find the opportunities that can really balance out all of the other businesses you are involved with?

>> for us it is a necessary change. we talk about values, we are not just -- the future value of the electric vehicle is here that is what we are doing right now, we are producing this to wheeler. it is a game changer, particularly the use of electric auto bikes and we redesign products to improve people's lives in a new lifestyle that can be adapted with the formation of a green ecosystem. i want to tell you that are tech line is a lifestyle solution, empowered into a cleaner, smarter future. that is what we believe in and besides ev we are in other things, in natural big solutions, businesses and basically to be really proactive in creating both ev ecosystems

and infrastructures. this will also encourage consumers and indonesia to choose ev for their infrastructures and we are here for the long term and we do believe in this with ev but again green energy is here. >> good to have you with us, president director and chairman of the indonesian chamber -- of commerce and industry. be sure to tune into bloomberg green a to hear more from the days big newsmakers, getting in-depth analysis from the daybreak team broadcasting live from our studio in hong kong. listen through the app radio plus or bloomberg.com plenty more ahead stay with us. ♪ thanks to avalara, we can calculate sales tax automatically. avalarahhhhhh what if tax rates change? ahhhhhh filing sales tax returns? ahhhhhh business license guidance? ahhhhhh -cross-border sales? -ahhhhhh -item classification? -ahhhhhh does it connect with acc...? ahhhhhh ahhhhhh

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>> here is a quick check of the latest business flash headlines, google is said to be hit with a formal antitrust complaint from the eu that could pave the way for massive fines. sources say the charge sheet which could be announced as soon as wednesday will target the core of the alphabet units ad tech business model. google's advertising business accounts for about 80% of its annual revenue. oracle's quarterly revenue topped estimates as sales increased 17% in the fiscal

fourth quarter, the results signal the tech firms cloud business is benefiting from increased demand for ai workloads. oracle's cloud infrastructure revenue jumped 76% and cloud applications sales increased 45% in the period ending may 31. nomura plans to scale back a brokered venture with messaging operator line group, nomura has invested 170 $2 million in a joint venture nsaids the restructuring will have almost no impact on earnings. it is another setback for him you're out has battled losses as the venture sought younger tech savvy clients. we are headed to the opens in korea, japan and australia. australia coming back from a holiday. these are some of the stocks we are watching, oil is rebounding in the asian session but only

after extending last week's losses and falling to a three month low in the new york session. this after goldman sachs cut its forecast for the third time in six months. we are watching those oil stocks on the board at the open including woodside, beach energy, ampex and s oil. a busy hour ahead on daybreak asia, standard chartered will tell us why they are skeptical about the sustainability of the broader stockmarket rally. in the former japanese finance minister official joining us for a preview of this week's boj policy. plus we will speak to ubs about the chip industry next up cycle. the market opens in sydney, soul, and tokyo are next. this is bloomberg. ♪

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>> this is daybreak asia we are counting down to asia's major market opens. he saw another day of gains in the wall street session led by tech as treasury yields were broadly lower. traders gearing up for a fed pause but tuesday cpi will be key. >> we see the ai boon continuing to drive chip stocks higher, the philadelphia semiconductor sitting at a highest since february 2022 and that added to the bulk of the gains when it comes to the nasdaq. it's take a look at the open here in australia and the rest of the region. >> a trio of markets coming online, we are just a few seconds away. we are watching as well those moves we had seen and treasuries in the prior session inching lower with the expectation as we look ahead to those key risk events this week. we have that u.s. inflation data on tuesday. what that will tell us is what the fed does next and the

expectation is we are going to see it head on pause. the riskier is if we get some sort of blow out number that one or bloomberg economics team seeing a greater risk that inflation here comes in softer than the consensus. ahead of that we had seen u.s. markets powering higher led by tech and oracle. we are watching them in after hours today, that stock up around 4% in late trading signaling its cloud business is benefiting from ai. another tech name saying -- in japan today we are taking cues at the start of trade. it seeing the nikkei two to five coming online to the upside here 7/10 of a percent and that weaker yen playing into it. expectations that the boj will keep its settings unchanged later this week. let's change on because we've got the open of soul, again in korea here very correlated to what we see in the u.s. session. very tech a and unsurprisingly we are seeing the cause dock

