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a very good morning. welcome to daybreak australia. i'm heidi stroud. what's in sydney? i'm annabel trawlers we're counting down to asia's major market opens. good evening from bloomberg's world headquarters in new york. i'm sharing the top story this hour. the fed hits pause, but an updated dot plot sends a hawkish signal, with jay powell warning inflation risks remain to the upside. i would say about to about july. two things. one decision hasn't been made to. i do expect that it will be a live meeting. the fed's hawkish pause is putting a dampener on the us stock rally. bond traders nearly wiping out bets on rate cuts this year. plus, china holds urgent meetings for advice on reviving the economy, with activity data due later set to confirm a sluggish recovery. take a look at how us futures are coming online. we're seeing a little bit of upside, about one tenth of 1% for s&p futures. of course, this after the s&p 500.

we scooped losses after the fed decision. yes, we had a hawkish fed statement and projections, but at the same time, we actually got the press conference from chair powell seeming to downplay projections and being open for the next few meetings when it comes to future rate hikes. so, in fact, we did manage to achieve the longest winning run since november of 2021 for us stocks. but treasury two-year yields climbing to 4.69 levels. of course, that's the most sensitive to policy decisions. a ten year yield. you can see it's at 378. we are also seeing oil rebounding from earlier losses in the new york session. it actually dropped because, of course, we have the fed hinting more rate hikes, but also data showing this massive increase in us crude stockpiles. but really it was all about the fed today. let's bring in global economics and policy editor kathleen hays. and kathleen, from the new dot plot to powell's remarks, what's the key takeaway? more rate hikes most likely are

coming. now. the fed is data dependent. you don't get data that can dependent all that until until we get to july. powell tried to say it over and over. no, i can't tell you if we're going to hike then. but he certainly held the door wide open. now, they did hold the benchmark rate in the 5 to 5.25% range. they didn't hike and the vote was unanimous. somehow, despite all the back and forth we heard from fed bank presidents and fed governors, powell managed to bring them all together and get everyone on board, at least for now. the median forecast is for two more hikes this year. all nearly all, powell said, expects some further rate hikes. now, it's also interesting that he said all the risks are to the upside. he said the fed keeps saying inflation is going to come down and it hasn't. core inflation is still far too high. he seems very concerned and very hawkish. the dots, the dots, so much focus here because is now there are some 12 of 18 policy makers

who see going above that rate of 5.2, 5% to five and a half to five and three quarters. that's a two thirds. that's a majority. but let's look at let's really put this in perspective and show how important and powerful this shift is, because if you look at the median forecast for 2023 and 2024, the march meeting, remember, they update all this stuff every three months, five and 5.1, two five. that was going to be the median for the march meeting. and then on 2024, cuts down to 4.25. look what we see now in june. what a difference now this media and this middle of the of the band. is 5.625 that i would say is quite a big move. and the june meeting, they're still forecasting some hikes starting next year, but they're going to only get down to 4.625%. that is also a very big difference. now in terms of what jay powell

said, certainly they did move their inflation forecast higher. that's very important. 3.1 is what they had said before. the last summary of economic projections. update now they've got it at 3.9%. there's another reason why jay powell apparently sees all the risks are to the upside. even if you can't commit to a july rate hike just yet. let's listen. we didn't make a decision about july. i mean, of course, it came up in the in the meeting from time to time. but really, the focus was on what to do today. i would say about about july 2nd things. one decision hasn't been made to i do expect that it will be a live meeting. i thought it was interesting and anderson, reporters questions. jay powell, you know, was was trying to say everything's open. we haven't decided. and you're you're surely going to hear a lot of different fed officials talking about this. i thought that was pretty fascinating. so let's get a former fed official to talk about this now. charles prosser was president of the philadelphia fed. he joins us now live.

