you are watching daybreak: asia live from new york. >> we are counting down to

asia's major market opens. >> the top stories, china's struggling recovery set to weigh on asian trade with janet yellen telling bloomberg she expects spillover but no u.s. recession. exclusive interview in a moment. evergrande revealing losses topping $18 billion as the developer releases results. >> ceos of the world's biggest chipmakers pushing back. that was really to do with perhaps more optimistic comments from secretary yellen, not to mention renewed speculation the fed will need to really end its tightening. that is a big debate ongoing right now. we saw treasuries gaining ground

. we are getting into earnings season. oil prices holding about $74 per barrel after we saw pressure in the new york session. we had the restart of supplies but again it is a disappointing chinese economic data leading to concerns about global demand for oil. really those concerns being elected also in comments from secretary yellen about spillover but she seemed optimistic that will not lead to a u.s. recession. she spoke exclusively with bloomberg tv from the sidelines in the g20 finance ministers meeting. >> the united states, growth is slowed by the labor market continues to be quite strong. i do not expect a recession. i do think we are on a good path

to bringing inflation down. the most recent inflation data were quite encouraging. we are making progress on getting inflation down. as i hoped and expected that would occur in the context of a strong labor market and we continue to see that. the labor market has been so strong and that has encouraged more prime age people to enter the labor force and to work and that has helped take a bit of the heat out of the labor market. the fact that growth overall is slowed after we enjoyed a rapid recovery. that is normal but it is also led to some reduction in the desire of firms to hire, lots of job openings.

i think we are in a good path on the united states. >> soft landing as your base case and you do not think we are going to see a recession. yesterday talking to reporters who talked about de-escalation with china. you rolled out lifting tariffs as part of this de-escalation. what is on the table? >> tariffs, you know, we put tariffs in place on china because we had underlying concerns about unfair trade practices, particularly those affecting intellectual property and technology transfer. those concerns really have not been addressed. we are undergoing a 40 year required review of tariffs.

china also retaliated putting tariffs on us. we have to see what comes out of the four year review but i would emphasize the underlying concerns we have have not yet been addressed. we will need to work on that going forward. >> janet yellen to bloomberg's annmarie hordern. -- janet yellen speaking to bloomberg's annmarie hordern. we have interviews coming up with policymakers including the australian treasurer jim chalmers. >> we will be looking forward to those comments at a time when we have concerns ongoing about the chinese economic recovery. wall street banks cutting their growth forecast for the world's second-largest economy, but they are also seeing less chance of the u.s. recession. chips are in focus with ceos of the top u.s. manufacturers visiting the white house.

kathleen hays and stephen engle. kathleen, let me start with you because it is all about chinese economic growth. what are the expectations right now and is beijing's 5% growth target at risk? >> the economy was actually supposed to get stronger in the second quarter and the latest data show you it is losing momentum. it did not get stronger, still growing, but this is an important factor to figure out what is going on next. our quarterly basis, quarter to quarter gdp was up 2% in china but it slowed down to 0.8. base effects, the headline numbers look stronger but this is what you have to be looking at now. right out of the gate morgan stanley cut its gdp forecast, china looking for 5% based on this. citi cut.

society general. so many dead. the comments -- many were hoping we would get stimulus out of china, the government would get things going, be the counterweight to the consumer. it looks less optimistic lately. they are warning people must trim expectations of a cure-all package of stimulus. hsbc notes we might have more stimulus but overstimulating demand could imbalance china. china has to revive the property market to turn things around but this is going to be a slow process. are they willing to put up as much cash as they need to? again we get the problem of doing too much. retail sales, this is one of the things that is very important here. we saw the latest retail sales numbers going from 12.9%, i believe it was, definitely over 12%, down to about 3% or so. a much slower pace.

that is a problem. it is interesting s&p global ratings is saying today that this sputtering consumption needs no engine for recovery and course inflation risk is rising. we saw the gdp deflator turning negative. all of these are signs things are not so great and they seem to be losing momentum the economy needs right now. >> this is the key meeting we are hearing about taking place at the white house in terms of these heads of major chipmakers really wanting to make their case about these restrictions. how they will impact not just the business but really the outlook for american tech ongoing. >> absolutely. this has been an urgent matter. this seems like an 11th hour appeal from chipmakers. we are talking qualcomm, nvidia, intel. leaders meeting with key officials in the biden

administration including lael brainard as well as jake sullivan. you see the importance. this is not just an economic matter, this is a national security matter. that is how the biden administration has been pivoting toward the narrative, that this is going to be more narrow, new restrictions potentially on china on national security grounds. janet yellen in that exclusive interview talked about these investment curbs and the potential for a biden administration executive order to broaden that. but it is not broadening it. it is extending it. they are trying to make the case it is going to be more narrow in scope. trying to assuage the fears of industry like the chip industry that they are not going to be cutting off completely the biggest revenue generator, china, for their industry. qualcomm get 60% of their revenue from china, nvidia as well. they are voicing concern as is the chip industry. the semiconductor industry association which represents these companies put out a

statement. overly broad, ambiguous, and at times unilateral restrictions risk limiting the semiconductor industry competitiveness, disrupting supply chains and causing market uncertainty and prompting escalatory retaliation by china which we have already seen. a key chipmaking, metals obviously. we do not have the details of the meeting other than who are the participants. these chip companies have refused to comment to bloomberg news. the white house has refused to comment so far. it should be going on right about now. but we will give you details if we get them as soon as we get them. >> and we are seeing more measures from the u.s. when it comes to not only influencing their own u.s. companies but also overseas companies in trying to restrict china's growth in terms of tech and advanced tech. >> this is why this has become a geopolitical issue. when you enlist the companies in

allied countries if you will like asml in the netherlands, the chipmaking equipment, we are hearing as well that any kind of new export controls could add to the restrictions the u.s. is imposing on chipmaking equipment. that would obviously hurt companies like that. you are seeing obviously mr. hwang of nvidia. this could come in the form of an executive order from the biden administration and we could be getting details forthcoming. this particular company which is really the gold standard for artificial intelligence, semiconductors, would be impacted dramatically. i would expect mr. hwang is at the white house meeting that should be ongoing right now. >> wall street might be looking more downbeat on china but feeling more upbeat when it

comes to the odds of a soft landing. u.s., goldman for example cutting recession risk probability and saying don't worry so much about the inverted yield curve. >> let's start from the top. janet yellen of course said she thinks one of the reasons the u.s. will avoid a recession is because the labor market is still so strong. even though there are definitely risks that china slowdown affects the rest of the world, certainly affect the economies in asia, it is something that reverberates. i think it is interesting. the chief economist at goldman made a reduction in his recession risk, i guess 20%. he went from 25% to 20% so he is inching that direction. a lot of people have been ahead of the curve when it comes to saying no recession but we do not know if they are correct. in his case, he says it is the recent inflation data. look how much cpi came down.