gaining at the start of trade and outpacing those border gains for the kospi that is still up 6/10 of 1%. the korean won is trading a little stronger as well as we move further away from that key 1300 level. a fairly light day on the data docket in terms of eco-numbers in asia generally. we do have the be ok meeting minutes for may that are due later in this was a meeting where they extended its paws already. let's change on because in australia we do have consumer confidence numbers coming out later this hour, they will be closely tracked given the expectation of what the rba does next. it was one of those central banks that surprised that 25 basis point hike even though it had been one of the first central banks in asia expected to go on hold. also taking a look at brent crude and how it comes online, a little firmer but you have to keep that in perspective because we had seen it tumbling in the prior session after goldman sachs cut its forecast saying brent is going to be below $90 a

barrel by the end of the year. >> let's bring in our next guest who remain skeptical about the sustainability about a broader stockmarket rally. with us now is steve bryce group cio at standard wealth management. right to have you with us. we have seen that huge market rally not only here in the u.s. where we extended those gains as this chart shows our viewers with the s&p 500 further into bull market territory. the nasdaq 100 gaining more than 30% from its 2022 lows. even em stocks almost at that bull market territory. is this frothing this we are seeing right now, especially if we have concerns about global liquidity? >> there is a macro question and a market question. if you look at the macro first we still think it's sliding towards a recession. we will see china that will be very difficult, all indicators on that recession checklist that

we look at our moving more towards signaling a recession coming. that is obviously at some point going to kick in and be a headwind for equity markets. in the short-term we still have severe positioning which is very short around global equities and related to the inflation numbers later this week will be very important. there is a good case to be made that inflation will come in lower in the coming months which may temporarily give a soft landing scenario more countenance in the market. we ultimately think that will be disappointing but that could lead to a melt up and equities in the short-term. >> some are saying if we do see a mild downturn or a soft landing we could see another rally in cyclicals and given we already saw moves from china to boost their economy, could that all add up to some gains in sectors that have been under pressure lately?

>> absolutely it could. the narrative is probably going to be one where we see people becoming less concerned about a sharp recession. ultimately i think they will be disappointed because there signs of tightening in the long lags we have in terms of data hitting the economy, i think we will see a slightly stronger-than-expected recession, a harsher recession. something that could be pretty damaging to sentiment but as i said the challenges when do you time that? do you time that for the coming quarter or do you say it is going to be toward the end of this year. that is the hardest question to answer in our opinion. >> how do you gauge market expectations when it comes to what we get from the pboc and other chinese authorities? are we inevitably set up for disappointment because we know it is not going to be a massive

move from the central bank there? >> obviously the key thing that is happened this year or two key things, we are seeing real gdp growth quite strongly. there is a narrative around disappointment in terms of how strongly has proven but the reality is it has been pretty strong. at the same time we have seen inflation come sharp below. rba in negative territory and around zero. as nominal gdp growth has not done a whole lot, marginally. i think the authorities are still in and easing policy environment but clearly they don't want to repeat anything on the scale of what happened in 2008. it is softening and that is going to support growth in our opinion but given global headwinds the question is when will we see growth, in the first half of this year or a resurgence in the second half. we are starting to see consumer

confidence in china bouncing off depressed numbers of course but it is starting to bounce. that suggest that maybe the second half will be ok but coming to the beginning of next year we could see a deceleration. policy easing yes but still gradual from our perspective. >> we are going into our 10th straight week of gains for japanese equities, the weaker yen is also helping. is it too late to buy into this rally, how much further upside do you see? >> we still feel the environment is pretty positive. we have been talking about the potential for corporate governance to become a dominant theme for the japanese market for decades. this time does seem to have a bit more teeth to it which is great, we are seeing share buybacks and dividend increases coming through from corporate activity. that weaker yen is helping at the moment as well in the international environment is not too friendly although the recession will come to bite.