so, charlie, what what is your takeaway? i know you think that this is a bit of a what just john, just what i want to say. disjointed, kind of decision from powell and his team and the language as well? i think so. think this is a kind of as you were alluding to, the powell said a lot in his press conference about the inflationary is not pleasant, not going away. their biases to the upside and economy remains strong and and then they send out a pause or no interest. and i think there's a example of trying to the committee trying to reach a consensus on a statement. and in doing so, send a statement that was confusing, unclear, and really not very informative about the fed's view. so what's the risk here,

charlie? i'm sorry. go ahead. finish your thought. say this is a classic problem to trying to get consensus and and as a result, the statement wasn't very clear. and powell listening to very different messages, trying to keep everybody happy and everybody on board on the statement think and that results in a bad statement. it would have been better, i think at had the committee send a statement where they were they the pause and had some dissents or they raised rates by 25 basis points and has some dissents that would have been a more informative way to undertake the uncertainty and the communication that it was so. so what's the risk of this? they've paused. they've signaled the doors open, a more rate hikes. they can move as soon as july. why? what's what's the problem with this but because you're going to have some people in the

marketplace, we're going to say, oh, well, they're they're done. it's going to be one. and done. they they're not going to go any higher than two and two to maybe this year. more rate hikes. but they're going to raise rates almost for sure in july and maybe in september or whenever the next one is in. why not raise them now? i mean, this is just a really bad signal and allows people to read way too much of what they want to hear from the statement and think it was a poorly constructed effort in an effort to build consensus out of out of a spot where there was not much consensus and you saw the reaction from the markets, right. they took the statement as very hawkish than they read bound it because they're now thinking chair powell is downplaying

those projections. and at the same time, even when it comes to future rate hikes, the fed's dot plot projections show what 100 basis points of rate cuts next year. but then chair powell says we're not expecting cuts for a couple of years out. so what is the risk of such as kathleen said, disjointed message? well, you're sending mixed signals to the marketplace about the nature of policy and the challenges of policy. and it's not very informative and doing it this way, like i said, it would have been better had they whatever decision they made, they had registered some dissents from the policy and disagreements. that would have been a more honest way of trying to send these signals. and and now the markets can sort of take away what what they want to take away, which is not very much and not very sure. so it was really less informative than it could have been.

and should have been thought. they say they're waiting for more data. right. that's always been the case, that they're data dependent. what is really core to to that data that could do you think, in the months to come result in more decisiveness and perhaps, you know, in your view, better communication to the markets? well, as you pointed out, they could always say we're waiting for more data. that's what got us into trouble in 2021 and 2022, when the fed kept saying, we're going to wait, we're going to wait and see more data right. it's all transitory. next thing we know, we're in this deep hole. now. they've got to get themselves out of. so waiting for more data is just it doesn't mean anything because you always say that. so. so they need to to be more clear about what the debate is about. and and be more transparent about the debate within the

committee. okay. and so think that the data that you've been looking at clearly is what happens to inflation and and employment over the next few months. and that was always that's always the case. yeah. well, charlie, let me ask you this didn't really justify the pause in terms of the data. well, yeah, because jay powell did say how tight the labor market is, but but they justified it in the sense of we need to get more data. we need to assess it. in your view, you've sat in that chair, you've been there, done that. you see what the data are right now and where they've come from. how much more does the fed going to need to do? what's it going to take to finally get down inflation, which powell himself says it's still too high. we have been forecasting for months that it's going to come down and it hasn't not not enough. yeah. relating that back to what happened in 2021 when the fed kept saying that inflation was going to come down and it did. so i think you can rely on that

excuse to not do anything, but that's what got us in trouble. so think they're going to be looking inflation and i don't know how hard they're going to have to go for sure. maybe as it shows a 16%, then it is 5.5% and it may maybe slightly above 6%. but that's your depend at the end of the day on what happens to inflation and employment. i don't know inflation is not coming down, the risk of inflation is to the upside. why are they pausing? what is this wait-and-see policy that got them in trouble in 2021 and 2022 the right policy?

