it's an amazing thing when you show generosity of spirit to someone. and you want people to be saved 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. ♪ kathleen: kathleen: you're watching "daybreak: asia." coming to your live from new york, sydney, hong kong. annabelle: we are counting down

to asia's major market opens. haidi: the top stories this hour. a inflation bolsters bets that the fed is close to a rate hike. the dollar drops to a 14 month low the bok is escorted to keep rates on hold. and thailand's leading prime ministerial candidate faces legal challenges, with parliament set to vote for the country's are. annabelle: we are counting down to the opening of sydney, seoul and tokyo. the main theme investors are digesting is the u.s. inflation print, it came in at the weakest level in about two years. the headline at 3% on the year. we have much more analysis to come. in terms of market reaction, it is the more we are seeing in bodily yields. we saw yields retreating in anticipation that we could see hikes for a hold coming up on

the horizon. it is being led by the retreat in the front end of the curve. big moves in the fx space. the dollar pulling back quite sharply. the japanese yen, we are watching it consolidated below the 140 level. the pressure on intervention has been truly removed from the japanese government officials. the swiss franc is amongst the other movers and we are seeing it at a level that we have not watched since 2015. so big moves as well across the entire fx space. let's change on. in the session today in asia when we look at equity gauges, we will be tracking the gains on wall street overnight. the highest gains since april. that is also translating to strong futures moves. sydney-one, higher by zero point 1%. we had the premier li qiang in china weeding with tech

executives from the likes of alibaba, tencent and meituan, to enforce the innovative and leading china's tech economy. he says that it's another supportive factor for the private sector. oil is higher at the start of trading. certainly a lot of focus on what the u.s. inflation print means for the u.s. economy, the fed, and other central banks. kathleen: let's get some of those details, as we look at the latest numbers on the consumer price index. embarq economics says the cooling inflation rate could convince the fed to wrap up its tightening cycle this month. our economist joins us for more. we know this is potentially a pivotal report, but the fed has already signaled, in fact, if fact, jay powell has underscored a couple of weeks ago, that a strong majority is expecting to do two hikes, right, so would it

be odd for the fed to not hike in july? what are the odds that they will? wes: the odds are near a mortal lock that we will see a hike in july. and there will be an additional hike after that. the question is whether it comes in september or november. with a yiqin: imprint today, it is more likely the case that november is in play, instead of september. haidi: the need is permanence. what will convince the fed that the tide has actually turned for good, that this is not like the previous head fake and that will not see the secondary charge inflation pressures? stuart: we are going to need to see more softening in the labor market. if you see housing and the new strip out some of the less intensive services within the core cpi, things like airfares, if you strip those out and focus on the labor-intensive elements within the cpi services, you end

up seeing about 30 basis growth month-on-month. that is still down from what we had seen previously, but inconsistent with the fed's 2% target. 150 thousand private sector jobs added, that is double the pace that the fed is expecting over the long run to be consistent with operational growth. we need to see more loosening of the labor market to know that inflation is sustainable. kathleen: the wage book showed relief on inflation. and they are watching other elements of the economy. in terms' forecast, where is the labor market going? willits often enough to not just have the fed pausing, meaning after in november hike, but even moving rates slower? stuart: i would not anticipate any rate cut mid 2024 at the latest. the labor market is still relatively light. there are cracks underneath the surface.

he published research showing that we anticipate, showing all the reasons why we are to submit period being revised down, for example. but with the unemployment rate on track to may be hit 4.3% at year-end, we are still talking about a labor market that is officially tight further to maintain its higher for longer posture. kathleen: i don't know if the markets will like that. stuart paul, i think a lot of people at the fed agree with you. you so much for joining us, were bloomberg economics looker at the fed. how other currencies are reacting to cpi numbers, let's bring in over chief richards correspondent for asia and mliv contributor, garfield reynolds. what is it -- 14-month low in the dollar. steady pulling back. where do you see it going from here? garfield: it was a 14 month low. you were close. it was the bloomberg dollar

index which dropped by the most in one day since january, which was also a time when there was anticipation that inflation was being trained, and, therefore, the fed could not just slow it's rate hikes, but stop them. so a little bit of deja vu there. that level for the overall index is about 1.2% higher than where the dollar index was a week before the fed started taking. we're almost at the stage where we have wiped out everything that the fed's tightening cycle brought for the dollar. with everybody fully cognizant that the fed is almost certain to hike next month, with the risk that they will hike once more again, the message as far as currency traders are concerned is that the fed is just about done. that means the dollar could have back down to where it was before the tightening cycle, probably a decent and short-term target for

the overall gauge. and how individual currencies go to some extent, depends on where they are seeing their tightening cycle. how much certainty or uncertainty there is about what the central banks will do, and also behind that, is how strong or weak their economies are looking. because the backdrop for the dollar's weakness and part of what might support it going forward, if it turns out to be incorrect, is the strong anticipation that this inflation slowdown is going to be accompanied by any further economic slowdown, which then again, would force the fed. its interest rate hike cycle and start to consider when it might lower rates in order to avoid a deeper economic slowdown. haidi: when it comes to the move inbound yields -- in bond

yields, is it real in terms of the outlook for bond bulls? garfield: every time bones drop end-yields jump, bond bulls go, we will wait until there is a peak and then once we think there is a peak, if these yields that were at 5% or so for two year just a few days ago are just too appealing to ignore, two yields still well above 4%, 10-year yields still above 4.5 percent. those are the levels that investors have consistently shown that they will buy, unless there is imminent danger of extreme fed aggression. so that helps to explain the strong moves overnight. we might stabilize for a bit

here leading into the fed meeting. but we are likely to get a sustained advance for treasuries, unless that fed meeting brings some real shocks in terms of what the fed is expecting to do. or, for that matter, just after the fed meeting we get the fed's favored inflation gauge, the pce deflator. if it stays sticky in the face of this month's cpi report and the report that came up last month which was also heading in the right direction, if we get sticky core inflation on that measure, then that would cause some concern for the bond market because it would be likely to spur the fed to stick to its play, which is probably a hike in july, a hike in september or november and then hold for a significant amount of time.

haidi: bloomberg chief drake correspondent for asia, and mliv contributor garfield reynolds there. we have another central-bank decision to look ahead to, the bank of korea will announce its rate decision on thursday. bloomberg economics expecting they will hold rates at 3.5%. our korea economist joins us now. it's a balance of risks, but consensus has it that they will hold for a fourth consecutive meeting. >> yeah. i expect a hawkish world from the back of korea at today's meeting. even if the inflation is falling, it is still higher than the bok center percent target. and inflation is even higher at 3%. which implies that underlying inflation is still high. so the bank of korea will be

kept on alert for the back of korea will keep its hawkish stance. falling inflation is driven by lower energy prices. we expect that it will go down further in july. but the inflationary pressure will push inflation up later this year at around 3%, so that it will keep the back of korea hawkish. but with the weaker growth outlook, the back of korea will hold today. kathleen: what are the balance of risks here? and how will that be ok governor communicate that?