that valuation is not stretched it all still trading around 8% with global equities so our senses we can still see some significant upside for japanese equities here. we would not be hedging currency risk, at some point we think the dollar will weaken against the yen. and then we have conversations with international investors if they hedge their currency risk. overall japan is one of our firm markets. >> let's talk a little more about currencies, how are you factoring that in because we see the divergence not only with japan at the pboc which could pressure the chinese yuan. how positive has that been for the equity space and what are the risks? >> obviously very different dynamics. china and japan. you have seen some sense that the chinese authorities want to restrain the pace of the depreciation, so from our perspective that suggests

positive rates on u.s. dollars. overall we think the dollar will be peeking out over the course of the next three to six months, and that is as we get closer to this realization that the fed will have to back off its tight managing policies in the face of a recession and its growth elsewhere in the world is a little more resilient to that outcome than many give it credit for. we do see a mild downside for the dollar over the next few months, maybe five or 6% over the next 12% -- 12 months. that should be a positive environment for flows into the region and support the equity markets as well. >> steve great to chat with you, group cio at standard chartered wealth management. let's get to bell for a look at some of the movers. >> just under 10 minutes now into the session for seoul, sydney and tokyo. a few different sectors we are watching but kicking off at the

moves we are seeing in tech names because these are powering higher. softbank more than 4% at the open. what is driving those moves that we had in the wall street session overnight, a couple names and focus. apple hitting a new all-time record high. on top of that the expectation the fed could pause interest rates later this week and that is something else supportive of these factors in the likes of oracle reporting after hours and that stock gaining as much is 4%. another name that is benefiting from that move into ai linked names. this is the state of play for some of these tech stocks here. you can see the msci i.t. index gaining as well. another sector we are keeping an eye on is what is happening with japan. machinery tool makers, these here at looking a little more range bound but still mostly moving to the upside. we are seeing the nikkei two to five coming online in the green. we dig see machine-tool orders falling in may from a year

earlier according to preliminary estimates coming through from a local body in japan. but that was down for a fifth straight month. we saw domestic orders down around 24% for an order is down 21%. if you working days this month one of the factors being cited as an absence of large load overseas orders. that is what we are also seeing from jeffries. changing on, the last sector and focus is the mining names in australia. we have these moving to the downside. a little significant given we have iron ore declare -- declining for a second straight session in singapore. that is at the bottom of the screen. really being driven after we had a note from goldman sachs warning the property sector weakness we are seeing in china is going to be something that ends up a multiyear growth dragging in the country there. we had that metal down around 5% in the prior session. >> let's get to vonnie quinn with the first word headlines. >> ubs says a slew of top credit

suisse executives will leave while others will take on lesser roles. this as the larger bank exerts its dominance following a historic take over. high-profile departures include credit suisse cfo and investment banking cohead. only 1/5 of the 100 60 leadership positions in the combined bank are coming from credit suisse. jp morgan has agreed to pay $290 million to settle a lawsuit alleging it knowingly benefited from sex trafficking by former client jeffrey epstein. the bank says the agreement in principle will settle a class action filed last year by an unnamed epstein victim. a source is the bank will not admit liability. in a statement jp morgan says its association with epstein was a mistake it regrets. u.s. secretary of state antony blinken says the trump administration was slow to counter chinese spying overseas, he says the past administration was aware beijing was expanding its intelligence efforts and failed to slow it down. the white house has acknowledged the presence of chinese facilities in cuba could be

capable of spying on southeastern parts of the united states. a severe cyclone is set to batter coastal areas of india and pakistan this week, prompting authorities to start moving thousands of people to safer places. india's weather bureau says wind speeds could hit 150 kilometers per hour, the storm is expected to make landfall on thursday which is home to major ports and refineries. global news powered by more than 20 700 journalists and analysts in 100 20 countries, i am vonnie quinn this is bloomberg. >> still ahead we will preview the upcoming bank of japan decision with the former finance official, and why he sees inflation becoming more widespread. this is bloomberg. ♪