>> thank you so much for your time today. as well as kathleen steady. investors in asia waking up. let's see how we are setting up for the market open. >> as charles was saying, mixed signals coming through from the fed, so the question is how the market will be interpreting that. morgan stanley among those saying there will be quite a bumpy road ahead for markets. this inflation battle was always going to be something that took a while to play out, so in terms of what we are seeing for stocks today, we are seeing pictures still pointing to the upside, but in potently, some gains. they will be quite muted we saw the wall street session, slight advance for the s&p 500 and its biggest move in a couple of months. watching the treasury, yields little changed, slightly higher on the front another curve.

we are keeping and i on what we see in the currency space this morning as well. we did see the dollar pairing its drop after that meeting, but the big move higher could come as we await what jay powell cygnus on the outlook for financial conditions, and the closer attention we pay to that, essentially saying two currencies at the potential to fade. the key we dollar one of the bigger gainers, gaining as much is 1.2%, and that is a divergent outlook coming from the rv and z -- the rbnz. we are as well expecting the pbmc to make it similar decision later today. >> coming up, we will get more reaction to that decision. we find out how our next guest is positioning their portfolio for what they see as a hard landing. and we previewed big central

bank decisions that are yet to come this week here in asia. the bank of japan and the ecb as well. this is bloomberg. ♪ when you automate sales tax with avalara, you don't have to worry about things like changing tax rates, exemption certificates or filing returns. avalarahhh ahhh ahhh ahhh

>> urgency is the word now most associated with china's efforts to shore up its sagging economy. sources tell bloomberg business leaders, even foreign ones, on how to revitalize growth. what sort of input are they asking for, and, i guess the question is, what does this tell you about how much this is needed for the chinese economy? >> it is clear the chinese economy recovery is weak. it is stymied by weak confidence, and they are kind of puzzled about how to reverse this trend right now because any kind of bump we got coming out of covid zero has petered out. we are going to get the data dump for may later today, and that's likely to reflect the weakening confidence as it relates to those economic numbers, and we could also get a

rate cut on the one-year medium-term lending facility later today, so there could be some monetary policy moves. sources have said we have had at least six meetings so far in recent weeks that top government officials have called just soliciting the opinions of business leaders as well as economists and also some of those foreign business leaders on what they need to do. leaders press them for ideas on ways to stimulate the economy, no doubt, restore in the private sector and revive the real estate industry. in response, sources are saying those gathered call on the government to make urgent policy revisions, also adopt a more market-oriented rather than planned approach to growth. of course, all this sort of flies in the face of the mandate that has been laid out by xi jinping at a time when we are

trying to weed through the ramifications of the simultaneous crackdowns on the platform economy, on education, and of course, covid zero, which was the big dampener on the economy. one analyst tells bloomberg that business leaders are scarred by those simultaneous crackdowns. it does not surprise me the government would solicit outside opinions on how to get some fresh ideas at a time, of course, over the last year we have seen xi jinping solidify his grip on power, put the party in more positions of power rather than the state in controlling the economy. this is a fundamental problem that the chinese economy has right now, and it will be very interesting to see how open the ears of chinese government officials will be.

let's if we get the data done today, it is likely to show further economic slowing. >> look at all the different members. industrial production, which is factory output for may. you are dropping two percentage points from one month to the other month, not month over month, but again, the difference, as you can see, 2.1% drop, and that really is the lowest since december and shows again, reflects that weakening confidence, and also weakening export prospects for sure. retail sales, which, of course, the chinese government wants to boost consumption, but consumption has been slow out of the gates coming out of covid zero. retail sales at 13.7%, the consensus estimate. it was 18 point 4% in april. when you look a stimulus, what kind of stimulus there could be, yes, there will be rate cuts.

barclays says there could be several rate cuts coming, so they are going to cut monetary policy, but what about on the fiscal side? their balance sheets are obliterated. there will be very little room on the fiscal side, and that's where i think they are soliciting some of the advice, so the fixed asset investment, that's the key, railways, bridges, and the like, the key cocktail the chinese government has always used two stimulate growth. we are expecting 4.4% growth in may, the lowest since december of 2020. >> chief know asia correspondent stephen engel there with the latest data we are expecting from china -- our chief north asia correspondent. we are also waiting for policy decisions from the ecb and bank of japan.