he is more confident the recession will not actually be needed to bring down inflation. if it is needed to keep hiking rates, the fed will and they will let the recession happen. inflation data may be helping them out. he thinks the july hike will be the fed's last. that is another thing people are debating a bit. it is hard to say whether inflation is going to continue to come down. there are great base effects. b of a noting the private market has been affected by this view among investors that recession odds are less likely. and the rate hikes will stop sooner. the issue is retail sales will be driven by car prices. new-car prices. manufacturers cut those prices a lot to get people to buy more. that might be something that is bloomberg economics says is going to mask the fact there are dynamics here the consumer is

going to keep selling ahead. >> kathleen hays there. also our chief north asia correspondent stephen engle with the latest on our top stories. let's get you to the set up when it comes to the session in asia this morning. >> having listened to stephen kathleen, it is two stories, two themes investors are going to be looking at quite closely. what is going to have more influence on the market direction? the narrative around the u.s. economy is holding up, the lower recession risk kathleen was talking about from goldman sachs? on the other hand you have what you are hearing from china and the downbeat narrative that came through really in the second-quarter gdp numbers. also the monthly activity readings in the session prior. that has been expressed in currencies. it has been the story of the yen moving back to the 138 level but also the weakness. not only in the chinese yuan but

commodity linked currencies. lower in the prior session. let's take a look across markets today. futures again looking mixed. you have sydney looking for a drop, new zealand online, china futures pointing higher as our japan futures and chicago. fairly flat. which one is going to have more credence? the u.s. story, the china story? we will see. i don't like to say wait and see but that -- time will tell on that one. >> still ahead, we take a look at the push to use ammonia as a renewable fuel. we are joined by the co-owner and ceo of a new clean energy company. first we will be getting investment stretches from j.p. morgan, getting more views as to why they see china's recovery as uneven and volatile. this is bloomberg. ♪

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>> we have to realize china is more volatile. compared to china we know from the past decade. maybe china is getting a more normal economy. i'm not sure that is a good news but we have to realize this. for trading partners this could be more challenging.

>> the bund is bank president speaking to us in india. our next guest is cautious on china. let's welcome joyce chang, global research chair at j.p. morgan. always great to see you in person. >> great to be here. >> let's talk about china. the eco-number was disappointing. are we facing the risk of deflation? what would that mean for the global implication of the recovery not happening in china as expected? >> the third quarter is going. they will do some stimulus measures. >> you think they will? >> they will be modest. we have put in things look at 10 basis point policy rate cut, 25 basis points for the rrr. removing some of the requirements on the down payments. lifting restrictions on housing. but these are small things. i think the government wants to sustain the 5% target. you have had an uneven and

volatile pattern in china partly because demand has been weak, consumer confidence is not there. and really it is the private investment, the private entrepreneurs, where we see this disconnect between state-owned investment and the private sector. i do think you are going to see stimulus coming in which means the second-quarter may have been more of the low. the third quarter. . a bit better. but we seek one half percent off china's growth. the inflation risk is there. with housing it is weak stabilization, not a turnaround, we are looking at. >> it is animal spirits isn't it? the best case is kind of targeted muted levels of stimulus when we know stimulus is less productive anyway when it comes to more debt being added there. does that mean there needs to be a total shift in mindset in terms of thinking of china as this is the new slower growing normal?

>> i think they want to make the 5% target but the key thing is -- and this is key to the youth unemployment. you need to see the private entrepreneurs and private investment come back. we have seen state owned enterprise investment holding in their. some of the uncertainty on the regulatory environment, all of that has been one reason you have not seen the return of consumer confidence. higher youth unemployment rates. you are going to see modest stimulus because there has been such disappointment in the second-quarter growth. the third quarter should look better but i think they want to end the year with a 5% target still in place. >> the breakdown in retail sales is interesting to me. it looks like the headline consumer is resilient. the producer side was continuing to be weak. how do you feel about the chinese consumer? >> you had this excess savings that had been built up which they had been spending down at

this point in time. but one thing that does concern me is you see the youth unemployment number continue to tick up. inflationary pressures are visible. the property sector is still a drag. when i look at the whole balance of what is going on in china, they are going to do stimulus here. you are looking at a third quarter that will be somewhat better. some of the uncertainty we have seen since the reopening is not going to go away easily at all with the measures they are going to put into place. >> talking about consumers, the resilience in the u.s., confidence soaring to a two-year high or so. not surprising it seems everybody has a job. the labor market seems pretty resilient. can inflation come down to levels the federal reserve wants it and you have such a resilient labor market? >> we are not in the soft landing camp. let's talk about what the definition of a soft landing is.

it means you come back to the central bank on a sustained basis without a downturn. what we see is inflation, it has not come back to the central bank comfort zone. the key thing is the labor market strength. definitely no near-term recession. the odds of that are probably 5%. but i would caution against the medium term landing scenario. this may take longer to play out because we see a real resilience in the economy so we are looking at something more like 2024 materializing rather than this year. there is one more hike and then you could see a pause, but is that going to be enough? will you actually see the labor market strength begins to shift? we have not seen that yet. what i caution against is everybody saying 3% inflation, that is victory. i wonder if 2.5% is more what you need to see. if it is 3% or over that, the

central banks are not going to feel like they are comfortable with being in the zone they need to be in. >> i love talking to you because you follow the americas as closely as i do. talking about central banks and comfortable it is interesting how -- they are still not cutting despite the fact a lot of latin american central banks have been at the forefront of the aggressive rate hikes. today we saw the brazilian economic activity numbers coming in much lower than expected. is that going to be a problem? given that we are now seeing huge impact on their growth. >> i do think you see room for the latin central banks to weaken cutting before the end of the year. we see brazil cutting later in the year. with the risk of a near-term recession coming down, looking at one more hike, from the fed and then perhaps a pause just to assess where everything is, you will see central banks -- you have also had the appreciation of the currency.