because growth is expected to pick up in some ways, but china's economy is not a done deal. there is disappointment there. the export numbers are not looking so good. what kind of message do you think the dok will give us after they hold? >> i think the bok will still give us a message that it is open to another hike, because as i told you before, they care about inflationary risks, after the low energy prices, the lower prices and the higher rates decrease that inflation will go up later this year. and also recently, there are signs that household credit is

increasing. not only increasing, but also the growth of household credit is accelerating, so the back of korea we will keep an eye on that evolution of household debt. they are concerned about the financial imbalances. they will worry about financial stability. so i think the balance will be more on the hawkish side. haidi: bloomberg korea economist you're sunk one there. you can turn to bloomberg for more. tliv is where you will get commentary and analysis from our team of expert editors. still ahead, thailand's parliament is set to vote for its next prime minister as a leading candidate is hit with last-minute legal challenges. we will be assessing the latest risks later this hour.

plus, defiance etfs will tell us why the u.s. inflation print is sending a loud and clear message to the fed. we will get there market outlook next. this is bloomberg. ♪

>> this was a good report. >> an extraordinarily good

print. >> this is officially starting to take hold. >> at her thick agendas what they will do at the july meeting. >> i don't think it changes the move in july for the fed. >> i think the fed will hike in july. >> they can't take their foot off the pedal yet. >> it would call into question hikes beyond july. >> immediately after july they might take a break just like we did this last time. >> the september hike is one where they could afford to skip again, given how inflation is behaving right now. >> it's a long time between now and november 1. >> the november rate hike is up for grabs at this point. kathleen: our tv guests commenting on u.s. inflation data. our next guest is ceo and cio of defiance etfs, sylvia jablonski with a look at what this means for the fed and also for investors and markets. is the market in a position now

where they are ready to rally -- you are ready to rally, because inflation is coming down? or is there still a risk that if inflation comes down the fed leaves rates where they are, that at some point that becomes a headwind rather than a tailwind for markets? sylvia: i think things can be true. on the one hand you have been bullish for a while because i think that although inflation is high and the fed keeps raising rates, we knew that this year was the reversal of that. we knew the fed would slow down, pause for date long period of time. that bodes well for stocks like growth stocks. that were really hampered when inflation was incredibly high. i think it opens up a way for investors looking towards some of those nasdaq stocks that were beat up in 2022. i think the momentum will continue in the short-term.

to the second part of your question, if the fed keeps rate higher for longer than we thought, then there is a risk that the shallow recession is not so shallow and lasts a bit longer. i don't think we will get there though. kathleen: there was commentary on the fact that so much of the rally in stocks consolidates around the big tech stocks. but you step outside of that ring, right? so what do you look for now when you say i am not is going to buy amazon, what is the main quality that you look for? sylvia: you probably have some formal if you have about nvidia by now. now you are towards the tail end of performance on that. so what are you look for? they look for the potential. where is the next chatgpt or ai machine learning story. i think for example electric vehicle stocks, stocks like rivian, who for months we were

talking about their massive supply chain issues that they were quick to deliver anything, and lo and behold, beat numbers and have been rallying. tesla opening charging stations with the biggest automakers in the world. there are opportunities there. last weekend 50 million people traveled for the fourth of july. so i look at airlines, cruises and hotels. in the short-term they have a great new wind behind them. so there are still great places to park your money. haidi: that is the two sides of the inflation outlook question, right, because travel is such a big part of that. you assume the lack of capacity and i guess lack of ability or willingness for a lot of these providers to add capacity will continue? sylvia: unfortunately, it is good news for investors because a lot of these providers are price-gouging. the price of fly anywhere is incredibly high right now. even to get on the cruise sheep are incredibly high.

so is the interest of consumers which has gone from spending on goods and services. they are getting the heap of the pie there. i think these stocks are retuning to perform. inflation has not impacted them that much. where it was in the past was around covid obviously, but also fuel costs, and we see that number coming down significantly, too. i just think they have a goldilocks story for the coming few months. haidi: it is interesting, a lot of consumer watchdogs are keeping a watchful eye over these accusations of price-gouging, particularly when it comes to the airlines. let me turn to the trade has driven the gains that fire in cross-border markets. do you look at the big names in tech, the one further down the chain, over being able to see the immediate value of ai exposure to their businesses? sylvia: what i do, i look at all

the above. we'll look at the tech generals that have led the market, they are also leading the ai race -- microsoft, nvidia, amd. they have won so far and will continue to win. but the ai machine learning story, you have to look at etfs. there are a lot of smaller companies out there, or companies that people are just hearing about this year, companies like palo alto that will be involved in the various parts of ai, whether it is network security or cloud or power chips. getting a diversified aspect allows you to get winners on the smaller cap side, but you get the balance sheet quality of a microsoft, apple and amazon, who are still members of this drive. kathleen: thank you so much, sylvia jablonski, ceo of defiance etfs. as for you, get a roundup of the story you need to know to get

your day going in today's edition of "daybreak." terminal subscribers, go to dayb . also available on bloomberg of the bloomberg anywhere app. you can customize your settings so you only get stories on the assets in the industries you care about. this is bloomberg. ♪ harnessing data-driven insights and boundless curiosity. we dissect the market from every angle. helping to build portfolios that redefine what's possible. ♪ because investing isn't one size fits all. ♪ allspring. purposefully divergent.

haidi: let's get you some other the stories were watching today. pakistan has won final approval to borrow $3 billion from the imf. the find's executive board approved a nine-month standby arrangement to support the country's economic stabilization program. the move allows for an immediate disbursement of about $1.2 billion after months of delay. canada's central bank has raised

rates for the second method o'rourke, pushing the benchmark rate to its highest. the bank is prepared to hike rates further to get inflation under control. officials expect inflation will gradually decline to the 2% rate in mid-2025, two quarters later than previous projections. china's state pension fund is said to be cutting its exposure to bonds from week local government financing vehicles and private developers. sources say the national council for social security fund asked mutual funds that handle its money, to sell some riskier debt after review. among the bonds mentioned were from that data-saddled port city -- work from the debt-saddled port city of tianjin. the u.s. inflation print was softer than expected, the 3% number flagged as digitally a turning point when it comes to the rich cycle. we are seeing upside broadly

when it comes to equities, as well as bond markets. seeing yields sliding in the asian session. sidney futures are up 0.1 percent, really primed to rally. muted gains out of the qa session. some of the manufacturing pmi data, as well as accelerated food inflation creating a bit of a mixed picture for the rbnz. chicago nikkei futures are up about 0.1 percent. putting a bit of a dampener on sent

haidi: the chinese premier met with the leading technology firms, including alibaba and bytedance. he urged local governments to