it is a bonanza if you are a central bank watcher this week. what are we expecting? >> the ecb is put much luck on for another basis point hike. even though inflation is coming off -- core inflation came off the most recent print, headline inflation still remains well above the ecb's comfort zone. christine lagarde, the head of the ecb, has made it clear it does remain too high. interesting take away will be what they signal for the month ahead. probably not expected to move again in july next month, and to take a break, but what will they do when they come back in september? do they still see scope for further tightening? the fed talking about the idea that they are on something of a skip or pause or however you want to frame it. the point is they are willing to raise rates again if needed, and that would be interesting given that the eurozone just fell into

recession earlier this year when it was expect it to escape. bank of japan, slightly different story. inflation obviously well above its target. it comes down to, is the bond -- the bond willing to pull out, but all indications are not yet, for at least no other reason then they don't want to trigger unnecessary financial volatility. >> we were just discussing how big the challenge is for chinese policymakers with their economy weakening right now. how much space does the pbo see have to do more? >> i mean, they have a lot of space on paper, right? they never went down the qe route. they criticized western central banks for having done that during the pandemic. they also have space for

conventional interest rates, but the bigger question is what that will achieve for china. everything i'm reading in the reporting coming out of beijing suggests the price of credit or the availability of credit is not necessarily an issue. it is about how to read about consumer confidence, consumer spirits, get the manufacturing side of things going again. i think they do have room. they probably feel they have to make some responses, but the bigger story really is going to come on the borrowing and spending side of things, especially of central government, and where will they try to get money, get activity going, and of course, how long can they hang on for the global trade story to turn? >> boost confidence. households and businesses want all of that money, right? our global economics correspondent with other monetary policy decisions we

have coming up given that we have now the fed out of the way. this is bloomberg. ♪ is he hailing a ride to the concert hall? no. he's making sure his portfolio and retirement plans work in harmony. they want to adopt a child and build a new home. so they're talking numbers with their merrill adviser. she's not researching her next role. she's learning how to handle market ups and downs without the drama. personalized advice so impressive your money never stops working for you with merrill. a bank of america company. you've been a real rock star. rock star? what do you know about rock stars? billy idol? i mean where's the skin-tight leather? my shoes are leather. where's the unnecessary zippers? that thing! billy, rock star is just how doug feels when he uses workday. thanks, rory. i'll show you rock star! be a finance and hr rock star. workday. for a changing world.

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heidi: taking a look ahead at the day for new zealand and australia. bloomberg economics are expecting the economy to just barely avoid a technical recession. here in australia, today's on the planet report could show an increase in jobs but not enough to keep in line with the expanding pool of workers. a survey found 50% rise in 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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>> this was a very effective way

to message, we are going to assess what is out there and what additional tightening is needed. >> they for sure trying to tell us that code inflation is too high and it was emphasized several times from j file -- jay powell. >> this is about pushing back against the recession, consensus. >> they succeeded in what we expected, delivering a hawkish skip, it did signal strongly that more rate hikes are coming. >> the longer you do not see the response and labor markets and inflation, the more the data is telling you that you are not tightening in terms of policy and to get tight, you need to go much higher. >> we expect them to raise rates in july and september, and to get to 8.5% up. >> our bloomberg tv guest reacting for the fed rate because. -- the fed rate pause.

he has been digging into the fed's new dot plot. jay powell tried to downplay production. they were still pretty hawkish. >> it was, for one, the only two officials, each one gets one., only two had a new dot plot that suggested no more eight hikes. the majority see two more. there was an explicit message being given out of the fed, we are putting it on your screens, march meeting, june meeting, two more hikes, peaks this year, and to lower rates we are. -- lower rates year. it is even higher than the thinking about three months back. act in march, that was when the banking crisis was taking place. between now and then, it doesn't seem that moved the needle. you look at how the market has