you begin to see central banks, starting with chile and peru, but also brazil and mexico. you have had some of the strongest performance you have had in the currencies of this year in brazil and mexico and colombia as well. >> is there room for upside or are we going to see downside from here with those currencies? >> when people talk about china proxies it is not just asia. mexico has come out as one. i was there a couple weeks ago. . there really is -- it is not yet in the higher value added sectors. manufacturing, a lot of investment has been coming in. >> joyce chang, thank you as always. more to come on daybreak asia. this is bloomberg. ♪

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>> let's get you the latest from the corporate stories we are following. evergrande posts combined losses

of $81 billion over two years after releasing its results. a $14.8 billion loss for 2022 adding to a $66 billion deficit in the prior year. microsoft and activision blizzard are nearing the finish line on their $69 billion deal but are not likely to close it by the tuesday deadline. the company will continue seeking final regulatory approvals. much more to come on daybreak asia. this is bloomberg. ♪

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your kohler® walk-in bath. and take advantage of our on interest for 12 months financing. >> this is daybreak: asia. we are counting down to the market opens in korea, japan, and australia. so far there is one theme dominating the narrative and that is a note from goldman

sachs. essentially it's chief economist has cut to the outlook for a u.s. recession within the next year to 20%. down from 25% prior. what he is saying is driving that is better economic numbers and signals that price pressures are starting to moderate. when you look at bond markets of course it tells us a very different story. yield curve inversion we know has a very strong track record of predicting economic recessions. we are currently seeing the three-month t-bill yielding above its tenure counterpart. -- 10 year counterpart. goldman's saying we need to ignore this chart and what it might be telling us. instead, he is watching the term premium. that is still negative but the measure has held below zero for the past several years. on top of that as well it is well below its long-term average. that means it takes fewer

expected rate cuts to invert the curve in turn. in addition to that he says as inflation cools it opens a plausible path to be able to ease rate cuts rather -- to ease up on rate cuts without triggering a recession. shery: we also spoke to the ecb governing council member joachim nigel about the central bank right path. he says the central bank must raise interest rates again. the bundesbank chief talk to us in india warning that underlying inflation is proving to be sticky. >> i think this time we have to be more patient. it looks like the interest rate cycle is different. the pace maybe not as fast as it was in the past.

it could more or less be one reason that the transmission channel is not working like it worked in the past. but i am confident for next year inflation is coming down significantly and in 2025 we come close to our target of 2%. but it is too early. we have to wait for the data. for what the september data will tell us. >> how are you assessing the risk the ecb might be tightening too much? >> for the moment i do not see this risk. i have no indication this could be the case. yes, we hiked eight times. 400 basis points since july last year. this is a lot, but it was necessary because inflation was so high. but i do not see the danger this over tightening -- i do not see it for the moment.

>> have you seen the impact in the real economy at all? >> we see it. we have the first indication from the construction sector, but also other sectors are getting more and more affected by it, the rate hikes. but this is intended. it is the intended consequences of what we did in terms of monetary policy. we have to slow down the economic activity to bring inflation down. as i said, it takes a little longer. i guess at the end we will get you our target. >> you have said before you are doubtful the tightening could lead to a hard landing. what makes you so confident? >> i am a data-driven person. i do not see this hard landing. we went through a technical recession over winter time in the first quarter. the second quarter we announced

it today, it is better than the first quarter. we see a tiny growth rate. for the rest of this year i am more positive so i believe this will not end up in a hard landing. >> you talk about being positive but when you look at pmi's, the data out of china, could that be a red flag for the eurozone? >> it is obvious we are not living in very easy times. with china we have to realize china is getting more volatile compared to china from the past, the past decade. maybe china is getting a more normal economy. i'm not sure if that is good news but we have to realize this. for the trading partners this is getting more challenging. we have to take this into account. that gives us an implication we should produce trade

dependencies regarding china. >> what does that mean? engaging more with countries like india? >> could be. diversification is good for so many things. it is also good for trade. >> what assumptions are you making about the u.s. economy? what is your take? >> i have to concentrate on the euro system, of my country. i guess what i see in the u.s. from the fed, they are doing an excellent job and i'm confident they can solve the inflation story like we do in the euro system. >> joaquim nagel at the g20 in india. we have conversations coming up from the g20. catch these conversations on the times on your screen. let's now get you to the top

stories from around the world. russia has ended screen export deal with ukraine -- grain export deal with ukraine increasing uncertainty over global food supplies. moscow says its terms have not been met in the packed which was designed to ensure safe passage of exports through the black sea. the move jeopardizes a key trade route from ukraine which is one of the world's top grain and vegetable oil shippers just as the next harvest begins. the thai pro-democracy leader will attempt a second time to become prime it is -- to become prime minister. another vote is due wednesday. taiwan's president will visit the u.s. on his way to an inauguration in paraguay.

china has filed a diplomatic complaint with the u.s.. he is also a leading candidate for presidential elections in january. the biden administration says the transit will be low key, private, and not official. coming up next china says it is seeking substantial dialogue this week with u.s. climate envoy john kerry. we have more next on the first major global warming talks between the two powers in almost a year. this is bloomberg. ♪

>> u.s. climate envoy john kerry has opened his first major talks with chinese officials in almost a year with both sides pledging to work for tangible results despite deep tensions between the parties. for more let's bring in bloomberg's head of research. tell us what has happened since the last major cooperation agreement between the u.s. and china. >> in the run-up to cop26 in glasgow in 2021, they came together and made a joint declaration. the hope was they would work on

individually -- and try to cooperate on carbon capture and storage. there was a divisional working group set up to work on implementing this list. in august 2022 in response to then speaker of the house nancy pelosi's taiwan visit, china halted diplomatic meetings with the u.s. which unfortunately had a negative impact on this working group. there was a glimmer of hope there would be a revival when president biden visited on the sidelines of the g20 summit in bali. that was short-lived. during this time period there

have been informal talks. we have not seen tangible progress on the list of items the countries listed in their joint declaration. in parallel, u.s.-china relations have deteriorated well we have seen the u.s. pass its inflation reduction act excluding reliance on materials and components sourced from china. this makes it more difficult to insulate china u.s. climate negotiations from the broader geopolitical tensions. >> are there any areas that are less discussed that could be critical for progress when it comes to sustainable energy and this transition to green energy? >> not to overstate the obvious. the u.s. and china are the largest trading partners with each other but also it is

important to remember china is the world's largest exporter while the u.s. is the world's largest importer. most of the trade between the two as well as the rest of the world relies on maritime transport and to a lesser extent aviation. while we have seen technology progress as well as some international cooperation, through the international maritime organization, these are areas that require more international policy support to make viable technologies be widely adopted globally if and this is a big if the u.s. and china would be willing to cooperate in this area it would be significant. at the same time it is important to remember what treasury secretary yellen mentioned about expectations around any sort of