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>> the u.s. inflation report out later tuesday may bolster the case for the federal reserve to skip a rate hike this week. our global economics and policy editor kathleen hays is here with what to expect. the idea is a subdued print could really bolster the case for a pause, a skip, what are we expecting? >> it certainly could. that is one reason we are watching it so closely. also because inflation has been

the number one problem for the federal reserve as it tries to get away from trying to hike rates and not enough progress yet. it this helps. wait another meeting and see what they will do. let's see what we are looking for on the headline cpi, you can see on the lower part receive the monthly number dropping down to 0.1. that is a low more normal number. 0.4 the previous month. the headline down to -- down from 4.9 is a move in the right direction. it is now only doubled the fed's target. of course you have the core, a good drop in the year-over-year court cpi. 25.2 from 5.5. the monthly number stays the same, what is going on? one of the big things driving that big improvement in the headline cpi that compared to the core cpi is commodity prices have fallen, particularly oil. oil down 3.1% last month. that is welcome. it certainly drops inflation,

but commodity prices are volatile. that can move in a heartbeat. that is not so reliable, seeing things like services come down. this is an important chart because those green bars show the core services, that takes out rent. that is jay powell's number one thing to look at. it has improved a little bit recently and is expected to improve more. our bloomberg economics teams say it could hit its note -- lowest numbers since september 2021. that sounds like good news bolstering a case for the pause, convincing maybe the hawks they should go along with the doves. citibank strategist warning that traders themselves are not seeing this, if you want to talk about improvement in the cpi for this month they don't realize how good it is going to be. that is what the market indicators suggest so maybe look at the bond rally if it comes in that good. >> the fed also seems to be

backing away from wages as a major inflationary drive, how does that play into the decision? >> bolster the hands of the doves, the people that want to pause -- i should not call them pause because the people that want to skip a hike still are saying that the move could definitely be another hike. however the ardent proponents of going ahead and hiking will probably disagree because wages are not such a big driver, more research shows that. fed speak shows that. that we should not worry so much about labor going up and hiking rates to keep them down but a hawk might say what about final demand, if people are getting bigger paychecks and working more hours, earning more money, they are going to keep spending and drive up inflation. in elation expectations are also important because the new york fed survey was out today and the one you're out inflation expectations had a drop down to 4.1 and that was the lowest

since may of 2021 down 3/10 of 1%. in the three to five year looking out further a bit of an increase. the problem here is near term expectations are determined by what you just saw in inflation. if you still think inflation is not coming down over the longer term that is not a good sign for the shifts in psychology the fed wants to see. >> our global economics and policy editor kathleen hays, as the world struggles to recover from covid-19 and russia's war in ukraine and inflationary impacts the arrival of the first el niño in almost four years threatens economic damage and perhaps the biggest load to global growth yet. for more let's bring in bloomberg editor in hong kong, then this was a distressing story. a great story but tell us what is the assessment in terms of the magnitude of climate risk here? >> good morning. it is very difficult to ascertain at this stage, how

severe this el niño could be this time around. if you look at el niño's past they have had significant impacts on the economy, on the global economy. it is the warming phase of another climatic cycle, it is the themes associated with it. a drought. heavy rains in south america. but where you are on the east coast of australia, we could see more wildfires. the thing it tends to affect his commodities. especially agriculture commodities. your staples from cocoa to coffee to wheat to sugar. we could be looking at going down the line, that cup of coffee could be more expensive. you might think twice about that block of chocolate in the supermarket aisle because that could get expensive. it is an inflationary event and it comes after the pandemic as the war in ukraine is going on and adds that inflationary pressure.