provide more support to the internet firms calling them trailblazers of the era. it's a fair environment and reduce compliance cost to promote the sound development of the platform economy. annabella's taking a deeper look at the moves in china tech in more detail. it's been such a roller coaster ride. they are struggling from the signaling the support for private enterprise might be here. >> that's exactly right, i think the roller coaster is the word to use for chinese stocks in chinese tech what -- chinese tech ones in particular because it's persistent between two and three. the big moves really kicked off in the last week or so, we started to get signals coming through. china was starting to refocus and reprioritize the private sector. we had that meeting with li qiang and other tap -- top economic officials on the top

economic planner really highlighting the importance of the biggest tech companies in china to the overall innovative tech sector and the importance to the economy overall. we have seen the hang seng tech outperformance against its china pc. this one taking a look at the daily performance spread that started to kick off, trending into the end of this month or the start of this month. let's look at the moves in particular here. on a two week faces, just highlighting the strength of that rotation back into chinese tech names. alibaba eating the charge. but kathleen, we got that fine coming through for the end of the week. something that was considered by investors to be quite manageable. it signaling that the end of the crackdown on alibaba and tencent was coming to an end. kathleen: bloomberg learning a chinese state pension fund suggest its asset managers sell

bonds following a review including those from riskier, local government financing vehicles and private developers. let's bring in bloomberg shanghai bureau chief. what is going on? it seems to me the l g-v's are already under pressure and now they may get more pressure put on them. >> what we are hearing is china state pension fund have asked the fund managers handling their money to have a close look at the sector in shafting them to sell bonds and also by private developers. the reason for that is, the concerns about the sector, the entire local financing -- local government financing vehicle has increased because of the economy

and also expectations of deterioration in local governments financing situation. during the covid outbreak, spending on that has increased sharply. in this severe downturn in the property markets has cut into the revenue, a key source of the revenue, which is the sale of land. originally the yield raised sharply in the property risk has significantly increased. that has helped explain why the national security firm, which manages the companies pension money, is becoming an increasing risk. we are more concerned about the risk in this sector. there has been no default of publicly issued bonds. that certainly shows that investors risk aversion has increased a little bit.

haidi: it's interesting to me because even with these bouts of weakness, whether you talk about local government debt or property developers, you see top-down the mobilization of state owned banks and other funding avenues being mobilized to support these areas. what does it tell us that there is distinction being made for a red line being drawn about how risky this debt is? charlie: given the sector, it's important to the economy and to local government financing. i don't think -- as we learn from people we talked to, the chinese government will allow a sharp increase in the number of defaults in the sector, otherwise that will pose a lot of challenges for them to raise financing, refinance their

debts. but probably it will also instill some market discipline into the sector, otherwise it will be more risky, reckless borrowing. the yield in the economic week provinces have actually risen quite a bit. although the entire sector remains -- looks still very calm as reflected by the limited spread over sovereign debt. but, whatever, investors are taking more cautious stands about the sectors we just talked about. and in revenue from local land auctions. kathleen: that was bloomberg shanghai bureau chief charlie ziu.

let's get the latest from the corporate front. elon musk announcing the formation of wet he's calling x ai. because after months of hints that he wants to build an alternative to the popular chatgpt ai chatbot. he was involved in the creation of the developer of chatgpt, openai, but he's frequently in publicly criticize the start up since he left the board in 2018. turning to imax, offering to buy out its hong kong traded chinese subsidiary in a deal at $124 million. it's offering 10 more hong kong dollars a share that represents a 49% premium over the 30 day average closing price. chinext -- china imax shares will resume. disney has extended the contract of ceo bob iger for another two years. the company announced he will remain in the top job through the end of 2026, giving him more time to implement his turn

around and find a successor. he returned to disney after previously serving as ceo for 15 years. nvidia is said to be in talks to join a list of investors anchoring an ipo for the chip designer back by softbank. sources say the group will be finalized until the offering gets underway later this year. we are also told the finalist of anchor companies is likely to have five or six. haidi: the partner says china will have ai success even while facing the challenge of securing large language models are he spoke with bloomberg's ed ludlow's from the sidelines of the conference in idaho. >> one of the benefits and challenges we have of being part of this great western system is we have a free press. lots of reporting. i think one thing that's great about our society, and that's more challenged. so you don't have as much visibility. they have amazing technologists

and cyclical companies, they are very dedicated to building technology for the future, so i think they will have a number of great ai efforts. there ai efforts are somewhat challenged by the fact that large language models are difficult to control. so, can you make sure a very scale large language model can both generate all of this interesting material and also not say, here is 10 funny jokes about xi jinping. here's the argument about why the chinese communist party is not a democracy that you had to vote for once. the chinese government system doesn't want that in any of its internet or digital things. ed: in the data, why is that important, not just volume of data, but what is in the data? reid: data is a complicated story when it comes to ai. what you need is volume of data versus the specific, you have

this really high quality data. the high quality data can be useful. useful for coding, etc. the chinese general lack of privacy controls our data could make the effort stronger. the challenge when you do that with large language model approaches is those large language model approaches don't necessarily go, here's how i can obey ccp regulations. that will be one of the challenges we will have. ed: we can talk for the rest of the week about ai, but we won't. threats. reid: meta has done a great product launch. because of turbulence around social media they have a natural launch for that. by the way instagram has done things like that before, they launch stories and their stories launch was successful and became part of the instagram ecosystem.

we will see how it stays but it's launch was amazing. ed: mark zuckerberg has been active. i want to reflect what you see in mark now versus all those years ago when facebook started. reid: one of mark's strength is he's an infinite learner. he's been learning since then. so what are the things you pay attention to, how do you launch good products. this is an anonymously successful good product launch. established companies don't have new successful product launches and this is one of them. that's a testimony to what he has learned over the years. kathleen: reid hoffman speaking to ed ludlow at sun valley. thailand's leading prime minister a candidate faces fresh legal threats against -- ahead

of the parliamentary vote thursday. analysis next with control risk. this is bloomberg. ♪ i was told my small business wouldn't qualify for an erc tax refund. you should get a second opinion from innovation refunds at no upfront cost. sometimes you need a second opinion. [coughs] good to go. yeah, i think i'll get a second opinion. all these walls gotta go! ah ah ah! i'd love a second opinion. no. i'm going to get a second opinion. with innovation refunds, there's no upfront cost to find out.

so why not check like i did for my small business? take the first step to see if your small business qualifies for the erc. haidi: thailand's leading prime minister ariel candidate and his move forward party are facing legal challenges ahead of thursday's parliamentary vote.