collaboration when it comes to u.s. and china trade. >> let's talk about one new technology and the company that is developing the potential of ammonia as a renewable fuel to the carbonized -- to decarbonize the trespass to sector. it is great to have you in the new york studio. let's talk about what we do. when we talk about sustainable energy, the people focus on ev's and battery power. you are talking heavy duty like maritime shipping. perhaps even airplanes. tell us about your technology. >> thank you for having me today here. amogy is developing technology to convert ammonia to power. our technology is apt demise for -- optimized for heavy-duty

transportation such as maritime shipping. battery technology cannot be a solution because of the fundamental limitations. even a battery as big as the container ship, you can never make the transpacific voyage. that is what is possible with a fuel like ammonia. ammonia has high density and zero carbon contents. it has been hailed as a new fuel. but there has not been any technology enabling the use of ammonia as a fuel. that is the technology amogy is providing for the first time to the market. >> the technology is to split ammonia to hydrogen and nitrogen. is there an issue with the part of the process, not necessarily being completely green? hydrogen is not necessarily green. >> that is a good question. our process and technology converts ammonia to hydrogen and uses the generated hydrogen in the technology called the

hydrogen fuel cell. hydrogen fuel cells have been made available by toyota or hyundai but it has not been developed to the market not because of the fuel-cell, because of hydrogen being inefficient and expensive fuel. we are using ammonia as a hydrogen carrier so you can use ammonia as a hydrogen source and use that as a fuel, enabling the use, the more effective use of hydrogen in vehicles. >> what is the timeframe you are operating with to see more widespread application within the industry? >> companies in the early stage, we are only two and a half years old but we have aggressively scaled the technology from the five kilo scale draw to a marine vessel today. we are looking to commercialize this technology in the maritime shipping as soon 2024, next year.

that is also possible because the company just raised under $50 million which is facilitating the expedited development of this technology so we can provide a solution to the market. >> some of your backers include sk innovation, amazon's climate pledge fund, aramco as well. how important are partnerships? are the private private partnerships and private public partnerships in making this more mainstream and commercialized? >> collaboration is the key to enable the transition of the heavy transportation industry. the company is fortunate to have a great investor and shareholders including amazon, aramco, sk, mitsubishi, and many more who share our vision using this ammonia to decarbonize

maritime shipping. we really have to collaborate with them because they know how to build the ship, how to move the large-scale assets. the company can provide innovative solution to enable it. >> have you had conversations on who would be your clients going forward? have they expressed safety concerns on this technology? >> company has actually announced the very first preorder last month. the ship operator has committed to our technology so we are deploying the first to norwegian water in 2025. we see markets for shipping such as singapore and asia for power generation to use ammonia as a fuel because they have regulations and policies. these collaborations making sense. that is the areas we are going first.

>> what about the safety concerns? ammonia is a toxic substance. >> ammonia is toxic. however ammonia has very well used in industries such as agriculture for 100 years. we use ammonia as a fertilizer and ammonia has been used in every industry for 100 years. people have learned how to use ammonia and transport ammonia. we have international gas carrier vessels transporting ammonia between countries. in the u.s. we have longer than 4000 pipeline miles of ammonia as well as barges and other infrastructure available. we are piggybacking on established infrastructure. >> really great to have you with us in the new york studio with this technology coming from amogy. we will have more on the outlook for renewable energy later on the bloomberg tv programs as well with india's council on energy environment and water

ceo. catch that conversation at 11:40 a.m. in hong kong. this is bloomberg. fabulous surroundings... but everyone's looking at their phones for financial insights from merrill. 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.

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by storms that killed people in floods and landslides. let's bring in bloomberg's seoul chief reporter. more rain has been forecast, what is the situation? >> it seriously did rain a lot last night in seoul but the situation is looking worse on the southern side of south korea where there was an incident linked to a tunnel at the underpass of a city south of the country which is linked to at least over a dozen deaths. 16 vehicles including a bus were trapped in the underpass after the underground road was flooded as a nearby river overflowed. this is not the first time south korea suffers from storms and heavy rainfall every summer with natural disasters claiming dozens of lives and damaging property annually. seoul was hit with one of the heaviest rain storms in 80 years

last year. but the death toll alone is significantly worse this time. the rain will continue but we have to see how it will start to diminish starting wednesday. >> we know the president is visiting the region. what has been the government response given that this will take a lot of rebuilding. >> the government response is mainly to mobilize as many troops and police for the risky -- for the rescue operations. in the southern regions specifically. yoon was there after his overseas trip to lithuania. he went to poland, the biggest buyer of south korean arms and he made a surprise visit to president zelenskyy. after his back he ordered that

more of these responses are necessary and especially when it comes to that, he mentioned these climate events should not be treated as an anomaly but a norm from now on as this is happening. it is repeated over and over again every summer in south korea. >> do we know the impact or the risk to industry at this point? >> the impact to industry is pretty minimal especially compared to last year when as you said, -- their operations and steal plans. especially oil bank yesterday. they had some issues, minor issues. gas stations. but it was immediately repaired. the trade industry minister has been overseeing this issue very carefully.

we have also heard from the insurance association that some of the damages that claims from the cars were damaged cars from the floods have amounted to $7 million. as of yesterday. the past month. the industry impact is not a significant. you will have to keep an eye out for the rainfall the next few days. >> the latest on the ongoing disaster in south korea. let's take a look at how currency markets are trading. we actually have the dollar trading in a narrow range against g10 peers. we are not seeing movement on the others the trade. you see the aussie dollar remains unchanged at 68 u.s. cents. this is after we saw the downside pressure given week economic data out of china and the fact we saw the -- same

story with the kiwi which fell in china data after the best week since october. the offshore yuan, a lot of weakness. near the 720 level given the disappointing economic figures and the fact we have wall street banks lowering projections for economic growth this year in the country. we are watching the japanese yen. japan comes back from holiday so we will be watching how the stock markets open. the yen has been holding steady near the two month high. the market opens in japan, south korea, and australia our next. this is bloomberg. ♪

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day where we have more optimism about the global economy. especially with train -- treasury secretary yellen talking about spillover from the week chinese recovery but not seeing u.s. recession ahead. >> we are seeing this divergence. more muted expectations of chinese recovery. more optimism when it comes to the u.s.. the possibility of sticking the soft landing. there are a number of downgrades to contend with as we get to the session when it comes to chinese economic expectations. how is the set up looking? >> that is right. that is the big two themes investors are weighing. the optimism we are seeing in the u.s. economy versus china in particular. we did hear the treasury secretary janet yellen essentially saying china's economic slowdown does risk causing ripple effects around the global economy but as for now she does not see a recession in the u.s..