been interpreting this, we will show you the pricing of the november meeting, 2023. it does not mean the fed gets there. it is almost like they are taking on an insurance policy, an option to leave the door open in case they need to move tomorrow. as far as market reaction, there was a meeting in the middle, up until literally right now. cuts were priced for the november meeting. now we are seeing no cuts for november. that is the key take away. whether or not they are overshooting the target and engendering a hard landing is another thing altogether. shery: given what david has just told us, no wonder our next guest sees a hard landing as more likely. joining is not from san francisco, good to have you with us. we are hearing from the former

philadelphia fed president talking about how the fed is sending mixed signals. you have a very hawkish projection, a less hawkish presser. how do you build a portfolio around this? guest: clients have been asking us, especially with the s&p 500 performing so well, they feel like they are missing out on a party. but we think that being by -- being diversified is the way to go. there is a lot of uncertainty, our portfolios that we are dicing -- designing for our clients, need to be able to protect against that times that could come and also take advantage of opportunities that prevent -- present themselves in the marketplace. we are playing defense and offense at the same time, being nimble and paying attention to what is going on in the economy and around the global gets. shery: it is a composition, more

defensive in terms that you would go a more liquid, especially with cash. i see in some of your calls, you see opportunities in lu stocks, you think it -- you think we would get a recession and those would take a hit. guest: because we are working with individuals and families, we look at their cash needs based on what is coming up for them and personages desk just as in the months ahead. we are being very opportunistic in looking hard at treasuries and money market funds. within the portfolio we do not have as much pressure to keep cash, because we have that covered for clients. we want to make sure we are nimble. the way we have been doing that is keeping a fair amount in bonds, we are much more alicia around bonds now than we have been in the last couple of years. we are keeping a slice of a 20%

of the portfolio in liquid alternatives, the rest are in equities. within the equity portfolios, we are playing that defense and offense come off we have high-quality stocks that should have lower volatility. we are also tilting towards the value stocks where we think they are going to outperform by 4-6% annualized over the next seven years. that creates a lot of great opportunity. also we are bullish on overseas stocks, particularly emergent markets. there is a little bit of everything, that is really important at this time when the fed is still trying to figure things out with the economy. in a situation where interest rates could be higher for a lot longer. heidi: tell us about the emerging-market views that you have. if that could be a challenging environment for ems.

guest: we are looking over the next seven years, we are not trying to make calls based on the next few months. we are attracted to emerging markets because of the different policy regimes that have happened in the a lot of those countries. the countries were taking a much bigger stance against inflation and temping down on that faster than we did in the u.s.. also valuations are much lower. when we look across the world, companies in countries like china, india, korea and taiwan look attractive to us, as do result. we are looking at tech companies there, financial services, industrials and materials. heidi: what are you looking at when it comes the chinese market? so much of the momentum hinges on what we get from the pboc this week. guest: well diversified in china

, but looking at financials overall, consumer discretionary and i.t.. we feel very good about that as we look out over the seven here's, not so much the next seven months. we think it is worth being there now and being patient. heidi: always great to chat with you. let's stick with investor reaction to the fed. annabelle has those from our morning calls. jp morgan says it is the time to move money out of money market funds. and into bonds. annabelle: they say this is the conversation they are having with clients at the moment. we spoke to the banks local head of fixed income about this cash trap, in which money market funds, people gravitating into those. michael is saying this is the time to shift into debt and out of those.

forget about weight -- forget about what we are saying in the treasuries, look at the aggregate inside of the bond market. when you are buying back in barth, huber close to 4%, we are at the 5% mark. could do better in money market funds but only to the tune of 25 or 50 basis points. he says you can get better value when you look into the future. he is projecting we will see the fed cutting rates by september, then those cash returns are going to start to evaporate. if you do switch to bonds, he says you will not have only locked in the carried but capital appreciation from your pond -- a bond portfolio. he says we can expect that. shery: also coming out with its calls on stocks, morgan stanley. annabelle: the bank is expecting losses ahead for u.s. equities. that is the key takeaway we had from our interview earlier from mike wilson, the chief u.s.