the election committee wants him to be disqualified as lawmaker after allegedly breaching rules by holding shares in a media company. the constitutional court will hear a motion to move forward over its promise to amend defamation laws. let's bring in harrison shane, the associate director of control risk where he focuses on the political landscape in southeast asia. great to have you with us. ahead of these last-minute staffers, if you will, how do you see this playing out? harrison: i think the recent position by the election commission to forward the case to the constitutional court is going to be difficult in securing the necessary votes for today's vote. i think the election commission's position as well as

the constitutional court's position over the past 24 hours will re-discourage quite a number of supporting peter in the boat today. either the vote today will result in this or it will be based on a position by the house speaker. haidi: how long were we talking about in terms of how long for anyone waiting for a decision and uncertainty will have to wait for a result and talk us through the alternative scenarios that could play out. harrison: the constitution doesn't specify how many rounds of voting will be needed. the house speaker has admitted that there could possibly be maybe three rounds. he initially scheduled it for the second round to be on the 19th of july on the third round on the 20th of july. the house speaker has made a

significant cut that all positions on however many rounds need to be held, whether a person can be put up for the camp to see more than once if your sheet fails in the first time will be determined by both chambers, both upper and the lower house of park -- parliament. the upper house is opposed to him. so he may actually not get a second chance. however, i think that because of all of these considerations, what the senate, and probably what the legislators will want to do, except for move forward, is to try to wrap up the process as quickly as possible to avoid broader political instability. so we could be looking at may be a conclusive round of voting by the end of july or early august. kathleen: please explain to us a little bit better. what he's being charged with his breaching election rules by holding shares in the media

company when he applied to run for public office. how serious is that charge. is it a valid charge or is it something that was dug up because people feel threatened by him because he and his party, move forward, are so popular? harrison: i think if you look at the details of the case that have been brought up against him, what the election commission is doing is not necessarily pulling him responsible for holding those shares, but based on whether he knew he was ineligible to run for the election and still decided to contest anyway. the charge itself could be considered significant because or rather serious because it does carry a jail term if he is found guilty. the circumstances around how the case came to light is quite fishy and there's a lot of circumstantial evidence that this was brought up against him as a political motivated case

and brought up by petitioners who are linked to the ruling coalition. and facilitated by some of the independent institutions. if you look at thailand's political history all the way to today, some of these independent agencies have acted in ways that are obviously unfavorable to the opposition. move forward is essentially the largest threat to the ruling establishment right now. kathleen: you mentioned maybe this could turn into a vote in july and concern about political instability. is that a concern that is broadly shared that he because he is popular, because there may be some sense of fishing us around these charges, and an attempt to get him out of the way, is that -- what is the likelihood that this could lead to more upheaval?

harrison: it's looking more and more likely by the day. essentially what is the challenges that you see before him will be predictable because electoral violations have been used time and again to oust former civilian in ministrations, whether through the courts, through the election commission and so on. but the problem with the current situation is that both sides are deadlocked. for example, there is a fairly easy way for move forwards partner to break the deadlock. basically by breaking away from move forward. i'm pretty sure most of the current coalition -- the ruling coalition will team up and they also know it's a seemingly easy way and a surefire way to completely lose their voter base at the next election. they will probably migrate to move forward, therefore creating a supercharged move forward.

so i think they will stay with move forward and that's going to make things more difficult. i think move forward and knows that if it drops the proposal to amend the law, that could be a way to go through and solve a solution. he also knows that if he does that, essentially, its entire reform policy -- report platform is going to crumble, it's going to lose a lot of credibility, and it knows that as long as the loud remains in place, move forwards broader agenda is more democratic and true constitutional monarchy and the democracy will falter significantly. haidi: does this or should this change the risk premium when it comes to investing in thailand? how should investors gauge this?

you said there are longer-term risks to the democratic principles, potentially more protests. we saw protests this week as a result of everything that played out on wednesday. harrison: i think the political situation being more volatile will trigger risks of civil unrest and we will probably see more protests in the coming week seven that the ruling coalition and the establishment are not going to give way. they explain they are not going to give way to the other side. i do think that if you want to look at the risk premium and investing in thailand, it needs to be on a sector brace. some sectors are not necessarily going to be affected by the politics going on in bangkok. establishing manufacturing, health care, tourism. however, i think what investors will be looking at is can they create a government stable enough to push long-term policies on growth areas such as

electric vehicles, renewables, and so on. everyone is waiting for the new government to, --, because there are a lot of things that need to be put up front in the political crisis is making it longer and longer to push those out. investors are not going to wait around forever. a been waiting for china's -- thailand's political situation to calm down for years. it was stable in a sense security wise, but there was real policy innovations away we see indonesia or vietnam with fbi related reform. kathleen: a very complicated situation. harrison cheng, thank you for joining us in explaining what's going on and what the risks are, including for investors. he is the associate director of control risk. how taiwanese money is shifting away from china as a japan focused equity fund in nearly

640 million dollars. details next. this is bloomberg. ♪

kathleen: the biggest japan equity makes with the king demand for the neighbors booming share market as they retreat from china. bloomberg asia equities reporter winnie issue joins us now. why did they set up this japan equity fund in the first place?

winnie: we see investors shifting away from china looking at the sluggish economy and the geopolitical tension with the u.s. and with taiwan. they are looking for an alternative outside of the country and we are seeing that japan is an attractive option when you look at how it has very close ties with taiwan and also it's the world's third largest economy. looking at the rally this year which appends equity market, fundamentally speaking, structurally and cyclically, the japanese equity market seems to be very attractive according to the fund. haidi: our bloomberg asia equities reporter winnie hsu. we will talk investment strategy. j.p. morgan private bank joins us in ing gives us a preview of that korea rate decision.

market open in sydney, seoul and tokyo are almost upon us. asian equities are primed to continue the rally after the softer u.s. inflation printer. more to come. this is bloomberg. ♪

it's an amazing thing when you show generosity of spirit to someone. and you want people to be saved 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. kathleen: this is daybreak asia, counting down asia's major market open. it's all about cpi and u.s. trade and how it carries over to asia s&p ending at its highest

since april 2022 after the inflation gauges dropped to their lowest since 2021. haidi: we are seeing risk assets primed to follow that rally. we are also watching that weakness in the u.s. dollar being played out across a plethora of effects trade. we aren't done yet when it comes to central-bank decisions looking ahead to the bank of korea today. taking a look at the market open. annabelle: the conditions are ripe for a rally across risk assets in asia this thursday. it is down to that reaction to the inflation print, and essentially as you say, sliding to its lowest level in more than two years in june, recapping the headline level easing to 3% on the year. that's a third of where was one year ago. the signaling is that the fed is not done just yet. we are likely to see a hike later this month, but the key question is what we will see in the meetings following that in