that certainly did move markets higher in the wall street session monday but the next pressure point as we know is what you are referring to as well, earnings. we have hundreds of companies reporting over the coming days and we have seen at least four s&p 500 firms the expectations building that we are going to see a drop of 9% in profits in the second quarter which would make it the worst season since 2020. would that be the bottom and we start to improve? another key question we are looking for answers from as we await the earnings calls. in terms of the session we did see yields retreating in the prior session. tech stocks boosted in particular because we saw the nasdaq a little bit weaker in futures. up 1% in the prior session and we are also seeing the caused act -- kosdaq outpacing. the korean won is still flat but we have seen a trading around a

five month high. a lot of that coming down to optimism the fed could be nearing the end of its rate hiking program. let's change on because the open is well upon us for australia. at the start of the trading day we are going to be taking a look at tech stocks there. chip ceo's meeting official at the white house. any reaction we see in commodities, we have week coming online to the downside. this is the start of trading for commodity contracts. we saw a russia exiting the black sea grain deal monday. in terms of the reaction to anything around china's economy, more downgrades are coming through on the outlook. shery: we are talking about these wall street banks now cutting the forecast for chinese growth. jp morgan, morgan stanley, and citigroup among those downgrading their projections to 5%. citigroup saying beijing's official target set in march around 5% is now at risk.

u.s. treasury secretary janet yellen telling us exclusively that china slowing growth could have ripple effects across the global economy. >> maybe countries depend on strong chinese growth to promote growth in their own economies. particularly countries in asia and slow growth in china. it can have negative spillover. for the united states growth is slowed but our labor market continues to be quite strong. i don't expect a recession. >> joining us from singapore, the ceo of global fixed income at blackrock. you are of the opinion the u.s. does not have to fall into recession. how does the worse than expected slowdown in china play?

in previous economic cycles china has made the cyclical force of growth. >> thank you for having me on. when you try and assess your calculus for global growth, china throws a real curveball into your calculus. not only the growth dynamics, you look at inflation dynamics at the central banks, the developed market central banks are fighting. those inflation reports, cpi at 0% year on year, negative 5% in ppi. these numbers are significant. china being the second largest economy in the world, a huge driver of demand for commodities. you have to factor it in to your calculus for global growth. that said i am comfortable u.s. growth will be durable through this. i think as secretary yellen said, you have an employment dynamic, unemployment at 3.6% with real wages above four.

the u.s. economy has the ability to withstand some slowdown in the rest of the world. >> when it comes to bond and fixed income market opportunities you are comfortable investing on the inverted yield curve with opportunities there but i'm wondering how you are assessing out opportunities within the u.s. versus international markets, europe. >> talking about the equity market, the equity market has had a good run. that said there are a lot of equities in the u.s. that are in a cyclical framework where growth is that a reasonable shape whether it is the autos come of the airlines, the homebuilders, where you have multiples that are attractive. the equities in the u.s., there are a lot of equities that makes sense. fixed income, there's a lot of yield available. the front end of the yield curve you can buy assets including things like commercial paper over 6%.

if you can get high-quality assets without taking a lot of interest rate risk at the yield curve risk, credit risk, fixed income, this is a good scenario. this is nirvana for fixed income. we can get sixes without taking a lot of interest rate, credit risk, you can build a portfolio, hold some equities for upside. a good environment for a fixed income investor. >> is that also applicable to china? >> yes, so i would say it depends what direction you are coming from. we have started to look at chinese equities were valuations for the big names that used to price in a lot of upside potential and growth, valuations are reasonable today. we have added a bit on the equity side. chinese rates relative to the rest of the world are through much of the developed today.

you saw stress in real estate and parts of the credit market. for the most part the opportunity is on the equity side in china more than the debt side. it is interesting, we have been underweight the currency. a lot of pressure on the currency on the rmb. we have brought in some of that underweight recently. >> let's talk about sovereign bonds. you have two calls when it comes to emerging markets and advanced economies. one underweight, the other overweight. >> yes, you know, when you think about emerging markets, emerging markets are used to dealing with excessive high levels of inflation. emerging markets got ahead before the developed markets. i like the rates in parts of latin america and mexico, brazil. you are getting paid yields that are extremely attractive as long

as you are willing to to currency risk. getting paid high or low double-digit, high single-digit yields. we have inflation coming down so your total return is as good as it is anywhere else in the world. now that we are getting to the end of the hiking cycle which i think is upon us at least within eyeshot in the u.s., you can take more interest rate risk in the u.s. today. if you said which what i change in terms of emerging markets versus developed markets, em is attractive. >> i have to ask about broader thematic's. you like technology is an overweight. are you looking further down where we have not seen the ai value materialized but may well do in the medium to longer term? >> it is a great question. ai in terms of the public

markets is a pretty hard expression to put into your portfolios when you know it's going to be a game changing factor in productivity. it is hard other than the big chip companies. we have exposure to the big semiconductor or gpu producers. that we still think have some upside. that being said some of the big tech companies, the platform companies that will pivot off of ai as a complement to their enterprise, that is where there is better value. it has been a good run for technology. i like technology. i think in equities technology will continue to carry the day but we are more rotating now, we talk about cyclical equities where the multiple -- if you strip seven sox -- seven stocks out of the s&p 500 and look at the multiple on these cyclical companies, valuations are pretty reasonable. even if the economy slows. i'm not that worried but even if

it moderates to pay three to five times cash flow for some of these cyclical companies is pretty good. i have not lost a lot of money in my career buying companies at four times. >> what do you think of hardware in the sense of many of these northeast asian economies depending on semiconductors at a time when we have this diversions between the u.s. and china and more rivalry in terms of advanced technologies? >> one of the things for investors that is the hardest to assess his geopolitical co. sovereign interrelationship. to invest alongside of technology, talking about hardware companies, there are some in europe i think are interesting that distribute to asia. that are good businesses in the semi space.