>> nobody in our team wants to see coffee become more expensive. this year i have even been worried about taking my dog for a walk because tics are so abundant all over new york. the winter last year really was not cold enough. this is really the least of our concerns. the devastation that higher temperatures can bring to the world, the most vulnerable economies will get hardest hit. >> you are absolutely right. anybody looking for reese bite from the heat is not going to get it. it is the warming phase of a normal climatic cycle so think higher temperatures. just have to look at the last major event in 2016 that coincided with the hottest temperatures on record. we could be up for a grim master, the world could hit its higher -- highest temperatures yet.

climate change is a problem. sadly during hot events people want to be air-conditioned, you need to fuel irrigation pipes for agriculture. the things that tend to fuel that are coal, coal is the big beneficiary and that feeds into climate change and greenhouse gases and man-made events. >> bloomberg spend sharples there with the impact effects of the return of el niño. we have plenty more to come on daybreak, this is bloomberg. ♪

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start for free at godaddy.com >> barclay ceo says that leadership changes at the firm's investment bank and refocusing on new growth areas has contributed to higher than usual attrition.

they spoke to bloomberg about the economic outlook and banking landscape. >> we are losing a few investment bankers but not that much more than what is normal annual turnover. this is the period in the first few months of the second quarter were people have been paid their bonuses and there has been a little musical chairs as you know. it is a time-honored tradition in this industry. we made a management change in our investment bank, we spent a lot of time last year thinking about what we expected the banking landscape to be over the next decade. what you have seen his rising interest rates, changing business models, the importance of sectors that are fairly new to the economy. not just technology but sustainability and mobility, climate tech. then there is the different players and importance of the players in the banking market. the private equity groups have been large, private credit funds are bigger.

they are intermediate in what banks are doing -- as we begin with a very investment bank in the u.s. with the acquisition of barclays and as we have grown in europe we want to put more emphasis in europe as well. you bring it altogether and you are talking about thinking about the next generation of leadership of the investment bank. building on our strengths and get -- debt capital markets and growing in equities and growing in europe. when you do that kind of organizational change sometimes it has impacts. >> you suggested something, is there a strategic shift in emphasis in the investment bank a little away from the united states and toward europe. you're too & co. had before were based in the united states, the two now are based in europe. >> one is in europe and one is here in the u.s.. it is not a shift so much as an expansion to give more attention to europe relatively speaking. u.s. remains critically important to us and u.s.

businesses or something, especially in the debt capital markets where we are leading and we want to maintain that. >> that was the barclays ceo they are speaking to bloomberg's david westin. coming up next as we count down to this week's boj's decision a former finance minister official tells us what he sees no policy change even as inflation becomes more widespread, 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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haidi: consumer confidence numbers crossing the bloomberg.

when it comes to the adjusted month on month number for june we are seeing a gain of .2%. that is a reversal of the contraction of a most 8% that we saw in the month of may. the west bank consumer confidence index, the headline number for june coming in at 79.2. a little bit of an acceleration. this, as we see consumer sentiment sitting near hs and -- near recession lows, as we really see the impact of the rba rate hikes for a second straight month, really upsetting some of that some of that significant rise we have seen in the minimum wage. sentiment, according to the most recent westpac survey, really still pretty close to the vulnerable levels. their chief economist says we are seeing levels we have not seen on a sustained basis since the deep recession of the 1980's and early 1990's, and the confidence in the labor market, which has been pretty robust and consistently positive, in their view, has also turned.