the odds of another 25 basis point move after july have now fallen to one in three and you compare that to a week ago of more than 50%. that's what we see in stocks market. did see the retreat led by the front end of the curb and treasury. looking at the open of cash markets now in japan and watching, as you say, that pullback we see in the dollar. that has been significant. in korea today, we are monitoring what to expect from the be ok, a lot of economists, in fact, all economists expecting no change to the key rate, steady at 3.5%. it will be a fourth straight hole. what sort of signaling will we see from the bank of korea, that's the key question for policymakers, will we see the indication that a further hike would be to come. we will talk about that trimmed mean cpi saying elevated. the underlying inflation price pressures are still at a higher level. the korean won, just continuing

to pull back from the 1300 level , that is quite a significant move of 1% higher against the greenback. broadly emerging currencies have been stronger. let's change on because we have the open of australia. inflation expectations are due in an hour from now. the asx 200 coming online. staggered start. it takes about nine minutes to be fully underway. yields continuing that retreat led by the front end of the curve. also marking those moves we see in brent crude. take a look, above that $80 a barrel level, first time since april we've seen that cooler inflation story. we have stockpiles, taller supply outlook, something else that's been boosting prices over the last couple of weeks or so. haidi: we are getting an alert when it comes to response from activision confirming the previous position when it comes to the fact that they will be looking forward to reinforcing

the strength of their case in court when it comes to the deal with microsoft. if issued the statement saying the facts haven't changed and they are confident the u.s. will remain among the 49 countries where the merger could close. they look forward to reinforcing that case. this comes as the federal trade commission intends to appeal that ruling by that federal judge in california that would allow microsoft to move forward with that $69 billion acquisition with blizzard. they will ask the ninth circuit of court of appeals in san francisco to overturn the judge findings that the deal won't thwart competition in the markets when it comes to consults, subscription and cloud gaming and ultimately hurt gamers. we will be watching that, all of this coming before the agency's request for a preliminary injunction that would have stopped that deal from closing before that july 18 deadline. much more to come when it comes to that deal. in the meantime, let's get back to -- which is easing u.s.

inflation and how that changes fed expectations and broader central-bank expectations. our next guest says stick your inflation remains at -- remains our key risk urine when you take a look at the numbers that we had overnight, the repricing when it comes to fed expectation, terminal rate expectations, does it change your outlook and how you invest? >> thank you for having me onz the show. as we think about inflation, it's the base case as well as the risk case. the inflation comes down a little bit gradually and that opens up more investment opportunities for us across equities and fixed income. the risk case hasn't necessarily changed too much, and that is, if you look at labor market, it remains strong in the u.s. that is still fairly persistent with underlying inflation from a wage perspective. if you look at housing markets,

it has recently picked up a little bit. we are getting signed some parts of the u.s. economy are bottoming out. what that means is there still some uncertainty with regard to how the fed tackles with this once this near inflation washes out and we are lending 3% or something around that when it comes to the broad range of inflation. what does the fed do with that? and i think that still presents different scenarios. could the fed remain higher for longer, that's a different outcome for markets. could the fed then hike more, and that means the risk of recession then rises again. i think this is related to the risk part of the portfolio. there are safety margins and that's why we frame our positioning the investment

grades for the asset allocations and why we are up -- opportunistic and selective when it comes to equities. haidi: in super selective when it comes to arrange trading chinese equities. i do wonder the developments when it comes to further signaling that private enterprise will get more support that tech is returning as one of the favored sectors now. does that change things at all? julia: for china, we are positive on long-term. so we think that china will go through some structural changes, but they will be able to make their economic growth more sustainable down the line. i do think that the market has some difficulties as they transition into thinking about a new valuation framework for chinese assets. that will take time. in the meantime we want to boost our return by having more range trading ideas.

i think recently, what we see is the markets are pessimistic because second-quarter gdp, which is coming out next week, we are seeing growth momentum indicating second-quarter roles will probably see a week sequential growth in market speaking quite worried and pessimistic recently on the back of those recent than expected indicators. i think that presents opportunity for us to trade our range from the low side, because we think the second half of the year, growth momentum actually will be more positive. kathleen: you say service sector, more sustainable broad-based recovery, you prefer large-cap internet and consumers, you aren't expecting a policy bazooka. why not? it doesn't have to be a big bazooka, couldn't it be a little bazooka? we see more and more of these nice words, but if they really want to turn things around, do they have to take steps that are a little more aggressive?

julia: i think there are two parts. when it comes to the policy, it's definitely to put a floor on growth. so if we do see growth slowing quite a bit, i think you see more supportive policies, not quite altogether but in a more incremental fashion. that doesn't necessarily engineer in a v-shaped recovery as we've seen past cycles, so what it does more is to reassure markets that there is still an underlying growth momentum. i wouldn't necessarily call it a policy bazooka, i think the focus is on stability and not stimulus. as we think about 2023 and going into 2024, as we think about the shape of this very unusual growth recovery with that housing market somewhat absent, the survey sector will take the lead. it is a very different cycle, and i think going forward, policy will play less of an

interventionist role. they will want the economy to find new gross drivers. that is a different growth driver we are shifting to, and is a very big regime shift. i do think that from that perspective, we should not expect policies to be as interventionist as they were in past cycles. the focus is really more on finding new growth drivers organically. to that point, some of the recent policy language suggesting policymakers want to support privacy sectors, they want to improve sentiment, i think it's in the right direction. you want the economy to find a new growth driver naturally. business sentiment is actually very important in that regard. kathleen: maybe it can get more capitalistic in china. thank you so much, global market strategist at j.p. morgan private bank. now let's get to annabel, currencies and focus, particularly after the dollar dropped to a 14 month low after

seeing cpi numbers. what are you looking at now? annabelle: a reaction to the softer dollar coming through. the big move at the open, 10 minutes into trading for cash markets. the korean won coming online. we are seeing a move around 1% higher against the greenback in the session. it really is that story of dollar weakness. traders trimming their expectations around the prospect of further rate hikes. that's important in korea today because we have that be ok rate decision and the policymakers they are widely expected to send pat for a fourth straight time with key weight -- key rate at 4.5. checking the japanese yen because it has been a very big mover following the inflation numbers in the u.s. we are consolidating below the 140 mark. namor is saying you should short the dollar yen to 135 if we will stop at 140. let's take a look at the equity movers in focus for the session

today because, as i say, 10 minutes into trading, we are watching tourism stocks in japan in particular, this is after we had a report out for mitsubishi, morgan stanley. they are looking at the limits, the restrictions that china is imposing to japan. they say that they could be maintained for several factors. some include the proposed opening of a nato office in tokyo. that's one office that could keep restrictions in place for quite a while. the other factor is the release of radioactive water. japan planning to release more than one million cubic leaders, that's enough to fill 500 olympic size swimming pools of treated radioactive water into the pacific ocean as early as the summer. something else that morgan stanley is tracking quite closely, the opposition we see, it's also feeding into food stocks this morning in tokyo as

well, because these are slipping. we have reports out that hong kong could be banning some japanese seafood if this release of radioactive water does go ahead. haidi: still ahead, new signs of china's crackdown on the tech industry is lifting as the premier valves for more support, details coming out of his pretty upbeat meeting with industry heads. coming up next, we look at polling inflation u.s. numbers are raising expectations of it being one and done when it comes to rate hikes. this is bloomberg. ♪

>> this was a good report. >> extraordinarily good print for the fed. >> disinflation is starting to take hold. >> i don't think it changes the july meeting. >> i don't think it changes the move in july from the fed. >> i think the fed will hike in july. >> they can't take their foot off the pedal yet. >> if this is the new run ralph, this would call into question sykes beyond july. >> the more movement after july to celebrate this last time. >> the september hike is when they could afford to skip again, given the way inflation is behaving. >> we will get to november 1. >> there is a lot of time between now and november.