i like some of those today. i think being invested generally in technology in asia -- i'm trying to think through in terms of the hardware companies in asia. not many come to mind that we like a significant amount whereas broad technology as a theme in asia is a place we will continue to be overweight. >> we have been talking a lot about front end yielding assets. are you looking on the longer side to try and rebalance in this environment? >> it depends how much longer. the answer is yes with this inflation report last week. i think people will go back and assess 2023, look at that inflation report. the three-month moving average core services -- there is that 1.7%, three-month moving average

pretty good. core goods. auto. close to zero, three-month moving average. we have extended interest rate exposure to the belly of the curve. i think the widening of the yield curve is not getting you unless you have a liability pension fund. given the inversion of the curve, the lack of benefit it creates for your portfolio. i would rather extend a little bit, lock in rates but go out to the belly of the curve and that is where you need to pick up enough yield going up to the backend or more so. you have the benefit if the fed starts cutting a year or two hence. we have extended some duration. certainly not to the back of the curve. >> always great to have you with us. cio of global fixed income a blackrock. he is also the head of global allocation. let's turn to what's moving in the markets in early asia trading. >> picking up what you are

discussing around this move into chip stocks, we are hearing from the likes of -- we will get more details. we are also checking some of the big luxury names here. we have richmond which owns cartier and other subsidiaries. overnight been reported a surprise drop in revenue from the americas. also hit by china's reports of slower than expected growth and that was a major focus in the price session. down 10%. lvmh down nearly 4% in turn. this morning we are not seeing the same sort of reaction. we have most sox pointing higher. -- most stocks pointing higher. we have just had stocks coming online in the last 15 minutes or so and we are seeing a slight move to the upside.

>> still ahead what we learned from china evergrande long-delayed earnings report is aiming to resume stock trading and complete its restructuring. >> coming up, more from our conversation with treasury secretary janet yellen at the g20. we will be getting her views on china's trade practices and those tariffs that were triggered as a result. this is bloomberg. ♪

>> top u.s. chip executives are getting their chance to push back against washington curbs on dealing with china. ceos from intel, nvidia, and qualcomm joining a white house meeting with president biden's economic and security advisors. let's get more from stephen engle who has been following this out of hong kong. what do we know about this meeting? >> a lot of developments on the chip front-end export controls today. -- chip front and export controls today. this is a major push by chipmakers which have a significant size of their revenue coming from china. qualcomm gets 60% of revenue from china. nvidia, the gold standard for ai chips, they get a fit of their revenue from china.

they are making i would guess pleas to the white house to not roll out new export controls on the chip industry as word gets rumbling the biden executive order to limit semiconductor investment in china as well as ai and quantum computing really picks up steam. there have been reports of further export controls on chipmaking equipment. that would hurt obviously the industry's efforts and their revenue generation going forward. but we are hearing this meeting probably already took place at the white house. the companies involved are declining comment to bloomberg news. the white house declining comment. it shows the sensitivity of this matter. the national economic council director lael brainard and the national security advisor jake sullivan were in these talks with the heads of intel, nvidia, qualcomm. . these chipmakers obviously concerned these curbs will cut them off from their largest

market and will undermine u.s. leadership in the chip industry. that is reflected by the industry association, the semiconductor industry association putting out a statement monday saying overly broad ambiguous and unilateral restrictions risk diminishing the u.s. semiconductor industry's competitiveness, disrupting supply chains, causing market uncertainty and prompting escalatory retaliation by china. will the national -- the national security -- responded saying the curbs have been carefully tailored. that's going to be the focus of rhetoric coming up from the white house. if and when the biden administration releases these new export controls if you will on key investments into china in the executive order that is impending. >> we have more details when it comes to those plans from the

biden administration perhaps more narrow and slow than we expected. >> washington bureaucracy is slow at the best of times. it has to go through so many agencies and the like. the speculation is perhaps any kind of executive order signed by mr. biden if indeed -- speculation is it will be wrapped up by the end of august but bureaucracy will slow it down so we would not see it enacted until next year. 2024 at the earliest according to sources. these sources are telling bloomberg news in this group that we have hitting the bloomberg terminal that these new investment curbs on investment into chinese quantum computing, ai and semiconductors , will be narrowly focused on the cutting edge technologies and will be only on new investments going forward. it would not take effect as well until next year because of the

bureaucracy as i said. this new executive order would possibly put into place the screening and possibly prohibit investment into these industries that are deemed to be national security threats. that is something janet yellen in that interview with annmarie hordern did touch on. these new curbs are going to be narrow in focus and would not necessarily have a broad impact on investment by american companies into china according to her estimation. >> secretary yellen seeking to de-escalate tensions. stephen engle joining us from hong kong. let's hear from the treasury secretary directly. she spoke exclusively with bloomberg tv from the sidelines of the g20 finance ministers meeting in india. >> on tariffs, you know, we put tariffs in place on china because we had underlying

concerns about unfair trade practices particularly those affecting intellectual property in technology transfer. those concerns have not been addressed. we are undergoing a four-year required review of tariffs. china also retaliated putting tariffs in place on us. we have to see what comes out of the four-year review but i would emphasized that really the underlying concerns have not yet been addressed and we need to work on that going forward. >> when you are looking at de-escalating we are trying to figure out what would be left on the table. it feels like he ministry and is an thing up. -- the administration is an thing -- amping up.

could that be pulling a punch? could that be a place you could de-escalate with beijing? >> first of all i want to say what we are doing is not tit-for-tat. what we are doing is putting in place controls that are designed to protect u.s. national security and in some cases to address fundamental human rights abuses. we do intend to protect our national security. we have export controls that play an important role in accomplishing that. what i tried to explain to our chinese counterparts is that our desire is to make these u.s.

policies clearly national security focused, transparent, and narrow. we are not attempting to stifle economic progress in china that we have and want to continue to have deep economic ties. after all this year our trade has reached almost $700 billion. >> you obviously have a lot on your plate when it comes to re-engaging with china. i'm curious, how difficult the dialogue is going to continue to be after the revelations about chinese hacking of your colleague, secretary gina raimondo. >> i have concerns about hacking of u.s. government officials, or private individuals or companies. i know the united states has

expressed those concerns. we intend to continue to deepen our discussions with china to increase our engagement. it's especially important to explain what our motivation is to avoid misunderstandings that can lead to unnecessary and dangerous escalation. president xi and president biden agreed in bali that senior officials including those in economics should interact more regularly. i think an outcome of my trip was that we will have deeper ongoing engagement at all levels. >> when did you learn about the china email hacking? i'm curious if you had a chance to bring this up on your trip to

beijing? >> i believe i did not know about that in beijing. it not one of the things we discussed.