let's get to vonnie quinn now with the first word headlines. vonnie: pakistan's central bank left interest rate unchanged at a record 21%. this, in order to stop growth from weakening and rain in inflation. policymakers expect price pressures to ease beginning this month. the central bank hikes the discount rate by 600 basis points in the last four meetings as part of efforts to help the government unlock a long-delayed imf program. vietnam has allowed factories to increase production ours has power shortages begin to ease. the government said manufacturers include apple suppliers and samsung, they can now operate for up to 17 hours. thousands of factories in vietnam have been forced to curb power construction -- consumption as rolling blackouts swap to the country. the netherlands are set to be working on legislation used to bar chinese students from diversity programs teaching sensitive technologies. the proposal will avoid mentioning china directly, but is intended to limit beijing's

access to dutch knowledge. the education ministry confirmed plans to screen students, although the rules will be country neutral. the death of italy's four-time prime minister may trigger a widescale redrawing of his business empire. the 86-year-old billionaire was one of italy's most influential politicians, but his career was plagued by sex scandals and allegations of corruption. investors are already speculating about a selloff spree by his heirs. global news powered by more than 2700 journalists and analysts in more than 120 countries. i'm vonnie quinn. this is bloomberg. shery: how are we looking in the markets now half an hour into the trading session? annabelle: really taking the cues from the wall street session overnight of course, because we had apple creating a fresh record high. then you had more investors piling into tech stocks

generally. oracle one of the names we are watching in after hours. a lot of this down to the expectations around what we get from the fed later this week and the expectation that has been continuing to build that we will see the fed going on pause. here we are seeing most markets moving to the upside bit australia looking a little more subdued but we have perhaps of the bit of a catch-up trading going on given this is the benchmark that is more sensitive to what is going on in china. we have calls out from goldman sachs thing the property sector is going to become a multiyear growth drag so we are seeing some heavyweights on the asx 200 in the red this morning. broadly we are moving higher at the start of the day, .4% gain for the asia-pacific index. the expectation of course from the fed will be driven from what comes through from inflation data which is due later. what citigroup has a note out, this is one of the most read stories this morning, the risk is that broadly we are expecting inflation to be more subdued on

the month. but the risk is that it actually could come in firmer than what was expected. what they are basing that on is essentially that it would be after but we had in the months prior. so essentially they are saying that the bond traders will be underestimating how much of the cpi report will show the inflation rate dropped last month. haidi: watching softbank in the session today. at the moment we have breaking news. the british chip designer arm ahead of the ipo are in talks with a potential strategic investor group including intel to potentially angle what would be one of the biggest ipo's of the year. that is occluded to people familiar with the matter. they are in talks with intel and other companies, seeking to raise $10 billion in that listing. people asking not to be identified because the matter is private. these early talks are still underway and it could still come apart ahead of the listing. we are not sure how much would

be invested in in arm, what the structure would be, but bringing on an anchor in vector -- investor would drum up momentum and interest, particularly as we are witnessing a rough month for new listings. intel would eventually be listed in the prospectus ahead of the listing if the talks succeed. we have seen arm's chief pitching the direction of this ipo as being an ai play in the build up towards a listing. the ceo has been talking up arm's technology has been key for building up new ai applications, which of course makes sense if these talks with intel are currently ongoing. shery: it is really all about ai, tech, and monetary policy this week because we are expecting now the bank of japan to come out. the expectation is to keep policy unchanged at this meeting. let's bring in kathleen hays and our guest takatoshi ito, professor at columbia university.

he previously served as a member of the japanese prime minister's council on economic and fiscal policy. welcome to you both. what are the expectations for this week's meeting? even sources are saying officials don't see the need to tweak curve control. takatoshi: right. any policy change is tied to the inflation expectation. so, that is expressed in the document which comes out four times a year. the last time was in april, the next time will be july. so this month they will be no new information about inflation expectation. kathleen: let's explain that because i don't think a lot of people realize who are waiting for the boj to raise the inflation outlook, because inflation is so far above 2%. it is only every other meeting that the boj moves. it is a technicality and away,

but it is the main reason you don't expect any announcement of a higher outlook to match reality at this meeting. takatoshi: right. this meeting officially their forecast of inflation was the end of this year will stay the same as april, which means 1.8% for the fiscal year 2023. so right now it is above 2%. it is 3%-something. but it's expected to go down. so looking at that, they have no need to move. kathleen: so you expect them to raise their inflation outlook in july? and if they do, what is the significance of this? does it open the door then to another step, more normalization of policy? takatoshi: that is a good question.