>> november rate hike is up for grabs at this point. kathleen: bloomberg tv guests comping on the u.s. june inflation reports and the implication for federal reserve policy. let's get more on the cpi report from bloomberg jill d sis. -- bloomberg's jill. the headline came down, core came down year-over-year. these are all good, markets rallied, is it justified from white you see in the report from the economists you talk to, to be this optimistic that the fed is just about done with rate hikes? jill: there is a lot of optimism, isn't there. there is one caveat we have to keep in mind with this data, we have a pretty interesting base of comparison with last year. that was just after russia's invasion of ukraine. he saw a run-up in energy prices . we've heard from economist saying, it's making it more dramatic than it otherwise would

be. as you just heard on the clip, this is a very optimistic gauge for how much inflation does seem to be coming down. so i think this led to the additional speculation that may be, even if this rate hike this month is completely baked in or feels baked in, maybe this is the last hike this year, we've heard many times from fed officials that they are counseling looking at the data and they are making decisions based on the data, they want decisions to be live and adjust from the data of what it's telling them. it would suggest things are coming down right now. kathleen: we have two things to be seen in opposition, the fed's beige, 12 district things, they put it out a couple three weeks before their policy meetings. inflation relief and they are looking at cooling off in the economy. we had to fed officials, tom bark in richmond fed and neel kashkari minneapolis fed saying

the greatest chances will be doing more hikes. which message do we listen to? jill: i think i was losing you at the end there. but ultimately, i agree there is some stuff in here that's a little bit difficult to follow or that kind of stands in opposition with each other. ultimately with the beige book was telling us was that there was activity that was continuing to pick up in may, and i think it sends the signal of, wait a minute, is the economy cooling. what we did see out of the survey is we've had a lot of expectations regionally that it would slow in the coming months. that gives you something to work with. at this point, what fed officials are looking at before they decide how all of this affects the dot plot going forward, because, remember, when we heard from jay powell a few weeks ago, even last week or so,

we were still expecting a second rate hike at some point in 2023. that shows that there needs to be some kind of a sustained consistent expectation that activity is slowing. i think what that means is ultimately the fed will be looking for events, data points over the next several weeks to see how that evolves. kathleen: i shouldn't have said it better myself. great wrap up of the cpi and the fed. breaking news, listen to this, carlyle group and trust ark capital are seeking to raise $4 billion from funds, including gic pte to buy part their stakes in mcdonnell corporations operations in hong kong and mainland china. this is a big deal. it looks like they are providing a partial exit for the buyout firms after they bought the business six years ago. this is according to people familiar with the matter. it's not official for these companies yet. the investment company, which is

the abu dhabi sovereign wealth fund, has been approached about the deal that values the business of up to $10 billion, including debt, according to people telling us, shareholders agreed to the plan and asset managers aim to finalize the agreement with investors in the fourth quarter. this is the latest we know so far. private equity firm setting up a new vehicle to provide partial exit for existing investors while attracting fresh capital to fuel restaurant grows. big news for mcdonald's. they are such a popular franchise around the world in china has been a big location. it's interesting to see some shifts that would allow investors to cash out in ipo fees. president haydn, another wild story, wrapping up the summit say the u.s. commitment to ukraine remain steadfast. he spoke after ukraine's president soften criticism of what he earlier called nato's absurd election -- reluctance to give a clear timeline on membership.

bloomberg's marie her dern reporting -- anne-marie reporting from with awaiting a. anne-marie: president biden took a victory lap following a two day nato summit. speaking to a cheering crowd of nearly 10,000 with the way needs waving american-ukrainian with awaiting and flax, biden promised to stand by. president biden: nato is stronger and more energized and more united than ever in its history. we will not waver. we will not waver. i mean that, our commitment to ukraine will not weaken. anne-marie: the speech comes after an important shift of tone from president volodymyr zelenskyy. it moved from one of anger to one of gratitude, an important win for president biden as he tries to show unity on a global stage as ukraine is facing this aggression from russia. beyond that, president biden was also talking to an american audience.

he wants to be seen as a safe pair of hands as he goes into the 2024 presidential election. beyond putin's aggression in ukraine, biden talked about the economy, climate change and supply chains, clearly making his pitch to american voters. kathleen: annmarie hordern reporting from the nato summit. plenty more to come on daybreak asia. keep it here. this is bloomberg. ♪

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haidi: as we spoke earlier about cinema operator at max looking to china out its subsidiary deal of a hundred $24 million the company says it would save and add to earnings immediately. let's bring in bloomberg's media and entertainment coverage. a cost-benefit seem to check

out, but what was the motivation and how long has this been in the possibility? >> having a separate china subsidiary was a trendy thing and it made sense. you could sort of arbitrage the valuations really high to raise a lot of money. in the growth and that's exactly what they did. it has been in a underperformer friday while, so even though they are paying a premium compared to recent trading, they are actually getting a pretty good deal compared to historical levels of the stock. in imax that it would be creative to earnings so, they can save money at a time when the movie business is very much in flux in both china and the u.s. let's talk about -- kathleen: let's talk about bob iger, will he be in internal ceo at disney now? >> it certainly seems that way,

i think this is at least the fifth time they've renewed his contract, depending on if you want to count the time they brought him back in november. it's not a giant surprise. when he stepped back into the role last year, two years didn't see mike a lot of time for the successor, which is the priority, they would give somebody the title of president for a year and they don't have everybody at the corporate level who's at the all-around corporate experience that they probably need. so, this gives bob until 2026 to meet that challenge. haidi: some immediate challenges, including this possibility of an actors strike on top of the writers strike, are these looking like in terms of the content pipeline for streaming services? chris: we will find out tonight

if they actually do go on strike. that would be a lot of work, so that would be almost a total shutdown. you can't do anything without actors. it would pause tv schedules and dramatically impact them. companies have pushed release dates to movies. there is no question it's going to impact schedules for some time. that's one of many challenges that he faces, bringing profits back to the streaming business, negotiating tv, now it looks like the theme parks business are cooling a bit, so there's a lot going on. kathleen: i guess that's why they brought him back. let's take a look at features market where we had a big day in stocks, we had a rally at the short end of the treasury curve, s&p futures and at their highest since april of 2022, you can see green still on the screen when it comes to equities, not big