equity strategist. it is a few we have heard from him before, but it is interesting that he reiterated it, we have been hearing the likes of goldman sachs and banks of america -- and bank of america raising their targets. he is sticking with his view that we are going to end the year at 3900. we can expect a respite from the fed, we are seeing a boom link to the ai play continuing to play out. this is why he expect a down momentum ahead. >> our view is inflation is going to come down, while that is good for bonds, it will not be good first -- good for stocks. the reason we were bullish in 2020 and 2021, we expected inflation to drive a profits boom. now when inpatient comes down, you are going to have a profits recession. shery: now turn to some top corporate news. the european union charging

google with abusing its dominance over advertising technology to push -- to crush competition. the you threatening to rake a part of google's business? >> it could break up part of the ad business, the good news is the eu probes can take years to complete. that gives a lot of time for both investors and the company. who will has been in the crosshairs of the eu before, this time it is accused of using his ad tech dominus to crush the competition. the alphabet unit had favored its own at exchange programs over rebels, bolstered the companies role in the ad tech supply chain, as well as boosting his ability to charge a high fee for services. the commissions for luminary view is that this means that only the mandatory breakage -- a breakup of the business would resolve concerns. the you hit it with an antitrust charge that kicks off a lengthy process. it can also pave the way for

fines of up to 10%. that is a big ouch. however this is not google's first time down the eu road. they have had prior finds that total up to 8 billion u.s. dollars. these have failed to put a dent in google, alphabets shares were little changed by the end of the day. they had been down almost 2%, but paired that by the close. it seems investors taking a lot of this in stride. heidi: what are we expecting next? guest: the commission, with this charge invites google to present their counterarguments, or rebut the claims. that kicks off a lengthy process , one google and also that have been through before. google remains committed to

creating value for its publishers and advertising partners. eta believes that the eu's focus is narrow here, it is expected in other cases to fight vigorously. there is a similar case that was brought here in the u.s.. online advertising is alphabets most lucrative business, generating about 80% of its total revenue last year, adding about dashing adding to $225 billion. it focuses on the black box, the little-known aspect of the online advertising business where google automatically calculates and offers at prices. different proposals to advertisers who publish with them as users click on the webpage. where this sheds the light, or is another instance where google has managed to pay a fine and move on, we shall see. not much we -- not much reaction

in this latest trading session in the u.s.. shery: su keenan with the latest. much more to come on daybreak australia, this is bloomberg. ♪ j.p. morgan wealth management knows it's easy to get lost in investment research. get help with j.p morgan personal advisors. hey, david! ready to get started? work with advisors who create a plan with you, and help you find the right investments. so great getting to know you, let's take a look at your new investment plan. ok, great! this should have you moving in the right direction. thanks jen. get ongoing advice; and manage your investments in the chase mobile app.

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heidi: breaking news when it comes to new zealand gdp numbers crossing the bloomberg, the economy has fallen into a technical recession with a decline of 0.1% of gdp seasonally adjusted quarter on quarter number from the first quarter to the fourth quarter. that slipping from what we saw a steeper contraction in the previous quarter. your on gear that is 2.2% that is also softer than expectations of 2.6% matching the previous quarter the game. paul allen joins us now. there was a huge margin of uncertainty here. we are starting to see those 525 basis points of hikes starting to find. guest: the rbnz went harder than

the fed. that is clearly had an impact here. you are right, we had nine economists of the 16 predicting this. the other five thought we would see an expansion. the bank of new zealand expected a modest expansion, but it did not happen. in terms of of reaction, not a great deal so far. the stock market has not linked. he be dollar trading it'll weaker at the moment, but a number of other factors beyond the type at play. there was the devastating cyclone that stuck -- struck the east earlier this year. the cleanup continues after that. on the other hand, there is reasons to be optimistic as well. the unemployed rate is still at a record low. immigration is strong, tourism is bouncing strongly also. this could be a shortened shallow recession, we will have to see where we go from here. shery: the imf said that new