depends on how much they will increase the forecast. the forecast has been increasing for the 2023, from 1.1% to 1.4%, 1.6%, and now 1.8% as of april. suppose in july goes above 2%. people will say, a-ha, you have achieved the stable inflation target of 2%. then you have two choices. one is, yes, we've achieved, and this is a good time to gradually raise the ycc ceiling. the other camp would say no, no, it's still too early to lift the ycc. let's wait until next year. we need to have next year's wage hike to make it stable and sustainable inflation target 2%.

haidi: what would potentially change the guidance if he's asked. if the -- is the narrative still one that holds? takatoshi: i think that they are saying that they would err on the side of overshooting rather than premature tightening. shery: were you disappointed at how little the shinto negotiations translated in boosting expectations? takatoshi: we have not seen the full effect of the wage hike into the inflation expectation. again, we have to wait until july. but the market seems to be satisfied with 3% above wage increase, which has been very new for the last three decades. the question is, can we continue

this 3%, at least for the large-company regular workers, 3% above increase next year. it's a long process. kathleen: it is interesting, because of the different ways they could change policy. it could be a very simple thing like a tweak, where they widen the ycc ban. the ultimate would be raising the overnight policy rate from -20. it would be changing ycc in a much bigger way. let say they raise the inflation forecast in july. what is going to happen next? what is the next possible move they could make? takatoshi: they have three policy instruments. the policy rate, the ycc ceiling, and qe or qt. so, what would be the natural order of these three instruments? i say the ycc band, raising the

ceiling, would be the first one to come. that would make a slope steeper on the yield curve, which makes banks more profitable, to have this spread. then, probably the policy rate. ycc, i think they would like to avoid that speculative attack on the ceiling which had happened last november and december. they were sort of forced to raise the ceiling. they want to raise the ceiling comfortably before being attacked. so when would that be? kathleen: it could be right now but july is the first time. so you see july then as potentially a live meeting? and you know mr. rueda.

do you think that is a possibility, that there will be something that signals or says, in addition to raising inflation outlook -- you said it a few months ago, the first step towards the first step? takatoshi: yeah. i know mr. ueda for a long time. he is my friend. what i cannot read his mind, unfortunately -- but i cannot read his mind, unfortunately. he is very serological -- theological person for data. data is important. and how he thinks weighing the risk on the upside and downside. i think he is telling what he is thinking, which is that the risk of premature tightening is greater than the risk of over sharing. shery: takatoshi ito of columbia

university, always great to see you. and also our kathleen hays. still to come, ubs's semiconductor analyst joins us before their inaugural future now conference in hong kong. an update on china's chip efforts coming up 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 at how softbank is trading at the moment, gaining almost 7% in tokyo trading. this as we hear that intel could be discussing being an anchor investor in arm's ipo. this is of course the company backed by softbank. bloomberg learning from people familiar with the matter that it is in talks with potential strategic investors that include intel to anchor what will be one of the largest ipo's of the year. for more, let's go to debby wu, who leads bloomberg's asia tech coverage. what have we learned? debby: we are looking at the chip designer working with intel

to see whether intel can be an anchor investor in its ipo. softbank is looking to raise as much as $10 billion in the ipo in new york, bloomberg news has previously reported. the significance of this potential partnership between arm and intel is that this could help drum up the interest in arm's ipo in a volatile year in the market. also at the same time, that means intel, which in the past has almost exclusively worked and produced its own design, is indicating it would be willing to open up its factories for competitors like arm. arm has helped power rivals, including processors for apple's iphones and qualcomm, which supplies its mobile chips to a