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kathleen: the g20 finance ministers and central governors meeting continues to do in india. let's go to markets, anchor haslinda amin there with the latest. what can we expect today?

haslinda: the two big themes here pretty much has been the slowdown in china, as well as debt relief. a lot of talk about how policymakers are concerned about china's slowdown, the extent of the slowdown. janet yellen, for instance, talking about how the ripple effects will be felt mainly in the economy, but even the u.s. will not base pair. relationships have been building as well, even though there have been a lot of restrictions and tit-for-tat movement from the two sides. she talked about how although despite the concern, there will be no recession for the u.s., the first time perhaps that she has been definitive that the u.s. will avoid recession. now, the other big issue has been that relief. there has been a lot of concern that the progress has been really slow. policymakers had wanted to use the zambia deal as a template

for other countries, and other emerging economies looking for debt relief like sri lanka, but that is not to be. talks have been slow, there has been pushed back from china not wanting its lenders to take their haircuts that other lenders are taking and hands that is slowing everything down. there has been a lot of disagreements. the g20 perhaps a microcosm of how delighted the world has been. there has been a lot of frustrations here. haidi: you also spoke to the use economic!. was there a sense of optimism in that conversation? haslinda: you know, there was a lot of optimism. he talked about how there is no stagflation in the eurozone area. beginning to see growth. when it comes to inflation itself, he is looking at perhaps 2% in 2024. so, yes, there is a lot of hope

and optimism. take a listen to what he had to say. >> our expectation is that the headline inflation will decline slowly, not with the speed of headline inflation. core inflation will be slower. so this is a think because of the fact that headline inflation is influenced by energy prices. and core inflation is influenced by the increased prices, wages, services. so it mixed situation. but overall, i think we will have in 2024, the level of inflation in your to our targets. haslinda: so underlying inflation has peaked? >> sure. haslinda: is stagflation the right word to use to describe the european economy right now? >> listen, we still have growth.

weak growth, of course. slightly weaker than expected in the first quarter and probably also in the second quarter. but if we look to the last autumn, we were expecting a real recession. blackouts, energy problems, supply problems for energy. these risks did not materialize. i am not saying we don't have any risks ahead of us, because indeed, tightening of monetary policy will produce an impact. and also the energy transition, we are not completely out of the woods in europe. we may be going out of the dependency of russian fossil fuels, but it will be a

challenge also. overall, i would say that we are not in a stagflation situation. we still have growth and we expect that in 2024, to have stronger growth. and will have an incredibly resilient labor market. haslinda: worth noting that gentiloni is not the only person who is saying that inflation is moving in the right direction. in my conversation with the president of the prudence back -- of the prudence bank, he said it is too early to call victory, but it is moving in the right direction. haidi: our markets, anchor haslinda amin there. we will have more coming up from her throughout the course of the david live interviews with key policymakers. and look at how european features are pulling up. we will be watching comedies and

grain markets closely given the geopolitical developments causing heightened anxiety and volatility across grain pricing, potentially cascading into further inflationary upside. also watching luxury giants. we have been looking at earnings across assets. a european stocks have been declining as we have seen a luxury take a leg lower. it has been another few beneficiaries of the china recovery story. the resilience of the chinese consumer there. german dax futures looking flat. the euro stoxx 50 is up 0.1%. euro bund future's are up zero point 1%. very much a fixation on corporate earnings for a look at how the impact on global growth is playing out for european companies. we will be waiting to see what the luxury goods makers like hvm

h -- like lvmh who have been leading the market lower, how they will be impacted. annabelle: it is really two different details of the economy that we are getting through. this chart puts it into perspective because it is the china slowdown story also playing out in europe as a key trading partner with the mainland. if you look at the citi economics a price index, you can see the strong recovery in the u.s. reading here really reflecting the better-than-expected numbers coming through. also the outlook around price pressures. to the downside here, the eurozone economics of price index, deeply in negative territory. we just heard from paolo gentiloni, the numbers have been worse than expected. the economic surprised by citi also nearing negative territory,

after we had the weaker gdp numbers yesterday and mixed monthly activity data. those are the different tales. what we're looking at is what investors have to weigh -- more optimistic. we heard from goldman sachs downgrading the outlook for u.s. recession from 25% to 20%. janet yellen also saying she sees no u.s. recession. stocks were quite mixed, but we see the nikkei 225 moving 0.2% to the upside. japan was closed for a public holiday. currencies are quite mixed. more firmness coming back into the south korean won. south korean stocks are under pressure. commodities again, a bit under pressure, more of the china story coming through. investors having a lot to weigh, the outlook of the u.s. economy, versus the negative on china's. shery: more to come on "daybreak: asia," including more on china, especially when it

comes to the long-delayed results of developer evergrand this is bloomberg. ♪

shery: chinese property developer evergrande has finally posted results for the last couple of years and the numbers show losses of more than $80 billion. to discuss is the china credit editor with us.

kevin, perhaps not surprising the huge losses, but what does that mean for evergrande going forward? kevin: $81 billion worth of losses, like you said, much of it was related to property losses, asset losses. a lot of it was actually not operating losses although they did have those for both 2021 and 2022. now, what we have is revenues fell by nearly half in 2021, as the property market struggled in china last year. it got worse in 2022. sales fell another 10%. that is where evergrande will understand as it looks to move to the next phase of the restructuring process. haidi: when are we going to learn more about that process? kevin: we have court hearings next week in both hong kong and the cayman islands, hearings to

the company to proceed with starting a boat for both assets that are held in the hong kong and assets held in the caymans. -- starting a vote. this is the first step. there has been support from classes of creditors for the company. it is really getting things going as far as where the roads are going to be, and how their support is going to end up for evergrande in its restructuring process. haidi: our china credit editor kevin kingsbury there. circling back to one of our top stories, reacting to the chinese gdp print and domestic activity numbers. we also have an update on the so-called credit impulse -- not looking great either. let's ring in our chief markets editor david ingress. this also is not much of a surprise. david: not at all. certainly the prognosis if you

extrapolated to credit markets, it will not be a surprise when he looked at the outlook. this is a leading indicator that may not be painting a very good picture. that gdp print yesterday -- and we will talk about the revised forecasting a moment -- what it does is give us the second factor that we need to calculate the credit impulse. we had the blowout numbers for june. we now have this, a better indication of which way it is trending. the change in the absolute value and the em basket on the chart, that is trending lower. this one has actually turned back negative. the issue here is that this tends to be, not all that time, but it tends to be a leading indicator for em stocks by a couple of months. when it is trending lower, what does it tell you about what is next for emerging markets? i will leave it there.