zealand should not be cutting rates for a prolonged period. what are the and plug-ins for the rbnz here? guest: they have already signaled it was done, it came as a surprise to a lot of people at the last meeting. they are content to let the lacking impact of the 525 basis points of tightening we have seen layout. there could be more to come because of mortgage holders not going to roll over. other issues at play here as well. we have an election year in new zealand this year. there will be political dimension to this. it is the economy stupid. it expects political mileage to made out of this. this recession has, earlier than the reserve bank predict appeared the anticipated one in the second and third quarter. it has come in the first quarter instead. the next meeting is on july 12, and a week after that we get inflation numbers. next month we will get a better

sense of what the rbnz does next. or it could be nothing. shery: confirming that recession for new zealand, and of course a great deal of uncertainty when it comes to those expectations, but also the implications of the rbnz. we are watching, the reaction when it comes to the q. week dollar is really relatively unit. -- the kiwi dollar, is relatively muted. we are seeing the kiwi dollar raising the intraday gain after the gdp earnings confirming a soft position new zealand. we saw hawkish pause from the fed, potentially further gains to complement comes to the aussie dollar and watching asian bonds as we see treasuries going through a bit of consolidation there.

moves it to be expected when it comes to the 10 year japanese yield as well as we get into the bank of japan decision on friday. for that we have the ecb as well as the pboc. lots of central-bank action dominating the move said that we see in currency as well as bond markets this week. turn into bloomberg radio, you can hear more from the days big newsmakers and get in-depth analysis from our team there. broadcasting live from our studio in hong kong make you can listen the app or bloombergradio.com. much more ahead, this is bloomberg. ♪

shery: take a look at currencies trading at though to dollar fell towards a one month low. we are seeing the aussie at 68 u.s. cents. we have seen four sessions of gains already against the u.s. dollar. the commonwealth bank singing those interest rates differentials between australian and u.s. have become less negative. we could see more upside. q. week dollar under pressure at-the-money. this after we saw the new zealand economy contracting. we saw gains in the kiwi dollar being erased after the data was out a few minutes ago. we are watching the japanese yen surpassing the 140 level.

we are at the six-month low against the u.s. dollar, we continue to see speculation that monetary policy will be unchanged as we get up hawkish old from the federal reserve. the chinese yuan past the seven dollars per level. when it comes to that one year medium term london facility as well. former southbank ceo is targeting half $1 billion of his new latin american focused vc fund capital. it has amassed more than 448 million dollars in commitments so far. more about the latin american investment landscape. >> there are so many latin american founders who actually went to harvard and go back, and they -- or rather than become

entrepreneurs in the u.s., they take the knowledge and take it back to latin america. most of the stories you have seen, a lot of those founders were u.s. educated, most of them went to stamford, and go back to latin america. that has given rise to a boom in entrepreneurial ecosystem that is hitting san pablo. -- san paulo. there are huge stories of success. the most valuable district bank in the world and the one that makes money and worth tens of billions of dollars. now you have the growth -- a multibillion dollar marketplace that continues to grow. there are enough stories of success that have created an extra manorial -- and on tribunal ecosystem. what we started at softbank, we took latin america from $1.5

billion a year to $16 billion per year. that gave rise to an entrepreneurial ecosystem that needs our capital. often america deserves a fund that is going to be focused on latin america and not the traditional tourist capital that comes in only when times roll. then they retrench when things are not good. we are in it for the next few years, i made it a point to focus the rest of my career in latin america, that is what i want to do. >> you are dedicated to diverse founders, how much -- an environment where interest rates are going higher, companies are slimming down, people are wanting to put money into tried and tested founders, how are you able to focus on a minority founder? >> the interesting thing about founders who are underrepresented, is they have the grid it takes to succeed, they have been overlooked, they are the perfect solution. they do not come from the

typical mold, they have had to struggle, and we like to back those founders because we think they are unfairly overlooked. it is not about the back row, it is about the micro and to the people best suited to navigate moments like this or people in places that are overlooked, people who look like they are overlooked, and if you back those folks, believe you can make a lot of money. heidi: speaking to bloomberg's -- coming up in the next hour, we continue to dissect the fed's hawkish hold. john taylor joins us, we will be mapping out the bank of japan's potential policy path. "daybreak australia""daybreak australia" that is it for, daybreak asia is next. this is bloomberg. ♪ 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.