moves, but was a pretty good day on wall street. the small-cap stocks are having a good couple of weeks as well, that has been a trend lately, now we are waiting to look closely at. and also new signs of china's crackdown on the tech sector is coming to an end. keep it right here. this is bloomberg. ♪

annabelle: this is daybreak asia, i'm annabelle droulers with a check on markets. half an hour into the session for tokyo, seoul and sydney. it is very risk on and the session, that's following the u.s. inflation print that came out overnight, sliding to a more

than two-year low. headline coming in at 3%. what exactly is that telling us? perhaps the fed signal we are getting is that we are nearing the end of fed rake -- fed rate hikes. another move this month but after that, the situation, the move from traders is getting less clear in the swaps market showing only a one in three chance of a 25 basis point hike at the upcoming meeting after the july 1. essentially, the focus from investors is really moving into the bond space and that retreat, that repricing we continue to see in bonds really being led by the short end of the curve during moves in treasury means a weaker dollar complex. we are seeing the dollar really sliding in the session. asian effects really benefiting. we see the korean won advancing as much as 1% against the dollar so far in the session. weaker dollar, it also has implications for the commodity space. price in dollars is a beneficiary. we are seeing metals moving

higher. perhaps a little bit supportive by those signals we are starting to see in china, that they are serious about supporting the private sector, more stimulus coming through from the likes of the property sector. materials gaining in the session is also playing out in the equity space this morning. we are seeing the material sub index leading the gains. but, kathleen, a lot of green behind needs -- behind me, that tells us the risk on rally we see. kathleen: chinese tech stocks rallying on wall street as more signals emerge that beijing is ending its multiyear crackdown on the internet platform sector. the premier met with tech executives while the national executive and reform commission praise the companies for supporting china's innovation. let's get more with our chief news -- chief north asian correspondent stephen engle, in hong kong. the premier's message, is the government becoming more of a cheerleader for, get out there, do it, innovate?

don't be capitalists, exactly, but seems like they are trying to beat a new drum. stephen: we have been teased before in these three years since that crackdown on monopolistic behavior began on alibaba, as well as that discovering and the 11th hour of the ant ipo in november of 2020 and these companies have been chopped down to size. alibaba is being broken up into six divisions left to their own devices for capital raising and unlocking values. so there has been some confidence crisis going on in the platform economy in china. so, there is some conflicting messages because a lot of these companies were brought down to size because of regulatory action. now because the economy in china is sputtering, they won't -- they don't want to do a big bazooka of stimulus, they want the private sector to start picking up again, the economy as they did pre-ipo's in 2020.

but they are different companies now. so he met with executives from alibaba and bytedance, the parent of tiktok in the chinese equivalent to tiktok. also made tuan in the food delivery companies, this yesterday in a -- in beijing and jd.com submitted written input to that meeting, he basically -- the premier's is urging local governments to provide more support to internet firms in the sense of providing and pushing these companies to innovate more in ai and semiconductors, as well as for the local governments to create fair environment and reduce compliance cost. it's a big burden to put on the local governments that are obviously the local governments financing vehicles that have been under extreme stress, if not, risk of default because of their debt issues that were encouraged to the course of the pandemic response in the property downturn.

you mentioned the national development reform commission, they are also adding their support to the tech platform economy. says they essentially press the on my platform companies to boost the nation's tech innovation, pledge support for them and to create jobs. that's a big key thing because these platform companies, like alibaba, work for yuchi -- were huge employers of young tech savvy individuals. after this decimation over the last two and a half, three years, youth unemployment, i'm talking 16 to 25, record unemployment for youth numbers in china. it's a big task but they are courting the private sector to pick up the economy.

haidi: chief north asian correspondent stephen engle with the latest. bloomberg has learned that a chinese state pension fund has suggested its asset managers sell bonds following a review. this includes those from riskier local government financing vehicles and private developers. that spring in bloomberg's china credit editor. this is fascinating, because does it kind of draw a redline in terms of the risk that is willing to be tolerated. kathleen: i think we've got a little technical difficulty here, so we are hoping to continue our discussion of this very important story as investors and china's local government financing vehicles cutting the length of time, prepared to extend credit, demanding higher returns as cracks appear in the $9.1 trillion market. what do you make of this if these changes are being made at a time when these vehicles are week, and they are local

government financing vehicles and local governments are highly indebted, they are in a tough position, it seems to me that moving in this direction right now is not so good for the local government. what's going on? >> it does seem as though there is some bit of drawing the redline. the government is going to say, some of you just have to really deal with your debt flows and we are not going to bail you out. we've been kicking this can down the road for so many years now, debt has continued to increase and we have to put a stop to it. we are fearful of a debt bubble, we just don't want, as we've seen with property developers, which is another area they want to pair their holdings on, they just don't want to have this exposure and they want to make sure that they are able to be paid for their service, and whatever debt troubles there are, just don't explode. haidi: i was saying, earlier

before i was cut off, it's fascinating because super does she usually see cohesive support across because i government bodies when it comes to supporting the entirety of the economy rallying the banks, to lend more to the property sector. is this sort of a redline that's being drawn out? kevin: it does seem so. it appears as though there is this appetite to have some of these high debts struggling, poor areas, poor developers, poor borrowers, to get restructured and to not have to continually extend debt or bring in new debt to finance the old debt, that there is some bit of redline to just put a stop to it all and to make sure that either these debts get repaid, or we are not shoveling good money after bad. that seems to be the impact we are seeing from some of these government officials. kathleen: interesting story. bloomberg china credit editor

kevin kingsbury. still to come, china's move forward will get a shot of the country's top job when parliament votes for a new prime minister. we will look at the mounting challenges he faces, next. this is bloomberg. ♪ behind all the regret, disappointment, and years of battling opioid use disorder is the same third-generation firefighter who always answered the call for help. the same guy who saved 15 lives, carrying people out of burning buildings. now in recovery, richard is stil focused on helping people. he's just pulling them out of a different kind of fire. helping them fight opioid use disorder just like he did.