shery: our bloomberg markets coanchor and chief markets editor david english. let's get a preview of the market opened in the mainland and also hong kong, now coming back after yesterday's suspension due to the typhoon warning. let's bring in our asia equities reporter charlotte yang. . what are you watching out for today? charlotte: the key thing to watch i think it is for how market sentiment will hold up, both mainland and hong kong. investors have had more time to process the disappointing second-quarter yesterday. we also have five banks slashing their economic forecast for china for this year. citi, morgan stanley and also jp morgan economists, all have/the economic forecasts to 5% for china this year. the key reasons is the major weakness in recovery, and also the government's muted stimulus. so today i think the key thing, especially for hong kong, we had

the typhoon yesterday so we did not get to see how investors will react, so we would discussed the evergrande thing and how that could affect -- how that could hurt investor sentiment. also supply chain starts, those are all under watch today. haidi: yeah we were talking about the big luxury, european recession leading broader stocks lower. some of that mining bomber stocks. the china effect. -- mining stocks. the china effect. we expect similar moves today, or has negativity been priced in already? charlotte: our recent chat with strategists, they feel like china exposed assets elsewhere could take a bigger hit. yesterday we didn't get a chance to see any trading. the moves today will be particularly important because last week we had a good week.

we were seeing that the investor seems to be getting more positivity with china given we're heading into the july politburo meeting. the key thing today for hong kong will me to see how that holds up. we have chinese newspapers flagging the countries likely to have a rrr cut in the third quarter to support the economy. so we will have to watch if investors could take that cue as a signal of more stimulus to come, or if they have suppressed expectations of more stimulus. haidi: dave, we continue to watch the back-and-forth as sentiment for chinese equities. what aspect of this are you looking at? david: so, charlotte was talking

about how we are going to see how these gauges hold up, one of the levels we have been tracking has actually held steady for the better part of the year, the shanghai composite. we were flirting with the 60-day. that has held. it is range-bound. in terms of support, it is really key to where you go, at least the potential downside if we break below that. the other thing, i mentioned this as we go into the session -- hong kong is reopening, we know that. but this caught my eye. when we talk about the need for consumption, household goods -- i promise you this will make sense -- there is actually a joint ministry briefing today, the ministry of commerce, housing ministry, and the market regulator at 3:00 p.m. local time. the traffic there will be boosting spending on household -- the topic there will be used

in spending on household products. one key area where the economists have told us is the important. maybe we'll get something from this briefing. haidi: interesting, given we did see the consumer element of retail sales kind of still looking ok in the numbers yesterday. but, of course, huge implications when it comes to some of these big luxury brands. one of them saying they are focusing on the chinese market. and also india as key growth centers outside of its home country. the ceo told us exclusively about the potential for giant asian markets, and how the company is making their approach. >> we want to stay unique and special, that is where we are building in markets like china, and india which are promising for the future. being deliberate on planting the right foundation so that we can

build from there with the right image perception. >> china has huge potential, but it is still quite a small market frame. >> still small for us. huge short-term and long-term potential for us. it is about 6% today for the company, double what it was three or four years ago but still quite small and you look at the penetration of the chinese business for some of the best luxury players in the industry that are 30%, 40%. so i am excited about the opportunities on the runway which, really energizing for us in china is how the brand is connecting with the younger and more elevated consumer. we serve, oddly enough, our most elevated products, we sell best in china. we have the best gender balance, as i believe you know most of our business historically has been more men. in china, it's a good balance of men and women. and it is a relatively young consumer, late 20's and early 30's. it's actually a good example for us to the rest of the world.

we are being very deliberate in our approach to china. we went to do it inequality way. -- do it in a quality way. shery: ralph lauren ceo patrice louvet, with bloomberg's francine lacqua. we have more to come on "daybreak:this is bloomberg. ♪ you're a rock star. you are a rock star. no more calling co-workers rock stars. look, it's great that you use workday to transform your business. but it still doesn't make you a rock star. so unless you work with an actual rock star. hi, i'm ozwald. hello ozwald. pam, you are a rock- i wasn't going to say it. ♪♪

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haidi: gautam adani's empire continues to suffer from the fallout of short-seller hindenburg's attack. bloomberg has learned it is going to bankers cautious after the release of the report in january. let's get to more details on the scope from our finance reporter. in this exclusive, it is fascinating, because barclays was also left in a difficult situation to try and fill this hole in terms of the sheer amount of money we are talking about, and the fact that in the longer term, do they really want to bet against adani? >> indeed it is a very important question. barclays has to do -- barclays is a key lender for adani, actually the biggest bond arranger for adani. that shows how much of a reliance the british bank has on adani's business.

the revenue they earned from adani. so it is a tough call. on the other hand there are accusations that a global bank cannot just give a blind eye to. so it is a very tough decision that barclays is taking. it has to think about revenue and reputation risk. barclays is turning cautious. we have seen the bank has been nudging adani to prepay some existing loans and bonds that they have raised for adani. a part of those amounts have been prepaid by adani on the insistence of berkeley, it --

by the insistence of barclays. this shows barclays is getting cautious on funding for adani. shery: how big is barclays' presence in india? >> that is a very important question and very crucial for our listeners. barclays' india presence is one of the largest. they are the fourth largest in terms of revenue growth globally , which shows how importance there india business is for the bank globally. for asia, barclays's india business has grown the fastest among all the countries in asia and asia pacific. that shows how much reliance barclays has on adani. and adani being a key client for

barclays, this is important for barclays' india growth and therefore, at adani's growth. shery: reporter suvashree ghosh with the latest on adani. ford shares tumbling as it slices prices on its ford f1 50 pickup truck by as much as 70%. the company is aiming to fend off the competition, for tesla and general motors. the cheapest f-150 lightning pro starts at just under $50,000. merck has learned microsoft and activision blizzard are nearing the finish line of their 9 billion-dollar deal, but they are not likely to lose it by the tuesday deadline. sources say the company will continue seeking the final regulatory approvals that they need. an april order from regulators bars the two companies from closing the deal, even though it has received government approval

from 39 countries. haidi:. haidi: some of the stocks we're watching ahead of the open in hong kong and china property developers are in focus. evergrande reporting losses of $80 billion for the last two years. also, shares of luxury goods makers could see a move, we saw the global peers, particularly lvmh and others sliding on these concerns about the chinese economy and the disappointing data that we had yesterday. that is just about it for "daybreak: asia." we are looking to the start of trading in hong kong, shanghai and shenzhen. this is bloomberg. ♪

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