lot of smart makers around the world. haidi: debby wu there on our story on intel potentially becoming an anchor investor in this arm ipo with these discussions at the early stages and ongoing. of course tech stocks including softbank are in focus today pretty we saw usb climbing amid optimism the fed will pause its rate hikes. in particular chips continued to drive the broader upside in the nasdaq. the philadelphia semiconductor index rising to its highest since february 2022. let's get you to the ubs future now apac conference in hong kong. day two, they are focusing on a biontech driven trends. we are joined by sunny lin, semiconductor analyst at ubs. even this breaking story on intel to become an anchor investor in arm, we know that arm is really selling the ipo ahead of the listing by really

playing up the potential application for ai. it feels like all roads lead to ai for investors at the moment. how do you frame the immediate and longer-term opportunities? sunny: sure. so, i do think joining ai as a technology could potentially bs transformational as mobile and intel 1.0 for the longer-term. if we look at the demand-side, i think now, including smartphone, pc, it is very critical the semiconductor industry has a new growth driver. ai could take off. that means a lot for the industry in terms of demand profile, technology migration, etc. based on our recent analysis, for a lot of semis at the leading edge, we think ai could

potentially create 5% to 10% demand upside, which is quite meaningful. in terms of technology migration, ai chips by nature are performance hungry. it is also a pretty important application to continue to drive the gratian requirement for the industry -- the migration requirement for the injury. haidi: where do you see the most upside? particularly if you look at the semi-migration going on in china. are there opportunities when we look beyond what the regulatory framework might be? sunny: obviously, the export control announced by the u.s. government last october has to redirect -- has a very direct impact on the migration for chinese semis, including for

memory. i think at lease for the next couple of years, without the support of u.s. vendors, it is going to be very challenging for china to come into do that leading edge technology development. on the economy side, we do see continued efforts by the china supply chain in localizing the supply, especially in areas like webcasters, etching, deposition. for some of the high entry barriers like software fee, we think it is going to take some time. but for the other areas like localization in chip design, we are seeing a pretty strong incentive to localize the chips for power, sensors, radio frequencies.

we see a lot of resources being redirected to mature technology which china can continue to invest. shery: we have heard when it comes to arm's ipo, softbank's founder wants to make it the largest ipo ever by a chip company. at this stage, what are your topix for some of these semiconductor makers? because we have a broad range of names out there. sunny: yeah. so i'm not in a good position to comment on this ipo. but for semis, a lot of focus on ai. we think leading-edge foundry, memory, apf soft rates, server odm's in taiwan, are good places to invest for the longer-term. shery: sunny lin, semiconductor

analyst at ubs. we have plenty more tech and ai conversations with industry experts coming from the ubs future now apac conference. stay with us. this is bloomberg. ♪

haidi: oracles quarterly revenue topped estimates as sales increased 17% in the fiscal fourth-quarter. the result signaled the tech firm's cloud business is benefiting from increased demand for ai workloads pretty oracles cloud infrastructure revenue jumped 76%. cloud application sales jumped too. google is set to hit with a formal antitrust complaint from the eu that could pave the way for massive fines. the charge, which could be announced wednesday, would target the whole of the alphabet unit and tech -- ad business model. it accounts for 80% of annual revenue. shery: take a look at how softbank is trading. we are talking about the best day for the stock in about seven months, since november of last year. arm is in talks with investors including intel to anchor what would be one of the largest

ipo's of the year according to people speaking to bloomberg. arm has held talks with other companies about participating in the ipo according to these people. the talks are early and could still fall apart ahead of the listing. it is still unclear how much would be invested in arm or the structure -- or what the structure would look like. arm of course we know is looking to raise as much as $10 billion in its listing in new york later this year according to our reporting. coming up, the key risks in chinese equity. . . j.p. morgan asset is with us to share views. later the outlook for esg investing in india with waterfield advisors. this is bloomberg. ♪ when you automate sales tax with avalara, you don't have to worry about things like changing tax rates or filing returns. avalarahhh ahhh

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