kathleen: walt disney extended

the contract of ceo bob iger for another two years. he will remain in the top job through the end of 2026. bloomberg's at the low has more from sun valley, idaho where he was attending the annual conference. >> the extension keeps bob iger in the ceo role through december 31, 2026, two year extension to give him more time to think about succession. that is the story going into sun valley, who will eventually lead disney if and when bob iger does decide to step down. the reception here, not a lot of surprise from those in attendance. one particularly said it was a very good piece of news for disney shareholders. steve has known bob iger personally for a long time, but he's also one of the mba owners and espn and nba in bob iger's leadership of disney will have an impact. >> i think he's one of the best

ceos that i've ever seen. so the disney shareholders will be thrilled. he recognizes the value of sports and he really understands the product and how to put the product on. i think that's a major positive thing for the nba and disney shareholders. so, i'm thrilled. ed: iger is the story at the conference, 2020 three. it was interesting because he was here with disney's parks chief and the tv chief. in both of those names have been touted as potential ceos of disney in the future, the turnaround story of disney, the focus on cost reduction, bob iger has been at the heart of that. there has been a lot of discussion about what will happen in the context of hulu. comcast retains a period of it. it has the rights to acquire disney to buy out the rest of the stake. we haven't heard anything about that, but there are a lot of questions people are asking

disney this year that's in focus. ed ludlow from sun valley, idaho for bloomberg news. haidi: pakistan has one final approval to borrow $3 billion from the imf. the fund's executive board approved a nine month standby arrangement to support the economic stabilization of the country. the move announced for an immediate distress meant of $1.2 million after months -- 1.2 billion dollars after months of delay. raising rates for a second time in a row, hsing the benchmark rate to the highest in 22 years. the governor says the bank is prepared to hike rates further to get inflation under control. officials expect inflation will gradually decline to the 2% target in mid-2025. that's two quarters later than previous projections. the thai politician will have his first shot at the country's top job when lawmakers gather today to elect a prime minister. let's bring in -- what are the

odds looking and what are the odds that we will get a quick resolution? >> he is going into parliament today with the odds stacked very high because he will be elected by the joint national assembly, which includes not only the freshly elected 500 members of the lower house, that the 250 elected senators who were appointed by the military government after they took power in 2014. so under these rules that were designed to prevent popular candidates from taking power, he will be facing a tough job an uphill battle because of his party's platform to amend the law, which is a law that prohibits insults, which has

riled the royalist establishment. so it looks like it's going to be not an easy choice, even though he's the only candidate running. kathleen: it's such an interesting situation, and if he doesn't win today, what about the risk of protest. >> there are already some protests that were planned and stated nationwide already yesterday, so that doesn't bode well for the future of thailand, which looks pretty uncertain. the people that came out yesterday said that the senators who are unlikely to vote for him in the election commission that filed fresh legal challenges should listen to the voice of the people. they are claiming that the may 14 election results should be respected, so if he doesn't win today, there is a high chance

that it will be prolonged. haidi: the grounds for the proposed disqualification, now he's holding shares in the media company as well as the world defamation issue, how big a deal are these issues that have emerged? patpicha: they seem significant because it will hover over his candidacy for a while. with the media's shares that was filed yesterday by the commission, it starts to disqualify him as a lawmaker, and that threatens to sink his candidacy. and the other law threatens to completely disband the move forward party. not only that, but bandits executive members from politics for 10 years. these look like they come out of a playbook that would happen with move forwards party predecessor after the election

getting the leader of the party at the time was also disqualified over the media shares case. and it was disbanded. that has led to mass protests that led to unprecedented calls for monarchy reforms. so if the same thing happens to him in the forward party, the future looks very uncertain. although there might be an upside because the vote for p.m. doesn't have to go today. parliament is planning to hold a second session on july 19. kathleen: a very big week, very big time for thailand. bloomberg's patpicha tanakasempipat, thank you so much. this is bloomberg. ♪

at morgan stanley, old school hard work meets bold, new thinking, ♪ to help you see untapped possibilities and relentlessly work with you to make them real. ♪ haidi: that bank of korea decision is due out any moment now. take a look at korean market setting up ahead of that. this is a picture across equities trading, pretty risk on. so much of that coming from the broader asian rally with that weaker than expected u.s. inflation number, expectations really being repriced when it comes to the fed's next move.

broader asian equities are rising after that two-year low for that inflation number, japanese shares are looking pretty mixed. they see a boost there as well. that weakness to the 14 month low of the dollar in texts. kathleen: seeing south korea and japan economist at ing, we are going to get that decision any minute now, i will start with the cpi and the fed because if the cpi peaks and continues to come down, if the fed may be closer to two angler hikes and maybe not cutting it, does that enter in question mark does that help the bank of korea maintain their position of not hiking anymore, but holding for a period month and may eventually being able to cut? >> i think that the bank of

korea has a widening gap between the fed and be ok's policy rate probably provides some -- to the be ok, they're great actions. actually in korea it is more obvious that the headline cpi is coming down towards the bank of korea's target range of 2%, and it is happening at a steady pace for tonight. the be ok will stay in the july meeting, and also bring forward them extending their positivity at the end of this year. but we believe that the bank of korea will not give up their hawkish stance at today's meeting because they do not want to give the signal to the market to early on the easing cycle.

so they will keep their hawkish stance at this moment. kathleen: do you think they will at least maintain their hawkish signal, but give us any sense that they appreciate inflation has come down, that they expect growth to slow, and that even in the tiniest way, not dovish, but just give an acknowledgment of the reality they are seeing? >> the thing is, what they are seeing about the inflation, because already inflation came down to a 2% range, they are expecting it will hit a 3% level of gain in the middle of the third quarter. so they are very cautious about this inflation outlook, and the seat upside risks still exist, so they will highlighted for chipping their hawkish stance on

the growth side. however, we believe -- yes? haidi: we are getting the bank of korea decision now. kathleen? kathleen: unchanged at 3.5%. i guess that is as expected. i know you've been looking at the market. they know we will see a big reaction since this is so widely priced into the markets, but now we look forward all the more to getting the press conference. we will learn a lot about with the thinking is right now. haidi: all 15 economist said they would hold at 3.5%. i'm going to get back to you, give us get expectations in terms of what will be communicated. how much of this is watching to see what the fed does? that differential is already at

record levels. record negative -- record negative differential at 175 basis points for the policy right below the fed's. >> i think the key difference is inflation. in korea, it's already in the 2% range compared to the u.s. 3% range. so for the difference of the monetary policy stance, and we don't think that if the fed stops, that the policy hike of july, we don't expect it to go between the fed and the u.k. will not widen anymore. currently, the korean wad -- korean won is at the 12 70 level, so pretty much a very appreciative so very much very appreciated. so it's not going to trigger the

concern for the be ok that will push up inflation again. so we believe that, at this point, that the widening gap between rate differential is not going to be a major concern for the be ok at this moment. haidi: very well concerned about household debt, the re-inflation risk and it looks like the job market is looking quite resilient. >> the unemployment rate stays at 2.6% from the previously's, but it's not really concerning for the be ok, and you're seeing that after manufacturing jobs and seeing k flow received the sector momentum is recovering from the first one because we expect exports to continue to recover in the second half of this year. and probably investments for the

bank of korea will still progress on the deflation site, not the truths moment -- not the growth side at this moment. haidi: senior south korean and japan economist at ing. you can turn more to your bloomberg for that be ok decision. tliv to get commentary and reactionary analysis from our team of expert editors as you see, as expected, keeping rates unchanged. ♪

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